Sunday, November 8, 2015

TPP text released, Keystone XL terminated, the latest EIA oil stats, and global rig counts

a couple big stories broke late this past week...first, on Thursday, the text of the Trans Pacific Partnership was released and Obama announced that he intended to sign it, starting the ninety-day period during which the public and Congress get to look it over before he actually does sign it, at which time Congress gets another 90 days to approve it by a yes or no simple majority, with no possibility of amendments or filibustering since Congress granted Obama trade promotion authority...then, just before noon on Friday, the administration announced that they had rejected the application from TransCanada to build the keystone pipeline, finally ending the 7 years of debate the nation has had about that pipeline ...

since the TPP is 1500 pages and all i've read is the preface, i cant comment on what's actually in it first hand, but i can tell you that almost everyone who has cracked open a chapter underlying their personal interest in it has commented that it's worse than they fact, if we simply google "TPP worse", we find dozens of new headlines from those who want to relate that TPP is worse than they thought it would be...the only piece i've seen that's close to a full analysis on such short notice came in the form of a 17 page pdf from Public Citizen, who has made it their cause to monitor all the trade agreements that our country has been far as we're concerned, there's not much new that we hadn't discussed previously (ie, here and here); the signatory nations will have a right to as much of our gas and oil as our corporations can supply, and hence our prices for the same will rise to the international level, which will unleash a new round of drilling and environmental degradation...furthermore, the oil companies can meet any attempt by state or local governments to curtail fracking or other polluting activities with a lawsuit to recover loss of potential profits, which would be adjudicated not by our own courts, but by a supra-national court set up under the World Trade Organization's Investor Dispute Settlement Body....

the Keystone story had several interesting turns earlier in the week...on Monday, we learned that TransCanada had asked the Administration to suspend it's Keystone application, citing multiple lawsuits and difficulties in getting approval from state authorities for a route through Nebraska....that brought out the expected applause and claims of vindication from the environmental websites opposing the pipeline, but the request by TransCanada turned out to be just a ploy to get the process delayed until such time as a Republican could be elected president...the administration saw through that, of course, and denied the TransCanada request for a Keystone delay, with Obama affirming that he wanted to take action on the pipeline himself before his time in office ended...whether that TransCanada request precipitated the action later in the week is unknown, but the late Friday announcement, made after the congressional supporters of Keystone had left Washington for a week in the districts, was a politically opportune time for such an announcement nonetheless...predictably, the response from Calgary-based Suncor Energy, Canada’s largest oil producer, was that without Keystone, they would just have to ship more tar sands crude by rail...

nonetheless, we shouldn't pretend that stopping this pipeline is somehow stopping tar sands crude from reaching the US...recall that a combination of Enbridge pipelines including the Alberta Clipper and Flanagan South started pumping tar sands crude clear to the Gulf of Mexico late last year, and within a month they had an approval for another 800,000 barrels per day pipeline to move tar sands crude from Flanagan Illinois east....Enbridge already has such an extensive US pipeline system in place that they're now planning to ship tar sands crude to two refineries in Quebec by pumping it first to Flanagan Illinois, then on through Michigan and Ontario to meet a Montreal pipeline which they're now reversing... furthermore, as we discussed earlier this year, eventual expansion of the Seaway pipeline system to Houston would double its capacity to 850,000 barrels per day when completed, even more than the expected 830,000 bpd capacity the Keystone XL would have had...and even without the Keystone, Canadian oil exports to the US have increased from 95.6 million barrels in August of 2013 to 121.5 million barrels in August of this while Keystone at 830,000 barrels per day would have carried about 25 million barrels of oil per month, without it our imports from Canada increased by 26 million barrels per month over the past two years anyway...

This Week’s Oil Data from the EIA

this week's data from the Energy Information Administration indicated a small decrease in our crude oil imports, an even smaller increase in our production of crude, a similar small increase in the use of that crude by refineries, and hence a smaller increase in the amount of surplus oil that had to be stored....for the week ending October 31, our field production of crude oil rose to 9,160,000 barrels per day, an increase of 48,000 barrels per day from the production of 9,112,000 barrels per day during the prior week, and still 2.1% greater than our production of 8,972,000 barrels per day during the week ending October 31st last year; that was also our highest output of crude since the last week of August, but still about 4.7% below the modern weekly record production of 9,610,000 barrels per day that was set in the first week of June this year...meanwhile, our imports of crude oil fell to 6,943,000 barrels per day during the week ending October 31st, an 89,000 barrels per day decrease from the 7,032,000 barrels per day we imported during the week ending October 23rd, but still 4.0% more than the 6,675,000 barrels per day we imported during the same week last year...however, checking the 4 week average of imports in the weekly Petroleum Status Report (62 pp pdf), we find that U.S. crude oil imports averaged 7.2 million barrels per day over the last 4 weeks, 0.8% below our imports in the same 4 weeks of last year...

meanwhile, crude oil used by US refineries averaged 15,637,000 barrels per day during the week ending October 30th, 21,000 barrels per day more than the week before, as our refineries operated at 88.7% of capacity during the week, up from 87.6% of their operable capacity during the week ending October 23, 2015, and just up a bit from the 88.4% of capacity they used during the week ending October 31st last year....gasoline production fell to an average of 9,537,000 barrels per day, while distillate fuel production was up a bit, averaging 4.9 million barrels per day....and while our ending gasoline inventories fell for the 4th week in a row, at 215,347,000 barrels those supplies still remain above the upper limit of the average range for this time of year...the greater usage of oil by refineries combined with a lower supply led to another drop in the oil left over that had to be stored, but we still added nearly 2.85 million barrels to our inventories during the week, lifting our stocks of crude oil in storage, not counting the government's Strategic Petroleum Reserve, to 482,810,000 barrels as of October 30th...we've now added roughly 28.8 million surplus barrels of oil to storage over the past 6 weeks, and we now have 27.0% more oil in storage than we had on October 31st a year ago, leaving us the most oil we ever had stored anytime in October in the 80 years of EIA record keeping, which had never seen more than 400 million barrels stored before this year...

Latest US & Global Rig Counts

the number of rigs drilling for oil in the US fell for the 10th week in a row, while the number of rigs drilling for gas rose for the 4th consecutive week...Baker Hughes reportedthat their count of active oil rigs fell by 6 to 572 in the week ending November 6th, while their count of active gas rigs rose by 2 to 199; those counts are down from the 1568 rigs, 356 gas rigs, and 1 miscellaneous rig that were active on November 7th of 2014....rig changes this week include a rig added on an inland lake, bringing the inland waters rig total up to 5, but still down from 13 a year ago, and one rig removed from offshore California, where none remain...we now have 32 offshore rigs still drilling, all in the Gulf of Mexico off Louisiana, which is down from 51 Gulf rigs and a total of 53 offshore rigs that were working the same week last year...

unlike last week, when 14 horizontal rigs were shut down, a net of 8 horizontal rigs were added this week, bringing the total of working horizontal rigs back up to 585, which is still well less than half of the 1362 horizontal rigs that were working a year ago...on the other hand, this week's vertical rig count fell by 7 to 105, well down from the 360 vertical rigs that were in use a year ago....the week also saw 5 directional rigs stacked, leaving 81, which is down from the 203 directional rigs that were in use the first week of November last year...

of the major shale basins, the Permian of west Texas saw an increase of 3 rigs, and they're now up to 232, which is still down from 567 last year at this time...2 rigs were added in Oklahoma's Arkoma Woodford, which now has 10, up from 6 a year ago, and which is the only major basin to show a year over year increase...single rigs were also added in the Mississippian lime of the Kansas Oklahoma border, and the Williston of North Dakota; the former now has 13, down from 76 a year ago, while the later is back up to 63, but down from 193 a year ago...meanwhile, the Cana Woodford of Oklahoma was down 4 rigs to 32, which is down from 39 a year earlier, while the Eagle Ford of south Texas was down 3 rigs to 72, 140 less than the 212 rigs working that area a year addition, the Barnett shale, underlying the Dallas-Ft Worth area, was down a rig to 5, which was down from 23 a year ago...

the state count shows New Mexico the big winner this week, as they were down 5 rigs to 37, leaving them 57 fewer than the 96 they had working last November 7th...California and Wyoming both shed 2 rigs; California now has 12, down from last year's 46, while Wyoming has 24, down from last year's addition, Oklahoma was down 1 to 83, which was down from 208 a year earlier...states adding rigs included Colorado, where they' were up 3 to 33, but still down from 75 last year, Kansas, where they now have 10, still down from 28 a year earlier, Texas, where their 340 count is down from 906 a year earlier, North Dakota, where their count of 63 is down from last years 181, and Illinois, where they now have 4 active rigs including at least 1 drilling a shallow horizontal well, up from just 1 rig a year ago...

this week also saw the monthly release of the global rig count for October, which unlike the weekly count, is an average of the number of rigs running in each country for the month, rather than the month end total...October saw an average of 2,086 rigs drilling for oil and natural gas around the globe, which was down from 2,171 in September and down from 3,657 rigs that were in use in October of last year...the lions share of the reduction was in the US, which saw 57 fewer rigs in October, and saw the total rig count average drop from 1925 last October to 971 with this addition, although Canada saw 184 rigs in October, up 1 from a month earlier, their count was down from 424 a year earlier...

the Middle East region saw an increase of 7 rigs for the month, as their count rose from 396 in September to 403 in October, with 54 of those offshore in the Gulf region, up from 47 offshore in September and 44 offshore a year ago, and their total active rig count is now up 13 from the 390 that we in use in the region a year ago....Abu Dhabi in the United Arab Emirates accounted for this month's increase, as they added 8 to the 40 rigs they had working in September, which was up from 35 a year ago...Egypt also added 2 rigs; they now have 40, which is still down from the 53 they were working last October...meanwhile the Kuwaitis idled 3 rigs, leaving them with 40 drilling, down from the 41 they were running in October of 2014...and the Pakistanis averaged 23 active rigs in October, down from 27 in September, but up from 19 a year earlier...meanwhile the Saudi rig count was unchanged at 125 in October, which was up from 108 a year earlier....note that Iran, Russia, and China are not included in Baker Hughes international data, although China offshore, with 28 rigs, is...

the Latin American countries saw a reduction of 27 rigs in October as the region averaged 294 rigs for the month, including 55 offshore; that was down from 393 a year ago, which included 84 offshore rigs at that time...Latin American countries idling rigs in October included Argentina, where they were down 5 to 105, but still up from 101 a year earlier, Brazil, where they were down 4 to 36, which was down from 46 a year earlier, Colombia, where they were down 6 to 20, and down from 44 a year ago, Ecuador, where they were down 5 to 6, which was down from 25 a year earlier, and Venezuela, where they were down 4 to 71, which was down from 73 last October...

elsewhere, the Asia-Pacific region had 213 drilling rigs working in October, 5 fewer than in September and down from 252 last October...the only notable change in the region was in India, where they reduced their 114 rigs to 110, which was down from 121 a year ago...the total count of rigs drilling in Africa fell by 3 to 93, which was down from the 125 rigs that were working on the continent in October a year earlier...Algeria was down 2 to 51 but up from 45 a year earlier, Gabon was down 2 to 2, down from 5 a year earlier, and Morocco saw their only 2 rigs shut down…meanwhile, the rig count in Angola rose from 7 to 12, which was still down from 14 a year ago...lastly, the rig count in Europe was down 1 to 108, and down from 148 a year ago, as Norway and Denmark both stacked two rigs, leaving Norway with 15, down from last year's 16, and Denmark with 2, down from 3 a year ago....and while the German rig count jumped from 1 to 3, it was still down from 4 a year earlier...


'Worse Than We Thought': TPP A Total Corporate Power Grab Nightmare -- 'President Obama has sold the American people a false bill of goods,' says Friends of the Earth.  As expert analysis of the long-shrouded, newly publicized TransPacific Partnership (TPP) final text continued to roll out on Thursday, consensus formed around one fundamental assessment of the 12-nation pact: It's worse than we thought. "From leaks, we knew quite a bit about the agreement, but in chapter after chapter the final text is worse than we expected with the demands of the 500 official U.S. trade advisers representing corporate interests satisfied to the detriment of the public interest," said Lori Wallach, director of Public Citizen's Global Trade Watch.  In fact, Public Citizen charged, the TPP rolls back past public interest reforms to the U.S. trade model while expanding  problematic provisions demanded by the hundreds of official U.S. corporate trade advisers who had a hand in the negotiations while citizens were left in the dark. On issues ranging from climate change to food safety, from open Internet to access to medicines, the TPP "is a disaster," declared Nick Dearden of Global Justice Now. "Now that we’ve seen the full text, it turns out the job-killing TPP is worse than anything we could’ve imagined," added Charles Chamberlain, executive director of Democracy for America. "This agreement would push down wages, flood our nation with unsafe imported food, raise the price of life-saving medicine, all the while trading with countries where gays and single mothers can be stoned to death." Major climate action groups, including and the Sierra Club, were quick to point out that the text was notable as much for what it didn't say as what for what it did. "The TPP is an act of climate denial," said 350 policy director Jason Kowalski on Thursday. "While the text is full of handouts to the fossil fuel industry, it doesn’t mention the words climate change once." What it does do, however, is give "fossil fuel companies the extraordinary ability to sue local governments that try and keep fossil fuels in the ground," Kowalski continued. "If a province puts a moratorium on fracking, corporations can sue; if a community tries to stop a coal mine, corporations can overrule them. In short, these rules undermine countries’ ability to do what scientists say is the single most important thing we can do to combat the climate crisis: keep fossil fuels in the ground."

FirstEnergy substation to benefit customers  - FirstEnergy is building a new substation that will not only benefit the oil and gas industry, but will improve service for customers in three counties. This substation will be built in Smithfield, and Todd Meyers, a Mon Power spokesman, said it will enhance service reliability for more than 6,000 Mon Power customers in Wetzel, Marion and Tyler counties. The project will cost about $63 million. Meyers said the project is similar to a substation that was built in Harrison County in 2014. He said there isn’t enough infrastructure there, so the company is building more support for the oil and gas industry. “We wouldn’t be building it if it weren’t for the need,” Meyers said. “It helps support the Marcellus shale, but it also benefits other customers.” This 138,000-volt substation will be located on 50 acres of land, but Meyers said it will only take up about 3.3 acres. Meyers said currently prices are low so there isn’t as much drilling with the oil and gas industry, but he expects that to change.

Gates Mills voters pass charter amendment requiring referendum for fracking on village land - — Voters approved a charter amendment intended to give residents more say over potential fracking in the village, according to unofficial election results from the Cuyahoga County Board of Elections. About 52 percent approved. The amendment, drafted with the help of defeated council candidate Charles Belson, would require voters to approve any new leases for horizontal oil and gas wells on village property or changes to existing gas and oil wells. There are multiple vertical wells in the village, but none of the larger, more-invasive horizontal wells. Villagers petitioned to have the issue placed on the ballot in an effort to gain more local control over drilling, since state laws regulate wells. Gates Mills is one of several Northeast Ohio communities that have been grappling with ways to prohibit drilling. Last November, Gates Mills voters rejected a proposed bill of rights intended to, among other things, give residents more control over drilling. The issue was a response to a controversial proposal by former Mayor Shawn Riley to form a land trust in hopes of building negotiating power with oil and gas companies. Riley did not seek re-election this year.

Youngstown voters reject an anti-fracking charter amendment for the fifth time: Backers of the anti-fracking Community Bill of Rights charter amendment in Youngstown lost for a fifth time, but it was, by far, the closest margin of defeat. The proposal lost by less than 3 percentage points, according to unofficial but final results from Tuesday’s election. “It’s great we came so close,” said Susie Beiersdorfer, a member of Frackfree Mahoning Valley. “I can’t say we’ll put another initiative on the Youngstown ballot. It’s very close. We may want to look into a recount.” The proposal that called for fracking to be banned in the city, which opponents and state officials say isn’t enforceable, hasn’t been close in the previous four attempts either. It lost by 13.7 percent in May 2013, 9.3 percent in November 2013, 8.3 percent in May 2014, and 15.4 percent in November 2014. Mayor John A. McNally, who opposed the proposal, said, “I’m happy that the charter amendment was defeated for the fifth time even though it was less than 3 percent. Voters stated that they don’t need this time of legislation in our charter.”

4 hatches found open in sunken barge in Lake Erie— The sunken tanker barge Argo is not leaking now, but when it sank 78 years ago during a Lake Erie gale it may have lost some of its 200,000-gallon cargo into the lake bottom. A Coast Guard contractor is scheduled to start taking 20-foot-deep samples today from the lake bottom around the wrecked barge, which was lost about eight miles east of Kelleys Island in 1937 and discovered in August by a shipwreck hunter. Lt. Ryan Junod, a spokesman for the Marine Safety Unit in Toledo, said an assessment by contractor T&T Marine Salvage, of Roseville, Mich., found eight of 12 hatch covers in place on the sunken barge, but the four forward hatches were open and their contents “had free communication with the water.” Test samples have been taken from sediment inside the open hatches, Lieutenant Junod said, and T&T took some preliminary sediment samples from the lake floor near the barge. But to get more information about how deeply any contaminants may have seeped into the lakebed, he said, a sonic drill had to be sent to the wreck site. It’s scheduled to start work today, and sample-taking could be a multiday task, depending on how far from the barge officials decide samples are necessary. The work also is weather dependent. Petroleum still could be inside the eight hatches that haven’t breached, the Coast Guard spokesman said. “There’s the potential for those tanks to be intact,” Lieutenant Junod said. But until officials know the condition of the surrounding lakebed, no attempt will be made to do anything of consequence with the sunken vessel, he said.

Feds consider fracking plan in Wayne forest - Columbus Dispatch - The federal government is considering, again, opening Wayne National Forest to fracking. Oil and gas companies have formally expressed interest to the U.S. Bureau of Land Management in hydraulically fracturing about 31,900 acres of the Wayne. The bureau is reviewing those requests to see if the federal government owns the mineral rights beneath those sections of the forest, and it plans to assess potential environmental risks. In the meantime, though, the bureau also has scheduled three public meetings to see what the public thinks about those plans. For environmental groups and residents throughout southeastern Ohio, though, it is a battle that has been fought before. Four years ago, oil and gas companies told the bureau they wanted to drill for oil and gas beneath the Wayne. Environmental groups and local residents were outraged, and, eventually, the bureau pulled the proposal. The areas that oil and gas companies have proposed for drilling are similar to the ones proposed in 2011. Roxanne Groff, a township trustee in Athens County who has opposed oil and gas drilling in the Wayne, said her concerns from the 2011 proposal haven’t gone away. “The concerns have even multiplied, because we know that fracking is problematic,” Groff said. “ And even though the industry continues to say it hasn’t caused any problems, we know that to not be true.” Oil and gas companies filed documents called “expressions of interest” with the Bureau of Land Management as a first step to opening the Wayne to fracking. The documents are public records, but the bureau did not make them available on Tuesday.

US looks at proposed fracking in national forest in Ohio — A federal agency is again considering requests to open Wayne National Forest in southeastern Ohio to oil and gas drilling. The Columbus Dispatch ( ) reports that oil and gas companies formally expressed interest to the U.S. Bureau of Land Management in drilling about 31,900 acres of the forest through hydraulic fracturing, or fracking. The bureau says it’s reviewing to see if the government owns mineral rights beneath those forest sections and to assess potential environmental risks. A bureau official says the agency has scheduled public meetings to discuss the industry’s interest and proposed leasing. Oil and gas companies told the bureau in 2011 that they wanted to drill beneath the forest. The proposal was dropped after opposition from southeastern Ohio residents and groups concerned that it would cause environmental problems.

BLM schedules hearings on fracking in national forest -- As the lead federal agency for federally owned minerals across the United States, the Bureau of Land Management (BLM) will begin Environmental Assessments (EAs) to consider whether or not to lease parcels on approximately 31,900 acres of the Wayne National Forest for potential oil and gas development. However, some environmentalists are charging that insufficient information about the proposal has been available in advance of the scheduled public meetings. Meanwhile, a pro-drilling group – LEASE – issued a release Monday praising the BLM for scheduling public scoping meetings in Athens and other small cities near the Wayne National Forest. Following the completion of each EA, according to a news release from the BLM, a decision will be made by the agency’s Northeastern States District to either approve leasing parcels, not approve leasing parcels, or complete an Environmental Impact Statement (EIS) to address leasing. As part of the process, public meetings will be held in Marietta, Ironton and Athens – all small Ohio cities near separate districts of the Wayne National Forest. The Athens meeting is set for 6:30-8:30 p.m. on Wednesday, Nov. 18, at the Athens Community Center. The meetings are intended to receive public comments on leasing federally owned minerals beneath the Wayne forest. Acres of interest by unit are included below, followed by time and location of the public meeting for each specified unit. Being considered for oil and gas development are 18,800 acres in the Marietta Unit of the Athens Ranger District (in Washington County); 9,975 acres in the Ironton Unit of the Ironton Ranger District (in Gallia County); and 3,150 acres in the Athens Unit of the Athens Ranger District (some in York Township, Athens County, and some in Monroe Township in Perry County).

Ohio's oil boom - The shape of things to come for the nation, maybe - Without even realizing it, presidential hopeful Donald Trump's swipe at fellow contender Gov. John Kasich (R-Ohio) may have unwittingly given all the GOP candidates another topic to use against their Democratic competition. As reported by Jeremy Pelzer of the Cleveland Plain Dealer updated on Oct. 30, 2015, The Donald's assertion that the economic upturn in the Buckeye State has nothing to do with Kasich's abilities, but instead just dumb luck due to geologists recently discovering shale oil and natural gas may not be 100 percent true. Yet the attempted zinger has brought the employment boon of hydraulic fracturing, or "fracking," to the forefront.  While many Americans have at least heard the phrases "shale oil" and "fracking," few are aware just how much shale oil and natural gas the United States is sitting on top of. In Colorado, Utah, and Wyoming's Greater Green River Basin alone, there are an estimated 1.82 trillion barrels of recoverable shale oil. Unbeknownst to most citizens is that the Green River Basin is one of the smaller shale gas regions in the country. Trillions of more barrels of oil and natural gas are in the East Texas Basin which stretches from the panhandle of Florida all the way to outskirts of Dallas. Then there's the staggeringly oil-rich Williston Basin which encompasses half of North Dakota, much of northeastern Montana, a sizable chunk of South Dakota and also stretches into neighboring Canada. Many more of our fellow citizens are completely unaware of such job generating areas such as the Fayetteville Shale Play that stretches the width of Arkansas. The Western Mountain states have literally millions of acres worth of shale gas plays and basins ranging from the Permian Basin in West Texas to the Montana Thrust Belt on the Canadian border. Then there's the massive Appalachian Basin. In what many have described as a figurative ocean of oil and natural gas, the Appalachian Basin stretches from the New York-Vermont border all the way to Alabama. Within the Appalachian Basin are three of the richest shale gas plays in the world, the Marcellus, Utica and Devonian. 

Plenty of room to hike frack tax - Columbus Dispatch  -- A handful of state legislators spent part of their summer doing research only to conclude what was obvious to begin with: Ohio has a low severance tax on fracking compared with the rates in other states. This data was already available, since Gov. John Kasich has been saying this for three years and Ernst & Young has produced two similar studies for the Ohio Business Roundtable since 2012.  The report clearly states: “Ohio’s total tax burden on the oil and gas industry is lower than or as low as every other state with a severance tax.” This is another way of calling Ohio’s tax rate a “total and complete rip-off to the people of this state,” as Kasich has. Yet even after confirming this fact on their own, lawmakers are in no rush to fix this and give Ohioans a fair return on the extraction of the state’s nonrenewable natural resources.  Many lawmakers have reaped generous political donations from oil and gas companies and have offered a variety of excuses for their unwillingness to raise the fracking tax. First, it was that Ohio would scare off hundreds of thousands of good-paying jobs if it raised taxes just as the boom in fracking began a few years ago. Then it was “requires more study.” Now? The data don’t bear out this doom and gloom, though. According to the most recent report released by the Ohio Department of Natural Resources, the second quarter of 2015 continued to see “ record numbers” in oil and gas production in the state. The first half of the year saw a 125 percent increase in oil production and a 160 percent increase in natural gas production, compared with the same period in 2014. They may be getting less for their product for the moment, but that doesn’t sound like an industry in dire straits ... nor in imminent danger of pulling out of Ohio.  Meanwhile, Ohio’s oil and gas resources are being drained at bargain-basement rates, and Ohioans are the losers.

Oil and Gas report, October 25-31  Drilling operations in the Marcellus and Utica shales slowed down considerably from October 25 to 31. Compared to Pennsylvania’s total of 58 permits approved in the previous week, the state’s Department of Environmental Protection issued only 31 permits.  Natural gas inventories just took a hit nationwide, which most likely was a result of decreased demand. Prices might have seen a slight rise, but National Fuel reported the lowest demand in the past 19 years.  Meanwhile, it’s been a pretty quiet week on the oil and gas front for Ohio. The state’s Department of Natural Resources reported zero permits for the state’s Marcellus formation and only one permit for its Utica formation between October 25 and 31. Despite the slow oil and gas week, Ohio’s Utica Shale-dominant acreage may give it a leg-up on other neighboring states’ energy industries. EQT CEO David Porges said his company plans to drill 10 to 15 wells in the Utica formation in Southwestern Pennsylvania and West Virginia. “If the deep Utica works, it is likely to be larger than the Marcellus over time,” he said. “We’re highly encouraged by the success we have seen in the Utica to date and over the next two to three years expect the dry Utica to become the primary focus of our development plan,” said Tim Dugan, chief operating officer for gas at Consol, which announced good initial results from a well in Monroe County, Ohio. Consol is fracking and completing wells but has stopped all drilling until 2017.”

Like Ohio, Pennsylvania embroiled in political fight over fracking taxes -  -- —Ohio's not the only state to have a high-stakes battle over oil and gas severance taxes, with hundreds of millions of dollars on the line. In neighboring Pennsylvania, the governor and state lawmakers are battling over creating the state's first-ever severance tax. Drilling for natural gas – and oil, to a lesser extent – has ramped up in both Ohio and Pennsylvania in recent years. Both states show how efforts to increase taxes on growing drilling activity in the areas have been resisted by the oil and gas industry and conservative lawmakers worried about smothering a potential energy boom in its infancy.  Pennsylvania and Ohio are responsible for 83 percent of the increase in U.S. natural gas production since 2009, according to federal statistics. Government forecasters predict the Marcellus Shale formation, which runs under eastern Ohio and much of Pennsylvania, will yield up to 147 trillion cubic feet of natural gas by 2040. And the Utica Shale formation, a few thousand feet below the Marcellus, may be even more promising. Pennsylvania Gov. Tom Wolf and Ohio Gov. John Kasich are each pushing to make shale drillers pay more to their states. But a severance tax has been a sticking point in a four-month-long budget impasse in Pennsylvania. And in Ohio, lawmakers removed Kasich's severance tax plan from the budget and have worked in vain for more than a year to find a compromise between the governor's office and the oil and gas industry, which opposes any tax increase.

Gas drillers to wait and see on Utica shale's promise - Big results from recently drilled Utica shale wells have several Marcellus producers eyeing a possible push into the deeper rock, though not every driller is sold on its promise.   Executives at Downtown-based EQT Corp. and Consol Energy Inc. in Cecil spent a chunk of time during quarterly earnings calls in the past two weeks discussing the potential of the layer, pegged by some to be more prolific than the Marcellus, which runs above it.  “If the deep Utica works, it is likely to be larger than the Marcellus over time,” “We're highly encouraged by the success we have seen in the Utica to date and over the next two to three years expect the dry Utica to become the primary focus of our development plan,” The Utica is less explored in Pennsylvania — development has centered on Ohio — but could hold as much or more recoverable gas than the Marcellus, a government report found this year. Companies pinched by the lowest gas prices in three years and extra costs for pulling low-priced liquids from so-called wet gas are lured by the possibility of getting more bang for their buck in the dry gas gushers, industry leaders and analysts say.  “Eventually, when we have a place to take it, it's going to be very good,” retired U.S. Steel CEO John Surma told financial and industry leaders during an energy summit in Pittsburgh last week, acknowledging the pipeline constraints that have contributed to depressed prices. Surma, a onetime Marathon Oil executive, serves on the boards of driller Concho Resources and Marathon Petroleum's pipeline partnership. Given the wells' costs, though, committing to their development likely will hinge on how they compete with cheaper Marcellus wells.

New law to give greater freedom for use of treated mine water in fracking process - Gov. Tom Wolf recently signed into law a bill that will give greater freedom to oil and gas companies to use treated mine water in the fracking process. The law, sponsored by freshman state Sen. Camera Bartolotta, R-46, Carroll Township, Washington County, could also result in a significant reduction in the demand for fresh water in Pennsylvania’s lakes and streams being used for fracking. Bartolotta said Friday that some oil and gas companies have already been using treated mine water for fracking, but added that certain liability issues prevented a large majority of companies from pursuing that option. Her bill, which attracted bipartisan support and support from the state Department of Environmental Protection, clearly defines who is liable during the process of transferring treated mine water from coal companies to fracking sites run by oil and gas companies. Specifically, the bill protects coal companies from being liable regarding the use of the water once it leaves their possession, and it protects oil and gas companies from liability in treating the mine water before it is in their possession. The issue is important for Bartolotta because her district, which includes parts of Beaver, Greene and Washington counties, is the “heart and soul” of both the oil and gas and coal industries in the region.

More than 1,500 file to intervene in PennEast pipeline project -- More than 1,500 people, organizations, municipalities and counties have signed on to get involved in the PennEast pipeline case, including Luzerne County Council and several local people. When PennEast Pipeline Co. LLC filed its application with the Federal Energy Regulatory Commission on Sept. 24, it started a 30-day period for interested parties to comment or intervene that ended on Thursday. As of Monday, when FERC posted the last of these on the docket, approximately 1,520 residents, landowners, organizations and municipalities filed to intervene. Interveners have legal standing in the case, and are also put on email lists to receive information. PennEast plans to construct a $1 billion, 114-mile, 36-inch diameter pipeline that would start in Dallas Township at the Transco interstate pipeline, run through Kingston Township, West Wyoming, Wyoming, Jenkins Township, Laflin Township, Plains Township and Bear Creek Township in Luzerne County, then go through Carbon, Northampton and Berks counties, cross into New Jersey and terminate in Mercer County, New Jersey. Many municipalities and counties along the route have filed to intervene, including Luzerne County, Plains Township and Dallas Township. The county’s request, filed Wednesday, states: “As representatives of persons residing in the areas where the pipeline is tentatively slated to be built, the members of the Luzerne County Council have concerns (that) the construction and completion of the pipeline will endanger the health, safety and welfare of the citizens and visitors of Luzerne County as well as deter the use and enjoyment of County recreational lands.”

Pennsylvania Township Passes Bill of Rights Banning Fracking Wastewater Injection Wells -- Last night, the people of Grant Township adopted the country’s first municipal charter establishing a local bill of rights. The Grant Bill of Rights codifies environmental and democratic rights, and bans fracking wastewater injection wells as a violation of those rights.  Grant joins growing numbers of communities across Pennsylvania and the U.S. that are coming together in a community rights movement to stand up to a system of law that forces fracking waste wells and other practices into communities, and protects corporations over people, communities and nature.  The passage of the Grant charter comes fourteen months after the township was sued by Pennsylvania General Energy Company (PGE) and the Pennsylvania Independent Oil and Gas Association (PIOGA). PGE proposed a fracking wastewater injection well for the community against the wishes of township residents. Injection wells have polluted drinking water and triggered earthquakes in several states.

"Abandoned" by EPA, Landowners from Dimock, Pavillion, Parker County Demand Inclusion in EPA National Fracking Study --  For the past five years, the EPA has undertaken a highly-consequential national study on the impacts that hydraulic fracturing (fracking) can have on American drinking water supplies. This June, the national study's draft assessment was released to the public, and while hundreds of spills, accidents, and even cases where fracking itself directly contaminated underground aquifers were reported by EPA, it was a phrase from the agency's press release that drew the attention of the national media: “hydraulic fracturing activities in the U.S. are carried out in a way that have not led to widespread, systemic impacts on drinking water resources.” It was a line that outraged those living on the front lines of the shale gas rush, where rural homeowners are no longer able to drink from their wells after the water turned odd colors, became laced with chemicals, or even could be lit on fire.A group of these individuals — all tied to some of the highest-profile multi-year battles over fracking and water contamination nationwide — arrived at a meeting of the EPA's Scientific Advisory Board (SAB) last Wednesday, Oct. 28th, to ask why the pollution at their homes and in their communities had been left out of EPA's draft assessment. Ray Kemble brought a yellowish-green jug of water from his home in Dimock, PA, and pre-tests showing that there was nothing wrong with his water before drilling and fracking. “I'd love to know why Dimock wasn't even included in this new study you did,” Mr. Kemble told the SAB. “I still don't have water at my house.” “All I want is you to come back and do your damn job and tell us the truth,” he told the assembled scientists.

Casey asks oil trains to slow down in Pennsylvania cities (AP) — A Pennsylvania senator is asking two freight railroad companies to reduce the speed of trains carrying flammable crude oil. Democratic U.S. Sen. Bob Casey wants CSX and Norfolk Southern to reduce speeds to 35 mph for oil trains traveling through major urban areas like Philadelphia and Pittsburgh. His letter to the railroads Wednesday called it a common sense stop to reduce the threat of derailment. Gov. Tom Wolf made the same request earlier this year. Neither railroad has agreed to slow their trains, saying their current safety approaches work. Pennsylvania has seen a huge increase in the number of oil trains from North Dakota. As many as 70 trains rumble across Pennsylvania each week. BNSF Railway has committed to a 35 mph limit in cities with populations greater than 100,000.

Weekly Natural Gas Storage Report - EIA: Working gas in storage was 3,929 Bcf as of Friday, October 30, 2015, according to EIA estimates. This represents a net increase of 52 Bcf from the previous week. Stocks were 371 Bcf higher than last year at this time and 147 Bcf above the 5-year average of 3,782 Bcf. In the East Region, stocks were 9 Bcf below the 5-year average following net injections of 32 Bcf. Stocks in the Producing Region were 145 Bcf above the 5-year average of 1,223 Bcf after a net injection of 16 Bcf. Stocks in the West Region were 11 Bcf above the 5-year average after a net addition of 4 Bcf. At 3,929 Bcf, total working gas is above the 5-year historical range.

Natural gas inventories fall short of expectations, but prices rise -- Projections for U.S. national gas storage inventory grew less than expected this week, but Market Realist says that industry isn’t suffering too much. In its weekly natural gas update, the U.S. Energy Information Administration indicated that natural gas storage inventories increased by 63 billion cubic feet, falling short of the 69 billion cubic feet mark that was originally predicted. As of October 29, U.S. inventories store a total of 3,977 billion cubic feet of natural gas. When natural gas inventories dip, it can mean one of two things: there was either more demand or less supply than expected. In this case, it seems as though it was demand that took a hit last week. From October 21 to 28, total U.S. consumption fell 0.4 percent, led by a 2.2 percent loss in the residential and commercial sector and 0.1 percent in the industrial sectors. The power sector, however, saw a rise of 1.1 percent. Though Market Realist says loss of demand usually results in lower natural gas prices, it later reported an 11 percent jump in prices, driving the price up to $2.26 per million British thermal units as of October 29. Ascending prices result in increased revenue not only for natural gas producers, but also Master Limited Partnerships (MLPs), which usually deal with energy infrastructure like pipelines, processing plants and terminals.

Frackers Fail To Challenge New York Frack Ban! - Giving a new meaning to ‘fracking chicken hawks,’ who threatened to sue towns, sue the state, sue the Governor, sue the DEC, harass individuals, frack with propane, secede from the state and have just generally made nuisances of themselves over fracking in New York for the last 10 years or so. Time has officially run out on any legal challenges to New York’ frack ban. After years of fracking hype, the oil and gas industry has left New York with nothing but a lot of hot air.  I don’t suppose they plan to secede now either, huh ? Think that was just a fracking crock too ? Like that napalm clusterfrack. ALBANY — The oil-and-gas industry will let a key deadline pass without challenging New York’s ban on large-scale hydraulic fracturing.  API New York, the state chapter of the American Petroleum Institute, will not file what’s known as an Article 78 challenge against the state’s fracking ban, according to executive director Karen Moreau.Tuesday was the deadline to file an Article 78 claim, a legal process used to challenge an official state action or determination.  Instead, Moreau said the trade organization — which has long been assessing its legal options related to the ban — is weighing other potential legal remedies. And the group is “closely watching” a challenge to the ban filed earlier this year by East Rochester-based attorney David Morabito, on his own behalf, representing himself. The lawsuit from Morabito, who owns land in Allegany and Monroe counties, seeks to force the state Department of Environmental Conservation to allow high-volume fracking on his property. It is based largely on a January letter from a DEC official informing him the state’s ban applies to his property. He argues that the state’s research, detailed in part in a health report released last December, doesn’t justify the ban.

Letter: Kinder-Morgan pushing a dying energy source - The pictures in a recent Berkshire Eagle article displayed a stark reality: Kinder-Morgan hired a "security" force to protect themselves from an informed public, not to protect the public. Indeed, if they were building a solar panel production site, there would be no need for a security force at all. Unfortunately, Kinder-Morgan is greedily prolonging the life of a dinosaur paradigm: extraction of energy from fossil fuels.  In Western Mass., we must fight against another terrible aspect of the accelerating fossil fuel colonization of America — the potential building of a fracked gas pipeline and a poisonous compressor station in Windsor. If one thinks about it, Kinder-Morgan's "Northeast Energy Direct" pipeline proposal (and many others) enables and exacerbates the fracking of gas and oil in states such as Pennsylvania, Ohio, Colorado, California etc. The citizens in fracked sites are suffering from this pillaging and are fighting fossil fuel companies for their health, safety, environment and property. The rest of the world is racing ahead of America by ending its reliance on fossil fuels and is in a rapid transition to renewable energies, energy conservation and efficiency. We don't need this fracked gas and we don't want it in Windsor or anywhere else. Get on the right side of history and tell your elected officials to oppose the "Northeast Energy Direct" pipeline proposal before it's too late.

Fracking rules for coastal Virginia focus of 2 hearings - (AP) — Hearings are scheduled this week on proposed new rules for oil and gas drilling in Virginia’s coastal plain. The Virginia Department of Mines, Minerals and Energy has scheduled hearings Monday and Tuesday in the Fredericksburg area and in Richmond. The hearings will focus on proposed changes in so-called fracking, a drilling process that uses a cocktail of water and chemicals to free natural gas from shale. Among the changes in proposed rules is the greater disclosure of those chemicals used in hydraulic fracking. Energy companies have indicated an interest in drilling in areas east and south of Fredericksburg where large reserves of natural gas are located.

Customer groups to PSC: Stop allowing gas hedging -- Customers of Florida Power & Light Co. and the state’s three other investor-owned electric utilities have lost more than $6 billion since 2002 because the utilities have purchased natural gas to run their plants through hedging rather than on the open market. On Monday, the Office of Public Counsel, which advocates for ratepayers, the Florida Industrial Power Users Group, the Florida Retail Federation and phosphate producer PCS Phosphate called for the Florida Public Service Commission to stop allowing hedging on natural gas by the utilities. FPL, Duke Energy Florida, Gulf Power and TECO don’t dispute the losses, but say that hedging has been successful because it has reduced price volatility for customers. Customers pay for fuel as a “pass-through” charge on their bills, meaning the utilities do not make a profit on the fuel. Collectively, the four power companies have 7.8 million customer accounts. “FIPUG members would rather pay at the pump,” said FIPUG attorney Jon Moyle at the PSC meeting in Tallahassee. “Hedging has not worked to our liking. We ask you to discontinue it.

Texas regulator maintains gas company permits despite earthquakes -— The regulatory agency overseeing the oil and gas industry in Texas has voted to maintain the wastewater injection permits for two companies whose North Texas wells are believed to have caused a series of small earthquakes. The Texas Railroad Commission decided Tuesday to allow the permits. The commission previously ordered hearings after a university study suggested the companies’ wells were responsible for quakes that shook Reno. The study concluded that rumblings in the shallow Ellenburger formation that migrated down the fault into the deepest layer of rock triggered the quakes. But the commission determined in September that seismicity was likely not caused by injection wells, which store briny wastewater from hydraulic fracturing. Commission staff testified Tuesday that the study established a correlation “too small to imply a causal relationship.”

Sub-$50: When ‘fracking does not work’  -- The downturn shows no signs of reversing for the oilfield services industry, and now these businesses that represent some of the top private employers in Odessa face a deepening pain, particularly those that frack wells. Today, about half of the fracking companies who were bidding on new work in the Permian Basin at this time last year continue to do so today. And the major public companies show signs of stress, announcing new rounds of layoffs in recent earnings calls. These developments suggest the smaller companies face what one analyst described in an interview as the “point of maximum pain” after dropping their prices in an estimated range of 30 to 60 percent. Halliburton executives, for example, recently revealed that they laid off another 4,000 jobs worldwide during the three-month period ending Sept. 30, bringing the total job losses to about a fifth of the service giant’s workforce, not layoffs could lie ahead. Revenue dropped from $8.7 billion to $5.6 billion, and in North America, operating income has fallen to about breakeven levels, company officials said. The rest of the year, they forecast, looks worse. “Literally U.S. fracking does not work at this pricing — it’s uneconomic,” said Joseph Triepke, a financial analyst from Odessa and the managing director of “The operators have pressed these guys so much that they margins they are making, they might be able to pay their people, they might be able to keep fuel in the tanks, but the equipment will start to deteriorate and they won’t have money to repair it.”

Iowa landowners hope regulators hear their pipeline concerns — The Iowa landowners who oppose a proposed pipeline to carry North Dakota oil to Illinois hope state regulators will consider their concerns about the project. Rancher Jack Montgomery tells the Sioux City Journal that the pipeline Dakota Access has proposed has started to seem like a done deal.  “If it does go through, I just don’t want it to go through my land. Go around me,” Montgomery said.  The Iowa Utilities Board is scheduled to begin pipeline hearings on Nov. 12 after a judge ruled that landowners should take their concerns to regulators before filing a lawsuit. Dakota Access is storing pipe for the project near Newton and Keokuk in Iowa and just over the border near Canton, South Dakota. An appraisal firm has also contacted landowners about inspecting land along the route Don Tormey, who is a spokesman for state regulators, said the board hasn’t made any decision on the 348-mile pipeline route across Iowa. “The storing of pipe does not have any impact on the board’s decision in this case,” Tormey said. “The stockpiling of pipe would be a Dakota Access business decision, and they do so at their own risk.”

Rand Paul opposes eminent domain for Bakken line — Kentucky Sen. Rand Paul lent his ear and voice Saturday to the plight of farmers balking at the possible use of eminent domain to take their land for the Bakken crude oil pipeline. Paul, who is seeking the Republican nomination for president, visited the Van Gorp 1,400-acre livestock and crop farm here about 10 miles south of Newton. “There are times we have to use eminent domain for roads and things like that, but for this, if it is going to another private property owner, I don’t think the government should be taking property through eminent domain,” Paul said. The proposed pipeline would pump up to 570,000 barrels of oil per day from the Bakken and Three Forks region of North Dakota through South Dakota and diagonally across Iowa to a terminal in Patoka, Ill. Each state will need to grant permission separately. Multiple generations of the Van Gorps, who farm several properties in the area, and other local farmers came to discuss issues of the pipeline and eminent domain. “They try to scare you into cooperating,” said Jim Strover, of Newton. Strover said he receives regular mailings signed by lawyers that he feels are attempts to scare him into agreeing. Strover said he hasn’t and won’t be willing to grant an easement for Dallas-based Dakota Access LLC to build the pipeline. “If the pipe breaks and the oil leaks out on the ground, it takes 10 years before you can grow anything again,” Strover said. “You ruin the soil.” The Van Gorps signed an easement early at a “very good price” but did so because of the threat of eminent domain, said son Bryce Van Gorp and father Carroll Van Gorp.

Midwest's frac sand industry falters as oil prices drop - "We opened on Memorial Day weekend, and a few weeks after that, they started laying people off and shutting plants down," Tom Bischel said. "You can't plan for that. Nobody could." The dramatic change is the result of sand shipments plummeting in response to lower oil prices. The price of a barrel of U.S. West Texas Intermediate crude oil closed at $44.60 on Oct. 23, down 47 percent from $84.40 a year ago and down nearly 60 percent from June 2014 when Eau Claire gasoline pump prices peaked at $3.74 a gallon. As oil prices have fallen, so has the demand for energy produced by the nation's shale oil industry and for the Wisconsin sand -- much of which is mined in the region within a 60-mile radius of Eau Claire -- that has become a key ingredient in America's recipe for domestic oil.  Wisconsin is the nation's leading producer of sand used in hydraulic fracturing -- the drilling technique commonly known as fracking that involves injecting a mixture of sand, water and chemicals deep into underground wells to force oil and natural gas to the surface. Wisconsin sand, prized by frackers for its ideal size, shape and durability, is shipped to drilling sites in states including North Dakota, Pennsylvania and Texas.  The latest fallout came last month when Hi-Crush Services revealed in a filing with the state Department of Workforce Development that it was laying off 27 workers and suspending production at its site at S11011 Highway M in Augusta.   Similar shutdowns have occurred throughout the region. In Chippewa County, only one of the six operational mines, the Chippewa Sands property in the town of Cooks Valley, is still mining, said county conservationist Dan Masterpole.

U.S. propane exports increasing, reaching more distant markets - Today in Energy - U.S. (EIA)  As U.S. propane production has increased and domestic demand has remained relatively flat, the United States has transitioned from being a net propane importer to a net exporter. Facilitated by rapid expansion in the capacity to export domestic supply, propane exports from the United States are changing traditional propane trade patterns across the globe.The initial growth in U.S. propane production, between 2008 and 2010, led to a reduction in dependence on propane imports, with net imports falling from an average of 109,000 barrels per day (b/d) in 2008 to a near-balance of 16,000 b/d in net exports in 2010. By 2011, only Canada remained as a major supplier of propane into the United States, with imports from other countries relegated to deliveries to Hawaii and occasional shipments into the Northeast.  On the international market, propane prices are typically set by the Saudi Aramco monthly contract price (ACP). Saudi Aramco generally bases its propane price on naphtha, a light petroleum product created through refining crude oil, because naphtha competes with propane as a petrochemical feedstock. In 2005, when the United States was still a net importer of propane, the U.S. price of propane at Mont Belvieu, Texas, averaged a 3 cent per gallon (gal) premium to ACP. Growing U.S. propane exports began to approach the capacity of export terminals, resulting in Mont Belvieu prices that were lower than the international market, averaging an 89 cent/gal discount in 2012. The wide price differential prompted the construction of new export terminal capacity, and as export capacity in the United States grew, the spread between international and U.S. propane prices gradually narrowed.

LETTERS: Fracking doesn't affect water? Visit North Dakota - Las Vegas Review-Journal -  In my 70 years of life in this desert I have learned one thing: Without clean water you can't make beer. Even more important than making beer, water is essential to life. Without clean water you can't have a healthy life. Heck, you can't even have a decent shower. I recently got to go to a wedding in Bakersfield, Calif. My nephew flew in from the oil fields in North Dakota. Over the course of the wedding I got to talking to him, and he would tell us about how bad it is in North Dakota. The guys on the oil crews can't even take a shower without the oil company trucking in water. And in the places where they are going after methane, the crews can literally light the water from their faucets on fire, a result of built-up methane gas. To top it all off, he told us about the work sites around him being closed down because it's not economically viable to go after what's there. In its Tuesday editorial, the Las Vegas Review-Journal cites a lot of claims that fracking doesn't hurt groundwater without delving into the funding sources of the scientists who conducted the studies to ensure there is no conflict of interest. The Review-Journal also claims that this type of development is sustainable. I invite the editorial page staff of the Review-Journal to take a trip and shadow my nephew for a day.

What Does Exxon Know About Fracking That It's Not Saying? -  Wenonah Hauter: Corporations have a long and shady track record of hiding critical information from the public. For years, tobacco companies hid the science that showed cigarettes caused cancer. Now, the Los Angeles Times and Inside Climate News are reporting that oil giant ExxonMobil sat on decades worth of studies that indicated fossil fuels were killing the planet -- and then spent millions to cover it up. According to the Times one of Exxon's scientists told company executives in 1992 that "potential global warming can only help lower exploration and development costs" in the Arctic region. Maybe that's why ExxonMobil has spent $31 million since 1998 to fund climate denier think tanks and politicians, while keeping its research out of the hands of the concerned public. It's no leap to wonder if the company -- the largest fracking company in the U.S. -- is doing the same thing to mislead and deceive the public around fracking safety. The oil and gas industry's spin machine has worked for years to ensure that fracking -- an extreme form of fossil fuel extraction -- has a place in the future energy mix. The industry spent at least $721 million in 2014 pushing its fossil fuel agenda in Washington, D.C. The industry's aggressive lobbying and the inclusion of fossil fuels in the Obama administration's climate action plan cannot be a coincidence.

Audit finds railroad safety lacking during high oil traffic — Montana’s oversight of railroad safety falls short at a time when volatile crude oil train traffic from the Bakken region, already high, is only expected to increase, a new audit found. Montana has no active rail safety plan and employs only two inspectors to cover the vast state, the Montana Legislative Audit Division report released Wednesday said. In addition, there is a lack of statewide emergency planning and hazardous-material response capability should an oil spill occur, the report found. That’s a potentially precarious situation with oil a new crude oil transfer station in North Dakota coming online that should boost oil traffic crossing Montana from about 10 trains a week to up to 15 cars per week. One out of every five Montanans lives in an evacuation zone for an oil-train derailment, which is within a half-mile of a rail line, the report said. Trains carrying Bakken crude have been involved in fiery derailments in six states in recent years. In 2013, a runaway train hauling crude from the Bakken derailed and exploded in downtown Lac-Megantic, Quebec, killing 47 people. More recently, a train hauling Bakken crude derailed and spilled 35,000 gallons near the remote northeastern Montana town of Culbertson in July. That area was highlighted in the audit for its lack of equipment and trained manpower to respond to a spill.

Buffett's BNSF helped lead fight to delay train safety technology | Reuters: When an Amtrak passenger train derailed in Philadelphia in May, killing eight people and injuring scores more, the railroad industry's campaign to delay a Dec. 31 deadline to install technology to prevent such disasters appeared to be finished. Not, as it turned out, if billionaire investor Warren Buffett and Sen. John Thune, a South Dakota Republican, had anything to do with it. Thune chairs the Senate Commerce Committee, which oversees the rail industry. Last week, under pressure from companies including Buffett's BNSF Railway Co, which has spent more money lobbying Congress this year than any other railroad, U.S. legislators passed, and President Obama signed, a law that delays the so-called positive train control mandate for at least three years, with the possibility of an additional two-year delay. That means railroad operators can put off having to buy and install equipment that safety advocates say would have prevented accidents that have claimed more than 245 lives and caused over 4,200 injuries since the National Transportation Safety Board began calling for the technology in 1969. Railroad advocates presented a blunt argument: Unless the mandate to install positive train control technology was delayed, the railroads would attempt to cripple the economy.  Railroads that missed the deadline to install systems that automatically slow or stop a train under dangerous circumstances claimed that they would face heightened liabilities by operating outside of federal law, and that therefore they would decline to carry passengers, including commuters. They wouldn't deliver commodities that are classified as hazardous, but are also vital to the economy – including chemicals like chlorine and ammonia needed to run city water treatment plants, refine oil and keep farms and factories running.

With Cancellation Of Spiritwood Fertilizer Plant, MDU Cancels 96-Mile Pipeline -- - Natural Gas Intel is reporting: With a collapse of plans for a highly promoted multi-billion-dollar fertilizer plant in the state, North Dakota-based MDU Resources Group's pipeline unit on Wednesday pulled its application at FERC for a 96-mile, 20-inch diameter natural gas pipeline that would have served the proposed plant. The prospects for MDU's WBI Wind Ridge Pipeline became doubtful last August when St. Paul, MN-based agricultural cooperative conglomerate CHS Inc. decided to drop its plans to develop a major natural gas-based fertilizer plant (see Shale Daily, Aug. 17). On Wednesday, WBI Energy withdrew its pre-filing application at the Federal Energy Regulatory Commission for the proposed pipeline extension and a related compressor station near Spiritwood, ND.  Originally touted three years ago, the project was endorsed by North Dakota Gov. Jack Dalrymple as the largest single private investment ever proposed in the state. The plant was slated for 200 acres in Spiritwood and was expected to add 100-150 new jobs.

U.S. oil refiners look abroad for crude supplies as North Dakota boom fades – PBF Energy Inc, one of the largest independent oil refiners in the United States, spent heavily in recent years to build the rail terminals at its Delaware City complex that it needed to take delivery of large loads of crude coming from North Dakota’s Bakken oil fields. But now it is considering eliminating those deliveries altogether, and replacing them with foreign crude imports, according to two sources familiar with the situation. It has even closed its small Oklahoma City office that was only opened in 2013 and had served as a hub for the company’s trading in North Dakota’s oil, the sources said. The sudden lack of interest in Bakken crude by PBF, which is run by Thomas O’Malley, one of the biggest names in the U.S. oil refining industry, reflects a dramatic recent change in the way East Coast refineries are sourcing the crude that they turn into everything from gasoline to heating oil and jet fuel. The boom in the output of oil from North Dakota’s shale has ebbed as producers have begun to cut back in the face of the plunge in prices by nearly 60 percent since the summer of 2014. North Dakota’s Bakken production peaked at 1.153 million barrels per day in June, and had fallen to 1.13 million barrels per day by August, according to state data. The supply restraint has made Bakken crude relatively more expensive after transport costs than oil shipped from Latin America, the Middle East and Africa, prompting East Coast refiners to return to a foreign crude diet they derided as unprofitable five years ago.

Hoeven requests updated oil & gas reserve estimates for Williston Basin - U.S. Sen. John Hoeven (R-ND) has requested that the U.S. Geological Survey (USGS) complete an updated study assessing the amount of recoverable oil and gas reserves locked away in the Williston Basin. As reported by the Forum News Service (FNS), Hoeven made the request to Dr. Suzette Kimball, who was nominated to become the director of the USGS. She said that if confirmed, she would work with Hoeven to secure an update. Hoeven said, “USGS released its last estimate for the Bakken and Three Forks in 2013. That assessment more than doubled the previous estimate and has been tremendously helpful in attracting infrastructure investment along with energy development.” The April 2013 report conducted by the USGS stated that the amount of technically recoverable oil was an estimated 7.4 billion barrels, more than double the previous recoverable reserve estimates for the Williston Basin. The report also estimated that there is 6.7 trillion cubic feet of recoverable natural gas. Although North Dakota production decreased slightly from the steady 1.2 million barrels per day sustained over the summer months, there remain an estimated 1,000 wells that have been drilled but uncompleted. With improved drilling and hydraulic fracturing techniques being employed in the field, operators are witnessing increasingly higher rates of return. As technology continues to advance, the amount of recoverable oil in the Bakken formation could continue to increase.

Only 1 Percent Of Bakken Shale Is Profitable At These Prices -- Only 1 percent of the Bakken Play area is commercial at current oil prices based on my analysis that follows. Only 4 percent of horizontal wells drilled since 2000 meet the EUR (estimated ultimate recovery) threshold needed to break even at current oil prices, drilling and completion, and operating costs. The leading producing companies evaluated in this study are losing $11 to $38 on each barrel of oil that they produce, the very definition of waste. Although NYMEX prices are about $46 per barrel, realized wellhead prices in the Bakken are only $30 per barrel according to the North Dakota Department of Mineral Resources. At that price, approximately 125,000 acres of the drilled play area of 10,500,000 acres is commercial (green areas in Figure 1).  Bakken Shale Play commercial area map at $30 per barrel wellhead price. Contours are in barrels of oil estimated ultimate recovery. Contour interval = 200,000 barrels of oil. Source: Drilling Info, North Dakota Department of Natural Resources & Labyrinth Consulting Services, Inc.  (click image to enlarge)  The break-even per-well EUR is 700,000 barrels at a $30 oil price. The underlying economic assumptions are shown in Table 1. There has been much debate about the break-even price for tight oil plays in the U.S. This discussion is largely meaningless because there is no single break-even price for any play.

Bakken crude-by-rail: Montana train derailments caused by heat, tracks -- BNSF Railway has determined that the cause of two July train derailments in eastern Montana were the result of tracks that buckled in the summer heat, reports the Forum News Service (FNS). One of the incidents, which occurred on July 16, caused 22 oil tankers to derail 5 miles east of Culbertson, releasing 35,000 gallons of Bakken crude. The derailment was caused by what is known as a sun kink, or “thermal misalignment,” which happens when rail tracks expand with heat and then buckle. The same cause has been attributed to the July 14 derailment, which occurred about 10 miles west of Culbertson, but didn’t involve a spill. Although BNSF has reported the cause of the derailments, the Federal Railroad Administration (FRA) said it is still conducting its investigation. As reported by FNS, BNSF has reported to the FRA that both incidents resulted in about $3.2 million worth of damages to both equipment and tracks. A BNSF spokesman said the company inspects bridges and tracks more often than what the FRA requires. The derailments prompted the Montana Legislature to perform an audit on the state’s rail safety and inspection program. A report released last week points to weaknesses in the state’s ability to provide oversight of rail safety and bemoaned the lack of emergency response teams in the northeast region. The closest hazmat team is located in Billings, nearly 300 miles from where the derailments occurred.

Agriculture secretary: Cancel leases on sacred land— U.S. Agriculture Secretary Thomas Vilsack has recommended the cancellation of long-suspended oil and gas drilling leases near Glacier National Park, federal officials disclosed Monday. The 18 leases are on land considered sacred to the Blackfoot Indian tribes of the United States and Canada. A drilling suspension has been in place since the early 1990s. The owner of one of the leases had challenged that prohibition in federal court, hoping to extract natural gas from the area. But lifting the drilling ban would have “adverse effects” on the site in the Badger Two-Medicine area of northwestern Montana, Vilsack wrote in a Friday letter to Interior Secretary Sally Jewell. “I find that the balance of considerations weigh in favor of not lifting the suspension of operations and production,” Vilsack wrote. He added that the leases themselves should be terminated. Jewell’s agency will have the final say.

The Heroic Resistance of a Latino Community Besieged by Fracking -- This siege takes place in hundreds of Latino communities across the country, and one of these heroes is Juan , an organizer with the Center on Race, Poverty and the Environment, in Kern County, California. Flores's fight is nothing short of heroic.  Kern County generates over 75 percent of California's oil output, including 95 percent of the fracking that occurs in the state, more than any other county in the nation. And the price the overwhelmingly Latino population pay for this is heartbreaking. "We have one of the highest asthma rates in the country, especially among our children," says Flores. "It is sad for a kid to live with the reality of having an asthma attack every other day. They cannot catch a break. That's why we are putting up a fight." According to a 2014 National Resources Defense Council study, close to 2 million Californians, who already put up with very high levels of other kinds of pollution, are living within a mile of an oil and gas development. Of them, a breathtaking 92 percent are communities of color. The report also found that in Kern County, 64 percent of people living within one mile of an oil or gas well and in areas facing the worst environmental health threats are Latino.

Gov. Jerry Brown had state workers research oil on family ranch: Gov. Jerry Brown last year directed state oil and gas regulators to research, map and report back on any mining and oil drilling potential and history at the Brown family's private land in Northern California. After a phone call from the governor and follow-up requests from his aides, senior staffers in the state's oil and gas regulatory agency over at least two days produced a 51-page historical report and geological assessment, plus a personalized satellite-imaged geological and oil and gas drilling map for the area around Brown's family ranchland near the town of Williams.Ultimately, the regulators told the governor, prospects were “very low” for any commercial drilling or mining at the 2,700-acre property, which has been in Brown's family for more than a century. Through the state's open records law, the Associated Press obtained the research that state regulators carried out for Brown, and the emails among senior oil and gas regulators scrambling to fulfill the governor's request. Brown spokesman Evan Westrup declined to discuss the work for the governor, referring the AP to California's Division of Oil, Gas and Geothermal Resources. That agency said the work was a legal and proper use of public resources — and no more than the general public would get. But oil industry experts said they could not recall a similar example of anyone getting that kind of state work done for private property.

Congressional Energy Chairs Form Fundraising Committee, Rake In Oil, Gas Cash As They Push Bills For Fossil Fuel Industry: The fossil fuel industry had already managed to shape a bill moving rapidly through Congress last summer, gaining provisions to ease its ability to export natural gas. But one key objective remained elusive: a measure limiting the authority of local communities to slow the construction of pipelines because of environmental concerns. Then, U.S. Rep. Fred Upton, a Michigan Republican who chaired the House Energy Committee, gave the industry an opportunity to amplify its influence. Joining forces with Sen. Lisa Murkowski, the Alaska Republican who chaired the Senate Energy Committee, he launched a so-called joint fundraising committee, a campaign war chest that would accept donations from a range of contributors, with the proceeds divided between the two lawmakers. Executives at one of the nation’s largest natural gas pipeline companies soon deposited more than $80,750 into the joint fund’s coffers. The very next day, Upton delivered on the industry’s aspirations: He rushed a bill through his legislative panel that would not only streamline the approval process for new pipelines but also empower federal officials to impose tight deadlines on state and local governments seeking to review their potential environmental impacts.

KunstlerCast 271 – A Conversation with Gail Tverberg of -  Kunstler - Original audio source.   A conversation with Gail Tverberg of Gail Tverberg is an analyst who has been researching the connection between oil limits and the economy for nearly 10 years.  She writes a widely-followed blog called Our Finite World. Her background is as an actuary, working as a consultant to insurance companies. She also has a foot in the academic world, where she has lectured and written academic articles. Gail was in China in March-April of this year lecturing at China University of Petroleum in Beijing and is scheduled to return next spring, to teach another class.

New Bill Would Keep Fossil Fuel Reserves On Public Lands In The Ground --  Over the past year, environmentalists have called for keeping significant stores of the world’s remaining fossil fuel stores in the ground in order to curb climate change — a call that’s backed up by science. Now, a new bill aims to do just that.  Sen. Jeff Merkley (D-OR), along with Senator and presidential candidate Bernie Sanders, is introducing a bill Wednesday that would bar new leases on coal, gas, oil, and tar sands extraction on public lands in the U.S. The bill, titled the Keep it in the Ground Act, would also prohibit offshore drilling in the Arctic and the Atlantic Ocean and prohibit the renewal of leases that haven’t yet produced fossil fuels.   “This bill is about recognizing that the fossil fuel reserves that are on our public lands should be managed in the public interest, and the public interest is for us to help drive a transition from fossil fuels to a clean energy future,” Merkley said on a press call Tuesday. Merkley referenced findings from earlier this year that 80 percent of coal reserves — along with a third of global oil reserves and half of global natural gas reserves — should stay in the ground between now and 2050 in order to keep warming to 2°C, the limit that many scientists agree we need to stay below in order to avoid the worst effects of climate change. Banning new oil and gas leases on public lands, as the bill would do, would be a step towards this target. “Many leases are exploited for decades — you have leases for gas that can go 30 years and leases for coal that can go 40 to 50 years, so doing new leases locks in fossil fuel extraction for decades to come,” Merkley said. “That’s not in the public interest.”

Keep it in the ground: Bernie Sanders wants to ban new fossil fuel development -- On Wednesday, presidential hopeful Bernie Sanders announced his support for a new bill that would ban all new fossil fuel development on United States’ federal lands while cancelling the current leases which aren’t producing, reports Mother Jones.. The bill, titled the “Keep It In The Ground Act,” would also prohibit offshore oil and gas drilling in both the Arctic and Atlantic, in addition to halting the issue of new leases for offshore drilling in the Pacific and the Gulf of Mexico. At a rally at the Capitol in Washington D.C., Sanders told the audience, “I believe all of us have a moral responsibility. That’s just the simple truth.” He added that if the US doesn’t become more proactive about reducing the amount of carbon emissions created by burning fossil fuels, “the planet that we’re going to be leaving for our kids is something we should be ashamed of.” As reported by Mother Jones, the Vermont senator made the announcement alongside Oregon Senator Jeff Merkley (D). A statement released by Merkley’s office stated that the new legislation was constructed to leave “over 90 percent of the potential carbon emissions from oil, gas and coal on our federal lands and federal waters underground forever.” In addition to condemning the burning of fossil fuels, Sanders also admonished the opposing Republican Party and its members’ reluctance to take action on climate change. He indicated that many Republicans ignore the scientific facts regarding climate change, but wouldn’t dispute the fact that smoking tobacco can lead to cancer. He said, “But somehow – somehow! – when it comes to climate change there are massive attacks on scientists who tell us the truth about climate change.”

Stone Energy Corporation Announces Third Quarter 2015 Results -  -- Stone Energy Corporation today announced financial and operational results for the third quarter of 2015.  Stone had a third quarter of 2015 adjusted net loss of $8.4 million, or $0.15 per share, on oil and natural gas revenues of $128.4 million, before a pre-tax non-cash impairment charge of $295.7 million related to the impairment of oil and gas properties.  The non-cash impairment of oil and gas properties is primarily due to lower oil and gas prices, widening basis differentials and increased transportation, processing and gathering expenses in Appalachia, which reduced the future net cash flows from proved reserves.  If the net capitalized costs of proved oil and gas properties exceed the estimated discounted future net cash flows from proved reserves, an impairment occurs. After the non-cash impairment charge, the reported net loss was $292.0 million for the third quarter of 2015.  Please see "Non-GAAP Financial Measures" and the accompanying financial statements for a reconciliation of adjusted net income, a non-GAAP financial measure, to net loss.

Noble Energy, Weld County’s second largest oil and gas producer, reports $283 million third-quarter loss -- Noble Energy on Monday reported a third-quarter loss of $283 million. “Noble Energy delivered tremendous performance in the third quarter,” said David Stover, Noble Energy’s chairman, president and CEO in a news release. “This was highlighted by material reductions in our quarterly capital and controllable unit costs, which were driven by continued operational efficiency gains throughout the business.” The news is not surprising in today’s commodities markets, and especially since Weld County’s No. 1 producer, Anadarko Petroleum, posted a $2.2 billion loss on the quarter just last week. Company officials will have a conference call this morning to discuss results further. Just last week, officials confirmed the company would “adjust its workforce,” but did not elaborate on planned layoffs. Noble operates across the globe but focuses its U.S. drilling in the Denver-Julesburg Basin in Colorado, and in fields in Texas and Pennsylvania. In the DJ Basin, the company reported sales volumes averaged a record 116,000 barrels of oil equivalent per day in the third quarter, up 13 percent from the same time last year. During the quarter, the company operated with four drilling rigs, but has since dropped that to three, and has plans to leave 40 wells uncompleted, or hydraulically fracked. Companies have increasingly chosen to not finish their well drilling until commodity prices return to more favorable levels. When that time comes, they can finish the wells, but spend less, since half of the job has been done.

Pioneer Natural Resources records strong bottom line - Pioneer Natural Resources bolstered its bottom line in the third quarter by selling its midstream operations in the Eagle Ford Shale and implementing aggressive cost-cutting measures in its oil and gas drilling operations. The Irving-based energy company on Monday said net income rose to $646 million, or $4.27 per diluted share, compared with $374 million in last year’s third quarter. And despite lower oil prices, revenues climbed $705 million — to $2.2 billion from $1.5 billion — thanks to asset sales and derivative trading. Pioneer profited by selling its oil and gas transportation system in the Eagle Ford for $2.15 billion — pumping about $530 million into its accounts in the third quarter with the rest to be paid in 2016, the company reported. It also realized savings by cutting its costs on drilling and services by 25 percent compared with 2014, the company reported. But excluding derivative market-to-market gains and other unusual items, its adjusted results came to a loss of one cent per diluted share.

Apache's quarterly loss widens on $3.7 bln charge - (Reuters) - Apache Corp reported a much bigger quarterly loss as it took a $3.7 billion writedown due to a slump in oil prices. Net loss attributable to Apache's common shareholders widened to $5.56 billion, or $14.95 per share, in the third quarter, from $1.33 billion, or $3.50 per share, a year earlier. The latest quarter also included a $1.5 billion charge related to deferred tax assets.

US Oil Producer Apache Raises Production Forecast  (Reuters) - Apache Corp reported a much smaller-than-expected quarterly loss and joined a growing list of U.S. oil producers in raising full-year production forecast even as many of them cut spending. Increased efficiencies, a drop in service costs and low break-even levels in core U.S. shale fields are all helping U.S. oil companies increase production on reduced budgets. U.S. producers ranging from Oasis Petroleum Inc to Devon Energy Corp have forecast higher production in their latest quarterly reports. Apache on Thursday raised its full-year North American onshore production forecast to 307,000-309,000 barrels of oil equivalent per day (boepd), from 305,000-308,000 boepd. The company also increased its international and offshore production forecast to 172,000-174,000 boepd, from 164,000- 168,000 boepd. "As we turn to 2016, prudent capital allocation will continue to be our primary focus...," Chief Executive John Christmann said in a statement. Oil producers are keeping a tight leash on spending to cope with a near-60 percent drop in global oil prices since June last year that has sapped profitability. The net loss attributable to Apache's common shareholders widened to $5.56 billion, or $14.95 per share, in the third quarter ended Sept. 30, from $1.33 billion, or $3.50 per share, a year earlier. The latest quarter included a $1.5 billion charge related to deferred tax assets and a $3.7 billion writedown due to the oil slump.

Chesapeake cuts budget again on weak oil and gas prices - Chesapeake Energy Corp cut its 2015 capital budget for the second time this year to cope with low oil and gas prices and swung to a large quarterly net loss as the second largest U.S. producer of natural gas wrote down the value of assets. The Oklahoma City, Oklahoma company’s shares fell 5 percent to $7.25 in morning New York Stock Exchange trading, as third-quarter cash flow fell short of Wall Street estimates. U.S. oil and gas producers are slashing budgets, costs and streamlining operations as a near 60 percent drop in global oil prices since June last year saps profitability. In response, Chesapeake has so far cut about 15 percent of its workforce and suspended its dividend. Now, the company cut its 2015 capital expenditure target by $100 million to $3.4 billion to $3.9 billion. And further reductions are on the way.  Chesapeake said on Wednesday it wrote down the value of some oil and gas assets by $5.42 billion, adding to the $10 billion in impairment charges it has already booked this year. Excluding the impairment charge and other items, Chesapeake reported a loss of 5 cents per share, compared with the loss of 13 cents estimated by analysts, according to Thomson Reuters I/B/E/S. Net loss was $4.69 billion or $7.08 per share in the third quarter, compared with a year-ago profit of $169 million or 26 cents per share a year earlier. Chesapeake had cash flow from operations of $219 million in the third quarter, well below the consensus estimate of $369 million, according to analysts at Simmons & Company International in Houston.

Gulfport Energy reports 3Q loss - Gulfport Energy Corp. (GPOR) on Wednesday reported a third-quarter loss of $388.2 million, after reporting a profit in the same period a year earlier. The Oklahoma City-based company said it had a loss of $3.59 per share. Losses, adjusted for one-time gains and costs, came to 8 cents per share. The results exceeded Wall Street expectations. The average estimate of 15 analysts surveyed by Zacks Investment Research was for a loss of 15 cents per share. The independent oil and gas company posted revenue of $230.6 million in the period, also surpassing Street forecasts. Eight analysts surveyed by Zacks expected $160.4 million. Gulfport Energy shares have fallen 25 percent since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $31.38, a drop of 34 percent in the last 12 months.

Gulfport to cut oil and gas production - Gulfport Energy is voluntarily cutting production of oil and natural gas through early 2016, citing low commodity prices and a faster-than-expected drilling pace. CEO Michael G. Moore said slowing production is the sensible thing to do. “Our hope is that our peers, by choice rather than by necessity, will do the same,” Moore said during a conference call Thursday to discuss the company’s third-quarter earnings. Oklahoma City-based Gulfport has drilled 209 wells in Ohio’s Utica Shale. That’s the second-highest number of any company. The company lost $388.2 million or $3.59 per share during the third quarter. Oil and natural gas revenue was $230.4 million. Gulfport produced 647.1 million cubic feet equivalent of natural gas per day during the quarter. Utica Shale wells accounted for 97 percent of production. The company’s production mix was 81 percent natural gas, 12 percent natural-gas liquids and 7 percent oil. Gulfport started curtailing production by 100 million cubic feet equivalent per day at the beginning of the month. The company is running four horizontal rigs in the Utica. It drilled 15 gross wells and began production from 16 gross wells during the quarter. Well costs have decreased between 5 and 8 percent. In light of oil and natural gas prices, Gulfport won’t add a fifth Utica rig in early 2016. The company also will idle a fracking crew.

EOG Resources Reports Third Quarter 2015 Results; Increases Delaware Basin Net Resource Potential by 1.0 BnBoe - EOG Resources, Inc. today reported a third quarter 2015 net loss of $4.1 billion, or $7.47 per share. This compares to third quarter 2014 net income of $1.1 billion, or $2.01 per share. Adjusted non-GAAP net income for the third quarter 2015 was $13.5 million, or $0.02 per share, compared to the same prior year period adjusted non-GAAP net income of $720.6 million, or $1.31 per share. Adjusted non-GAAP net income is calculated by matching realizations to settlement months and making certain other adjustments in order to exclude one-time items. (Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.) During the third quarter 2015, proved oil and gas properties and related assets were written down to their fair value resulting in non-cash impairment charges of $4.1 billion net of tax. The impairments were due to declines in commodity prices and were primarily related to legacy natural gas and marginal liquids assets. Significant reductions in operating expenses were more than offset by lower commodity price realizations, resulting in decreases in adjusted non-GAAP net income, discretionary cash flow and adjusted EBITDAX during the third quarter 2015 compared to the third quarter 2014

Devon Energy has $3.5 bln quarterly loss on writedowns | Reuters: (Reuters) - Devon Energy Corp on Tuesday reported a quarterly loss compared with a year-earlier profit, as low prices prompted the onshore U.S. oil and gas company to write down the value of some assets. Crude oil prices have prompted shale companies like Devon to cut spending and costs, yet drilling efficiencies and improved well completion techniques are helping to push output higher in fields including the Permian Basin in west Texas. Devon said it was raising its full-year production growth outlook for the second time this year. "We are delivering this incremental production growth with significantly lower costs," Dave Hager, Devon's chief executive said in a statement. "We are now on pace to save around $1 billion of capital and operating costs in 2015 versus original expectations." The Oklahoma City, Oklahoma company had a third-quarter loss of $3.5 billion, or $8.64 per share, compared with a profit of $1 billion, or $2.47 per share in the same period a year earlier. Excluding one-time items including about $6 billion to write down the value of oil and gas properties, Devon had a profit of $316 million, or 76 cents per share. Analysts on average had expected Devon to report a per-share profit of 52 cents, according to Thomson Reuters I/B/E/S.

Continental Resources reports $82 million loss in third quarter | News OK: Continental Resources Inc. on Wednesday reported a net loss of 82.4 million, or 22 cents a share, in the third quarter as low commodity prices offset increased production. The net loss was down from a profit of $534 million, or $1.44 a share, in the year-ago period. Adjusted for one-time expenses, the Oklahoma City-based oil company recorded a net loss of $43.5 million, or 12 cents a share. Earnings before interest taxes, depreciation, amortization and drilling expenses was $472 million, down from $948 million one year ago. "This was another solid quarter's performance," CEO Harold Hamm said in a statement. "As expected, we continue to deliver on cost controls and operating efficiencies while maintaining our exploration focus. We continued in the third quarter to improve across the board in the key metrics we control — faster drill times, lower completed well costs, and strong well results from enhanced completions. On the financial side, we remain focused on balancing capital expenditures with cash flow." Total revenues slipped to $683 million, down from $1.6 billion one year ago. Continental produced more than 147,000 barrels of oil per day, up from almost 123,000 barrels per day in the year-ago period. Total production was 228,000 barrels of oil equivalent in the third quarter, up 25 percent from the year-ago quarter.

Continental Resources boosts crude output forecast (Reuters) - Continental Resources Inc, North Dakota's second-largest oil producer, boosted its production forecast on Wednesday despite posting a quarterly loss, betting technological advancements and cost cuts will help it extract more oil at a cheaper price. The bold bet, just as the company's credit line was increased, matches an evolving industry trend. Companies have been raising output projections, banking on efficiency gains to help offset the steepest oil price crash in six years. "We continue to deliver on cost controls and operating efficiencies, while maintaining our exploration focus," Harold Hamm, Continental's chief executive and largest shareholder, said in a statement. The Oklahoma-based company now expects to pump 24 percent to 26 percent more oil than last year's output of roughly 174,000 barrels of oil equivalent per day (boepd). Previous guidance had called for a boost of 16 percent to 20 percent. While Hamm canceled Continental's oil hedges last fall, much of his confidence stems from the company's increasing ability to use innovative ways to extract oil from the 1 million acres of North Dakota shale it controls. In the past 11 months, Continental said it has cut its drilling and completion costs for new wells by 25 percent. Still, Continental slashed its 2015 capital budget two months ago for the third time this year, saying it planned to temporarily end fracking of its North Dakota wells, a strategy it did not alter on Wednesday.

Halcon Resources Announces Third Quarter 2015 Results - Halcón Resources Corporation (today announced its third quarter 2015 results. The Company generated revenues of $129.9 million for the three months ended September 30, 2015. In addition, Halcón realized a net gain on settled derivative contracts of $114.9 million during the quarter. The Company produced an average of 40,739 barrels of oil equivalent per day (Boe/d) during the period. Third quarter 2015 production was 80% oil, 10% natural gas liquids (NGLs) and 10% natural gas. Including the impact of hedges, Halcón realized 168% of the average NYMEX oil price, 15% of the average NYMEX oil price for NGLs and 111% of the average NYMEX natural gas price during the period. Total operating costs per unit, after adjusting for selected items (see Selected Operating Data table for additional information), decreased by 27% to $17.04 per Boe in the third quarter of 2015, compared to the third quarter of 2014. After adjusting for selected items primarily related to a non-cash gain on the extinguishment of debt and a non-cash pre-tax full cost ceiling impairment charge (see Selected Item Review and Reconciliation table for additional information), net income available to common stockholders was $21.2 million, or $0.04 per diluted share, for the three months ended September 30, 2015. The Company reported net income available to common stockholders of $123.5 million, or $0.18 per diluted share for the quarter.

Crescent Point reports 3Q loss - Crescent Point Energy Corp. (CPG) on Thursday reported a third-quarter loss of $154.1 million, after reporting a profit in the same period a year earlier. On a per-share basis, the Calgary, Alberta-based company said it had a loss of 31 cents. Earnings, adjusted for non-recurring costs, came to 2 cents per share. The results met Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was also for earnings of 2 cents per share. The oil producer posted revenue of $559 million in the period. Crescent Point shares have declined 38 percent since the beginning of the year. The stock has fallen 53 percent in the last 12 months.

SM Energy misses Street 3Q forecasts - SM Energy Co. (SM) on Tuesday reported third-quarter earnings of $3.1 million. On a per-share basis, the Denver-based company said it had profit of 5 cents. Losses, adjusted for non-recurring gains, came to 34 cents per share. The results fell short of Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for a loss of 27 cents per share. The independent oil and gas company posted revenue of $371.2 million in the period, which also did not meet Street forecasts. Seven analysts surveyed by Zacks expected $406.9 million. SM Energy shares have dropped 22 percent since the beginning of the year. In the final minutes of trading on Tuesday, shares hit $30.01, a decline of 47 percent in the last 12 months.

PetroQuest reports 3Q loss - PetroQuest Energy Inc. (PQ) on Monday reported a third-quarter loss of $50.6 million, after reporting a profit in the same period a year earlier. On a per-share basis, the Lafayette, Louisiana-based company said it had a loss of 80 cents. Losses, adjusted for non-recurring costs, were 18 cents per share. The results topped Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for a loss of 22 cents per share. The independent oil and gas company posted revenue of $26.9 million in the period, also beating Street forecasts. Four analysts surveyed by Zacks expected $24.1 million. In the final minutes of trading on Monday, the company's shares hit $1.13. A year ago, they were trading at $4.70.

Parsley Energy misses Street 3Q forecasts - Parsley Energy Inc. (PE) on Wednesday reported third-quarter earnings of $909,000. On a per-share basis, the Austin, Texas-based company said it had net income of 1 cent. Losses, adjusted for non-recurring gains, came to 8 cents per share. The results missed Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for a loss of 5 cents per share. The independent oil and gas company posted revenue of $64.2 million in the period, which also fell short of Street forecasts. Nine analysts surveyed by Zacks expected $74.2 million. Parsley Energy shares have risen 9.5 percent since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $17.48, a rise of 13 percent in the last 12 months.

C&J reports 3Q loss - C&J Energy Services Inc. (CJES) on Wednesday reported a third-quarter loss of $455 million, after reporting a profit in the same period a year earlier. On a per-share basis, the Houston-based company said it had a loss of $3.89. Losses, adjusted for non-recurring costs, came to 65 cents per share. The results fell short of Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for a loss of 63 cents per share. The provider of services to the oil and natural gas industries posted revenue of $427.5 million in the period, which also did not meet Street forecasts. Seven analysts surveyed by Zacks expected $430.5 million. C&J shares have dropped 57 percent since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $5.66, a fall of 67 percent in the last 12 months.

Sandridge Energy reports 3Q loss - Sandridge Energy Inc. (SD) on Wednesday reported a third-quarter loss of $640.4 million, after reporting a profit in the same period a year earlier. On a per-share basis, the Oklahoma City-based company said it had a loss of $1.23. Losses, adjusted for non-recurring costs, came to 7 cents per share. The results surpassed Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for a loss of 11 cents per share. The independent oil and gas company posted revenue of $180.2 million in the period. In the final minutes of trading on Wednesday, the company's shares hit 40 cents. A year ago, they were trading at $3.56.

PDC Energy reports 3Q loss - PDC Energy Inc. (PDCE) on Thursday reported a third-quarter loss of $41.5 million, after reporting a profit in the same period a year earlier. The Denver-based company said it had a loss of $1.04 per share. Earnings, adjusted for one-time gains and costs, came to 38 cents per share. The results missed Wall Street expectations. The average estimate of 13 analysts surveyed by Zacks Investment Research was for earnings of 47 cents per share. The independent oil and gas company posted revenue of $231.1 million in the period, topping Street forecasts. Nine analysts surveyed by Zacks expected $160.4 million.

Large losses in tar sands and the Arctic drag down Shell’s earnings - Royal Dutch Shell reported weak third quarter earnings last Thursday morning, hobbled by a triple whammy of low oil prices and losses related to suspended projects in the Arctic and Canadian tar sands. The company lost $6.1 billion overall in the quarter, compared with a gain of $5.3 billion a year earlier. The oil giant took a staggering $7.9 billion in write-offs, including $2.6 billion for the dry hole drilled in Alaska’s Arctic waters, $2 billion related to the suspension of the Carmon Creek oil sands project and $3.7 billion due to lower oil and gas price forecasts, including $2.3 billion related to shale oil properties in the United States. Shell’s results reflect not only the company’s frustrations but broader trends across the oil and gas industry, which is grappling with lower oil prices and disappointments in frontier areas that have been the repositories of hopes for future oil production. Excluding items, the company made $ 1.8 billion in the quarter, versus $ 5.8 billion a year ago, when crude oil prices were nearly twice as high. In the Chukchi Sea, Shell noted, it drilled the Burgher J well which was “considered a dry-hole, with minor oil and gas shows, and the result renders the Burger Prospect as uneconomic. This, combined with the current economic and regulatory environment, has led Shell to cease further exploration activity offshore Alaska for the foreseeable future.”In a conference call with analysts, Shell’s CEO Ben Van Beurden said that this was “a very expensive dry hole” and that while there was an “unbelievably complex regulatory environment,” he said the company would look back and “try to learn from this as much as possible.” Van Beurden said that suspending the Carmon Creek oil sands project was done because of the “economic environment” as well as “uncertainty about the evacuation route,” a reference to continuing controversy over the construction of pipelines that would carry bitumen from the project to distant refineries. “There were too many things coming together conspiring against the project,” he added. But he said that Shell would continue operations at existing oil sands developments and said that cash costs at its open pit oil sands mines were about $25 a barrel.

Giant Sucking Sound of Capital Destruction in US Oil & Gas -- Chesapeake Energy is a good example. The second largest natural gas producer in the US, after Exxon, reported its debacle yesterday. Revenues plunged 49% from the quarter a year ago, when the oil bust had already set in. The company has been slashing costs and capital expenditures. In June, it eliminated its dividend. And yesterday, it recognized $5.4 billion in impairment charges, bringing impairments for the nine months to a staggering $15.4 billion. Impairment charges are a sudden accounting recognition of accumulated capital destruction. These impairments pushed its losses from operations to $5.4 billion in Q3 and to $16 billion for the nine months.  Chesapeake currently gets 72% of its production from natural gas, 17% from oil, and 11% from natural gas liquids. The oil bust has been going on since the summer of 2014. The US natural gas bust has been going on since 2009! Two natural gas producers have already gone bankrupt this year: Quicksilver Resources and Samson Resources.  Its annual free cash flow has been negative since 1994, even during good times, with only two tiny exceptions (Bloomberg chart). After living off borrowed money, it’s now trying to hang on by selling assets and lowering its mountain of debt. But it still owes $16 billion, much of which QE-besotted, ZIRP-blinded, yield-hungry investors had handed it over the years, based on hype and false hopes. In terms of capital destruction, Chesapeake is in good company, and not even the leader. A new report by Evaluate Energy, which covers Oil & Gas companies around the globe, examined the financial statements of the 48 US oil & gas companies that have reported earnings for the third quarter so far. The amounts and the speed of deterioration are just stunning. Turns out, what started in Q4 last year is getting worse relentlessly. On a quarterly basis, the losses in Q3 jumped 58% from Q2 and 70% from Q1 to $25.5 billion. This fiasco, which has been spiraling down at a breath-taking pace, looks like this: Of the 48 companies, 38 recognized impairment charges totaling $32.8 billion in Q3 alone, a 79% jump from Q2, when impairments hit $18.4 billion. Since Q4 2014, these 48 companies recognized impairments of $84.6 billion; 39% of that in Q3. Devon Energy was king of the hill, with $5.9 billion in impairments in Q3, after having recognized impairments every quarter this year, for a total of about $15.5 billion.

Bankruptcy becomes a way of life for oil and gas companies - RAAM Global Energy Co. is just the latest oil and gas company to file for bankruptcy protection, but it certainly won't be the last. The Lexington, Ky., debtor submitted its Chapter 11 petition in the U.S. Bankruptcy Court for the Southern District of Texas in Houston on Oct. 26, at the end of a 12-month span that's been abysmal for the sector. For a sense of just dismal things are looking for the space, consider the fact that two industry experts The Deal spoke to Thursday both said the exact same thing: "Things will get worse before they get better." Nearly two dozen large oil and gas companies have ended up in bankruptcy in the past year. Exploration company Endeavour International Corp.  kicked off the string of petitions, on Oct. 12, 2014. The debtor had plans to implement a restructuring support agreement that soon fell apart due to falling oil and gas prices. Other relatively large companies followed suit soon after, including Quicksilver Resources Inc. (March 17), Sabine Oil & Gas Corp.(July 15) and Hercules Offshore Inc. (Aug. 13). Smaller companies like Cal Dive International Inc. March 3), Dune Energy Inc.(March 8), BPZ Resources Inc. (March 9), ERG Intermediate Holdings LLC (April 30) American Eagle Energy Corp.  (May 8), Saratoga Resources Inc. (June 16), Milagro Oil & Gas Inc. (July 15) and Miller Energy Resources Inc. (Oct. 1) also ended up in bankruptcy court. Canadian companies have also not been immune to distress in the sector. Verity Energy Ltd. on April 29 sought protection under Canada's Companies' Creditors Arrangement Act. Well-fracturing service provider Gasfrac Energy Services Inc. (Jan. 15), oil sands exploration company Southern Pacific Resource Corp. (Jan. 21), crude oil producer Laricina Energy Ltd. (March 30) and exploration company Shoreline Energy Corp. (April 9) have also done the same.

Despite gloom, four U.S. shale oil firms lift output views - A handful of U.S. shale oil producers are pushing up their production forecasts, saying efficiency gains from drilling in prime rock are helping them eke out more crude in the middle of the worst price crash in six years. The slightly bolder outlooks this week from Oasis Petroleum Inc, Devon Energy Corp, Pioneer Natural Resources Co and Diamondback Energy Inc show that the confident swagger that typified the U.S. shale boom’s early days has yet to be fully tempered by the more than 50 percent drop in oil prices since last year. Though the consensus view is that rig productivity in U.S. shale basins is stalling to portend a drop in national output as companies struggle to pump more with less, some firms appear to still be finding new ways to drill wells faster and frack them more intensively at a lower price. “Over time, we continue to think we’ll need less rigs than we’re even saying now,” Pioneer Chief Executive Officer Scott Sheffield told investors on Thursday. Shares of Oasis, Devon and Pioneer rose more than 2 percent after their respective forecasts were announced. Shares of Oasis and Devon have lost about a quarter of their value this year, while those of Pioneer have held mostly steady.

California Consumers Drive Chevron To Record Refining Profits In First Nine Months, Says Consumer Watchdog -- Chevron today reported its highest U.S. refining profits for the first nine months of the year—a whopping $2.6 billion as compared to $1.7 billion for the same period last year. Since 54 percent of the company's refining takes place in California, California drivers paid the price, Consumer Watchdog said today. "Chevron's results reinforce the fact that our gasoline market is stacked against consumers by oil companies that routinely manipulate the supply and price of gasoline," said Consumer Advocate Liza Tucker. "Instead of passing through savings from tanking crude oil prices, these companies keep a larger and larger share of the profit because they can." Chevron reported a U.S. refining profit of $1.2 billion for the three months ended September 30, beating the highest quarterly earnings from downstream operations that the company ever reported of $1.03 billion for the 4th quarter of 2008. Valero and Tesoro, two refiners that just reported California-specific profits, this week also reported their most lucrative California quarters ever. Their quarterly reports for July through September help explain why Californians have paid a dollar per gallon over the US average during 2015.

Total beats expectations thanks to record refining margins - (Reuters) - French oil and gas company Total's reported better than expected third-quarter profit on Thursday after high margins in its European refining business and increased production softened the blow of prolonged low oil prices. A lower-for-longer outlook for oil prices took its heaviest toll yet as oil companies reported a dramatic drop in income in the third quarter, with some even falling to a loss. Total, however, appeared to fare better than its peers, even though net adjusted profit tumbled by 23 percent year on year to $2.756 billion. Analysts had expected $2.391 billion in net adjusted profit, according to Thomson Reuters I/B/E/S estimates. The French group, Europe's biggest refiner, benefited from record-high refining margins in Europe, which helped its downstream division to post an 82 percent profit jump. "In a context where the oil price has fallen by 50 percent in one year, Total was able to demonstrate its resilience by limiting to 23 percent the decrease in its third-quarter adjusted net income," Chief Executive Patrick Pouyanne said in a statement. The company also made an upward revision to its production growth target to more than 9 percent this year, from 8 percent previously, after a 10 percent jump in output in a third quarter boosted by new projects.

TransCanada asks U.S. to suspend Keystone XL pipeline application: TransCanada, the company behind the controversial Keystone XL pipeline from Canada to the U.S Gulf Coast, has asked the U.S. State Department to pause its review of the project. TransCanada said Monday it had sent a letter to Secretary of State John Kerry requesting that the State Department suspend its review of the pipeline application. The pipeline company said such a suspension would be appropriate while it works with Nebraska authorities for approval of its preferred route through the state that is facing legal challenges in state courts. The move comes as the Obama administration was widely expected to reject the pipeline permit application. "We have just received TransCanada's letter to Secretary Kerry and are reviewing it. In the meantime, consideration under the Executive Order continues," State Department spokeswoman Elizabeth Trudeau said. The White House declined to comment, referring all questions to the State Department. The State Department review is mandated as part of the application process because the pipeline crosses an international border. The State Department does not have to grant TransCanada's request for a pause in the review process and instead can continue the review process. Ahead of TransCanada's announcement Monday, White House spokesman Josh Earnest said President Barack Obama intended to make a decision on the pipeline before his presidency ends in January 2017, although he declined to elaborate on the timeline. Hillary Rodham Clinton and her main challengers for the Democratic nomination are already on record as opposing it. All of the leading Republican presidential candidates support the pipeline. Some pipeline opponents contend that TransCanada hopes to delay the review process in hopes that a more sympathetic Republican administration will move into the White House in 2017.

TransCanada Asks State Department To Suspend Review Process For Keystone XL Pipeline - Canadian oil company TransCanada has asked the State Department to suspend the review process for the controversial Keystone XL pipeline. The company announced Monday that it had sent a letter to Secretary of State John Kerry, asking him to pause the permit application review process for the tar sands pipeline.  “We are asking State to pause its review of Keystone XL based on the fact that we have applied to the Nebraska Public Service Commission for approval of its preferred route in the state,” Russ Girling, TransCanada’s president and chief executive officer, said in a statement. “I note that when the status of the Nebraska pipeline route was challenged last year, the State Department found it appropriate to suspend its review until that dispute was resolved. We feel under the current circumstances a similar suspension would be appropriate.” In the letter, TransCanada notes that an ongoing review process in Nebraska is expected to take seven to 12 months, and that during that time, it would make sense for the State Department to pause its federal review. “In order to allow time for certainty regarding the Nebraska route, TransCanada requests that the State Department pause in its review of the Presidential Permit application for Keystone XL,” the company writes in the letter. “This will allow a decision on the permit to be made later based on certainty with respect to the route of the pipeline.”

New twist in Keystone controversy: Pipeline owner TransCanada asks for a delay -- The company that hopes to build the Keystone XL pipeline to carry crude oil from Canada to the Gulf Coast asked the Obama administration Monday to delay its review of the proposal — a striking turn that adds further uncertainty to a project that has generated bitter debate since it was proposed seven years ago. The company, TransCanada, made its request in a three-paragraph letter to Secretary of State John F. Kerry, citing legal challenges it said had prompted it to change tactics. The State Department must review the project because it would cross an international border. President Obama had said that he would make the final decision. “TransCanada believes that it would be appropriate at this time for the State Department to pause in its review of the presidential permit application for Keystone XL,” the company wrote. Spokesman Mark Cooper said TransCanada was not withdrawing its application. Instead, he said, “We are asking the State Department to suspend a decision.” A State Department official said the agency was reviewing the request. The move by TransCanada appeared to confirm speculation that the company hopes to push off a decision until the next administration because it fears Obama will reject the pipeline. Hours before TransCanada announced its request, the White House said it expected Obama to make a decision about the pipeline “before the end of his administration,” though it did not specify when. The request also reflects a remarkable turnabout by TransCanada, which has spent years complaining of delays in the process only now to request one itself.

Transcanada Just Killed The Keystone XL Pipeline -- In an ironic twist, just hours after we discussed the record capital outflow from Canada, resulting from the plunge in oil prices and the mothballing of Canada's energy industry, Obama's long-desired goal of killing the Keystone XL pipeline has finally come true.  Moments ago, the WSJ reported that Alberta-based Transcanada asked to suspend its U.S. permit application, "throwing the politically fraught project into an indefinite state of limbo, beyond the 2016 U.S. elections."  Calgary, Alberta-based TransCanada Corp. sent a letter to the State Department, which reviews cross-border pipelines, to suspend its application while the company goes through a state review process in Nebraska it had previously resisted. “In order to allow time for certainty regarding the Nebraska route, TransCanada requests that the State Department pause in its review of the Presidential Permit application for Keystone XL,” the company said in the suspension request reviewed by The Wall Street Journal. “This will allow a decision on the Permit to be made later based on certainty with respect to the route of the pipeline.” The WSJ correctly notes that "the move comes in the face of an expected rejection by the Obama administration and low oil prices that are sapping business interests in Canada’s oil reserves." Clearly the former was never an issue before, however the collapse in oil prices and the resultant plunge in CapEx spending means that the pipeline no longer made much economic sense.

Keystone XL Pipeline Stopped by Eminent Domain Opposition --  This win becomes Exhibit A in why fighting condemnation is the best strategy. Always was, always will be. No eminent domain for private gain.   The Keystone XL pipeline is nothing more that a gigantic privately owned hot tar line from Canada to a refinery on the Gulf Coast- it is not a utility.Since it is not a utility, it should not have the power of eminent domain over private land. It is not only your right as a US citizen to fight it, if you are a landowner in its way, you have a public obligation to oppose it – in court.  Congratulations to Bold Nebraska and all those courageous American’s who fought this corrupt, illegal expropriation of their land.

Editorial: Keystone XL delay is a setback for public safety in Minnesota --The triumphant but misguided e-mail landed in inboxes just hours after the Canadian company pushing to build the Keystone XL pipeline announced it wants the U.S. government to suspend review of the pipeline’s construction permit application. “We made our voices heard that we would stand up to protect our planet for future generations,” trumpeted a Democratic National Committee missive that urged climate-change activists to double down on their advocacy and share their personal e-mail with the DNC — likely for fundraising purposes. But the latest delay for the oil pipeline shouldn’t inspire political victory dances. Particularly in Minnesota, the snag should spur a sense of alarm. This is a serious setback for public safety in a state where more than 425,000 people live within half-mile wide blast zones along heavily traveled oil train routes. Pipelines certainly aren’t a fail-safe way to transport crude, but they are widely considered the least risky way to move this volatile energy source. The alternatives are rail, trucks and tanker ships. Because of geography, Minnesota is one of the major railroad routes for transporting crude oil from North Dakota and Canada’s western provinces to refineries in the southern and eastern parts of the U.S. An estimated 35 to 59 oil trains, some more than 100 tank cars long, roll through Minnesota each week. Many go through the Twin Cities metro area, and a recent letter written by Gov. Mark Dayton spotlighted a new oil train route that comes through west-metro communities and skirts Target Field.

Keystone XL's builder faced darkening prospects | Reuters: Faced with dimming prospects for approval, the Canadian company behind the proposed Keystone XL pipeline chose to plead with the U.S. government for a delay on its fate, signaling that prolonged uncertainty is preferable to rejection of the $8 billion project. Monday's appeal by Calgary-based TransCanada Corp has been widely interpreted as an attempt to avert an impending "no" from President Barack Obama to the nearly 1,200-mile (2,000-km) cross-border pipeline. Keystone XL would carry heavy crude oil from Alberta to Nebraska and on to Gulf Coast refineries, and has become the symbolic heart of a struggle between environmentalists opposed to oil sands development and defenders of fossil fuels. The U.S. State Department said it had received a letter from TransCanada asking for the delay but a spokesperson said the review would continue for now. TransCanada spokesman Mark Cooper said the company would not speculate on what the decision may be or when it may come. But the Obama administration has become more vocal and active on climate change issues as it closes in on its final year in office, and the president has repeatedly expressed doubts about the merits of the pipeline. TransCanada's request for a delay came amid a darkening political outlook for the project on both sides of the border.

The KXL is Dead! (But that’s irrelevant) -- Sorry to burst your bubble….A couple of weeks ago, as Hillary Clinton was making stump speeches, she famously “came out against Keystone XL pipeline”, after years of silence and fence-sitting (as she was selling Fracking to European nations).Now today, the news is that Enbridge will suspend its application.Guess what? It doesn’t mean … much.This is mostly election year politics, and a re-alignment for the pipeline companies. Deals have been made.  KXL Northern Leg can be killed now. I predicted it would when Hillary came out against it. They’ve already got another plan, and a backup plan.Recall the KXL southern leg renamed the Gulf Coast Pipeline is already built. (red dotted line, bottom).  Image: Existing KXL Southern leg already is built Cushing OK to Port Arthur TX.  Proposed ETC Dakota Access. Notice how it conveniently bypasses  the Nebraska problem area (Ogallala Aquifer and Sand Hills region) to the East:  It’s about 200 miles from either of these to pick up tar sands from existing Enbridge pipelines in Canada, e.g., Regina, SK, CA. Oh, and let’s not forget Line 78 to Flannagan IL.  So it’s hard for this observer to call this a win. OK, so it IS a win for Bold Nebraska, as these proposed re-routes avoid the state altogether. However the Ogallala Aquifer is still at risk by the Enterprise pipeline, and Tar Sands Development moves forward…

Keystone backers look to Obama's successor to make the call - The company pleading for permission to build the Keystone XL pipeline looked beyond President Barack Obama on Tuesday in apparent hopes a future Republican president would greenlight the project. But the administration signaled it was in no mood to hand off the decision to the winner of the 2016 election. TransCanada insisted its request for the U.S. to suspend its review of the proposed project had nothing to do with presidential politics even though a delay could thrust the decision a year or more into the future, likely putting it in the hands of Obama’s successor. Questioning the motivation for the Canadian energy giant’s request, the White House said “there might be politics at play” and Obama still intended to make the decision. It was an unusual reversal of roles for TransCanada, which complained bitterly for years about Obama’s delays before suddenly requesting one of its own. Likewise, Obama’s administration, after seven years of delay, seemed to discover a newfound sense of urgency when faced with the prospect of letting the next president make the call. The State Department, the official arbiter of the pipeline permit, said it was considering TransCanada’s new request but in the meantime the pipeline review would move forward unabated. “We’d like to finish this review process as swiftly as possible,” spokeswoman Elizabeth Trudeau said Tuesday. That was 2,601 days after TransCanada first proposed the $8 billion project. For TransCanada, a delay into 2017 might improve the prospects for approval — if a Republican wins the White House. The GOP presidential field is unanimous in its support for Keystone, while Obama has downplayed its benefits and emphasized environmental risks, setting up a high bar for approval.

Obama Won’t Yield to Company’s Bid to Delay Keystone Pipeline Decision - — The White House on Tuesday said President Obama had no intention of bowing to a request from the company behind the Keystone XL oil pipeline to delay a decision on the project, saying he wanted to take action before his tenure ends. The State Department is reviewing a request made on Monday by the company, TransCanada, to pause its yearslong evaluation of the proposed 1,179-mile pipeline, which has become part of a broader debate over Mr. Obama’s environmental agenda. Josh Earnest, the White House press secretary, said on Tuesday that “there’s reason to suspect that there may be politics at play” in TransCanada’s request. He strongly suggested that the review, which has been widely expected to result in a rejection of the pipeline as soon as this month, remained on track. “Given how long it’s taken, it seems unusual to me to suggest that somehow it should be paused yet again,” Mr. Earnest said about the evaluation at the State Department, which reviews proposed cross-border projects that require a presidential permit. The president, Mr. Earnest added, “would like to have this determination be completed before he leaves office.” Environmental protection advocates say Mr. Obama is poised to reject the pipeline project in large part to make a bold statement about his commitment to curb climate change in advance of a United Nations summit meeting in Paris. He will seek to broker an accord at the December gathering, committing every nation to enacting new policies to counter global warming.

TransCanada request for Keystone XL delay rejected — The Obama administration says it is continuing a review of the proposed Keystone XL oil pipeline, despite a request by the project’s developer to suspend the review. State Department spokesman John Kirby says the department advised TransCanada on Wednesday of its decision to continue the review. The State Department has jurisdiction over the pipeline because it crosses a U.S. border. Kirby says there is no legal requirement for officials to suspend the review, adding that “a lot of interagency work” has gone into the review so far. He says Secretary of State John Kerry believes that it’s most appropriate to keep the process in place. TransCanada asked the U.S. to delay consideration of the pipeline, which could put off a decision until the next president takes office in 2017.

Obama Rejects Construction of Keystone XL Oil Pipeline - — President Obama on Friday announced that he had rejected the request from a Canadian company to build the Keystone XL oil pipeline, ending a seven-year review that had become a flash point in the debate over his climate policies.  Mr. Obama’s denial of the proposed 1,179-mile pipeline, which would have carried 800,000 barrels a day of carbon-heavy petroleum from the Canadian oil sands to the Gulf Coast, comes as he is seeking to build an ambitious legacy on climate change. “The pipeline would not make a meaningful long-term contribution to our economy,” the president said. Mr. Obama hopes to help broker a historic agreement committing the world’s nations to enacting new policies to counter global warming. While the rejection of the pipeline is largely symbolic, Mr. Obama has sought to telegraph to other world leaders that the United States is serious about acting on climate change. The once-obscure Keystone project became a political symbol amid broader clashes over energy, climate change and the economy. The rejection of a single oil infrastructure project will have little impact on efforts to reduce greenhouse gas pollution, but the pipeline plan gained an outsize profile after environmental activists spent four years marching and rallying against it in front of the White House and across the country. Republicans and the oil industry had demanded that the president approve the pipeline, which they said would create jobs and stimulate economic growth. Many Democrats, particularly those in oil-producing states like North Dakota, also supported the project. In February, congressional Democrats joined with Republicans in sending Mr. Obama a bill to speed approval of the project, but the president vetoed the measure.

Obama rejects Canada-to-U.S. Keystone pipeline – U.S. President Barack Obama on Friday rejected the proposed Keystone XL oil pipeline from Canada in a victory for environmentalists who have campaigned against the project for more than seven years. “The pipeline would not make a meaningful long-term contribution to our economy,” Obama told a press conference. He said Keystone XL would not reduce gasoline prices for drivers, and that shipping “dirtier” crude from Canada would not increase U.S. energy security. The denial of TransCanada Corp’s more than 800,000 barrels per day project will make it more difficult for producers to develop the province of Alberta’s oil sands. It could also put the United States in a stronger position for global climate talks in Paris that start on Nov. 30 in which countries will aim to reach a deal to slow global warming. Secretary of State John Kerry, who determined that the pipeline was not in the country’s interest before Obama’s final decision, said approving Keystone “would significantly undermine our ability to continue leading the world in combating climate change.” Keystone XL would have linked existing pipeline networks in Canada and the United States to bring crude from Alberta and North Dakota to refineries in Illinois and, eventually, the Gulf of Mexico coast. TransCanada first sought the required presidential permit for the cross-border section in 2008 but the proposal provoked a wave of environmental activism that turned Keystone XL into a rallying cry to fight climate change. Blocking Keystone became a litmus test of the green movement’s ability to hinder fossil fuel extraction in Canada’s oil sands.

Obama rejects Keystone pipeline -- President Obama on Friday rejected the application to build the Keystone XL Pipeline, ending the seven-year saga over the controversial plan to transport oil sands from Canada to the Gulf Coast. "The State Department has decided that the Keystone XL pipeline would not serve the national interest of the United States. I agree with that decision,” Obama said at the White House.  With Vice President Biden and Secretary of State John Kerry at his side, Obama lamented the intense partisan warfare over the pipeline, arguing that both sides had exaggerated the importance of the project. "For years, the Keystone pipeline has occupied what I, frankly, consider an overinflated role in our political discourse. It became a symbol too often used as a campaign cudgel by both parties, rather than a serious policy matter," Obama said. "All of this obscured the fact that this pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others." Still, the president said, the pipeline would not do enough to create jobs, and he argued it would damage American energy security and “undercut” the country’s leadership on preventing climate change. “The pipeline would not make a meaningful, long-term contribution to our economy,” he said.

Obama Rejects Keystone XL!  -- Acting on the best scientific advice and mindful of the fact that the proposed pipeline is not a common carrier in the US, so not entitled to the power of eminent domain, President Obama has rejected the Keystone XL pipeline.  President Obama rejected a presidential permit Friday for the controversial Keystone XL pipeline, citing concerns about its impact on the climate. “America’s now a global leader in taking serious action to fight climate change,” Obama told reporters, standing in the Roosevelt Room beside Vice President Biden and Secretary of State John F. Kerry. “And frankly, approving this project would have undercut that global leadership. And that’s the biggest risk we face, not acting.” He said now was the time to act to “protect the one planet we’ve got while we still can.” In the roughly seven-minute statement, Obama rejected the idea that the project, which would bring Canadian tar sands oil to the United States, would either lower oil prices or improve America’s energy security. “The point is the old rules said we couldn’t promote economic growth and protect our environment at the same time,” he said, “but this is America and we have come up with new ways and new technologies to break down the old rules.” The decision to deny TransCanada Corp. a cross-border permit for a 1,179-mile pipeline between Hardisty, Alberta, and Steele City, Neb. puts an end — at least for now — to a seven-year fight over a project that came to symbolize what Obama could do unilaterally to keep fossil fuels in the ground.

Statement by the President on the Keystone XL Pipeline -- Several years ago, the State Department began a review process for the proposed construction of a pipeline that would carry Canadian crude oil through our heartland to ports in the Gulf of Mexico and out into the world market. This morning, Secretary Kerry informed me that, after extensive public outreach and consultation with other Cabinet agencies, the State Department has decided that the Keystone XL Pipeline would not serve the national interest of the United States. Now, for years, the Keystone Pipeline has occupied what I, frankly, consider an overinflated role in our political discourse. It became a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter. And all of this obscured the fact that this pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others. To illustrate this, let me briefly comment on some of the reasons why the State Department rejected this pipeline.  First:  The pipeline would not make a meaningful long-term contribution to our economy.  So if Congress is serious about wanting to create jobs, this was not the way to do it.  If they want to do it, what we should be doing is passing a bipartisan infrastructure plan that, in the short term, could create more than 30 times as many jobs per year as the pipeline would, and in the long run would benefit our economy and our workers for decades to come.   Second:  The pipeline would not lower gas prices for American consumers.  In fact, gas prices have already been falling -- steadily.  The national average gas price is down a dollar over two years ago.  Third:  Shipping dirtier crude oil into our country would not increase America’s energy security.  What has increased America’s energy security is our strategy over the past several years to reduce our reliance on dirty fossil fuels from unstable parts of the world.

Obama’s Keystone XL decision irks North Dakota US lawmakers — Members of North Dakota’s congressional delegation say President Barack Obama’s rejection of the Keystone XL pipeline is disappointing. Obama says he’s rejecting the pipeline because he does not believe it serves the national interest. Republican Sen. John Hoeven and Democratic Sen. Heidi Heitkamp both think the decision is political. Republican Rep. Kevin Cramer says Obama’s decision is “anti-growth, anti-American jobs.” North Dakota Sierra Club spokesman Wayde Schafer applauded Obama’s move, saying it “sent a clear message that he is serious about addressing climate change.” TransCanada Corp.’s proposed pipeline would carry more than 800,000 barrels of Canadian crude a day to refineries along the Gulf Coast. It wouldn’t go through North Dakota but it would move about 100,000 barrels of oil daily from North Dakota’s oil patch.

Keystone rejection expected to spur more crude-by-rail shipping into the U.S. - Rejection of the Keystone XL pipeline will complicate and add cost to getting western Canadian oil to U.S. markets but it isn’t expected to actually prevent any shipments reaching south of the border, observers say. The decision announced Friday by U.S. President Barack Obama was greeted with disappointment by Calgary oil producers, industry insiders and local businesspeople who observed that Canadian crude is being singled out by the United States with a trade impediment while other countries have free rein. Suncor Energy Inc. president and chief executive Steve Williams said in a statement that the U.S. decision, made seven years after Calgary-based pipeline firm TransCanada Corp.’s initial application, hurts Americans as much as it does Canadians. “Clearly we’re disappointed in today’s decision. Keystone XL is important infrastructure not only for producers in the U.S. Bakken (centred on North Dakota) and Canada as it would provide expanded connectivity to the Gulf Coast, but also for U.S. refiners as it would provide security of supply from a longtime energy provider and trading partner,” he said. The Calgary-based company, Canada’s largest oil producer by market capitalization, says it has 600,000 barrels per day of current access to world markets, including 80,000 bpd of rail loading capacity, as an alternative to the 830,000-bpd Keystone XL.

The Next Great Scandal For The Oil Industry? --U.S. President Barack Obama rejected the Keystone XL pipeline today, issuing a statement at the White House. The decision will end a process that has stretched more than seven years. Not only are environmental groups achieving their goal of blocking the project, but they have seemingly convinced the President to do so on climate change grounds. Environmental groups hope to parlay the success into other areas of energy development, seeking to elevate climate change criteria as a means to scrutinize all sorts of oil, gas, and coal projects. Readers will most likely be inundated with post-mortems on the Keystone XL, but suffice it to say that the decision is a momentous shift from years ago when the administration had looked favorably upon the project.  The allegations that ExxonMobil covered up its climate science and lied to the public about the dangers of climate change has rapidly moved from a small news story into a full-fledged scandal. That is because the New York Attorney General launched an investigation into potential wrongdoing this week. It is early days for this probe, which could widen to ensnare other oil companies that peddled climate misinformation. It will take time to fully grasp the ramifications of what might stem from this, but it is important for investors to keep an eye on it. To be sure, proving some sort of criminal wrongdoing is going to be extremely difficult, but it could balloon into a significant problem for the energy industry.

Diamond Offshore says 2 rig contracts with Petrobras terminated -- Diamond Offshore Drilling Inc, one of the world’s top-five offshore rig contractors, said contracts for two rigs with Brazil’s Petrobras had ended ahead of schedule. The company said it had secured an 875-day extension on another rig working for the Brazilian oil and gas producer in exchange for the terminations. Diamond, which also reported a better-than-expected quarterly profit on Monday, said the extension of term will add $333 million to the company’s revenue backlog. The terminated contracts will reduce revenue backlog by about $91 million, the company said. While one of the rigs terminated will be cold-stacked, the other will be scrapped. Diamond, like most of its rivals, has been scrapping rigs and cutting costs in the face of weak demand due to a steep fall in global crude prices. However, the company also said on Monday it booked a one-year contract for a rig in the UK North Sea at $220,000 per day, starting March 2016. Diamond’s third-quarter profit more than doubled to $136.4 million, or 99 cents per share, helped mainly by lower expenses and improved rig dayrates.

Upton anti fracking camp: Violence predicted as court date for eviction order set - The battle between anti-frackers and frackers over the future of a protest camp on the outskirts of Chester is hotting up with predictions of a possible violent ending. Campaigners established the camp in a field off Duttons Lane, Upton, in 2014 to prevent an energy firm drilling a coal bed methane borehole fearing it could lead to the controversial extraction method known as fracking.  But there were recent clashes when warning notices were issued by Dart Energy and IGas requesting campaigners leave the camp because they were trespassing. A 29-year-old man was arrested and charged on suspicion of assaulting an enforcement officer.  The warning notice issued to anti-fracking camp residents by IGas bailiffs  Now a formal eviction notice is being sought with a High Court hearing due to take place at Manchester County Court next Friday (November 6) where a demonstration will be held outside with banners and placards. The action has been brought by farmers Tim and Piers Dutton, the freehold owners of the land, along with Dart Energy (West England) Ltd and IGas Energy Plc who are now the leaseholders. Kevin Lee, a partner in law firm Hill Dickinson, who represents the claimants, anticipates trouble at the camp once proceedings are served because he expects protester numbers to swell as calls for support go out on social media.

Fracking could be delayed for up to two years across UK after Lancashire council rejects test drilling -- Government plans to roll out fracking across Britain face delays of up to two years following a surprise decision to reject exploration for shale gas in Lancashire. Ministers are concerned by the implications of the decision by Lancashire County Council last month to reject planning applications from the shale gas company Cuadrilla to drill eight wells at two sites on the Fylde coastal plain. The Government had been expecting councilors to give their go-ahead to exploratory drilling on sites. But instead they turned down Cuadrilla’s application on the grounds that it would have an unacceptable visual impact and create too much noise. Cuadrilla has now appealed but that process, regardless of the outcome, is likely to take 16 months. Senior Government sources said they feared other companies were now unlikely to submit further fracking applications – that were not already underway - until they saw the outcome in Lancashire. A Government source said: “It is incredibly frustrating. These are temporary exploratory wells so how on earth Lancashire County Council can turn them down on the basis of visual impact makes no sense at all.

Corbyn congratulates Lancashire for standing up to fracking -  New Labour leader Jeremy Corbyn has congratulated the people of Lancashire for standing up to fracking. Mr Corbyn, along with deputy Labour leader Tom Watson and a raft of the UK’s most influential Labour politicians, are attending the North West Labour party conference in Blackpool. He said that he was “worried” about fracking and congratulated the people of Lancashire, along with the county council, for standing up to the government’s efforts to force through permission to drill for shale gas.Corbyn also told the conference that he will fight the Trade Union bill and cuts to tax credits for working families.

Fracking rules to protect national parks from surface drilling -  Fracking wells would not be drilled from the surface in national parks and areas of outstanding natural beauty under new proposals from the Department for Energy and Climate Change. Sites of special scientific interest would also see a ban on surface drilling under the plan, which has been put out for consultation by ministers. Greenpeace said the announcement would do little to combat pollution from wider fracking activity and insisted the move was aimed at calming potentially rebellious MPs and not protecting the landscape. Announcing the consultation, Energy Minister Andrea Leadsom said: "The UK has one of the best track records in the world when it comes to protecting our environment while developing our industries. "We have the right protections in place to ensure that fracking can go ahead safely without risk to our most beautiful and important natural sites. "People should have confidence in these protections and in this vital industry which could create over 60,000 jobs and be worth billions of pounds to our economy - that is why we are providing further reassurance for our most valued areas." Greenpeace campaigner Hannah Martin said: "This announcement might have banned drilling rigs from littering the landscape, but the Government isn't banning fracking pollution spilling over into our most fragile and treasured countryside. "Some of England's special scenery and nature reserves could still be ringed by fracking rigs bringing light, air, water and noise pollution to areas that should be completely protected.

Firm ‘no’ to fracking in KwaZulu–Natal: A company wanting to explore the province for natural gas has admitted that “fracking is a possible end goal”. Environmental consultant Matthew Hemming, of SLR Consulting and acting on behalf of Rhino Oil and Gas Exploration South Africa, made the statement at a heated meeting at Ashburton Community Hall in the first of 11 public consultation meetings being held throughout the Midlands. Rhino, a Texas-owned company with its corporate offices in the tax haven of the British Virgin Islands, has applied to the Petroleum Agency of South Africa to explore 1.5 million hectares, including 10 000 farms, near Pietermaritzburg, Ladysmith and Nkandla, looking for natural gas deposits in the main, and minerals. But in order for the company to proceed, it needs to present the agency with an environmental impact assessment which includes public consultation. The 100-strong crowd that attended the first hearing included landowners, developers, business owners, farmers, councillors, environmentalists and a “spiritualist”, and gave a resounding “no” to any exploration.

Gazprom Neft undertakes first cluster fracking using high-silica “frac sand” - Gazprom Neft has successfully completed cluster fracking* using high-silica “frac sand” at the ;Yuzhno-Priobskoye Gazpromneft-Khantos field. This new technology, delivering greater oil recovery, was tested at the field with the support of specialists from the Gazprom Neft Research and Development Centre. The application of cluster fracking with the use of frac sand is expected to result in a 20-percent reduction in fracking costs, while maintaining full efficiency.  Cluster-fracking technology has already been in use throughout Gazprom Neft fields for several years, and differs from traditional hydraulic fracking insofar as ceramic proppant** is injected into the strata. The process typically involves continuous injection of proppant throughout the fracking process, completely filling the fissures created under hydraulic fracturing. The use of cluster-fracking technology involves the injection, in rotation, of a proppant agent (proppant) and a special synthetic fibre, allowing channels to form within these fissures. In this way, the use of cluster-fracking technology reduces the volumes of proppant necessary in hydraulic fracking by 40 to 50 percent. The method involving the use of frac sand in place of proppant (the cost of which is two to three times lower) which has been tested at Gazpromneft-Khantos fields demonstrates still higher production efficiency and cost effectiveness.

Worst Petrobras Strike In 20 Years Endangers Debt Plan -- A four-day strike against Petrobras gathered steam on Wednesday, cutting crude and natural gas output from the No. 2 South American oil producer and threatening to become the most disruptive walkout at the state-run oil company in 20 years. Petroleo Brasileiro SA, as Petrobras is formally known, is expected to continue to report significant output cuts after new offshore units were affected by the strike, which began on Sunday. On Monday Petrobras said it had lost 273,000 barrels a day of crude output, or about 13 percent of its Brazilian output. It has made no formal estimate for output since then. The cuts have already caused the biggest strike-induced hit to Petrobras' crude output since a 32-day strike in 1995 that led to lines at gas stations and military occupation of refineries. The latest strike is also likely to increase pressure on a company hobbled by a vast corruption scandal and struggling under $130 billion of debt, the largest in the world oil industry. "This is serious because it is happening in the midst of Brazil's worst economic crisis in decades and in the middle of Petrobras' worst crisis ever," said Adriano Pires, head of the Brazilian Infrastructure Institute, a Rio de Janeiro Energy research company.

Libya Oil Output Drops as Factions Fight Over Energy Assets - Rigzone: -- Libya’s oil output dropped below 400,000 barrels a day after the divided country’s internationally recognized government in the east closed a port run by a rival administration in the west, in a push to assert control over more energy assets and exports. Production fell after crude exports halted at the port of Zueitina, Mohamed Elharari, a spokesman for the National Oil Corp.’s management in the western city of Tripoli, said Wednesday by phone. Libya pumped 430,000 barrels a day in October, data compiled by Bloomberg show. Zueitina will be closed until further notice, and tankers seeking to load crude there must now register with a rival NOC management loyal to the internationally recognized government based in eastern Libya, according to a Petroleum Guard spokesman Ali al-Hasy. Vessels registered with the NOC administration in Tripoli, seat of an Islamist-backed government, are “illegitimate” and won’t be permitted to load at Zueitina, he said. “This is clearly an escalation” by the eastern government to make buyers deal directly with its NOC management rather than continue working with the Tripoli authorities and thus gain more control over oil revenue, “The more interesting question is whether there’s a risk of the same action being repeated at the other terminals under the control of the eastern government,” he said, referring to the ports of Hariga and Brega.  Libya, with Africa’s largest oil reserves, pumped about 1.6 million barrels a day of crude before a 2011 rebellion ended Muammar Qaddafi’s 42-year rule.

Indonesia to Process More of its Oil as Southeast Asian Supplies Fall (Reuters) - Indonesia's state-owned energy firm Pertamina plans to process more domestic crude oil in a bid to limit the impact on the country of declining production, a plight that is also affecting oil-rich neighbours Malaysia and Brunei. All three countries, which rely heavily on energy revenues, are running out of oil. Reuters research based on government, industry and consultancy data shows they could run dry within the next 25 years. "Pertamina intends to maximise domestic crude processing to reduce dependence on the market," said Daniel Purba, vice president for integrated supply chain at Pertamina, outlining plans to buy more locally produced supplies. It would also use more biofuels and liquefied petroleum gas (LPG) to limit diesel imports, he said. The three Southeast Asian nations are heavily dependent on oil revenues, with oil rent - the value of oil production after costs - equal to about 15 percent of the national budget in Indonesia, rising to 40 percent in Malaysia and almost 100 percent in Brunei. While production estimates can change with new discoveries and technology, many of the big fields that have propped up their budgets in recent decades are declining, with low oil prices limiting the prospect of increased recovery or finding new sources. Governments are facing losing hundreds of millions of dollars in revenues, with annual production output declining at between 1.5 percent and 4 percent, while oil and gas prices have more than halved since 2014.

Amnesty accuses Shell of failing to clear Nigeria oil spills – Shell has failed to fulfill its legal obligations to clear up oil spills that it has caused in Nigeria’s oil-rich Niger Delta region, Amnesty International said on Tuesday. Oil pollution caused by corroded pipelines and crude theft has longed plagued the southwestern Delta, an impoverished region despite being home to much of Nigeria’s oil and gas wealth. Amnesty said the findings of a 38 page report were based on research conducted in the Boobanabe, Bomu Manifold, Barabeedom swamp and Okuluebu areas of Niger Delta’s Ogoniland region, between July and September this year. Spills in those areas date back several years. Researchers said they found waterlogged areas with an oily sheen, “patches of oil-blackened soil at several locations” and, in some cases, pollution “spreading into neighboring land and waterways.” The human rights organization called on Shell to change its approach to the way in which it cleans up after oil spills and urged the government to publish detailed information relating to such operations.

What The Oil And Gas Industry Is Not Telling Investors - Oil prices crashed because of too much supply, but will rebound as production shrinks and demand rises. But what if long-term demand for oil ends up being sharply lower than what the oil industry believes? That is the subject of a new report from The Carbon Tracker Initiative, which looks at a range of scenarios that could blow up oil industry projections for long-term oil demand. Historically, Carbon Tracker says, energy demand has been driven by population, economic growth, and the efficiency (or inefficiency) of energy-using technologies. Carbon Tracker looks at a couple possible future scenarios in which those parameters are altered, resulting in dramatically lower rates of oil consumption. Carbon Tracker has been a pioneer in the concept of “stranded assets,” the notion that fossil fuel assets will lose their value as the world moves to restrict carbon emissions. If an oil field cannot be produced profitably in a carbon-constrained world – or cannot legally be produced because of certain regulations – then it ceases to have value. That puts investors’ dollars at risk, a risk that financial markets have not fully grappled with. However, in a new report, Carbon Tracker expands upon the possible scenarios in which oil demand may not live up to industry predictions. For example, if the world population hits only 8.3 billion by 2050 instead of the 9.7 billion figure typically cited by the UN, fossil fuel consumption could end up being 17 percent lower in 2050 than the oil industry thinks. Coal would be affected the most, with 25 percent reduction in demand compared to the business-as-usual case.

Oil slides on slower Chinese factories, record Russian output – Oil prices fell on Monday as weak Chinese economic data fueled concerns about demand slowing there and record-high production in Russia exacerbated the global supply glut. Brent crude futures, the global benchmark, traded down 50 cents at $49.06 a barrel at 1428 GMT, down 1.1 percent. U.S. futures were trading at $45.98 a barrel, down 60 cents or 1.3 percent on Friday’s close. “High OPEC production, record-high production in Russia and weak China data are driving prices lower,” said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. China’s factory activity fell for an eighth straight month in October, a survey showed, pointing at continued sluggishness in the world’s second-largest economy. The global oil supply glut, which has more than halved oil prices since a peak in June last year, was emphasized on Monday when Russia reported that its October oil production hit a post-Soviet record of 10.78 million barrels per day. The data reflected Russia’s strategy of defending its market share as rivals from the Gulf start supplying Moscow’s traditional markets.

WTI oil futures rally above $47 ahead of API weekly supply report - West Texas Intermediate oil futures rallied sharply on Tuesday, as market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil consumer. Crude oil for delivery in December on the New York Mercantile Exchange jumped 96 cents, or 2.08%, to trade at $47.10 a barrel during U.S. morning hours. It earlier rose to $47.28, the highest since October 19. The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 2.7 million barrels in the week ended October 30. According to industry research group Baker Hughes (N:BHI), the number of rigs drilling for oil in the U.S. decreased by 16 last week to 578, the ninth straight weekly decline and the lowest level since June 2010. Over the prior nine weeks, drillers in the U.S. have cut 97 rigs. A lower U.S. rig count is usually a bullish sign for oil as it signals potentially lower production in the future. However, U.S. oil production has held around 9.0 million barrels a day, close to the highest level since the early 1970's. Meanwhile, total U.S. crude oil inventories stood near levels not seen for this time of year in at least the last 80 years. Elsewhere, on the ICE Futures Exchange in London, Brent oil for December delivery tacked on 93 cents, or 1.9%, to trade at $49.72 a barrel.

API Reports Larger-Than-Expected Total Crude Inventory Build For 6th Consecutive Week, Cushing Draw -- For the sixth week in a row, API reports a larger than expected 2.8mm inventory build (though that is lower than the last few week's build). Cushing stocks, however, saw a 508k draw, easing some storage concerns. Crude oil prices remain confused for now having pumped and dumped to unch. Sixth weekly build in a row...Crude popped and dropped... Charts: Bloomberg

Kuwait oil minister says believes oil prices have bottomed out  -- Kuwait’s oil minister said on Wednesday he believed oil prices had bottomed out. Asked whether he agreed with recent remarks by Qatar’s energy minister that oil prices had bottomed, Ali al-Omair told reporters on the sidelines of a carbon conference in Riyadh: “Yes I agree with him, because now for two to three months, the prices don’t go down. So maybe yes, they are at the bottom.” As he spoke, Brent oil was trading around $50.70 per barrel. Omair also said: “Now we can see that several rig rates have declined as a number and the high-cost production started to withdraw from the market. For about six months we can see a decline in the rig rates. Of course this would help the prices. “But the other point which would help the prices is economic growth, so we have to wait and see how the economic growth in south Asia, in Europe, in America proceeds. If this is going to increase, as economic growth, this would improve the prices.” Asked whether OPEC should stick at its meeting in December to its current oil market strategy of not reducing production, Omair replied: “OPEC should not cut production alone, yes…I think OPEC should stick to its unity. OPEC now has been targeted by the non-OPEC countries…but if there is any cost or cutting in production, this should not be only for OPEC countries, we have to share together the cost of reduction.”

U.S. crude oil stocks build on strong output despite import drop – EIA - – U.S. crude oil inventories rose for a sixth straight week as domestic production increased, outweighing a drop in imports to the lowest level since 1991, data from the Energy Information Administration showed on Wednesday. Crude inventories rose 2.8 million barrels in the week to Oct. 30, in line with analysts’ expectations in a Reuters poll. U.S. crude imports fell last week by 89,000 barrels per day to 6.4 million bpd, the lowest since 1991. Crude production rose 48,000 bpd to 9.16 million bpd, the highest level since Oct. 2. “The part of the report that continues to amaze is the domestic production number, which showed a small rise, despite the ever-plunging rig count,” said John Kilduff, partner at New York hedge fund Again Capital. Oil services company Baker Hughes Inc said drillers removed 16 oil rigs in the week ended Oct. 30, bringing the total rig count down to 578, the least since June 2010. U.S. oil prices, already down about 1 percent before the EIA report, extended losses after the data and were down more than 3 percent, or $1.45, at $46.45 a barrel by 11:22 a.m. EST (1522 GMT). Crude stocks at the Cushing, Oklahoma, delivery hub for U.S crude futures fell 212,000 barrels, EIA said. Refinery crude runs rose 21,000 bpd as refinery utilization rates rose by 1.1 percentage points to 88.7 percent of capacity.

Jack Kemp's Weekly Energy Tweets -- November 4, 2015:

  • US refinery throughput essentially unchanged from prior week as refineries pass midpoint of maintenance season; throughput remains above 10-year high, but just barely.
    US propane stocks hit new record of 102 million bbls; up 22.2 million bbls above prior-year level. This year's propane stocks are so much higher than the 10-year range, the graph is simply staggering. The 10-year graph no longer has any relevance. The entire US crude oil and natural gas metrics will have to be re-set, perhaps starting with 2013 or 2014.
    US distillate stocks fell 1.3 million bbls; the 7th consecutive week of decline. Total draw of 13.2 million but still up 9.2 million above average. Sits about in the middle of the 10-year range -- actually looks a bit lower than the mid-point of that range.
    US gasoline stocks fell 3.3 million bbls, the 4th consecutive week of declines, though still 12.1 million bbls above the 10-year seasonal average. The graph is staggering.
    US commercial crude stocks rise 2.8 million bbls and are now 103 million bbls above 2014. The graph at the tweet is amazing, to say the least. The ten-year high was around 350 million blls; the ten-year low was about 250 million bbls. Most recently, about 475 million bbls. US commercial crude stocks are in the stratosphere and will make new 10-year graphs completely meaningless.
    US total refined product stocks fells 5.2 million bbls last week, the 7th consecutive decline.  Again, the same comments regarding the 10-year history as noted above.
    US total commercial oil stocks fell 2.3 million bbls last week, second consecutive decline. The graph is staggering. This year's number is so far above the 10-year range, the 10-year graph has become meaningless.
    US diesel very cheap compared with gasoline as market enters winter with unusually large stocks. The interesting thing is that distillate fuel oil stocks are right in the middle of the 10-year history grapha nd trening down, for several weeks now.
    Over the past four weeks, US gasoline demand is trending up; diesel is trending down, but choppy.

Crude Prices Pump'n'Dump After 6th Consecutive Inventory Build & Surge In Production -- Crude oil algos traders are buying WTI despite DOE reporting the 6th consecutive weekly inventory build in US crude stocks (confirming API's build at 2.8mm barrels). Furthermore, for the 3rd week in a row, US crude production rose (back to one-month highs)... and thenthe humans appeared to read the DOE report and the selling began.  Another weekly build in US crude inventories... And for the 3rd week in a row production rose... And crude rallies... And then the humans read the report... Charts: Bloomberg

U.S. refineries start to return from maintenance – Total stocks of crude oil and refined products in commercial storage across the United States dropped for the second week running last week, the first back-to-back fall since May, according to the U.S. Energy Information Administration (EIA). More than 1.4 million barrels per day (bpd) of refinery capacity is still offline for routine maintenance and upgrades after the end of the summer driving season. Turnarounds have contributed to the accumulation of crude inventories but resulted in a big draw down in stocks of refined products including gasoline and distillate fuel oil. Stocks of crude rose by 2.8 million barrels in the week ending on Oct. 30, and have increased in each of the last six weeks, by a total of almost 29 million barrels. Crude stocks are now nearly 103 million barrels, about 27 percent, higher than they were at the same point last year (“Weekly Petroleum Status Report” published on Nov. 4). But the stock of refined fuels has fallen for seven consecutive weeks by a total of 25 million barrels, or about 500,000 bpd. Gasoline stocks have fallen more than 8 million barrels over the last four weeks while distillate stocks have been down for seven consecutive weeks by a total of more than 13 million barrels. At the end of the summer there were widespread predictions that the United States was headed for a glut of refined products once the driving season finished. But the threatened oversupply has not materialized as refineries have successfully matched runs with lower seasonal demand.

U.S. crude overtakes Brent in S&P commodity index rebalance - A widely watched commodity index is returning the U.S. crude benchmark to the top of its weightings table, just a year after allowing Europe’s Brent oil benchmark to dominate, the firm managing the index said on Thursday. The elevation of the U.S. West Texas Intermediate (WTI) crude benchmark within the 24-commodity S&P GSCI index comes amid higher liquidity for the contract, index manager S&P Dow Jones Indices said. WTI’s weighting will rise by 2.13 percentage points to 23.04 percent in the 2016 rebalancing of the S&P GSCI that will take effect in January, the company said in a statement. Brent’s weighting will drop by 1.1 percentage points to 20.43 percent, it said. “The WTI volume and prices drove the change in the percentage weights,” Miriam Hespanhol, a spokeswoman for S&P Dow Jones Indices, said in an email. Reuters charts show daily volumes in WTI averaging about 416 million contracts now versus about 370 million a year ago and around 225 million in November 2013.

U.S. rig count declines by 4 this week to 771 | The Salt Lake Tribune: The number of rigs exploring for oil and natural gas in the U.S. this week declined by four to 771, oilfield services company Baker Hughes said Friday. The company's weekly report showed that 572 rigs were seeking oil and 199 explored for natural gas. A year ago, with oil prices about double the prices now, 1,925 rigs were active. Among major oil- and gas-producing states, New Mexico lost five rigs, California and Wyoming two, and Louisiana and Oklahoma one apiece. Colorado gained three rigs while Kansas, North Dakota and Texas each increased by one. Utah was unchanged, along with Alaska, Arkansas, Ohio, Pennsylvania and West Virginia.   The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

U.S. Oil-Rig Count Falls by Six - WSJ: The U.S. oil-rig count dropped by six to 572 in the latest week, the 10th- consecutive week of declines, according to Baker Hughes Inc. BHI 4.41 % The number of U.S. oil-drilling rigs, which is viewed as a proxy for activity in the oil industry, has fallen sharply since oil prices started falling last year. After a streak of modest growth, the rig count has now declined for 10 consecutive weeks. There are now about 64% fewer rigs from a peak of 1,609 in October 2014. According to Baker Hughes, the number of gas rigs rose by two to 199. The U.S. offshore-rig count was 32 in the latest week, down one from last week and 21 from a year ago. For all rigs, including natural gas, the week’s total fell by 4 to 771. Earlier in the week, weekly U.S. inventory data showed a sixth-straight increase in crude supplies and an unexpected uptick in production. Persistent concern about the global glut of crude has sent prices plunging to below $50 a barrel from over a $100 just over a year ago. Major oil producers such as Saudi Arabia and Russia have continued to produce at a high pace in a bid to defend and extend their market share.

Brazil oil strike cuts output 25 percent, union says – A strike that began on Sunday at Brazil’s state-run oil producer Petroleo Brasileiro SA has slowed daily oil output by around 25 percent, the country’s largest union FUP said on Tuesday. FUP’s general coordinator José Maria Rangel said in a video published online that in the first 24 hours since the union’s members joined the strike, they had prevented around 450,000 barrels of oil from being extracted in the offshore Campos Basin, and nationwide around 500,000 barrels. Petrobras, as the company is known, produced around 2 million barrels of oil per day in September. News of the strike in the ninth biggest global producer helped push oil prices back up towards $50 per barrel on Tuesday. The production hit comes as Petrobras is particularly strapped for cash, amid the country’s largest-ever corruption scandal and low oil prices. The lost oil production could cost Petrobras some $25 million per day in foregone revenue, analysts said.

The Earth is not running out of oil and gas, BP says - (BP video) The world is no longer at risk of running out of oil or gas, with existing technology capable of unlocking so much that global reserves would almost double by 2050 despite booming consumption, BP has said. When taking into account all accessible forms of energy, including nuclear, wind and solar, there are enough resources to meet 20 times what the world will need over that period, David Eyton, BP Group head of technology said. "Energy resources are plentiful. Concerns over running out of oil and gas have disappeared," Mr Eyton said at the launch of BP's inaugural Technology Outlook.Oil and gas companies have invested heavily in squeezing the maximum from existing reservoirs by using chemicals, super computers and robotics. The halving of oil prices since last June has further dampened their appetite to explore for new resources, with more than $200bn-worth of projects scrapped in recent months. By applying these technologies, the global proved fossil fuel resources could increase from 2.9 trillion barrels of oil equivalent (boe) to 4.8 trillion boe by 2050, nearly double the projected 2.5 trillion boe required to meet global demand until 2050, BP said. With new exploration and technology, the resources could leap to a staggering 7.5 trillion boe, Mr Eyton said.

BP sees technology nearly doubling world energy resources by 2050 - The world is no longer at risk of running out of oil or gas for decades ahead with existing technology capable of unlocking so much that global reserves would almost double by 2050 despite booming consumption, oil major BP said on Monday. When taking into account all accessible forms of energy including nuclear, wind and solar, there are enough resources to meet 20 times what the world will need over that period, David Eyton, BP Group Head of Technology said. “Energy resources are plentiful. Concerns over running out of oil and gas have disappeared,” Eyton said at the launch of BP’s inaugural Technology Outlook. Oil and gas companies have invested heavily in squeezing the maximum from existing reservoirs by using chemicals, super computers and robotics. The halving of oil prices since last June has further dampened their appetite to explore for new resources, with more than $200 billion worth of mega projects scrapped in recent months. By applying these technologies, the global proved fossil fuel resources could increase from 2.9 trillion barrels of oil equivalent (boe) to 4.8 trillion boe by 2050, nearly double the projected 2.5 trillion boe required to meet global demand until 2050, BP said. With new exploration and technology, the resources could leap to a staggering 7.5 trillion boe, Eyton said.

"Earth Is An Oil-Producing Machine — We're Not Running Out" -- Investor's Business Daily.  Ever since M. King Hubbert in the 1950s convinced a lot of people with his "peak oil" theory that production would collapse and we'd eventually exhaust our crude supplies, the clock has been running. And running. And it will continue to run for some time, as technology and new discoveries show that there's still an ocean of oil under our feet. Engineering and Technology Magazine reported this week that BP — the company that once wanted to be known as "Beyond Petroleum" rather than "British Petroleum" — is saying "the world is no longer at risk of running out of resources." Things are so good, in fact, that Engineering and Technology says "with the use of the innovative technologies, available fossil fuel resources could increase from the current 2.9 trillion barrels of oil equivalent to 4.8 trillion by 2050, which is almost twice as much as the projected global demand."  That number could even reach 7.5 trillion barrels if technology and exploration techniques advance even faster.

"Peak demand" means world may never see oil at $100 a barrel again – Just as the energy industry has brushed aside concerns that the world could run out of oil, industry executives now say they believe it is demand, rather than supply, that is nearing its apex.  Ian Taylor, today the chief executive of the world’s largest oil trader Vitol, was part of a team at Royal Dutch Shell that forecast oil prices would rise five fold to $125 a barrel in 2015 as global reserves were expected to become more scarce. Now he says it is unlikely to ever reach those levels again. Oil today stands at around $50 a barrel, having more than halved since June 2014 after global supplies dramatically rose due in large part to the U.S. shale oil boom but also due to the unlocking of huge offshore reserves in Brazil, Africa and Asia. “We all talk about ‘peak supply’ and maybe with shale that is becoming a disabused concept. I have begun feeling that… we are coming to peak demand towards 2030,” Taylor said on Wednesday at The Economist Energy Summit in London. “I believe we may not see $100 (a barrel) ever again,” Taylor said. Such forecasts come at a time when oil companies have slashed billions off their budgets and scrapped more than $200 billion of oil and gas projects to cope with the sharp price drop. Lower future demand for fossil fuels could wreck the finances of producing countries like Saudi Arabia, Russia and Venezuela that depend on high oil prices to fund public spending, but would be an overall boon for the world. The overwhelming majority of people live in countries – whether rich like the United States, middle-income like China or poor like Bangladesh – that consume more energy than they produce.

OPEC October oil output falls led by Saudi, Iraq, survey says – OPEC oil output has fallen in October from the previous month, a Reuters survey found last week, as declines in top producers Saudi Arabia and Iraq outweighed higher supply from African members. The drops are not indicative of deliberate supply cuts to prop up prices, sources in the survey said, and the Organization of the Petroleum Exporting Countries is still pumping close to a record high as major producers focus on defending market share. OPEC supply has fallen in October to 31.64 million barrels per day (bpd) from a revised 31.76 million in September, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants. With one day left in October, the final figures could be revised. Even so, OPEC has boosted production by almost 1.5 million bpd since the November 2014 switch to defending market share. Despite the decline this month, output is not far below July’s 31.88 million bpd, the highest since Reuters records began in 1997. The OPEC increase has added to ample supplies, which have helped cut prices by more than half from June 2014 to below $50 a barrel. Still, with reductions in capital spending by oil companies expected to curb future supply, analysts see signs that OPEC’s strategy will deliver.

OPEC proves fracking is no panacea - November marks the one-year anniversary of Organization of the Petroleum Exporting Country’s (OPEC) decision to continue its excessive rate of production despite spiraling oil prices on international markets. The result was easily predicted by anyone with only a rudimentary understanding of economics: Over-supply in the face of stagnant demand led to an even more precipitous fall in the price of oil. Nearly a full year later, West Texas Intermediate benchmark crude oil is trading around $43 per barrel – about half its price a year ago. And as reported by E&E’s Energywire, analyst John Dennis of WoodRock & Co. says, "$40-to-$45 oil is overpriced,” with others suggesting oil could drop to the $30 range.Meanwhile, the prices of other energy dependent commodities have become destabilized across the board, with experts uncertain where the bottom lies. While generally good news for consumers, the drop has been dizzying for the producers of those commodities. But it has been particularly devastating for the oil and gas sector. Early in 2014, the U.S. oil economy was riding high. Many trumpeted hydraulic fracturing – fracking – as the great American liberator of the Middle East’s stranglehold on energy markets. Enthusiastic drillers would flood the markets with domestic oil, the theory goes, driving down the price of oil and saving drivers at the pump. “Just let the free market system do the work,” they chimed. Of course those predictions were wildly optimistic. Only OPEC has the supply and thus the ability to turn on – or off – the floodgates that affect the price of oil. Further, as a result of much higher costs associated with their drilling, the domestic fracking industry has contracted to the point that foreign oil is once again flowing across our shores.

Gulf oil producers delay field work, see weaker 2016 prices - sources – Gulf oil producers are delaying some field maintenance until next year to keep production high and reduce costs as they forecast weaker oil prices in 2016, industry sources said. It was not possible to clarify which fields were affected – information which is highly sensitive. But it showed that Gulf oil producers aim to keep pumping hard as they expect weak oil prices next year when sanctions on Iran are lifted allowing it to export more to an oversupplied market, the sources said. They told Reuters that OPEC members Saudi Arabia, United Arab Emirates and Qatar are rescheduling non-essential maintenance work at oilfields originally planned for the last quarter of this year later into 2016 due to low oil prices. “The non-urgent maintenance is definitely being pushed. We see huge focus on production in Qatar, Abu Dhabi and Saudi Arabia,” said one industry source. “They are delaying to keep production high, if they shut down now they will not produce, and they also have to preserve cash,” the source said. Two more sources also said that Gulf oil producers are pushing forward some of their maintenance plans for oil rigs, wells and pipes that are not critical to production or safety of operations, but declined to give details. “There is delay. The reason is low oil prices, they are trying to have some control over the cost,” another industry source said of Saudi Aramco’s maintenance plans this year.

Exclusive: OPEC confidential report sees market share squeeze to 2019 -- Global demand for OPEC’s crude oil will remain under pressure in the next few years, the producer group said in an internal report, potentially fuelling a debate on its strategy of defending market share rather than prices. The draft report of OPEC’s long-term strategy, seen by Reuters, forecasts crude supply from OPEC – which has an output target of 30 million barrels per day (bpd) – falling slightly from 2015’s level until 2019, unless output slows faster than expected in rival producers. OPEC governors, official representatives of the 12 members of the Organization of the Petroleum Exporting Countries, met at the group’s Vienna headquarters on Wednesday to approve the final draft of the report. The 44-page report, marked “CONFIDENTIAL,” includes an annex containing comments from two members, Iran and Algeria, suggesting OPEC return to its old policy of propping up prices at a desired level by adjusting supplies. “Reaching agreement on a fair and reasonable price of oil for the next six to 12 months” is one of the steps that Iran recommends OPEC take. “OPEC production ceiling should be set for six or 12 months intervals.” OPEC oil ministers meet on Dec. 4 to decide whether to extend the strategy of allowing prices to fall to slow higher-cost rival supply. Since November 2014, when the group adopted that policy, OPEC production has risen but prices have deepened their collapse, hurting oil revenue.

Saudi CDS Soars To 6 Year Highs -- This weekend we saw an important action in the downgrade of Saudi Arabia, highlighting just how far the EM crisis has carried. As Ice Farm Capital's Michael Green notes, in response, Saudi CDS continues to climb, reaching its highest since 2009 (amid both default risk and devaluation concerns).  Now clearly Saudi’s distress is largely a byproduct of oil weakness. I create an “adjusted” Saudi CDS by netting out Germany and as you would expect this fairly closely tracks oil prices: But this is what is perhaps concerning – because even with oil prices undercutting the 2009 lows, Saudi adjusted CDS remains well below the levels briefly achieved in that period. Combined with the additional risks of a war in Yemen, Saudi succession challenges (which we have highlighted previously) and the emergence of ISIS, it’s perhaps surprising that the world’s view of Saudi Arabia has not deteriorated even more. As discussed in the weekly, theEmerging Market pain trade seems to be a fairly direct outcome of the European desire to weaken its currency to capture global growth. With Draghi continuing to push, and Yellen still not acting to turn the US into the extreme global consumer by strengthening the dollar, the rising risks in Saudi Arabia are a reminder that growth weakness has its own feedback mechanism – if oil prices stay at these levels for an extended period of time, it appearsunlikely that Saudi Arabia will remain the reliable source that the world is currently counting on.

BofA Sees Saudi Rating Risks Another S&P Cut Amid Oil Slump -- Saudi Arabia faces an “elevated” risk of another credit rating downgrade by Standard & Poor’s as the world’s biggest oil exporter grapples with the slump in crude prices, Bank of America Merrill Lynch said. The rating agency on Friday lowered Saudi Arabia’s credit rating one level to A+, the fifth-highest classification, saying the oil rout will increase the budget deficit in a country that relies on energy exports for more than 80 percent of its revenue. The International Monetary Fund expects Saudi Arabia to post a fiscal shortfall of more than 20 percent of economic output this year. "Based on planned fiscal consolidation measures, we think the risk of another downgrade" is elevated, Jean-Michel Saliba, Bank of America Merrill Lynch’s Middle East and North Africa economist, said in an e-mailed report on Tuesday. S&P’s expectation of a budget deficit of 10 percent of economic output next year and 5 percent in 2018 is optimistic, he said. The slump in oil prices by more than 40 percent over the last year is slowing growth in the kingdom’s non-oil economy and pushing the government to search for savings, contemplate project delays and sell bonds for the first time since 2007. The Emirates NBD Purchasing Managers’ Index for Saudi Arabia, a measure of growth in the non-oil economy, fell in October to its lowest level in six years, driven by weaker expansion in new business. Finance Minister Ibrahim al-Assaf said the kingdom was working on attracting foreign investment as part of efforts to reduce its reliance on oil revenue. Saudi Arabia is ready for the challenges posed by the oil price decline and will overcome them, he said.

Mideast money - Cheap oil eats into Saudi corporate profits, more pain ahead -- Saudi Arabian corporate earnings shrank during the third quarter of this year as low oil prices began hurting the wider economy, and are unlikely to achieve anything more than modest growth while the energy market languishes. The slowdown comes at an awkward time for the world’s top crude exporter, which has so far made little headway in attracting more international money to the bourse since opening it to direct purchases by foreign institutions in June. Combined net income at 166 listed companies for which data was available dropped 14.0 percent from a year earlier to 27.6 billion riyals ($7.4 billion) in the July-September quarter, Reuters calculated after the firms finished issuing earnings statements last week. As expected, petrochemical producers’ earnings, a big chunk of the stock market, fell sharply as cheap oil pushed down selling prices for their products, hurting profit margins. But earnings in some other sectors such as construction and banking also shrank or rose only modestly, suggesting cheap oil is now making itself felt throughout the economy in the form of tighter monetary conditions and less generous state spending. Standard & Poor’s cut Saudi Arabia’s long-term foreign and local currency sovereign credit rating last Friday, citing a “pronounced negative swing” in the government’s budget balance. Riyadh criticized the one notch drop to ‘A-plus/A-1′ as unjustified.

Saudis Bring Oil War To Europe With Largest Price Discount Since 2009 --- With oil exports to Europe having slipped from 13% of Saudi's total to just 10% in the last six months, The FT reports, the de facto leader of OPEC has slashed its Official Selling Price (OSP) to Europe in an effort to regain market share. Saudi lowered its OSP for its Arab light crude grade in Europe by $1.30 a barrel for December, taking its discount to the weighted average of the North Sea Brent benchmark to $4.75 a barrel - the largest discount since February 2009. The move, as we detailed previously, is basically going after Russia's customer base, has raised heckles in Moscow, with Rosneft CEO Igor Sechin complaining last month about Saudi "dumping" after he revealed the kingdom was selling oil to refineries in Poland. As The FT reports, the de facto leader of Opec, which produces more than one in every ten barrels of oil in the world, has been squeezed in Europe over the past year as rival producers have sent more oil to the region. Rising shipments from Iraqi Kurdistan that are delivered into the Mediterranean via the Turkish port of Ceyhan have displaced some Saudi shipments this year, traders and analysts said, while more crude from west Africa is also flowing to Europe. Saudi Arabia has responded by trying to find new customers, including targeting refineries that have traditionally taken the majority of their supplies from Russia and the North Sea.

What’s the big deal between Russia and the Saudis? -- Despite so many degrees of separation, the Saudis are still talking to the Russians. Why? A key reason is because a perennially paranoid House of Saud feels betrayed by their American protectors who, under the Obama administration, seem to have given up on isolating Iran. The Saudis can’t intellectually understand the see-saw of incoherent Beltway policies due to the power struggle between Zionist neocons and the old establishment. No wonder they might be tempted to move to the Russian side of the fence. But for that to happen there will be many a price to pay. So let’s talk about oil. In energy terms, an oil deal with the House of Saud would mean a lot to Russia. A deal could produce incremental oil revenue for Moscow of around $180 billion a year. The rest of the GCC does not really count: Kuwait is a US protectorate; Bahrain is a Saudi resort area; Dubai is a glitzy heroin money-laundering operation. The UAE itself is a wealthy group of pearl divers. And Qatar, as ‘Bandar Bush’ famously remarked, is “300 people and a TV station,” plus a decent airline that sponsors Barcelona. Riyadh – paranoia included - fully took note of the Obama administration’s supposed “policy” of dumping Saudi Arabia over an alleged Iranian natural gas bonanza, which would supposedly replace Gazprom in supplying Europe. That won’t happen, however, because Iran needs at least $180 billion in long-term investment to upgrade its energy infrastructure.

Is Iran Opening A "Secret Passage" To Asia For Russian Crude? -- Russia is looking to expand its influence through oil trade. And a little-reported deal this week may give it access to an entirely new part of the planet when it comes to crude exports. That's the Persian Gulf. Where reports suggest Russia is close to negotiating a "secret passage" for its oil shipments. The move is coming through a deal with Iran, which that government says could open the door for crude oil swaps between the two countries -- facilitating exports of "Russian" oil out into Asia and beyond. Iran's Deputy Petroleum Minister Amir Hossein Zamaninia told local press Monday that Russian energy company representatives will be arriving in Iran this week to discuss such a swap deal. Russia lacks access to ocean shipping routes beyond the Pacific and Arctic. Iran has better access, through its ports on the Persian Gulf. But Russia does have ports on the Caspian Sea. And as the map below shows, that provides a short shipping route into Iran.  Russia and Iran can exchange crude oil shipments along the Caspian Sea The swap scheme would see Russian crude oil sent to Iran, in exchange for equal shipments of Iranian crude flowing to Russia. And from there, it will be interesting to see what happens. Officials said that Russian oil would likely be used within Iran's northern provinces. But the swaps agreement opens up another possibility -- Russian crude could be sent further south, and even exported through Persian Gulf ports. That would give Russia unprecedented access to markets around the Indian Ocean -- including go-to crude buyers in Asia, greatly changing the dynamics of oil markets in this part of the world.

OPEC Infighting Reaching Critical Levels: OPEC members are fighting over long-term strategy, with many countries far apart on how best to coordinate oil production. According to an internal strategy document, and reported on by Reuters, OPEC members Iran, Algeria, Iraq, and others put forward a variety of strategies, including a return to the quota system, production cuts, and a price target. Iran wanted a return to country-specific limits on production, which was backed by Algeria. Iraq wanted more autonomy for countries to set their own policies. But, despite all of the suggestions, Saudi Arabia maintains that the market should determine oil prices. The internal squabbles suggest that the December 4 meeting in Vienna will likely be contentious, with expectations of no change in policy. Saudi Arabia holds enough sway to ensure OPEC stays the course, but it is also feeling the pain from the market share strategy. S&P downgraded Saudi Arabia’s credit rating last week to A+, arguing that oil prices are causing a widening budget deficit. The IMF expects Saudi Arabia’s deficit to reach 20 percent of GDP this year, and Bank of America Merrill Lynch said this week that the country was at risk of further credit downgrades if oil prices do not rebound.  The cutback in production from the Bakken has led refineries on the East Coast to turn to imported oil from abroad. Oil from Latin America, the Middle East, and Africa has become cheaper than North Dakota crude. Several refining companies, including PBF Energy, are set to purchase the least amount of Bakken crude since 2013.

Iran to announce oil output rise at next OPEC meeting - Shana – Iran will officially notify producer group OPEC in December of its plans to raise its crude oil output by 500,000 barrels per day (bpd), the Iranian oil minister said on Saturday. “We…ask them to respect the 30-million-barrel ceiling which they have agreed,” Bijan Zanganeh was quoted as saying by Shana, the ministry’s news agency. “Iran is prepared to supply at least 500,000 bpd of crude oil to global markets,” he added. The Organization of the Petroleum Exporting Countries (OPEC) will meet in Vienna in early December. OPEC is pumping close to a record high as major producers focus on defending market share. This has added to amply supplies, which have helped cut prices by more than half from June 2014 to below $50 a barrel. Under a deal reached with six major powers in July, Iran agreed to curb its nuclear program in exchange for an end to economic sanctions imposed on the country in 2012 over its disputed nuclear work. The country’s oil production is down one million bpd since the start of 2012 at 2.7 million bpd, depriving it of billions of dollars in oil revenue. Iran has repeatedly said it will ramp up crude oil production and reclaim its lost share of exports shortly after international sanctions are lifted. The OPEC member aims to raise oil output by 500,000 bpd as soon as sanctions are lifted in early 2016 and by one million bpd in March.

Crude Supertanker Rates Collapse As VLCC 'Traffic' To China Lowest In 13 Months -- A few days ago we warned, confirming Goldman Sachs' earlier analysis that the world was running out of space to store crude distillate products, that China was running out of storage space for crude oil as it dramatically ramped up its Strategic Petroleum Reserve 'buy low' plan. While the brightest indicator at the time was "about 4 million barrels of crude oil stranded in two tankers off an eastern port for nearly two months," this week, the dial went to 11 on the oil-demand-fear-o-meter, as Bloomberg reports supertankers sailing to Chinese ports plunged to its lowest in 13 months, sending the daily rate for shipping crashing.The marginal demand-er of last resort just left the market.  As a reminder, this is what Goldman said: "the build in Atlantic distillate inventories this year has been large, following near-record refinery utilization in both the US and Europe, only modest demand growth, especially relative to gasoline, and increased imports from the East on refinery expansion and rising Chinese exports." As a result, and despite a cold winter in both Europe and the US last year, European and US distillate storage utilization is reaching historically elevated levels, driving a sharp weakening in heating oil and gasoil time spreads.

China burns much more coal than it claims: China, the world's leading emitter of greenhouse gases from coal, is burning far more annually than previously thought, according to new government data. The finding could complicate the already difficult efforts to limit global warming. Even for a country of China's size and opacity, the scale of the correction is immense. China has been consuming as much as 17 per cent more coal each year than reported, according to the new government figures. By some initial estimates, that could translate to almost a billion more tons of carbon dioxide released into the atmosphere annually in recent years, more than all of Germany emits from fossil fuels. Officials from around the world will have to come to grips with the new figures when they gather in Paris this month to negotiate an international framework for curtailing greenhouse-gas pollution. The data also pose a challenge for scientists who are trying to reduce China's smog, which often bathes whole regions in acrid, unhealthy haze. The Chinese government has promised to halt the growth of its emissions of carbon dioxide, the main greenhouse pollutant from coal and other fossil fuels, by 2030. The new data suggest that the task of meeting that deadline by reducing China's dependence on coal will be more daunting and urgent than expected, said Yang Fuqiang, a former energy official in China who now advises the Natural Resources Defence Council.

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