Sunday, November 13, 2016

fracking Trump, largest oil output rise in 18 months, record high gasoline production*, global rigs, et al

i imagine you all know what happened on Tuesday...while we can hardly garner exactly what energy and environmental policies a candidate might initiate based on his or her campaign speeches and tweets, we can certainly begin to get an idea where Mr Trump is going to take this country based on the moves he's already making in building his transition team....his initial move towards taking over came on Wednesday, even before all the votes were counted, when he appointed well known climate denier Myron Ebell, dubbed a 'climate criminal' by Greenpeace, to lead his EPA transition team...while it seems unlikely that that Trump would eliminate the EPA entirely, as he had promised he would during the campaign, Ebell's appointment certainly indicates an end to EPA regulation of CO2 and probably lax enforcement of the rest of our environmental laws...moreover, that initial move against the EPA probably means that he'll move to carry out his other anti-environment campaign pledges, such as scrapping the Clean Power plan and other environmental regulations that Obama put in place, eliminating all Federal incentives for renewable energy and clean power R&D, and pulling the US out of the Paris climate accords...while theoretically the earliest date that the US could legally withdraw from the Pairs accords would be 4 years after they came into force (ie, November. 4, 2020), lawyers have already suggested Trump could get around that by pulling out of the parent climate treaty, the 1992 U.N. Framework Convention on Climate Change, that was ratified by George Bush Sr, in one year, by simply giving the UN a notice to that effect...

we can also glean from his campaign speeches that he'll push a “drill-baby-drill” policy for oil & gas exploitation, which would included opening up all federal lands and waters to fracking, and that he'd cut Federal regulations that have slowed big oil projects from going forward...that would certainly include the Dakota Access Pipeline that he's personally invested in, which the Obama administration had held up in September, and which is now just 2 weeks away from drilling under the Missouri River...btw, the original plans for that project called for the pipeline to cross the Missouri River north of Bismarck, but that route was rejected as a threat to the water supply of the white people of Bismarck, and the route was instead moved to cross the river downstream, where it would only impact the Standing Rock Sioux tribe's water...Trump had also campaigned on reopening the Keystone XL pipeline route, and with his election we find that TransCanada is formulating plans to resubmit their proposal for that pipeline...it's hard to understand their thinking, since all the tar sands expansion projects that had been proposed early in the decade have since been cancelled because of low oil prices, and the takeaway needs for current tar sands production is already being met by existing pipelines...we also know that fracking interests will be well represented in the Trump administration, since fracking billionaire Harold Hamm has been his energy adviser throughout the campaign and is rumored as the next Energy Secretary...in addition, Politico reports that Trump is considering fracker Forrest Lucas of Lucas Oil as the next Secretary of the Interior...and if you think that's bad, it could even get worse, because someone from Trump's inner circle has leaked that Sarah Palin is in line for one of those cabinet positions too, while Newt Gingrich is being vetted for Secretary of State... 

still, it's not the end of the world, although Trump's election may bring that end a little closer...we'd do well to remember that we've been here before, and survived...if you're old enough, you might remember that Jimmy Carter's National Energy Policy had once set the nation on a course to switch to renewable forms of energy and replace fossil fuel vehicles with electric, and that his green energy policy came to a complete halt after Ronald Reagan was elected and removed the 32 solar panels from the roof of the White House, which Carter had installed to provide the premises with heat and hot water...historically, most of our political leaders have been partially owned by the energy companies anyway, so if you’ve bought into the idea of American democracy, you have to live with it's fickle consequences...

still, no matter what Trump or his appointees do, they cannot force US oil and gas exploitation if it's unprofitable, and this week saw prices for both of those commodities again fall...initially, US oil prices were up 82 cents, or 1.86%, to $44.89 a barrel on Monday, after the FBI said it had not found new evidence to warrant charges against Hillary Clinton, and on renewed hope that OPEC would come to an agreement on production cuts...prices then rose to $44.98 a barrel on Tuesday after after the American Petroleum Institute reported a larger than expected crude supply increase, offset by larger than expect drawdowns of gasoline and distillates...oil prices then fell almost $2 from there in overnight trading as most markets were limit down as the election returns came in showing that Trump was winning, but recovered by the time the market opened on Wednesday and went on to increase to $45.27 a barrel, after the EIA reported smaller supply diversions from market expectations than were indicated by the API....prices then fell 61 cents, or 1.4%, to $44.66 a barrel on Thursday, after the IEA’s monthly report showed OPEC members pumped a record 33.83 million barrels a day in October, and then gathered pace on Friday to fall another 3% on that same news, ending the week down by $1.51, or 3.4 percent, at $43.14 per barrel...

natural gas prices also started out the week higher, rising to $2.816 per mmBTU on Monday before forecasts of mild weather drove prices down 18.3 cents, or 6.5%, to $2.633 permmBTU on Tuesday...and while they rebounded to $2.690 per mmBTU by the close on Wednesday, they fell right back to $2.632 per mmBTU on Thursday, after the EIA reported record inventories of natural gas in storage...prices then drifted lower from there on Friday to end the week at 2.619 per mmBTU, 5.3% lower than the previous week's close...

The Latest Oil Stats from the EIA

this week's release of oil data for the week ending November 4th by the US Energy Information Administration indicated that our crude oil production jumped by the most in 18 months, while our crude oil imports fell back to more normal levels, while refiners started to recover from their fall slowdown...for the week, the crude oil fudge factor that was needed to make the weekly U.S. Petroleum Balance Sheet (line 13) balance rose to +450,000 barrels per day, from last week's +395,000 barrels per day, which means that 450,000 more barrels of oil per day showed up in our final consumption and inventory figures this week than were accounted for by our crude production or import figures, meaning that one or several of this week's metrics were off by that amount...that's now the 3rd large positive adjustment in a row, and as a result the cumulative daily average of that adjustment has risen to 105,000 barrels per day, meaning the EIA's figures are also going off balance for the whole year, and should by rights be taken with a large grain of salt, if not completely ignored...but these figures are still what drives prices and hence oil field activity, so we'll just continue to track them as long as the market participants continue to believe them...

thus, for the week ending November 4th, the EIA reported that production of crude oil from US wells rose by 170,000 barrels per day to an average of 8,692,000 barrels per day, the 5th US oil production increase in a row and the largest production jump in 18 months...moreover, that happened as output from Alaskan fields rose by just 7,000 barrels per day, and production from the lower 48 states was 163,000 barrels per day higher, and that means our oil field production is now the highest it's been since June 10th of this year....however, that still left the week's domestic oil production 5.4% lower than the 9,185,000 barrels we produced during the week ending November 6th of last year, and 9.6% below the record 9,610,000 barrels per day of oil production that we saw during the week ending June 5th 2015...our oil production for the week ending November 4th was also 527,000 barrels per day, or 5.7% lower, than what we were producing at the beginning of this year, which we're citing as an interim benchmark, since our otherwise declining production had also been rising in the last few months of 2015...

at the same time, the EIA reported that our imports of crude oil fell by an average of 1,553,000 barrels per day to an average of 7,442,000 barrels per day during the week ending November 4th, down from last week's 4 year high of 8,995,000 barrels per day during...as a result, the 4 week average of our oil imports reported by the EIA's weekly Petroleum Status Report (62 pp pdf) slipped back to an average of 7.6 million barrels per day, 5.3% higher than the same four-week period last year...meanwhile, our exports of crude oil were again little changed, rising by an average of 6,000 barrels  per day to an average of 410,000 barrels per day for the week, in data that is not directly comparable to last year's exports of 504,000 barrels per day for the same week, since the EIA has recently switched to reporting Custom's export data, rather than use estimates based on untimely export stats from the Census Bureau..

the EIA also reported that the amount of crude oil used by US refineries rose by an average of 369,000 barrels per day to an average of 15,817,000 barrels of crude per day during the week ending November 4th, as our refinery utilization rate rose to 87.1% during the week, up from last week's 85.2%, but down from the refinery utilization rate of 89.5% seen during the week ending November 6th last year...US oil refining is still down by 1,113,000 barrels per day, or by 6.6%, in the 9 weeks since Labor Day, as the refinery utilization rate has fallen from 93.7% over that stretch .. the crude oil refined this week nationally was also 0.8% below the 15,939,000 barrels of crude per day US refineries used during the week ending October 30th last year, but up 0.4% from the 15,752,000 barrels per day that were being refined during the equivalent week in 2014...

with the jump in the amount of crude oil being used by refineries, the EIA reported that refineries’ production of gasoline rose by 632,000 barrels per day to 10,456,000 barrels per day during the week ending November 4th, which appears to be a new record high for US gasoline output...if that number is to be believed (it's consistent across several EIA reports), it means our gasoline output was 7.9% higher that the gasoline output of 9,693,000 barrels per day during the week ending November 6th last year, and 11.9% higher than the gasoline production during the same week of 2014....at the same time, the EIA reported that refinery output of distillate fuels (diesel fuel and heat oil) rose by 122,000 barrels per day to 4,784,000 barrels per day during the week ending November 4th....however, the week's distillates output was still 1.8% lower than the 4,873,000 barrels per day that was being produced during the same week last year, and 0.8% lower than the 4,822,000 barrels per day of distillates we produced during the equivalent week of 2014...    

however, even with that big jump our gasoline production, our gasoline supplies reportedly fell by 2,841,000 barrels to 220,963,000 barrels as of November 4th, as our domestic consumption of gasoline rose by 30,000 barrels per day to 9,213,000 barrels per day and as our gasoline imports rose by 42,000 barrels per day to 500,000 barrels per day....the reason those numbers don't add up* is because there was a large swing of 554,000 barrels per day in yet another fudge factor for gasoline, as shown in Table 2 on page 7 of the U.S. Petroleum Balance Sheet, which the footnote tells us is an "adjustment to correct for the imbalance created by the blending of fuel ethanol and motor gasoline blending components"  ..be that as it may, November 4th's gasoline inventories were still 3.6% higher than the 213,245,000 barrels of gasoline that we had stored on November 6th of last year, and 8.5% higher than the 203,565,000 barrels of gasoline we had stored on November 7th of 2014....at the same time, our distillate fuel inventories fell by 1,948,000 barrels to 152,378,000 barrels by November 4th, the 7th consecutive large drop in our distillate supplies....however, even after the withdrawal of 16.4 million barrels of distillates from storage over the past 7 weeks, our distillate inventories were still 5.7% higher than the distillate inventories of 141,109,000 barrels of November 6th last year, and 27.2% above the distillate inventories of 116,850,000 barrels of November 7th, 2014

finally, even with the 1.5 million barrel per day drop in our oil imports, our inventories of crude oil still rose by 2,432,000 barrels to 485,010,000 barrels by November 4th, following last week's 14,420,000 barrel addition, the largest supply jump in history...however, with 2 hurricanes interfering with oil imports over the past 10 weeks, our oil stockpiles have still decreased by 10.23 million barrels, or 2.1% over that span, at a time of year when oil supplies are usually rising, and are 5.3% below their April 29th peak of 512,095,000 barrels...however, we still ended the week with 6.6% more crude oil in storage than the 454,822,000 barrels we had stored as of the same weekend a year earlier, and 40.1% more crude oil than the 346,150,000 barrels we had stored on November 7th of 2014...   

This Week's Rig Count

US drilling activity slipped for the 1st time in 8 weeks during the week ending November 11th, as lower prices for both oil and natural gas over recent weeks seem to be taking their toll.....Baker Hughes reported that the total count of active rotary rigs running in the US fell by 1 rig to 568 rigs by this Friday, which was also down from the 767 rigs that were deployed as of the November 13th report last year, and down from the recent high of 1929 drilling rigs that were in use on November 21st of 2014...

active oil rigs still rose by 2 rigs to 452 rigs this week, as oil drilling activity has only been down once in the past 20 weeks...oil drilling work is still down from the 574 oil directed rigs that were working a year ago, however, and down from the recent high of 1609 oil rigs that were drilling on October 10, 2014...at the same time, the count of drilling rigs targeting natural gas formations decreased by 2 rigs to 115 rigs, which also left active gas rigs down from the 193 natural gas rigs that were in use a year ago, and down from the recent natural gas rig high of 1,606 natural rigs that were deployed on August 29th, 2008...another rig that was shut down this week was classified as miscellaneous, which still left one miscellaneous rig active, up from a year ago, when no such miscellaneous rigs were active...

a single rig that had been drilling through an inland lake in Louisiana was among those shut down this week, which left only one such rig set up on inland waters, down from 3 a year ago...the number of horizontal drilling rigs that were deployed nationally also fell for the first time in 8 weeks, dropping by 2 rigs to 457 rigs this week, which was also down from the 587 horizontal rigs that were in use on November 6th 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 vertical rig count rose by 1 rig to 59 rigs this week, which was still down from the 108 vertical rigs that were in use a year earlier... meanwhile, the directional rig count was unchanged at 52 rigs, which was down from the 72  directional rigs that were deployed during the same week last year...

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 year over year rig count changes for the major producing states, and the second table shows weekly and year over year 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 November 11th, the second column shows the change in the number of working rigs between last week (November 4th) and this week (November 11th), the third column shows last week's November 4th active rig count, the 4th column shows the change in the number of rigs running this Friday from the equivalent Friday 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  case was for November 13th of 2015...  

November 11 2016 rig count summary

International Rig Count for October

Baker Hughes also released the international rig counts for October this week, which unlike the weekly North American count, is an average of the number of rigs that were running in each country during the month, rather than the total of those rig drilling at month end....Baker Hughes reported that an average of 1,620 rigs were drilling for oil and natural gas around the globe in October, which was up from the 1,584 rigs that were drilling around the globe in September, but down from the 2,086 rigs that were working globally in October of last year...increased North American drilling again accounted for the global increase, as the average US rig count rose from 509 rigs in September to 544 rigs in October, which was still down from the average of 791 rigs that were working in the US in October a year ago, while the average Canadian rig count rose from 141 rigs in September to 156 rigs in October, again still down from the 184 Canadian rigs that were deployed in October a year earlier....outside of Northern America, the International rig count fell by 14 rigs to 920 rigs in October, which was also down from 1,111 rigs a year ago, as an increase in drilling in the Middle East was more than offset by decreases elsewhere.. 

drilling activity in the Middle East rose for the 4th time in the past 10 months, as the countries included in this region added a net of 5 rigs, bringing their average up to 391 rigs for the month, which was still down from the 403 rigs deployed in the Middle East a year earlier....the largest regional drilling increase was again in Qatar, where their active rig count rose from 9 rigs in September to 12 in October, which was also up from the 6 rigs that Qatar had deployed in September a year ago...both Iraq and the Saudis added two rigs in October; that brought the Iraqi count up to 42 rigs, which was still down from last year's 50, and brought the Saudi's count up to 126 rigs, which was up from 125 rigs last October...the Saudi count has averaged near 125 rigs weekly since early 2015, which means they've increased drilling from their average of around 105 rigs in 2014...in addition to the Qataris, the Iraqis, and the Saudis, Abu Dhabi also added a rig in October; they now have 50 rigs deployed, up from 48 rigs a year ago..

meanwhile, the Latin American region saw its active rig count drop by a net of 6 rigs to 183 rigs, their first drop in 4 months, while they were also down from 294 rigs in October of 2015, as the region had idled 92 rigs over the first 6 months of 2016...the regional decrease came by way of shutting down 8 offshore platforms, as Latin American offshore activity fell from 38 rigs to 30 rigs, which was also down from 55 offshore last October...both Brazil and Mexico cut 4 rigs for the month, which left Brazil with 14 rigs, down from 36 rigs a year ago, and left Mexico with 21 active rigs, down from the 38 rigs they were running last October... at the same time, Venezuela shut down 3 rigs, leaving them with 48 still running, down from 71 rigs a year earlier...Argentina also idled a rig, leaving them with 69, down from 105 rigs last October...on the other hand, drillers in Columbia activated 5 additional rigs, as they had 11 rigs running in October, which was nonetheless still down from the 20 rigs thy had active a year earlier...in addition, Chile saw a rig added, bringing their count up to 3 rigs, up from 1 rig a year earlier...

at the same time, drilling activity in the Asia-Pacific region was reduced by 8 rigs to 182 rigs in October, with their offshore count reduced from 88 rigs to 84, which was down from the 213 rigs working the region a year earlier, which included 89 working offshore at that time....India shut down 3 rigs, leaving 112 still active nationwide, which was up from the 110 rigs they had deployed in October of last year...Indonesia idled the 2 rigs they had added in August and hence are back to running 17 rigs, down from the 23 rigs they had working a year earlier...Vietnam also idled 2 rigs, leaving 2 rigs still working, down from 3 rigs a year earlier...in addition, Australia, Myanmar, the Philippines and China offshore each saw a one rig drop...that left Australia with 3 rigs, down from 16 a year ago, left Myanmar with no activity, same as a year ago, left the Philippines with 1 rig, down from 2 last year, and left China with 28 platforms drilling offshore, same as they had last October...on the other hand, Malaysian drillers added 2 rigs; they now have 5 rigs deployed, still down from 7 a year ago, and 1 rig started drilling in Japan, which except for three months this summer, was their only drilling activity in 2 years...

meanwhile, the net rig count in Europe fell by 5 rigs to 87 rigs in October, which was down from the 108 rigs working in Europe a year ago at this time...however, that net drop masked an even larger pullback in the North Sea, as the European offshore count fell by 50%, dropping from 36 rigs in September to 24 offshore in October, which was also down from 43 offshore rigs a year ago...leading that pullback, Norwegian drillers shut down 7 platforms, leaving just 9 still working in October, which was also down from 15 working there a year earlier...the UK also shut down an offshore rig, leaving 7, which was down from the 14 platforms they had working offshore a year earlier...at the same time, Turkey added 2 rigs and thus had 31 rigs running, also up from 29 rigs a year ago...in addition, both Germany and the Netherlands added rigs in October; that meant 2 rigs active for the Germans, down from 3 a year earlier, and meant 4 rigs active for the Dutch, up from 3 rigs a year earlier...digging further into other files to resolve the offshore discrepancy, we find that Italy shut down their only offshore rig, while at the same time added one on land, leaving them unchanged at 3 rigs for the month, while "other Europe" shows an offshore reduction of 3 rigs, while 2 rigs were added on land...that ‘other’ category would include Sakhalin Island off the east coast of Russia, mysteriously included in the European count, where the overall rig count fell from 8 rigs to 7, which was also down from 8 rigs a year ago at the time..

lastly, the African continent saw no net change in its total activity in October, although at 77 rigs they were still down from the 93 rigs working in Africa last year at this time...Angola shut down 2 rigs, leaving 2 rigs still working, which was down from the 12 rigs that they had active a year earlier...in addition, both Morocco and Nigeria idled rigs; that left Morocco with none, same as a year earlier, and cut the Nigerian count to 4 rigs, down from 9 rigs a year earlier...at the same time, both the Congo Republic and Tunisia each started up 2 rigs, after both had none operating in September; for the Congo Republic, those 2 rigs were down from 3 rigs a year ago; while Tunisia also had no rigs in operation last October....finally, note that Iranian, Russian, and Chinese rig counts are not included in Baker Hughes international data, although you may have noted that China's offshore area, with an average of 28 rigs active in October, down from 29 in September, were included in the Asian totals here... 

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Big Wins for Ailing Coal Industry in the Ohio Valley Region | WKMS - Key races across Kentucky, Ohio, and West Virginia went to candidates who showed strong support for coal. Coal operator and billionaire Jim Justice won the governor’s race in West Virginia, one of the few Democrats to prevail in the region’s statewide races. Justice got the united Mine Workers endorsement despite his failure to pay $15 million in taxes and mine safety fines. Republican Attorney General Patrick Morrisey held onto his seat. Morrisey gained notoriety for leading the state’s challenge to the federal Clean Power Plan, which would limit emissions from coal power plants. With control of the U.S. Senate in play, races in Kentucky and Ohio gave Republican Majority Leader Mitch McConnell some help in maintaining his hold. Incumbents Rand Paul and Rob Portman both won handily, and both advertised heavily on support for the coal industry.

Serious Fracking Trouble: Will Portman Keep Wayne Wild? –  Lost amongst the din of this crazy election season has been the importance of environmental issues.  For example, here in our own swing state of Ohio, an important environmental issue has popped up under the radar, and while environmentalists have taken note, politicians have not. As reported by The Columbus Dispatch in October, the federal government has announced plans to auction off oil and gas lease rights for 1,600 acres of Wayne National Forest — Ohio’s only national forest — which would affect parts of Monroe and Washington counties and lead to fracking on a portion of those public lands. While oil and gas extraction has taken place in the forest for years, the U.S. Forest Service says the roughly 1,200 conventional oil and gas wells that are currently there are mostly small and non-active. Of course, this potential expansion of fracking into the Wayne would be a game changer, because it could be the catalyst to allow more fracking on public lands in Ohio and across the country. Naturally, since fracking has been found to be harmful to air and water quality, attorneys for the Ohio Environmental Council are planning to appeal the decision before the government holds its online auction on Dec. 13, stating that the decision is “bad for wildlife, bad for recreation and bad for the overall health of the Wayne.” Local environmentalist groups are doing their part to stop the auction as well. The Athens County Fracking Action Network (ACFAN) has made their stance clear on their website, stating that “potentially significant impacts [of fracking] must be considered with full public input [by federal law.] This was not done.”  In addition to ACFAN, an organization calledThe Ohio Revolution took their anti-fracking efforts to Ohio’s politicians, starting with our state’s junior senator, Rob Portman. The group held an action last week that put activists outside of Portman’s main offices in Ohio to hold signs and “encourage [Portman] to join [them.]”  An official spokesperson for Portman’s D.C. office was on the campaign trail with the senator and could not be reached for comment before Election Day, but if you look at Portman’s donor list, you can probably guess whether or not he’ll be more of a “Teddy Roosevelt conservationist” Republican or a “drill baby drill” Republican. Portman’s fourth highest donor in the state (and eighth nationally) is the oil and gas industry, and they’re likely looking to get something for their money. Knowing Portman, he’ll probably give it to them.

Utica and Marcellus shale- Oil and gas drilling permits in higher  — The Ohio Department of Natural Resources issued 27 oil and gas well permits in September and another 34 permits in October, showing a slight increase from the 27 permits issued in August, and 19 in July. In Carroll County, which leads the state in the number of producing wells at 430, there were no new permits to drill issued in September or October, and only one permit was issued in August. In Harrison County, where there are now 275 wells in production, there have been no new permits issued for drilling since April 2016. Permitting activity continues to be strong in Belmont County. There were nine permits granted in September and another 22 in October. Rice Drilling received four permits in September for two wells in Goshen Township and another two wells in Smith Township,and commenced drilling on three of the wells. In October, Rice Drilling received 13 permits for drilling, all in Smith Township. Drilling began on three wells. Ascent Resources Utica received three permits in September, all for wells in Colerain Township. The company received another two permits in October, one in Colerain and one in Wheeling townships. XTO Energy received two drilling permits in September for the Schnegg Unit in York Township. Gulfport Energy Corporation received seven permits to drill in October, four in Richland Township and three in Somerset Township. Since the shale play was discovered, there have been 384 drilling permits issued in Belmont County. Of those, 62 have been drilled but have not been put into production, and another 202 are producing wells.The ODNR issued 11 drilling permits in September and three in October in Monroe County.Gulfport Energy Corporation received seven of the September permits, three for the Claugus well sites in Center Township, and four for the Potter sites, also in Center Township. Drilling commenced on all but one of the wells.CNX Gas Company received four permits in September, all for the Frances Kinzy well sites in Switzerland Township. In October, CNX Gas Company received three additional permits for drilling on Kinzy leases in Switzerland Township. To date, there have been 264 total permits issued in Monroe County. Of those, 137 are in production, with another 42 wells drilled, but not producing.

Appalachia Indirectly Endorses Energy on Election Day - Natural Gas Intelligence --Appalachia went red on Tuesday, not only helping Republicans take the White House and keep their grip on the U.S. Senate, but mostly endorsing candidates with pro-energy agendas and rejecting an effort to thwart the oil and gas industry. In Ohio, Republican Sen. Rob Portman handily defeated his Democratic challenger, former Gov. Ted Strickland, by more than one million votes. The incumbent's victory was expected in the state, but it had a heightened air of importance as Democrats had hoped to wrest control of the chamber from the GOP. In Pennsylvania, Republican Sen. Pat Toomey narrowly fended off a challenge from Democratic hopeful Katie McGinty in a closely watched race to keep his seat by an unofficial vote of 49-47%.A former Wall Street investment banker, Toomey, like Portman, has been an advocate for oil and gas-related growth in the Appalachian Basin. McGinty, who once served as chairwoman of the White House Council on Environmental Quality and as secretary of the Pennsylvania Department of Environmental Protection, promoted a climate protection agenda and favored a stronger transition to clean energy. She played an instrumental role in the early days of regulating the Marcellus Shale boom in the Keystone state.Democratic candidate Jim Justice, a billionaire who owns Appalachian coal mines, a luxury golf resort and other businesses, won the West Virginia gubernatorial race. Justice beat Republican state Senate President Bill Cole by an unofficial margin of 49-42%. The state split the top of the ticket, as Donald Trump took the presidential race. Justice is an unconventional Democrat, however. He’s previously been registered as a Republican, didn't publicly support Hillary Clinton and at times aligned with Trump.West Virginia ranks fourth among all states in total energy production and is one of the nation's largest coal producers, according to the Energy Information Administration. Justice railed against the federal Clean Power Plan and also said he wanted to cultivate more markets for the state's natural gas, which he believes can continue to aid the economy (see Shale Daily, Oct. 24).

Judge issues temporary stay of some Pennsylvania drilling rules -  In a ruling in a lawsuit brought by the Marcellus Shale Coalition, a Pennsylvania judge on Tuesday ordered the temporary stay of several key provisions of a set of natural gas drilling regulations recently promulgated by the state's Department of Environmental Protection. In an order handed down in the Commonwealth Court of Pennsylvania, Judge Kevin Brobson issued a preliminary injunction blocking the state from enforcing provisions of the rules pertaining to public resources, well permit reviews, wastewater impoundment and site restoration. "We're pleased with the court's decision to preliminarily stay unlawful, burdensome and costly portions of the challenged regulations from going into effect until this matter can be fully decided in the courts," MSC President David Spigelmyer said in a statement. "All seven provisions that the MSC has challenged conflict with DEP's statutory authority granted by the General Assembly as well as Supreme Court precedent and bring immediate harm to our industry, which is expected to cost Pennsylvania job creators an initial ... $40 million to $70 million and up to $16 million annually while realizing little discernible environmental benefit," he said. DEP spokeswoman Julie Lalo said the department would answer the judge's ruling in court filings next week. However, the ruling denied the MSC's request for an injunction to block other provisions of the regulations pertaining to onsite processing, the remediation of spills and waste reporting. The MSC filed the suit in October to block the implementation of seven provisions of Chapter 78a of the Pennsylvania Code. The rules, which regulate many aspects of unconventional gas drilling, took effect October 8.

US Northeast natural gas providers gear up for winter, takeaway expansions. - Northeast production growth, the primary driver of overall gains in U.S. natural gas output in recent years, has largely stalled in 2016. Rig counts in the Marcellus/Utica dropped to near six-year lows, and the region has been facing constraints—from takeaway capacity and in the past month or two from storage injection capacity. But market factors are again about to roil the Northeast: 1) winter heating demand is on its way, and 2) more takeaway capacity has come online in the past month and still more is coming before the year is up. Today, we review recent Northeast natural gas production trends using pipeline flow data from Genscape and assess factors that will impact regional production this winter. Since 2010, by far the most significant growth in U.S. natural gas production has occurred in the Northeast, where the Marcellus/Utica shale plays in Pennsylvania, West Virginia and Ohio have proven to be among the most productive in the world. To put that into perspective, while production from the rest of the U.S. has declined by nearly 7 Bcf/d over the last five years, Northeast production has climbed at an astounding pace, from less than 5 Bcf/d in 2011 to a record 22.8 Bcf/d in February 2016. Since February, volumes have bounced around but overall growth has flattened. With winter now just around the corner and pipeline expansions coming online, it’s time to revisit what’s happened with Northeast production this year and consider the prospects for supply growth in the coming months.

Northeast NGL production and takeaway capacity. Production of natural gas liquids in the Northeast has been rising sharply for several years now, challenging the ability of NGL producers and midstream companies to deal with it all. Lately, though, drilling in “wet” gas parts of the Marcellus and Utica shale plays has slowed, mostly because prices for NGLs have sagged due to lower crude prices and the high cost of takeaway capacity, thereby reducing the incentive to drill for the wet gas responsible for NGL production growth. However, it is quite possible that total NGL production growth could continue for some period of time as more ethane is extracted from wet gas instead of being “rejected”. Meanwhile, new NGL pipeline capacity out of the Marcellus/Utica has been coming online, providing a relief valve of sorts. Today we begin a blog series on recent developments regarding Northeast NGL production, takeaway capacity and pricing.

NYMEX December gas settles at $2.690/MMBtu, up 5.7 cents - The NYMEX December natural gas futures contract swung almost 13 cents from early Wednesday to settle 5.7 cents higher at $2.690/MMBtu despite expectations for storage inventories to set a new record Thursday and projections for above-average temperatures to continue into the latter half of November. According to Phil Flynn, senior market analyst with Price Futures Group, a possible jolt to the natural gas market came in the form of a one-two punch of oil prices rebounding and the stabilization of the stock market following the announcement of the election of Donald Trump as president-elect, helping to provide a "relief rally" in the natural gas market. However, movement of the prompt-month contract may be heavily influenced by the upcoming US EIA weekly gas storage report and the National Weather Service's latest weather projections calling for above-average temperatures over the Chicago and New York City markets into the latter half of November. A consensus of analysts surveyed by S&P Global Platts estimate a 51-Bcf build for the week ended November 4, which would push storage levels above the previous record of 4.009 Tcf nearly two weeks earlier than 2015. An injection in this range would sit below the 58-Bcf from a year ago, but well above the five-year average of 38 Bcf.Concurrently, national production is projected to average around 70.7 Bcf/d, according to data from Platts Analytics' Bentek Energy. In particular, Northeast production has fluctuated over the last few days after reaching 22.81 Bcf/d over the weekend, the highest level since August, signaling that production levels have rebounded from October lows and will remain stable heading into the winter.

As bill dies, specter of an oil train explosion haunts residents - Call it ironic that on the very day six people died in a gruesome bus accident in southwest Baltimore, the chambers of the City Council were absorbed in an exercise on how to duck, delay and disengage from planning for a disaster of much greater magnitude: the explosion of one of the CSX freight trains that routinely carry a highly volatile Bakken crude oil across the city. The threat is not academic. Three years ago, a train carrying tank cars filled with Bakken crude derailed and exploded in Lac-Mégantic, Quebec. Forty-seven people were killed, many of them incinerated in an instant. So City Council President Bernard C. “Jack” Young agreed to introduce a bill calling for risk assessments of oil-carrying trains going through Baltimore and preparation of an emergency plan in case of a spill or explosion. “We thought we were finally making progress,” Robinson said. So the women waited patiently for the Council to take action, duly noting an accident last February 4, where CSX cars carrying hazardous materials derailed in nearby Fairfield, and another on June 13, when a train carrying a carload of acetone jumped the tracks in the Howard Street tunnel. Neither incident resulted in any release of flammable liquids. But neither did it spur Young or the chair of the committee handling the legislation, Councilman James B. Kraft, to move the oil train bill forward. But nothing happened until CCAN activists showed up at a Kraft committee hearing in September, wearing red t-shirts with “hear the bill” and “don’t be crude” messages on them. “At that meeting, Jim Kraft announced he would be hearing the bill on November 1,” said Jamshid Bakhtiari, campaign coordinator for CCAN. During the hearing two days ago, Kraft wandered out of the chambers, leaving the committee bereft of a quorum, then returned to tell two dozen supporters: “We’re not going to vote the bill. We’re going to hear the bill.” By failing to take a vote, Kraft ensured that the oil train bill had no chance of passing the Council before its term ends on December 5 – and all legislation pending before it expires. .

The bureaucrats strike back - The Mayor’s Office of Emergency Management (MOEM) doesn’t know how many gallons of volatile Bakken crude oil roll through Baltimore on CSX trains. Or what’s considered best practices for responding to a massive oil train explosion like the Lac-Mégantic disaster that killed 47 people in a small Canadian town. But officials say these information gaps don’t matter. Why? Because the city has THIRA. The Threat and Hazard Identification and Risk Assessment (THIRA) is Emergency Management’s bible, a report that defines the “critical core capabilities” of Baltimore government such as risk and disaster resilience, supply chain integrity and security, threats and hazards identification, environmental response, fire management and suppression. Thus, for City Council Bill 16-0621 to call on MOEM to undertake a safety assessment of “one unique concern” – the transport of crude oil by rail – is “not consistent with our operational framework,” Robert Maloney, director of MOEM, wrote to the Council last week. An oil train explosion, Maloney strongly suggested, is not a significant risk to Baltimoreans based on the THIRA assessment. So to make the “human capital investments” needed to prepare for the possibility of the risk would be “inefficient and ineffective” and would force MOEM “to sacrifice critical services we already struggle to maintain.” All that said, what was the real stopper for Maloney? The answer, implicit in the final paragraph of his memo, is: money. If his agency were handed $150,000 to $300,000, he’d do the study.

What Happens When the Most Important Pipeline in the U.S. Explodes The 5,500-mile Colonial delivers about half of the refined products used on the East Coast.  On Monday, a construction crew in Alabama triggered a massive explosion when a track-hoe struck the biggest fuel pipeline in the U.S. The blast killed one person, injured several, and sparked a wildfire that burned for nearly a day across 31 acres. It also stopped the flow of millions of gallons of gasoline that move up the East Coast each day, from refineries in Houston to tanks in Linden, N.J., outside New York Harbor. The 5,500-mile Colonial Pipeline delivers about half of the refined products used on the East Coast. It consists of two lines—one that carries gasoline, the other that carries distillate fuels such as diesel and jet fuel. Think of it as the country’s fuel aorta. The consortium that owns Colonial includes private equity behemoth KKR, industrial conglomerate Koch Industries, and oil-and-gas supermajor Royal Dutch Shell. The fact that it’s so little known, yet such a vital piece of infrastructure, is a testament to how well Colonial has been run over the years. But this is its second outage in two months. In September, a spill leaked 250,000 gallons of gasoline and caused states of emergency to be declared in Georgia and Alabama as gasoline ran out in some areas. The Colonial was down for 12 days. The U.S. has plenty of gasoline in storage. Tanks are brimming with near-record levels of supply. But that was true in September as well, when the outage caused all kinds of disruptions and price spikes. “All that supply does you absolutely no good if you can’t move it around,”

Retail Gasoline On East Coast 6 Cents Lower Than National Average - Colonial Gasoline Pipeline Back On-Line After Spill / Interruption - November 8, 2016 - All that anxiety about the Colonial Pipeline gasoline spill and interruption? Never mind: Gasoline is expected to reach as far north as Charlotte, North Carolina within a day of Line 1's restart. Gasoline shipments on Colonial's system are expected to reach as far north as Baltimore, Maryland, by Tuesday and to reach their northern terminus in Linden, New Jersey, near New York Harbor, by Wednesday.   EIA's weekly retail price for regular gasoline for the Lower Atlantic (PADD 1C) was $2.17/g as of Monday, November 7, virtually unchanged from the previous week, and 6 cents/g below the national average. – EIA

Major Quake Strikes Cushing, Oklahoma - Near US' Largest Oil Storage Facility -- Shortly after 19:45 local time, a strong 5.3 magnitude earthquake struck some 50 mile northeast of Oklahmoa City. The nearby town of Cushing, home of America's largest oil storage facility, experienced structural damage and lost power. No injuries have been reported. As Bloomberg reports, the quake struck 2km west of Cushing, Oklahoma, according to USGS. Cushing is location of largest oil storage site in U.S. where benchmark WTI crude futures are delivered. Quake at depth of 5km. Cushing fire officials haven’t yet received any calls for damage at the oil tank yard, and no injuries have been reported, News9 Oklahoma’s Justin Dougherty says in posting on Twitter. Oklahoma registered 5.6 magnitude earthquake in September, tying state record set in 2011; number of earthquakes measuring 3.0 or higher reached 890 last year. Several energy producers, and also the U.S. Environmental Protection Agency, are facing lawsuits because of seismic activity allegedly linked to oilfield wastewater disposal in Oklahoma and other states

Substantial damage after earthquake rattles major Oklahoma oil hub | Fox News: Dozens of buildings sustained "substantial damage" after a 5.0 magnitude earthquake struck an Oklahoma town that's home to one of the world's key oil hubs, but officials said Monday that no damage has been reported at the oil terminal. Cushing City Manager Steve Spears said 40 to 50 buildings were damaged in Sunday's earthquake, which was the third in Oklahoma this year with a magnitude of 5.0 or greater. No major injuries have been reported, and Spears said the damage included cracks to buildings and fallen bricks and facades. Oklahoma has had thousands of earthquakes in recent years, with nearly all traced to the underground injection of wastewater left over from oil and gas production. Sunday's quake was centered 1 mile west of Cushing and about 25 miles south of where a magnitude 4.3 quake forced a shutdown of several wells last week. Fearing aftershocks, police cordoned off older parts of the city about 50 miles northeast of Oklahoma City to keep gawkers away late Sunday, and geologists confirmed that several small quakes have rumbled the area. Spears said an assisted living community had been evacuated after damage was reported. The Cushing Public School District canceled Monday classes. The Oklahoma Department of Transportation reported Sunday night that no highway or bridge damage was found within a 15-mile radius of the earthquake's epicenter.

'Pipeline Crossroads of the World' hit with strong earthquake - Cushing - A large earthquake rattled residents all over the state of Oklahoma Sunday night, causing "significant damage" in the city of Cushing. The U.S. Geological Survey reported the quake was a 5.0 magnitude earthquake. The central Oklahoma city of Cushing, which dubs itself the "Pipeline Capital of the World," has one of the world's largest oil storage terminals. There is great concern that the quake may have damaged key infrastructure. Sunday night's earthquake hit at 7:44 p.m. and was centered one mile west of Cushing and 25 miles south of where a magnitude 4.3 quake forced a shutdown of several wells last week, according to Fox News affiliate News9.com.  The trembler shattered windows and brought down the facades of many older buildings in the downtown area of the city. Cushing Assistant City Manager Jeremy Frazier told a news conference late Sunday there were reports of a number of people injured, also noting the worst damage appeared to be contained to the downtown, according to the Associated Press. Fearing aftershocks, the downtown area was cordoned off to keep gawkers away, and geologists have confirmed that several additional "small quakes" have hit the area. Frasier also said an assisted living center had been evacuated after damage was reported to the building. "Stay out of the area," said City Manager Steve Spears. He said it would take a thorough assessment of buildings and other structures in the daylight to determine the real extent of any damage, and the area was not safe yet.  The earthquake was felt as far away as Iowa, Illinois, and Texas. The U.S. Geological Survey initially pegged the quake at 5.3 magnitude but later lowered the reading to 5.0 magnitude, according to Fox News.

Oklahoma Hub Pipelines Resume Operations After Magnitude 5 Quake - Pipeline owners near a crucial Oklahoma oil hub reported little damage and resumed normal service after a magnitude 5 earthquake struck late Sunday. Oklahoma’s oil and gas regulator reported that all pipelines under its jurisdiction were operating again after shutting down as a precaution because of the temblor, centered less than 2 miles west of the city of Cushing. It’s the second sizable quake in the past two months for the area, which serves as a delivery point for West Texas Intermediate crude and sets the benchmark U.S. oil contract price. Oil futures rose 38 cents to $44.45 a barrel at 10:34 a.m. on the New York Mercantile Exchange. “It’s definitely a long-term negative development if you are getting earthquakes of that magnitude at such an important site,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by telephone. “It doesn’t bode well for the future.” The Oklahoma Corporation Commission hasn’t ordered the shutdown of any waste-water disposal wells in the area after the earthquake, Matt Skinner, a spokesman for the agency, said by phone. The regulator “is working on an action plan” regarding disposal-well operations in the Arbuckle formation, according to an e-mailed statement. When a similar-magnitude quake hit the state in September, the agency ordered 37 wells shut. Magellan Midstream Partners LP, a pipeline operator, resumed normal operations at Cushing late Sunday after a controlled shutdown of its assets after the quake, spokesman Bruce Heine said in e-mailed statements. Enbridge Inc. spokesman Michael Barnes said by e-mail that there was no effect on the company’s facility in Cushing.

Oklahoma modifies injection well policy after Cushing earthquake - Oklahoma regulators were working Monday to modify their rules for oil and gas wastewater disposal wells after a magnitude 5.0 earthquake shook oil storage hub Cushing Sunday evening. It was the state's fifth-largest earthquake on record. Magellan Midstream Partners shut pipeline and storage facilities in the Cushing area overnight as a precaution. It found no damages and resumed normal operations Monday, said spokesman Bruce Heine. Enbridge also followed an emergency response plan to check all tanks, pipes, motors, pumps and other equipment, said spokeswoman Terri Larson. Storage tanks at Cushing are built inside clay-lined berms designed to trap any oil products that might leak during a natural disaster, she said.The US Geological Survey has connected past Oklahoma earthquakes to injection wells, concluding that the massive volumes of wastewater are changing the underground pressure, lubricating the faults and triggering earthquakes. The policy under revision by Oklahoma regulators targets disposal wells connected to the Arbuckle formation -- a very deep geological layer below oil and gas reservoirs. When a cluster of smaller earthquakes struck Cushing in October 2014, the largest measuring magnitude 4.0, the Oklahoma Corporation Commission temporarily halted injection operations at four wells in the area. Of the four wells, two have since been plugged so that the operator can only inject into shallower formations, one was converted to a monitoring well for research use by the Oklahoma Geological Survey, and the fourth remains shut in, said OCC spokesman Matt Skinner. USGS geophysicists predicted in an October 2015 paper that Cushing faced an increased risk for earthquakes after studying fault data from the 2014 earthquakes in the area. "Based on stress changes due to the 2014 Cushing sequence and continued wastewater injection, we hypothesize that the Cushing and Wilzetta-Whitetail fault zones are critically stressed in a region sufficient enough to increase the likelihood of a large and damaging earthquake similar to the 2011 magnitude 5.6 Prague earthquake,"

Regulators overhaul oil, gas drilling rules for national parks | TheHill: The National Park Service (NPS) updated its standards Friday for oil and natural gas drilling on land it owns, bringing hundreds of wells under the agency’s authority for the first time. Oil and gas drilling is rare on NPS land and is limited to areas where a private or state landowner controls mineral rights. Drilling only happens in 12 of the 413 national parks. “We have a fundamental responsibility to conserve park resources and the values for which these parks are created for the enjoyment of future generations,” NPS Director Jonathan Jarvis said in a statement. “The changes we made to this rule bring more than 300 previously exempt oil and gas operations in parks under NPS regulations,” he said. “The rule clarifies the process for oil and gas development in the small group of parks where current operations exist, and for parks that may have to manage oil and gas operations in the future.” The rule had not been updated in 37 years. The update brings 319 wells under NPS regulations, removes a cap on financial bonding requirements for drillers and strengthens enforcement powers. The National Parks Conservation Association welcomed the rules but said the NPS needs to go farther and buy out private and state mineral rights to stop drilling.

A Colorado Ballot Measure Could Make it Nearly Impossible to Ban Fracking - The Colorado oil and gas industry is poised to strike a devastating blow against anti-fracking activists Tuesday. Enactment of Amendment 71, a statewide ballot initiative campaign that’s backed by the industry, will make it, in the words of the Denver Post’s editorial board, “nearly impossible” for Colorado voters to amend their state constitution to allow for local fracking bans — or, for that matter, anything else. It’s a story worth telling in some detail, because it vividly illustrates the many obstacles well-connected and well-funded special interests can put in the way of citizens trying to oppose them. The latest battle in a multi-year campaign by a network of pro-fossil fuel groups to defend the fracking industry against local opponents, Amendment 71 would require 2 percent of registered voters ineach of Colorado’s 35 state Senate districts to sign petitions for any future initiative before it could be put on the ballot. Right now, anyone who wishes to amend the state constitution must collect signatures from 5 percent of the number of voters who voted for secretary of state in the last election. That threshold is still not always easy for grass-roots groups to meet: Two green priorities — an amendment allowing for local bans on fracking and an amendment requiring fracking operations to be at least a half mile from homes or schools — failed to make the cut for this year’s ballot, according to the secretary of state. Disappointed environmentalists attribute that to a lack of time and resources, but also to a very well-financed campaign by the oil and gas industry. A report released by the watchdog group Public Citizen estimated that fossil fuel interests outspent anti-fracking activists by a factor of 24-to-1. Nonetheless, greens feel ballot measures are among the best options in their political toolbox in a state where well-heeled oil and gas interests have managed to convince both Democratic and Republican politicians that what’s good for their industry is good for the state’s economy.

Court to hear Obama admin’s appeal in fracking rule case | TheHill: A federal appeals court has scheduled a January session to consider the Obama administration’s request to reinstate its regulation on hydraulic fracturing on public lands. The Court of Appeals for the 10th Circuit, based in Denver, filed a notice Tuesday that oral arguments with lawyers for and against the rule will be Jan. 17, three days before President Obama leaves office. The rule, published last year by the Interior Department’s Bureau of Land Management (BLM), sets federal-land fracking standards regarding well-casing integrity, transparency of the fracking fluids and storage of the waste fluids. Judge Scott Skavdahl, an Obama-appointed judge in the District Court for Wyoming, overturned the rule in June. He agreed with industry groups and some western states that said a 2005 law explicitly prevents the BLM from regulating fracking, even on federal land. The BLM appealed to the 10th Circuit Court, asking judges to reverse Skavdahl’s ruling, because it ignores long-standing precedent that gives the federal government wide authority over oil and natural gas drilling on federal land. “The district court’s crabbed view of BLM’s authority is wholly unprecedented and manifestly incorrect,” federal lawyers wrote. “Rather than defer to BLM’s longstanding interpretation of its governing statutes, the district court substituted its preferred interpretation for that of the agency. That was legal error.”

So fracking reduces carbon emissions, right? - Fracking, the process of horizontal drilling into shale layers with slickwater injection, hydraulic fracturing, and subsequent gas (and oil) extraction, has dramatically increased US natural gas production in the last 10+ years. As much of the newly produced natural gas is burned in new power plants for electricity production, it has replaced a significant amount of electricity produced in coal-fired power plants. But that is not the dominant reason why US carbon emissions have been dropping. The main reasons US CO2 emissions have been dropping since 2007 is a combination of the recession (demand decline), improvements of energy efficiency/intensity, and the lowering of "carbon intensity" (expressed more simply as the amount of CO2 emitted per kWh electricity produced). However, there is a persistent myth that US carbon dioxide emissions are dropping mainly because of dropping carbon intensity, promulgated e.g. by popular press articles such as this one.The reality is that Approximately one third of the US carbon dioxide emissions drop since 2007 is due to changes in electricity production away from coal combustion toward natural gas and renewable energy use.  In the alternate reality of the fossil fuel industry and its front groups, however, this third could be thought of as the whole story if one reads only the headlines. And the right-wing press is quick to highlight fracking as the dominant source of declining emissions. What about methane?  We have discussed US methane emissions in a recent article, and there is no doubt that oil and gas exploration related methane emissions present a significant offsetting factor to US carbon dioxide emission reductions. Though the US fracking boom is likely not responsible for the parallel increase in global atmospheric methane, it is likely higher than inventoried, affecting global ethane and higher hydrocarbons, including air toxics. In turn, burning natural gas is much cleaner than burning coal, reducing other air pollutants such as PM, SO2, and NOx.

Some Iowa Landowners Complain About Oil Pipeline Work - ABC News: Some Iowa landowners are raising concerns about construction of the Dakota Access oil pipeline, saying crews have left behind debris, released cattle from grazing areas and disrespected their land. The Des Moines Register reports ( http://dmreg.co/2fRawKc ) that the complaints have been filed with local or state officials, including from several landowners who oppose the overall project and took part in demonstrations against it. Supporters of the $3.8 billion, four-state pipeline say the complaints don't represent major problems with the project. The Iowa Utilities Board had received 22 official complaints as of late October, including 10 involving landowners. The board is in various phases of investigating the grievances, said board spokesman Don Tormey. But three complaints filed in the spring have been fully investigated and dismissed. The pipeline is designed to carry oil from North Dakota through South Dakota and Iowa to a shipping point in Illinois. The project has attracted protests and strong opposition from the Standing Rock Sioux Tribe and its supporters, who argue that the pipeline — slated to skirt the tribe's reservation near the North Dakota-South Dakota border — threatens drinking water and cultural sites. The company building the pipeline, Texas-based Energy Transfer Partners, insists that the pipeline is safe.

Iowa landowners on pipeline work: 'They show no respect': A landowner grew so frustrated with Dakota Access Pipeline workers that she delivered a garbage bag to county supervisors that was full of metal debris collected from her fields.  Cyndy Coppola said she and her nephew have found several 30-inch steel rings and other debris on their 80-acre family farm in Calhoun County. She was astonished to see that crews have no garbage bins on site to collect refuse as they go. "I guess our biggest complaint is they show no respect," said Coppola, 68, who lives in Des Moines and was arrested for trespassing while protesting construction on her land in October. A northwest Iowa rancher was so fed up from his cattle repeatedly escaping that he mailed a bill to the pipeline company for the costs of constantly chasing his animals. Countless others across Iowa also have petitioned county inspectors, supervisors and state regulators, claiming that questionable construction practices are worsening tensions between landowners and Dakota Access LLC, builders of the 1,170-mile pipeline. It's evidence that even as the pipeline nears completion in Iowa, opposition to the pipeline and the way it has been built shows no signs of ebbing. In Boone County, about five landowners have asked county supervisors for help, Supervisor Tom Foster said. Several have complained of problems with drainage tile disruptions or crews working in wet conditions. But Foster said landowners have not had much luck finding cooperation from Dakota Access. Bill Gerhard, president of the Iowa State Building and Construction Trades Council, said landowner complaints are mostly sour grapes from people who opposed the pipeline on principle. He said pipeline installation is "going great" in Iowa. "These guys need to move on," said Gerhard, a member of the pro-pipeline Midwest Alliance for Infrastructure Now. "There's an old saying — the dogs howl and the caravans pass. These people need to get a life."

Dakota Access Pipeline Builder Ignored Obama Admin Request to Halt Construction  -- Steve Horn -- The U.S. Army Corps of Engineers has confirmed to DeSmog that Energy Transfer Partners, the owner of the proposed Dakota Access Pipeline , has ignored the Obama administration's Sept. 9 request to voluntarily halt construction in a disputed area, 20 miles east and west of Lake Oahe and the Missouri River. The confirmation came in the aftermath of a video published by drone pilot Shiyé Bidziil on the news website Indian Country Today . The video was featured on Nov. 2 and offers an airborne view of pipeline construction—coupled with heavily guarded concrete fortresses around key construction locales—in close proximity to the Missouri River.  "The Army will not authorize constructing the Dakota Access Pipeline on Corps land bordering or under Lake Oahe until it can determine whether it will need to reconsider any of its previous decisions regarding the Lake Oahe site under the National Environmental Policy Act (NEPA) or other federal laws," reads the initial Sept. 9 statement disseminated by the U.S. Department of Justice, U.S. Department of Interior and Army Corps. "Therefore, construction of the pipeline on Army Corps land bordering or under Lake Oahe will not go forward at this time. In the interim, we request that the pipeline company voluntarily pause all construction activity within 20 miles east or west of Lake Oahe."  After showing the video to Curry Graham, director of public affairs for the Army Corps, Graham confirmed to DeSmog that Energy Transfer Partners has proceeded with construction inside of the administration's requested zone. Graham also said construction has halted just short of the federal property bordering Lake Oahe. "After the DC courts ruled in favor of the federal government, federal agencies asked the Dakota Access pipeline company to voluntarily pause all construction activity within 20 miles east or west of Lake Oahe," Graham told DeSmog. "The key word is 'voluntary,' and the company chose to proceed with construction. As to why they did this, you will have to contact Energy Transfer Partners to ask that question."

Nov 15 #NoDAPL Day of Action at Army Corps of Engineers -  Indigenous leaders are calling on us to take to the streets and disrupt "business-as-usual" one week after the election to demand that President Obama’s Army Corps of Engineers and the incoming administration stop the Dakota Access Pipeline -- and all those after it. On Tuesday, November 15th, join a massive day of action in solidarity with those at Standing Rock, and demand the Federal government and the Army Corps reject this pipeline. Find an event at an Army Corps of Engineer office near you, or sign up to host an action in your city to support the indigenous communities and landowners fighting on the front lines.The Army Corps fast-tracked the Dakota Access Pipeline without proper consultation, and as a result, bulldozers are approaching Standing Rock as we speak. But with coordinated, massive demonstrations across the country, we’ll make it clear that this powerful movement will not allow the Obama administration or the incoming President to sacrifice Indigenous rights, our water, or our climate - they must reject this pipeline. Click here for a map of the Army Corps of Engineers District Headquarter offices around the country. (If you're not near a District HQ, you can search Google to identify if there's a local Army Corps of Engineers field office in your city)

Planned Feeder Pipelines to Dakota Access -- The Army Corps of Engineers is said to be considering alternative routes for the most controversial segment of the Dakota Access Pipeline, which could help break the impasse that has stalled construction on that part of DAPL. If the 450-Mb/d crude oil delivery project gets back on track soon––something that no one knows for sure––an important two-part question remains: Where will the crude to fill the 450-Mb/d pipeline come from, and where will it be fed into DAPL? Today we look at the supply sources that will help fill one of the most important oil pipelines now under development.  As we all know, Bakken production has fallen sharply since its peak nearly two years ago; in its October (2016) Drilling Productivity Report, the Energy Information Administration (EIA) estimated current production in the play at ~950 Mb/d, a roughly 300-Mb/d decline. Plummeting output has reduced the need for incremental pipeline takeaway capacity. Look at Figure 1, which shows Bakken production (shaded areas––more on these in a bit), combined pipeline-takeaway and in-region refining capacity (yellow line), and total pipeline-plus-refinery-plus-CBR capacity (blue line).

Kaine: Rerouting ND pipeline ‘the right thing to do’ -- Democratic vice presidential nominee Tim Kaine has endorsed President Obama’s call to reroute the controversial Dakota Access pipeline. “They already rerouted it once — it was routed to be near Bismarck and that route was changed,” Kaine told Fusion in an interview. “If it’s changed once, if it’s an important enough project, you ought to be able to find a route that works. So what the Obama administration has done by saying, let’s look at route alternatives, I think is the right thing to do.”  Obama last week told NowThis News that he hopes the Army Corps of Engineers eventually reroutes the $3.8 billion pipeline project.  A tribe in North Dakota has objected to the planned route for the pipeline, saying it threatens cultural sites and drinking water near their land. The project is on hold while the Obama administration reassesses its previous approval process for the pipeline, a review Obama said will “determine whether or not this can be resolved in a way that I think is properly attentive to traditions of the first Americans.” The Standing Rock Sioux Tribe welcomed the call to move the pipeline, though environmentalists insist Obama should deny it outright. Dakota Access developer Energy Transfer Partners said there has been no discussion about moving the project. Hillary Clinton’s campaign has not set out a specific position on Dakota Access, making Kaine’s Monday statement the clearest answer yet on what would happen to it should the dispute stretch into Clinton’s administration.

Dakota Access Is Pushing Pipeline Forward, Will Drill Under Missouri River Within Weeks - As water protectors dig in for the winter near construction of the Dakota Access Pipeline (DAPL), many rumors have been circulating about whether DAPL was in fact going to halt construction, as had been requested by the Department of Justice and U.S. Army Corps of Engineers in September.  Many claims have been made that the Army Corps of Engineers, in negotiations with the Standing Rock Sioux Tribe, had ordered a 30-day pause on DAPL construction. As we reported on Sunday , the Army Corps has in fact clarified that the 30-day halt was "only a proposal" and no work stoppage has been implemented .  On Nov. 7, Unicorn Riot documented active DAPL construction that could be seen from the main Oceti Sakowin encampment. The afternoon of Nov. 8, as the U.S. presidential election was well underway, Dakota Access, LLC released a statement denying recent claims from the Army Corps of Engineers that they had agreed to a slowdown in pipeline construction.   Dakota Access also claims a public statement made by the Army Corps was "a mistake and the Army Corps intends to rescind it."  Dakota Access, LLC had previously made a statement announcing that eviction would take place of the Oceti Sakowin 1851 treaty camp which had been set up directly in the path of the pipeline. The appearance of Dakota Access making public statements which accurately predicted police actions was denounced in an article by Sarah Lazare at Alternet as "clear evidence" of "outrageous militarized police collusion with Big Oil." The statement by Dakota Access, LLC goes on to claim that they have "completed construction of the pipeline on each side of Lake Oahe" and states that they are "currently mobilizing horizontal drilling equipment to the drill box site."  Below you can see drone footage of Dakota Access machines building Hesco barriers , normally used to protect U.S. military bases in war zones like Iraq or Afghanistan, to protect an area believed to be the drill box site from water.According to the release, Dakota Access expects to have fully mobilized all equipment needed to drill under the Missouri River within 2 weeks. Once all the equipment is in place at the construction site, Dakota Access plans to immediately commence horizontal drilling underneath the river.

Dakota Access prone to spills, should be rerouted, says pipeline safety expert   - A detailed analysis by a pipeline safety expert found the U.S. Army Corps of Engineers underestimated the potential for the Dakota Access pipeline to spill oil into the Missouri River, and called the Corps' environmental assessment "seriously deficient." The review,  by a pipeline safety expert hired by the Standing Rock Sioux tribe, called for a rerouting of the pipeline away from areas prone to landslides. "The Environmental Assessment is incomplete," said Richard Kuprewicz,  president of Accufacts, Inc., a consulting firm that advises government agencies and industry on pipeline safety and who conducted the review. "I don't agree with the finding of no significant impacts." Kuprewicz was asked by the tribe to provide an outside review of the Army Corp's final environmental assessment, which had concluded the pipeline would have no significant impact on the environment where it crosses the Missouri river at Lake Oahe and Lake Sakakawea in North Dakota. That assessment by the Army Corps, the federal agency with jurisdiction over the pipeline project, permitted Dakota Access LLC to proceed with both river crossings. The decision in July was seen as a key in green-lighting the 1,172-mile project that would carry roughly half a million barrels of crude oil per day from the Bakken oil fields of North Dakota to a transfer station in Illinois. (The Environmental Protection Agency had previously urged the Army Corps to revise its environmental assessment out of safety concerns.) The Standing Rock tribe, whose reservation is a half-mile downstream from the river crossing at Lake Oahe, where  the reservation draws its drinking water, opposes the current pipeline route. Thousands of mostly Native Americans have joined members of the Standing Rock tribe in protesting the pipeline, many calling for it to be shut down entirely. On Sept 9, the Obama Administration said the Army Corps would withhold granting a final easement for the Oahe river crossing and would conduct an internal review of its environmental assessment. Kuprewicz's outside review concluded the Army Corps failed to properly evaluate the risk of oil spills where the pipeline crosses the Missouri River at Lake Oahe. He also faults the Army Corps for overstating the ability of leak detection technology to quickly identify oil spills and for underestimating the worst-case scenarios for major leaks.

Standing Rock protesters sit out the election: 'I'm ashamed of them both' - Frank Archambault is not going to vote for president. In mid-July, the 45-year-old member of the Standing Rock Sioux tribe packed up all of his belongs and his family – five children and a grandson – to travel from Little Eagle, South Dakota, to Cannon Ball, North Dakota, to join the movement of “water protecters” facing off against the federal government and the oil industry. He is fully committed to doing whatever it takes to to halt the Dakota Access pipeline from crossing the Missouri River. But Archambault is not interested in choosing the next elected leader of one of his enemies. “I don’t want to have a say in government,” he said. “I guess you could call it trauma. I don’t have faith in government, so I don’t want to have a say.” The “trauma” Archambault speaks of lies heavy over the encampments that have arisen on the windswept banks of the Missouri River. Generations of war, massacres, broken treaties, discrimination, police harassment, and poverty have resulted in a general feeling of distrust, disillusion, and disinterest in mainstream politics among the Native Americans gathered at Standing Rock. And historical traumas have only been compounded by the militarized police response to unarmed protesters, who have been met with Mace, rubber bullets, Tasers and sound weapons.

Standing Rock and Imperialism Itself -- The Dakota Access Pipeline was originally scheduled to cross the state of North Dakota north of Bismarck, the state capital (pop. 70,000). But then the route was shifted 40 miles south, to the south, to pass by the Standing Rock Sioux reservation (pop. 8200).  This is sovereign territory of the Sioux, whose reservation straddles North and South Dakota and whose members include Hunkpapa Lakota and Yaktonai Dakota. The Sioux are a nation of about 170,000 people, divided linguistically into the Lakotas, Dakotas and Nakotas concentrated in what are now North and South Dakota. The Standing Rock Reservation’s boundaries are defined by the Fort Laramie Treaty (or Horse Creek Treaty) of 1851, which exchanged Sioux recognition of “the right of the United States Government to establish roads, military and other posts, within their respective territories” on their territory for a U.S. commitment “to protect the aforesaid Indian nations against the commission of all depredations by the people of the said United States, after the ratification of this treaty.” They are confirmed by another treaty signed in 1868. Back to the Dakota Access Pipeline. According to the Bismarck Tribune, the route was changed due to concern that the DAPL, built by Sunoco and projected to send 500,000 gallons of oil every day from North Dakota to Illinois, wouldendanger the water supply to the city’s residents.(These by the way are 92% white, 4% Native American, 4% other.  Full disclosure: my father was born and grew up and was raised in North Dakota, as was his father before him. I visited Bismarck multiple times in my childhood. One of my mother’s brothers worked in government there. It is a very white place.) The water issue is the first issue (of two) raised by those protesting the DAPL raise. The Missouri River that constitutes the reservation border is the people’s only source of water. (Specifically, Lake Oahe, which is a large swelling within the river straddling the two Dakotas.) It is at present quite pure. The pipeline will flow beneath it. The Army Corps of Engineers has assessed that it will pose no threat to the water, but the people point to reports that pipelines leak. The Standing Rock Sioux are arguing in court that the pipeline directly violates the tribe’s rights as a sovereign nation because it will hurt its drinking water resources.

What Everyone Is Missing About the Dakota Access Pipeline Protests - There is an ongoing clash in what is known as North Dakota; an event that is more than simply a protest, it is an intersection of many different ideas and values that transcend the issues that appear to be at the fore: water, land, and oil. One of the unfortunate side-effects of this growing intersection is that the deeper meaning, the long-standing issues that have contributed to the confrontation, are being ignored and therefore forgotten by the press, and by those who rely on the popular media for information. By framing discussions and reporting of the Dakota Access Pipeline and water protectors from the Standing Rock Sioux Tribe and their supporters as a legal question, the mass media not only overlooks the colonial and assimilatory aspect of such arguments, they actively participate in them. That a definable rule of law, as codified by a judicial body and overseen by agents of that body (often a police force), is universal and therefore universally applicable, let alone fair, is a colonial construction.As actions in and around Cannon Ball escalate, there is a growing discussion in the popular press as to the legality of these actions. Treaty rights, private property, and violations like trespassing have all become central issues to how the grievances of the Water Protectors and their allies are being portrayed, particularly on the ground, ignoring the very idea that the imposition of a colonial legal structure is, by its very imposition, an act of colonization.  Pre-Columbian North Americans were not a lawless group, despite such portrayal. Nor are their descendants. What was at issue during the early stages of colonization was the inability for Euro-North American governments to recognize indigenous concepts of law. Imposing Euro-American legal structures on Native Americans not only created the conditions for dispossessing indigenous peoples from their traditional lands, it also set the stage for all future arguments. Basically, in creating a legal system in the European model, the U.S. is able to choose the language of all conversations it has with Native land defenders, and Native territorial disputes.

Deputies From Wisconsin And Elsewhere Leave North Dakota, Refuse To Return As Millions Join Movement Widespread outrage over both the construction of the Dakota Access Pipeline and violent police crackdowns rages on. That outrage is spreading even to police agencies now returning from deployment to the reservation. Two departments have already refused to return, citing personal and public objections. As if that wasn’t enough, an army of sympathizers is re-purposing social media to combat police efforts in Standing Rock. Minnesota’s Hennepin County Sheriff’s Department is among that group. Lawmakers, according to MPR News, found police activities in Standing Rock “inappropriate”. It’s to the point where they’re considering rewriting legislation to avoid future deployments to incidents like the pipeline resistance. Police officials, of course, declined to comment on their return from North Dakota or their feelings on what’s happening there. It’s also made the task of rebuilding trust with the community an even loftier uphill battle. “I do not support Sheriff Stanek’s decision to send his deputies to North Dakota”, says LT. Governor Tina Smith, “nor did we approve his decision to begin with. I do not have any control over the Sheriff’s actions, which I think were wrong, and I believe he should bring his deputies home if he hasn’t already.” Smith’s comments split the state’s government, however, and she was targeted. Minnesota State Rep. Tony Cornish condemned Smith for prioritizing “the rights of protesters over the needs of law enforcement”, saying she should apologize to the cops. Sheriffs from Wisconsin’s Dane County were more empathetic, pulling out and refusing to return. According to the Bismarck Tribune, Sheriff Dave Mahoney made the decision after a “wide cross-section of the community” decried the deployment. “All share the opinion that our deputies should not be involved in this situation”, says Mahoney. Dane County’s deputies were deployed to Standing Rock for around a week. Sources report Dane County wasn’t involved in recent arrests, a string of which scooped up an alderwoman from Madison Wisconsin.

Environmentalists Target Bankers Behind Pipeline - In early August, just as protesters from across the country descended on North Dakota to rally against an oil pipeline near the Standing Rock Sioux Reservation, some of the world’s biggest banks signed off on a $2.5 billion loan to help complete the sprawling project. Now, those banks — which include Citigroup and Wells Fargo of the United States, TD Bank of Canada and Mizuho of Japan — have come under fire for their role in bankrolling the pipeline. In an open letter on Monday, 26 environmental groups urged those banks to halt further loan payments to the project, which the Sioux say threatens their sacred lands and water supply. In campaigning to reduce the world’s carbon emissions, environmentalists have increasingly focused on the financiers behind the fossil fuel industry — highlighting their role in financing coal, oil and gas projects. It is an expansion of traditional protest efforts, and it has met with some early success. Environmental groups have also criticized the Dakota Access pipeline as outdated infrastructure with no place in a world racing to stave off the worst effects of climate change. The 1,172-mile pipeline is expected to carry nearly half a million barrels of crude oil daily out of the Bakken fields of North Dakota, according to the company building the pipeline, Energy Transfer Partners. “Banks have a choice to either finance the transition to renewable energy, or to finance pipelines and power plants that will lock us into fossil fuels for the next 40 years,” said Johan Frijns, director of BankTrack, a Netherlands-based advocacy organization that led the campaign. “If we’re serious about fighting climate change, we can’t continue to finance fossil fuel infrastructure of any kind.” The letter from BankTrack and other environmental groups, including the Sierra Club, Greenpeace and Friends of the Earth, was addressed to the Equator Principles Association, a consortium of global banks committed to responsible environmental and social practices.

Norway's Biggest Bank Is 'Reconsidering Its Participation' in Funding the Dakota Access Pipeline -- The protests by First Nations against the North Dakota Pipeline are beginning to rattle the funders behind the highly controversial scheme. This means that the pipeline that once seemed unstoppable is increasingly looking vulnerable.  We have news that one of the banks behind the scheme is reconsidering its involvement.  On Monday, the Reuters news agency reported that the Norwegian bank, DNB, which is the country's largest bank, is "reconsidering its participation" in the financing of the North Dakota Pipeline if "concerns raised by Native American tribes against its construction are not addressed."  DNB, which is rumored to be loaning just under $350 million or some 10 percent of the cost of the project, said in a statement that the bank is now looking with "worry at how the situation around the pipeline in North Dakota has developed. The bank will therefore take initiative and use its position to bring about a more constructive process to find a solution to the conflict."  The statement continued: "If these initiatives do not give appeasing answers and results, DNB will consider its further involvement in the financing of the project." At the moment it is difficult to see how the bank can be constructive, unless it pulls out altogether. The pressure on those building the pipeline continues to grow with continued physical and online protests. The brutal militarized response , with the use of armored vehicles, rubber bullets attack dogs and mace has sent shock-waves around the world.   The violence against the First Nations has gotten so bad that representatives from the United Nations Permanent Forum on Indigenous Issues, has been collecting testimony from the water protectors of excessive violence used against them, unlawful arrests and mistreatment in jail. 

Trump victory a new challenge for Dakota pipeline protesters | Reuters: The surprising victory by Native American and environmental groups in September to delay the Dakota Access Pipeline may turn out to be short-lived, after Donald Trump's unexpected win in the U.S. presidential election. Trump backs measures to speed energy industry development and upgrade the country's oil and gas infrastructure. He has not commented specifically on the $3.7 billion Dakota Access line but has said he would seek to revive another controversial pipeline, the Keystone XL line. That project, which would pump oil from Canada through Nebraska, was rejected in 2014 by the Obama administration. The 1,172-mile (1,885 km) line was planned to run from North Dakota's Bakken shale region to Illinois, but protests from environmental activists and the Standing Rock Sioux Tribe of North Dakota galvanized the Obama administration to delay construction to ensure Native American concerns about the line's route were properly addressed. One day after Trump's victory, Standing Rock Sioux Chairman Dave Archambault II said the results show "that we as a country have so much work to do." He did not mention Trump in his statement to Reuters, instead saying President Barack Obama could still halt the pipeline. "We must strengthen our resolve to protect the water, pray together for understanding, and pour our hearts and minds into the future of all our children," he said. It is not clear now whether Dakota Access would be rerouted or piped under the sensitive watershed, which the tribe considers sacred.

Cramer says pipeline issue will be moot by Trump's inauguration - bismarcktribune.com: Newly re-elected Rep. Kevin Cramer, R-N.D., said he’d use some of his considerable political capital with Donald Trump's administration to see that the Dakota Access pipeline is approved — but he doubts that will be necessary. Instead, Cramer said he thinks the U.S. Army Corps of Engineers will issue an easement in late November or early December for the controversial pipeline to cross the Missouri River, and the topic will be moot by the time Trump takes office in January. “I think the pipeline will be largely done, and boring (under the river) will have begun. The easement is written, it’s on their desk and it’s to the point where there’s no legal reason not to do it,” Cramer said Wednesday, the day after Trump was elected president. He said he has not specifically discussed the pipeline with Trump or any of his staff, though he wrote white papers on energy-related issues for Trump’s campaign. The corps’ easement is the only authority preventing the company from hooking the pipeline from one side of the water to the other on its 1,172-mile route toward Illinois.The crossing has been the subject of intense dispute since mid-August as thousands of Native Americans and others who fear water contamination and desecration of sacred lands have camped nearby on the Standing Rock Sioux Reservation. Activists, who call themselves water protectors, have repeatedly disrupted construction, leading to more than 400 arrests and daily deployment of police in the pipeline vicinity. Standing Rock Sioux Chairman Dave Archambault II said what happens could rest upon what President Barack Obama does in his remaining two months in office.

Trump To Clear Way For Oil Pipelines --Donald Trump’s victory could ultimately lead to a lot more oil pipelines moving forward, one sector of the fossil fuel industry specifically targeted by environmentalists. The most controversial project right now, the Dakota Access Pipeline, received a jolt from Tuesday’s result. The more than 1,100-mile pipeline, valued at $3.7 billion, would carry oil from North Dakota to refineries in Illinois. The Obama administration has requested a temporary halt to construction, although the company behind the project, Energy Transfer Partners, has pressed forward, ignoring the Army Corps of Engineers. The Corps reiterated a request for a stoppage this week, but the outcome is up in the air.  The Dakota Access Pipeline has been reeling from protests, work stoppages, bad press and a federal government willing to listen to the grievances from the Native American community affected. Trump has shown little inclination of being as accommodating, so the Dakota Access Pipeline has gone from being a project on the ropes to one with a great deal of momentum. Unless the Corps rescinds a permit in the next few months, the project will move forward. Even if it is blocked, however, it would likely be revived under a Trump administration. Energy Transfer Partners’ stock price surged as much as 9 percent on Wednesday and was up more than 3 percent on Thursday. The company hopes to complete construction by the first quarter of 2017.  And Dakota Access’ predecessor, at least in terms of a national flashpoint, could also be coming back from the dead. TransCanada issued a statement on Wednesday, telegraphing the company’s interest in reviving the defunct Keystone XL Pipeline, which would take Alberta tar sands to U.S. Gulf Coast refineries. “TransCanada remains fully committed to building Keystone XL,” spokesman Mark Cooper said in the post-election statement. “We are evaluating ways to engage the new administration on the benefits, the jobs and the tax revenues this project brings to the table.” TransCanada’s stock price jumped more than 2 percent on Wednesday.  During the campaign Trump said that he supported the pipeline, but wanted the U.S. to get a “better deal.” His words are often conflicting and contradictory – he has also said that he is for an “America First” energy plan that would remove “all barriers to responsible energy production.” So there is no reason to think that he wouldn’t simply revive the project as is, especially given that he is surrounding himself with advisors from the oil and gas industry.

California county votes on fracking, Washington state on carbon tax proposal - The Barrel Blog: Voters in California’s Monterey County passed a ballot initiative Tuesday to ban hydraulic fracturing in the county, a vote which may shut down all oil production in the coastal county after roughly 70 years there. Voters approved the initiative, known as Measure Z, which will ban the use of fracking and other high-intensity methods of oil and gas extraction, such as acid stimulation, prohibit new oil and gas operations in the county and phase out operational oil and gas wells. The measure was approved by a vote of 40,332, or 55.8%, to 31,949, or 44.2%. Results of the vote were not fully counted until Wednesday morning. The approval of the ballot measure Tuesday marked the first time a US county with relatively significant oil production has voted to ban fracking. Monterey County’s San Ardo field has produced, on average, 21,900 b/d of crude this year, about 4.4% of California’s overall 499,000 b/d of onshore production, according to the state’s Department of Conservation.A group known as Monterey County for Energy Independence spent millions of dollars fighting the measure in the weeks leading up to Tuesday’s election. The group was funded largely by Chevron and Aera Energy, a venture between Exxon Mobil and Royal Dutch Shell. The measure was expected to be challenged by industry in court.

Monterey Becomes California's First Major Oil-Producing County to Ban Fracking - Voters in Monterey County, California's fourth-largest oil-producing county, on Tuesday passed Measure Z to ban fracking and other dangerous extraction techniques.  The measure won with more than 55 percent of the vote, despite supporters being outspent 30 to 1 by oil companies, including Chevron and Aera Energy. Measure Z also phases out toxic wastewater injection and prohibits new oil wells in the county. Monterey is the sixth county in California to ban fracking. "We congratulate the people of Monterey County for banning fracking and protecting California's water, agriculture and public health," said Adam Scow, California director of Food & Water Watch. "This campaign proves that everyday people can defeat Big Oil's millions, even in a place where it is actively drilling. We look forward to seeing Californians build on this momentum towards winning a statewide ban on fracking." Residents put Measure Z on the ballot after county supervisors in 2015 rejected the unanimous recommendation by the planning commission to enact moratorium on fracking and wastewater injection. "David beat Goliath in Monterey County's stunning victory against oil industry pollution," said Kassie Siegel of the Center for Biological Diversity. "Despite spending millions, oil companies couldn't suppress this grassroots campaign. This triumph against fracking will inspire communities across California and the whole country to stand up to this toxic industry."

Trump Wins, Renewable Energy Investments Lose and Dirty Energy Stocks Surge -- Political upheaval has major influence over the stock markets, and with climate-change-denying Donald Trump's "disaster" of an election win , renewable energy investment is looking bleak at the moment as dirty energy surges. The world's top coal trader Glencore Plc rose more than 5 percent today while the world's biggest wind-turbine maker Vestas Wind Systems A/S fell about 13 percent, according to Bloomberg . Solar companies First Solar, SunPower and SolarCity were down a respective 6 percent, 17 percent and 6 percent this morning. Shares in European renewable energy equipment makers and utilities with significant investments in the U.S. have fallen as much as 10 percent, Reuters reported.  As Bloomberg warned in its report, "the swing foretells a story of fossil fuels making a comeback, while the fight against climate change —and investment in wind and solar power—languishes." Our president-elect—who literally said "the wind kills all your birds" and solar is "not working so good"—has made no bones about his support of dirty energy , from his ties to the controversial Dakota Access Pipeline to his pledge to bring back the dirtiest fuel on the planet, coal. The U.S. wind power industry is "bracing itself for an uncertain future following the election of Donald Trump to the presidency," staff from Wind Power Monthly wrote in a column today. The publication quoted Trump's plans to "unleash America's $50 trillion in untapped shale, oil, and natural gas reserves, plus hundreds of years in clean coal reserves."

Interview: Trump advisor sees end of federal oil, gas overreach - Following Donald Trump's victory in Tuesday's presidential race, Congressman Kevin Cramer, a North Dakota Republican and a top Trump energy advisor, spoke with S&P Global Platts about what impact the election will have on US oil producers, energy markets and stalled pipeline projects. Cramer has called for a federal government probe of potential oil price manipulation by OPEC and said that he plans to re-introduce a bill in the next Congress to mandate that investigation. Here's a partial transcript from the interview which took place late Wednesday:

Big Oil revels in Trump victory, expects less red tape | Reuters: The U.S. energy industry on Wednesday reveled in Republican Donald Trump's presidential victory, expecting him to advocate for more oil and gas output and to cut red tape holding back billions of dollars of investment in new projects. Shares of most oil and gas producers, energy construction firms and pipeline operators rose after the election results, while crude oil prices also settled higher. Exxon Mobil Corp, the world's largest publicly traded oil producer, said it hoped Trump's administration would use "sound science" on future regulations. Exxon has drawn fire from environmentalists who say the company misled investors and the public about the risks of climate change. Trump has previously called climate change a hoax. "We intend to work constructively with the president-elect and his administration," said Exxon spokesman Alan Jeffers. Exxon's shares were up about 1.0 percent, and shares of Chevron Corp rose about 0.3 percent. The world's largest energy market saw an energy revolution under Democratic President Barack Obama's administration, as improved technology led to the rapid development of shale oil and gas reserves. Even as shale expanded, the energy industry bemoaned environmental regulations that slowed development. Now, the industry expects Trump to roll back those restrictions. For one thing, Trump has promised to rescind the Environmental Protection Agency's Clean Water Rule, which the industry called an attempt to regulate fracking.

Trump’s sweeping promises on energy reform are scant on details: As oil investors analysed market gyrations in response to the US election victory of Donald Trump, attention turned to his US domestic energy policies and the country’s relations with some of the world’s biggest oil producers. His proposals until now have been scant of details. But at a glance his energy agenda is the antithesis of the current administration’s as well as his opposition candidate’s that favoured cleaner fuels, said analysts at JBC Energy. “Mr Trump has vowed to lead a fossil fuel revival to underpin job growth and has also put man-made climate change denial at the forefront of his energy policy,” they said. On the campaign trail Mr Trump lauded a so-called “drill-baby-drill” policy of pursuing US energy independence, backing the opening up of all federal lands and waters to fossil fuel production including hydraulic fracturing. He has made sweeping promises to unleash what he argues are tens of trillions of dollars in untapped oil, and natural gas reserves. Of late the conversation around US energy policy has been overwhelmingly focused on climate change, but it is likely to shift more towards energy security and affordability as part of a broader economic programme that focuses on growth and tax cuts. Opec meeting will be critical but there are other factors at play As yet, however, it is unclear how far reaching Mr Trump’s energy reforms will be and how quickly he can enact change as he faces hefty institutional constraints.

What will be Donald Trump's impact on the energy industry? – Platts Snapshot video - Herman Wang, senior writer, examines what Donald Trump's victory means for the energy industry including its impact on fossil fuel production, industry regulation and the fate of President Barack Obama's clean air policies. Watch now...

Gas, power industry officials caution over impact of Trump US election victory - Senior gas and power industry officials reacted with caution Wednesday to Donald Trump's surprise US presidential election victory, saying at a Paris conference it remained to be seen if he would follow through on some of his more controversial policy pledges regarding the energy sector. Speakers warned the gas and renewables industries would be impacted by a Trump administration, while others said they hoped the impact on energy exports would be limited. "I don't see him getting in the way of business -- I think he will be business-friendly," Souki said on the sidelines of the Petrostrategies conference. "A very large percentage of American trade is exports, so he understands this. I don't see any problems with that," he said. Nonetheless, Souki said the road forward under a Trump administration was unclear. "We have no idea where he's coming from, what he really thinks. I'm hard pressed to know who his advisers are for energy policy. I wouldn't know who to go to ask, so you have to wait and see what happens. He's just as surprised as the rest of us," he said. Charif Souki, chairman of US-based Tellurian Investments, and former head of US LNG pioneer Cheniere Energy, said Trump's protectionist attitude toward trade should not mean a future block on development of US LNG export projects.

Factbox: Energy impacts of Trump's surprise US presidential victory –  Here is a snapshot of some of Trump's energy-related statements:  Trump has said he supports all forms of energy and wants the market to decide which ones succeed. He has promised to open all federal lands and waters to fossil fuel production, in contrast to Clinton, who had called for new, stricter limits on oil and gas production on public lands and indicated she wanted US offshore production confined to only the Gulf of Mexico.  Analysts say it is impossible to determine just how much of an impact a Trump administration may have on domestic supply because of a number of shifting factors, particularly prices.  But Trump, widely seen as a far bigger supporter of the oil and natural gas industry, will likely rebuff any environmentalist attempts to curb domestic fossil fuel production and will likely give US producers access to far more on and offshore plays than Clinton would have. Trump has said he will pursue a policy path to open up more US lands and waters to drilling and, in turn, boost consumption of even cheaper domestic oil and other fossil fuels. Analysts say his broad plans to boost US production and eliminate many of President Obama's regulatory efforts to combat climate change may result in less demand reduction than if Clinton were elected. Trump would likely quash efforts to institute new greenhouse gas performance standards for petroleum refineries and may push to weaken future fuel economy standards for light-duty vehicles, but those possible moves would not necessarily correspond with an increase in demand, particularly since efficiency gains already in place in the US vehicle fleet are already forecast to cut gasoline demand as much as 500,000 b/d by 2020. Trump has promised to either dismantle or overhaul the Environmental Protection Agency and roll back Obama administration regulations to curb coal industry pollution. Cramer said Trump believes EPA needs to return to its core mission of protecting clean water and clean air, and that Congress has granted it too much leeway in interpreting legislation.  Trump is expected to try to scrap the Clean Power Plan. Trump is expected to abandon, or at least weaken, efforts by EPA and the Department of the Interior to regulate methane emissions from oil and gas operations and also could weaken future car and truck fuel-economy standards. Trump has not addressed the Dakota Access Pipeline controversy, but he holds personal investments in project sponsors Energy Transfer Partners and Phillips 66. He has said that, if elected, he would urge TransCanada to renew its Keystone XL permit application, which the Obama administration rejected in late 2015 after years of debate. Trump has said he would spend "at least double" what Clinton planned on infrastructure, funding it with new debt to take advantage of still-low interest rates. Trump's possible efforts to end incentives for alternative energy development would boost near-term demand for fossil fuels. For example, a potential cut in the Investment Tax Credit to 10% from the current 30% would slash solar installation demand by 60%, according to S&P Global Market Intelligence.

Oil lobby lines up Trump administration agenda: The nation’s top oil and natural gas lobbying group says it expects President-elect Donald Trump and a GOP-controlled Congress to be friendlier to the industry than President Obama’s administration. American Petroleum Institute President Jack Gerard said Thursday the incoming administration should reassess Obama-era rules for the oil industry, approve pipeline projects like Keystone XL and expand drilling rights in the United States. That message isn’t a new one from API, which has long railed against what it considers excessive federal influence in its industry. But with Trump in the White House and Republicans in control of both the House and Senate, the group says it has a chance to break through and institute what Gerard called “forward-thinking energy policies.” “We need to look at the current regulatory approach holistically,” Gerard said of federal oil and gas regulations. “I would suggest that the whole approach should be a priority. What is being done to really impede our ability to provide what the American voters want should be looked at and improved.” He said Congress should work to approve oil infrastructure projects like the Dakota Access Pipeline and Keystone XL, which developers on Wednesday said they could pursue again once Trump enters the White House. “This is one of those areas where we can come together as a nation, we can find common cause, we can bridge the gaps that we had,” he said. “Within infrastructure, we need to take a close look at permitting. Dakota Pipeline is an example, the Keystone Pipeline is an example. We need to build this infrastructure to benefit the American consumers.”

Hamm joins Trump’s short list of cabinet prospects - As the dust settles from this year’s presidential election, conversation has already turned to Donald Trump’s proposed cabinet. Big names like Rudy Guiliani, former New York City Mayor, and other “like-minded CEOs,” top the list for positions in Trump’s cabinet. What does this mean for the oil and gas industry? One of the industry’s most prominent businessmen could hold a position, championing oil and gas policy that would encourage energy independence and minimal regulation for oil and gas drillers. Several sources have cited Continental Resources CEO Harold Hamm as one of Trump’s top choices as energy secretary. An October 13 Politico article speculated:  A Trump Cabinet might include Hamm as Energy secretary and Forrest Lucas, CEO of oil products company Lucas Oil, as Interior secretary. The prospect of oil industry executives like Hamm and Lucas making decisions about the federal government’s lands, drilling and environmental policy has environmental activists worried. They fear the executives would put the interests of the oil industry over those of the general public. Hamm would be the first U.S. energy secretary directly recruited from the oil and gas industry. Hamm has called for expanded drilling in addition to cuts on environmental regulation that curb U.S. oil production. He says limiting production at home threatens America’s ability to hold its own against OPEC affiliated countries. According to Reuters, Hamm reiterated his stance at a speech during the Republican National Convention to a cheering crowd: Every time we can’t drill a well in America, terrorism is being funded. Every onerous regulation puts American lives at risk.”

OilPrice Intelligence Report: Trump To Usher In New Era for Oil and Gas -  The shockwave of the surprise election of Donald Trump is still being felt around the world, with all sectors of the global economy scrambling to figure out the ramifications of his presidency. The political establishment in Washington is reeling, and there are more questions than answers on Trump’s approach to energy. One thing is for sure: he will usher in one of the most deregulated eras for oil and gas in recent memory. He will rescind regulations that affect methane emissions, hydraulic fracturing, and greenhouse gas emissions. He will likely streamline or gut permitting requirements for major infrastructure projects, clearing the way for pipelines. He will probably open up public lands for expanded drilling opportunities, and in time, he could auction off drilling rights in the Atlantic Ocean, Arctic Ocean, Alaskan wilderness, and even the Eastern Gulf of Mexico. He has also promised to withdraw from the Paris Climate Accord. Some of that agenda will require acts of Congress, but with Republican control of both the House and Senate, nearly all of that agenda is within reach. It is hard to overstate what a revolution in energy policy this could be. Trump has Myron Ebell leading his EPA transition team, a known denier of climate science. His priority list will be gutting major environmental regulations, which could even include the “endangerment finding,” a scientific declaration that found carbon emissions as a threat to public health, which was used by the Obama administration as the legal justification for greenhouse gas regulations. In short, executive action on climate change is likely dead. That is ominous for the trajectory of climate change, but the energy industry will rejoice.  Politico reports that Trump is considering Forrest Lucas, the founder of Lucas Oil, as his pick for Sec. of Interior. The agency oversees public lands, and would seem to be a move to open up the vast swath of public lands for more drilling. The Dakota Access Pipeline, led by Energy Transfer Partners, will probably be able to overcome federal scrutiny and environmental protest under a Trump administration. ETP says that it expects to complete the pipeline in the first quarter of 2017 and is excited about the Trump administration. “My God, this is going to be refreshing, so I think, overall, I’m very, very enthusiastic about what’s going to happen with our country,” he said.

The Challenges Facing Alaska Crude Oil Producers  - Forty years ago, Alaska was seen as the next big thing for U.S. crude oil production––and it was. With the completion of the Trans Alaska Pipeline System in 1977, Alaska North Slope production took off, and by early 1988 it was topping 2 MMb/d and accounting for nearly one-quarter of total U.S. output. But that was the peak; since then, ANS production has fallen steadily, and in August 2016 it averaged only 443 Mb/d, or 5% of the national total. While there is clearly a lot of oil (and natural gas) still in the ground in the North Slope region, developing those resources would be very costly. Today we begin a two-part series on energy production in the 49th state with a look at the oil side of things.  After the shock of the 1973-74 OPEC oil embargo, U.S. consumers welcomed the 1977 completion of the 800-mile Trans Alaska Pipeline System (TAPS) and the increasing flow of ANS oil to West Coast refineries with open arms.   Way back in 2013, after presenting at the Alaska Oil and Gas Infrastructure and Development Summit in Anchorage, AK, we discussed (in Anchored Down in Anchorage) the ANS production declines that had already occurred, as well as the competition from shale and tight-oil plays in the Lower 48 that were attracting an increasing share of investment dollars. The physical characteristics of the North Slope’s medium sour crude, with a 31.5 API gravity and about 1% sulfur, were (and are) a plus––West Coast refineries were configured to use it, and ANS crude is marketable in Asia too, at the right price. But without a new round of investment in new production, North Slope production was (and is) destined to continue falling, a point driven home in A Change Is Gonna Come in mid-2015. There, we also talked about the fact that, as volumes transported on the 2.1-MMb/d TAPS ratchets down from 550 Mb/d to 350 Mb/d, more and more mitigation would be needed to keep the oil flowing through the pipe (due to freezing, wax buildup and other problems), and that if and when volumes fell below 350 Mb/d or 300 Mb/d all bets were off on whether the pipeline could continue to operate without a major re-do.

Investors call for moratorium on Arctic high seas oil & gas activity | Reuters: A group of investors representing more than 5 trillion euros ($5.53 trillion) in assets under management have called on oil and gas companies to observe an unlimited moratorium on activity in the Arctic high seas. Led by French asset managers Mirova and Natixis Asset Management, the group of 19 investors said it was an "urgent call" to protect the hydrocarbon-rich region from future exploration and reflected national pledges on climate change. "We would like to involve both companies and policymakers so as to take the Arctic issue to the next level and seek greater protection for the region," said Mirova Chief Executive Philippe Zaouati in a statement on Monday. The group said countries should take into account national climate pledges before granting new licenses or extending existing ones. They should also apply stricter, common criteria to ongoing projects and restrict approval to those presenting minimal operational risks. Oil and gas companies, meanwhile, should stop drilling in Arctic marine waters covered by ice "due to current technological uncertainty in terms of the effectiveness of oil recovery mechanisms" and avoid areas of ecological significance. The group also called on oil firms to publicly disclose their licenses held in the region, whether they intend to use or extend them and how these plans fit with their broader climate change mitigation commitments.

Analysis: US crude exports hit record in September -  US crude exports rose 35,000 b/d to a record 692,000 b/d in September after Brent's premium to WTI widened, an analysis of Census Bureau data released Friday showed. Brent's premium over WTI widened from 34 cents/b in May to average $1.88/b in August and $1.66/b in September. After the spread tightened in May, US crude exports shrank to 383,000 b/d by June as arbitrage opportunities tightened. By August, US crude exports had bounced back to 657,000 b/d. US crude exports have risen significantly since Congress lifted export restrictions in December 2015.Previously, some analysts attributed some of the early exports to refiners testing various US grades in their systems, but that likely is not the case anymore, according to Dominic Haywood, oil analyst at Energy Aspects. "Early on, it may have been test cargoes, but I think that's done and dusted now," he said. "If you look at where the WTI/Brent spread traded in August, it's clear that the trend is based on good economics for barrels delivered in September, October and November." Haywood also cited a tightening in the Atlantic Basin crude market in the third quarter amid sustained Nigerian outages. The US exported crude to 13 countries in September, led by Canada at 243,000 b/d, while a record 99,000 b/d of US crude was shipped to Singapore. Out of the total, 17,000 b/d was Canadian heavy crude re-exported to Spain, where Repsol owns coking units at its Cartagena, Bilbao and La Coruna refineries. US crude exports to Europe in September averaged 209,000 b/d, with US cargoes arriving in Italy, the Netherlands, Spain, Switzerland and the UK.

ConocoPhillips plans 2017 program around $50/b oil price - Oil | Platts News Article & Story: ConocoPhillips plans conservative financial and operating programs in 2017, planning for a longer-than-expected $50/b oil world by reducing its capital budget 4%, growing production up to 2% and forging technologies to squeeze out the last smidgen of resource from existing assets. Production for full-year 2017 is pegged at 1.54 million to 1.57 million b/d of oil equivalent, compared with projected output this year of 1.54 million boe/d after asset sales, executives said during webcast remarks at the company's Analyst Day in New York.But the key takeaway from top management is that the company is set to thrive and even grow slightly at a $50/b Brent oil price and that it has at least 18 billion boe of resource with an average cost of supply -- the price it takes to achieve a 10% after-tax return rate -- under $40/b Brent and in some cases under $35/b. "The world has changed," ConocoPhillips CEO Ryan Lance said. "You can't count on rising commodity prices to bail out your business model." Lance said his company takes a view that commodity prices will be "lower and more volatile" in the years to come and that its executives are "shifting our mindset to be a business managed for free cash flow." Growth will mostly come from rampup at APLNG in Australia, Canada's Surmont 2 oil sands project, the Kebabangan offshore natural gas field in Malaysia and increasing Lower 48 shale activity. Production numbers exclude Libya.

Canada's energy pipeline prospects shoot up with Trump win | Reuters: Donald Trump's victory in the U.S. presidential election cheered investors in Canadian energy producers eager to revive the stalled drive to approve the controversial Keystone XL pipeline, giving oil sands crude better access to U.S. markets. President Barack Obama denied a permit to TransCanada Corp's proposed cross-border Keystone XL pipeline last year. In May, Trump said that if elected, he would "100 percent" approve Keystone XL, which would carry 830,000 barrels per day from Alberta to Nebraska, but would seek a better deal. TransCanada shares rose 2.2 percent to C$59.49 on the Toronto Stock Exchange on Wednesday while the Canadian energy index climbed 2 percent led by Suncor Energy which gained 2.5 percent. "I suspect there are a few people in the offices over at TransCanada who are dusting off some files," said Dirk Lever, an analyst with AltaCorp Capital in Calgary. Obama's decision last year to deny the permit was a victory for environmentalists who campaigned against the project. U.S. Secretary of State John Kerry said the pipeline "would significantly undermine" efforts to fight climate change. In a statement on Wednesday, TransCanada said it remained fully committed to building Keystone XL. "We are evaluating ways to engage the new administration on the benefits, the jobs and the tax revenues this project brings to the table," spokesman Mark Cooper said. Analysts in Canada's energy capital Calgary said it was unclear how quickly the pipeline could go ahead if approved, or at what point in the regulatory process TransCanada's application could pick up again.

Keystone pipeline developer plans to ‘engage’ with Trump | TheHill: The company behind the proposed Keystone XL oil pipeline plans to “engage” with President-elect Donald Trump’s administration in its ongoing fight to build the project. In a brief statement Wednesday, mere hours after Trump was declared the election’s winner, TransCanada Corp. said little about its strategy, but vowed to fight on. “TransCanada remains fully committed to building Keystone XL,” spokesman Mark Cooper said in the statement. “We are evaluating ways to engage the new administration on the benefits, the jobs and the tax revenues this project brings to the table.” President Obama a year ago rejected the company’s permit to build Keystone XL, which would run from the oil sands in Alberta, Canada, to the Gulf Coast. But Trump made approving Keystone a key pillar of his energy agenda, and plans to ask TransCanada to renew its application for a cross-border pipeline permit. Keystone was central to the national debate over energy and environmental policy. It was a bellwether for a choice between continued reliance on oil imported from a close ally and moving away from fossil fuels. Congressional Republicans tried numerous times to force approval of the project, but Obama always blocked their attempts. Trump has also said that he wants the United States to get some of the profit from Keystone, though he has not specified how that would work. “I want the Keystone pipeline, but the people of the United States should be given a significant piece of the profits,” he said in May.

Trump Victory Renews Keystone XL Pipeline Fight -- TransCanada said it is formulating plans to persuade the incoming Trump administration to approve construction of the controversial Keystone XL pipeline , which President Obama rejected last November.  Trump has in the past said he believed that the pipeline had no environmental impact. "I would absolutely approve it, 100 percent, but I would want a better deal. I want it built, but I want a piece of the profits. That's how we're going to make our country rich again," he said in May.  On Wednesday, the Canadian Press reported , "TransCanada Corp. says it's evaluating ways to engage the newly elected Donald Trump administration on the potential benefits of the Keystone XL pipeline. Company spokesman Mark Cooper said Wednesday that TransCanada remains fully committed to building the controversial project that U.S. President Barack Obama rejected last year." According to The Council of Canadians , "Filling the Keystone XL pipeline with tar sands crude would facilitate a 36 percent increase in current tar sands production and increase greenhouse gas emissions by an estimated 22 million tonnes a year. The 1,897 kilometre pipeline from Hardisty, Alberta, to Houston, Texas, would also—just like the Dakota Access Pipeline —cross numerous waterways and put drinking water at risk."

Despite what Everyone Thinks, Biggest Threat to Mexico’s Economy isn’t Trump but Pemex - The fear of a Donald Trump victory has reached fever pitch in Mexico this weekend, as the nation’s economists pontificate on the potentially devastating effects such an outcome would have on both the country’s currency and its broader economy. In recent weeks, Mexican financial authorities even ordered local banks to stress-test the potential impact on their balance sheets of Trump winning the U.S. presidential election. They have good reason to be concerned. If Trump wins the election and actually honors some of his pledges, particularly those regarding trade, the immediate fallout for Mexico is likely to be brutal. After all, a staggering 80% of Mexico’s exports go to the U.S. That’s similar to the level of dependence that the Cuban economy had on its trade with the Soviet Union at the height of the Cold War. While the effects of a Trump victory on Mexico are likely to be huge, there are plenty of other reasons the country’s economy and currency are under growing pressure, including a consumer slowdown in the U.S. In fact, all the hullabaloo about a prospective Trump presidency provides the Mexican government with a perfect smokescreen for many of the country’s deep-seated homegrown problems, chief among them the ongoing decline and fall of its debt-burdened, money-losing, fast-shrinking, state-owned oil company Pemex. In the last three years alone, Mexico’s oil revenues have shrunk from 6% of GDP to 2.5%, on the back of sharp declines in both international oil prices and domestic production. The export figures are just as ugly. In 2011, when the price of Brent crude averaged over $100, Pemex’s export revenues hit a historic peak of $49 billion, a monthly average of $4.11 billion. In the first quarter of 2016 the monthly average was just $893 million. That’s a plunge of 78%.

Value of Chilean October LNG imports rises 92% on year: central bank - Chile imported $79 million worth of LNG in October, an increase of 92% from the year-ago month, Central Bank figures showed Monday. The sum also a marked a 51.9% increase from $52 million in September. The value of imports during the first 10 months of 2016 totaled $673 million, down 8.5% year on year. Chile is almost wholly reliant on LNG imports for its natural gas supplies since neighboring Argentina cut off exports in 2009. The country imported 2.683 million mt of the fuel during 2015.

Interview: Norway's energy minister doubts 2016 natural gas exports will match last year - Norway may not match last year's record natural gas exports of 115 Bcm in 2016, the country's energy minister said Thursday, but Oslo is confident of its projections of average annual exports of 100 Bcm over the next 20 years. In a wide-ranging interview with S&P Global Platts in London, Tord Lien said Norwegian gas exports would remain high in the future through careful exploitation of the vast resources on the Norwegian Continental Shelf. "I'm not sure if this year we'll be able to beat last year, but it'll be in that range," Lien said, when asked if supplies would be higher than 2015's record 115 Bcm. "You can't have records every year," he said.Given the system's downtime each year for planned maintenance, there would always be a variable impact on overall annual flows, he added. But, Lien said, given the current technical capacity of the Norwegian gas system of some 130 Bcm/year, "when you are exporting 115 Bcm, that means everything is running smoothly." Some analysts have questioned Norway's ability to maintain its gas exports at such high levels, especially given the slowdown in investment in new exploration since the oil price crash of 2014-2015. In addition, no new major gas discoveries have been made for many years on the NCS.

Japan LNG buyers pay average $6.10/MMBtu for spot cargoes contracted in Oct - Japanese LNG buyers paid an average $6.10/MMBtu for spot cargoes contracted in October, up 7% from $5.70/MMBtu in September, data released by the Ministry of Economy, Trade and Industry showed Thursday. The ministry gathers data from utilities and other LNG buyers in Japan to publish a simple average of contract prices. The delivery months of the cargoes are not disclosed. METI also said the average price of cargoes delivered to Japan in October stood at $5.70/MMBtu. The ministry last month did not publish the delivered price for September.Platts JKM averaged $6.535/MMBtu in October, reflecting spot deals concluded for November and December deliveries to Japan and South Korea. The Platts JKM for October delivery averaged $5.470/MMBtu. The assessment period for cargoes to be delivered in October ran from August 16, when the JKM was $5.45/MMBtu, to September 15, when it was again at $5.45/MMBtu.

Italy's Eni to continue Algerian natural gas purchase trend into 2017 -  The head of Italy's Eni said Thursday that the company would continue to buy Algerian gas next year in the same vein as its purchases this year, though the volumes the company expects to buy will depend on "pricing conditions." Claudio Descalzi, speaking on the sidelines of a London conference, said Eni discussed its expected volume purchases with Sonatrach "every year." Italy has increased its gas imports from Algeria significantly in 2016, volumes averaged 46 million cu m/d in the first ten months of the year, according to data from Platts Analytics' Eclipse Energy. That compares with an average of just 19 million cu m/d in 2015.Asked whether Eni would continue to buy Algerian gas at the same levels as this year, Descalzi said: "The answer is yes, we will continue to buy." "The volume is something we discuss every year, so I'm not in a position to say if I'm going to buy 8, 9, 10 [Bcm] or more," he said, adding that its purchases are also related to the prevailing price conditions.

European front-month high sulfur fuel oil paper cracks hit more than 4-year high - European front-month high sulfur fuel oil paper crack spreads -- measuring the relative value of the product to crude oil -- hit a more than four-year high Monday, amid strong buying interest in the paper barge market, traders said. December 3.5% sulfur FOB Rotterdam barge swap cracks moved to minus $9.05/b Monday, up by 69 cents on the day. The last time cracks were higher was on June 29, 2012, at minus $8.11/b, S&P Global Platts data shows. According to traders, HSFO barge paper cracks strengthened on the prompt due to strong bids for inter-month barge spreads, pushing the November/December spread to a backwardation of $3.50/mt and bringing the December/January contango down by $1/mt to 50 cents/mt. "Some of the strength is linked to the [open] arbitrage as well...people are hedging cargoes," one paper trader said.Another view taken by other traders suggests that low inventories in Asia and Europe may be playing a big part in the stronger cracks. "Inventories are low in Asia and Europe, and paper prices are the result of balance of buying and selling, so think current situation is reflective," said another fuel oil trader. On the physical HSFO side, although cracks have risen in line with paper cracks, fundamentally little has changed, sources said.

Gazprom gas supply to Europe, Turkey set to hit 172 Bcm in 2016: official -   Russian gas supplies to Europe and Turkey in 2016 are on track to hit a new record high, with the most recent forecasts suggesting total sales of 172 Bcm this year, a senior Gazprom Export official told S&P Global Platts on Monday. Gazprom's gas supplies to Europe and Turkey -- but not including the countries of the ex-Soviet Union -- continue to be competitively priced compared with European gas hubs, triggering a buying spree by European customers in 2016. "This year will definitely be a record high level -- the latest estimates are 172 Bcm," Valery Nemov, Gazprom Export's deputy head of contract structuring and price formation, said. The most recent export forecast up to now was from Gazprom CEO Alexei Miller, who said that the company was targeting exports of 170 Bcm this year and that the number could rise in a cold winter scenario.The previous record of Gazprom supplies to what it calls the "Far Abroad" was 161.5 Bcm in 2013. The export expectation comes as Gazprom said last week it expected its average gas price realization at the end of 2016 to be around $165-$170/1,000 cu m, well down on prices from the past three years. Gazprom Deputy CEO Alexander Medvedev said in an in-house interview at the end of October that Gazprom expected European gas demand to remain at high levels in November and December. Medvedev also said the share of Russian gas in European consumption will, "at the very least," remain at its current level in 2017.

Analysis: As crude weakens, China's gasoil stockpiling takes a backseat -  The unforeseen rush to build gasoil stocks that China witnessed recently is starting to ease as traders have applied brakes to their buying spree amid expectations that a weakening crude oil market could push down product prices further and help them get even more competitively priced cargoes. While gasoil demand from end-users remain healthy in the domestic market, a slowdown in appetite for stockbuilding had improved the local supply situation, helping to pull down the wholesale National 5 zero-pour gasoil price to Yuan 5,900/mt ($117/b) on Friday in East China's Zhejiang province, from the year's high of Yuan 6,020/mt hit on October 28, according to information provider Sublime China Information. Prices were as low as Yuan 4,750/ mt on September 2, Sublime China Information said. Crude oil markets paused for breath on Friday, after a five-day sell-off that has seen both crude benchmarks falling by more than 10% from October highs of around $54/b for front-month ICE Brent and $52/b for NYMEX crude."Buying for stockpiling in China has slowed since late October and we don't expect an upward trend in the next few weeks," said a Shandong-based trader.

Nigeria's bid to ramp up oil output comes under threat as militants back out of peace talks -  Nigeria's hopes of ramping up oil production back to pre-January 2016 levels of 2.2 million b/d hang in balance as militants put forward further demands and one group backed out of peace talks over the weekend, following a meeting between the country's president and Niger Delta leaders. Nigerian President Muhammadu Buhari met senior Niger Delta leaders last week to end the militancy in the Niger Delta oil region, and the country's junior oil minister had said on November 1 that oil output had recovered sharply to 2.1 million b/d following the peace that was gradually returning to the region. But militant groups from the region expressed dissatisfaction over the weekend, in the outcome of the peace meeting and said they had little or no hope about Buhari meeting demands put forward by region's leaders. The Niger Delta Greenland Justice Mandate, one of the various militant groups that have sprung up in the delta, earlier on Saturday disassociated itself from the peace meeting and threatened to launch further attacks on oil installations that would bring Nigerian production to 500,000 b/d.The group in a statement claimed responsibility for the November 2 bombing of the Trans-Forcados pipeline, which transports the popular export grade Forcados. "The destruction of the Trans-Forcados Pipeline is just a warning. That shadow operation that brought the [pipeline] down was only meant to let these companies know that we aren't kidding with them," the militant group said. The self-styled Niger Delta Avengers, or NDA -- the group responsible for most of the attacks on oil facilities that slashed Nigeria's output to nearly 30-years low -- said Sunday they had added further demands to the 16-point demands submitted by the leaders, including immediate take off of a Maritime University in the Niger Delta, the immediate withdrawal of troops in the region and involvement of international negotiators in the peace negotiations.

Oil Tries & Fails To Reach $45 Overnight - Should Investors Take OPEC Seriously Anymore? –- Between risk-on sentiment from Comey's latest bombshell and the earthquake in Cushing overnight, WTI crude prices rallied to $44.99 but as OilPrice.com's Gregory Brew notes that in the midst of a week of bad to terrible news for oil prices, OPEC tried and failed to alleviate concerns that its meeting this November will, in fact, produce a meaningful deal on production cuts. “We remain deeply optimistic about the possibility that the Algiers agreement will be complemented by precise, decisive action among all producers,” announced OPEC via its regular publication, “OPEC Bulletin.” The announcement came as industry analysts and pundits criticized the organization, casting doubt on its ability to deliver a deal on a production freeze. OPEC was also very visibly lashing out at critics who have criticized its ability to influence markets in a substantive way. The September announcement helped push prices past $50 for over a week, before they plunged back down to $44 this week. The decline was largely attributed to massive inventory build reports from the EIA and API. The zig-zagging of prices mirrors a similar trend from last April, when an anticipated OPEC freeze deal at Doha helped send prices up before disagreements between Saudi Arabia and Iran caused Riyadh to scupper the deal, leaving markets to tumble.

Oil Prices Rise on Hopes of Output Accord - Oil prices were up along with the broader market Monday, after the FBI said it had not found new evidence to warrant charges against presidential candidate Hillary Clinton, and amid renewed hope that the world’s major oil producers will come to an agreement regarding production cuts. U.S. crude futures rose 82 cents, or 1.86%, to $44.89 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 57 cents, or 1.25%, to $46.15 a barrel. Analysts said oil was also benefiting from increased appetite for risky assets amid growing confidence that Hillary Clinton could prevail over Donald Trump in Tuesday’s presidential election. Equity markets have also rallied as investors interpreted the FBI’s announcement as favorable to Mrs. Clinton’s chances and removing a key element of uncertainty. “The stock market likes it, and the oil market likes it as well,” said Phil Flynn, senior market analyst at The Price Futures Group. But strength in the U.S. dollar limited oil’s rise. The WSJ Dollar Index, which measures the dollar against other currencies, rose 0.53% Monday. A stronger dollar can make oil, which is traded in dollars, more expensive for buyers using foreign currencies. Also bolstering oil markets Monday, the Organization of the Petroleum Exporting Countries reaffirmed its commitment to cutting output. OPEC Secretary-General Mohammed Barkindo said Monday that the cartel remains committed to the tentative accord the group reached in Algiers in September, and that Russia remains on board with the plan to limit output. The statements followed reports of disagreements between OPEC members that stoked fears that the continuing talks about production cuts won’t lead to a deal at the group’s meeting in Vienna on Nov. 30. Both crude benchmarks lost about 10% last week on growing skepticism about a deal and a record 14.4-million-barrel rise in U.S. oil stocks.

Opec risks handing US shale drillers a gift with cut -- Has US oil production hit bottom? Answering yes is a risky call. After all, oil markets are still depressed. Closely followed forecasters including the International Energy Agency and Opec believe volumes will fall in both 2016 and 2017. But the industry’s surviving companies, having hunkered down during the crude rout, are regrouping. Earlier forecasts for a slide in US output look dubious in light of recent statistics. The prospect of stabilisation in the US complicates talks among members of Opec as they put flesh on a tentative deal to curtail output. Shale supplies have created a dilemma for the producers’ cartel, as any success in driving up oil prices could put US drillers back in business. Data from the US Energy Information Administration last week showed US crude production averaged 8.744m barrels per day in August, 51,000 b/d more than July and 404,000 b/d more than the agency had previously forecast for the month. The number of drilling rigs seeking oil in the country increased by nine last week to 450, the highest since February, according to the Baker Hughes oilfield services company. Drilling is necessary to maintain or increase production in shale basins. Since September 28, when Opec members met in Algiers and jolted the oil market by agreeing to reduce output for the first time since 2008, US crude prices marched from below $45 a barrel to nearly $52 on October 19. Then the West Texas Intermediate benchmark marched right back down, trading at $44.68 on Monday. US producers took advantage of the brief rally to buy insurance against a weaker market in 2017, analysts say. Government data reveal that the category of trader that includes producers increased forward sales of WTI futures and options contracts by 4 per cent to 608m barrels equivalent — the biggest gross short position on record — in the two weeks between September 27 and October 11. “Opec was trying to shore up the price and the fundamentals of this market, but they inadvertently threw US producers a lifeline,” says Michael Tran, energy analyst at RBC Capital Markets. “US producers jumped on it and hedged production.” Oil companies have over the past two weeks given upbeat views on the outlook for US production. Chevron, which has a large land holding in the Permian Basin of western Texas, said its shale production had been running ahead of expectations and was up 24 per cent over the past year. The company said it was on course for 250,000-350,000 barrels of oil equivalent of production from the Permian by the end of 2020, up from a little under 150,000 boe/d today. EOG Resources, one of the leading independent oil producers, raised its projected growth rate for 2017-20. Other companies have been talking about stepping up the rate at which they are drilling and completing wells.  Virtually all of the growth in production last August came from federal waters in the Gulf of Mexico, not shale regions on land. One new offshore project was Noble Energy’s Gunflint field, which the company said went online in mid-July and was operating at “higher rates than expected”.

OPEC Might Fail To Boost Oil Prices But Crude Isn’t Going Anywhere - With each passing day there is another indication that OPEC has struck a deal to limit production in an effort to raise the price of oil from its current mid-$40 a barrel range. Usually these announcements rest upon the Saudis, Iranians, Iraqis or other member-states wanting to keep market share while raising prices to assist their floundering economies, or war-torn countries. These are some of the factors that have caused recent attempts at limiting production to fail. What is never taken into account are balance sheets, profit and losses, to drill or expand, and whether or not there is sufficient demand for additional barrels of oil to reach world markets. Further, no one seems to be asking what to do with Chinese debt bubbles, and abundant supplies of crude sitting in storage around the world. The laws of supply and demand, and international finance have taken a back seat to the whims of OPEC members who can’t agree on production limits. Even recent announcements indicate OPEC is still drilling, pumping and exporting oil at a record pace. But why has it reached this point? Simply put, the Saudis and Iranians deep dislike and distrtust for each other is one of the larger reasons OPEC can’t agree on production limits and price adjustments. And while OPEC has managed to produce documents that outline strategy, until the Saudi-Iranian rift is solved it is hard to imagine anything else will matter regarding OPEC relevancy for production limits. The Russians not agreeing to cut production is important, but the Saudi-Iranian rift has deeper implications.

Oil Prices Settle Higher After a Turbulent Trading Day as U.S. Votes - WSJ: Oil prices settled higher after a turbulent day of trading on Tuesday, with market participants remaining cautious as voters went to the polls in the U.S. presidential election. U.S. crude futures prices gained 9 cents, or 0.2%, to $44.98 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 11 cents, or 0.24%, to $46.04. Crude markets swung from gains to losses and back on light trading awaiting election results.In recent sessions, risky assets such as stocks and oil have risen as Democratic presidential candidate Hillary Clinton pulled ahead in the polls, with many investors believing that a victory for Mrs. Clinton would bring stability to markets. Crude prices snapped a six-session losing streak on Monday, following the stock market higher, after the Federal Bureau of Investigation said it hadn’t uncovered new evidence to warrant charges Mrs. Clinton. Investors interpreted that as favorable to Mrs. Clinton’s chances. The dollar also surged on Monday, as investors have grown more confident that Mrs. Clinton would win the presidency. But strength in the U.S. dollar is often a headwind for oil, since it makes the commodity more expensive for buyers who deal in other currencies. After surging Monday, the dollar wavered somewhat on Tuesday, with the WSJ Dollar Index edging up less than 0.1%. Market participants are also weighing the chances the Organization of the Petroleum Exporting Countries will be able to finalize a deal to limit output. OPEC officials reaffirmed the cartel’s commitment to a tentative agreement to cut production on Monday, helping boost prices, but analysts and traders still are watching commentary from OPEC and non-OPEC producers closely ahead of the cartel’s Nov. 30 meeting. “Clearly the election remains top of mind, but we have a large event at the end of November that oil markets are focused on,”

Natural Gas Prices Fall on Mild Weather Forecasts – WSJ -  Natural gas prices tumbled to their lowest settlement value since mid-August after a shift in weather forecasts stoked fears that the coming winter could be a repeat of last year, when stockpiles swelled to record highs and a glut lingered for months. “The market is struggling to find a floor,” said Zane Curry, director of markets and research at Mobius Risk Group. “We’re out of available storage capacity for all intents and purposes.” Natural gas prices fell 18.3 cents, or 6.5%, to $2.633 a million British thermal units on the New York Mercantile Exchange. It was the largest one day decline since July, and Over the weekend, weather models had pointed to the potential for colder temperatures to appear by the end of the month, and natural gas prices rose Monday. But that possibility seemed remote after updates Tuesday that showed mild temperatures in the Midwest could be extended. Unusually mild fall weather has raised the prospect of a warmer winter, which would mean less demand for natural gas for heating. Coupled with high production all year and a lingering glut, softer demand could mean that already elevated natural gas supplies will grow even further, analysts said. “This winter is really starting out even more bearish than last winter, and last winter was the most bearish on record,” said Kyle Cooper, a consultant for Ion Energy in Houston. “It’s warm basically everywhere. When mother nature is this bearish, it’s hard to get any kind of rally,” he said. But Andy Huenefeld, price risk manager at U.S. Energy Services Inc. in Louisville, Ky., said changes in supply in demand could lead to a tighter market even if extreme cold temperatures don’t materialize. “We’re producing less than we were 12 months ago. We’re exporting more. And there’s at least some level of increase in baseload demand from power generation,” he said.

WTI Crude Rises After Big Drawdown In Gasoline, Distillate Inventories -- Following last week's record build in crude inventories, API reported a bigger than expected crude build this week (+4.40mm vs +2mm exp), but the huge draw in gasoline was the most notable (-3.6mm vs -1.5mm exp) as we suspect Colonial pipeline fallout affected levels.Distillates also saw the 7th consecutive draw (-4.3mm). WTI's initial reaction to the crude build was lower but the product draw sent prices higher.  API:

  • Crude +4.40mm (+2mm exp)
  • Cushing +156k (+300k exp)
  • Gasoline -3.6mm (-1.5mm)
  • Distillates -4.3mm

Following last week's biggest crude inventory build ever, crude built again but products saw a major drawdown... WTI Crude futures prices are down from around $50 to $44 in the last two weeks (and down from last week's big build)... WTI was around $47 before last week's API print... Prices dipped on the crude build butthe product drawdowns sparked buying..

Saudi-Iranian Fallout Could Destroy The OPEC Deal -- While OPEC is officially communicating that it is ‘deeply optimistic’ that it could reach a deal to stabilize oil prices, and simultaneously scolding industry observers for being too quick to judge and express skepticism, behind closed doors, two of OPEC’s heavyweights and bitter regional rivals - Saudi Arabia and Iran - are reverting to their old ways of posturing with threats that neither will back down in the name of the greater (OPEC) good and let the other have their way. At meetings between OPEC-only and non-OPEC experts last week, it has just been disclosed that Saudi Arabia and Iran went at it again. Saudi Arabia waved its oil weapon, strong-arming the cartel with threats of bringing down crude prices by increasing its own oil production should Iran continue to refuse to participate in the cut.According to OPEC sources, Saudi Arabia offered to cut to around 10.2 million bpd from the summer peak output of 10.7 million bpd if Tehran agreed to freeze at 3.6 million-3.7 million bpd. Which Iran did not.“The Saudis have threatened to raise their production to 11 million barrels per day and even 12 million bpd, bringing oil prices down, and to withdraw from the meeting,”according to an OPEC source, as quoted by Reuters. Ironically enough, shortly after this came out, it was denied by OPEC secretary General Barkindo and contradicted again by another senior OPEC official.Saudi Arabia – which went on a mission to raise its market share and wage war on higher-cost producers in 2014 - has been ramping up output steadily since then, flooding the market with crude oil and exacerbating the oil glut.Iran, on the other hand, apart from harshly criticizing the Saudi pump-at-will tactics while it was under international sanctions itself, is now fully intent to return to its pre-sanction oil production and export levels. Tehran is not giving up on its stance that it should be exempt from any production cuts that OPEC producers may have to make to fit the cartel’s total production into the 32.5 million bpd-33 million bpd preliminary range that it had set in Algiers. According to OPEC’s Monthly Oil Market Report from October, the organization’s crude oil production averaged 33.39 million bpd in September, up by 220,000 barrels compared to August, secondary-sources figures showed.

Iran, France′s Total sign major gas deal - Iran on Tuesday inked a memorandum of understanding with France's Total to develop a major gas field. It marks the first big contract with a Western energy firm since the lifting of most sanctions against Tehran. Total said it would lead a consortium including China National Petroleum Corporation and Iran's Petropars to develop Phase 11 of the South Pars field. The offshore field in question is shared by Iran and Qatar in the Gulf and contains some 14,000 billion cubic meters of gas, that's 8 percent of the world's known reserves. Total's head of Middle East exploration and production, Stephane Michel, said overall investment would amount to $4.8 billion (4.3 billion euros), with the development and operation of the project due to last two decades. The final agreement would be signed early next year, Michel noted. It would mark Total's return to Iran, some four years after the company pulled out when France joined EU partners in imposing sanctions over Tehran's nuclear program.

Iran makes $6 billion deal with Total, CNPC - According to the Wall Street Journal, Iran plans to sign a preliminary $6 billion deal with Total SA on Tuesday to help develop an onshore gas field. The move by Total is the first return by a Western energy company since sanctions were lifted this year. Total was long one of the most active Western oil companies in Iran, and its executives have said they were eager to return to a country with the fourth-largest reserves of oil in the world. Total kept an office open in Iran throughout sanctions and was the first European oil company to buy Iranian oil and ship it to Europe after the restrictions were lifted. In addition to Total, China National Petroleum Corp (CNPC) will work with Iran’s state-owned Petropars to develop a gas field in the Persian Gulf. CNPC and Total have a head start over competitors, says the Journal, even though CNPC deal may take a few months. Companies have been nervous about working with Iran. Statoil, Royal Dutch Shell, and Repsol left at the beginning of the 2000s because they were “wary of escalating tensions between the Iranian government and western countries over Tehran’s efforts to make a nuclear bomb.” Not exactly a stress-free work environment. Just last October, however, the Chicago Tribune reported that Western investors have been slow to arrive, leaving Iran no choice but to work with China, despite the Iranian government’s desire to “ease dependence on China” in a time when U.S. sanctions gave them little choice otherwise.Western investors have been slow to arrive, forcing Iran back into the arms of the Chinese. That’s especially true in the energy sector, where pressure to increase production is intense. Elsewhere, Western clearing banks still refuse to do business with Iran for fear of falling foul of non-nuclear U.S. sanctions that remain in effect, meaning Western companies can’t raise project finance. It appears Iran should be ecstatic to see investors beginning to find their way back, with potentially large projects on the horizon.

Crude oil futures take a hit as Trump wins race to White House - Crude oil futures nosedived in late afternoon trading in Asia on Wednesday as a hotly contested US election saw Donald Trump winning the race for the White House. At 3:30 pm Singapore time (0739 GMT), January ICE Brent crude futures were down 64 cents/b (1.39%) from Tuesday's settle at $45.40/b, while the NYMEX December light sweet crude contract fell 59 cents/b (1.31%) to $44.39/b. A Trump presidency is seen as uncertain and unfavorable for Wall Street and for US business dealings in general, analysts said.Front-month ICE Brent had slumped more than 3.21% to $44.56/b at one point, while NYMEX crude dropped 3.71% to an intra-day low of $43.31/b, after early polling results showed Republican Donald Trump in the lead. "A Trump win is likely to create immediate uncertainty in financial markets, in particular placing equity markets under pressure. There would likely be a rush into safe-haven assets, US treasury bonds, gold, Japanese yen and the Swiss franc," said Alvin Liew, UOB senior economist.

OPEC's job has just become tougher with Trump win | Reuters: OPEC's job of trying to prop up oil prices has just got much harder. With Donald Trump winning the U.S. presidential election, the 14-country oil-producing cartel may have to battle a sourer outlook for the global economy and weaker demand for crude. It also faces the prospect of increased U.S. oil output - a major bugbear for the Organization of the Petroleum Exporting Countries - given Trump's pledge to open all federal land and waters for fossil fuel exploration. OPEC's internal dynamic could change, with Trump promising to tighten policies on Iran just as oil companies begin slowly to return to the Islamic Republic. "Buckle up your seatbelts for a more turbulent and uncertain global economy that is ahead," Pulitzer Prize-winning U.S. oil historian Daniel Yergin, vice-chairman of the IHS Markit think tank, told Reuters. "The outcome of the U.S. election adds to the challenges for the oil exporters because it will likely lead to weaker economic growth in an already fragile global economy. And that means additional pressure on oil demand," Yergin said. Oil prices fell almost 4 percent early on Wednesday but recovered to trade up slightly at around $46 per barrel by 1055. OPEC will meet on Nov. 30 in an effort to curtail output and reduce the global oil glut that has seen prices more than halve since 2014.OPEC sources said they expected oil to remain weak in the days and weeks ahead due to worries about the global economy and uncertainty about Trump's policies for the Middle East. "Oil is doomed," one of the sources said.

WTI Crude Slides As US Production Soars Most In 18 Months - DOE reported a bigger than expected crude build (+2.432mm vs +2mm exp) but smaller than API's reported 4.4mm build, but DOE reports a considerably smaller drawdown in the products side (gasoline and distillates). Cuhsing saw a small build but US crude production soared 2% on the week - the most since May 2015. DOE

  • Crude +2.432mm (+2mm exp)
  • Cushing +28k (+300k exp)
  • Gasoline -2.841mm (-1.5mm)
  • Distillates -1.948mm

Other observations:

  • PADD 3 crude -1,028k
  • PADD 1B gasoline -1,466k
  • PADD 1 Distillates -920k
  • Refinery utilization +1.9 ppt vs est. +0.5 ppt
  • Refinery crude inputs +369k b/d
  • Crude imports -1,553k b/d

7th weekly drawdown in distillates inventories as crude built for a second week (note that DOE product drawdowns were smaller than the API reported ones) But the big news a massive surge in US Crude production - the most since May 2015 to its highest in 6 months...

OPEC Just Knocked $20 Off Its Oil Price Outlook OPEC warned in newly released report that oil prices might not rise above $60 per barrel until the end of the decade, in an acknowledgement that an array of bearish forces will conspire to keep a lid on any price rally.OPEC’s new World Oil Outlook (WOO) offers medium and long-term predictions for the oil market. OPEC’s Reference Basket (ORB) price will average $40 per barrel this year, and the group projects that the price will rise by $5 per barrel each year through the rest of the decade. That only takes ORB prices up to $60 per barrel in 2020.That is a remarkable prediction from a group of oil-exporting countries, often known for a much more bullish outlook for oil. There are a few reasons that OPEC is more resigned to a “lower for longer” mantra.OPEC admitted that things have not gone according to plan since it decided to abandon market intervention in November 2014. The group, led by Saudi Arabia, thought that low oil prices would stoke demand and also push out high-cost producers, two predictions that did not play out, at least to the degree that top OPEC officials predicted. “While analysts initially anticipated that lower oil prices would have a positive impact on global economic growth, the reality is that the overall impact has been neutral. Scars from the economic crisis such as high household debt levels, fiscal imbalances and high unemployment, combined with industry investment cuts, have limited the propensity to consume,” OPEC wrote in its WOO report. U.S. gasoline demand did hit a record high this year, but it took two years of low prices to reach that level and oil consumption lagged behind the huge spike in miles traveled, an indication that fuel efficiency blunted the impact of more driving. Meanwhile, China’s demand has continued to soften even as oil prices languished at record lows.

Oil Prices Fall as IEA Reports Record OPEC Production - WSJ: Oil prices fell Thursday after the International Energy Agency reported record production from Organization of the Petroleum Exporting Countries members and subdued expectations for demand growth. Light, sweet crude for December delivery settled down 61 cents, or 1.4%, at $44.66 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 52 cents, or 1.1%, to $45.84 a barrel on ICE Futures Europe. The IEA’s monthly report showed OPEC members pumped a record 33.83 million barrels a day in October, making the scale of the output cut needed to stabilize prices being discussed by the group’s members later in November look increasingly challenging. “The IEA didn’t change its forecast in terms of global oil demand, so the growth outlook is fairly lackluster,” said Harry Tchilinguirian, head of commodity strategy at BNP Paribas SA. “That means that the issue of excess supply that permeates markets currently is going to extend into next year.” OPEC is set to meet Nov. 30 to approve a plan to cap the group’s production to between 32.5 million to 33 million barrels a day. But traders have been selling in recent weeks as output surged despite the promises of a cut. Even if an agreement is signed, enforcement of individual production quotas could be weak. With many key producers already pumping close to peak capacity, freezing output at these levels wouldn’t help abate the overhang soon, according to many bearish traders.   “They’re trying to come up with a deal, but pumping more oil out than it ever had,” said Mark Waggoner, president of brokerage Excel Futures. “It just doesn’t make any sense to me.”  A Trump presidency could also lead to lower oil prices for longer given his strong support for fracking in the U.S. The president-elect has favored plans to lift restrictions on tapping energy reserves, approve the Keystone XL pipeline, and cancel billions in payment to the United Nations climate-change programs. The move will likely buoy crude production in the U.S., analysts said. U.S. crude production is already on an uptrend as producers are eager to capture the rising prices. The Energy Information Administration this week raised the forecast on U.S. crude output, saying production would fall slower than expected, led by a ramp-up in drilling in west Texas.

Oil prices tumble 3 percent after OPEC data adds to glut worries | Reuters: Oil prices tumbled more than 3 percent on Friday after OPEC said October output reached another record, casting doubt on whether its plan to limit production is achievable or enough to ease persisting oversupply in the market. The Organization of the Petroleum Exporting Countries said Friday that its output rose to 33.64 million barrels per day (bpd) last month, up 240,000 bpd from September. Crude futures have wiped out gains made since the end of September when OPEC said it would agree to cut oil production to shore up persistently low prices. While investors have been skeptical that a deal to cut or freeze oil output levels will be reached at an OPEC meeting on Nov. 30, an increasing amount of data has underscored a global skew towards oversupply. Following its latest data, the cartel would have to trim up to a million barrels per day of output to make good on its promise to reduce production to between 32.50 million bpd and 33.0 million bpd. "The next couple of weeks, even if they get a deal done, there's so much oil coming to the market,"International Brent crude futures LCOc1 traded at $44.34 per barrel at 11:13 a.m., down $1.50, or 3.27 percent, its lowest since August. U.S. West Texas Intermediate futures CLc1 were down by $1.51, or 3.4 percent, to $43.14 per barrel. The International Energy Agency (IEA) has said the supply overhang could run into a third year in 2017, should OPEC fail to act.

Oil Tumbles To $43 Handle As Iran Production Surged Most Since Sanctions Lifted -- The cracks in the cartel are showing. Amid Saudi threats (over exemptions), Iran tells OPEC it has raised output by the most since international sanctions were lifted. With inventories remaining 300mm barrels above average and OPEC production at a new record high, hopes for any production freeze deal are fading fast and WTI has test pre-Trump $43 handle lows. The countries driving the bulk of the increase--Nigeria, Libya and Iraq--are those seeking exemptions from the cut. Without a cut, the world's oil stockpiles are likely to keep building, putting further pressure on oil prices, which are still trading below $50 a barrel, down from the more than $100 levels seen in mid-2014. "Looking ahead, it is important to consider the immediate impact that the assumed global supply/demand balance has on inventories, given the expected demand for OPEC crude in 2017 of 32.7 million barrels a day," OPEC said in its report. "Adjustments in both OPEC and non-OPEC supply will accelerate the drawdown of the existing substantial overhang in global oil stocks and help bring forward the rebalancing of the market," the report said.

U.S. rig count declines by 1 to 568 - Baker Hughes’ latest rig count report shows the number of rigs drilling for oil rose by two this week to 452. Rigs drilling for natural gas was down 2. The total rig count fell by one to 568, still higher than the May low of 404. Total offshore rigs are down 12 from last year at this time. States losing rigs include Alaska and North Dakota with two each, and New Mexico, Oklahoma, Pennsylvania, and Utah each lost 1 rig. The price of crude oil dropped, however, after a report from the Organization of Petroleum Exporting Countries (OPEC) showed a jump in production. Many analysts predict that the price of benchmark crude will not rise significantly without a cut in OPEC production. West Texas Intermediate (WTI) oil futures fell 2 percent to $43.75, according to Business Insider, which is the lowest level in almost two months. Market Realist reported that natural gas prices fell 4 percent year-to-date, noting the negative impact on drilling activity. A drop in prices is due to oversupply in the market. Market Realist notes that drilling activity could rise with the new Trump Administration.

Baker Hughes Total Rig Count Declines To 568 From 569; Oil Rigs Up to 452: The latest Baker Hughes North American rig count data recorded a decline in the total number of rigs to 568 from 569 the previous week. There was a small increase in the number of oil rigs to 452 from 450 previously, the highest level since February, while there was a decline of 2 in the number of gas rigs to 115. The number of rigs in the Permian Basin was unchanged at 218, compared with 229 the previous year as the previous sharp declines continue to come out of the annual comparison. There was a decline in the Cana Woodford Basin, although this was the only field to register an annual increase in rigs. There was an increase in the number of rigs in Texas to 268 from 262 previously, although it was still well below the level of 338 seen last year. The number of rigs will continue to be monitored closely in the short term, especially given the sharp decline in crude prices. There will inevitably be a lagged reaction, but the rate of growth has already slowed. The response of companies, which have already announced expansion plans, will be extremely important in the short term and will have a wider impact on capital spending plans. Crude prices edged higher after the data, primarily in a correction from earlier sharp losses to the $43.15 p/b level.

U.S. Oil Rig Count Inches Up As Production Jumps - Despite today’s turbulent markets and less-than-appealing oil prices, North American drillers seem to be continuing to slowly but steadily ramp up the number of active rigs in production by the week, and this week the oil rig count rose again—this time by a modest two. Oilfield service company Baker Hughes has reported a 2-count rise in the number of active oil rigs, and a 2-count decrease in the number of gas rigs. Miscellaneous rigs also dipped one this week. Last week, Baker Hughes reported that 9 new oil rigs were placed into production, unsettling an already turbulent market courtesy of OPEC in-fighting, the looming supply glut, and the general uneasiness over the then-undecided US Presidential election. Prices this week looked even more grim. Gas rigs also saw a three-site increase in the prior reporting period. But don’t panic, everybody. Despite this important indicator that often moves markets, US production is not catapulting into the stratosphere. The figures may be a sign that US rigs, although taking a hit in late 2015 and early 2016, are once again on the upswing. In fact, overall gains within the last six months of over 122 oil rigs. The increases in rig count, however—from 328 oil rigs on May 6 to 452 this week (a huge 37 percent increase in that timeframe) didn’t seem to jive yet with US oil production, which was 8.8 million barrels per day on May 6, and now stands at 8.69 million barrels per day on November 4—a 1.2 percent decline, according to EIA data. The production trend however seems to have turned around last week as the following chart from Zero Hedge shows:

Feeling The Oil Crunch: Saudi Arabia Cancels $266 Billion In Projects - Saudi Arabia’s governing economic body called the Council of Economic and Development Affairs (CEDA) has cancelled $266.7 billion in projects, the Saudi Press Agency said, and announced it would be settling much-delayed private-sector payments by year end.The projects that have been canceled are the ones that are not expected to accelerate the kingdom’s growth or improve the living standards for its people.The cancellations were first considered in September, but at the time, it was noted that only$20 billion in projects would be considered to put on the chopping block.The size of the delayed payments—mainly due to severe hits to the kingdom’s oil revenue—remains undisclosed, but it includes delayed payments to construction firms, medical establishments, and foreign consultants. One analyst, according to Reuters, estimated that the amount still owing just to construction firms was US$21 billion.The 2016 budget deficit will not be known until late December, when Saudi Arabia announces its 2017 budget plan.Payment delays in the kingdom are nothing new. Last year in October, Saudi Arabia also experienced a delay in payments to contractors. Companies working on infrastructure projects had, in late 2015, met with payment delays that exceeded six months as the government tried to hang onto its cash as crude prices started to bite.

Saudi Arabia: A Kingdom Coming Undone - Though some find reason for optimism in Saudi Arabia’s National Transformation Plan, the roadmap to economic diversification released earlier this year, there is little realistic prospect for a smooth transition. The very push toward reform, while noble and necessary, could propel Saudi Arabia toward political instability. Recognizing this, the United States should encourage Riyadh by offering high-level coordination and technical expertise but not unconditional support even as the Kingdom struggles. Far from “a revolution here disguised as economic reform,” as some have called it, the situation is more simply described as a series of choices, ranging from risky to dangerous, that are being forced upon the Saudi government by a lack of planning when the Kingdom was flush with cash, a social contract underwritten by welfare spending, and a foolish faith that high oil prices would persist. Saudi Arabia is embarking on its economic transformation under two principal budgetary burdens: demographic change and collapsed oil prices. First, the Saudi adult population will more than double in the next fifteen years, driving subsidies and other government payments to unsustainable levels. The creation of private-sector jobs is the obvious answer for a country whose government employs 70 percent of its working citizens, but the sheer numbers show the difficulty. Executing the National Transformation Plan would require the creation of six million new jobs by 2030 — more if women enter the workforce in larger numbers — and yet the 2003-13 oil boom created just one-third that many. The Kingdom’s currently aims to create 450,000 non-oil jobs before 2020, and yet it would need to create 226,000 jobs a year just to accommodate new entrants to the labor market. In the meantime, declining global energy prices are draining funds for reforms projected to cost an estimated 4 trillion dollars. Moreover, Saudis rely almost entirely on domestic diesel and natural gas for power; at current rates demand will cut two million barrels a day from exports by 2020 further paring cash to commit to reform.

No Saudi Aramco Oil Shipments to Egypt for Second Month - Egypt will buy from global oil markets in November after Saudi Aramco halted deliveries for a second month, an oil ministry official said on Monday. The move by the Saudi oil giant came as the two countries disagreed over Syria's conflict, with Egypt edging closer to Russia, a key backer of President Bashar al-Assad's regime whom Riyadh opposes. Egypt announced in October that it had invited tenders to meet its refined oil products needs after Aramco halted the delivery of 700,000 tonnes. "In November we're buying from the world market," said the ministry official, adding they have not been informed when Aramco would resume shipments. Saudi Arabia has provided Egypt with billions of dollars in aid and credit since President Abdel Fattah al-Sisi overthrew Islamist Mohamed Morsi in 2013 while army chief, and King Salman visited Cairo in April. They had agreed during the visit to finance Egyptian imports from Aramco for five years in a $23-billion (21-billion-euro) deal. The two governments have differences over the Syrian conflict and over Egypt's unwillingness to send ground troops to join a Saudi-led coalition fighting rebels in Yemen.

In "Seismic Shift" To Mid-East Regional Power, Saudis Halt Egypt Oil Supplies As Cairo Turns To Iran -- While the proxy war in the middle-east rages, a curious, and largely under the radar pivot has been taking place in one of the countries directly impacted by Hillary Clinton's foreign policy: Egypt.In mid-October, we reported that, for the first time ever, Russia and Egypt would conduct joint military drills. This followed news that Russia will sell attack helicopters to the North African nation and invest billions in Egyptian infrastructure. These items, along with the fact that Egypt is eager to be re-granted Russian tourism rights for its citizens after recent bad blood between the countries, lead one to the logical conclusion that Egypt has every incentive to cooperate with Russia going forward.    It appears, however, that the quiet Egyptian pivot has not gone unnoticed by the US and its mid-east allies, and on Monday, Saudi Arabia informed Egypt that critical shipments of oil products expected under a $23 billion aid deal have been halted indefinitely, which according to Reuters suggests a deepening rift between the Arab world's richest country and its most populous.The official narrative is that while Saudi Arabia has been a major donor to Egypt since President Abdel Fattah al-Sisi seized power in a violent countercoup in mid-2013, Riyadh has become frustrated with Sisi's lack of economic reforms and his reluctance to be drawn into the conflict in Yemen. During a visit by Saudi King Salman in April, Saudi Arabia agreed to provide Egypt with 700,000 tonnes of refined oil products per month for five years but the cargoes stopped arriving in early October as festering political tensions burst into the open. What is curious is that the deal fell apart just weeks after Cairo suddenly became friendly with Moscow. While Egyptian officials said since that the contract with Saudi Arabia's state oil firm Aramco remains valid and had appeared to expect that oil would start flowing again soon, on Monday, however, Egyptian Oil Minister Tarek El Molla confirmed it had stopped shipments indefinitely. Aramco has not commented on the halt and did not respond to calls on Monday.

World Oil And Its Seven Biggest Chokepoints - It’s common knowledge that most of the world’s oil is transported internationally by tankers.What might not be so commonly known is the fact that almost half of the crude shipped around the world passes through waters where piracy, the danger of terrorist attacks, or the possibility of local governments shutting down the waterway are all too real. Using new visualization tech, we can map the seven main chokepoints of the global crude oil routes. The map highlights the fact that four of these chokepoints – the biggest ones, at that – are in politically unstable or otherwise unfavorable regions, which could potentially threaten crude oil supplies around the world.

  • 17 Million bpd Through the Strait of Hormuz. - The biggest chokepoint for tanker shipments is the Strait of Hormuz in the Persian Gulf, between Oman and Iran. The Iran-controlled passage is where 17 million barrels of crude pass through on a daily basis. One of the biggest risks with this route is Iran’s threat wielding regarding it.
  • 15.2 Million bpd Through the Strait of Malacca. Malacca remains the shortest route between the Middle East and the Asian Markets.
  • 4.6 Million bpd Through the Suez Canal.
  • 3.8 Million bpd Through Bab el-Mandeb. - South of the Suez Canal is Bab el-Mandeb, another passage that accounts for 3.8 million barrels of crude daily. Since it passes between Yemen on the one side, and Eritrea, Djibouti, and Somalia on the other, shipments via Bab el-Mandeb are under constant threat from pirates and other militant groups operating in the area.

The four waterways above account for a combined 40.6 million barrels of crude every day. The rest of the chokepoints are not exactly in safe waters either, but much safer waters, perhaps except for the Bosphorus and the Dardanelles in Turkey, which account for around 2.9 million bpd of global oil shipments. Due to the nature of the current Turkish government with Recep Tayyip Erdogan at the helm, closing off the straits on a whim or as a demonstration of power to any of his many allies is never off the table. The rest of the maritime world oil goes through the Danish Straits (3.3 million bpd)—mostly Russian crude for Europe—and the Panama Canal, which is the smallest of the seven, transporting 800,000 bpd on average. Some 4.9 million barrels of crude are also shipped by Cape of Good Hope by those who would rather avoid the chokepoints of Suez and Bab el-Mandeb.

WHO says over 7,000 killed in Yemen 20-month war  Yemen's 20-month war has killed more than 7,000 people and wounded nearly 37,000, the World Health Organization said, as the UN envoy voiced alarm over the worsening humanitarian situation. "More than 7,070 people have been killed and over 36,818 injured" as of October 25, the WHO said in a statement. Another 21 million people are in need of urgent health services, the UN health agency said. Speaking to reporters at the airport of the rebel-held capital Sanaa on Monday, UN envoy Ismail Ould Cheikh Ahmed said that the situation cannot continue. "People are dying... the infrastructure is falling apart... and the economy is on the brink of abyss," he said. Yemen has been rocked by fighting between Iran-backed rebels and government forces supported by a Saudi-led coalition since March 2015, months after the insurgents seized Sanaa and advanced across the country. The UN envoy urged the coalition controlling Yemen's airspace to allow commercial flights into and out of Sanaa's international airport to evacuate the wounded. The coalition argues that the rebels would use the airport, completely under their control, to transport weapons. International organisations have also warned in recent weeks of a spread of disease and growing malnutrition rates in the country. The WHO said 2.1 million people have been internally displaced by the conflict. More than half of all health facilities across the country have been shut or are functioning only partially amid "critical shortages" in doctors, it said. Ould Cheikh Ahmed warned of a "very dangerous" health situation with an estimated 2,241 suspected cholera cases. The UN has confirmed 71 cases of the disease, which is transmitted through contaminated drinking water and causes acute diarrhoea. Attempts by the UN envoy to convince the warring parties to commit to a ceasefire and resume peace talks have failed.

Trump Faces Battle to Undo Iran Nuclear Deal - WSJ: —Donald Trump as president will be positioned to swiftly pull the U.S. out of the Obama administration’s landmark nuclear agreement with Iran, as he suggested during his campaign. A much harder task for Mr. Trump, however, is to convince other global powers to join him and dismantle a deal that President Barack Obama says has diminished the threat of another war in the Mideast and opened a path for reduced tensions in the region. During his campaign, Mr. Trump said the Obama administration negotiated badly. He alternately said he would scrap the deal and that he would renegotiate its terms. “My number one priority is to dismantle the disastrous deal with Iran,” he told the American Israel Public Affairs Committee in March. Tehran has been found to have briefly violated its pledges twice since the deal was reached in mid-2015, according to U.S. and European officials. Yet international commitment to the agreement remains strong, and the parties who negotiated it—China, Russia, France, Germany, the U.K. and the U.S.—have pledged to promote it. European Union foreign ministers are set to reiterate on Monday their strong support for the full implementation of the accord.The Iran deal isn’t a treaty, wasn’t formally signed, and wasn’t ratified by the U.S. Congress. It was approved by the United Nations Security Council, but not under procedures that obligate member states to observe its terms under threat of penalty. Any partner—including Iran—could summarily cease to stick to the agreement, which resulted in Tehran scaling back its nuclear capabilities in return for the lifting of most international sanctions. “The agreement is valid only as long as all parties uphold it,” State Department spokesman Mark Toner said Wednesday. Many of the deal’s terms already have gone into effect. As part of the agreement, Iran has reaped billions of dollars in repayments of money held up by the West during years of sanctions, and has resumed trade with other countries in transportation, aviation and energy. The benefits it already has garnered couldn’t be pulled back, diplomats and experts have said. Tehran, in return, already has shipped out most of its stockpile of enriched uranium and mothballed thousands of centrifuge machines. Sanctions related to Iran’s nuclear program already have been lifted, although world powers have said they could quickly reimpose punitive measures. However, the diplomats and experts also have questioned whether European and Asian countries would be willing to return to a strict sanctions regime, even if the U.S. decided to back out of the agreement and ratchet up new sanctions.

Hillary Accepted Qatar Money Without Notifying Government, While She Was Head Of State -- Three weeks ago, when we first reported that Qatar had offered to pay the Clinton Foundation $1 million after a hacked Podesta email disclosed that the ambassador of Qatar “Would like to see WJC [William Jefferson Clinton] ‘for five minutes’ in NYC, to present $1 million check that Qatar promised for WJC’s birthday in 2011”, we said that in this particular case, the Clinton Foundation may also be in violation of State Department ethics codes. Underscoring the potential flagrant abuse of ethical guidelines if the Qatar payment is confirmed, Hillary Clinton promised the U.S. government that while she served as secretary of state the foundation would not accept new funding from foreign governments without seeking clearance from the State Department's ethics office. The agreement was designed to dispel concerns that U.S. foreign policy could be swayed by donations to the foundation. Of course, US foreign policy could also be easily swayed if Hillary accepted money and simply did not report it. However, and where things get awkward for Clinton, is that the State Department has said it cannot cite any instances of its ethics officials reviewing or approving new donations from foreign governments to the foundation while Clinton served as the country's top diplomat from 2009 until 2013, confirming the foundation was in clear breach of its ethics agreement over the not immaterial donation of $1 million from a foreign state, which as Hillary herself also disclosed in another hacked Podesta email, is the primary supporter of the Islamic State.

Russian “Volunteers” and Egyptian Army in Syria? -- Media sources have been carrying news indicating that the Egyptian government has dispatched military forces to Syria in the context of fighting terrorism, and the military cooperation and coordination with the forces of President Bashar al-Assad’s government. “The sources said that Egypt is keen on offering military aid and dispatching forces to Syria in order to participate in the battles of the Syrian government against the terrorists now that major schisms emerged between [Egypt] and the Kingdom of Saudi Arabia. The latter is offering support to the terrorists in Iraq and Syria in addition to the war it has launched against the unarmed innocent people of Yemen. The sources added that the Syrian and Egyptian governments will make an official announcement regarding this coordination, which will be based on combating terrorism, in the near future. “A Syrian source at the Ministry of Foreign Affairs that spoke to Tasnim neither denied nor confirmed the piece of news carried by the media sources. He however indicated that, if this piece of news is confirmed, an official statement will be issued by the ministry of foreign affairs. “Maj. Gen. Ali Mamlouk, the head of the Syrian National Security Office, had visited Egypt some two weeks ago. This was the first announced visit to be carried out by an important Syrian official. Meetings were held with prominent Egyptian officials and the two sides could have agreed on increasing the military cooperation between them. “The visit came at a time when the Egyptian-Saudi relations are seeing differences over the discrepancy between the two countries’ positions regarding the Syrian crisis. Cairo believes that a political settlement involving all the different parties is the way to conclude the Syrian crisis, which has been ongoing for around six years. Meanwhile, Al-Riyadh believes that Syrian President Bashar al-Assad must leave power first. In addition, Egypt has recently voted in favor of a Russian draft resolution regarding Syria at the International Security Council. This step stirred the dismay of Saudi Arabia, the number one country in terms of aid provision to Cairo. "According to Kapa, Russian veterans of the Ukraine fighting were recruited for ground combat in Syria when it became clear that Syrians would not be able to hold ground without help, despite Russian air support.

Russian Carrier Group Arrives Next To Syria, To Launch Aleppo Air Strikes "In Hours" - Having travelled for the past three weeks from its base in Severomorsk, the Russian naval group in the Mediterranean, headed by the Admiral Kuznetsov aircraft carrier, dubbed by Reuters the "Largest Naval Force Since The Cold War" has arrived in Syria, and as RT reports, is preparing an offensive against militants on the outskirts of Aleppo, Syria, according to reports citing a source in the Defense Ministry. The strikes will be launched "in the nearest hours" and will target the distant outskirts of Aleppo, the source said, adding that there are no civilian-populated areas nearby. Jets from the Admiral Kuznetsov, the Peter the Great battle cruiser and other military ships in the battle group equipped with precision weapons will take part in the operation, Interfax and Gazeta.ru reported on Tuesday, citing a source in Russia’s Defense Ministry. The reported operation is aimed at preventing more militants from entering the city, which has become a terrorist stronghold in Syria, Interfax quoted its source as saying.

Nato Puts Up to 300,000 Troops on 'High Alert' As Tensions Rise With Russia -- Rising tensions with Russia mean that up to 300,000 Nato troops will be put on ‘high alert’, said Nato’s secretary-general. The move is a response to Russian weapons tests and aggression against neighbours, said Jens Stoltenberg, secretary-general of Nato. The troops will come from nations across Nato, including the UK. Mr Stoltenberg said, ‘We have seen Russia being much more active in many different ways. ‘We have seen a more assertive Russia implementing a substantial military build-up over many years – tripling defence spending since 2000 in real terms; developing new military capabilities; exercising their forces and using military force against neighbours. ‘We have also seen Russia using propaganda in Europe among Nato allies and that is exactly the reason why Nato is responding. We are responding with the biggest reinforcement of our collective defence since the end of the Cold War.’ Britain’s outgoing Nato representative Sir Adam Thompson said the number of troops being put on alert was likely to be 300,000.

Russia ships 'chase away' Dutch submarine in Mediterranean - BBC News: Russia's defence ministry says two of its navy destroyers forced away a Dutch submarine to stop it spying on an aircraft carrier in the Mediterranean. The sub was 20km (12 miles) from the Admiral Kuznetsov at the time of the incident, the military said. Russia sent a flotilla to the eastern Mediterranean ahead of an expected resumption of air strikes in Syria. Nato said it was monitoring the ships in a "measured and responsible way". An official said the Western military alliance would not go into details but said it had been observing the fleet for some weeks. The Russian flotilla's conspicuous voyage from Severomorsk in northern Russia, through the North Sea and the English Channel and into the Mediterranean, has rung alarm bells among Nato allies. What happened and where? There was no confirmation of the Russian military's claim of an incident, and the Dutch military tweeted that it would give no comment on submarine operations. It was also not immediately clear where the incident took place. However, one report placed the Admiral Kuznetsov around 100km (62 miles) north-west of the Syrian port of Latakia.

'This is a mushroom cloud waiting to happen: Jill Stein blasts 'warmonger' Hillary saying a vote for Clinton could lead to nuclear war with Russia - Green Party presidential candidate Jill Stein had some harsh words for both Hillary Clinton and Donald Trump on the eve of the election, labeling the Democratic candidate a 'warmonger' and her Republican rival a 'fascist.' Dr Stein, who is currently polling at just under 2 per cent going into Tuesday, warned in a Facebook Live conversation with journalist Marc Lamont Hill on Sunday that if Clinton is elected president on Tuesday, Americans should be prepared to go to war with Russia.‘Yes, Donald Trump is a total wildcard, but Hillary has the proven record of the most pro-conflict military policy possible,’ Stein argued. The third-party presidential hopeful noted that Clinton was calling for a no-fly zone over Syria, which, she argued, was tantamount to a declaration of war against Russia, the right-wing news site Breibart.com reported. 'Declaring war on Russia at a time when we have 2,000 nuclear weapons between us and the Russians on hair-trigger alert,’ she said. ‘This is a mushroom cloud waiting to happen.‘This election, we are not only deciding what kind of world we will have, but whether we will have a world or not going forward.’

Syria Analysis: Obama Declares Fight is With “Terrorists” Rather Than Assad - Two days after Donald Trump’s election, officials of the Obama Administration have publicly acknowledged the shift in US involvement in Syria, focusing on the killing of leaders of the jihadist faction Jabhat Fatah al-Sham (formerly Jabhat al-Nusra) rather than confrontation with the Assad regime or even the Islamic State. The officials said President Obama has ordered the Pentagon to find and kill the leaders of JFS/Nusra, which formally revoked its allegiance to Al Qa’eda in July to focus on “unity” in the fight against the Assad regime. Despite the revocation, the official said Obama ordered the deployment of more drones and intelligence assets, overseen by the Joint Special ­Operations Command, because of “concern that [JFS/Nusra] is turning parts of Syria into a new base of operations for al-Qaeda on Europe’s southern doorstep”. The officials said the White House and State Department led the shift, overriding the objections of Pentagon staff who do not want to pull resources away from the fight against the Islamic State. They declared that Obama has been repeatedly told over the summer that JFS/Nusra is allowing Al Qa’eda leaders in Pakistan and Afghanistan to create a “haven” in northwest Syria. Officials also warned Obama that JFS/Nusra will try to fill the void as the Islamic State is pushed back. The shift in operations began in October. Officials said four “high-value targets”, including JFS/Nusra’s senior external planner, have been killed. Two of the strikes have been disclosed, but a November 2 attack on a gathering of JFS/Nusra leaders has yet to be revealed publicly.

US-Backed Forces Launch Military Offensive On Islamic State Capital - As the world remains focused on the unprecedented emotional rollercoaster that the US presidential election has become, a U.S.-backed alliance of Syrian, Kurdish and Arab  armed groups launched an operation to retake the northern city of Raqa, the capital of Islamic State in Syria. The new offensive ratchets up pressure on Islamic State at a critical moment, with its fighters already battling an assault by Iraqi security forces on their remaining Iraqi stronghold in the northern city of Mosul. The start of the assault by the Syrian Democratic Forces (SDF) came as Iraqi forces fought inside Mosul for the third day running amid fierce jihadist resistance. The two cities are the last major urban centres under IS control after the jihadists suffered a string of territorial losses in Iraq and Syria over the past year. As AFP notes, the US-led coalition battling IS is backing both assaults, hoping to deal a knockout blow to the self-styled "caliphate" the group declared in mid-2014. SDF commanders announced the start of the operation against Raqa in Ain Issa, some 50 kilometres (30 miles) north of the city. "The major battle to liberate Raqa and its surroundings has begun," SDF spokeswoman Jihan Sheikh Ahmed said. Operation "Wrath of the Euphrates" involves some 30,000 fighters and began on Saturday night, Ahmed said.

Selling ‘Regime Change’ Wars to the Masses - Imagine two cities. Both are under siege by the forces of the government of that country. Both cities are occupied by fanatics, who commit terrible atrocities, such as beheading people. But there is a vital difference. In one siege, the government soldiers are described as liberators by Western reporters embedded with them, who enthusiastically report their battles and air strikes. There are front-page pictures of these heroic soldiers giving a V-sign for victory. There is scant mention of civilian casualties. In the second city – in another country nearby – almost exactly the same is happening. Government forces are laying siege to a city controlled by the same breed of fanatics. The difference is that these fanatics are supported, supplied and armed by “us” – by the United States and Britain. They even have a media center that is funded by Britain and America. Another difference is that the government soldiers laying siege to this city are the “bad guys,” condemned for assaulting and bombing the city – which is exactly what the good soldiers do in the first city. Confusing? Not really. Such is the basic double standard that is the essence of propaganda. I am referring, of course, to the current siege of the city of Mosul by the government forces of Iraq, who are backed by the United States and Britain, and to the siege of Aleppo by the government forces of Syria, backed by Russia. One is good; the other is bad.What is seldom reported is that both cities would not be occupied by fanatics and ravaged by war if Britain and the United States had not invaded Iraq in 2003. That criminal enterprise was launched on lies strikingly similar to the propaganda that now distorts our understanding of the civil war in Syria. Without this drumbeat of propaganda dressed up as news, the monstrous ISIS and Al Qaeda and the Nusra Front and the rest of the jihadist gang might not exist, and the people of Syria might not be fighting for their lives today.

'Crashing waves' of jihadists fray soldiers' nerves in Mosul battle | Reuters: A week after his tank division punched through Islamic State defenses on the southeast edge of Mosul, an Iraqi army colonel says the fight to drive the militants out of their urban stronghold is turning into a nightmare. Against a well-drilled, mobile and brutally effective enemy, exploiting the cover of built-up neighborhoods and the city's civilian population, his tanks were useless, he said, and his men untrained for the urban warfare they face. His Ninth Armoured Division and elite counter terrorism units fighting nearby seized six of some 60 neighborhoods last week, the first gains inside Mosul since the Oct. 17 start of a campaign to crush Islamic State in its Iraqi fortress. Even that small foothold is proving hard to maintain, however, with waves of counter attacks by jihadist units including snipers and suicide bombers who use a network of tunnels stretching for miles (km) under the city. They appear able to strike at will, often at night, denying the troops rest and rattling frayed nerves. "We're an armored brigade, and fighting without being able to use tanks and with soldiers unused to urban warfare is putting troops in a tough situation," the officer told Reuters. He asked not to be named because he was not authorized to talk to the media.

Without telling the public, the U.S. started and ended a new bombing campaign in Libya - Salon.com -- The United States was bombing Libya again, although you might not have known it. And you wouldn’t be the only one — the U.S. government launched the war in August without telling the public. Then, on Oct. 31, the U.S. quietly ended the bombing campaign, once again without notifying its own citizens. The only reason we know this is because anonymous U.S. defense officials told Fox News that the war had wrapped up. Micah Zenko, a senior fellow at the Council on Foreign Relations, noted that there was not a single White House, Pentagon or State Department briefing on the three-month bombing campaign, nor was there a congressional hearing. From Aug. 1 until the end of October, the U.S. military conducted 367 airstrikes in Libya. Its goal was to beat back militants from the Islamic State, who seized control of the city Sirte, establishing their largest so-called caliphate outside of Iraq and Syria.ISIS has exploited the chaos wrought by the U.S.-backed 2011 war in Libya. NATO carried out a regime change operation to topple longtime strongman Muammar Qadhafi, effectively destroying Libya’s central government in the process, plunging the oil-rich North African country into chaos and a civil war from which it is still reeling.Zenko said it is appropriate that this bombing campaign “will end as a began, by leaks from anonymous DOD officials.” “War by press release, leaks, and selective video clips,” he quipped.

PetroChina Expands Receiving Capacity At LNG Terminals -- November 8, 2016 --As you read this story, remember four things:

  • the US has a lot of natural gas
  • the US is building a lot of LNG export terminals
  • the US allows LNG exports
  • China's appetite for LNG is growing
Data points from Reuters/Rigzone:
  • PetroChina is one of the larger Chinese oil and gas firms
  • PetroChina has three LNG receiving terminals
  • it is adding new storage tanks for LNG at two of those terminals 
  • one of the sites, Rudong: this is part of a second-phase expansion; will bring handling capacity up to 6.5 million tonnes/year; up from 3.5 million tonnes previously
  • at the second site, Dalian: will double its receiving capacity there to 6 million tonnes/year
  • PetroChina is raising its natural gas supply this winter by 7% year-over-year
  • most of that increase is domestically produced; a "moderate" amount will be due to imports

Analysis: Tax rebate signals China's growing confidence in secure oil supplies -  After more than a decade, China has decided to restore tax rebates on exports of gasoline, gasoil and jet fuel, a sign that Beijing is more than comfortable with the domestic supply situation for oil products. China's Ministry of Finance and the State Administration of Taxation announced late last week that the entire VAT of 17% would be refunded when those products are exported, effective November 1. This implies that products processed from domestic crudes can join the export bandwagon, in addition to those produced from imported crudes. Market participants said that while the re-introduction of the rebate, which was removed when China faced a domestic supply shortage a decade ago, would help encourage exports, Beijing could still keep an indirect control on it through the allocation of export quotas and regulate as and when needed."For refiners and exporters, the priority will still be on securing export quotas for gasoline, jet fuel, and diesel with third-party processing deals," Facts Global Energy said in a research note on the latest policy move. Chinese producers can export oil products in two ways -- under normal trade or under processing trade. Under processing trade, export quotas are needed and exports are required to be processed from imported feedstocks. This is the preferred route for domestic refineries as they are free of taxes. Currently 36 refineries, comprising independent and state-owned ones, have been granted export quotas for processing trades. Around 85-90% of China's gasoline and gasoil exports as well as 40% of jet fuel exports are under processing trades.  

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