DUC well numbers falling, natural gas prices at a 19 month high, 1 million bpd swing in oil fudge factor casts doubt on weekly data

as of this week, there's been a new addition to the raft of reports that the EIA publishes monthly that will be worth our watching...commencing with the September Drilling Productivity Report (which was released on the 12th), the EIA will be including a supplement that will provide a monthly estimate of the number of drilled but uncompleted wells (DUCs) in the 7 regions that the Drilling Productivity Report covers, and they'll be including a summary of that supplement under tab 3 on the anchor Drilling Productivity Report webpage....the addition of such data was a logical move, since a part of the Drilling Productivity Report has always cited oil and gas productivity per drilling rig data, which became pretty meaningless as drillers would drill wells but not frack them, thus showing no additional production after drilling...for this initial report, they estimate that there were 5,031 drilled but uncompleted (ie, unfracked) wells remaining in the 7 basins they cover (the Bakken, Niobrara, Permian, and Eagle Ford, Marcellus, Utica, and the Haynesville), down from 5,065 DUC wells in July...the Permian basin was the only region to see an increase in uncompleted wells, from 1310 DUC wells in July to 1348 in August, which fits what we already knew from the Baker Hughes rig count, wherein 70% of the rigs added over the past 19 weeks were in that basin...the Utica saw a nominal drop, from 132 DUC wells in July to 129 DUCS in August, while the Marcellus saw their uncompleted well inventory fall from 658 wells in July to 642 DUC wells in August...small graphs with the report indicate that oil basin DUCs (ie the Bakken, Niobrara, Permian, and Eagle Ford) rose from 2500 in late 2013 to over 4500 earlier this year, but declined by about 400 over the last five months...natural gas basin (Marcellus, Utica, and the Haynesville) DUCs, on the other hand, fell at a slow, irregular pace from near 1200 to near 1000 over the period, but have fallen more rapidly over the past several months to 914 as of the August report....that should not be a surprise, as the number of gas drilling rigs has dropped from over 1500 throughout 2008 to 374 rigs by the end of 2013, falling to set record lows for gas drilling most every week in early 2016, and hitting bottom at just 81 natural gas rigs nationally on both August 5th and August 26th...apparently, gas drillers have idled their rigs while they've been fracking their DUC inventory to maintain enough cash flow to pay interest on their debts...

speaking of natural gas, prices for October delivery of nat gas hit 19 month highs on two successive days of trading on the New York Mercantile Exchange this week, even though supplies remain 8.2% above normal for this time of year...you've probably noticed that it's been warmer than normal for this time of year, not just in Ohio but across the nation...since natural gas overtook coal as the top fuel for thermal electric generation earlier this year, warmer than normal fall weather means that many  Americans, especially south of here, are using more air conditioning than normal for this time of year, and thus consuming more electric power and hence more natural gas than they normally would, at a time of year when most surplus natural gas would normally be heading into storage...after closing last week at $2.948 per mmBTU (million British thermal units), natural gas prices rose to $2.934 per mm-BTU on Monday, then jumped to $3.047 per mm-BTU on Tuesday and to $3.057 per mm-BTU on Wednesday, putting them up 5.8% over 5 days, before falling back to $2.990 per mm-BTU on Thursday and to $2.955 per mm-BTU on Friday, after the EIA's Weekly Natural Gas Storage Report for week ending September 16th showed that 52 billion cubic feet of natural gas were added to storage in the US over that week, down from last year's 105 billion cubic feet addition, and down from the 83 billion cubic feet average addition for this time of year, which apparently disappointed traders who were expecting a smaller addition....what apparently drove the rally were forecasts that September was on pace to be the hottest on record in the US, and the NOAA three month forecast for October through December, that indicated a likelihood of warmer than normal temperatures for 80% of the country, with much above normal temperatures in the Northeast and Southwest, while only the 6 states in the Southeast would see close to normal temperatures...since it's been a few months since we last looked at a natural gas price chart, we'll include one here today...

the above graph shows the October contract price over the last 6 months for a million British thermal units (mmBTU) of natural gas at or contracted to be delivered to the Louisiana interstate natural gas pipeline interconnection known as the Henry Hub, which is the benchmark for setting natural gas prices across the US...obviously, recent prices still remain below the $4 per mmBTU breakeven price that was often quoted before prices crashed, and since the count of rigs drilling for gas continued to has hit new lows almost weekly over the entirety of this period up until the end of August, we feel it's safe to say that natural gas prices likely still remain below breakeven in all but the richest spots of the Utica and Marcellus today...still, as we noted, the older uncompleted wells are now being fracked faster than new wells are being drilled, so eventually some drilling will have to resume if the same level of natural gas supply is to be maintained...

US oil prices, meanwhile, which had fallen by 6.2% last week to $43.03 a barrel, rose every day this week until Friday, when they gave up almost $2 of their gains on a confluence of issues...up a bit to close at $43.30 on Monday, oil prices rose to $44.05 on Tuesday after the American Petroleum Institute reported a surprise inventory draw of 7.497 million barrels, when traders had been expecting a 3.25 million barrel addition to supplies...oil prices then fell again on Wednesday when the EIA weekly report confirmed a massive supply drawdown, and subsequently closed the day at $45.34 a barrel...the price rally continued on that sinking oil supply news on Thursday as price rose almost another dollar to close at $46.32 a barrel...however, on Friday prices were hit after a Saudi oil spokesman said that the oil producers meeting Algiers next week would not result in any formal decisions to freeze supply, and that any agreement would be deferred until the OPEC meeting in Vienna in November...the price drop got worse in the afternoon, after the Fed confirmed it intended to restrict bank involvement in markets for physical commodities such as oil, and with oil drilling on the increase again, oil prices went on to suffer their worst one-day loss since mid-July, but still managed to close the week a $44.48 a barrel, a 2% gain on the week overall...

The Latest Oil Stats from the EIA

the oil data for the week ending September 16th from the US Energy Information Administration showed an increase in our imports of oil to pre-Hermine levels, surprisingly large drops in our stockpiles of both crude and gasoline, and a seasonal pullback in the amount of oil used by domestic refineries....however, this week's crude oil fudge factor that was needed to make the weekly U.S. Petroleum Balance Sheet (line 13) balance swung by more than a million barrels a day to -532,000 barrels per day, from last week's +513,000 barrels per day, which means that 532,000 barrels of oil per day that we appeared to have produced or imported last week did not show up in the final oil consumption or inventory figures....needless to say, a million barrel per day swing in the balance sheet adjustment renders most of our week over week comparisons useless, but for the same week last year the adjustment was also an inordinately large negative -625,000 barrels per day, which means that at least our year over year comparisons will be subject to similar magnitudes of error...

with that in mind, then, we’ll note that the EIA reported that production of crude oil from US wells rose by 19,000 barrels per day to an average of 8,512,000 barrels per day during the week ending September 16th, as output of Alaskan oil rose by 6,000 barrels per day and production from the lower 48 states was 13,000 barrels per day higher, the third small increase in continental US production in a row....that still left the week's domestic oil production 6.8% lower than the 9,136,000 barrels we produced during the week ending September 18th of last year, and 11.4% below the record 9,610,000 barrel per day oil production that we saw during the week ending June 5th last  year...though our oil production for the week ending September 16th was 707,000 barrels per day lower than what we were producing at the beginning of this year, its now up by 84,000 barrels per day since the beginning of July, so it appears our oil output is stabilizing at these levels as more DUC wells are brought into production...  

for the same week, the EIA also reported that our imports of crude oil rose by an average of 247,000 barrels per day to an average of 8,309,000 barrels per day, 15.4% more than the 7,176,000 barrels of oil per day we imported during the week ending September 18th a year ago...the 4 week average of our oil imports reported by the EIA's weekly Petroleum Status Report (62 pp pdf), which includes both a 3 year high and the subsequent Hermine import bust, slipped to an average of 8.1 million barrels per day, still 9.1% higher than the same four-week period last year... but our exports of crude oil were up by an average of 170,000 barrels per day to an average of 588,000 barrels per day during the same week, partially mitigating the effect of this week's import increase on supplies...

meanwhile, the amount of crude oil used by US refineries fell by an average of 143,000 barrels per day to an average of 16,587,000 barrels of crude per day during the week ending September 9th, as the US refinery utilization rate fell to 92.0% for that week, down from 92.9% of capacity the prior week, but up from the refinery utilization rate of 90.9% logged during the week ending September 18th last year...however, despite a 343.000 barrel per day drop in refining over two weeks, the amount of crude refined this week nationally was still 2.4% more than the 16,203,000 barrels of crude per day US refineries used during the week ending September 18th last year, and 2.3% more than the equivalent week in 2014, as refining for “the summer driving season” normally comes to a close with the passing of the labor day weekend ...   

however, despite the apparent refinery slowdown, our refineries’ production of gasoline rose by 183,000 barrels per day to 10,083,000 barrels per day during the week ending September 16th, which was historically the highest US gasoline output in any week during the three months following Labor Day....that was thus 5.6% higher than our gasoline output of 9,545,000 barrels per day during the week ending September 18th last year, and 10.4% higher than the gasoline production of the equivalent week of 2014....at the same time, refinery output of distillate fuels (diesel fuel and heat oil) rose by 45,000 barrels per day to 4,978,000 barrels per day during the week ending September 16th, which still left our distillates production 2.1% less than the 5,083,000 barrels per day that was being produced during the same week last year, but 2.1% more than the 4,875,000 barrels per day of distillates production of the equivalent week of 2014...  

however, even with the increase in gasoline production, our gasoline inventories fell by 3,204,000 barrels to 225,156,000 barrels as of September 16th, as our domestic demand for gasoline unexpectedly rose by 244,000 barrels per day to 9,650,000 barrels per day and as our gasoline imports fell by 81,000 barrels per day to 569,000 barrels per day...still, this week's gasoline inventories remained 2.9% higher than the 218,756,000 barrels of gasoline that we had stored on September 18th last year, and 7.1% higher than the 210,324,000 barrels of gasoline we had stored on September 19th of 2014, and still remain categorized by the EIA as "well above the upper limit of the average range" for this time of year....at the same time, our distillate fuel inventories rose by 2,238,000 barrels to 164,992,000 barrels by September 16th, following the prior week's 4,619,000 barrel increase...that put our distillate inventories 8.6% above the distillate inventories of 151,875,000 barrels of September 18th last year, and 28.3% above the distillate fuel inventories of 128,595,000 barrels of September 19th, 2014...  

oddly, even with our crude oil imports higher and our refinery consumption of crude lower, we apparently needed to draw more oil out of storage to meet our need needs than last week, as our stocks of crude oil in storage fell by 6,200,000 barrels to 504,598,000 barrels....since our crude supplies have thus dropped by nearly 21.3 million barrels over the past three weeks, it would be a good time to pull out a longer term chart to see what that drop of supplies looks like from a historical prospective..

the above graph comes from a weekly pdf booklet of petroleum graphs produced by Yardeni Research, a provider of independent investment and economics research, run by Dr Ed Yardeni...it shows the end of the week stocks of crude oil in millions of barrels for each week beginning with January 2012, up to and including this week's report for September 16th, with graphs for each year color coded as indicated...here we can see how our oil inventories stayed in a narrow range between 2012 and 2014, represented by the mustard, green and blue bands, typically falling to 350 million barrels by the end of each summer and rising to around 390 million barrels by early spring....however, at the beginning of 2015, represented by the grape colored graph, our inventories of oil started rising each week till they reached 490 million barrels at the end of April 2015, and then stayed elevated in a range 80 to 100 million barrels above the previous norms...that continued into 2016, represented by the scarlet colored graph, and although the rate of increase tailed off early this year, our oil supplies had generally averaged about 15% above 2015's elevated levels, and more than 40% above historical levels, since early April of this year...the big hit to 2016 inventories came two weeks ago, when the Gulf and Atlantic Coast storm disrupted imports, and now we've seen another 6.2 million barrel drop, complicated by the massive half million barrel per day difference between apparent supply and end use...nonetheless, we still ended this week with 12.2% more oil in storage than the 453,969,000 barrels we had stored as of the same weekend a year earlier, and 40.9% more oil than we had stored on September 19th of 2014....however, the markets generally react to the year over year change as reported weekly by the EIA, but as we can see from the above graph, last year's supply of oil (and of most oil products) was already more than 20% above the historical norm...

This week's rig count

US drilling activity increased during the week ending September 23rd, after falling the prior week, and has now been up 14 out of the last 17 weeks...Baker Hughes reported that the total count of active rotary rigs running in the US rose by 5 rigs to 511 rigs as of Friday, which was still down from the 838 rigs that were deployed as of the September 25th report last year, and down from the recent high of 1929 rigs that were in use on November 21st of 2014...the number of rigs drilling for oil rose by 2 rigs to 418 rigs this week, which was still down from the 641 oil directed rigs that were in use a year ago, and down from the recent high of 1609 oil rigs that were drilling on October 10, 2014...meanwhile, the count of drilling rigs targeting natural gas formations rose by 3 rigs to 92 rigs this week, which was also down from the 197 natural gas rigs that were drilling a year ago, and down from the recent natural gas rig high of 1,606 rigs that were deployed on August 29th, 2008...there also remained a single rig that was classified as miscellaneous, technically an increase from a year ago when there were no miscellaneous rigs at work...  

the number of working horizontal drilling rigs rebounded to an 8 rig increase this week after falling by 2 rigs last week, which brought the count of active horizontal rigs back up to 402 rigs, which was nonetheless still down from the 629 horizontal rigs that were in use on September 25th of last year, and down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, the directional drilling rig count increased by 1 rig to 49 rigs, which was also down from the 86 directional rigs that were deployed during the same week last year...meanwhile, the vertical rig count fell by 4 rigs to 60 rigs this week, which was down from the 123 vertical rigs that were drilling in the US during the same week last year...there was also the removal of a rig that had been drilling through an inland lake in southern Louisiana, which cut the inland waters rig count back to 3 rigs, which was down from 5 rigs on inland waters a year earlier...

the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary from Baker Hughes which shows those changes...the first table below shows weekly and annual rig count changes for the major producing states, and the second table shows weekly and annual rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of September 23rd, the second column shows the change in the number of working rigs between last week (September 16th) and this week (September 23rd), the third column shows last week's September 16th active rig count, the 4th column shows the change in the number of rigs running this Friday from the equivalent Friday in September a year ago, and the 5th column shows the number of rigs that were drilling at the end of that week a year ago, which in this week's case was September 25th of 2015:       

again, we have another week where the table reveals there was not much changing going on anywhere in the country, although it's not apparent from the above where the 8 horizontal drillers were added...the complete state stable shows no additions outside of those listed here, so we'll have to guess that one or several states with both conventional and shale exploitation taking place, such as Texas or Oklahoma, saw vertical rigs removed in one area while horizontal rigs were added in another...also note that the Permian basin, where most of the new drilling has been taking place over the last 4 months, saw a reduction in its rig count for only the 2nd time in the past 19 weeks...

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Fracking Has Week Of Huge Legal Wins In Ohio - BOE Report -- Anti-hydraulic fracturing, or fracking, activists suffered a pair of major legal defeats in Ohio when the state Supreme Court refused to put anti-fracking measures on the ballot in November and blocked attempts by local governments to ban fracking. The Ohio Supreme Court’s Thursday rulings aren’t major surprises, as local fracking bans have repeatedly been struck down around the country. Several state and federal courts concluded that only the state government has the legal authority to regulate fracking, as any ban would be “preempted by state law and therefore, is invalid and unenforceable.” The oil and gas industry in most states have historically been regulated by state, not local, government. Environmental groups, including The Sierra Club, Greenpeace, Food and Water Watch, and Earthworks vehemently support local bans on fracking across the country. The court also concluded that local governments can’t hold referendums to amend charters to ban fracking.  “Their determinations were consistent with our prior decisions authorizing election officials to determine whether a proposal exceeds the scope of the authority under which it is placed on the ballot,” the majority of the Court wrote in a six to one decision. This ruling confirmed a previous court decision that stopped local governments from banning fracking using zoning laws in 2015. Ohio produces 1,000 percent more oil and natural gas than it did in 2006 and the state’s natural gas production grew 41 percent faster last year than it did in 2014, according to the federal Energy Information Administration. Republicans in both state legislative chambers of Ohio have a long history of being hostile toward green energy. They attempted in 2015 to gut an Ohio law mandating the state get 25 percent of its power from green energy by 2025, despite reported veto threats and hostile rhetoric from Republican Gov. John Kasich. The governor has long been at odds with his own party over the state’s energy future. Ohio’s green energy mandate is responsible for 29,366 lost jobs and caused a $3,842 reduction in average household income, according to a study by Utah State University.

Ohio Republicans Show Support For Oil And Gas Industry - WOSU Public Media -- Some of the state’s highest ranking Republicans are coming out to support the oil and gas industry and its impact on Ohio in an effort to counter rhetoric in the presidential race.   Democratic presidential nominee Hillary Clinton has said she’d like to crack down on the use of fossil fuels and create sanctions on the natural gas drilling practice known as fracking. Republican Lt. Gov. Mary Taylor says Ohio’s economy would be struggling if those policies were in place at the start of 2009. “The future of our economy is tied to energy. We need to support all viable energy options and I would caution anyone who would seek to take coal and natural gas off the table.” She cited numbers of the U.S. Chamber of Commerce which said the oil and gas industry created more than 114,000 jobs and brought in $9.9 billion.

Study: Fracking chemicals linked to reproductive health abnormalities in mice --In a new study — the first of its kind — researchers fed water laced with fracking chemicals to pregnant mice and then examined their female offspring for signs of impaired fertility. They found negative effects at both high and low chemical concentrations, which raises red flags for human health as well.  Published in the September issue of Endocrinology, the study adds to a growing body of research on the human health effects of fracking chemicals and the potential hazards of related air and water contamination. Just earlier this year, Nagel co-authored another study that found water located downstream from a fracking wastewater site contained levels of endocrine-disrupting chemicals high enough to negatively effect the aquatic inhabitants. In this most recent study, Nagel and colleagues selected 23 chemicals found in oil and gas operations, including fracking, and mixed them at four different concentrations to mimic what’s been found in drinking water and groundwater as well as in industrial wastewater. More specifically, the contaminated water samples were designed to reflect “environmentally relevant” concentrations, with the two lowest doses equivalent to what’s been reported in drinking water in drilling regions and the highest dose meant to mimic industrial wastewater. The contaminated water was then given to pregnant mice on day 11 of pregnancy through birth. The female offspring that were exposed to the chemicals in utero were then compared to female offspring that did not receive the contaminated water. The study noted that of the more than 1,000 chemicals used in unconventional oil and gas operations, at least 130 are known or suspected endocrine disrupters. The researchers found that the exposed group presented notable differences in key hormones related to reproductive health, including disruptions in the development of the ovarian follicle, which is central to egg development. In particular, the female mice offspring exposed to smaller concentrations of the fracking chemicals had fewer ovarian follicles, which may suggest fewer eggs and shorter fertile periods. On the other end, the offspring exposed to high doses of chemicals experienced a follicle increase, which suggests “inappropriate follicle activation (or accumulation) and ultimate follicle death.” In addition to reproductive health impacts, the exposed mice also had altered pituitary hormone production, increased body weights, and increased cardiac fibrosis (a thickening of the heart muscle and an indicator of future heart failure) as well as increased heart weights. (In a 2014 study, researchers found a relationship between proximity to natural gas wells and the prevalence of congenital heart defects in human babies.)

Northeast US gas pipeline plans will enable more production, impact markets further afield - (snapshot video) - The Northeast US is set to undergo radical changes with natural gas infrastructure, but many pipeline development projects are at risk of delay. Eric Brooks evaluates which domestic markets could be impacted by nearly 3 Bcf/d of expansion projects scheduled to come online by the end of 2016 and the feasibility of additional capacity slated for 2017.

14 Pipeline Projects in 24 States ... Which Will Be the Next Battleground? -- Encouraged by the Obama administration's shelving of the Keystone XL pipeline and its revoked authorizationfor construction of the Dakota Access Pipeline on federal lands, activists are now eyeing new battles.  At least 14 new pipeline projects are in the works, carrying both oil and natural gas. These projects involve at least 24 states, adding to the existing 2.5 million miles of energy pipelines in the U.S.—the largest network in the world. Driven by low natural gas prices and the fracking boom, these new pipelines will cross major urban areas as well as important watersheds. Supporters say that they supply energy needs for many communities, provide jobs and are safer for oil transport than truck or rail. Take the case of the Atlantic Sunrise pipeline expansion. Running from Louisiana through the Southeast all the way to Long Island, New York, the project is an expansion of an existing Transco pipeline operated by Tulsa, Oklahoma-based Williams Companies .  Counting branch pipelines, Transco is a 10,200-mile system that can move 10.9 billion cubic feet of natural gas per day. The company transports 10 percent of the natural gas consumed in the U.S., but it was built to move gas mainly from the Gulf of Mexico to the Northeast.  Now, the Marcellus Shale in Pennsylvania provides lower-cost gas and the Atlantic Sunrise will be reconfigured to move product south. In 2014, 1,370 wells were being drilled in the Marcellus, with high-yield wells using hydraulic fracturing, or fracking . The Marcellus provides more than 36 percent of the shale gas produced in the U.S.

With some gas stations dry, pipeline works to send more fuel  (AP) — Gas prices spiked and drivers found “out of service” bags covering pumps as the gas shortage in the South rolled into the work week, raising fears that the disruptions could become more widespread. The shortage is blamed on a pipeline rupture and leak of at least 252,000 gallons (954,000 liters) of gas in Alabama. The pipeline company has two main lines and said Monday that it is shipping “significant volumes” on the second of the two lines to mitigate the impact of the interruption on the other line. Colonial Pipeline said it was working “around the clock” to repair the break and supplies have either been delivered or are on their way to locations in Alabama, Georgia, Tennessee, South Carolina, and North Carolina.  Still, some motorists discovered bone-dry pumps. “I’m definitely on empty, so I’m going to have to figure something out,”  Alpharetta, Georgia-based Colonial has acknowledged that between 252,000 gallons (954,000 liters) and 336,000 gallons (1,272,000 liters) of gasoline leaked from a pipeline near Helena, Alabama, since the spill was first detected Sept. 9. It’s unclear when the spill actually began. The U.S. Department of Transportation is investigating. “We continue to be in regular communication with our customers, who are also working on their own individual contingency plans to minimize supply disruptions. This includes trucking and barging fuel from other markets and refineries,” the company said. Colonial Pipeline said over the weekend that it was beginning construction of a temporary pipeline that will bypass a leaking section of its main gasoline pipeline in Shelby County, Alabama. Its statement Monday did not say when that temporary pipeline is expected to be up and running.

Agency: Leak led to vapors in air, dead animals -- Federal officials say highly flammable vapors keep investigators from the site of a gas leak for the first few days after it was discovered.  The pipeline leak in Alabama has led to gas shortages across the South. Harmful chemicals in the air prevented firefighters, company officials and anyone else from being near the site for more than three days. The U.S. Pipeline and Hazardous Materials Safety Administration said in a preliminary report that the failure of the Colonial Pipeline in Alabama left about 6,000 barrels of gasoline in a pond near Helena, Alabama. The agency said state workers had noticed a strong gasoline odor, along with dead vegetation nearby, on Sept. 9. Three raccoons and a rabbit were later found dead.  The agency said highly flammable benzene and gasoline vapors in the air prevented anyone from investigating the cause in the first few days after it was discovered.

"Panic Gasoline Buying" In Southeast Leads To "Massive Car Lines", Gas Shortages, Price Gouging -- As reported over the weekend, the Colonial Pipeline, which runs from Houston to New York, began leaking on September 9, spilling 250,000 gallons of gasoline, or 6,000 barrels. The pipeline was built in 1962, and the current leak in Helena, Alabama, is the largest one Colonial Pipeline has experienced in 20 years. As a result, various states in the Southeast, including Alabama, Tennessee, & Georgia declared states of emergency ahead of what could be substantial gas shortages, with North Carolina and Virginia joining earlier today. For the Nashville area, however, this escalation achieved the opposite effect of the intended outcome: as the Tennessian reports, in the "panic-driven" rush to Nashville area gas stations to load up in advance of what would be higher prices if not outright shortages, motorists scrambled to load up, leading some stations to run out of gas while others reported long lines.  Ironically, the leaking Colonial Pipeline doesn't even regularly supply Tennessee, said Emily Leroy, executive director of the Tennessee Fuel and Convenience Store Association. However, that did not matter to local residents  And, Leroy adds, "Panic buying is the worst thing that can happen under any circumstance."  According to the paper, Nashville experienced similar panic in September 2008 after Hurricane Ike hit Texas. Officials estimated then that about 85 percent of Nashville area gas stations ran out of fuel — outages caused almost exclusively by panic buying. Many Middle Tennesseans had deja vu when they saw lines over the weekend. Jackie Dawson, 69, of Mt. Juliet, Tenn., gasped when she saw five cars deep at the pumps at her local Kroger. "I was just amazed at how everybody went into panic mode when they shouldn’t have," she said. "One woman put gasoline in three huge gas tanks as well as her car. It was bizarre. Just like in 2008. Just like the '70s."

Pipeline will soon reopen, carrying gasoline to 5 states (AP) — Gasoline should begin flowing again Wednesday — through a temporary bypass on a critical pipeline — after a major leak in Alabama forced a shutdown that led to surging fuel prices and scattered gas shortages across the South, a company official said Tuesday. The roughly 500-foot (152-meter) section of pipe serving as the bypass is now complete, but supply disruptions may continue for days, Colonial Pipeline spokesman Steve Baker told The Associated Press. “When Line 1 restarts, it will take several days for the fuel delivery supply chain to return to normal. As such, some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions. Colonial continues to move as much gasoline, diesel and jet fuel as possible and will continue to do so until markets return to normal,” Colonial said in a statement. Here are some details related to the spill that led to long gas lines and empty service stations:

East Coast Gasoline Prices Plunge After Leaking Pipeline Bypass Completed -- In what was clearly not 'government work' Colonial has completed the bypass of its leaking pipeline early and has told shippers it will restart supplies tomorrow. This has sent near-term gas prices to the east coast tumbling. Great news amid claims from Alabama's governor of price-gouging by retail gas suppliers. As Bloomberg reports, Colonial Pipeline has finished construction, fabrication and positioning of bypass connector pipeline segment around leak site west of Pelham, Ala., co. says in e-mailed statement.

• Colonial in process of carrying out hydrostatic test of new segment
• Segment is approx. 500ft in length
• Co. says it will take “several days” for fuel delivery supply chain to return to normal when Line 1 restarts
• Some markets should expect intermittent service interruptions

But the market is pricing out disruptions... This is great news as OilPrice reports several US Governors warned against price-gouging as shortages loomed...Georgia Governor Nathan Deal signed an executive order against unjust price hikes after gasoline prices spiked 20-40 cents across the state following a pipeline leak in Helena, Alabama.The order emphasizes the terms of an existing law that forbids gouging during “a state of emergency” by permitting price changes only as a reaction to the higher cost of fuel or fuel transportation.An increased demand for gasoline—as is the status quo in Alabama, Georgia, Tennessee and the Carolinas after a 252,000-barrel leak in Colonial Pipeline Company’s line last week—is not considered a valid reason to raise prices under the law.

The Latest: Accord reached on documents in ongoing Gulf oil leak (AP) — The Latest on a court fight over the confidentiality of documents related to an ongoing leak of oil from a site damaged by Hurricane Ivan in 2004. Environmental attorneys and an energy company have agreed to work out differences over the confidentiality of documents concerning an ongoing oil leak in the Gulf of Mexico from an offshore site damaged by Hurricane Ivan in 2004. Environmental groups and Taylor Energy agreed during a Thursday federal court hearing to negotiate supplemental language for a 2015 settlement agreement over how and when to release information on Taylor’s response to the leak. At issue are volumes of documents that Taylor Energy says include confidential information about oil spill containment technology developed for the company. A 2015 Associated Press investigation revealed evidence that the leak was worse than the company or the federal government had earlier reported. Government experts believe oil is still leaking at the site. Taylor has said persistent sheens are coming from residual oil oozing from seafloor sediment.

Obama Administration Urged to Halt Dumping of Offshore Fracking Waste Into Gulf of Mexico --  An Obama administration proposal to continue allowing oil companies to dump unlimited amounts of offshore fracking chemicals into the Gulf of Mexico violates federal law and threatens endangered marine wildlife, the Center for Biological Diversity warned over the weekend. In a letter to the Environmental Protection Agency on a proposed wastewater discharge permit for offshore oil and gas drilling activities in the eastern Gulf of Mexico, the Center explained that the proposed permit violates the Clean Water Act because it causes an undue degradation of the marine environment. “The permit allows the unlimited discharge of produced wastewater, including the unlimited discharge of chemicals used in offshore fracking and other well-stimulation treatments,” the letter noted. “The EPA is endangering an entire ecosystem by allowing the oil industry to dump unlimited amounts of fracking chemicals and drilling waste fluid into the Gulf of Mexico,” said Center attorney Kristen Monsell. “This appalling plan from the agency that's supposed to protect our water violates federal law and shows a disturbing disregard for offshore fracking’s toxic threats to sea turtles and other Gulf wildlife.” Today's letter also points out that the EPA is relying on a 33-year-old study of waste fluid produced by offshore platforms, despite the drilling of more than 450 wells in the area since 2010 alone. The letter urges EPA to adopt a zero-discharge requirement for produced water and fracking chemicals, as is required under other offshore drilling permits.

EPA Plans to Allow Unlimited Dumping of Fracking Wastewater in the Gulf of Mexico: Environmentalists are warning the Environmental Protection Agency (EPA) that its draft plan to continue allowing oil and gas companies to dump unlimited amounts of fracking chemicals and wastewater directly into the Gulf of Mexico is in violation of federal law. In a letter sent to EPA officials on Monday, attorneys for the Center for Biological Diversity warned that the agency's draft permit for water pollution discharges in the Gulf fails to properly consider how dumping wastewater containing chemicals from fracking and acidizing operations would impact water quality and marine wildlife. The attorneys claim that regulators do not fully understand how the chemicals used in offshore fracking and other well treatments -- some of which are toxic and dangerous to human and marine life -- can impact marine environments, and crucial parts of the draft permit are based on severely outdated data. Finalizing the draft permit as it stands would be a violation of the Clean Water Act, they argue. "The EPA is endangering an entire ecosystem by allowing the oil industry to dump unlimited amounts of fracking chemicals and drilling waste fluid into the Gulf of Mexico," said Center attorney Kristen Monsell. "This appalling plan from the agency that's supposed to protect our water violates federal law, and shows a disturbing disregard for offshore fracking's toxic threats to sea turtles and other Gulf wildlife."

Don’t be fooled by the numbers, Eagle Ford play is a sleeping giant - The Barrel Blog: The Eagle Ford shale oil patch has seen brighter days. New well permits are down, production is low (down from its 2015 peak of 1.7 million b/d, to around 980,000 b/d this year) and producers are pulling out of the region to focus their efforts elsewhere. Symbolic of the mood in the field, things were a little more subdued at the recent Hart Energy DUG Eagle Ford conference in San Antonio. Many attendees were quick to notice the smaller scale of the conference this year. Lower oil and gas prices meant a lighter presence and scaled-back events surrounding the conference, which was held in conjunction with the Midstream Texas conference. Major players and past year exhibitors like Baker Hughes and Halliburton were obviously missing from the smaller-than-usual exhibition space and at least one attendee compared this year to past years by lamenting the absence of magicians and open bar at an after-hours mixer. Attendance this year was healthy, but still was a telling reminder of the current state of the Eagle Ford. Around 1,500 people were at the conference, a more than 45% decrease from last year. “While that’s smaller than during the ‘boom,’ it’s not down as much as the decline in crude oil price from the top to the bottom, or the fall in the US rig count, so we’re feeling pretty good about it with the current market conditions,” said Greg Salerno, vice president of marketing for conference presenter Hart Energy.

Oil and gas wastewater is changing the Earth's surface, study finds -- The U.S. oil and gas industry is having a visible effect on the Earth's surface, a new review of satellite images has found. In recent years, energy companies have pumped an unprecedented volume of wastewater — a byproduct of fracking and conventional drilling — deep into underground wells. The water often can't be reused or recycled for economic or technical reasons, so many companies have found it easier to inject the water back into the ground. That process has sparked a wave of earthquakes across the central United States, transforming the Earth both above and below the surface, according to a studypublished Thursday in the journal Science. SEE ALSO: Oklahoma's magnitude 5.8 quake comes amid concerns around oil and gas boom Wastewater not only puts pressure on underground fault lines, causing "induced" earthquakes, but also pushes up the surface of the ground — a phenomenon called "uplifting" that can be seen from space. Researchers used satellite images of ground uplifting to show how wastewater disposal in eastern Texas eventually triggered a magnitude-4.8 earthquake in May 2012, the largest earthquake recorded in that half of the Lone Star state. "We brought a new angle to this study of 'induced seismicity,' which is monitoring the seismicity from space," said Manoochehr Shirzaei, the study's lead author and a geophysicist at Arizona University's School of Earth and Space Exploration. "This hasn't been done before," he told Mashable. The team studied surface changes near two sets of wastewater disposal wells separated by less than 15 kilometers, or about 9 miles. Using satellite-based observations from 2007, 2010 and 2014, the researchers estimated the evolution of local "pore pressure" — the pressure of fluids within the pores of a subsurface rock. Shirzaei said they estimated the pore pressure changes were strong enough to cause earthquakes, including the 2012 temblor near Timpson, Texas.

'Groundbreaking' Study Links Texas Earthquakes to Wastewater Injection From Fracking -- Even though scientists are pretty certain that wastewater injection from fracking and conventional drilling has led to the unprecedented spate of earthquakes rollicking Oklahoma , Texas and other states in recent years. Definitive proof, however, is rare. But now, in a study published Thursday in Science , researchers have fastened another nail in the "man-made earthquakes" coffin.  Using satellite imagery, the researchers found that a series of earthquakes that struck Texas between 2012 and 2013— including the largest-ever quake recorded in eastern Texas—were caused by the injection of large volumes of wastewater from oil and gas activities into deep underground wells.   As Mashable explained from the study:  Wastewater not only puts pressure on underground fault lines, causing "induced" earthquakes, but also pushes up the surface of the ground—a phenomenon called "uplifting" that can be seen from space.  Researchers used satellite images of ground uplifting to show how wastewater disposal in eastern Texas eventually triggered a magnitude-4.8 earthquake in May 2012, the largest earthquake recorded in that half of the Lone Star state.  "Our research is the first to provide an answer to the questions of why some wastewater injection causes earthquakes, where it starts and why it stops," said study co-author William Ellsworth, a geophysics professor at Stanford's School of Earth, Energy & Environmental Sciences.  As a Stanford press release described, the researchers used Interferometric Synthetic Aperture Radar (or satellite-based radar) to detect tiny, highly precise deformations near four high-volume wastewater disposal wells where the 2012 temblor occurred.  These wells had operated between 2005 and 2007, injecting about 200 million gallons of wastewater annually underground at its peak—or, as Science pointed out, "about an Olympic swimming pool's worth of wastewater pumped underground each day."  This uplift, as a result of pumping so much fluid into the ground, caused the terrain between two sets of injection wells to bulge up to 3 millimeters a year on average between May 2007 and November 2010, Science noted. Over time, excess fluids seeped away from the injection point into tiny spaces in surrounding subsurface rocks, boosting water pressure—aka pore pressure. The ever-expanding pore pressure then reached fault zones, thus triggering earthquakes.

Authorities: 44 cited, 1 jailed in Iowa pipeline protest…(AP) — Authorities say 44 people were cited and one person was jailed during a weekend protest intended to block construction of a $3.8 billion, four-state oil pipeline in southeast Iowa. Lee County Chief Deputy Sheriff Scott Bonar said Monday that 38 adults were cited for trespassing and released from the county jail after authorities removed them from the work-site entrance of the Dakota Access pipeline in Sandusky. Six juveniles also were cited and released, and one was held on charges of trespassing and interference with official acts. About 200 people protested on Saturday, Bonar said, but were peaceful. Those cited were removed after walking through a line of private security and sheriff’s deputies who stood in front of the driveway. A larger protest over the pipeline, which would transport oil from North Dakota’s Bakken formation to Illinois, was been taking place in North Dakota.

Dakota Access Pipeline construction temporarily halted - A U.S. federal appeals court ordered for a portion of the Dakota Access Pipeline to halt construction on Friday, while the court considers an emergency request from the Standing Rock Sioux Tribe arguing that the pipeline’s construction would damage sacred lands.  The order applies to any portion of the pipeline within 20 miles of Lake Oahe, which the Standing Rock Sioux tribe has argued has deep historical significance to the tribe and has been a crucial component of legal action against the pipeline. The appeals court will now consider whether or not to issue a longer delay on construction of the pipeline. On September 9, U.S. District Judge James Boasberg said that while the site has “undeniable importance” to the tribe, they had failed to adequately show that the pipeline’s construction would damage the area, and denied the tribe’s request to halt construction. That same day, however, the federal government said it would not authorize construction on federal lands around Lake Oahe. A U.S. federal appeals court ordered for a portion of the Dakota Access Pipeline to halt construction on Friday, while the court considers an emergency request from the Standing Rock Sioux Tribe arguing that the pipeline’s construction would damage sacred lands.  The order applies to any portion of the pipeline within 20 miles of Lake Oahe, which the Standing Rock Sioux tribe has argued has deep historical significance to the tribe and has been a crucial component of legal action against the pipeline. The appeals court will now consider whether or not to issue a longer delay on construction of the pipeline.

Tribes open new front in fight over pipelines | TheHill: The Obama administration is launching a review of energy permits on American Indian lands, opening a new front in the fight over oil pipelines in the United States. Obama officials promised the review after pausing construction on the contentious Dakota Access Pipeline earlier this month. The stakes are high for both sides.  For Indian activists, the review raises the possibility federal officials could consult more with tribes and lead to fewer projects — energy and otherwise — that they oppose. The energy industry and its backers in Congress worry about that outcome, accusing President Obama of threatening energy projects on federal lands around the country. The Obama administration has hinted the review could be wide-ranging and have a major impact on federal permitting, saying that the Dakota case "highlighted the need for a serious discussion on whether there should be nationwide reform with respect to considering tribes’ views on these types of infrastructure projects.” Federal officials haven’t said what that review will entail, or how far the administration is thinking of going. Lawmakers were in the dark about the scope of the review this week. Sen. Heidi Heitkamp (D-N.D.) said officials told her “they’ll need a couple weeks” before they could detail what information they need for their review. For Indian rights groups, the review carries a big promise, especially in light of the Dakota Access fight.

Easy resolution unlikely for contentious Dakota pipeline | Reuters: A potential rerouting of a long-anticipated pipeline at the center of a protest in North Dakota would be a laborious and costly task, possibly delaying a startup by months and provoking further opposition from Native American and environmental groups who were instrumental in halting construction. The 1,172-mile (1,886 km) Dakota Access pipeline was slated to start up by the end of the year, transporting more than 470,000 barrels per day of crude oil through four states into Illinois before it hooks up to another pipeline down to Texas. But in a stunning twist last week, the U.S. Justice Department and other federal agencies intervened to delay construction in what industry and labor representatives called an "unprecedented" move. The halt on the $3.7 billion project was the result of a groundswell of protest from Native American tribes and environmentalists, some of whom now are vowing to continue the fight until the project is permanently suspended. While there are a few options for rerouting the line, most still cross either culturally important lands to Native Americans or large waterways. The more extensive a reroute, the more likely it is that regulatory obstacles crop up. "We're entering unchartered waters if a reroute happens at this stage and I can't think of another example of a case where this has happened," said Afolabi Ogunnaike, a senior analyst at consultancy Wood Mackenzie. "Should a reroute take place, there are some major challenges."

Memo to Briefcase Warriors: Be Bold! -- The Standing Rock lawsuit presents an opportunity to critique how Indian Nations represent themselves in legal battles. In this case, the picture looks depressingly familiar. Standing Rock was nowhere near as strong in litigation in the U.S. legal arena as they and the other protectors were on the ground. The Motion for a Preliminary Injunction—which the federal court denied— focused almost solely on a U.S. statute about historic preservation. The motion barely mentioned Treaty rights and did not challenge the notion that the U.S. Congress can override treaties. International law—especially the United Nations Declaration on the Rights of Indigenous Peoples—was not mentioned at all. The Complaint was somewhat broader than the motion. Though it mentioned the Treaty (only four times) it did not mount a vigorous defense of Treaty rights; and it presented the threat to water in terms of U.S. statutes rather than Indigenous Peoples' rights. Some might say the fault lies with Standing Rock's choice of legal counsel: Earthjustice, an environmental law organization based in Seattle. But the Earthjustice motion and complaint actually follow a familiar pattern we see in Indian cases, where lawyers for Indians not only fail to defend Native Nations against American claims of "overriding sovereignty," but actually embrace the "domestic dependent" status and "plenary power of Congress" doctrines decreed by federal Indian law. We have seen this pattern in so many cases that it now appears to be the “normal” way to litigate an Indian case. Lawyers have been trained inside the figurative box of federal Indian law thinking and cannot seem to find their way out. Though they are sometimes called "briefcase warriors," these lawyers repeatedly fail to do battle with the most basic parts of their adversaries' attacks on Indigenous Peoples' existence and rights.

AFL-CIO Bucks Progressive Allies, Backs Dakota Access Pipeline - HuffPo - On Thursday, the AFL-CIO announced that it was formally supporting development of the Dakota Access oil pipeline, a project fiercely opposed by Native American tribes and environmentalists. The $3.7 billion development has prompted mass protests led by members of the Standing Rock Sioux Tribe, who say their sovereignty will be trampled and their water supply imperiled if the project goes through.The AFL-CIO has said in recent years that it wants to link arms with other major liberal players on issues like civil rights and racial and environmental justice. But it also must answer to its member unions. Some of those unions ― particularly in the construction trades ― support energy projects like the Dakota Access pipeline because they create jobs for union members. There has been a similar friction within labor throughout the Keystone XL controversy.The Laborers’ International Union of North America, or LiUNA, has been the most vocal supporter of the Dakota Access pipeline within the AFL-CIO. LiUNA has accused the protesters of being “extremists” who trespass, intimidate and endanger its members working on the project.In its statement Thursday, the AFL-CIO said the pipeline provides “high-quality jobs” and makes the U.S. “more competitive.” It also argued that the project “addresses the threat of climate change.”“Pipelines are less costly, more reliable and less energy intensive than other forms of transporting fuels, and pipeline construction and maintenance provides quality jobs to tens of thousands of skilled workers,” reads the statement attributed to AFL-CIO President Richard Trumka. The federation took heat on Twitter for its support of the Dakota Access project:

Chip Ward, Peace Pipes, Not Oil Pipes - TomDispatch - In our new political world, the phrase "follow the money" has real meaning.  Consider the $1,530,000 that, according to OpenSecrets.org, billionaire Kelcy Warren has personally given away in the 2016 election cycle to influence your vote (or someone’s vote anyway).  One hundred percent of his dollars, just in case you were curious, have gone to “conservative” candidates, including key congressional Republicans.  Warren is a Texas oil pipeline magnate who's wildly rich.  According to the Wall Street Journal, “his 23,000-square-foot Dallas mansion, bought for $30 million in 2009, includes a bowling alley and a baseball diamond that features a scoreboard with ‘Warren’ as one of the teams.”  As Sue Sturgis of the Institute for Southern Studies wrote recently, “With business partner Ray Davis, co-owner of the Texas Rangers baseball team, Warren built Energy Transfer Equity into one of the nation's largest pipeline companies, which now owns about 71,000 miles of pipelines carrying natural gas, natural gas liquids, refined products, and crude oil. The company's holdings include Sunoco, Southern Union, and Regency Energy Partners.” And as Dr. Seuss used to say, that is not all, oh no, that is not all!  Don’t forget Energy Transfer Partners, part of the Energy Transfer Equity empire.  It's building the embattled Dakota Access Pipeline, which is supposed to bring fracked oil from North Dakota to the Gulf Coast.  Through a PAC, it has given at least $288,000 to a bevy of Republican House and Senate candidates.  In other words, election 2016 will, among other things, be an oil spill of an election.  And should Donald Trump, a man who gives “conflict of interest” new meaning, take the Oval Office by storm and so ride to the rescue of the oil and coal magnates of America with his drill-baby-drill environmental policies, that “investment” will matter even more.  In the meantime, Warren’s latest project -- that pipeline across the Dakotas -- has run smack into resistance of an unexpected kind as it approached the Standing Rock Sioux Reservation.  Faced with the prospect of fracked oil in their drinking water, the tribe rallied other tribes (including tribes of environmentalists) and, as of this moment, has miraculously stopped the pipeline dead in its tracks.  Think of what’s been going on as an Indian version of Occupy Wall Street.  As environmentalist and TomDispatch regular Chip Ward points out today, Native Americans, long ago discarded as the dispossessed and forgotten losers of American culture, have returned with a vengeance to protect not just the last wild places on our continent but the rest of us as well.  It’s one hell of a story and on an overheating planet that, as is increasingly said, needs to “keep it in the ground,” it’s not just a heartwarming tale, but a matter of life or death. Tom

As Dakota Access Protests Escalated, Obama Admin OK’d Same Company for Two Pipelines to Mexico -- Steve Horn   On September 9, the Obama administration revoked authorization for construction of the Dakota Access Pipeline (DAPL) on federally controlled lands and asked the pipeline's owners, led by Energy Transfer Partners, to voluntarily halt construction on adjacent areas at the center of protests by Native Americans and supporters. However, at the same time the pipeline and protests surrounding it were galvanizing an international swell of solidarity with the Standing Rock Sioux Tribe and its Sacred Stone Camp, another federal move on two key pipelines has flown under the radar. In May, the federal government quietly approved permits for two Texas pipelines — the Trans-Pecos and Comanche Trail Pipelines — also owned by Energy Transfer Partners. This action and related moves will ensure that U.S. fracked gas will be flooding the energy grid in Mexico. Within a two-week span in May 2016, as the Sacred Stone Camp was getting off the ground as the center of protests, the U.S.Federal Energy Regulatory Commission (FERC) issued presidential permits for the Trans-Pecos and Comanche Trail Pipelines. Together, the pipelines will take natural gas obtained from fracking in Texas' Permian Basin and ship it in different directions across the U.S.-Mexico border, with both starting at the Waha Oil Field. Similar to the case of North Dakota oil wells whose oil will likely be transported via Dakota Access, and like the name Dakota itself, the Comanche Trail Pipeline's nomenclature originates from a Native American tribe.Today the Comanche Nation is headquartered in the southwestern part of Oklahoma in Lawton, and was removed from Texas in the aftermath of the Comanche Wars. As part of those wars, this nomadic tribe used the Comanche Trail which crossed West Texas and through what is now Big Bend National Park. Like many other tribes, the Comanche Nation has come out in opposition to the Dakota Access Pipeline. Some members have formed a support group called Comanches on the Move, which has taken caravans on the road from Oklahoma to the Sacred Stone Camp in North Dakota.

North Dakota borrowing $6M for pipeline protest costs (AP) — A North Dakota legislative committee has approved an emergency request to borrow $6 million to cover the cost of law enforcement related to the ongoing protest of the four-state Dakota Access oil pipeline. The state’s Emergency Commission, headed by Gov. Jack Dalrymple, voted Wednesday to borrow the funds from the state-owned Bank of North Dakota. The leader of the state’s National Guard says North Dakota has spent about $1.8 million to date on law enforcement and other costs related to the protests, centered in south-central North Dakota. Maj. Gen. Alan Dohrmann says Morton County has spent an additional $400,000 in extra costs. The county may apply for reimbursement from the state. The Republican governor has asked federal officials to reimburse the state for the additional law enforcement costs.

Task force looking into security, pipeline protesters' clash (AP) — A joint task force of North Dakota and federal officials is investigating a clash between Dakota Access pipeline protesters and private security guards earlier this month, a county sheriff announced Tuesday. The Morton County Sheriff’s Department is heading up the probe of the Sept. 3 incident on private land, after which private security guards and protesters reported injuries. Tribal officials say about 30 protesters were pepper-sprayed and some were bitten by dogs at the construction site near the Standing Rock Indian Reservation. The task force includes members of the Morton and Mercer County sheriff’s departments, the state Bureau of Criminal Investigation and the federal Bureau of Indian Affairs. Morton County Sheriff Kyle Kirchmeier said the BIA is representing Native American tribes. Kirchmeier said the investigation will determine which firms were hired to provide security that day and whether they were licensed. The task force also is looking into whether tribal artifacts were disturbed at the site as the Standing Rock Sioux tribe has argued. “I am using all tools possible to insure this investigation is carried out with no bias toward Dakota Access pipeline nor the pipeline protesters,” Kirchmeier said in a statement. The sheriff’s office would not name any of the security firms being investigated. A North Dakota state agency that regulates private investigation and security firms is also looking into the incident. Monte Rogneby, an attorney representing North Dakota Private Investigation and Security Board, did not immediately return a message seeking comment.

Native American tribes back Iowa pipeline fight — Two Native American tribes are supporting the battle against the Dakota Access Pipeline in Iowa, as foes of the $3.8 billion project attempt to broaden their base of opposition. An anti-pipeline rally and protest here Thursday included several representatives of Iowa's Meskwaki tribe, based in Tama, as well as a half-dozen members of the Sisseton Wahpeton Oyate tribe of Agency Village, S.D., which has a reservation straddling both sides of the South Dakota-North Dakota border. In addition, activists from Illinois and Minnesota attended the events along with Iowans who have been fighting the pipeline the past two years. Strong opposition to the pipeline by the Standing Rock Sioux tribe in North Dakota has generated national news coverage in recent weeks as tribes from throughout the U.S. have joined forces against the Dakota Access project. They contend the pipeline will endanger sacred burial grounds and could threaten the tribe's water supply from Lake Oahe on the Missouri River. "We are going back to Standing Rock, and we are going to spread the word," Sylvana Flute, a member of the Sisseton Wahpeton Oyate tribe, told Iowans here. "We are all in this together, and we are here to support you." About 175 people participated in Thursday's demonstration in rural Boone County as they tried to disrupt pipeline construction on the west bank of the Des Moines River. There were no arrests, but 11 protesters received $200 tickets for illegally parking on a county road in front of the construction site, and one vehicle was towed for blocking the construction site entrance. Terrance Robertson, who is also a Sisseton Wahpeton Oyate tribal member, said he is convinced the pipeline will leak, polluting life-sustaining water. "Nothing man-made lasts forever, even if they build it perfectly," he said.

Pipeline developer buys ranch near North Dakota protest camp - (AP) — The company developing the four-state Dakota Access oil pipeline has purchased a portion of a historic North Dakota ranch where a violent protest occurred earlier this month due to what tribal officials said was construction crews destroying burial and cultural sites. Morton County records show Dallas-based Energy Transfer Partners purchased 20 parcels of land on the Cannonball Ranch totaling more than 6,000 acres from David and Brenda Meyer of Flasher. Financial terms of the deal, which was finalized Thursday, were not disclosed. The Meyers did not return telephone calls Thursday or Friday seeking comment. Energy Transfer Partners confirmed the purchase Friday but declined to provide further details. The ranch, which is more than a century old and was the first to be inducted into the North Dakota Cowboy Hall of Fame, is within a half-mile of an encampment on U.S. Army Corps of Engineers’ land where the Standing Rock Sioux Tribe and hundreds of others are gathered to protest the pipeline. The tribe says the pipeline, which is slated to cross Lake Oahe, a Missouri River reservoir, threatens its water supply and violates several federal laws. Corps records show Meyer pays $4,865 annually for exclusive grazing rights at the encampment site, a five-year lease that ends in 2018. The purchase of the ranchland will allow ETP to better access its construction sites and the pipeline, when it is finished.

While CBR Gently Weeps - An Update on Bakken Crude-by-Rail to PADDs 1 and 5  --For the first time since the start of the crude-by-rail (CBR) boom a few years ago, just as much crude oil is being transported by rail to PADD 5—that is, to states in the western U.S.—as to the Eastern Seaboard states in PADD 1. This primarily reflects the facts that 1) CBR deliveries from the Williston Basin/Bakken to PADD 1 continue to plummet and 2) refineries in the West remain reliable buyers of railed-in crude from the Bakken and Western Canada. Will CBR shipments to the East Coast continue to fall, or have we seen the worst of the decline? Today we take a look at recent trends in crude movements by tank car, and a look ahead. As we’ve discussed often in the RBN blogosphere, the volumes of U.S. and Western Canadian crude oil moving out of production areas in tank cars via railroads rose sharply in 2011-12, maintained high levels through 2013-14, and declined through most of 2015 and year-to-date 2016. There are a number of reasons for both the rise and fall of crude-by-rail (CBR). The rise was spurred in large part by the lack of sufficient pipeline infrastructure, primarily out of the Williston Basin/Bakken, and to some extent in the Permian Basin, the Denver-Julesburg and other tight-oil and shale plays where crude production was soaring. Building rail-loading terminals represented a logical, near-term fix—they could be constructed quickly and at relatively modest cost (filling a transportation-capacity gap until pipelines were developed), and using the rails gave shippers destination flexibility (allowing oil to be moved to wherever the netbacks were highest). As we said in our Slow Train Coming Drill Down report on CBR a while back, railed shipments of crude within the U.S. averaged only 55 Mb/d in 2010 and 121 Mb/d in 2011, but rose to an average of 394 Mb/d in 2012, 709 Mb/d in 2013, and 867 Mb/d in 2014 before falling back to 754 Mb/d in 2015.  U.S. CBR averaged only 439 Mb/d (on average) in the first six months of 2016 and had declined to only 363 Mb/d by June 2016.

In North Dakota, hints of US oil industry comeback -- Workers in this oil town in the US state of North Dakota, just an hour from the Canada border, once had their pick of jobs. Many are now looking for any work they can find. “They don’t have very many jobs for us right now,” said Heather Scallion, who travelled some 1,300 miles (2,100 km) from Arkansas, thinking there was still low-skilled work here. “Hurting for money, honestly,” she explained. Nearby, a ragged man in his 30s slept on a couch. Scallion was fairly certain he was homeless, because he slept on the same spot every day, wearing the same clothes. Just minutes from this temporary work site, at the state-run employment agency Job Service North Dakota, it is a far different world. There is a shortage of workers for highly skilled positions in drilling and oil pump maintenance, among others. “There were layoffs when oil really tanked,” said Cindy Sanford, who heads the agency’s Williston branch. “Now what’s happening is those companies are bringing people back.” North Dakota is now seeing hints of a recovery from the bust. As crude prices have rebounded to the US$40 range after a stunning crash, there are signs that the industry is slowly regaining its footing.But the recovery has been uneven, a distinct case of the haves and the have-nots, as skilled labourers see their prospects improving, while the less desirable workforce feels little optimism.

Update On The Bakken -- Lynn Helms -- September 23, 2016  Data points from The Williston Herald and a radio interview, September 23, 2016:

• North Dakota production will likely dip below 1 million bopd but not below 900,000 bopd
• wells continue to get better and better
• Bakken is 94% oil (important fact to remember when comparing the Bakken with the Permian and the Eagle Ford)
• if IPs used to average 1,100, now they are averaging 1,500
• at the beginning of the boom, Bakken wells were estimated to continue producing for 30 years; now it is estimated that Bakken wells will produce for 35 years
• Bakken wells EURs have increased 25%
• 8,000 to 8,500 wells drilled using old technology might be good refrack candidates
• oil in the $50 to $60 range: 900 DUCs highly economical
• frack crews now average in the range of five to eleven (5 - 11)
• at peak prices, there were 50 frack crews operating in the Bakken
• at $60 oil, the Bakken is superior to the Permian and the Eagle Ford
• today's rigs average 25 wells/year vs 8 or 9 wells in 2009
• multi-well pads, new bit technology, new motor technology, new mud technology
• recently an operator drilled a 3-mile lateral with one bit and one motor (previously reported at the blog); typically, an operator would require three bits/well
• Lynn Helms does not sound optimistic about the DAPL

A reminder: tight oil plays in the US -- EIA -- annual energy outlook (2016) -- out to 2040: graphic here

Settlement reached in damages from Exxon's Yellowstone spill  (AP) — Exxon Mobil Corp. will pay $12 million for environmental damages caused by a pipeline break that spilled 63,000 gallons (238,474 liters) of crude into Montana’s Yellowstone River and prompted a national debate over lax pipeline safety rules, officials said Wednesday. The payment settles claims from the U.S. and state governments that the 2011 spill harmed natural resources as it fouled an 85-mile (137-kilometer) stretch of the famous river that flows through southern Montana. Court approval is pending. The pipeline break upstream near the town of Laurel killed fish and wildlife and prompted a monthslong cleanup. A U.S. Transportation Department investigation found Exxon workers failed to heed warnings that the 20-year-old pipeline was at risk from flooding. Gov. Steve Bullock, Attorney General Tim Fox and representatives of the U.S. Justice Department announced the deal Wednesday morning at the site of the pipeline break in Laurel. The Associated Press obtained details in advance. “All of us as Montanans lost something when that spill occurred,” Bullock said. “This money is to make sure not just that we’re compensated but the pelicans are where they should be, the fish are where they should be.” Assistant U.S. Attorney General John Cruden said restoration of the river is not done.

Federal Bill Seeks First Native American Land Grab in 100 Years  - Even as the Dakota Access Pipeline protest in Standing Rock has galvanized Native Americans across the U.S., a bill entered in the U.S. House of Representatives by Utah Republican congressmen Rob Bishop and Jason Chaffetz seeks to take 100,000 acres of Ute tribal lands and hand them over to oil and mining companies. Will Bears Ears be the site of the next standoff?  The proposed bill also seeks to remove protection from 18 million acres of land in eastern Utah and prevent President Obama from designating the Bears Ears area a national monument.  Adjoining Canyonlands National Park and the Glen Canyon National Recreation Area, Bears Ears is an unprotected culturally significant region that contains more than 100,000 Native American archeological sites. These sacred sites are subject to continual looting and desecration. More than a dozen serious looting cases were reported between May 2014 and April 2015.  The area has been inhabited for at least 11,000 years. Many Southwestern tribes have longstanding connections to this land, including Navajo, Ute and Paiute peoples. The Navajo Nation and the White Mesa Ute Reservation border Bears Ears. Rock paintings and petroglyphs are found throughout the area. The area is rich in mining deposits including uranium and potash with some deposits of tar sands present as well. Oil and gas companies are eyeing the area for drilling. The area around Bears Ears, as well as Canyonlands and Arches National Park, are already dotted with oil rigs. Writing in the May/June 2015 issue of Sierra , Julian Smith reported on an area just north of Bears Ears. "The air was full of harsh mechanical noises and a petroleum smell," she wrote.

Online Auction Allows Big Oil to Frack Public Lands for as Little as $2 Per Acre -- Have you ever thought to yourself, "I wish it were easier for fossil fuel companies to get their hands on public land so they can drill for oil and gas?" Yeah, neither have I.  Unfortunately, that seems to be what the Obama Administration was thinking when it announced it would move auctions for the rights to exploit public lands for fossil fuels to an online bidding process.  The switch to online auctions is a direct result of pressure built by the keep it in the ground movement over the past year.  Fossil fuel lease auctions—organized by the Bureau of Land Management (BLM)—had been relatively dull events conducted in person for years. But recently, activists have taken the events by storm, converging on lease sales across the country in peaceful protest to make it clear that our public lands are not for oil and gas profit. Since this time last year, the BLM has cancelled or postponed nine of 15 scheduled sales due to mounting public pressure.   But instead of hearing the concerns of the 1 million people who want the U.S. fossil fuels to stay in the ground, the BLM is listening to the fossil fuel industry and simply changing venues.  Enter today's online auction.  More than 4,000 acres of land will be made available across Missouri and Kansas, but what's at stake goes beyond this individual sale.  Fossil fuel executives see online auctions as a way to " end the circus " created by keep it in the ground activists mobilizing in the thousands at recent lease sales. Never mind that these auctions are for our public land and that this "circus" is what the right to assembly and freedom of expression look like in practice.  To make the switch online, the BLM has turned to a company called EnergyNet , dubbed "eBay for oilfields" by Forbes Magazine . EnergyNet has been in the business of auctioning private land for oil and gas exploitation for years, but this is its first foray into selling off federal land.  Starting today, fossil fuel representatives can follow EnergyNet's simple 8-step bidding process to lease the rights to drill and frack for as little as $2 per acre. If no else bids, a company could buy the entire parcel available for the price of a used Camry. Meanwhile, the Environmental Protection Agency found last year that inaction on climate change could cost the country $180 billion by the end of the century.

After Early Losses, Industry Stops Anti-Fracking Measures - — The oil and natural gas industry in Colorado was losing the public relations game. One industry association executive said it was “caught flat-footed” as oil and gas companies watched voters in Longmont pass a ban on fracking and other drilling activities in November 2012. A year later, voters approved four more citizen initiatives, imposing fracking moratoriums in Boulder County, Broomfield and Fort Collins and a permanent ban in Lafayette.  Oil and gas producers knew it was time to respond. They quickly invested in the creation of new issue committees and information campaigns designed to beat back bans. They stressed the importance of energy exploration and production to the state economy.  Meanwhile, environmentalists and community activists accused the industry of rigging the political process, creating “disinformation” campaigns and even harassing volunteers who were out in public gathering signatures in support of the proposed drilling restrictions.  Industry groups outspent them by a 15-to-1 ratio, paying freelancers to write paid newspaper commentaries and flooding radio and TV outlets with pro-industry messages, environmental advocates said.  In the 2016 election cycle, one of the new issue groups, Protecting Colorado’s Economy, Environment, and Energy Independence, launched a counter-campaign urging voters to “Decline to Sign” petitions in support of two proposed anti-fracking ballot measures it described as “job-killing” and “too extreme” for the state. The strategy worked. At the end of August, Colorado Secretary of State Wayne Williams (R) announced that the campaigns behind the two measures had failed to gather enough signatures to qualify the initiatives for the ballot.  Environmentalists and community activists who promoted the two proposals, Initiatives 75 and 78, say they were outmaneuvered by industry’s disinformation effort designed to confuse voters and make them second-guess signing the petitions to put the measures on the ballot. “They hired people to go out there and harass signature gatherers,” Micah Parkin of 350Colorado, one of the groups driving the petition campaign, told Bloomberg BNA. “They followed our petition circulators around, holding signs that said, ‘Don’t destroy Colorado’s economy’ and ‘Don’t take my job,’” she said.

Encana said to be hanging 'For Sale' sign on Colorado assets - Encana Corp., the Canadian oil and gas company that has its U.S. headquarters in Denver, is exploring the sale of all of its “non-core” assets, including its operations in Colorado’s Piceance Basin on the Western Slope, according to Reuters.  Reuters quoted two unnamed sources the news agency said were familiar with the matter.  The sale of Encana’s assets in North America and the United States could bring the company $1 billion, helping to reduce the company’s roughly $5.4 billion in fixed and revolving debt, the sources told Reuters. Encana officials have listed as its “core” focus the company’s Montney and Duvernay assets in Western Canada, along with the Permian Basin and Eagle Ford assets in western part of Texas and the southeastern part of New Mexico. According to Reuters, the sources said Encana is open to offers on all of its non-core assets including its Piceance Basin assets in western Colorado, its San Juan Basin assets in New Mexico, its Tuscaloosa Marine Shale assets in Mississippi and Louisiana, the Deep Panuke offshore gas field in Nova Scotia and its Horn River and Wheatland assets in western Canada.

Rail Industry Requests Massive Loophole in Oil-by-Rail Safety To Extend Bomb Trains Well Beyond 2025 --In the most recent oil-by-rail accident in Mosier, Oregon the Federal Railroad Administration (FRA) concluded that the tank cars involved — the jacketed CPC-1232 type — “performed as expected.” So an oil train derailing at the relatively slow speed of 25 mph should be “expected” to have breached cars resulting in fiery explosions. Current regulations allow those tank cars to continue rolling on the track carrying volatile Bakken crude oil and ethanol until 2025 with no modifications.Yet industry lobbying group the Railway Supply Institute (RSI) has now requested the Federal Railroad Administration to essentially allow these jacketed CPC-1232 tank cars to remain on the tracks for decades beyond 2025. This was just one of the troubling facts that came to light at the National Transportation Safety Board (NTSB) roundtable on tank car safety on July 13th, and perhaps the one of greatest concern to anyone living in an oil train blast zone like Mosier, Oregon. Just Re-Stencil It and Call It a DOT 117  One of the biggest risks with Bakken oil train accidents is that often the only way to deal with the fires is to let them burn themselves out. This can result in full tank cars becoming engulfed in flames for hours or days in what is known as a pool fire. This can lead to a “thermal tear” in the tank and the signature mushroom cloud of fire so often seen with these derailments. The new regulations address this issue by requiring tank cars to have a layer of ceramic insulation covering the entire tank car to prevent the oil from heating up to the point of creating a thermal tear (ceramic shown in pink in the image below.)

Montana board to decide on fracking chemicals disclosures (AP) — Montana regulators are to consider a petition that would force companies to divulge more information about fracking chemicals they use to produce oil and gas. A 2011 state rule allows companies to conceal chemicals considered trade secrets. A group of landowners, environmentalists and health advocates oppose the trade secrets exception. They say it violates the public’s right to know about chemicals that threaten public health. The group petitioned the Montana Oil and Gas Conservation Board in July to tighten its rules. Board administrator Jim Halvorson says a decision is expected following a public hearing Thursday in Billings. The Montana Petroleum Association has said the public should not have access to proprietary company information.

US Study Confirms Rapid Increase of Methane Emissions by Oil and Gas - Another U.S. scientific study has confirmed that methane emissions from oil and gas activity are increasing more rapidly than previously estimated, and that these increases were happening at the same time that the North American shale gas boom and related fracking frenzy took off.The latest study, one of several major scientific papers on growing global methane emissions published this past year, found that methane venting and leaks from oil and gas activity stabilized in the early 1980s and ‘90s and then dramatically escalated between 2000 and 2008.“Overall fossil fuel emissions didn’t change a lot until 2000, and then it really ramps up,” reported Andrew Rice, a climate scientist at Portland State University.Although the timing corresponds with the shale gas and fracking boom, the study did not identify shale gas sources or distinguish emissions from hydraulic fracturing in North America from other fugitive fossil fuel sources.Methane is a much more dangerous greenhouse gas than carbon dioxide. It can be 34 times more potent than CO2 as a disruptive climate changer over a 100-year frame, and 86 times more potent than CO2 over a 20-year time horizon.The increase in methane from the fossil fuel sector identified by the study corresponds with increases in coal mining in China and the fracking of shale gas in the U.S.The study, published by the Proceedings of the National Academy of Sciences, was based on an analysis of archived air samples from Oregon and other places between 1977 and 2009.Researchers then used the isotopic fingerprint data on methane from different sources to infer how the sources may have changed total methane levels over time.

EIA now provides estimates of drilled but uncompleted wells in major production regions -- Starting this month, EIA's Drilling Productivity Report (DPR) includes monthly estimates of the number of drilled but uncompleted wells (DUCs) in the seven DPR regions. Estimates will go through the prior month; the September DPR includes estimates through August.  Current EIA estimates show DUC counts as of the end of August totaling 4,117 in the four oil-dominant regions (Bakken, Eagle Ford, Niobrara, and Permian) and 914 in the three natural gas-dominant regions (Haynesville, Marcellus, and Utica) that together account for nearly all U.S. tight oil and shale gas production. In the oil regions, the estimated DUC count increased during 2014 and 2015, but the count declined by about 400 over the past five months. The DUC count in the gas regions has generally declined since December 2013.  DUCs are wells that have been drilled by producers, but have not yet been made ready for production. The full completion process involves casing, cementing, perforating, hydraulic fracturing, and other procedures to make the well ready to begin producing oil or natural gas. Following the large decline in oil prices since mid-2014, new drilling and completion activity slowed, and the number of DUCs in oil-dominant regions increased. A high inventory of DUCs has implications for the size and timing of the domestic supply response to changes in oil prices, with or without significant changes in the number of active drilling rigs.  Although both drilling and completion activity have declined since late 2014, the completions have experienced a deeper decline than drilling in oil-dominant regions. The differences in drilling and completion rates in these oil regions may be attributed to several factors. For instance, some long-term contracts for drilling rigs and lease contracts may mandate drilling or producing in order to fulfill commitments made to the landowners and mineral-right owners.   Estimates of the number of DUCs have been available from other sources. These estimates often vary significantly because of differences in methodology and operational assumptions, or, in some cases, insufficient data. EIA develops its estimates of DUCs for all seven regions in the Drilling Productivity Report using a consistent methodology and uniform assumptions.

Greens urge Obama to block new Arctic, Atlantic drilling - Key environmental groups are pushing President Obama to block any potential offshore drilling operations in the Atlantic and Arctic Oceans.  In a Tuesday letter to Obama, the groups said the world “needs leadership on policies that help limit global warming by addressing fossil fuel supply," starting with public lands and waters.   Blocking drilling in the Atlantic and the Arctic, they said, would “present a key opportunity for you to complete major first steps on this front before leaving office.” "No existing oil drilling jobs are at stake,” said the letter, signed by the heads of seven environmental groups.“The current lack of infrastructure for drilling either oceans’ outer continental shelves means oil production — if feasible at all — would be decades away, arriving too late to fuel America’s transition to a low carbon economy. It would also require massive public and private investments that should instead go into clean energy.”The heads of the Natural Resources Defense Council, NextGen Climate, League of Conservation Voters, Earthjustice, Sierra Club, Environment America and Defenders of Wildlife signed on to the letter. The Obama administration hopes to finalize a five-year offshore drilling plan before the end of his term. The proposed plan would block drilling in the Atlantic Ocean despite an earlier proposal to allow operations there, and it would allow up to two drilling lease sales in the Arctic Ocean.  Oil industry groups have urged the Obama administration to at least allow drilling in the Arctic as part of the plan.

Donald Trump Promises Deregulation of Energy Production - WSJ: —Republican presidential candidate Donald Trump promised sweeping deregulation of natural-gas, oil and coal production as part of an “America-first energy” plan. Speaking on Thursday to a conference of 1,500 gas-industry executives, managers and salespeople, Mr. Trump said he would lift restrictions on America’s “untapped energy—some $50 trillion in shale energy, oil reserves and natural gas on federal lands, in addition to hundreds of years of coal energy reserves.” He promised to end “all unnecessary regulations, and a temporary moratorium on new regulations not compelled by Congress or public safety.” Mr. Trump named an $850 million coal export terminal in Washington, a $3 billion Northwest gas pipeline and a $6.8 billion gas-export terminal as examples of the fossil-fuel projects that have been rejected by regulators or withdrawn by supporters since 2012. A recent tally found about $33 billion in projects have been derailed by regulations, grass-roots opposition and falling energy prices, a figure that Mr. Trump cited in his speech.  Democratic nominee Hillary Clinton has called for investment in renewable energy and steep reductions in U.S. carbon emissions as part of an effort to address global warming. Mr. Trump promised new prosperity in the gas industry via deregulation, which he said his friends in the business were more enthusiastic about than tax cuts. He said deregulation would lift gross domestic product by $100 billion a year and add 500,000 jobs annually in the next seven years.  Some conference delegates noted that on the campaign trail, Mr. Trump has focused more on coal than on gas. In his speech Thursday, Mr. Trump also promised to “end the war on coal,” including rescinding a coal-lease moratorium and conducting “a top-down review” of all coal regulations issued by the Obama administration. This year is the first in which gas will supply a larger percentage of U.S. electricity than coal.

Alaska emergency crews study up for nation’s first LNG by rail - Starting tomorrow, the Alaska Railroad will be the first in the nation to carry liquefied natural gas by rail. With the Federal Rail Administration’s blessing, LNG will travel the tracks from Anchorage to Fairbanks. As with any new venture, safety is always a topic of discussion. Cappel said he’s training the Anchorage Fire Department in case the worst happens. “It’s very important for everyone to understand how rail cars work, especially the fire department,” said Cappel. “If they are responding to any kind of disaster they need to know how these cars work so they don’t get hurt and the people they are rescuing don’t get hurt.” Over the next four weeks, the Alaska Railroad will complete eight round-trip test runs of liquefied natural gas shipments from Anchorage to Fairbanks. It’s a big first, for Alaska and the U.S. — LNG has never been shipped by rail before. Fairbanks Natural Gas hopes this will be a cheaper, safer way to move the fuel. Recent oil train explosions in the lower 48 have some people worried about moving train cars filled with fossil fuels through communities. Lois Epstein, an engineer who works for The Wilderness Society, says shipping LNG by rail is generally safer than carrying it in a truck, which is how the LNG is being shipped to Fairbanks now. “Where I would be concerned, however, is places where the railroad crosses the road because that’s where there are some very real safety issues,” said Epstein.

First Nations across North America sign treaty alliance against the oilsands - The thunderous pounding of indigenous drums echoed in the air on Thursday as more than 50 indigenous nations across North America rallied together to sign a historic, pan-continental treaty alliance against oilsands expansion in their traditional territory. The collaboration, formalized at simultaneous ceremonies in Quebec and B.C., aims to block all proposed pipeline, tanker, and rail projects affecting First Nations land and water, including TransCanada's Energy East pipeline, Kinder Morgan's Trans Mountain expansion, Enbridge's Line 3 pipeline, and Enbridge Northern Gateway. At the signing on Musqueam land in Vancouver, the lineup of chiefs waiting to put their names down filled up an entire room. It was a powerful ceremony, and participants clad in the regalia of their nations travelled from across B.C. and northern Washington to be part of the growing movement. Grand Chief Stewart Phillip of the Union of BC Indian Chiefs, who also signed the document, said indigenous people will no longer stand for dangerous projects on their territory that advance the threat of climate change."In this time of great challenge we know that other First Nations will sign on," he said, extending the invitation to Indigenous communities far and wide."Based on our sovereign, inherent right to self-determination, we have collectively decided that we will pick up our sacred responsibilities to the land, waters, and people. We will come together in unity and solidarity to protect our territory from the predations of big oil interests, industry, and everything that represents." It's a movement that's already happening, he added, with no better example than in North Dakota, where the Standing Rock Sioux have forced the federal government to pause Dakota Access pipeline construction.

Natural Gas Prices Rise on Historic Heat - WSJ: Natural gas prices surged to their highest point since the winter of 2015 as hot weather reports keep stoking expectations for strong demand. Historic heat has caused record demand for gas-fired power at a time of declining drilling activity, persuading many that a glut leftover from last winter is easing. Bearish traders had been expecting that heat to wane as summer nears an end, but weather forecasts show extreme heat as much as 15-degrees-Fahrenheit above normal until the end of this week, and more warm temperatures covering most of the country into next month. “Demand is supposed to drop. And it has not. It has gone up,” said Scott Shelton, broker at ICAP PLC. “It’s still much better than everyone anticipated.” Natural gas for October delivery settled up 11.3 cents, or 3.9%, at $3.047 a million British thermal units on the New York Mercantile Exchange. That is the highest settlement since Jan. 16, 2015 and the first settlement above $3/mmBtu since May 18, 2015. Heat is the big driver for gas futures in the summer because demand is closely tied to power. Intense heat leads to higher consumption as people turn on their air conditioners. This September is on pace to be the hottest on record or second-hottest trailing only last September, according to Commodity Weather Group LLC in Bethesda, Md. “Weather is undefeated in the natural gas market,” said Zane Curry, a gas analyst at Mobius Risk Group in Houston. Futures have also been boosted by higher spot prices in recent sessions, themselves a beneficiary of the heat and high demand for gas-fired power near the Henry Hub benchmark, analysts and brokers have said. Data showing recent production declines in the Gulf of Mexico and Louisiana’s Haynesville shale have also probably helped spot prices, Mr. Curry said. It is rare for them to be higher than futures in September, analysts said.Physical gas for next-day delivery at the Henry Hub in Louisiana traded Tuesday from $3.06/mmBtu to $3.10/mmBtu, compared with $2.92 to $2.99 on Monday. Cash prices at the Transco Z6 hub in New York traded from $1.73/mmBtu to $1.83/mmBtu, compared with Monday’s range of $1.50 to $1.60.

Natural Gas Prices Are at a 19-Month High: What Does It Mean? -  In the last five trading sessions, natural gas October futures have risen 5.8%. They closed at ~$3.06 per MMBtu (million British thermal units) on September 21, 2016. This is ~0.3% more than the previous session. On September 21, 2016, active natural gas futures hit a high of $3.06 on closing price basis—the highest level since January 2015. The rise in natural gas could be attributed to record-high temperatures. This led to higher demand for natural gas at gas-fired powerplants to satisfy the cooling demand. The natural gas–targeted drilling activity has been weak. We’ll discuss natural gas and crude oil rigs in the next part. The market also expects the gap between the current inventory levels and historical averages to close. We’ll discuss this in detail in Part 3. Last winter, natural gas usage for heating was weak due to mild weather. As a result, prices were weak. At the end of March 2016, US natural gas inventories were at 2.5 trillion cubic feet—67% higher than the levels in 2015 and 53% higher than their five-year average. Natural gas futures hit a 2016 and 17-year low of $1.64 on March 3.The EIA (U.S. Energy Information Administration) projects that natural gas inventories will be ~4,042.4 Bcf (billion cubic feet) at the end of October 2016. This would be the highest level on record at the end of October. During the week ending September 2, natural gas inventories were at 3,437 Bcf—10% higher than their five-year average and 6% higher than the level last year.On September 21, natural gas futures were trading ~17.8% above their 100-day moving average and 6.7% above their 20-day moving average. This indicates the bullishness in natural gas prices. The above graph shows the price performance of natural gas futures relative to key moving averages.

Natural Gas Price Dips on Inventory Build -  The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 52 billion cubic feet for the week ending September 16. Analysts were expecting a storage addition of around 52 billion cubic feet. The five-year average for the week is an injection of around 83 billion cubic feet, and last year’s storage addition for the week totaled 105 billion cubic feet. Natural gas inventories rose by 62 billion cubic feet in the week ending September 9. Natural gas futures for November delivery traded down about 1% in advance of the EIA’s report, at around $3.06 per million BTUs, and traded near $3.03 after the data release. Natural gas closed at $3.13 per million BTUs on Wednesday, a five-day high. The 52-week range for natural gas is $2.05 to $3.02. One year ago the price for a million BTUs was around $2.99.  Natural gas prices rose to a recent high on Tuesday and Wednesday on forecasts for continued warm weather and higher demand for natural gas through the end of this month. But summer’s high temperatures are pretty much behind us now and more gas is likely to be headed for storage. The concern is that natural gas could threaten the country’s physical storage limit of around 4.3 trillion cubic feet by the time the winter heating season begins. Stockpiles remain about 4.1% above their levels of a year ago and more than 8% above the five-year average. The EIA reported that U.S. working stocks of natural gas totaled about 3.551 trillion cubic feet, around 268 billion cubic feet above the five-year average of 3.283 trillion cubic feet and 140 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 3.411 trillion cubic feet for the same period a year ago.

NGL-to-crude ratio pricing heading back to pre-2012 level. The ratio of NGL-to-crude oil prices looks like it will be rebounding, and over the next two or three years could rise to levels not seen since the Shale Revolution brought down NGL prices at the end of 2012, a signal that all of the new NGL-consuming petrochemical cracker projects now under construction may not be as lucrative as their developers had once hoped. Several factors are driving the ratio’s rise: increasing U.S. demand for NGLs; more exports; stubbornly low crude oil prices and a lower trajectory of NGL production growth. Today, we examine the historical relationship between NGL and crude oil prices and the reasons why that ratio may be headed back above 50%.  The Shale Revolution has had many market effects –– it’s made fortunes, transformed regions like the Marcellus/Utica and Bakken into energy and economic powerhouses, and given the U.S. a degree of energy independence that few would have predicted a decade ago. It’s also wreaked havoc on what for years had been reliably consistent relationships or ratios between different types of hydrocarbons. The NGL-to-crude ratio is a case in point. First, an explanation. As we at RBN define the measure, the NGL-to-crude ratio is a weighted average of OPIS/Mont Belvieu natural gas liquids (NGLs) prices divided by CME/NYMEX front month crude oil futures. The weighted average for the NGL mix that we use to calculate the ratio is 42% ethane, 28% propane, 11% normal butane, 6% isobutane, and 13% natural gasoline. 

Over, Under, Sideways, Down - KM's Tejas Crossover to Help Move Gas to Export Markets - Planned liquefaction/LNG export facilities along the South Texas coast and growing demand from Mexico’s electric power sector together will require several billion cubic feet/day of additional U.S. natural gas over the next three to five years. Gas producers from the Marcellus/Utica to the Permian are targeting these markets, but there are questions regarding whether the Lone Star State’s existing pipeline infrastructure is sufficient to deliver all that gas to these critically important export markets. Part of the solution will be optimizing the use of Texas’s impressive—but sometimes misunderstood intrastate pipeline networks, particularly the far-reaching systems operated by Enterprise, Energy Transfer and Kinder Morgan. Today, we discuss one part of the solution, an inexpensive but impactful Kinder Morgan project that will enable about 1 Bcf of natural gas from various sources to reach South Texas LNG exporters and Mexico on KM’s intrastate system. For some time now, three of the more frequent topics in the RBN blogosphere have been rising natural gas production; the potential for liquefied natural gas (LNG) exports from the Gulf Coast and pipeline gas exports to Mexico; and the infrastructure needed to deliver gas to these markets. Most recently, we addressed all three of these topics in Part 1 of “Miles and Miles of Texas,” a two-part Drill Down report on Marcellus/Utica gas being piped to Louisiana and Texas to help meet export demand—and on the challenges inherent in moving all that gas to Gulf Coast liquefaction/LNG export terminals and south of the border into Mexico. (Part 2 of the Drill Down will be published in the next couple of weeks.) In Part 1 we noted that while Texas still produces more natural gas than any other state (20.1 Bcf/d of marketed production as of June 2016, according to the Energy Information Administration, or EIA), the three states in the Marcellus/Utica plays (Pennsylvania, Ohio and West Virginia) together produce even more (21.8 Bcf/d as of June) and because of favorable economics could—and probably will—produce a lot more in the years ahead.

European buyers may bring US LNG to 'home' markets in 2018/19: Cheniere - Contracted buyers of US LNG in Europe, such as France's Engie and Spain's Gas Natural, could bring their volumes to their own home markets in the next few years as an expected widening of the Henry Hub/oil spread makes US LNG more attractive, a senior official from US LNG pioneer Cheniere said Wednesday. Speaking at the LNGgc conference in London, Cheniere Marketing's Genevieve Solomon also conceded that US LNG exports were "less compelling" now because of the oil price fall than had been the case when most of the US LNG export projects were sanctioned. Cheniere began exporting LNG in February this year, but out of the 30 or so cargoes exported to date, only two have come to Europe. This is partly due to the low gas prices in Europe and a pick-up in Russia, Norwegian and Algerian pipeline supplies.Solomon said that by 2018 or 2019, US LNG is expected to be cheaper than the oil-indexed gas in Europe. This, she said, should incentivize some of Cheniere's contracted buyers to bring gas to Europe. "If you consider where the oil price is expected to be, they should want to take some of their US LNG over oil-indexed gas," she said. "So I wouldn't rule out US LNG being taken into the home markets of those that have signed the contracts," she said.

Coal's cost advantage over LNG slipping, but not yet enough: Russell | Reuters: Thermal coal has been one of the commodity success stories this year, but there is a risk that it becomes a victim of its own success by eating into its advantage over liquefied natural gas (LNG) in generating electricity. The benchmark Australian thermal coal price, the Newcastle Index, rose to $70.76 a tonne in the week to Sept. 16, its highest in 18 months and taking its gain since the start of the year to almost 40 percent. In contrast, the price of spot LNG in Asia was $5.60 per million British thermal units (mmBtu) on Sept. 16, down almost 19 percent from the end of last year. The two fuels are at different stages in their price cycle, with thermal coal likely to snap five years of losses in 2016, while LNG is on track to notch up a third consecutive down year. The difference is mainly because the market for coal used in power stations has finally started to balance, with the prior years of oversupply coming to an end as mines shut down or cut back output and demand gains in Asian markets, with China proving a standout so far this year. LNG is still some way from this point, with more supply expected to reach the market this year and for the next few years, coupled with question marks over whether demand growth will rise sufficiently to absorb the new production. Nine liquefaction trains are expected to start up in 2016, adding 35 million tonnes of LNG to the market, ANZ Banking Group said in a research note published on Sept. 13. The additional capacity is largely from new plants in the United States and Australia, which is poised to become the world's largest producer of the super-chilled fuel as it completes eight new projects that have been under construction.

Algeria's Skikda resumes LNG exports after two-month shutdown - Maintenance at Algeria's Skikda LNG export facility has now been completed, with the first cargoes shipped out in the past week. The two-month shutdown was partly to blame for a slump in exports of LNG to Spain in August, while Spanish gas demand was also lower. The 4.7 million mt/year Skikda plant was closed for planned maintenance in mid-July, according to industry sources, with the final cargo before the shutdown loaded on July 11, data from Platts Analytics' Eclipse Energy showed.The first LNG cargo to leave Skikda after the restart was aboard the Cheikh Bouamama, which took 45 million cu m of gas equivalent to the Fos Cavaou LNG import plant in southern France last weekend. A second cargo loaded from Skikda aboard the Cheikh el Mokrani is taking 45 million cu m of gas equivalent to the Sagunto terminal in Spain and is expected to arrive Friday, according to Platts Analytics. Skikda has been a steady supplier of LNG to Spain over the past 12 months, supplying close to 2 Bcm of gas equivalent to the Spanish market since September 1, 2015, according to Platts Analytics data. That equates to around 15% of Spain's total LNG imports of 13.3 Bcm over the past year.

In Ohio, frackers are drilling. Soon Ineos will be doing the same in Britain -   Ineos is planning as many as 30 applications for fracking sites in the UK within the next year. As part of its campaign to win over critics, Ineos invited journalists to tour fracking sites in Pennsylvania operated by Consol, a Pittsburgh-based producer of natural gas and coal and, supposedly, an example of why fracking will be good for the UK.What’s in store for the UK can be seen about an hour southwest of Pittsburgh, in the town of Switzerland, Ohio, where a rig stands near a farm. The well is in its earliest stages: drilling goes on 24 hours a day, seven days a week. Sitting in a big armchair surrounded by screens, “T-Ball”, a burly 6ft drill operator, works 12-hour shifts, controlling the drilling like a video game. He does this for two-week stints. At night, another person takes over – also working a 12-hour shift. Ineos estimates that it will be at least five years before any of its UK wells are actually producing shale gas. Fracking will be good for Britain, according to Ineos, making it more independent and creating jobs. By 2018-19, about 69% of UK gas will be imported. Fracking, Ineos says, would help the UK become less dependent on other nations and would supplement dwindling North Sea resources. A 2014 Ernst & Young report predicts that fracking could create more than 64,000 jobs. There has been no fracking in the UK since 2011, when Cuadrilla Resources’ operations were said to be a “highly probable” cause of two earth tremors in northwest England. The moratorium on fracking was lifted in May 2013, but no fracking well proposals were actually approved until earlier this year, when North Yorkshire county council gave the go-ahead to an application by Third Energy.  But the consequences of unfettered fracking are clear in the US. A study by the US Geological Survey showed that increased fluid pressure in geological fault zones from disposal wells has increased earthquake vulnerability in a some states. As a result, parts of Oklahoma and Kansas now face earthquake risks on a par with California.  There is no way fracking can be done responsibly, “no matter what regulations are proposed”, according to John Detwiler of the Marcellus Protest coalition, an environmental pressure group in Pennsylvania. He said many company-sponsored fact-finding trips to Pennsylvania were “merely window-dressing for decisions being made in back rooms”.

First U.S. shale gas shipment to arrive in Britain, serenaded by a Scots piper | Reuters: The first shipment of gas fracked from U.S. shale will arrive in Britain next week, upping pressure on Scotland to reassess its opposition to fracking. Chemicals giant Ineos will be importing ethane, obtained from rocks fractured at high pressure, in a foretaste of larger deliveries of liquefied natural gas (LNG) from shale set to reach Europe in 2018. The shipment of ethane, used to make plastics, anti-freeze and detergents, will arrive in Scotland's Firth of Forth on Tuesday, accompanied by a lone Scots piper at sunrise, the company said. The Zurich-headquartered group is against a Scottish moratorium on fracking. It is Britain's biggest shale gas company in terms of acreage and it has promised to share six percent of future shale gas revenue with local residents. Chairman Jim Ratcliffe, one of Britain's wealthiest men, argues he is offering the potential from shale fracking to create tens of thousands of jobs, putting pressure on the Scottish government grappling with an economy expected to be weakened by Britain's decision to leave the EU. "Shale gas can help stop the decline of British manufacturing and this is a first step in that direction," he said in a statement.While the British government backs shale gas extraction, Scotland, under its devolved powers, imposed a moratorium on fracking in early 2015. It said more research was needed before a final decision.

Big Oil Flocks To Argentina As Permian Land Prices Skyrocket -- The Permian Basin has become so hot that some oil companies are starting to stay away, instead looking at frontiers that are less picked over. BP is one such company. The British oil giant’s CEO Bob Dudley said that land in the Permian has become too expensive, and instead he is looking to expand operations in Argentina, where the vast Vaca Muerta shale basin offers appetizing opportunity. In an interview with Bloomberg TV from Buenos Aires, Dudley said BP is planning on acquiring more assets in the Vaca Muerta. And it isn’t just the “enormous potential” from the oil and gas reserves in the shale basin, but also the friendly policy put forth by the new Argentine government led by President Mauricio Macri. “I’m really encouraged by what I see,” Dudley said. “There’s a lot of future here.” BP has a joint venture with Bridas Corp. – BP owns 60 percent of Pan American Energy LLC and Bridas controls the other 40 percent. BP will expand its presence in Argentina through this JV. Argentina is quickly becoming one of the few countries that has achieved shale development outside of North America. One of the biggest incentives the government has offered is regulated oil prices, set at levels higher than the international price. Several of BP’s peers are already drilling in the Vaca Muerta, including Chevron, ExxonMobil, and Royal Dutch. The state-owned YPF said that it would need investments totaling about $200 billion to fully exploit the Vaca Muerta. Exxon said earlier this year that it might spend more than $10 billion in Argentina, building on several pilot projects. The investments would span decades. “I am very encouraged by the changes that have occurred here in Argentina, with the change in government,” Exxon’s CEO Rex Tillerson said in June. More and more companies are starting to build up their presence in Argentina.

Petrobras divestment plan opens door for other players: analysts - Oil | Platts News Article & Story: Brazilian state-led oil company Petrobras will expand asset sales and partnerships in several key segments, including refining, in moves that will further open Brazil to foreign oil companies and other players, according to analysts and industry observers. The company's 2017-21 investment plan, unveiled Tuesday, forecasts a jump in divestments and partnerships to $19.5 billion in the 2017-18 period. That total is on top of the $15.1 billion target set for divestments in 2015-16, a mark that Petrobras has struggled to reach amid a market flooded with assets as companies adjust to the low oil price environment. So far, the company has sold about $4.1 billion.Petrobras is refocusing on oil and natural gas exploration and production, especially in the promising subsalt frontier, after years of being used by Brazil's government as a tool for broader economic development. The company plans to exit segments such as biofuels, LPG distribution, fertilizers and petrochemicals, officials said.

How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil — One oil rig was idle for weeks because a single piece of equipment was missing. Another was attacked by armed gangs who made off with all they could carry. Many oil workers say they are paid so little that they barely eat and have to keep watch over one another in case they faint while high up on the rigs. Venezuela’s petroleum industry, whose vast revenues once fueled the country’s Socialist-inspired revolution, underwriting everything from housing to education, is spiraling into disarray. To add insult to injury, the Venezuelan government has been forced to turn to its nemesis, the United States, for help.“You call them the empire,” said Luis Centeno, a union leader for the oil workers, referring to what government officials call the United States, “and yet you’re buying their oil.”The declining oil industry is perhaps the most urgent chapter of Venezuela’s economic crisis. Oil accounts for half of the Venezuelan government’s revenues, what former President Hugo Chávez once called an “instrument of national development.” The state oil company poured its profits, more than $250 billion in all from 2001 to 2015, into the country’s social programs, including food imports.  But those profits have evaporated with mismanagement and the drop in global oil prices over the past two years. Now, even Venezuela’s subsidized oil shipments to its vital ally Cuba are slowly being phased out, oil executives with operations in Venezuela contend, forcing Havana to look to Russia for cheap oil. For President Nicolás Maduro — like Mr. Chávez, who died in 2013, before him — Venezuela’s oil wealth has been essential to the nation’s identity and sovereignty, the financial might behind its regional ambitions and its angry defiance of the United States.

Can India Become An LNG Juggernaut? - In the world of liquefied natural gas (LNG), no market is watched with more interest or more potential excitement than India. In 2015 the country with the second-largest population on earth imported 15 million tons of LNG, but some forecasters predict it will import nearly 50 million by 2030.  LNG faces a critical juncture, with some 40-50 million tons reckoned to be “homeless” by 2020 unless new contracts are signed; this has placed buyers like India and Japan in privileged positions, with the leverage to re-negotiate existing LNG contracts (which are generally signed for long-term, fixed amounts) and take advantage of a global glut to make short-term and spot price buys, minimizing divergence with market prices. India, currently the world’s fourth largest LNG importer, may turn into an LNG juggernaut, taking in the new production from Australia, the U.S., Iran and elsewhere. It has announced plans to increase re-gasification capacity to 55 million metric tons in order to feed demand. But the key question remains: is that demand reliable?  Indian Oil, the state-run refining company, has announced that it expects to earn 15 percent of its total revenue from gas-related projects by 2021. At the moment, gas trading contributes only 5 percent to the company’s bottom line, and India overall relies on gas for 6.5 percent of its energy needs, lagging behind the global average of 23.8 percent. India Oil is set to invest $27 billion in oil and natural gas inside India, including a planned “mega refinery” in partnership with foreign capital. The company has reportedly secured 13 million tons of LNG regasification capacity across terminals in India, and has retained a commitment to importing two cargos of LNG from the Dahej import terminal every month. The terminal is run by Petronet, the country’s single largest LNG importer, which has been exploiting low prices to feed a “buying binge:” it’s expanding Dahej’s capacity from 10 million cubic meters a year to 15 million and is constructing a brand new terminal in the Indian province of Gangavaram on the East coast. These projects come with a high price tag, but Petronet can apparently afford it: the company reported a 55 percent increase in net profit for the first quarter (ending June), though the increase amounts to total net profits of $56 million, chump change for energy majors.

Tanker Returns to Libya’s Ras Lanuf Port to Load Oil After Clash - Bloomberg: A tanker returned to Libya’s third-biggest oil port to load a cargo a day after clashes between rival armed forces forced it to sail away to safety, in what would be the first overseas crude shipment from the terminal of Ras Lanuf since 2014. The vessel Seadelta was to resume loading 781,000 barrels of oil for shipment to Italy within four hours, Nasser Delaab, petroleum operations inspector at Harouge Oil Operations, said Monday by phone. The ship would be full 18 hours after that, he said. Another tanker, the Syra, would arrive in Ras Lanuf later on Monday to ship 600,000 barrels of crude to Italy, he said. The Seadelta halted loading amid fighting that complicated efforts to end a five-year conflict that has slashed Libya’s oil exports. Forces loyal to eastern-based military commander Khalifa Haftar repulsed a local Petroleum Facilities Guard unit that tried on Sunday to seize control of Ras Lanuf and the country’s largest oil port of Es Sider in east Libya, Mohammad Al-Azoumi, spokesman for a battalion under Haftar’s command, said by phone. Five petroleum guards were killed during the clashes, he said.The OPEC country is seeking to boost crude exports after fighting among rival militias slashed oil production following the 2011 ouster of former dictator Moammar Al Qaddafi. The conflict halted exports from the nation’s main oil ports of Es Sider, Zueitina and Ras Lanuf as the country struggled to form a unified national government. The National Oil Corp. planned to resume exports from the ports after reaching an accord with Haftar, who seized control of the facilities last week. The Seadelta had been loading crude from onshore storage tanks on Sunday before being interrupted, said Delaab, who helps organize oil movements at Ras Lanuf. The vessel arrived there from Trieste, Italy, according to tanker tracking data compiled by Bloomberg. The Syra was navigating off the Libyan coast as of Monday evening local time, according to the tracking data.

Oil bet gone wrong: rusting tankers and rigs clog up Asian waters | Reuters: Some 15 km (9 miles) from the bustling port of Singapore,a rusting tanker as big as the world's largest aircraft carriers lies idle in a muddy estuary flanked by mangrove trees on the coast of southern Malaysia. The 340-metre (1,115 ft) "FPSO Opportunity", a hulking so-called Floating Production, Storage and Offloading (FPSO) vessel capable of drilling for oil in deep waters, is currently surplus to requirements along with scores of other rigs, tankers and support vessels in an era of cheap oil. The fleet of mothballed giant vessels anchored around Southeast Asian waters is the physical fallout of an oil downturn heading into its third year, and a stark reminder of how badly the industry miscalculated market conditions. "There was a misguided focus‎ on scarcity in the supply side from the early 2000s," said David Fyfe, head of research at oil and commodity trading firm Gunvor. "As an industry, they were complacent. They thought because cost was high, prices will remain high ... (but) then there was the advent of shale. Since that period, there is a realization that there is no scarcity of oil." The shale revolution turned the United States into one of the world's biggest oil producers, at a time when exporters in the Middle East and Russia were also pumping out record volumes, causing oil prices LCOc1 to more than halve since mid-2014 to under $50 per barrel. The FPSO Opportunity, which has been laid up for over two years, was built in 1972 and operated by Chevron CV.N and Australia's Woodside Petroleum (WPL.AX) before being taken over by a Bermuda-registered FPSO Opportunity Inc in 2011. The newest owner could not be reached for comment.

Libya oil chief fears 'financial collapse' unless exports rise - Conflict-hit Libya could run out of money next year without a swift resumption of oil exports, the head of the country's National Oil Corporation (NOC) warned on Thursday."It is no secret we are on the road to financial collapse," NOC chairman Mustafa Sanalla told AFP in the capital Tripoli."We are running a budget with a huge deficit and we have spent half our reserves in the last few years."Sanalla was speaking after an oil tanker left the key Libyan port of Ras Lanuf on Wednesday with the first crude shipment from the terminal in two years. The cargo of 776,000 barrels was also the first to leave the country since oil terminals were seized last week by military strongman Khalifa Haftar, who handed control of the ports to the NOC. Libya has Africa's largest oil reserves, estimated at 48 billion barrels, but production and exports have slumped dramatically through years of crisis. Libya pumped around 1.6 million barrels of crude a day before longtime strongman Moamer Kadhafi's overthrow in 2011, but the ensuing chaos slammed production, which fell as low as 290,000 in recent months, according to the NOC.

Libyans Who Once Opposed Gaddafi Now Regret US-Led Regime Change - Who actually benefits from American-led wars across the globe? The aftermath of American-led conflicts shows it is not the common people, though the military and politicians vow they are liberating and protecting them. The Sunday Mail, Zimbabwe’s “leading family newspaper,” has published accounts of a number of Libyans who expressed regret over Muammar Gaddafi’s overthrow in 2011, despite the fact some of them even took up arms against him. As one said: “‘I joined the revolution in the first days and fought against Gaddafi,’ former revolutionary fighter Mohammed, 31, said from the southern city of Murzuq. ‘Before 2011, I hated Gaddafi more than anyone. But now, life is much, much harder, and I have become his biggest fan.’”In 2011, we were told Gaddafi was going to commit grave bloodshed against his own people and that as a result, the international community needed to intervene to protect Libyan civilians. This proved to be false, according to an analysis of statistics obtained by Human Rights Watch. Further, an investigation conducted by Amnesty International also found a number of claims against Gaddafi were fabricated, as noted by the Independent: “Nato leaders, opposition groups and the media have produced a stream of stories since the start of the insurrection on 15 February, claiming the Gaddafi regime has ordered mass rapes, used foreign mercenaries and employed helicopters against civilian protesters. “An investigation by Amnesty International has failed to find evidence for these human rights violations and in many cases has discredited or cast doubt on them. It also found indications that on several occasions the rebels in Benghazi appeared to have knowingly made false claims or manufactured evidence.” The so-called “no-fly zone” the U.N. Security Council Resolution authorized did not allow for regime change, something NATO representatives further promised their Eastern counterparts would not happen.

Swiss traders blame governments for dirty fuel in Africa (AP) — Swiss commodity traders accused of deliberately blending toxic fuel and dumping it in West Africa say African governments are to blame for low standards and failure to invest in refineries and newer vehicles to lower exhaust emissions that cause respiratory and other diseases. “What is very clear is that the role of improving fuel quality in Africa clearly rests with African governments, not with the fuel suppliers,” the Geneva-based African Refiners Association representing many traders said in a letter obtained Monday by The Associated Press. It was responding to allegations from Swiss watchdog Public Eye accusing traders of deliberately adding toxic products that lower fuel quality to increase profits at the expense of Africans’ health. Public Eye said traders including Vitol and Trafigura provide Europe with fuel meeting European Union standards of 10 parts per million of sulfur while creating what’s called “African Quality” fuel that has 2,000 ppm or more of sulfur. Nigeria, for example, allows up to 3,000 ppm of sulfur in petrol.  Nigeria’s Department of Petroleum Resources called the Public Eye report “grossly exaggerated.” The refiners’ association noted traders’ essential role in “the survival and growth” of economies in Africa, which imports more than 50 percent of its fuel. “If Swiss traders followed the report recommendation today their role would be filled by traders from other nations who would simply supply the quality required to meet the official specifications. The result would be that nothing would change in Africa,” it said.

Onlookers drawn to flare with gas company Origin fracking exploratory well in Northern Territory - ABC Rural (Australian Broadcasting Corporation): The Northern Territory Government says a large flame burning from an exploratory gas well is standard exploration practice. Media player: "Space" to play, "M" to mute, "left" and "right" to seek.Audio: Ross Evans from Origin Energy says government approval for well testing at the Amungee NW-1H was received four days before the NT election. (ABC Rural) Origin Energy Resources has recently fracked a horizontal shale gas well on Amungee Mungee station, east of Daly Waters, as part of a government-approved testing process. But the flare has pastoralist Daniel Tapp concerned. He said he and a friend drove to the area and filmed the gas flare from the Carpentaria Highway. He's worried it's a sign of things to come. "We've just been promised a moratorium on fracking. They're ([he NT Government] going to do an inquiry that's going to cost us more money," Mr Tapp said. "The well integrity issue has not been resolved, and by the time this inquiry gets lodged the [gas] infrastructure will already be in place and ready to frack." Ross Evans, Origin's general manager of exploration and new resources, said well testing at the Amungee NW-1H well site was permitted to continue until late November, however it was likely to be completed earlier. He said the production testing for gas quality and gas flow began last week.

OPEC ‘Very Close’ to Agreement to Stabilize Market, Maduro Says - Bloomberg: Maduro held ‘positive discussions’ with fellow OPEC members Share on FacebookShare on TwitterShare on LinkedInShare on RedditShare on Google+E-mailShare on TwitterShare on WhatsAppOPEC members are close to reaching an agreement on how to stabilize the market, Venezuelan President Nicolas Maduro said after speaking to his counterparts from Iran and Ecuador. Maduro held “positive discussions” with fellow members of the Organization of Petroleum Exporting Countries who attended the Summit of the Non-Aligned Movement, he said Sunday at a press conference following the event, in which 15 heads of state gathered in the South American country. Maduro said he spoke with Ecuadorian President Rafael Correa and Iranian President Hassan Rouhani at the summit and that he hopes an accord can be reached by the end of the month. “We are close to an agreement between OPEC and non-OPEC countries to stabilize the market,” state oil company Petroleos de Venezuela SA wrote on Twitter, citing Maduro. A “definitive answer” for market stability could come this month, he said, according to PDVSA. Ministers from all 14 member nations of OPEC, as well as the energy minister of Russia plan to have informal discussions about the oil market in Algiers on Sept. 27 on the sidelines of the International Energy Forum. News of the meeting has fanned speculation that producers may agree on an output cap to shore up prices that are languishing below $50 a barrel nearly two years into the largest market crash in a generation. If the ministers reach a consensus in Algeria, OPEC may call a special meeting, Secretary General Mohammed Barkindo said on Sunday, according to Algeria’s official news agency. Brent crude, the global benchmark, was up 1.8 percent at $46.57 a barrel as of 11:22 a.m. Singapore time.

Oil Slide Extends As OPEC SecGen Sees No Production Freeze This Month -- With just a few days before the highly anticipated OPEC meeting in Algeria, WTI Crude prices are tumbling once again as OilPrice.com reports a top official from the group threw cold water on the possibility of a production freeze.  Expectations for a deal have gone up and down since they were first floated in August, taking oil prices on a volatile ride. But, as OilPrice's Charles Kennedy notes, rumors of a possible deal were enough to spark a 20 percent rally in oil prices in August, ending what had become a bear market. Since then, a cavalcade of comments, opinions, and seemingly off the cuff remarks from OPEC officials and oil ministers have fueled market speculation about the possibility of a production freeze. But the latest comment from OPEC’s Secretary-General is arguably the most definitive to date, and it doesn’t bode well for a production freeze in Algiers. Secretary-General Mohammed Barkindo said over the weekend that the group wouldn’t be making a decision on any limits. “It is an informal meeting, it is not a decision-making meeting,” Barkindosaid to Algerian state media. On the other hand, Venezuelan President Nicolas Maduro said that they were closing in on a deal, which could be announced before the end of the month. "We had a long bilateral meeting with Rouhani. We're close to a deal between OPEC producer countries and non-OPEC," Maduro said at a news conference, referring to a meeting with Iranian President Hassan Rouhani on the sidelines of a summit in Venezuela for the Non-Aligned Movement. Venezuela is one of the countries that is most desperate for a deal, so those comments should be taken with a large dose of skepticism.

Long Term Consequences Of The Oil Price Crash -- The World Energy Investment study released by the IEA on September 14 confirmed what analysts have been prophesying for months: the current decline in oil-and-gas investment is the biggest one in half a century. The current bout of low prices has gotten so deep and remained there for so long that capital investment in new projects, and hence new production, has taken a major hit.But in an era of shifting energy policies, surging interest in renewables and uncertainty over the consistency of demand, what does this drop in investment really signify? And what could it mean, over the long term? There are a lot of factors to keep in mind when taking a look at this new report from the global energy watch-dog.The IEA found that worldwide investment in energy in 2015 was $1.8 trillion, a fall in real value of 8 percent from 2014. Investment in oil and gas fields, according to IEA’s executive director, by 25 percent in 2015 to $583 billion, with a further decline of $450 billion expected for 2015. The decline in oil and gas, which has otherwise retained the largest share (46 percent) of total investment, was partially off-set by growth in renewables, electricity networks and energy efficiency (see a handy pie chart here).The largest contributor to the decline was cost deflation, or falls in supply and equipment costs, which accounted for about two-thirds of the total fall in investment.Other notable aspects of the IEA report: investment in energy efficiency rose by 6 percent and reached $220 billion, a further sign that increased efficiency remains a “fuel” in its own right. The IEA had estimated in October 2014 that energy efficiency could potentially be worth $310 billion worldwide.

WTI Crude Jumps After Surprise Massive Inventory Draw -  Following last week's unexpected draw (following the huge storm-driven draw from the week before), traders expected a 3.25mm build this week but API reported another surprise draw (massive 7.497mm draw!) . The Colonial pipeline leak/shutdown likely had some exogenous effect as Cushing saw a large build but Gasoline drewdown as Distillates inventories rose. WTI prices are surging back to yesterday's highs on the surprise. API:

• Crude -7.497mm (+3.25mm exp)
• Cushing +407k (+100k exp)
• Gasoline -2.5mm (-1.4mm exp)
• Distillates +1.4mm

For the 3rd week running (including the epic draw from the storms), Crude inventories declined... but Distillates inventories rose for the 6th week in a row... While prices are expected to remain somewhat rangebound ahead of Algiers, the surprise draw sent the mahcines ramping WTI above $44.50 (to yesterday's highs)...

S&P sees oil prices recovering to just $55/b by 2019 as industry costs fall - S&P Global Ratings has revised upward its price assumptions for Brent and West Texas Intermediate crude oil this year to $42.50/b but said it does not expect average prices to rise above $55/b before the end of the decade. The ratings agency said it expects the global oil market to remain oversupplied "well into 2017" with high oil and product inventories continue to drag on spot oil values. It said its long-term price assumptions, however, mostly reflect the expected impact of significant industry cost deflation, which is lowering the long-term cost of producing a marginal barrel.Assigning its first oil price assumption for 2019, S&P said it sees prices climbing gradually to average $47/b next year before rising to $50/b in 2018 and $55/b in 2019. "Declining costs come after a decade of inflation, thanks to engineering optimization, improved drilling efficiencies, and production cost reductions, especially in the once high-cost US shale formations," S&P said. "Drillers, forced to improvise because of the low prices, have introduced new drilling methods, fracking, and well-completion techniques that have resulted in more permanent cost reductions." Citing its assessment of current oil futures price curves, S&P said it has raised its estimate for the two benchmark oil prices by $2.50/b from $40/b for the rest of 2016. Its previous 2016 estimate of $40/b was published in mid-January.

Crude Extends Gains After Bigger Than Expected Inventory Draw (Despite Production Rise) --Following last night's surprisingly large API-reported crude draw, DOE confirmed the drop with a 6.2mm draw (less than API's 7.5mm though) with some wondering if the Colonial Pipeline closure affected inventories. Cushing saw a notable build and Distillates inventories rose for the 6th week in a row. While gasoline inventories fell (Pipeline?), production rose for the second week in a row. DOE:

• Crude  -6.2mm (+3.25mm exp)
• Cushing +536k (+100k exp)
• Gasoline  (-1.4mm exp)
• Distillates

Crude drewdown for the 3rd week in a row (and a large draw)... Production rose for the second week - seemingly stabilizing at around 8.5mm bbl/day

Oil price rebound could create headaches for bankrupt drillers: Most oil producers would welcome higher crude prices, after a two-year downturn has pushed more than 100 U.S. energy companies into bankruptcy. But for some distressed drillers, a rebound could actually make things worse. Throughout the rout in oil prices, senior lenders have largely been able to dictate the terms of energy bankruptcy proceedings as drillers' assets have fallen in value. But when oil prices rise, so does the value of a company's reserves. That can in turn can prompt so-called junior creditors to challenge restructuring plans in a bid to get a bigger piece of what's left of the pie. Those junior classes include holders of the company's stock, who may see the value of their shares go to zero, and unsecured creditors, lenders or vendors the debtor owes money, but whose loans are not backed by collateral. In a bankruptcy, senior lenders have a legal claim to recover their investment before other more junior classes of debtholders. High oil prices "embolden junior classes to fight harder, meaning possibly fewer agreements, and hence more need for a court process to resolve the issues," said Patrick Hughes, a Denver-based bankruptcy lawyer at Haynes and Boone. Creditors at all levels have a lot to lose in the current bankruptcy cycle.  Last year, creditors recovered just 21 percent of the capital they lent to 15 bankrupt oil and gas exploration and production companies with at least $100 million in debt, Moody's Investors Service reported this month. That compares with a historical average recovery rate of nearly 59 percent.  There is nothing abnormal about shareholders and unsecured creditors challenging restructuring plans in order to seek a better deal from the indebted company. Stock owners and junior creditors are first in line to take losses when drillers buckle under debt, so it makes sense that they would try to claw back what they can.

MidEast Gulf Officials Reportedly Say There'll Be "No Formal Deal" In Algiers Next Week --  Following this morning's endless stream of rumors and denials regarding OPEC/NOPEC freezes, Argus Media is reporting that there will be no formal deal at next week's Algiers meeting clarifying that the meeting "will be informal, so will not result in any formal decisions." Via ArgusMedia.com, There will be no formal deal at a meeting of oil producers in Algiers next week, a Mideast Gulf official close to Saudi Arabia told Argus today. And asked if Saudi Arabia had offered Iran a deal on production levels, the official said this is "not an issue". "Saudi Arabia's goal is to create consensus amongst oil producers to reach a credible agreement that will help stabilise the market," he said. He stressed the Algiers meeting, to be held amongst Opec members and with major non-Opec producers on the sidelines of the International Energy Forum (IEF), will be informal, so will not result in any formal decisions. This echoes the views of Opec secretary-general Mohammed Barkindo. Saudi Arabia wants the Algiers meetings to lead to consensus over arrangements that can be drafted into a formal agreement in November, when the next Opec meeting will take place. A meeting of technical experts at Opec headquarters in Vienna yesterday "looked at different scenarios for Opec production", and those scenarios will be discussed at the informal talks in Algiers, he said. Of course, it's just another source, and for now oil is unchanged...

OilPrice Intelligence Report: OPEC Deal Look Bleak After Saudi Comments - Oil prices jumped in the second half of this week on larger-than-expected drawdowns in U.S. crude oil and gasoline inventories. The record drawdown a few weeks ago due to storms in the Gulf of Mexico was thought to be a one-off. But last week’s drop adds more momentum to the narrative that the oil market is adjusting. Crude oil inventories are now at their lowest level since the beginning of 2016 and more declines are expected. Crude prices, however, crashed on Friday, aided by Saudi comments that a decision will not be forthcoming from next week's OPEC meeting in Algiers. And things got worse for crude after the Federal Reserve confirmed it is looking to restrict bank involvement in physical commodities.... The latest news on the Algeria meeting set to take place this weekend and into the early part of next week is that Saudi Arabia reportedly sent an offer to Iran, proposing a cut to its output if Iran agreed to limit production at its current level of 3.6 million barrels per day. "They (the Saudis) are ready for a cut but Iran has to agree to freeze," a source told Reuters. Discussion took place in Vienna at OPEC headquarters this past week, but so far reports suggest there has been no agreement. Bloomberg surveyed oil analysts and 21 out of 23 respondents said that there would be no agreement in Algeria.   Meanwhile, rising output in Nigeria and Libya make the production freeze negotiations look even less important. Several hundred thousand barrels per day from the two troubled OPEC members would more than outweigh any effect from an output cap.  The FT published a must-read article on Russia’s campaign to boost oil production from aging oil fields in Siberia. Ramping up drilling in existing brownfield sites, as opposed to drilling in frontier regions like the Arctic, is a shift of focus for Russia’s oil industry. But the more aggressive approach to maintaining and even increasing oil flows from some of Russia’s old but still massive oil fields could allow it to increase output in the next few years, defying expectations of steady declines. Rosneft will more than double its drilling rate from 750 wells in 2014 to 1,700 per year beginning in 2017. It is also improving its drilling techniques, incorporating fracking and horizontal drilling. But the quest also raises questions about the wisdom of elevating production at all costs, which could damage long-term output. In any event, Russia’s need for tax revenue has it going down this path, but that could also make it difficult for Russia to sign on to any OPEC production freeze agreement.

Oil suffers worst loss since mid-July, but manages weekly gain - Oil futures on Friday suffered from their worst one-day loss since mid-July, paring a weekly gain, after a Saudi Arabian delegate reportedly said oil producers aren’t likely to make a decision on production levels at a meeting next week. Instead, the meeting planned for the last day of the International Energy Forum, which will be held in Algeria Monday through Wednesday, will only offer a chance for the Organization of the Petroleum Exporting Countries and other oil producers to consult with each other about production levels, Bloomberg reported Friday. The Wall Street Journal, citing Saudi and Iranian sources, said both countries see an agreement as unlikely. The news follows a report from Reuters which said Saudi Arabia offered earlier this month to scale back production to levels seen earlier this year, if rival Iran agrees to freezing production at the current level of 3.6 million barrels a day. Tehran is weighing the offer, according to Reuters. Prices also saw pressure after the Federal Reserve proposed restrictions on commodity trading among banks.November West Texas Intermediate crude CLX6, -3.73% dropped $1.84, or about 4%, to settle at $44.48 a barrel on the New York Mercantile Exchange. That was the sharpest one-day dollar and percentage loss since July 13, FactSet data show.  WTI oil had traded higher for four days in a row and managed to book a weekly gain of 2%.

Oil Tumbles To $44 Handle After Saudis Confirm "No Decision" Next Week, Fed Crackdown On Bank Commodity Holdings -- We hinted earlier and now Saudi Arabia has confirmed that it "doesn't expect any decision" next week when oil producers meet in Algiers. Oil's reaction was swift with WTI tumbling to a $44 handle very quickly:  This move was exaggerated by the report that The Fed is clamping down on bank holdings of commodities:  As we detailed previously...

• 1) the ban on 'investing in non-financial companies', which is highly ironic given that other central banks are directly buying massive stakes in the world's corporate entities; and
• 2) restrictions on physical ownership of commodities, which raises eyebrows on both oil manipulation and the hoarding of precious metals ahead of The Fed losing control.

But The Fed expanded it today: The Federal Reserve Board on Friday invited public comment on a proposed rule that would strengthen existing requirements and limitations on the physical commodity activities of financial holding companies. The proposal would help reduce the catastrophic, legal, reputational, and financial risks that physical commodity activities pose to financial holding companies. A limited number of firms supervised by the Board engage in physical commodity activities and investments. Some firms are permitted by law to engage in a broad range of physical commodity activities, including the extraction, storage, and transportation of commodities. Others may engage in more limited activities, such as commodities trading. The possibility of an environmental accident due to these activities presents significant risks to the firms. Based on a broad review of firms' physical commodity activities as well as comments received on the Board's 2014 advance notice of proposed rulemaking on this matter, the proposed rule would:

• Require firms to hold additional capital in connection with activities involving commodities for which existing laws would impose liability if the commodity were released into the environment;
• Tighten the quantitative limit on the amount of physical commodity trading activity firms may conduct;
• Rescind authorizations that allow firms to engage in physical commodity activities involving power plants;
• Remove copper from the list of precious metals that all bank holding companies are permitted to own and store; and
• Establish new public reporting requirements on the nature and extent of firms' physical commodity holdings and activities

Rig count sees small gain amid double whammy for oil | Fuel Fix: The amount of rigs in the U.S. drilling for oil jumped slightly by two this week in advance of bad new for oil prices on Friday. The double whammy for oil prices included Saudi Arabia indicating it’ll only freeze production levels if Iran does the same — an unlikely scenario between the two rivals — as well as domestic news that the Federal Reserve is considering making it harder for banks to trade physical commodities like oil and gas. The news sent U.S. oil prices plummeting back below $45 a barrel on Friday morning. Still, the nation’s drilling rig count is continuing to slowly tick up. The U.S. saw a net gain of five rigs for the week — two primarily drilling for oil and three seeking natural gas — according to data collected by the Baker Hughes oilfield services firm. Two rigs were gained in Texas, but the active Permian Basin actually saw a loss of one rig. The total count of 511 rigs is up from an all-time low of 404 in May, according to Baker Hughes. Of the total, 418 of them are primarily drilling for oil. But the oil rig count is down 74 percent from its peak of 1,609 in October 2014, before oil prices began plummeting.

WTI Extends Losses As US Oil Rig Count Rises To 7-Month Highs -- With oil prices plunging after Saudis stole the jam out of the oil freeze hopers donut, US oil rig count (at seven month highs) rose 2 to 416 (the 13th week in a row) and the total rig count rose to 511.  Rig count has risen for 13 straight weeks to 7-month highs... Given the extremely high correlation between rig counts and lagged oil prices, the chart above suggest we are getting close to rolling over in rig counts. For now oil is holding losses below the week's API inventories ramp levels... Charts: Bloomberg

BHI: US rig count up 5 to 511 - The overall US drilling rig count gained 5 units to 511 rigs working during the week ended Sept. 23, according to Baker Hughes Inc. data. Three gas-directed and 2 oil-directed units began operations.  Up in 14 of the last 17 weeks, the overall count has now added 107 units since the week ended May 27 (OGJ Online, Sept. 16, 2016). Compared with the week ended Dec. 5, 2014, after which began a steep dive in US drilling activity, the count is still down 1,409 units. The recent drilling rebound has been characterized by steady increases devoid of major rig and equipment constraints. With the overall count expected to continue to rise over the next 2 years, however, analysts at financial services firm Raymond James & Associates Inc. foresee “meaningful bottlenecks” emerging due to low spending on oil field infrastructure during the downturn.The primary culprit is expected to the beleaguered pressure pumping industry, whose readily workable US frac fleet is forecast to be down 35-50% by 2017 compared with 2014 levels, the analysts said in an industry brief this week. Some 3-4 million hp has been removed permanently during the downturn while another 3-4 million hp will require major investment to be refurbished into working condition.“With modest attrition on the nearly 2,000 rigs running in 2014, the market should be able to supply additional drilling rigs—of varying qualities—beyond 1,000 active rigs,” they said. “The problem will be, if wells cannot be completed, why drill them?”  US oil-directed rigs have now risen in 15 of the last 17 weeks, adding 102 units over that time to total 418 rigs working, down 1,191 units since their peak on Oct. 10, 2014. Gas-directed rigs now total 92, and have stayed within a range of 81-97 units since the beginning of March. The overall increase comprised onshore units, which are up 6 to 488. Rigs engaged in horizontal drilling gained 8 units to 402, a rise of 88 units since May 27 but down 970 since their peak on Nov. 21, 2014. Directional drilling rigs edged up a unit to 49. Several of the major oil-and gas-producing states made either a modest increase or modest decrease. Texas and Oklahoma led the way in increases, each gaining 2 units to 246 and 67, respectively. Texas is now up 65 units since May 13 but down 712 since a peak on Aug. 29, 2008. The Cana Woodford and Mississippian each added a unit to hit respective totals of 33 and 3. The Eagle Ford also was down a unit, settling at 37. Down 1 unit to 201, the Permian declined for just the second time in 19 weeks.

Gulf budget deficits to peak this year - Gulf Arab oil exporters are expected to see their budget deficits peak this year owing to the plunge in energy revenues, a report said Tuesday. The combined deficit of the six Gulf Cooperation Council (GCC) states is forecast to hit $153 billion in 2016, up from $119 billion last year, Kuwait's investment firm KAMCO Research said. OPEC kingpin Saudi Arabia is expected to account for 55 percent, or more than $84 billion, of the shortfall. Last year, the world's top crude exporter posted a record deficit of $98 billion. The GCC deficit will start easing from next year but the six nations are forecast to post an average annual shortfall of $100 billion until 2021, the report said. The GCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates, which together pump more than 18 million barrels per day of crude oil. GCC total revenues, mainly from hydrocarbons, dropped from a peak of $735 billion in 2013 to just $443 billion in 2015, the lowest in five years, KAMCO said. They are forecast to slide further to $365 billion this year, the report said.

Lost Trillions Haunt Russian Budget Keeper in Cheap-Oil Era - Bloomberg: To get a snapshot of a budget in crisis, visit any of the 10,700 abandoned construction sites that litter Russia, all that’s left after a trickle of state funding ran dry. The costly clutter is one reason the head of the Audit Chamber, a government agency that monitors the budget, says Russia’s finances are in for a “test” next year. Tatyana Golikova, 50, whose prior roles included a top Finance Ministry post and advising President Vladimir Putin, paints a picture of a budget riddled with waste, ranging from 1 trillion rubles ($16 billion) “lost” as a result of budget “inefficiency” to the unfinished construction that’s left the government on the hook for another 2.2 trillion rubles.The world’s biggest energy exporter can ill afford to squander more wealth as it adapts to the lean days after the crash in crude prices. What’s visiting fiscal grief on Russia is that its budget is derived from an old base formed during the boom times, according to Golikova, who took charge of the watchdog three years ago. “The budget faces a clear test in 2017,” she said in an interview. If the issue of fiscal efficiency “isn’t dealt with in the new three-year cycle, we’ll have all the same problems that existed with budget execution in 2015 and probably will continue in 2016.” It’s a sentiment increasingly heard from Putin. Speaking at a government meeting on Monday, a day after his party’s dominant showing in parliamentary elections, the president called for policies aimed at “increased efficiency” and changing the structure of the economy. While urging more targeted measures to help those in need, Putin said he rejects “shock therapy” as authorities rethink the distribution of social support.

Indonesia's plan to use more domestic crude hampered by current tax system - Indonesia's plan to process more domestic crude is hampered by a tax system that discourages the country's foreign producers to sell domestically and state-owned Pertamina has urged the government to change that if it wants to cut reliance on imports, a senior company official said this week. "In 2016, we have only been able to buy 12,000 b/d of domestic crude supply [from international companies operating in the country], when in fact the total potential figure that we can buy is around 150,000-200,000 b/d," senior vice president of Pertamina's Integrated Supply Chain Daniel Syahputra Purba said late Wednesday. So far in 2016, Pertamina has imported an average 430,000 b/d and consumed 440,000 b/d of domestic crude -- most of which came from its own net production and the government's entitlement, according to data from Pertamina. Crude and condensate exports averaged 358,000 b/d over January-July 2016, up 19% from 301,000 b/d over the same 2015 period, according to data from Statistics Indonesia. Indonesia in 2015 said that it planned to cut its crude exports by slightly more than half in 2016 and keep those barrels at home to cut reliance on crude imports.Gusti Wiratmaja Puja, director general at the energy and mines ministry, said then that Jakarta was planning to cut exports by about 200,385 b/d starting 2016. But an unfavorable tax system has discouraged international companies producing crude in Indonesia to sell it domestically. International companies operating in Indonesia, but with overseas trading arms, currently have to pay a 3% tax on crude sales within the country. If the trading arm is located within Indonesia, they pay a 1.5% tax.

Former OPEC President Optimistic There Will Be Deal in Algiers - Bloomberg: Chakib Khelil, the former Algerian energy minister who steered OPEC the last time it decided to cut supply, said he’s confident the group will reach an accord next week as low oil prices force members to act. With most of the Organization of Petroleum Exporting Countries now producing near full capacity, it should be straightforward to promise no further increases, said Khelil, who was the group’s president in 2008 when it agreed a record output cut that reversed a collapse in crude prices. “I am optimistic about an oil freeze,” he said in a phone interview Thursday. “They’re already feeling pain. Why add to the pain when they can avoid it just by saying something? Most producers have already reached their maximum level and their largest share of the market. There’s not much cost.” Brent futures traded near $47 a barrel on Friday, less than half the price two years ago. Crude rallied last month on speculation OPEC and Russia might announce a pact in the Algerian capital, but has since retreated on doubts there will be any serious steps to reduce the world oil surplus. “They need to do something, if they don’t the market will react negatively,” Khelil said. OPEC’s last attempt to strike a production deal with Russia collapsed in Doha in mid-April when Saudi Arabia insisted at the last minute that Iran had to join in. While Iran refused then because it was starting to restore exports after the end of sanctions, it’s now producing near full capacity and should have fewer objections to a cap, Khelil said.

Saudis offer oil cut for OPEC deal if Iran freezes output: Sources: Saudi Arabia has offered to reduce oil production if rival Iran agrees to cap its own output this year, in a major compromise ahead of talks in Algeria next week, three sources familiar with the discussions told Reuters. The offer, which has yet to be accepted or rejected by Tehran, was made this month, the sources told Reuters on condition of anonymity. Riyadh is ready to cut output to levels seen early this year in exchange for Iran freezing production at the current level, which is 3.6 million barrels per day, the sources said. "They (the Saudis) are ready for a cut but Iran has to agree to freeze," one source said. Two more sources confirmed the offer was presented to Tehran. The first source did not say by how much Riyadh would cut if Iran agreed to freeze at 3.6 million bpd, which has been the OPEC nation's output for the past three months.Riyadh's production has spiked since June due to summer demand, reaching a record high in July of 10.67 million bpd and edging down to 10.63 million bpd in August. From January to May, Saudi Arabia produced around 10.2 million bpd. Two sources said Saudi Arabia's Gulf OPEC allies the United Arab Emirates, Qatar and Kuwait were expected to contribute to any reduction if an agreement were reached.

Iran unlikely to agree to oil freeze, pre-sanctions output still aim: source  -- Iran would be unlikely to agree to freeze its crude output at current levels as part of any deal among OPEC and other major oil producers, an Iranian official told S&P Global Platts on Friday. Reuters reported earlier that Saudi Arabia has told Iran it would be willing to reduce its output if Iran agreed to freeze its production at current levels of around 3.6 million b/d, citing unnamed sources. The Iranian official, who spoke on condition of anonymity, as oil minister Bijan Zanganeh has final say over policy decisions, declined to confirm whether Iran had received any such proposal from Saudi Arabia. But he said Iran continues to insist on regaining its pre-sanctions output levels before agreeing to any restrictions on its output. "I think it's unlikely that Iran will even consider 3.6 million b/d," the official said. "It is very, very unlikely that Iran agrees to this figure or negotiates it." He added: "As far as the oil ministry's principal policy is concerned, we have always stressed that we want our pre-sanctions level of 4.2 million b/d back." Representatives from the two countries have been meeting in Vienna the past few days ahead of next week's International Energy Forum in Algiers, where OPEC is scheduled to informally meet and possibly discuss an output freeze, according to media reports. Saudi Arabia pumped a record 10.66 million b/d in August, according to the latest Platts OPEC production survey. Many observers expect the kingdom's output to decline in the coming months anyway, as the peak summer air conditioning season ends, reducing its domestic crude burn. Iran produced 3.63 million b/d in August for the third straight month, according to the Platts survey, as recovery from sanctions imposed on its oil sector by western powers over its nuclear program appears to be plateauing.

Iraq's Aug oil output revised down to 4.622 mil b/d, still at record levels: SOMO - Oil | Platts News Article & Story: Iraq's oil production in August averaged 4.622 million b/d, slightly down from a previous estimate of 4.638 million b/d but still a new production record, according to revised estimates from Iraq's State Oil Marketing Organization released Tuesday. The latest estimate is represents a 16,000 b/d increase from July and is the fourth time Iraq has passed the 4.5 million b/d threshold, according to official data. SOMO did not provide a breakdown of production between the federal government and semi-autonomous Kurdistan Regional Government in its statement. The data includes output from state-owned North Oil Co., Midland Oil Co., and an estimated output from KRG.Analysts told S&P Global Platts that the oil ministry has consistently overestimated KRG production, and hence the country's total, since December 2015. According to Iraqi oil industry experts, the ministry could be hoping to use the higher numbers as a bargaining tool for possible production freeze talks among OPEC members, as the producer group prepares to meet in Algeria next September. But Iraqi exports from the southern Basrah terminals along with a substantial increase in its domestic refining have contributed to higher production this summer for OPEC's second-largest oil producer.

AP Exclusive: Iraq oil fires could jeopardize Mosul mission - (AP) — A fire at one of Iraq’s major oil fields could hinder military and humanitarian efforts as operations to recapture the Islamic State stronghold of Mosul get underway. Black smoke continues to billow into the air from the Qayara oil field, damaged by IS militants last month as they fled the town, creating health risks for civilians and troops amassing there. The fires are also clogging up the skies in the area, where critically important airstrikes and aerial reconnaissance missions are taking place almost daily. Located on the west bank of the Tigris River, about 40 miles (65 kilometers) south of Mosul, Qayara has since become an important staging ground for military and humanitarian efforts ahead of the Mosul operation since it was recaptured by Iraqi forces last month. “Everything for the Mosul operation hinges on Qayara,” she said. “It’s the staging ground for military forces and it’s where 350,000 of the 1 million people who are expected to flee (Mosul) will either find shelter or pass through.” There are slow-going Iraqi efforts to contain the fires, but nearly a month after the town was recaptured from the militants, smoke and toxic fumes continue to pollute the air in and around Qayara. The Iraqi Oil Ministry spokesman, Assem Jihad, said Wednesday that IS militants set fire to 11 oil wells in Qayara to derail security forces and wreak havoc in the area as they fled. He said fires at nine of the wells have been extinguished, but two continue to burn powerfully. Kourosh Kian, an expert in petroleum drilling and reservoir engineering, said the simplest method to extinguish these types of fires is to inject water under high pressure at the base of the fire. Since Qayara is on the Tigris River, there would be no problem with the water supply, he said. The two main fields in the area, Qayara and Najmah, had been producing about 30,000 barrels per day of crude before the Islamic State took control of Iraq’s Nineveh Province in June 2014.

The US War On Terror Has Cost $5 Trillion And Increased Terrorism By 6,500% - On September 11, 2001, one of the most tragic events in recent American history took place. Close to 3,000 civilians lost their lives in horrific terror attacks that took place on American soil. Fifteen years later, it is time to ask the question: have our counterterror efforts helped to reduce the amount of terrorism in the world? Or at the very least, have they tried to make the world safer?According to a report released by Dr. Neta Crawford, professor of political science at Brown University, spending by the United States Departments of Defense, State, Homeland Security, and Veteran Affairs since 9/11 is now close to $5 trillion USD. Before we have the chance to ask how a country that has racked up over $19.3 trillion USD in debt can spend $5 trillion USD on war, the focus of this article is to ask: What has all of this spending achieved?  As Reader Supported News reported at the end of last year, terrorism has increased 6,500 percent since 2002 (they probably should rename it “the war of terror”). In 2014, the outlet noted, it was reported that 74 percent of all terror-related casualties occurred in Iraq, Nigeria, Afghanistan, Pakistan, or Syria. As stated by Paul Gottinger, a staff reporter for Reader Supported News, out of the aforementioned countries, “only Nigeria did not experience either U.S. air strikes or a military occupation in that year.” Omitted from that assessment is the fact that the U.S. has been meddling in Nigeria for some time now. Why wouldn’t they? Until recently, Nigeria was Africa’s largest oil producer, as well as the continent’s largest economy until last month

Supplying White Phosphorus to Saudis? New Claims Reinforce US War Crimes Complicity in Yemen -- Further damning the United States government's planned sale of $1.15 billion worth of weapons to Saudi Arabia, evidence has emerged that the kingdom may be using white phosphorus supplied by the U.S. in its campaign in Yemen, according to reporting Monday by the Washington Post. The Post reports that the evidence comes from "images and videos posted to social media."  White phosphorous munitions—sometimes compared to napalm as they can cause nearly unstoppable burning that can reach the bone—are not covered by a blanket ban by international law. They are allowed (pdf) to be used in open areas as a smoke screen for military operations, but, as they can ignite spontaneously in air, are prohibited from use against civilians and in civilian-concentrated areas. U.S. regulations also prohibit their sale unless their use will be solely for "signaling and smoke screening." Thomas Gibbons-Neff writes for the Post: U.S. officials confirmed that the American government has supplied the Saudis white phosphorous in the past but declined to say how much had been transferred or when. After reviewing a social media image taken from the battlefield that showed a white phosphorous mortar shell, a U.S. official said it appeared to be American in origin but could not trace it to a particular sale because some of the markings were obscured. [...]  The image the anonymous official looked at was first posted to Instagram in November 2015, Gibbons-Neff writes, while the most recent image posted to social media purportedly showing their use by the U.S.-backed coalition in Yemen was take Sept. 9, 2016. Gibbons-Neff also points out that the U.S. has directly used white phosphorus "including in 2004 in Fallujah, Iraq, and sporadically in Afghanistan over the course of the war there. In 2009, Israel used the weapon in populated areas in the Gaza Strip." Human Rights Watch said that use by Israel was evidence of war crimes.

Amnesty: US bomb used in Saudi-led strike on Yemen hospital that killed 19: Amnesty International says it has evidence that a Saudi-led coalition battling Yemeni rebels dropped a U.S.-made bomb on a hospital, and is calling for a halt to arms sales to the coalition. The airstrike in question hit a hospital run by Doctors Without Borders, known by its French acronym MSF, in northern Yemen last month, killing 19 people. Amnesty says in a report released Monday that a picture analyzed by a munitions expert reveals that a U.S.-made precision-guided Paveway-series bomb was dropped on the site. The attack — the fourth on the MSF's facilities— prompted it to withdraw from northern Yemen due to what it described as "indiscriminate bombings and unreliable assurances" from the U.S.-backed coalition.

Exclusive: Battered by war, Syria's wheat crop halved this year to new low | Reuters: The government of President Bashar al-Assad was forced to tender this summer for an unprecedented 1.35 million tonnes of imported wheat from political ally Russia to ensure supply of the flat loaves that are a staple for the Syrian people. Before the five-year-old civil war, Syria was a wheat exporter producing four million tonnes in a good year and able to export 1.5 million tonnes. Now wheat and bread have become an integral part of the war, with wheat farms, seed distribution, milling and bakeries all affected. The Damascus government subsidizes bread for the areas it controls and aid agencies offer supported prices in some areas, but Syrians in other parts of the country suffer bread shortages and high prices.The Syrian war has killed more than 250,000 people, created the world's worst refugee crisis, allowed for the rise of the Islamic State group and drawn in regional and major powers. "You know why most people carry weapons? Because of bread," said Mahmoud al Sheikh, a health worker from a besieged part of Damascus. "Hunger makes people sell themselves to the armed groups so they can eat and bring food to their families." Al Sheikh, speaking to Reuters by telephone from the capital's Eastern Ghouta suburb, said earlier in the year his besieged area scarcely saw bread. "Sometimes there's no bread at all. People start to make bread from barley ... It goes on like this for months. People eat cabbage instead - it's enough to test your faith. Really, people's situations become miserable," he said.

Never Ending War: Why The Cease-Fire in Syria Won't Help – SPIEGEL  -- First came two quiet nights. Then another 48 hours without bombs, a few days in which the people trapped in Aleppo and elsewhere could live without the constant fear of approaching jets. So great is the yearning for peace that people everywhere rejoiced in the peace this week -- despite coming just a short time after markets and hospitals had been bombed, leaving dozens dead. The cease-fire that went into effect on Monday night in Syria is fueling the wish around the world for an end to this war. The desire is so great that each additional day of calm is being commented on as if it were a break in the weather, a natural dynamic trending toward peace. But it's not. In contrast to the three previously announced agreements, the American and Russian negotiating partners have limited the duration of this cease-fire to seven days. Not with the intention of immediately beginning further negotiations, but instead to conduct joint air strikes against all groups they will have by then identified as terror groups. Starting at the beginning of next week, the plan calls for Russian and American military leaders to meet in the Joint Implementation Center to exchange target coordinates, voice objections and then deploy warplanes from both air forces to conduct strikes. As such, the agreement represents a reversal of Western policy. If implemented, the US will be flying sorties together with Russia against Assad's enemies.

Syria Accuses US Of Airstrike Killing 62 Soldiers In "Serious And Blatant Aggression" -- If the latest news out of Syria are confirmed, one can not only kiss last weekend's so-called "ceasefire" goodbye, but a full blown war may be about to erupt. The reason: moments ago the Syrian Army General Command reported, and shortly thereafter the Russian military confirmed, that US-coalition forces struck the Syrian airbase at Deir el-Zour, killing at least 62 Syrian army troops, "paving the way" for ISIS militants to advance in the fiercely contested area.. #Syria State TV: U.S. warplanes hit Syrian army base in Deir ez-Zorpic.twitter.com/Ont9tEuBi7 According to Syria’s official SANA news agency, the bombing took place on al-Tharda Mountain in the region of Deir ez-Zor and caused casualties and destruction on the ground. Sixty-two Syrian soldiers were killed and over 100 injured in the airstrike by the US-led coalition, Russia’s Defense Ministry spokesman, Major-General Igor Konashenkov, confirmed citing information received from the Syrian General Command. There was no immediate comment from Washington. If confirmed, the attack could be tantamount to an act of war as it would be the first time the coalition has targeted Syrian government forces.  Subsequently, the Pentagon told RT that it is “aware of the reports and checking with Centcom and CJTF (Combined Joint Task Force)."

Furious Russia accuses US of supporting ISIS after airstrike kills 62 Syrian troops  - Enraged Russian officials have accused America of backing ISIS [I-CIA-SIS] after a deadly airstrike killed at least 62 Syrian troops and allowed the twisted terrorists to take a key military position. Syria's military claim the Americans have bombed an eastern base surrounded by ISIS militants - allowing the extremists to advance...62 Syrian soldiers were killed and over 100 injured in the airstrike. The bombing took place on al-Tharda Mountain in the region of Deir ez-Zor. A Russian spokeswoman blasted: "We are reaching a really terrifying conclusion for the whole world: That the White House is defending Islamic State. Now there can be no doubts about that."    Last week, Moscow and Washington agreed to influence the Syrian government and the so-called moderate rebel forces respectively in order to establish a ceasefire in the country.Since then, Russia has repeatedly complained that the US is failing to keep its part of the bargain.   While the Americans have blamed Russia for not pressuring Damascus enough to facilitate humanitarian access to Syria.  The US Central Command has issued a statement, saying that it had no intention of targeting Syrian government forces near Dier ez-Zor.  "Syria is a complex situation with various military forces and militias in close proximity, but [the] coalition would not intentionally strike a known Syrian military unit,” the statement read.

US Accuses Kremlin Of Lying, Says Russia Bombed Syrian Aid Convoy --The big geopolitical news in the aftermath of yesterday's bombing of a UN humanitarian convoy in Syria, which according to unofficial, UK-funded "Syrian Observatory for Human Rights" was done by Russian or Syrian fighter jets, was this morning's vocal denial by the Russia defense ministry that neither Russian nor Syrian planes were responsible for the bombing raid."No airstrikes were carried out against a humanitarian aid convoy in a southwestern suburb of Aleppo by Russian or Syrian aviation. Seeing as the convoy’s route lied through the territories controlled by militants, the Russian reconciliation center monitored its passage yesterday via drones," Russian Defense Ministry spokesman Maj. Gen. Igor Konashenkov said Tuesday. According to the general, the monitoring finished when all humanitarian aid was delivered at around 10:40 GMT."Further movements of the convoy were not monitored by the Russian side. Only the militants controlling this area know details of the convoy’s location,"Konashenkov added. The examination of video footage reveals no signs of an ammunition strikes on the convoy, he said. "We have carefully studied videos by so-called activists from the site and found no signs of any ammunition striking the convoy. There are no shell holes, cars' bodies are not damaged and there are no construction faults from the bust wave. All shown on the footage is a direct consequence of the cargo being set on fire. The fire strangely coincided with a major offensive by militants in Aleppo."

Syria: Russia to send aircraft carrier -  CNN - Russia has announced it is sending its only aircraft carrier to waters off Syria's coast, as diplomats met at the United Nations in an effort to revive Syria's failing ceasefire. Russian Defense Minister Sergey Shoigu said the Admiral Kuznetsov, carrying dozens of military aircraft, would be sent to the eastern Mediterranean to join other Russian ships off the war-torn country's coast, state news agencies reported. The announcement -- a potential contingency plan for the failure of the ceasefire -- came in the wake of surging violence, including the deadly bombing of a Syrian Arab Red Crescent aid convoy on Monday night.Speaking at the United Nations, US Secretary of State John Kerry said the the ceasefire was "hanging by a thread." He denounced the "outrageous" attack on the aid convoy, and said the international community had been "woefully inadequate" in Syria. Kerry said that all war planes over Syria should be grounded, to "prevent Syria from doing what it so often does in the past -- to target civilians."

Syria conflict: US-Russia plans 'must be saved' - Lavrov - BBC News: US and Russian plans to end Syria's conflict must be saved as there is no alternative, Russia's Foreign Minister Sergei Lavrov has told the UN. He was speaking as the northern city of Aleppo endured a day of relentless air strikes, with the Syrian military determined to retake rebel-held areas. A seven-day US-Russian brokered truce collapsed on Monday. Mr Lavrov laid the blame on the US for failing to control the rebel groups it backs. He said a key condition of the truce was for moderate rebel groups backed by the US to separate themselves from militants. "Unfortunately the coalition led by the United States, which committed itself to make sure that this separation happens, has not been able to do this," Mr Lavrov said, although he said his "good friend" Secretary of State John Kerry had indicated this remained the commitment of the United States. Mr Lavrov said that if the location of militants of the Nusra Front could be pinpointed, he remained convinced a cessation of hostilities and a delivery of humanitarian aid would be possible. He said it was "now essential to prevent a disruption" of the US-Russia agreements.

Obama Puts Syria at Arm’s Length as Carnage Drags On - — When Secretary of State John Kerry took the floor at the United Nations on Wednesday to deliver a searing denunciation of the airstrike on an aid convoy headed for the Syrian city of Aleppo President Obama was crosstown, at his Manhattan hotel, preparing for a day of diplomacy that included Africa, Israel and Colombia — but, conspicuously, not Syria.It was typical of the arm’s-length approach the president has taken toward the Syria conflict on the world stage in recent weeks. At a summit meeting in China this month, he studiously avoided negotiating a cease-fire with President Vladimir V. Putin of Russia, leaving the diplomacy to Mr. Kerry and his Russian counterpart. At the United Nations, he scarcely mentioned Syria in a wide-ranging farewell address to the General Assembly.Mr. Obama’s public distancing, White House officials insist, does not reflect a lack of concern. On the contrary, they say the president is desperate for Mr. Kerry to negotiate a viable agreement with Russia that would halt the relentless bombing of civilians in Aleppo and elsewhere in Syria — if only because he does not see a viable Plan B to stop the carnage.But as Mr. Obama’s presidency enters its final months, the negotiations with Russia have become a threadbare exercise, leaving a president who has long avoided military entanglement with Syria backing a policy that he himself believes is destined to fail.This week, his frustration boiled over publicly. The situation in Syria “haunts me constantly,” the president said in an interview with the historian Doris Kearns Goodwin, published Thursday in Vanity Fair.

US Officials Claim ISIS Attacked US, Iraqi Troops With Mustard Gas - Shortly after Russia's accusations that a US drone was coincidentally overhead when the UN convoy was struck, CNN reports that US officials are stating that ISIS is suspected of firing a shell with mustard agent that landed at the Qayarrah air base in Iraq Tuesday where US and Iraqi troops are operating. Luckily, no US troops were hurt or have displayed symptoms of exposure to mustard agent.  For some context, this happened earlier (as Reuters reports)The Russian Defence Ministry said on Wednesday that a U.S. Predator drone was in the area where a U.N. aid convoy was partially destroyed in Syria on Monday and had appeared on the scene minutes before the incident.Repeating denials of Russian involvement in the episode, Igor Konashenkov, a spokesman for the ministry, said Western allegations that Moscow was responsible were an attempt to distract attention from the U.S.-led coalition's bombing of Syrian soldiers near Deir al-Zor airport on Saturday. And now, as CNN reports, ISIS is suspected of firing a shell with mustard agent that landed at the Qayarrah air base in Iraq Tuesday where US and Iraqi troops are operating, according to several US officials.

30 Israeli, Foreign Intelligence Officers Killed in Russia's Caliber Missile Attack in Aleppo : The Russian warships stationed in Syria's coastal waters targeted and destroyed a foreign military operations room, killing over two dozen Israeli and western intelligence officers. "The Russian warships fired three Caliber missiles at the foreign officers' coordination operations room in Dar Ezza region in the Western part of Aleppo near Sam'an mountain, killing 30 Israeli and western officers," the Arabic-language service of Russia's Sputnik news agency quoted battlefield source in Aleppo as saying on Wednesday. The operations room was located in the Western part of Aleppo province in the middle of sky-high Sam'an mountain and old caves. The region is deep into a chain of mountains. Several US, Turkish, Saudi, Qatari and British officers were also killed along with the Israeli officers. The foreign officers who were killed in the Aleppo operations room were directing the terrorists' attacks in Aleppo and Idlib. Earlier in September, the Syrian army units launched a preemptive strike on the terrorists of the so-called Aleppo Operations Room in their gathering centers near Castello road in the Northern areas of Aleppo and Mallah farms, foiling their plots to attack the region's supply route, a source said. The source said that the army's artillery units attacked the terrorists' gathering centers near Castello and Mallah farms in Zahra Abdo Rabbah, Kafar Hamra and Hurayatyn which killed and wounded dozens of militants.

“US Special Forces sabotage White House policy gone disastrously wrong with covert ops in Syria” - One of the major points of this article is that the CIA doesn’t give a rat’s ass about the Islamic State in Syria or Iraq. By the end of 2014 there were only twenty CIA targeting officers and analysts were dedicated to IS. By early 2016, it was not much better. Instead, the CIA neurotically focused on removing Assad from power by any means possible. This laser focus was established by Brennan. I surmise this focus is shared by most in the Obama Administration.  In spite of this focus, the CIA’s efforts in Syria is plagued by bureaucratic infighting. The CIA has three elements jockeying for power. The Syria Task Force is similar to the Iraqi Task Force and Iranian Operations Group that preceded it. It is Brennan’s baby. Damascus X is the Syrian CIA station now operating in Amman. And then there is the CTC/SI (Counterterrorist Center/Syria-Iraq), which is tragically focused on the Assad government rather than the terrorists. I have seen this kind of food fight for resources and prestige in the CIA and even in the DIA during the fat money days of the GWOT. I’m sure this cat fight is even more intense in today’s leaner fiscal environment. As many of you know, the CIA conducts a lot, perhaps most, of their operations through liaison with host nation services. While I’m comfortable with working with the Jordanian services, the thought of depending on the current Turkish intelligence service scares the bejeezus out of me. For several years now,the CIA has relied on Erdogan’s boys to determine which unicorns and jihadis were worthy of getting all the TOWs and other goodies doled out by Brennan under his Title 50 authorities(intelligence/covert ops).

Washington's Hawks Push New Cold War - Alastair Crooke - Does the failure of the U.S.-backed, major insurgent August “push” on Aleppo – and the terms of the consequent ceasefire, to which some in the U.S. only irascibly agreed – constitute a political defeat for the U.S. and a “win” for Russia? Yes, in one way: Moscow may, (just may) have cornered America into joint military air attacks on Al Qaeda in Syria, but in another way, one would have to be somewhat cautious in suggesting a Russian “win” (although Foreign Minister Sergey Lavrov’s diplomacy has been indeed tenacious). Secretary of State John Kerry’s Syria agreement with Lavrov though, has sparked virtual open warfare in Washington. The “Cold War Bloc,” which includes Defense Secretary Ash Carter and House Speaker Paul Ryan, is extremely angry. The Defense Department is in near open disobedience: when asked in a press teleconference if the military would abide by the terms of the agreement and share information with the Russians after the completion of the seven-day ceasefire, Lt. Gen. Jeffrey Harrigian, the commander of the U.S. Air Forces Central Command, which is directing the bombing campaign in Iraq and Syria, responded: “I think … it would be premature to say we’re going to jump right into it. And I’m not saying yes or no.” But President Obama wants to define some sort of a foreign policy historical “legacy” (and so does Kerry). And the President probably suspects (with good cause possibly) that his legacy is set to be trashed by his successor, whomsoever it be – the minute he steps down from office.

Russia Views Hillary Clinton As An "Existential Threat" To Peace - When it comes to the two front-runners in the current presidential race, the media often attempts to paint Donald Trump as a crazy, unpredictable president who will lead us down a path of terror. However, the truth remains that despite Trump’s overall nonsensical rhetoric, he is the only leading candidate who has said anything sane regarding American foreign policy. Statements to the effect that the Middle East would have been safer with Saddam Hussein and Muammar Gaddafi still in power are probably the most profound things ever spoken by the wildly racist billionaire mogul. Hillary Clinton, on the other hand, voted in favor of the Iraq war in 2003 and was instrumental in bringing about the fall of Muammar Gaddafi in Libya in 2011. She even laughed hysterically about the despot’s death in an interview despite the fact she single-handedly plunged the rich democracy that was Libya into an extremist war zone.  In the eyes of the Russian establishment, this is especially worrying given that it was Clinton who convinced Russia not to use their veto power at the United Nations Security Council level to stop the NATO onslaught of Libya; she promised the so-called “no-fly zone” would not be used to pursue regime change. Russian President Vladimir Putin was very critical of NATO motives when it became clear that NATO forces had, indeed, designated Gaddafi a military target, asking the important and necessary question: “Who gave NATO the right to kill Gaddafi?” After Gaddafi was murdered on the streets of Sirte, Putin astutely stated: “The whole world saw him being killed; all bloodied. Is that democracy? And who did it? Drones, including American ones, delivered a strike on his motorcade. Then commandos – who were not supposed to be there – brought in so-called opposition and militants and killed him without trial. I’m not saying that Gaddafi didn’t have to quit, but that should have been left up to the people of Libya to decide through the democratic process.”

Senate Approves Sale Of $1.15 Billion In Weapons To Saudi Arabia - For a few weeks, it seemed as if the previously reported sale of 130 Abrams Tanks, 20 armored recovery vehicles and various other military equipment to Saudi Arabia in exchange for $1.15 billion may not go through due to another round of highly theatrical opposition by US congressmen. However, late this afternoon, the Saudis - ostensibly the most generous donor to the Clinton Foundation - once again showed who pulls the strings in Congress, when despite all the populist rhetoric, the Senate backed the $1.15 billion arms sale to Saudi Arabia. More amusingly, this happened even as Congress is preparing to override an expected presidential veto of a different bill allowing 9/11 victims’ families to sue the Saudi government. As Politico reported, the Senate voted 71-27 to kill a resolution from Sens. Rand Paul (R-Ky.) and Chris Murphy (D-Conn.) that would have blocked the $1.15 billion sale of Abrams tanks to Saudi Arabia, which the State Department, best known these days for handing out "pay to play" favors under Hillary Clinton, approved last month.

Saudi Arms Deal Backed By US Senators Who Got Cash From Weapons Contractor That Will Benefit - The U.S. Senate on Wednesday blocked a bipartisan initiative to suspend a $1.15 billion arms deal to Saudi Arabia, clearing the way for a massive resupply of the Kingdom’s military as it continues its incursions into neighboring Yemen. The victory over lawmakers who were trying to stop the deal will benefit General Dynamics — a defense contractor whose employees and corporate executives have spent millions of dollars on lobbying and campaign contributions in the lead-up to the vote. Last month, the Obama administration greenlit the sale, which includes 130 Abrams battle tanks and 20 armored recovery vehicles. The arms will help replenish those lost or destroyed in the war in Yemen, where the Saudi military is trying to reinstall the country’s ousted president, who is a close Saudi ally. A bipartisan coalition of senators, including Kentucky Republican Rand Paul, Utah Republican Mike Lee, Connecticut Democrat Chris Murphy and Minnesota Democrat Al Franken, moved to block the transaction. They cited concerns about Saudi Arabia’s human rights record, and questioned the wisdom of U.S.-supplied arms race in the region. In a 71-27 procedural vote Wednesday afternoon, the Senate decided to table the senators’ objections to the deal — effectively destroying any chance at blocking the arms sale. The approval of the arms deal comes at a pivotal time for General Dynamics, which manufactures the armaments at issue. Last quarter, its combat division experienced a 7 percent dip in sales, and the company has been slashing jobs at its Ohio tank manufacturing center.General Dynamics has been spending big on politics in recent years. Since 2008, the company has pumped over $1 million dollars into both Democratic and Republican senatorial campaigns. According to data from the Center for Responsive Politics, the company in the 2016 election cycle has so far donated over $300,000 to 49 senatorial campaigns on both sides of the aisle: $134,835 to Democrats and $171,555 to Republicans, with an average contribution of around $6,400.  General Dynamics’ political action committee has also donated $165,000 to the political parties’ congressional election committees: $90,000 to the GOP and $75,000 to the Democrats.

European Union asks Obama to stop 9/11 Saudi bill | Reuters: The European Union on Wednesday called on President Barack Obama to block a U.S. bill allowing survivors and families of victims of the Sept. 11 attacks to sue Saudi Arabia, saying it was in violation of international law. "The possible adoption and implementation of the (bill) would be in conflict with fundamental principles of international law and in particular the principle of State sovereign immunity," the European Union delegation to the United States said in a letter to the U.S. Department of State seen by Reuters. The letter said the EU considers that the bill's adoption and its implementation could have unwanted consequences, as other states adopt similar legislation. Congress has overwhelmingly passed the Justice Against Sponsors of Terrorism Act, known as JASTA, in reaction to long-running suspicions, denied by Saudi Arabia, that hijackers of the four U.S. jetliners that attacked the United States in 2001 were backed by the Saudi government. Obama in coming days is expected to veto the bill on grounds that other countries could use the law as an excuse to sue U.S. diplomats, service members or companies. But Congress could have the last word if the Senate and House of Representatives each override that veto by a two-thirds vote.

Siding With Saudi Arabia, Obama Vetoes Sept 11 Bill Passed Unanimously In Congress - It has been a day of Friday afternoon surprises: just one hour after Ted Cruz's pretended to endorse Donald Trump when he really meant don't vote for Hillary, president Obama denied what all Americans citizens demanded - and got - when Congress unanimously passed the Sept 11 law several weeks ago, when he decided to veto the bill. As The Hill reports, Obama on Friday vetoed legislation that would allow families of 9/11 victims to sue Saudi Arabia in U.S courts, setting up a high-stakes showdown with Congress. Obama’s move opens up the possibility that lawmakers could override his veto for the first time with a two-thirds vote in both chambers. Worse, it appears that Obama has now sided not with the US population but with a small minority of Saudi emirs. Republican and Democratic leaders have said they are committed to holding an override vote, and the bill’s drafters say they have the support to force the bill to become law. The Justice Against Sponsors of Terrorism Act (JASTA) unanimously passed through both chambers by voice vote.  But the timing of the president’s veto is designed to erode congressional support for the bill and put off a politically damaging override vote until after the November elections.  Obama waited until the very end of the 10-day period he had to issue a veto, hoping to buy time to lobby members of Congress against the measure.  More details: White House officials also hope congressional leaders will leave Washington to hit the campaign trail before trying for an override, kicking a vote to the lame-duck session after the election. But Senate Majority Leader Mitch McConnell (R-Ky.) has said the upper chamber will remain in session until the veto override vote is done. Under current law, 9/11 victims' families may sue a country designated as a state sponsor of terrorism, such as Iran. JASTA would allow U.S. citizens to sue countries without that designation, including Saudi Arabia. The measure has touched a political nerve ahead of an election in which terrorism has emerged as a central issue. It has strong bipartisan support and is backed by 9/11 families’ organizations.  Those families have sought damages from Saudi Arabia, since 15 of the 19 hijackers on Sept. 11, 2001 hailed from that country.  Critics have long been accused the Saudi government of directly or indirectly supporting the attacks, though a concrete link has never been proven. 

Turkey won’t take part in Raqqa operation if Kurdish militants do: Presidential spokesman - MIDEAST: Turkey will not take part in a U.S.-led coalition operation to liberate the Islamic State of Iraq and the Levant’s (ISIL) de facto capital of Raqqa if Syrian Kurdish fighters are also involved, Presidential Spokesperson İbrahim Kalın said. Kalın ruled out the possibility of Turkey joining an operation by coalition forces against ISIL militants in Syria’s Raqqa if the Syrian Kurdish Democratic Union Party (PYD) or its military wing, the People’s Protection Unit (YPG), which Turkey regards as terrorist organizations, also take part. “Negotiations are still ongoing, there is nothing certain yet. Our principled stance is the same as it was with Manbij and Jarablus. It is out of the question for us to take part in an operation in which the PYD/YPG are present,” Kalın said in an interview on state-run news channel TRT Haber on Sept. 22. Turkey considers PYD and YPG as closely linked to the outlawed Kurdistan Workers’ Party (PKK) and deems all groups to be terrorist organizations. “In principle, we support Raqqa and the other Syrian cities being cleansed from Daesh, but as we said before, we have principles and conditions on the issue,” Kalın said, using an Arabic name for ISIL. While U.S.-backed Kurdish and Arabs fighters liberated Manbij in early August, Turkey-backed Syrian rebel forces and Turkish troops took control of Jarablus in late August.

75,000 Syrian Refugees Trapped, Dying Near Border, Amnesty Says: — Around 75,000 refugees are stranded in a no-man's land on the Syria-Jordan border, and hundreds are dying because they are cut off from food and medical aid, Amnesty International said Friday. The alert came ahead of two high-profile summits in the United States on the global refugee crisis. The human rights group obtained rare video footage from the border area showing upturned rocks scattered across the desert landscape — makeshift graves that mark the untold suffering of tens of thousands of refugees seemingly forgotten by the outside world. In less than a year, the number of people stranded on this desolate frontier has soared from a few hundred to its present level. "People that we were able to speak to described some really desperate conditions," Amnesty's Sara Hashash told VOA. "They said food is running out, diseases are spreading, some people are dying because of preventable illnesses. And what's truly tragic is that if they really did have access to medical care, some of those people's lives would be saved." The border between Syria and Jordan, known as the "berm," has been closed since June, when six Jordanian soldiers were killed in a suicide car bomb attack by suspected Islamic State militants. Hashash said the added border security was understandable, but Jordanian authorities must abide by humanitarian law. "At the very least, in the interim what they need to be doing is allowing humanitarian operations at the berm area on that Syrian-Jordan border to resume," she said.

The Other Front Line: Iraqi Schools Need Our Help - Young Iraqis are pushing to reclaim their country from extremism and intolerance, not just by joining the military offensive to oust ISIS from Mosul, but also by enrolling at the American University of Iraq in Sulaimani. These paths are more closely linked than they may seem. In their way, they are both front lines in the battle to stabilize Iraq — and they suggest how policymakers and defense leaders should lay their own plans. One front line lies at the edges of Mosul, where Iraqi forces have for months been waging a grueling and bloody campaign to retake the country’s second-largest city from ISIS. A generation of young people has been devastated by the group’s reign, which has closed eight universities in northern Iraq, shuttered many schools in eastern Syria, and imposed hyper-fundamentalist curricula on the rest. Roughly half of Syrian children can no longer attend school; many are among the roughly 1.5 million refugees under the age of 18. These disruptions can have stark implications: as one Syrian professor put it in a 2014 study by the Institute for International Education: young men will either “continue their studies, or they will join” ISIS. A second, figurative front line exists 140 miles away from the looming battle in Mosul. The American University of Iraq in Sulaimani (AUIS) is a bold effort to train the next generation of leaders and thinkers. There, a diverse mix of 1,400 students – including Kurds, Arabs, Turkmen, Yezidis, Christians, Sunni and Shi’a Muslims, about 40 percent of whom are women – study under an American-style liberal arts curriculum. Founded in 2007, AUIS has steadily worked to become a pillar of institution-building in Iraq, overhauling its board in 2012, adopting increasingly detailed financial and governance controls, hiring Ernst & Young as the auditor, and undergoing rigorous accreditation processes.

Chinese propane imports to rise in Q4 on startup of two PDH plants - Chinese propane imports are likely to climb faster in the fourth quarter, thanks to the expected startup of two new propane dehyrogenation plants, giving a much-needed boost to the recovering LPG market in Asia, sources said Wednesday. China's Oriental Energy aims to start up its second PDH plant with a propylene capacity of 660,000 mt/year next month, when test runs at the Ningbo facility are completed, a source with knowledge of the matter said. The startup date has been slightly pushed back from the original plan of third quarter due to the G20 summit in Hangzhou over September 4-5, when China ordered plants and factories in Shanghai, Jiangsu and Zhejiang provinces to stop production ahead of the summit in order to reduce pollution levels. The new plant is expected to add 66,000 mt/month to Oriental's overall LPG requirements when run at full capacity. But in the initial phase of the startup, the company would likely import just one more cargo of 44,000 mt/month, the source said.Oriental currently has LPG supply from existing US term contracts to feed the first 600,000 mt/year PDH plant at Zhangjiagang, eastern Jiangsu province, which was started up in May last year. The company also imports from Iran. To meet propane requirements for its second plant, Oriental is understood to be talking to Middle Eastern producers such as Saudi Aramco and Qatar's Tasweeq. Separately, Hebei Haiwei is still doing test runs at the first phase of its PDH plant with a propylene production capacity of 500,000 mt/year. When run at full capacity, the plant requires up to 730,000 mt/year or 60,000 mt/month of LPG feedstock. It has the ability to run upto 115% of its nameplate capacity. The second phase of the project will see another 500,000 mt/year of propylene capacity coming onstream. The startup date for this phase is still unknown.