NB: reports out of Saudi Arabia Saturday morning indicate that a drone attack by Houthi rebels has knocked out 5.7 million barrels per day of Saudi oil production; that's nearly 5.8% of global oil supplies...there's no info yet on how long they'll be down, but there is already talk of $100 oil...a few articles are included below, but you'd do better by checking the latest news..
oil prices fell for the first time in 3 weeks after Trump fired national security advisor and reprobate warhawk John Bolton, which oil traders took to mean that a war with Iran was less likely, thus reducing risks of a war-related oil price spike...after rising 2.6% to $56.52 a barrel last week on falling US crude supplies and China trade optimism, prices of US crude for October delivery opened higher on Monday after the new Saudi minister committed to continuing OPEC's output cuts and moved to a 6 week high as oil bulls interpreted his appointment as a sign that the Saudis would focus on pushing up crude prices, with oil closing $1.33 higher at $57.85 a barrel...the oil price rally continued into early Tuesday, with prices rising to as high as $58.76 a barrel before Trump announced on Twitter that he fired national security advisor John Bolton, sending oil prices tumbling to close down 45 cents at $57.40 a barrel...however, oil price moved back up in after hours trading Tuesday after the API reported a big draw on crude & gasoline supplies and thus opened higher on Wednesday and rose to as high as $58.30 after the EIA also reported a larger than expected draw in crude oil inventories, but then tumbled by as much as 5% on a report that Trump had discussed easing Iranian sanctions as a prelude to talks, with oil prices closing $1.65 lower at $55.75 a barrel...oil prices continued falling on Thursday, after OPEC and its allies delayed discussing bigger production cuts till December and after the EIA lowered its 4th quarter price forecast for Brent, the international benchmark, by $5, with US oil closing down 66 cents at $55.09 a barrel...prices edged lower again on Friday, as forecasts for weakening demand outweighed signs of progress in the U.S.-China trade dispute, with oil prices finishing the day 24 cents lower at $54.85 a barrel...oil thus ended the week $1.67, or 3% lower after four straight days of declines, posting its biggest weekly drop since July, amid oversupply concerns ...
natural gas prices, on the other hand, finished higher the third week in a row, largely on continued short covering, as traders looked past the summer glut to the heating season ahead...after rising nearly 10% to $2.496 per mmBTU on short covering after forecasts for late summer heat last week, natural gas for October delivery opened higher Monday and moved up 8.9 cents as the forecasts trended hotter, before pulling back a half cent on Tuesday and 2.8 cents on Wednesday, even as an unseasonably strong upper level ridge set up in the eastern half of the nation and limited the retreat...the rally resumed Thursday after the EIA report showed a smaller addition of gas to storage than was expected, with October natural gas prices rising 2.2 cents Thursday and 4 cents Friday to end the week at $2.614 per mmBTU, an increase of 4.7% on the week and nearly 28% higher than its early August lows...
the natural gas storage report for the week ending September 6th from the EIA indicated that the quantity of natural gas held in storage in the US increased by 78 billion cubic feet to 3,019 billion cubic feet by the end of the week, which meant our gas supplies were 393 billion cubic feet, or 15.0% more than the 2,626 billion cubic feet that were in storage on September 6th of last year, while still 77 billion cubic feet, or 2.5% below the five-year average of 3,096 billion cubic feet of natural gas that have been in storage as of the 6th of September in recent years....this week's 78 billion cubic feet injection into US natural gas storage was somewhat below the forecast for an 87 billion cubic feet injection by analysts surveyed by S&P Global Platts, while it was still above the average 73 billion cubic feet of natural gas that have been added to gas storage during the first week of September over the past 5 years, the 24th such average or above average storage build in the last 26 weeks...the 1,841 billion cubic feet of natural gas that have been added to storage over the 24 weeks of this year's injection season is the second most for the same period in the modern record, eclipsed only by the record 1906 billion cubic feet of natural gas that were injected into storage over the same 24 weeks of the 2014 natural gas injection season, a cool summer when there were no injections below 76 billion cubic feet….
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending September 6th indicated that because our refinery throughput and oil exports rose while our oil imports fell, we had to pull oil out of storage for the eleventh time in 13 weeks...our imports of crude oil fell by an average of 180,000 barrels per day to an average of 6,725,000 barrels per day, after rising by an average of 976,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 234,000 barrels per day to an average of 3,295,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,430,000 barrels of per day during the week ending September 6th, 414,000 fewer barrels per day than the net of our imports minus exports during the prior week...over the same period, the production of crude oil from US wells was reported to be unchanged from the prior week at 12,400,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well production totaled an average of 15,830,000 barrels per day during this reporting week..
meanwhile, US oil refineries were reportedly processing 17,495,000 barrels of crude per day during the week ending September 6th, 114,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA reported that a net of 987,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....hence, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 678,000 barrels per day less than what our oil refineries reported they used during the week...to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA inserted a (+678,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as "unaccounted for crude oil"....with that great a quantity of oil unaccounted for this week, it calls into question the other oil totals that the EIA has reported and that we have just transcribed (for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....
further details from the weekly Petroleum Status Report (pdf) indicated that the 4 week average of our oil imports fell to an average of 6,694,000 barrels per day last week, now 11.7% less than the 7,577,000 barrel per day average that we were importing over the same four-week period last year...the 987,000 barrel per day decrease in our total crude inventories all came out of our commercially available stocks of crude oil, while the amount of oil stored in our Strategic Petroleum Reserve remained unchanged...this week's crude oil production was reported to be unchanged at 12,400,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at 12,000,000 barrels per day, while a 44,000 barrels per day increase to 398,000 barrels per day in Alaska's oil production had no impact on the final rounded national production total...last year's US crude oil production for the week ending September 7th was rounded to 10,900,000 barrels per day, so this reporting week's rounded oil production figure was 13.6% above that of a year ago, and 47.1% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...
meanwhile, US oil refineries were operating at 95.1% of their capacity in using 17,495,000 barrels of crude per day during the week ending September 6th, up from 94.8% of capacity the prior week, refinery utilization rates that are fairly typical for late summer...however, the 17,495,000 barrels per day of oil that were refined this week were still 2.0% below the 17,857,000 barrels of crude per day that were being processed during the week ending September 7th, 2018, when US refineries were operating at 97.6% of capacity....
with the increase in the amount of oil being refined, gasoline output from our refineries was modestly higher, increasing by 88,000 barrels per day to 10,360,000 barrels per day during the week ending September 6th, after our refineries' gasoline output had decreased by 388,000 barrels per day over the prior week...but even with that increase in gasoline output, this week's gasoline production was still fractionally lower than the 10,384,000 barrels of gasoline that were being produced daily over the same week of last year....at the same time, our refineries' production of distillate fuels (diesel fuel and heat oil) rose by 187,000 barrels per day to 5,341,000 barrels per day, after our distillates output had decreased by 39,000 barrels per day the prior week....but even with that increase, our distillates production was still 3.5% less than the 5,536,000 barrels of distillates per day that were being produced during the week ending September 7th, 2018....
with just a modest increase in our gasoline production, our supply of gasoline in storage at the end of the week still fell for the 9th time in 13 weeks and for the 23rd time in twenty-eight weeks, decreasing by 682,000 barrels to 228,904,000 barrels during the week to September 6th, after our gasoline supplies had fallen by 2,396,000 barrels over the prior week....our gasoline supplies decreased this week because the amount of gasoline supplied to US markets increased by 336,000 barrels per day to 9,807,000 barrels per day even while our exports of gasoline fell by 182,000 barrels per day to 637,000 barrels per day, and while our imports of gasoline rose by 80,000 barrels per day to 797,000 barrels per day...after this week's decrease, our gasoline supplies were 3.0% lower than last September 7th's inventory level of 235,869,000 barrels, while remaining roughly 3% above the five year average of our gasoline supplies for this time of the year...
with the big increase in our distillates production, our supplies of distillate fuels rose for the 11th time in the past 26 weeks, increasing by 2,704,000 barrels to 136,226,000 barrels during the week ending September 6th, after our distillates supplies had decreased by 2,538,000 barrels over the prior week...our distillates supplies increased this week because the amount of distillates supplied to US markets, a proxy for our domestic demand, decreased by 310,000 barrels per day to 3,804,000 barrels per day, and because our exports of distillates fell by 315,000 barrels per day to 1,194,000 barrels per day, while our imports of distillates fell by 82,000 barrels per day to 44,000 barrels per day....but even after this week's inventory increase, our distillate supplies were still 2.2% less than the 139,283,000 barrels of distillates that we had stored on September 7th, 2018, and remained around 6% below the five year average of distillates stocks for this time of the year...
finally, as our exports rose and our refineries processed more oil, our commercial supplies of crude oil in storage fell for the eleventh time in thirteen weeks but for the seventeenth time in 34 weeks, decreasing by 6,912,000 barrels, from 422,980,000 barrels on August 30th to 416,068,000 barrels on September 6th...that decrease left our crude oil inventories 2% below the five-year average of crude oil supplies for this time of year, but still roughly 24% higher than the prior 5 year (2009 - 2013) average of crude oil stocks after the first week of September, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories had generally been rising over the past year up until the most recent thirteen weeks, after generally falling until then through most of the prior year and a half, our oil supplies as of September 6th were still 5.0% above the 396,194,000 barrels of oil we had stored on September 7th of 2018, but at the same time were 11.1% below the 468,241,000 barrels of oil that we had in storage on September 8th of 2017, and 13.3% below the 480,166,000 barrels of oil we had in commercial storage on September 9th of 2016...
OPEC's Monthly Oil Market Report
this week we're also going to review OPEC's September Oil Market Report (covering August OPEC & global oil data), which was released on Wednesday of this past week and is available as a free download, and hence it's the report we check for monthly global oil supply and demand data...as you’ll see, it shows there was again a large shortfall in the amount of oil produced globally in August, contrary to the story that's being told elsewhere...the first table from this monthly report that we'll look at is from the page numbered 63 of that report (pdf page 73), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate...for all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thus avert any potential disputes that could arise if each member reported their own figures...
as we can see from the above table of oil production data, OPEC's oil output rose by 136,000 barrels per day to 29,741,000 barrels per day in August, from their revised July production total of 29,605,000 barrels per day...however that July figure was originally reported as 29,609,000 barrels per day, so that means their production for August was, in effect, a 132,000 barrel per day increase from the previously reported production figures (for your reference, here is the table of the official July OPEC output figures as reported a month ago, before this month's revisions)...
we can also see that the 118,000 barrel per day increase by the Saudis, the 86,000 barrel per day increase by Nigeria, and the 43,000 barrel per day increase by Iraq were the reasons that OPEC output rose in August, as most other OPEC members either cut their output or were little changed...however, those increases in the output from Nigeria and Iraq means that both countries are now well over their output allocation as originally determined for each OPEC member after their December 7th, 2018 meeting, when OPEC agreed to cut 800,000 barrels per day as part of a 1.2 million barrel per day cut agreed to with Russia and other oil producers, and which were extended at their July 1st meeting a little over two months ago...this can be seen in the table of OPEC production allocations we've included below:
the above table came from a February 6th post on Saudi cuts and OPEC allocations at S&P Global Platts, and it shows average daily production quota in millions of barrels of oil per day for each of the OPEC members as was agreed to at their December 2018 meeting and has now been extended through March 2020 as of their recent meeting....note that Venezuela and Iran, whose oil exports are being sanctioned by the Trump administration, and Libya, which has been beset by a civil war, are exempt from any production quotas, and that none of those exempt countries are producing more than they did in the 4th quarter of 2018, which you can see in the third column of the OPEC production table above...
the next graphic from the report that we'll include shows us both OPEC and world oil production monthly on the same graph, over the period from September 2017 to August 2019, and it comes from page 64 (pdf page 74) of the September OPEC Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale...
including the increase in OPEC's production from what they produced a month ago, their preliminary estimate now indicates that total global oil production rose by 0.83 million barrels per day to 99.24 million barrels per day in August, but that reported increase came after July's total global output figure was revised down by 300,000 barrels per day from the 98.71 million barrels per day global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 700,000 barrels per day in August after that revision, with higher oil production from the US, Canada, Malaysia, Brazil and Russia the major reasons for the non-OPEC output increase in August.... the 99.24 million barrels per day produced globally in August was also 0.36 million barrels per day, or 0.4% higher than the 98.88 million barrels of oil per day that were being produced globally in August a year ago (see the September 2018 OPEC report (online pdf) for the originally reported August 2018 details)...but even with this month's increase in OPEC's output, their August oil production of 29,741,000 barrels per day slipped to 30.0% of what was produced globally during the month, down from the revised 30.1% share they contributed in July....OPEC's August 2018 production was reported at 32,565,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year, excluding Qatar from last year's total and new member Congo from this year's, are now producing 2,527,000 fewer barrels per day of oil than they were producing a year ago, when they accounted for 32.9% of global output, with a 1,394,000 barrel per day drop in output from Iran, a 596,000 barrel per day decrease in the output from Saudi Arabia, and a 523,000 barrel per day decrease in the output from Venezuela from that time more than offsetting the year over year production increases of 141,000 barrels per day from Nigeria, 130,000 barrels per day from Libya, 130,000 barrels per day from Iraq, and 113,000 barrels per day from the United Arab Emirates...
despite the 830,000 barrels per day increase in global oil output that was seen during August, there was still a large shortfall in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us...
the table above came from page 35 of the September OPEC Monthly Oil Market Report (pdf page 45), and it shows regional and total oil demand in millions of barrels per day for 2018 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2019 over the rest of the table...on the "Total world" line in the fourth column, we've circled in blue the figure that's relevant for August, which is their revised estimate of global oil demand during the third quarter of 2019...
OPEC has estimated that during the 3rd quarter of this year, all oil consuming regions of the globe will be using 100.63 million barrels of oil per day, which was revised from their estimate of 100.69 million barrels of oil per day for the 3rd quarter a month ago....meanwhile, as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were still only producing 99.24 million barrels per day during August, which means that there was a shortfall of around 1,450,000 barrels per day in global oil production when compared to the demand estimated for the month... in addition, the downward revision of 300,000 barrels per day to July's global output that's implied in this report, partially offset by the 60,000 barrels per day downward revision to 3rd quarter demand that we've just noted, means that the 1,980,000 barrel per day shortfall that we had previously figured for July based on last month's figures would now be revised to a deficit of 2,220,000 barrels per day....
however, demand figures for both the first quarter and 2nd quarter were also revised lower with this report, as you can see encircled by the green ellipse on the table above...the 170,000 barrels per day downward revision to 2nd quarter demand would mean that we'd have to revise our global oil deficit for June from 790,000 barrels per day to 620,000, that we'd have to revise our May deficit from 1,160,000 barrels per day to 990,000 barrels per day, and revise our global oil deficit for April from 1,030,000 barrels per day to 860,000 barrels per day...hence, for the 2nd quarter as a whole, even after those downward revision to demand, the world's oil producers were producing 767,000 barrels per day less than what was needed...
note that in green we've also circled a downward revision of 30,000 barrels per day to first quarter demand...that means that the global oil surplus of 160,000 barrels per day we had previously figured for March would have to be revised to a global oil surplus of 190,000 barrels per day...similarly, the 610,000 barrel per day global oil output surplus we had for February would now be a 640,000 barrel per day global oil output surplus, and the 520,000 barrel per day global oil output surplus we had for January would be revised to a 550,000 barrel per day oil output surplus..
our green ellipse above also highlights that OPEC has revised 2018's oil demand 10,000 barrels per day higher...when demand for 2018 was revised a month ago we adjusted our previously computed 2018 figures and for that revision and figured that for all of 2018, global oil demand exceeded production by roughly 47,240,000 barrels of oil for the year as a whole...the 10,000 barrels per day upward revision to 2018 demand would thus add 3,650,000 barrels to that deficit for a total shortfall of 50,890,000 barrels for 2018...
This Week's Rig Count
the US rig count fell for the 26th time in 30 weeks over the week ending September 13th, and is now down by 18.2% since the end of last year....Baker Hughes reported that the total count of rotary rigs running in the US fell by 12 rigs to a 28 month low of 886 rigs this past week, which was also down by 169 rigs from the 1055 rigs that were in use as of the September 14th report of 2018, and well less than half of the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market...
the count of rigs drilling for oil decreased by 5 rigs to 733 rigs this week, which was a 22 month low for oil rigs and 134 fewer oil rigs than were running a year ago, and quite a bit below the recent high of 1609 rigs that were drilling for oil on October 10th, 2014...at the same time, the number of drilling rigs targeting natural gas bearing formations fell by 7 rigs to 153 natural gas rigs, a 30 month low for gas rig drilling activity and down by 33 rigs from the 186 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...
offshore drilling activity was down by 2 to 26 rigs running this week, as platforms offshore from Texas and from Alaska were shut down...that still left 25 rigs drilling offshore from Louisiana and one offshore from the Kenai Peninsula in Alaska, a net increase of six offshore rigs from a year ago, when 11 rigs were drilling in Louisiana waters, one was drilling offshore from Texas, and two were deployed offshore from Alaska....
the count of active horizontal drilling rigs was down by 7 rigs to 776 horizontal rigs this week, which was the least horizontal rigs deployed since November 17th, 2017 and hence is a 22 month low for horizontal drilling...that was also 145 fewer horizontal rigs than the 921 horizontal rigs that were in use in the US on September 14th of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, the directional rig count was down by 10 to 57 directional rigs this week, and those were down by 14 from the 71 directional rigs that were operating during the same week of last year...on the other hand, the vertical rig count was up by 5 to 53 vertical rigs this week, but those were still down by 10 from the 63 vertical rigs that were in use on September 14th of 2018...
the details on this week's changes in drilling activity by state and by major shale basin are included in our screenshot below of that part of the rig count summary pdf from Baker Hughes that shows those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the 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 September 13th, the second column shows the change in the number of working rigs between last week's count (September 6th) and this week's (September 13th) count, the third column shows last week's September 6th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running before the equivalent weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 14th of September, 2018...
even with the majority of this week's rig decrease coming out of those drilling for natural gas, the 8 rig decrease in the oil-bearing Permian was still two-thirds of the total that were idled this week....of those, just one rig was shut down in Texas Oil District 8, or the core Permian Delaware, which still has 267 rigs drilling; while 2 rigs were shut down in Texas Oil District 8A, encompassing the northern part of the Permian Midland, and 5 rigs were shut down in Texas Oil District 7C, or the southern part of the Permian Midland, which now only has 9 rigs still drilling...other major changes in Texas include the startup of 4 rigs in Texas Oil District 7B, which accounts for the 3 rig increase in the Barnett shale, and 3 rigs that were shut down in Texas Oil District 10, the panhandle region, which corresponds to the Granite Wash...since the Granite Wash rig count is unchanged, it seems likely that 3 rigs began operation in the Oklahoma portion of Granite Wash to offset the shutdowns in Texas, given that the Oklahoma rig count increased despite the idling of 3 rigs in the Cana Woodford....oddly enough, even with this week's pullback in natural gas, the Cana Woodford, historically an oil play, saw a 2nd natural gas rig startup this week, while 4 oil rigs were idled in the basin, while the Barnett shale, more recently ployed for natural gas, had 3 oil seeking rigs added...another natural gas rig began operations in the Haynesville, apparently on the Texas side, since the Louisiana side of the basin shows a decrease...meanwhile, 3 natural gas rigs were shut down in West Virginia's Marcellus, one was shut down in Ohio' Utica, and 6 natural gas rigs were shut down in "other" basins not tracked separately by Baker Hughes...i'm not sure how to account for the 2 rig increase in Pennsylvania; all of the PA rigs shown to be drilling this week by the North America Rotary Rig Count Pivot Table (excel) are indicated to be in the Marcellus, but of the two rigs drilling in Fayette County, one is shown to be horizontal at a depth greater than 15,000 feet, while the other is indicated to be vertical at less than 5,000 feet...since that's physically impossible, we can probably assume that new PA rig in Fayette county is not targeting the Marcellus, thus accounting for the discrepancy in this week's count...we should also note that a horizontal rig started drilling for oil in Midland county Michigan this week, in the first drilling that state has seen since a 2 week stint in May of 2017...
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Court orders federal agency to explain pipeline decision— The nation’s top appeals court has ruled that a federal agency must explain why it approved a pipeline sending substantial quantities of natural gas to Canada and allowed the energy companies to force U.S. citizens to sell property so construction could begin. The U.S. Court of Appeals for the District of Columbia agreed with Oberlin, Ohio, and other plaintiffs Friday that the Federal Energy Regulatory Commission failed to justify giving owners of the NEXUS Gas Transmission pipeline credit for gas shipped to Canada to prove the project’s need. FERC officials declined to comment Tuesday about the ruling. Opponents long argued it was unlawful for the pipeline owners, Canada’s Enbridge Inc. and Detroit’s DTE Energy, to force U.S. citizens to sell property under legal threat so the 255-mile-long (412-kilometer-long) pipeline stretching across northern Ohio and into Michigan could be built. Plaintiff attorney Carolyn Elefant told a three-judge panel during oral arguments in May that about one-third of the pipeline’s daily capacity of 1.5 billion cubic feet (40 million cubic meters) per day was being shipped to a massive trading and storage hub in Ontario. The decision dismissed the remaining claims made by Oberlin and other opponents and allowed the pipeline, which began transporting gas from Appalachian shale fields in October, to remain in service. FERC attorney Carol Banta told the court in May that 93 percent of the pipeline was built without using eminent domain. Judge Robert Wilkins responded: “Even if it’s 1% of eminent domain needed, that’s someone’s property being taken, and that raises constitutional issues.” Attorney David Mucklow said the decision is a “great victory for enforcing people’s property rights in the United States.” “It’s going to force FERC to handle these types of cases differently,” Mucklow said, adding that people who sold property after being sued by NEXUS were forced to negotiate “with a gun to their heads.”
Court rules federal agency must revisit NEXUS pipeline approval - The Federal Energy Regulatory Commission will have to reexamine its rationale for approving a controversial natural gas pipeline that cuts across the state and into Michigan. The U.S. Court of Appeals for the District of Columbia circuit ruled FERC failed to adequately justify its approval of the NEXUS Gas Transmission pipeline when the company has contracts with Canadian shippers. The 256-mile-long NEXUS Gas Transmission pipeline, which crosses through Oberlin, carries gas to markets in northern Ohio, southeastern Michigan and Ontario, Canada. It begins and ends in the United States, but two of the companies it is contracted with are Canadian companies serving customers in Canada. The city of Oberlin petitioned the court to take up the case last year, receiving the latest judgement Friday. Eminent domain, the act of taking private property with compensation for public use, was used to construct the pipeline. Oberlin's petition argued a private pipeline selling gas to foreign shippers did not qualify as a "public use." Oberlin's attorney, Carolyn Elefant, argued nearly a third of the pipeline's daily capacity is headed to Canada. FERC's attorney countered that most of the gas shipped through the pipeline will be used in the United States and some of what is sent to Canada could be sold back to the U.S. The court opinion notes the FERC did not consider if the public benefits of the pipeline outweigh its disadvantages, and did not explain why it was lawful to issue the certificate that allowed for the pipeline's construction as an interstate pipeline. The court rejected Oberlin's other arguments, including two arguments on the pipeline's safety. The court's decision did not overturn FERC's original approval of the pipeline — allowing NEXUS to continue to operate — but could impact similar projects going forward.
Sale of Ohio pipeline to NEXUS to come with FTC conditions - Sierra Leone Times - Joint venture NEXUS Gas Transmission, LLC, and its member companies, DTE Energy Company and Enbridge Inc., will settle Federal Trade Commission charges that the joint venture's acquisition of an Ohio pipeline would likely harm competition to provide natural gas pipeline transportation in a three-county area that includes Toledo, Ohio.According to the FTC's complaint, NEXUS, which is owned in equal shares by DTE and Enbridge, agreed in January to pay $160 million for Generation Pipeline LLC. Generation owns and operates a 23-mile pipeline in the Toledo, Ohio area.The complaint alleges that NEXUS's purchase of Generation from North Coast Gas Transmission LLC ("North Coast") and several other owners is anticompetitive due to a non-compete clause that keeps North Coast from competing to provide natural gas pipeline transportation, for three years after the acquisition closes, in parts of the Ohio counties of Lucas, Ottawa, and Wood.North Coast's primary asset is a 280-mile natural gas transmission pipeline system that spans 13 Ohio counties, including Lucas, Ottawa, and Wood. The complaint alleges that the sale agreement's clause prohibiting North Coast from competing in parts of Lucas, Ottawa, and Wood counties violates federal antitrust law. According to the complaint, the non-compete clause eliminates actual and potential competition for three years between North Coast and any other pipeline. It also is not reasonably limited in scope to protect a legitimate business interest, according to the complaint. The Generation pipeline and the North Coast pipeline may be the best alternatives for some large industrial customers in the Toledo area who are located reasonably close to both pipelines. By prohibiting North Coast from competing with the Generation pipeline, the non-compete clause would harm customers who otherwise would benefit from that competition.
Ascent Resources loves its Utica Shale - The Utica is “really a phenomenal reservoir,” according to Jeff A. Fisher, CEO of Ascent Resources. The Utica play, primarily in eastern Ohio, is “still a bit misunderstood” and often overlooked, Fisher told an audience of roughly 600 Wednesday at Hart Energy’s 11th annual DUG East Conference and Exhibition in this Pennsylvania city. Kallanish Energy was in attendance. “This play really shines. The rock really performs,” he said. It produces dry natural gas, wet natural gas, natural gas liquids and condensate, depending on where in the Utica Shale you are drilling, Fisher said. His company has drilled 400 Utica wells and is the eighth-largest natural gas producer in the U.S. It is the No. 1 oil and natural gas producer in Ohio – with most of that activity in the last three years, Fisher said. Ascent expects to produce in excess of 2 billion cubic feet-equivalent per day (Bcfe/d) in 2019, up from 377 million cubic feet-equivalent per day (mMcfe/d) in 2016, and 1.36 Bcfe/d in 2018. His company has 10 Utica wells that have each produced 8 billion cubic feet of natural gas in 12 months, he said. Ascent has 274,000 acres, mostly in the southern Utica play, plus an additional 76,000 of royalty mineral rights. It has been operating six rigs since 2016, and intends to maintain that level of drilling, Fisher said. Ascent has been shipping about one-third of its natural gas to the Midwest, another third to the Gulf Coast, and the final one-third to the East Coast. It is also shipping 350 Mmcf/d to an unnamed LNG export facility. Oklahoma-based Ascent expects to begin producing free cash flow by the end of 2019, he said. The privately-held company is highly hedged for natural gas sales from 2019 through 2021. In other news from DUG East, Encino Resources is still settling into its $2 billion acquisition of 900,000 acres previously owned by Chesapeake Energy in eastern Ohio, said chief operating officer Ray Walker. “There’s a lot in the sandbox that we have,” he said of the company’s Utica drilling options. “Things are looking really good. … We have a lot of running room.” Encino flowing 70% of its gas to the Gulf The privately held company is sending 70% of its natural gas to the Gulf Coast with up to 25% going to Dawn, Ontario, and the rest being sold locally, he said. It is well-hedged for many years out. It is looking at possible acquisitions in the Utica and in other plays in the coming years, he said. The company intends to operate two rigs in the Utica and two crews for hydraulic fracturing in 2019, although that could grow slightly in 2020, he said.
Europe's Biggest Gas Pipeline Operator Looks To Get Hands On US Assets -- Europe’s biggest gas pipeline operator, Italy-based Snam is crafting a bid for a piece of Energy Transfer Partner’s $6 billion natural gas pipeline, Reuters sources said on Friday. If successful, it would not only be Snam’s first US project, but it also be its first project outside Europe, as the US natural gas industry is going gangbusters. Snam is now conducting due diligence on buying a 33% stake, sold by ETP for the Rover pipeline, according to Reuters. Despite all the controversy surrounding oil and gas pipelines in North America—both in the United States and Canada, they remain an attractive investment. The Rover Pipeline travels a distance of 713 miles, starting in Southeastern Ohio, Western West Virginia, and Southwestern Pennsylvania, and then continues west through Ohio and then north into Michigan The pipeline has the capacity to move 3.25 billion cubic feet per day, transporting gas from the Marcellus and Utica. Rumors first surfaced that ETP was considering a sale of its 33% stake in the pipeline project in mid-July. At the time, it was thought that such a sale would net ETP $2.5 billion, according to Bloomberg. ETP has already ditched a 32% stake in Rover to Blackstone for $1.57 billion at a time when the pipeline, then just under construction, faced possible delays over environmental scrutiny and even some environmental-related work stoppages and lawsuits. The pipeline has done much to relieve the bottlenecks in the Utica and Marcellus regions, and has increased natural gas production in the area through the relief of some of these bottlenecks. Also relieving the transportation bottlenecks in the area are the NEXUS and Williams’ Atlantic Sunrise pipelines.
How did fracking contaminants end up in the Monongahela River? A loophole in the law might be to blame - About a year and a half ago, Guy Kruppa realized something was wrong with his bugs. Kruppa is the superintendent of the Belle Vernon Municipal Authority, and runs the town’s small sewage treatment plant on the banks of the Monongahela River, south of Pittsburgh. The plant uses micro-organisms — bugs — to break down raw sewage before it’s treated and released into the river. But in 2018, those bugs stopped doing their job. Levels of bacteria and ammonia in the plant’s discharge to the river started going up. The plant began flunking water quality tests for its state pollution discharge permit. “We thought, was it something we were doing internally? Were we not processing enough sludge, maybe we aren’t pumping enough?” Kruppa said. “We went through the whole gamut of things.” Kruppa thought about all the places that send waste to the plant. “We take in a neighboring community — Washington Township, we take in Belle Vernon, North Belle Vernon … but we also take in a landfill.” That would be Westmoreland Sanitary Landfill, about a mile away in the town of Rostraver. For years, the landfill sent Belle Vernon its leachate — liquid waste that collects at the landfill when rainwater trickles through its piles of garbage. Kruppa began looking at test samples of the leachate. He sent it to an engineer he used to work with. “He goes, you have some very high numbers and as far as chlorides, conductivity, barium,” Kruppa said. “He said these are all indicators of frack waste.” Kruppa discovered the landfill was sending more leachate than the treatment plant was allowed to accept. And he found out about 40 percent of the landfill’s waste since 2010 had been solid oil and gas waste. That included drill cuttings — dirt and rocks that companies dig up to get to the region’s gas-rich shale beds. Those beds are naturally rich in salts and metals. “They were killing off our bugs. Our bugs are what treats the water,” Kruppa said. “And that’s why we weren’t making our permit levels, because we had nothing to work with.”
PA Pushback on EPA Plan to Eliminate Methane Regulations | BCTV – Environmental groups say the latest deregulation proposal from the Environmental Protection Agency would be devastating for the health of Pennsylvanians and the future of the planet. Late last week, EPA Administrator Andrew Wheeler released a proposal to eliminate direct regulation of methane emissions from new and modified oil and gas facilities.According to Mollie Michel, Southeast Pennsylvania field consultant with Moms Clean Air Force, that would endanger the health of vulnerable populations, like children and older adults, as more ozone-forming compounds escape into the air.“The EPA has become almost an arm of the oil and gas industry, protecting them over public health and the environment,” Michel sailThe EPA said the proposal is in line with President Donald Trump’s directive to eliminate rules that unduly burden energy development beyond what is necessary to protect the public.Experts estimate methane, a powerful greenhouse gas, accounts for 25% of the global climate change happening now. Michel pointed out that as the second-largest methane-producing state, Pennsylvania needs to step in where the EPA is backing off.“We’re looking toward Gov. Wolf to show his leadership on the state level and enact strong methane controls from existing sources of this dangerous pollution across the Commonwealth,” she said. In April, the Pennsylvania Department of Environmental Protection released draft rules for controlling emissions from existing oil and gas facilities – but critics say they don’t go far enough.
Pennsylvania permitting plummets as natural gas producers pull back - Still under pressure from investors to throttle back spending in the face of low natural gas prices, Pennsylvania shale gas drillers pulled 23% fewer permits for new wells in August compared with 2018 and 14% fewer permits compared with July. The single biggest drop-off in activity occurred in Greene County in the gas- and liquids-rich portion of the Marcellus Shale south of Pittsburgh. Neighboring Westmoreland County saw an uptick in activity-driven super major Chevron's 11 permits in the county southeast of Pittsburgh. Another global oil and gas producer, Spain's Repsol, joined with National Fuel Gas drilling unit Seneca Resources to almost triple the number of August permits year over year in northeastern Tioga County, presumably to take advantage of the increase in outbound pipeline capacity spurred by Williams. The decline in permitting activity statewide is directly reflected in the falling rig count in the Appalachian shales and low nationwide gas prices from huge supplies of gas coming onto the market, analysts said. Activity is expected to slacken throughout the second half of this year. "The real problem is that the SW Marcellus and Haynesville have continued to grow rapidly, even at a lower price than we anticipated," S . "The Marcellus/Utica added 5.3 Bcf/d year over year and the Haynesville an astounding 2.7 Bcf/d. We believe that price must force these two basins to not just stop growing, but decline from today to their beginning-of-year level and keep them there going forward to make storage balance." "Low gas prices are clearly having an impact on the rig count, with gas rigs at the lowest level since April 2017, though supply has yet to be affected,".
Pennsylvania royalty owners share the pain of low natural gas prices - Stubbornly low natural gas prices are leaving Pennsylvania property owners, big and small, with diminished royalty checks even as record amounts of gas are pulled from the commonwealth’s shales.The price slump has left shareholders angry and companies promising to slow new development. Royalty owners — those who have leases with drilling companies and share a stake in the gas sold from their property — have few options but to hope for prices to rebound.“You don’t control the well so you can’t turn off your production. You don’t get to say, we’ll hold it until next month, if prices go up,” said Robert Sher, president of the Pennsylvania Oil and Gas Landowner Alliance.Lower natural gas prices, driven in large part by a supply that has outpaced demand, make a dent in state and local budgets as well.The commonwealth is one of the largest royalty owners in Pennsylvania, with more than 260,000 acres of state forests, parks and waterways leased for oil and gas development.Similar amounts of gas were produced from state lands managed by the Department of Conservation and Natural Resources in fiscal years 2018 and 2014 — roughly 430 billion cubic feet — but the state's royalty revenue was cut in half last year, dropping from $135 million in 2014 to $67 million in 2018.Gas price fluctuations explain most of that drop, DCNR press secretary Terry Brady said. In 2014, gas produced from commonwealth land sold at an average of $4 per thousand cubic feet. In 2018, gas sales averaged $2.80/Mcf.
EQT reduces workforce by 23 percent as part of organizational streamlining — Oil and natural gas producer EQT will be letting go of approximately 23% of its workforce, according to news release from the company. The company plans to eliminate around 196 positions, saving it around $50 million annually in “general and administrative costs.” The decision, which the company calls “organizational streamlining,” will see the company reorganized, decreasing its current 58 departments to just 15.“Today’s action represents another significant milestone as we transform EQT into a modern, technology-driven and efficient natural gas producer,” said CEO Toby Rice. “Following the addition of proven leadership and the establishment of our digital work environment, we evaluated the business and determined the appropriate ‘future state’ organizational structure.” Rice and his brother Derek both serve on EQT’s board, having led a slate of seven new members elected on July 10. The Rice brothers, whose company, Rice Energy was acquired by EQT for more than $6 billion in 2017, now control the majority of board seats.Michael Laffin, vice president of communications for EQT, said the reduction went into effect Tuesday, the same day impacted employees were informed.The reduction applies to all of EQT’s operations, including West Virginia, Laffin said. Anne Blankenship, executive director of the West Virginia Oil and Natural Gas Association, declined to comment on the matter,
Study says renewable energy power plants will overtake natural-gas plants by 2035 -- According to the U.S. Energy Information Administration, natural gas is the top form of energy consumption in Pennsylvania, and about 40 percent of electricity in the state is generated from natural gas, just behind nuclear energy. Nationwide, natural gas is the single largest share of electricity production. But a new study indicates natural gas may not be on top forever and that nationwide, renewable energy will overtake natural-gas power plants within 16 years.According to the Rocky Mountain Institute (RMI), it will be more expensive to run 90 percent of natural-gas fired power plants compared to the costs to build wind and solar farms with storage systems by 2035. The institute analyzed the construction costs, fuel prices, and operation costs of 68 proposed natural-gas power plants across the U.S.“We find that the natural gas bridge is likely already behind us,” reads the RMI report, “and that continued investment in announced gas projects risks creating tens of billions of dollars in stranded costs by the mid-2030s, when new gas plants and pipelines will rapidly become uneconomic as clean energy costs continue to fall.” This report comes at a time when the jobs in the solar industry are on the rise in Pennsylvania, even though natural-gas jobs are also rising and make up a much larger percentage of the energy job sector. A large number of those proposed gas-fired generation projects are planned for Pennsylvania and the nearby Ohio River Valley. A cracker plant that will refine natural gas into plastics is currently under construction in Beaver County. The RMI report says rapidly falling prices and improved technologies of renewables are leading to an increasing cost advantage against natural-gas power plants.
State senator doesn’t have legal standing to block Sunoco’s Mariner East construction, Pa. court says - A state senator from Chester County lacks legal standing to challenge the construction and operation of Sunoco’s contentious Mariner East pipeline system, a Commonwealth Court panel ruled Monday.The court ordered the Public Utility Commission to dismiss a complaint filed by Sen. Andrew E. Dinniman, a Democrat who has battled Sunoco Pipeline LP over its 350-mile pipeline project, which weaves its way through densely developed parts of his district. In an opinion by President Judge Mary Hannah Leavitt, the three-judge panel ruled that Dinniman lacked both personal and legislative standing to challenge the project, and ordered the PUC to dissolve an interim emergency injunction blocking construction of parts of the pipeline. Dinniman filed the complaint in April 2018, contending that Sunoco’s construction of the Mariner East 2 pipeline caused sinkholes to develop in West Whiteland Township, undermining the integrity of the older Mariner East 1 pipeline. The pipelines are part of a system that Sunoco Pipeline is building to transport natural gas liquids, such as propane, from the Marcellus and Utica Shale regions to an export terminal in Marcus Hook, Delaware County. The court’s ruling will allow Sunoco to complete construction of the Mariner East 2 pipeline in several parts of Chester and Delaware Counties, which was blocked by the PUC’s decision. Sunoco was able to work around the incomplete sections by routing fuel flows through a 24-mile section of smaller pipeline that it repurposed for gas liquids.
Mariner East 1 pipeline shut down for upgrades at processing plant -- A big natural gas liquids pipeline that crosses Pennsylvania and begins in Washington County is out of service for planned upgrades at the terminal at the other end of the state. The Mariner East 1 pipeline has been shut down temporarily due to an upgrade at the Marcus Hook industrial complex outside Philadelphia, according to a spokeswoman for the pipeline's owner, the Sunoco Logistics subsidiary of Energy Transfer Partners (NYSE: ETP). One of the anchor customers of the pipeline, Range Resources Corp. (NYSE: RRC), also confirmed the shutdown. "We expect to put the pipeline back on line in the coming weeks," said Energy Transfer Partners spokeswoman Lisa Coleman. Range estimated the pipeline could be back online in early October. The pipeline, along with a newer pipeline called the Mariner East 2, have been the subject of regulatory action by multiple state agencies over the course of the last several years. But they have been operational and are critical for Range and other natural gas producers to take natural gas liquids from the Marcellus and Utica shales in southwestern Pennsylvania and bring them to markets overseas. Range said that through the month of September, it will put more ethane into the natural gas stream instead of shipping it separately via Mariner East 1, and it will ship the propane it would have sent via Mariner East 1 on Mariner East 2. Unlike previous stoppages, it won't impact cash flow at Range, the company said. But keeping the ethane in the natural gas stream instead of isolating it as a separate product could cut down some of Range's production in the third quarter. It said it would produce between 2.22 billion cubic feet of natural gas per day to 2.23 billion cubic feet, instead of the previously expected 2.25 billion cubic feet to 2.26 billion cubic feet.
Pennsylvania DEP to Sunoco: Your pipelines are showing - The state Department of Environmental Protection is ordering Sunoco Pipeline LP to cover up portions of its pipeline network that have become exposed over time. The order follows the discovery of an exposed pipeline in June by the state Public Utility Commission, which then requested that Sunoco report any additional exposed pipelines to DEP and PUC. In total, portions of Sunoco’s pipeline network located throughout the state are exposed at 43 locations, DEP said. Forty-two are used for transporting refined petroleum products, and one is used for transporting natural gas liquids. None are located at ongoing construction areas. DEP spokeswoman Elizabeth Rementer said the locations cannot be disclosed for security reasons. Of the 43 locations, 10 do not require a permit because of their location, 14 are undergoing or about to undergo remediation, 10 are awaiting permit approval from DEP and nine still require the submission of permit applications, DEP said. Energy Transfer spokeswoman Lisa Coleman said DEP’s order “took us by surprise” because “we have been working cooperatively with the DEP to address these areas.” Sunoco Pipeline is a subsidiary of Energy Transfer. Coleman said it’s not unusual for pipelines to become exposed during the normal course of operations — a point acknowledged by DEP Secretary Patrick McDonnell in a statement. “Pipelines can become exposed over time due to erosion in stream channels or due to their position in the ground, since many were constructed before there were standards on how deep they should be buried,” McDonnell said. “These identified pipelines are now exposed to weather, flooding and vandalism, which can result in a failure of the pipeline and subsequent impacts to our waterways, so it’s critical that Sunoco addresses them immediately.” According to the order, Sunoco has 30 days to apply for all needed permits on remaining sites. Once permits and approvals are obtained, Sunoco will have 60 days to bury all exposed pipelines to the appropriate amount of cover and then “fully stabilize and restore the site,” DEP said.
Was there a different regulatory path for the ruptured Revolution pipeline? - Two years before a natural gas pipeline slid down a slippery Beaver County hillside, bursting into flames and leaving a large scar that remains a year later, a smaller mark was made that might have changed the course of the Revolution pipeline. It was a check mark on Energy Transfer’s application for an erosion and sediment control permit. The permit would guide how the company kept the ground from sliding into streams as it dug a trench for its 40-mile pipeline and how the soil would remain stable once completed. When asked what kind of pipeline it was building, Texas-based Energy Transfer checked “transmission facility.” The Pennsylvania Department of Environmental Protection now says the company “misrepresented” its project. That ensured that its application for erosion management — the very thing that failed in the landslide on Sept. 10, 2018 — would be reviewed by a county conservation district instead of by state regulators. Although conservation districts act as delegates of the DEP in reviewing and issuing permits, the difference in resources and expertise between the local and state agencies came into stark relief recently when a recent state audit of the Beaver County Conservation District resulted in the first-ever revocation of its permit issuing powers. The DEP took the conservation district to task for missing required inspections, insufficient scrutiny of permit applications and a “lack of sound judgment.” An example of the latter, the DEP said, was the Beaver County Conservation District taking it upon itself to review the voluminous application for the Revolution pipeline instead of kicking that responsibility up to the state as it would any other gas gathering line. Except that no one, at the time, was calling it a gathering line. At least not to the DEP nor to the Beaver County Conservation District. Even though the new pipeline was intended to collect gas from wells in Beaver County on its way to Energy Transfer’s Revolution gas processing plant in Washington County, the word “gathering” was nowhere in the company’s lengthy narrative of the project. Yet when Energy Transfer registered the same pipeline with the federal Pipeline & Hazardous Materials Safety Administration, it checked a different box — gathering line — emphasizing the pipeline’s function in a short description. Gathering lines receive different, and less stringent, treatment from federal safety regulators than transmission lines. The registration document was dated one day after the erosion permit application.
Bankrupt Philadelphia refiner paid executives millions in bonuses just after fire: documents - (Reuters) - Executives of the Philadelphia Energy Solutions oil refinery were paid roughly $4.5 million in retention bonuses after a summer fire that led to the plant’s closure and before the company filed for bankruptcy a few weeks later, court documents show. PES announced plans to permanently shut its refinery following the June 21 explosive blaze and immediately began laying off many of its 1,100 employees without severance pay or health insurance coverage. The payments were made on July 5, about two weeks before PES filed for Chapter 11 bankruptcy, and while it was in the process of closing its 335,000 barrel-per-day refinery. Attorneys for the owners of PES were not immediately available for comment. Reuters could not immediately reach officials from PES. Chief Executive Officer Mark Smith received a $1.545 million retention bonus, the largest sum handed out to company executives, according to documents filed on Friday with the Bankruptcy Court for the District of Delaware. Attorney John McShane received $875,500, Chief Financial Officer Rachel Celiberti was given $721,000 and deputy staff attorney Anthony Lagreca made $450,000. Refinery manager Daniel Statile, who had been on the job since March, was paid $325,000. Additional spot bonuses, including a $75,000 payout for Celiberti and $50,000 for Lagreca, were made on the day of the June blaze. The company’s board of directors was not awarded bonuses, but there were other payouts, including a $772,5000 initial payment for annual consulting duties to Director Mark Cox on July 2.
Bonuses paid to PES refinery executives infuriate ex-workers and environmentalists - Infuriating. Unfair. Repulsive. Those are some of the printable words used by former employees of Philadelphia Energy Solutions to describe their thoughts about the news that company executives got about $4.5 million in bonuses before PES filed for Chapter 11 bankruptcy. A group of the workers gathered at a Philadelphia Refinery Advisory Group meeting on Monday night. They are among the more than 1,000 employees who were laid off with no severance pay or extended medical benefits by the end of August, after working at the refinery complex for years. Some have not been able to access their pensions, according to their union. Meanwhile, PES chief executive officer Mark Smith, in the job since August 2018, received a $1.545 million retention bonus, according to documents filed with U.S. Bankruptcy Court in Wilmington, as first reported by Reuters. “They stuffed their pockets while they walked — and had already walked — people out the gate, and intended to walk the others out the gate, without any compensation for a life’s time of work. It’s infuriating.” “These corporations, they feather their own beds all the time.” But union members are shocked about the amount, he said. “It’s a tough amount to swallow,” said Robert Campbell, who worked at the South Philadelphia refinery for more than 20 years. “I wish they would have shared their bonuses more fairly with everybody who worked there. A lot of guys put their blood, sweat and tears to that place, and they were crushed that they lost their jobs.” The bonuses were paid on July 5, exactly two weeks after the explosion and fire that ultimately shut the facility down, and just weeks before the company filed for Chapter 11, according to documents filed with the bankruptcy court. Others receiving bonuses of over $300,000 include executive vice president John McShane; chief financial officer Rachel Celiberti, who also received an extra $75,000 spot bonus; deputy staff attorney Anthony Lagreca, who also got a $50,000 spot bonus; and refinery manager Daniel Statile. Among other payments that bothered former refinery workers: those to Billy Goodhart, a human resources consultant who received $363,340 in 10 months working for the refinery while living in Texas — $295,646 for professional services, $56,651 for travel expenses, and $10,043 for other expenses. “It’s upsetting he was a self-proclaimed union breaker and earned so much for it,”
PennEast to resubmit application after latest pipeline permit deemed incomplete - PennEast was notified Wednesday by the state Department of Environmental Protection that its resubmitted application for a Freshwater Wetlands Permit was incomplete.The PennEast Pipeline is a proposed 120-mile, 36-inch diameter underground natural gas pipeline that would traverse from Pennsylvania through western Hunterdon County before ending in Mercer County.According to a letter issued by the DEP, PennEast is required to address a number of deficiencies and submit a number of missing and incomplete materials within 30 days. Failure to meet this deadline could result in the closing of its application.PennEast spokesperson Patricia Kornick said the company intends to resubmit an application meeting the requirements stipulated by the DEP.“PennEast is reviewing the department of environmental protection’s letter, and will move swiftly to provide any additional data the department believes it needs to begin its thorough review of the 24,000-page application,” Kornick said. “PennEast also is committed to working with the department as this process moves forward."She added the proposed route for the pipeline was shaped by feedback from the DEP to minimize environmental impacts.In the letter, the DEP outlines six regards in which the application was deficient or incomplete. For one, PennEast did not submit an associated right of way agreement or order of condemnation with the deeds of seven properties that are located along the proposed new alignment for the pipeline.
Another Rebuff for PennEast: Court Halts Bid to Seize State Lands - Federal appeals court reverses lower court’s decision that allowed company to exercise eminent domain over properties along pipeline route In another legal setback for the PennEast pipeline, the United States Court of Appeals for the Third Circuit has blocked the company’s bid to condemn state-owned lands to build its hotly contested 120-mile project. The ruling by the federal court reverses an earlier decision by a district court that allowed PennEast to exercise eminent domain to condemn 131 properties, including over 40 owned by the state that had been previously preserved for agricultural, recreational or conservation purposes. The properties are along the route in Hunterdon and Mercer counties where the pipeline would run. It is unclear whether the company could continue the project without rerouting the pipeline without those properties. The Third Circuit agreed with arguments made by the New Jersey attorney general that a private company lacked legal authority to seize or condemn state lands in federal court under the 11th Amendment of the U.S. Constitution. Under the legal doctrine of sovereign immunity, a state cannot be sued by a private company without its consent. While opponents of the project hailed the decision as a victory, it most likely means the much-litigated project will face new delays in what has been a five-year quest by PennEast to build a $1 billion pipeline that would move cheap natural gas from Pennsylvania into New Jersey and the metropolitan markets. “I look it as a big speed bump for PennEast and the rest of the other pipeline projects pending in the state and region,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “It’s a long way from a final win.’’ Pat Kornick, a spokeswoman for the PennEast Pipeline Company, said it is committed to moving ahead with the project. “While the decision is disappointing, PennEast will review the Third Circuit’s opinion in detail and determine its next steps,’’ she said. A court appeal is likely — given that even the Third Circuit acknowledged its ruling may disrupt how the natural gas industry operates. Cheap gas from the Marcellus Shale formation in Pennsylvania and other states has driven down natural gas prices, lowering costs for consumers who use the fuel to heat homes and manufacturers for whom the fuel is a big building block in their operations.
Cuomo on Constitution Pipeline: 'Any way we can challenge it, we will' – Gov. Andrew Cuomo on Friday said New York will continue its fight against the Constitution Pipeline after federal regulators ruled last week the state waived its right to deny the project a key water permit. Cuomo called a decision by the Federal Energy Regulatory Commission"disrespectful of states' rights" and criticized the Trump administration for overstepping its bounds before vowing to fight the ruling."We're looking at our legal rights now, but any way that we can challenge it, we will," Cuomo said during an interview with WAMC, a public-radio station based in Albany. The controversial 124-mile long pipeline would bring natural gas from Pennsylvania into the Southern Tier before stopping just outside Albany. But the battle to build the project has been in the courts since 2016 after New York's Department of Environmental Conservation denied the project a necessary water permit needed to advance the project.
Columbia Gas facing up to $1 million fines for abandoned gas service lines following Merrimack Valley explosions - On the eve of the one-year anniversary of the Merrimack Valley gas explosions, Massachusetts safety officials raised concerns regarding the state of Columbia Gas service lines. On Sept. 13, 2018, an over-pressurized natural gas line set off a series of fires and explosions in three Merrimack Valley communities. The explosions and fires damaged 131 structures, killed one person, drove thousands from their homes in Lawrence, Andover and North Andover, and sent to the hospital at least 21 people, including two firefighters. More than 2,000 families lived in temporary housing - some for weeks, others months - in the aftermath. Columbia Gas restored service to nearly 7,500 residential and business properties, installed more than 18,000 appliances in homes and replaced nearly 44 miles of gas main lines following the explosions. As part of the recovery efforts, the company disconnected 4,900 gas lines in the Merrimack Valley out of service and installed over 5,000 new lines. The state Department of Public Utilities raised concerns about the status of the old lines Wednesday in a letter to the president of Columbia Gas of Massachusetts. “While the abandoned services are not active and do not affect customers’ current service lines or heat, the issues identified regarding the two abandoned services concern the Department and indicate violations of Department regulations,” the letter from DPU Chairman Matthew H. Nelson reads. The disconnected lines require inspections and potentially additional work to properly cap the lines, Nelson said. State safety officials set a deadline for the initial phase of quality control work on the lines to be done by Nov. 16.
Still happening: Gas disasters take toll elsewhere - The gas disaster of Sept. 13, 2018 did not put an end to similar catastrophes taking place around the United States. Only a few weeks ago, a natural gas pipeline in Moreland, Kentucky ruptured and exploded, killing a woman and injuring five other people. Flames shot up 300 feet into the air and it took firefighters several hours to extinguish the inferno. The pipeline exploded at around 1 a.m. Aug. 1. The previous day, an explosion believed to have been caused by a gas leak leveled a house in Washington, Pennsylvania, just outside Pittsburgh. The homeowner, a neighbor and three firefighters were injured. Columbia Gas, the same company whose overpressurized lines caused explosions and fires in Lawrence, North Andover and Andover a year ago, took responsibility for this debacle. The Kentucky pipeline that exploded is owned and operated by Enbridge, a major transporter of oil and natural gas. Another Enbridge pipeline exploded in Noble County, Ohio on Jan. 21. Two people were hospitalized. A gas explosion in downtown Durham, North Carolina, the home of Duke University, killed two people, injured another 25, destroyed several buildings and damaged many others April 10. On March 4, a gas pipeline explosion in Martin County, Texas killed two workers in an oilfield at the Sayles Ranch. Green America, a nonprofit organization that promotes ethical consumerism, reported in June 2017 that “natural gas pipelines explode with alarming frequency in the U.S., killing and injuring people, and causing millions of dollars in damage. Interstate pipelines are permitted by the Federal Energy Regulatory Commission (FERC), which has approved all but one pipeline over the past 30 years, and routinely rejects legitimate concerns raised by impacted communities.”
Community frustrated with overwhelming noise from fracking - — Neighbors are outraged with the effects they say fracking is having in Bethany, W.Va. "This is absurd. This is the United States, but no, it’s still West Virginia, so we’re the lowest of the low and our voice is never heard,” said one community member. “When’s it going to end? When is there going to be the next pad? Are you just going to destroy all the hilltops?” While the room packed with citizens presented many concerns and questions, one reoccurring theme was the noise that the community members call unbearable to live with. "I kept thinking to myself, 'Is this anything close to freeway noise I had to deal with in LA?' And, I’m here to tell you there is no comparison. This is worse than anything I’ve experienced,” said another community member. And the impact it is having on their physical and mental health: “The first days we were doing outside activities and I couldn’t hear them because of the drill, and I am like; when are they all going to all start going crazy?” Representatives from Southwestern Energy that were present at Wednesday night’s meeting told the community that tonight was a way to hear their concern. But, citizens want solutions and they want them soon. “At least have the common courtesy of shutting the drills off or turning the drills down between the hours of 10 at night and 5 in the morning,” began one citizen. The representatives said they will take these discussions and have a meeting Thursday, and then solutions and ideas will be communicated to the mayor, Shirley Kemp, who says she will continue following up as well. Noise wasn’t the only concern. They also discussed health, transportation, and other stressors that the fracking is having on the community.
Atlantic Coast Pipeline remains halted as developers wait on court decisions — The developers of the Atlantic Coast Pipeline remain at a standstill as they wait for court rulings that could impact the future of the project.There are currently two federal permits under review — one issued by the U.S. Fish and Wildlife Service and one issued by the U.S. Forest Service — that are needed if construction is to continue.Developers hope the U.S. Supreme Court will decide to hear an appeal of a decision from the U.S. Court of Appeals for the 4th Circuit not to reconsider a ruling that denied the permit issued by the Forest Service allowing the pipeline’s route to go through two national forests and across the Appalachian Trail.Dominion Energy, the lead company in the consortium of energy partners backing the project, voluntarily halted all major construction activities on the pipeline in December following the 4th Circuit’s decision, which resulted in layoffs for much of the project’s workforce. Samantha Norris, communications specialist with Dominion, said the company is confident in its case for both permits. The company expects a resolution of the Fish and Wildlife Service permit “later this year” and of the Forest Service permit by “next summer,” Norris said. However, the resolution of the Forest Service permit will depend on the Supreme Court deciding to hear the case, Norris said.“We’ll find out in October if the Supreme Court will hear the case,” she said. “We believe that there’s a strong likelihood that it will. Then oral arguments will take place in February. If we receive a favorable outcome, which we feel very favorably that we will, then construction would resume next summer.”
Editorial: Can the Appalachian Trail block pipelines? Who owns the Appalachian Trail? Sometime this fall, the U.S. Supreme Court will have something to say on that, even if only indirectly. Here’s why that matters: One possible answer could make it difficult, if not impossible, to build either the Atlantic Coast Pipeline or the Mountain Valley Pipeline. Do we have your attention now? The case certainly has the attention of those who care about the pipelines, both pro and con. Sometimes little things matter and here a simple footpath could complicate the desire of those who want to market the natural gas in the Appalachian shale fields. The American Prospect magazine recently published an excellent summary of the case with the very direct headline: “Can the Appalachian Trail Block a Natural Gas Pipeline?” The Prospect is a left-leaning publication, but the story seems an even-handed account of why this case matters. While we’re focused on the Mountain Valley Pipeline, we sometimes miss that there are two natural gas pipelines in the works. The other is the Atlantic Coast Pipeline, backed mostly by Dominion Energy. In January 2018, the U.S. Forest Service granted the ACP the permits necessary to cross the Appalachian Trail near the Augusta-Nelson county line. Soon thereafter, the Charlottesville-based Southern Environmental Law Center filed suit against the forest service, contending it didn’t have the power to do so (for reasons we’ll elaborate on below). In December 2018, a three-judge panel of the Fourth Circuit Court of Appeals unanimously ruled in favor of the environmentalists. The ruling, written by Judge Stephanie Thacker, came with a literary flourish: She quoted from “The Lorax,” the children’s book by Dr. Suess: “We trust the United States Forest Service to ‘speak for the trees, for the trees have no tongue.’” If the National Park Service owns the Appalachian Trail — which is what the appeals court ruled — then it’s hard to see how any pipelines get built. As writer Noah Sachs puts it: “The lawsuit over this section of the Appalachian Trail could determine the fate of some of the largest natural gas deposits in North America. In a landmark decision last December, the Fourth Circuit Court of Appeals in Richmond axed the project — for now. That court found that the entire Appalachian Trail from Georgia to Maine is part of the national park system, blocking federal agencies from authorizing a pipeline crossing. The astonishing decision upended the U.S. natural gas industry and also jeopardizes other pipeline projects with proposed routes across the trail.”
US natgas production sets new record despite low prices - U.S. natural gas production set a new daily production record of 92.8 billion cubic feet per day (Bcf/d) on Aug. 19, according to estimates from IHS Markit, the Energy Information Administration reports. Natural gas production also set a new monthly record in August, averaging more than 91 Bcf/d for the first time, Kallanish Energy reports. The records were set despite gas prices declining. EIA forecasts dry natural gas production to average 93.4 Bcf/d from September through the end of the year. U.S. natural gas production increased by 7.1 Bcf/d (8%) between August 2018, and August 2019, led by production gains primarily in the Northeast, ie., the Marcellus and Utica Shale plays. U.S. natural gas production has increased, even as natural gas prices have declined. Natural gas spot prices at the national price benchmark Henry Hub have been on a downward trend since early spring. Spot prices at other natural gas hubs across the country have continued to sell at discounts to Henry Hub. Record growth in U.S. natural gas production continues to put downward pressure on prices. This summer, prices have continued to fall despite high levels of natural gas exports and increased consumption in power generation. Henry Hub prices averaged $2.40 per million British thermal units (Mmbtu) in June and $2.37/Mmbtu in July — the lowest monthly averages for June and July since 1999 — as growth in natural gas production continued to offset growth in consumption.
Late-Summer Sizzler Boosts Natural Gas Demand -- While the official start of Autumn lies just around the corner, Summer refuses to go away without a fight, as an unseasonably strong upper level ridge sets up in the eastern half of the nation, making it feel like the change in seasons is still far away. Our forecast is about as hot as you will see it at this time of the year. This is resulting in quite the boost for natural gas demand, with multiple days of 10 or more Gas-Weighted Degree Days (GWDDs). The hottest days over the next week will actually be challenging daily GWDD records, and this is pushing our projected GWDD total for the month of September up the charts, not quite to last years level, but among the hottest Septembers recorded in our dataset. Looking at the numbers for key cities across the nation, something new here at Bespoke, we find plenty of 80s and 90s from the Midwest to the Mid-Atlantic and down into the South. While certainly not the only factor that has led natural gas prices higher over the last 2-3 weeks, it has, at the least, provided some tailwinds for the bulls, with prompt month prices around 50 cents off their early August lows. Once to late September, it starts to get a little late for heat to move the needle, as we begin to patiently wait for that first colder outbreak in October than brings in our initial ramp up in HDDs. This typically puts weather on the back burner, so to speak, at least temporarily, allowing other forces, such as supply / demand balances to have control of market movement.
US working gas in underground storage rises 78 Bcf to 3.019 Tcf: EIA — US working natural gas volumes in underground storage added 78 Bcf last week, less than most of the market expected, as the Pacific region posted a shoulder-season draw.US storage increased to 3.019 Tcf for the week ended September 6, the US Energy Information Administration reported Thursday morning.The injection was much less than an S&P Global Platts' survey of analysts calling for an 87 Bcf build. Survey responses ranged from 73 to 101 Bcf. The build was more than the 68 Bcf injection reported during the corresponding week in 2018 as well as the five-year average of 73 Bcf, according to EIA data. As a result, stocks were 393 Bcf, or 15%, more than the year-ago level of 2.626 Tcf and 77 Bcf, or 2.5%, less than the five-year average of 3.096 Tcf.The October NYMEX Henry Hub contract ticked up 2 cents to $2.57/MMBtu following the less-than-expected storage injection. The winter strip was down less than a cent at $2.73, during late Thursday afternoon trading. The EIA's Pacific region posted a 1 Bcf net draw for the second straight week as injections along the Pacific Gas & Electric and Southern California Gas storage systems have slowed. PG&E injected a total of 3 Bcf during the past month, while SoCal Gas inventories have remained flat since August 10, according to S&P Global Platts Analytics. Pipeline maintenance work has limited each system's ability to fully utilize key receipt points. In addition, demand increased, adding tightness to the already restricted systems. SoCal Gas also faces significant maintenance beginning in two weeks.Total SoCal Gas working stocks sit at 69 Bcf, 7 Bcf below last year. Receipt capacity will continue to limit injection rates through November and likely place upward pressure on the SoCal Gas city-gate winter strip. Although injections have slowed on PG&E, inventories remain 24 Bcf above last year, leaving little worry for winter reliability. But the market should expect a build in the Pacific for the week ending September 13 as a week-over-week 5-degree temperature drop flipped the region from a net draw of 1 Bcf to a 5 Bcf injection, according to Platts Analytics.The week in progress on a national level has experienced small declines in supply and demand, resulting in a modest 0.5 Bcf/d tightening in overall US balances. Supplies are down 0.7 Bcf/d week over week on drops split between the Northeast, Rockies and Midwest. Downstream, total demand is down by 0.2 Bcf/d this week, with declines in gas-fired generation and LNG feedgas demand offset by a 0.4 Bcf/d rise in residential and commercial sector demand. Platts Anaytics' supply and demand model calls for a 71 Bcf build for the week in progress, which would grow the deficit to the five-year average by 11 Bcf. The final injection of the season occurs on average on November 8, allowing for nine more net builds before the flip to heating season if the average holds.
EIA Build Lower Than Expected as Natural Gas Futures Rise - Natural gas bulls regained some of their lost momentum Thursday after last week’s heat helped produce a smaller-than-expected inventory build in the latest government storage data. After slipping during the previous two sessions, the October Nymex contract gained 2.2 cents to settle at $2.574/MMBtu; November added 1.6 cents to $2.605.In the spot market, cooler temperatures drove Northeast discounts, while heat had Southern California prices rising; the NGI Spot Gas National Avg. slid 2.0 cents to $2.320. The Energy Information Administration (EIA) on Thursday reported a leaner-than-expected 78 Bcf build into U.S. natural gas stocks, injecting a little upward movement into a futures market that had sold off in recent sessions. The 78 Bcf injection for the week ended Sept. 6 tops both the 68 Bcf build recorded for the year-ago period and the five-year average 73 Bcf injection. Predictions had ranged from around 75 Bcf up to 94 Bcf, with major surveys centering around 81-82 Bcf. Total Lower 48 working gas in underground storage stood at 3,019 Bcf as of Sept. 6, 393 Bcf (15.0%) more than year-ago levels but 77 Bcf (minus 2.5%) shy of the five-year average, according to EIA.By region, EIA reported a 37 Bcf weekly build in the Midwest, with a 25 Bcf injection in the East. The Pacific withdrew 1 Bcf on the week, while 6 Bcf was refilled in the Mountain region. In the South Central, EIA recorded a net 2 Bcf injection into salt stocks for the week, with a 10 Bcf build in nonsalt. Bespoke Weather Services viewed the 78 Bcf build as “basically neutral, as holiday weeks are always difficult, and it was still quite hot in key areas of the South last week.” The outlook trended cooler overnight heading into Thursday’s trading, and given the potential for Friday’s forecasts to show additional cooler trends along the East Coast, “we don’t see much reason for prices to continue advancing higher from here...with risk, in our view, more skewed toward a move back near the $2.50 level,” Bespoke said. “...Demand will continue falling off after Sept. 20 to even lower levels, possibly allowing cash prices to weaken as well, as salts can more freely refill with less demand in place.” Cooling temperatures to close out the week prompted double-digit spot price declines throughout the Northeast Thursday. Algonquin Citygate fell 17.0 cents to $2.210, whileTransco Zone 6 NY slid 19.5 cents to $2.100.Maxar’s Weather Desk was calling for near- to below-normal temperatures for major cities along the Interstate 95 corridor for Friday, including highs in the mid-60s in Boston, and in the low 70s in New York City and Philadelphia.Elsewhere, prices were generally steady from the Gulf Coast to the Southeast as hot temperatures were expected to persist across the southern United States. Houston Ship Channel added 1.0 cent to $2.525, while Texas Eastern S. TX gave up 1.5 cents to $2.535. Meanwhile, a hot finish to the work week sent Southern California prices soaring Thursday. Maxar predicted above-normal temperatures for Burbank for Friday, including highs reaching 97 degrees.SoCal Citygate rallied 70.0 cents to average $4.015.
Recapping This Week In Natural Gas - For the third week in a row, natural gas prices posted a notable gain, closing nearly 12 cents higher on the week, with the prompt month October contract settling over the 2.60 level for the first time since late May. - As we have pointed out previously, this is the time of year that prices often do move in favor of the bulls. - This year's rally, percentage wise, has been quite large, however, partially due to such a low starting point, having been at multi-year lows for a prolonged period, but also due to a very large number of shorts in the market. - As prices move up, some of the short are forced to cover, sending prices even higher. The catalyst that sparked the move was a large run up in daily cash prices, although those appear to have peaked earlier this week. - We did see a pullback of more than 10 cents earlier in the week, before prices shot back higher after yesterday's EIA report showed a smaller-than-expected build for last week, and then again today toward the close, the latter of which may have simply been additional short covering as traders de-risk into the weekend. Looking ahead, trends in cash prices may still hold the key to the movement of futures. We still have some heat in the forecast, mid-September style, enough for well above normal natural gas demand in the near term. You will notice, however, by week two, that demand drops off considerably, and even the forecast for the upcoming week, while still impressive from a demand standpoint, is not as hot as models had forecast a couple of days ago, as seen by the large 2-day GWDD change in last night's modeling. Time will tell is this is enough to take the "heat" off cash prices, and in turn, provide at least a temporary halt in the strong rally of the last three weeks. Of course, all of the factors involved are fluid in nature, subject to change as new data rolls in.
As climate change threatens Earth, US to open nearly 200 power plants - Powerful hurricanes. Record-breaking heatwaves. Droughts that bring ruin to farmers. Raging forest fires. The mass die-off of the world's coral reefs. Food scarcity. To avoid a climate change apocalypse, carbon dioxide emissions need to fall by as much as 45% from 2010 levels by 2030, according to the U.N. Intergovernmental Panel on Climate Change. Instead, utilities and energy companies are continuing to invest heavily in carbon-polluting natural gas. An exclusive analysis by USA TODAY finds that across the United States there are as many as 177 natural gas power plants currently planned, under construction or announced. There are close to 2,000 now in service. All that natural gas is “a ticking time bomb for our planet,” says Michael Brune, president of the Sierra Club. “If we are to prevent runaway climate change, these new plants can’t be built." It also doesn't make financial sense, according to an analysis by the Rocky Mountain Institute, a Colorado-based think tank that focuses on energy and resource efficiency. By the time most of these power plants are slated to open their doors, the electricity they’ll provide will cost more to produce than clean energy alternatives.By 2023, the U.S. Energy Information Administration estimates the average cost of producing a megawatt hour of electricity will be $40.20 for a large-scale natural gas plants. Solar installations will be $2.60 cheaper and wind turbines will be $3.60 cheaper. The world needs to reduce its carbon emissions rapidly – by 50% within the next decade – or face the prospect of a global temperature rise of more than 2.7 degrees within decades, said Michael Mann, a professor of atmospheric sciences at Pennsylvania State University. That’s enough warming to kill off the coral reefs, melt large parts of the ice sheets, inundate coastal cities and to yield what Mann calls “nearly perpetual extreme weather events.”
Gas Plants Will Get Crushed by Wind, Solar by 2035, Study Says - Natural gas-fired power plants, which have crushed the economics of coal, are on the path to being undercut themselves by renewable power and big batteries, a study found. By 2035, it will be more expensive to run 90% of gas plants being proposed in the U.S. than it will be to build new wind and solar farms equipped with storage systems, according to the report Monday from the Rocky Mountain Institute. It will happen so quickly that gas plants now on the drawing boards will become uneconomical before their owners finish paying for them, the study said. The development would be a dramatic reversal of fortune for gas plants, which 20 years ago supplied less than 20% of electricity in the U.S. Today that share has jumped to 35% as hydraulic fracturing has made natural gas cheap and plentiful, forcing scores of coal plants to close nationwide.The authors of the study say they analyzed the costs of construction, fuel and anticipated operations for 68 gigawatts of gas plants proposed across the U.S. They compared those costs to building a combination of solar farms, wind plants and battery systems that, together with conservation efforts, could supply the same amount of electricity and keep the grid stable.As gas plants lose their edge in power markets, the economics of pipelines will suffer, too, RMI said in a separate study Monday. Even lines now in the planning stages could soon be out of the money, the report found. “Our story for gas plants is, if you build it, they won’t run -- they won’t run at their expected capacity factors,” said Mark Dyson, who co-wrote both reports. “And that filters down to pipelines, too.”
Misunderstanding Gas Storage - Years of waning interest in natural gas simplified the public discussion of gas price to a single factor: gas in storage compared to five-year average. This spring and summer as storage trended up toward while still below the five-year average, prices swooned to levels only touched briefly since the early 2000s. The idea of gas storage as the keystone indicator worked in a previous incarnation of the gas market, but it fails to understand the market’s ongoing metamorphosis. When natural gas was last fashionable, production hovered just over 60 Bcf/d for years on end. Today the supply is growing past 108 Bcf/d. Remarkably, prices trended downward during the transition, even as demand grew as ravenously as 8% per year. Supply stepped up to match demand in an elegant choreography of production, pipelines, and plants with only minor missteps along the way, sparing the market of shortages for many years. If demand were as stable as in those times past, then the current change in storage trajectory could portend a glut. However, neither storage nor demand is what it used to be. While the seasonal swings in gas demand for heating have not grown, the overall demand has. Storage crucially if less visibly also buffers the multi-year choreography of growth. Storage volumes, though, have not grown with production volumes. The standard frame of reference —five year range of storage—has been deformed by the extreme demands of 2014’s “polar vortex” and the chronic gas shortage, obscuring reality. For a better frame of reference, the chart below shows nearly 20 years of volumes in storage normalized to dry gas production. It shows how for the better part of the last three years storage trended down as demand chronically exceeded supply. On a longer time frame, normalized storage volumes have trended downward for nearly 10 years as storage did not expand with production. These overlaying trends caused last heating season to end with only 12 days of supply in storage. During the few times that normalized storage previously reached the nadir seen this spring, the drop caused headline-grabbing leaps in price. This time prices hardly moved. When the depletion trend finally reversed, the market did not see the change as partial abatement of a critical shortage but instead as evidence of a glut. Even with months of higher-than-average injections, last week’s storage ranks as the second lowest in two decades for the same week: 31 days of storage compared to a normal average of 47 days. Hardly a bearish signal. What is more, the market seems not to understand that gas demand will continue to grow aggressively this year and into next. Seven large trains and two clusters of smaller trains of LNG export totaling 5.3 Bcf/d of new demand were scheduled to come online between the first of 2019 and mid-2020. In addition EIA projects generally long-lead industrial demand to grow by 2 Bcf/d in 2019 and into 2020 and forecasts additional growth of NGL fractionation and export.
Bill Pre-Filed In Ky. Legislature Would Make Pipeline Protests A Felony - Acts of civil disobedience against pipeline operations in Kentucky would be considered a felony under legislation filed ahead of the 2020 regular session. The measure comes less than a month after one person was killed and six more were injured in a large pipeline explosion south of Danville, Kentucky. It also comes shortly after Louisville Gas & Electric began pursuing eminent domain actions to build a natural gas pipeline in northern Bullitt County. Republican Rep. Jim Gooch, chair of the House Natural Resources and Energy Committee, pre-filed the bill in late August after a similar attempt failed earlier this year. Gooch did not immediately return requests for comment.The bill makes trespassing on “key infrastructure assets” including pipelines a second degree felony punishable by up to five years imprisonment. Advocates for the measure say the bill is designed to protect critical infrastructure; opponents including indigenous groups and the American Civil Liberties Union say the legislation is an attempt to curtail free speech.“The concern we have is that it is being done as a way to chill free speech and target protesters who are engaged in protected speech,” said ACLU of Kentucky legal director Corey Shapiro. The bill is part of a national initiative to increase penalties for activists who attempt to block fossil fuel infrastructure projects, similar to the Standing Rock protests that impeded construction of the Dakota Access Pipeline. Shapiro said the ACLU currently has lawsuits filed to block similar legislation in Texas and South Dakota. Oklahoma first passed the anti-pipeline protest legislation in 2017. It has since become model legislation on the website for The American Legislative Exchange Council, a conservative legislative nonprofit.
ACLU: Kentucky Bill Could Muzzle Pipeline Protests | WUKY -- The Kentucky chapter of the American Civil Liberties Union is warning a bill pre-filed in late August would stifle protests surrounding pipeline controversies in the state. The bill, filed by Western Kentucky House Representative Jim Gooch, would reclassify natural gas or petroleum pipelines as “key infrastructure assets” and making tampering with, impeding, or otherwise inhibiting the operations of the lines an act of “criminal mischief in the first degree” – a Class D felony in Kentucky.The proposed legislation comes on the heels of a deadly natural gas pipeline explosion near Danville, Ky. that killed one and injured six. The accident is not the first along the 700-mile pipeline that stretches from the Mexican border in Teax to New York City. Six people in Kentucky and nine people in total have died in explosions along the Texas Eastern Transmission Co. pipeline since 1985, according to the Louisville Courier Journal. Meanwhile, Louisville Gas & Electric Co. is taking Bullitt County landowners to court in an effort to obtain sections of lands needed for a $39 million natural gas pipeline. The ACLU tweeted that the bill would “silence free speech," making offenses punishable by up to five years in prison. The civil rights organization also cautions the legislation "penalize people who help protestors, including providing water or first aid," adding that the bill "mirrors one promoted by the American Legislative Exchange Council, which is funded by fossil fuel companies, incl. one tied to the Danville pipeline."
Damaged barge spills oil in Tennessee - An oil spill has occurred from a damaged barge in the Jamie Whitten Lock at mile marker 412 on the Tennessee Tombigbee Waterway.Watchstanders at U.S. Coast Guard Sector Ohio Valley received a report at 6:46 a.m. on Sunday from the National Response Center that an unknown amount of crude oil was discharged from a damaged crude oil barge owned by Savage Inland Marine. The source of the spill has not been secured. The crude oil is contained within the lock and dam, and within the 35 feet of boom placed around the dam.Sector Ohio Valley Captain of the Port closed the waterway from mile marker 410 to mile marker 414 on the Tennessee Tombigbee Waterway. Coast Guard Sector Ohio Valley, Coast Guard Marine Safety Detachment Nashville and Mississippi Department of Environmental Quality are responding to the incident. The cause of the incident is under investigation.
Oil spill forces Jamie Whitten Lock and Dam to shut down (WCBI) – An oil spill has forced the Jamie Whitten Lock and Dam to shut down. Mitch Mays with the Tenn-Tom Waterway said that an incident involving a barge caused crude oil to spill into the lock chamber. The U.S. Army Corps. Of Engineers in the Mobile district said Sunday, a merchant vessel loaded with two barges of crude oil was locking southbound through the lock and dam when a collision happened.The Jamie Whitten Lock and Dam is a part of the Tenn-Tom Waterway.It’s located in Prentiss County at Bay Springs Lake.The Jamie Whitten Lock and Dam will be closed until further notice.The U.S. Coast Guard, Mississippi Department of Environmental Quality and the U.S. Army Corps of Engineers are all assessing the spill.
How A County-By-County Push Is Boosting Line 5— Enbridge, the company that owns the Line 5 oil pipeline that runs beneath the Straits of Mackinac, was a top sponsor last month of a gathering of county officials from across Michigan.In the weeks before the event, the Michigan Association of Counties described Enbridge as a “partner” in putting on the association's annual conference. At the conference, the company’s pipeline became part of the proceedings.County officials voted to adopt a pro-Line 5 amendment to the Michigan Association of Counties’ policy platform. The amendment supported a much-debated proposal to construct a tunnel in order to keep the pipeline in the Straits. Enbridge’s recent work with the Michigan Association of Counties comes amid a larger push to benefit the pipeline, a pipeline environmentalists see as a threat to the Great Lakes but others see as crucial to Michigan’s access to energy. The push has included a bevy of full-page newspaper advertisements, increased lobbying and a county-by-county effort to gather support for a pipeline Michigan’s attorney general is trying to shut down.Dickinson County Commissioner Joe Stevens was one of the county officials who backed the amendment to the Michigan Association of Counties' policy platform last month. Association members approved the proposal in a voice vote. Asked if he was concerned about the appearance of county officials backing a measure that benefits Enbridge at a conference sponsored in part by Enbridge, Stevens said no. “If there was a problem, there would have been some objections,” Stevens argued. He added, at another point during an interview, “This is an issue that would catastrophically affect the U.P. (Upper Peninsula) if Line 5 closed down.” According to Enbridge, Line 5 delivers 65 percent of the propane used in the U.P.
Enbridge looks to conduct surveys to move pipeline (AP) — Enbridge Energy is seeking permission to conduct land surveys in northern Wisconsin as it considers re-routing a pipeline out of an American Indian reservation. The company wants to conduct environmental surveys along a 40-mile stretch in Ashland and Iron counties to replace an existing 20-mile segment of Line 5 that runs through the Bad River Band of Lake Superior Chippewa’s reservation, Wisconsin Public Radio reported. Paul Halverson, an Enbridge contractor and land agent, told the Mellen City Council on Thursday that the company would like to access four parcels of city-owned property. Several area residents who attended the meeting said Enbridge agents had approached them over the last week seeking access to their property. The council didn’t take any action on the requests but the company got a prickly reception. Peter Turney, of Mellen, said he was worried about Enbridge using eminent domain to acquire land for a potential re-route and impacts to the city’s aquifer. Mayor Joe Barabe said he doubted whether firefighters and emergency medical responders could handle pipeline-related problems. Jennifer Smith, Enbridge’s community engagement manager for the upper Midwest, told the radio network by phone on Friday that the company wants to reach agreements with landowners and to avoid eminent domain. She said Enbridge only wants access to land for surveys at this point to see which routes may be feasible. Line 5 carries Canadian crude and propane to eastern Michigan. Members of the Bad River Band of Lake Superior Chippewa sued Enbridge in July in hopes of forcing the company to remove sections of the pipeline that run across their swampy reservation just south of Lake Superior. They argue it’s increasingly likely the 66-year-old line will rupture and cause catastrophic damage. The Pipeline and Hazardous Materials Safety Administration has recorded 33 spills on Line 5 since 1968.
Minnesota oil pipeline fight highlights Democratic dilemmas (AP) — A divisive fight over the future of a crude-oil pipeline across Minnesota is pinning presidential candidates between environmentalists and trade unions in a 2020 battleground state, testing their campaign promises to ease away from fossil fuels. Progressive candidates Elizabeth Warren and Bernie Sanders have condemned a Canadian company’s plan to replace its old and deteriorating Line 3 pipeline, which carries Canadian crude across the forests and wetlands of northern Minnesota and into northern Wisconsin. They’ve sided with environmental and tribal groups that have been trying to stop the project for years, arguing that the oil should stay in the ground. Other candidates — including home-state Sen. Amy Klobuchar and front-runner Joe Biden — have remained largely silent, mindful that such projects are viewed as job creators for some of the working-class voters they may need to win the state next year. The fight illustrates a hard reality behind the Democratic candidates’ rhetoric on climate change. For months, Democrats vying for the White House have sounded strikingly progressive on the issue, endorsing ambitious targets for reducing carbon emissions and putting forward sweeping proposals for investing in the green jobs of the future. But the debate often glosses over the harder, more immediate choices between union jobs and phasing out fossil fuels. Those fights often divide Democrats and may create an opening for President Donald Trump. Enbridge Energy’s Line 3 project has generated opposition on two main grounds: that the oil it would carry would aggravate climate change and that it would risk spills in pristine areas of the Mississippi River headwaters where Native Americans harvest wild rice. Enbridge says replacing the 1960s-era pipeline, which is increasingly prone to corrosion and cracking, will be safer for the environment while allowing it to restore the line’s original capacity and ensure reliable deliveries to refineries. Labor unions, once the bedrock of Democrats’ support in northern Minnesota, backed the plan on the promise it will create scores of new jobs.
IUB needs amendment to approve increase flow in pipeline - — The Iowa Utilities Board (IUB) issued an order Friday requiring Dakota Access to file a petition for an amendment to the pipeline permit to seek increase flow from a half-million barrels a day, to as many as 1.1 million per day. The original permit issued by the IUB to Dakota Access was file on April 8, 2016. The new request follows a June 12 informational notice filed by Dakota Access regarding improvements the company intends to make to the Dakota Access pipeline pumping station in Cambridge and plans to increase the capacity. IUB said the increase in flow of oil through the pipeline requires an amendment and then IUB will review the filing and make a ruling. Anyone wishing to file comments or objections in the docket must submit them in writing and may use the IUB’s online comment form or email to customer@iub.iowa.gov.
Equinor to clean up onshore post-hurricane Bahamas oil spill - Equinor will clean up the onshore oil spill discovered this week at its Bahamas storage terminal in the aftermath of hurricane Dorian, the Norwegian energy company said on Sunday.In preparation for the hurricane, Equinor shut down operations at the South Riding Point terminal on Aug. 31 and none of its staff were at the site during the storm.“Based on current visual assessments, there are no indications of continued oil leakage from the tanks or of oil spills from the terminal to sea or beaches,” Equinor’s statement said. “Further examination is ongoing to assess the full impact of the spill.”
Equinor sends two vessels to clean up Bahamas oil spill (Reuters) - Two vessels with clean-up equipment and personnel will arrive in the Bahamas within a few days to deal with an oil spill at the South Riding Point terminal damaged by hurricane Dorian, operator Equinor said on Monday. Equinor shut down operations at the oil storage and transshipment terminal on Grand Bahama on Aug. 31 in preparation for the hurricane, and none of its staff were at the site during the storm. The company has not yet provided an official assessment of the oil spill, but a picture published on its website showed a damaged onshore tank, with oil on the ground. Equinor reiterated on Monday that there were no indications of ongoing leaks from tanks, or that the oil spill had reached nearby beaches or the ocean. The company said additional oil spill personnel and equipment were being mobilized in Florida and could arrive at the Bahamas within two days.
Equinor says oil spotted near Bahamas crude terminal (Reuters) - Oil spotted off the coast of the Bahamas may not have come from a nearby crude storage terminal owned by Norwegian oil company Equinor that was damaged by Hurricane Dorian, the company said on Wednesday. "There are no indications that there has been a spill to the ocean from our terminal," said Equinor spokesman Erik Haaland. "We are investigating now and analyzing the situation and evaluating any mitigating actions, but we don't have any information on the source of the product." Oil or fuel has been spotted about 70 to 80 km (43 to 49 miles) northeast of the South Riding Point terminal on Grand Bahama Island, but the company said the source of the product was unknown. The company said earlier in the week that it had seen oil spilled on the ground at the terminal site and in neighboring areas. Equinor said it was closing the harbor at the terminal as a precautionary measure to "reduce the risk of oil spill to sea." South Riding Point terminal has a capacity of 6.75 million barrels. At the time the hurricane hit, 1.8 million barrels were being stored at the terminal.
House Votes to Block Offshore Oil Drilling Along U.S. Coasts - The U.S. House of Representatives voted Wednesday to block new offshore drilling in U.S. Atlantic and Pacific waters as well as territory near Florida’s Gulf Coast that is prized by oil companies. The bills passed by the House Wednesday are doomed in the Republican-controlled Senate, but their approval underscored significant bipartisan opposition to the Trump administration’s plans to expand coastal oil and gas development. The votes were part of a broader Democratic effort to challenge the administration’s oil drilling plans. The House is set to vote Thursday on legislation that would block oil and gas exploration in the Arctic National Wildlife Refuge, effectively reversing Congress’ decision to require leasing in its coastal plain as part of the 2017 tax overhaul. One of the bills (H.R. 205) voted on Wednesday, which passed 248-180, would permanently extend an existing ban on oil and gas leasing in the eastern Gulf of Mexico. The measure, which drew support from 22 Republicans, would effectively bar drilling in federal waters up to 125 miles off Florida’s west coast -- including territory oil companies consider attractive because of a series of promising nearby discoveries. The existing moratorium is otherwise set to expire June 30, 2022. Florida lawmakers and drilling foes said the protection is necessary to safeguard some $37.4 billion in economic activity and more than 600,000 jobs tied to fishing, tourism and recreation in the state. Representative Francis Rooney, a Republican from Florida, said offshore drilling poses an “existential threat” to the state’s west coast -- even when spills don’t touch its shores. After the 2010 Deepwater Horizon disaster, Florida vacations and fishing ventures were canceled “despite the fact that there was no impact to our coastline,” Rooney said. “Perception became reality.” The other measure (H.R. 1941), which passed 238-189, would put a permanent moratorium on oil and gas leasing in U.S. Atlantic and Pacific waters, effectively restoring prohibitions that existed before a spike in crude prices helped prompt their withdrawal in 2008.
House passes two bills blocking oil and gas drilling off both coasts - The House of Representatives on Wednesday passed two bills banning new offshore oil and gas drilling off the Atlantic and Pacific coasts and the Gulf Coast of Florida. It was set to vote on a third bill banning drilling in Alaska's Arctic National Wildlife Refuge. The legislation could hamper President Donald Trump's push to expand offshore oil and gas development. The first bill, Protecting and Securing Florida's Coastline Act of 2019, would ban oil and gas leasing in eastern areas of the Gulf of Mexico off the Florida coast. The measure passed 248-180, with the support of about 20 Republicans. Rep. Francis Rooney, R-Fla., the bill's sponsor, said a series of spills from oil and gas operations in the Gulf have threatened jobs in marine recreation and fishing. The House also passed a measure, 238-189, sponsored by Rep. Joe Cunningham, D-S.C., to permanently ban oil and gas leasing off the Pacific and Atlantic coasts. "This bill acknowledges that if we don't act, drilling rigs could soon appear off of our beaches," said Cunningham, whose state's beaches are a major tourist draw. The bills were not expected to gain traction in the Republican-led Senate. But the votes in the Democratic-led House were meant to send a signal to Republicans who have supported rollbacks of environmental regulations on oil and gas. Oil and gas interests opposed the bills, saying bans only increase U.S. dependence on foreign oil. "Congress should reject these bills, which would only outsource energy production to countries like Saudi Arabia and Russia, and instead stand up American energy produced with American values,"
Elizabeth Warren's call to ban fracking 'everywhere' fuels alarm over economy, energy imports - - Sen. Elizabeth Warren, Massachusetts Democrat, said Friday she would immediately ban fracking if elected president, drawing pushback from critics who said the move would cripple the U.S. oil-and-gas industry and force the nation to import fossil fuels. “On my first day as president, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands. And I will ban fracking—everywhere,” tweeted Ms. Warren. Her announcement came with environmentalists urging her to join Vermont Sen. Bernie Sanders, who issued a statement Wednesday calling for a “full fracking ban on public and private lands,” putting the two progressives at the anti-fracking forefront of the 2020 Democratic presidential primary field. Environmental groups have decried hydraulic fracturing as a threat to public safety and the climate, while critics warned that a nationwide ban would deal a devastating blow to the economy. Most U.S. oil-and-gas extraction involves fracking. University of Colorado professor Roger A. Pielke Jr. said that Ms. Warren’s plan would force the nation to rely on foreign fossil-fuel imports. “This is a big promise, both to ban fracking and to do it everywhere on day 1 of a Warren administration,” tweeted Mr. Pielke. “Banning fracking would kill off the ~entire US oil and gas extraction industry and turn the US into a major importer of fossil fuels. It would not reduce FF consumption.”
Elizabeth Warren's fracking ban would be bad news for the US, IEA chief says - Fatih Birol, executive director of the IEA (International Energy Agency), told CNBC that a ban on fracking as proposed by some Democratic presidential contenders would have “major implications” for the U.S. energy industry. “Just banning this would not be good news, not only for Americans but for Europeans,” Birol told CNBC’s “Squawk Box Europe” during the World Energy Conference on Monday. Democratic presidential contenders Elizabeth Warren, Bernie Sanders and Kamala Harris have all advocated plans to ban the fossil fuel extraction process that has catapulted the U.S. to becoming the world’s largest producer of oil. “This would have major implications on the market for the U.S. economy, for jobs growth and everything, and not good news for energy security, because for example U.S. natural gas provides a lot of security to the markets,” Birol said. “Up to recently, before the U.S. shale gas revolution, Russia was the country which was dominating alone the gas markets. With the U.S. coming into the picture, there is a choice, there are options for the consumers, better for energy security, for diversification.” Fracking advocates say it vastly increases natural gas supply — a cleaner fuel than crude oil — and cuts costs for consumers. Natural gas mining and extraction employs more than 162,000 workers in the U.S., according to 2019 figures from the Energy Futures Initiative and the National Association of State Energy Officials. More than 625,000 Americans work in the wider natural gas industry. The Turkish energy expert and economist maintained, however, that climate change is a real concern and warrants commitment to finding solutions that involve the oil and gas industry, rather than exclude it. Climate and environmental scientists also point to the polluting effects of fracking, which has led to earth tremors and contaminants leaking into groundwater. “I think climate change is serious issue — the oil industry, gas industry have to be part of the solution rather than being the problem or a barrier,” he said. “But stopping oil and gas production is something that I wouldn’t advise to the U.S. government or another government. But they have to produce oil and gas in a sustainable manner, and of course technologies and projects are already there to make sustainable oil and gas production.”
Elizabeth Warren’s Daft Fracking Scheme - National Review Senator Elizabeth Warren of Massachusetts promises that if she is elected president, she will issue an immediate unilateral prohibition — based on some presidential power that she’ll invent as soon as she gets around to it — on the method of natural-gas production known colloquially as “fracking.” Other Democratic contenders, including Vermont socialist Bernie Sanders and Kamala Harris of California, have made similar promises. Another way of saying this is that the Democrats promise to induce artificial scarcity in the energy market. Yet another way of saying this is that the Democrats promise to create effective subsidies for such relatively high-pollution energy sources as coal and diesel at the expense of a relatively low-pollution energy source in the form of natural gas. And yet another way of saying this is that the Democrats propose to subsidize petroleum producers from Russia to Iran at the expense of small to midsize businesses in Pennsylvania, Ohio, New Mexico, Texas, and other energy-producing states. Why? What we call “fracking” has revolutionized energy production in the United States — and that gets up the noses of certain people, prominent among them so-called environmentalists who are categorically opposed to all new development of conventional energy sources — even when that development comes with important environmental benefits. Their opposition is ideological and quasi-religious. It is based only very loosely on genuine environmental concerns.
Why A Ban On Fracking Will Never Happen - It's primary season, which generally means Democratic candidates for President are trying to see who can swing farthest Left. This is especially true when it comes to punishing the oil and gas industry that supplies most of the country's energy. The latest test of party purity involves promises to ban fracking if elected. Senator Elizabeth Warren is but one of many to make such a promise, tweeting: The resurgence of U.S. oil and gas production over the past dozen years is directly attributable to fracking. While fracking has been going on in the U.S. since the late 1940s, it wasn't until just after the turn of the century that it began to be increasingly used in conjunction with horizontal drilling. That marriage of technologies ushered in the fracking boom and resulted in a renaissance of oil and gas production. The resurgence of natural gas production followed years of decline and corresponding natural gas price spikes. But as production rose, natural gas prices collapsed. This price collapse was a major factor for utilities switching from coal to natural gas, which in turn resulted in U.S. carbon dioxide emissions declining by more than any other nation. The U.S. became the top natural gas producer in the world, and began to export liquefied natural gas (LNG). With respect to oil, in 2005 net imports of oil and finished products like gasoline had reached 13 million barrels per day (BPD). But fracking sent U.S. oil production soaring, and that has been the single biggest factor in seeing these net imports drop to less than 1 million BPD. How do proponents of a ban envision that it would work? They foresee modest and controlled production declines, offset by other policies that would reduce oil demand. In other words, they don't believe a ban would lead to a steady increase in oil imports.However, if we look to California, a different picture emerges. California's main supplies of oil 20 years ago were its own production and Alaskan production. Neither California nor Alaska engage in fracking to any appreciable extent. Both states have missed out on the fracking-enabled shale oil boom. Instead, oil production in Alaska and California have steadily declined. Meanwhile, even though California has the nation's most aggressive policies to reduce oil demand, that demand hasn't going down appreciably. As a result, California's dependence on foreign oil has skyrocketed as its two main sources of domestic production have declined.
Multi-well natural gas fires continue to burn in Coushatta - The Louisiana Department of Environmental Quality said there are no air quality concerns although multiple natural gas wells continue to burn on a single pad north of Coushatta In Red River Parish. The site is off of U.S. Highway 71 about a mile north of state Highway 515. Neighbors are upset the company responsible, GEP Haynesville, LLC, hasn't sent representatives by to speak to them. One neighbor, Glen Williams, said he still feels his house rattling. He said it's not as bad as last Friday, but he's still concerned. The fire creates a glow in the nighttime sky that can be seen 30 miles away. During the day, white smoke towers above the site. Louisiana State Police Emergency Services are helping monitor the fire. GEP Haynesville, LLC said in a statement the fire started during flow-back operations, but the exact cause is still under investigation. Haynesville Shale operators often maximize natural gas development by drilling more than one well per pad. The wells funnel natural gas from thousands of feet underground. It’s uncertain how many wells are on this site but most have at least four. Last week’s explosion ignited all of wells on the pad. DEQ spokesman Greg Langley said GEP Haynesville, LLC hired an environmental response firm. That group set up four monitors around the wells to test air quality. Williams only lives about a mile from the site of the wells. He said the rattling gets louder at night.
Fracked Gas Well Blowout in Louisiana Likely to Burn for the Next Month -- A fracked natural gas well in northwest Louisiana has been burning for two weeks after suffering a blowout. A state official said the fire will likely burn for the next month before the flames can be brought under control by drilling a relief well. DeSmog obtained drone video footage shot 13 days after the blowout, which occurred early in the morning on August 30, the day after the well was hydraulically fractured. A tower of flames reportedly shot into the air that could be seen from more than 30 miles away. While the flames are no longer as intense, the fire is still visible from a distance of more than a mile. GEP Haynesville, LLC, the well’s operator, told local ABC affiliate KPVI that the fire started during flow-back operations, but the exact cause has not been determined yet. Experts have voiced concerns over the pollution being released, especially given the length of time this fossil fuel well has been leaking and burning.“Blowouts are (unintended) large, uncontrolled pollutant sources with potentially significant health and environmental consequences,” Gunnar W. Schade, an atmospheric scientist at Texas A&M University, told me via email after viewing the drone video obtained by DeSmog. “Blowouts need to be shut down as soon as possible.”Sharon Wilson, Texas coordinator of environmental advocacy group Earthworks, outlined what happens during well blowouts like this. “The gas is under pressure so if they lose control, the gas, frack fluid, produced water, and oil/condensate all blast out of the hole,” Wilson said during a call after viewing the video. “They have to get specialized teams to come shut the well in.”
Climate protesters arrested at Texas port during U.S. presidential debate - (Reuters) - Police have arrested the Greenpeace climate protesters who closed part of a key oil export waterway for 18 hours by tying themselves to a bridge and dangling over the water. The closure of one portion of the Houston Ship Channel, which stretches 53 miles (85 km) from its entrance in the Gulf of Mexico to the Port of Houston, blocked tanker ship traffic to and from five major oil refineries as well as chemical and oil-export terminals. Twelve people were taken into police custody shortly after 5 p.m., Thursday, according to spokesmen for Greenpeace and the Harris County Sheriff’s office. The other 11 who were dangling by ropes and attached to one another were arrested late on Thursday and early Friday, police said. Sheriff’s deputies rappelled down to the 11, cut the ropes tying them to one another and lowered each individually to police boats, spokesman Jason Spencer said. The protesters timed the event to coincide with the nationally televised debate in Houston by 10 Democratic White House contenders, one member said. Mike Herbert, 36, a protester reached by phone while he dangled about 100 feet from the bridge, said the group wanted to “force the hand of the political hopefuls to address the elephant in the room: climate change.” The east Texas native who now lives in Maryland said members of the group were experienced climbers and had planned to continue the protest until Friday morning. They risked arrest because political leaders “aren’t taking climate change seriously,” he said. Greenpeace spokesman Ryan Schleeter said that the protesters did not resist arrest and were prepared to face whatever charges were be leveled.
Permian basin natural gas prices up as a new pipeline nears completion – The EIA reports that natural gas spot prices at the Waha hub in western Texas, located near Permian basin production, settled at $1.55/million British thermal units (MMBtu) on August 15, the highest price since March 2019. This price increase coincides with the 2 Bcfd Gulf Coast Express Pipeline (GCX) preparing to enter service. GCX will provide much-needed additional natural gas takeaway pipeline capacity from the Permian region of western Texas and southeastern New Mexico. Limited natural gas pipeline takeaway capacity from the region has kept prices very low, or even negative, in recent months. During the first eight months of 2019 (through August 19), the Waha spot price averaged just $0.65/MMBtu. The Waha spot price has been consistently lower than the Henry Hub spot price—the national benchmark price for natural gas. However, in recent days, that differential has significantly decreased, and Waha spot prices posted $0.65/MMBtu lower than the Henry Hub spot price last Thursday, which was the lowest daily differential since January. In comparison, this differential averaged between $2/MMBtu and $3/MMBtu between March and June of this year. This recent uptick in the Waha natural gas price coincides with flows on the GCX. Deliveries into the pipeline began on August 8. S&P Global Platts reported that deliveries at El Paso Natural Gas Pipeline’s interconnection with GCX reached nearly 0.26 Bcfd on August 14. Industry reports suggest that this level means that GCX is packing its lines in anticipation of entering service late next month, ahead of its announced in-service date of October 1. Once fully operational, the pipeline will be capable of sending about 2.0 Bcfd of natural gas eastward to the Agua Dulce receipt point near the Texas Gulf Coast.
He paid $1.50 an acre for barren Texas land now worth $7 billion - So much of the Permian Basin is under production that the lights glowing at night, on well pads and rigs and double-wide trailers, make the place look in NASA satellite photos like a giant Lite Brite. But there’s a spot where the Permian dims. It’s a big one, covering more than 250 square miles and loaded with enough oil and gas that it could, by some estimates, fetch $7 billion. In an era where everything in the basin seems to be for sale, though, the Fasken ranch isn’t. The owners have no interest. They don’t even want to drill very much. That’s heresy in the busiest U.S. oil patch, and almost as much of a curiosity as the lack of enthusiasm for cashing in. Back in 1913, when Toronto attorney David Fasken paid $1.50 an acre for plains outside Midland, the plan, according to lore, was to make a fortune raising cattle. There was too little water for that to happen. Fasken died 16 years later, unaware of the riches below the surface. Now his heirs are among the 100 families that are the biggest private landowners in the U.S.—No. 40 on the list in terms of acreage, and nearer the top in value. Their holdings include three ranches in South Texas and commercial, industrial and residential real estate scattered around the Lone Star State and California. Choice in the Fasken portfolio are the 165,000 acres in the Permian, a sedimentary basin of oil-steeped rock in West Texas and southeast New Mexico that produces more crude than every OPEC member except Saudi Arabia and Iraq. Companies have been taking over acreage and operations that had been in private hands for generations. Two years ago, Exxon Mobil Corp. bought the land of the Bass family of Dallas for $6 billion. The next to go may be Endeavor Energy Resources LP, owned by Autry Stephens and his relations, which has been in talks to sell to Royal Dutch Shell Plc for more than $10 billion. Then there’s the holdout, Fasken Oil & Ranch Ltd., still seemingly bound by the fading West Texas ethic that ruled in the days when ranches were handed from generation to generation, with the dictum of “Never sell the minerals” as guidance. “They’re one of the very rare owners that never severed their minerals and surface rights,” Wurtz said. The company is owned by descendants of Barbara Fasken, who wed a grandson of David Fasken and brought children from a previous marriage into the family. . Family members didn’t respond to requests for comment.. This reluctance fits with the strange way, by local standards, the heirs do things. Instead of shipping in fresh water for the drilling process, the company uses mostly recycled or nonpotable H2O. While the recent boom in Permian production has come from drilling mile-long horizontal wells, Fasken instead mostly sticks with the old-school vertical version. Much of America’s shale boom of the past decade has been financed with debt; the company has none. What’s more, the Fasken acreage is lightly drilled because, as Davis explained, the family wants to go slow and preserve the mineral base. What’s the rush?
The Shale Boom Has Turned To Bust- Producers Slashing Budgets, Staff, & Production Goals - The collapse in the shale industry is continuing with no signs of stopping or even slowing down.No sooner did we highlight how shale is doomed no matter what the industry does and how recent price movements have triggered chaos across the industry, than we find out that oil producers and their suppliers are now cutting budgets, staffs and production goals, according to Reuters. The U.S. now has 904 working rigs, which is down 14% from a year ago. Harold Hamm, chief executive of shale producer Continental Resources, still thinks this could be too many. Additionally, bankruptcy filings by U.S. energy producers through mid-August of this year have matched the total for all of 2018 already. Earl Reynolds, CEO of Chaparral Energy said:"You’re going to see activity drop across the industry."His firm has slashed its workforce by about 25% and cut spending by about 5%. It has also agreed to sell its headquarters and use some of the proceeds to pay off debt. Cowen & Co. estimated last month that oil and gas producers deployed 56% of their total budgets through June and the firm expects total spending to fall 11% over last year.And one slowdown begets another: as drilling slows, oilfield services companies are also making staff and budget cuts. Some, like Schlumberger and Halliburton Co., are considering restructurings. For example, Schlumberger is planning a writedown this quarter and has said that its North American results have been "under significant pressure". Halliburton, on the other hand, is reducing its North American workforce by 8% due to customer spending cuts. Superior Drilling Services CEO Troy Meier said: “The service sector I think is going to be flat.” His firm recently cancelled plans to add new machinery.
Even if Injection of Fracking Wastewater Stops, Quakes Won't - Jacob Walter likes to remind people that what has transpired in Oklahoma over the past decade is unprecedented in human history. Walter is Oklahoma’s state seismologist, and he is talking about the surge of earthquakes that has plagued his state since its most recent oil-and-gas boom. Production techniques—including hydraulic fracturing, or fracking—led to large-scale underground wastewater disposal, which scientists have tied to the state’s 900-fold increase in quakes since 2008. After 2015, when oil demand fell as prices dropped and Oklahoma instituted new wastewater-disposal rules, earthquake rates fell sharply. Still, the state continued to see rare but damaging tremors triggered by the fluids that had already been shunted underground. “I don’t think people fully appreciate the scale, the amount of water that was injected over the years,” Walter says, adding that humans have now caused four of the five largest earthquakes in Oklahoma’s recorded history. Since the surge began, scientists have grappled with how to manage the quakes without crippling one of the state’s most lucrative industries. Two new studies show how the continuing movements of injected wastewater can trigger earthquake activity—knowledge that sheds light on how to forecast and mitigate tremors. The findings suggest the effects of wastewater disposal can persist for years after injection rates slow or stop, as pressure from the wastewater continues to spread belowground and rupture ancient faults.
US seeks dismissal of tribes' lawsuit over Keystone pipeline (AP) — Attorneys for the Trump administration want a U.S. judge to throw out a lawsuit from Native American tribes trying to block the proposed Keystone XL oil pipeline from Canada to Nebraska. Tribes in Montana and South Dakota say President Donald Trump approved the pipeline without considering potential damage to cultural sites from spills and construction. The administration counters that Trump’s approval applies only to a 1-mile (1.6-kilometer) section of pipeline along the U.S.-Canada border and not the rest of the line. U.S. District Judge Brian Morris will preside over a Thursday hearing on the government’s attempt to dismiss the case. The judge blocked the line in November, saying more environmental studies were needed. But Trump circumvented that ruling in March by issuing a new permit for the $8 billion, 1,184-mile (1,900-kilometer) project. The Assiniboine and Gros Ventre tribes of the Fort Belknap Indian Reservation in Montana and South Dakota’s Rosebud Sioux tribe say Trump’s action violated their rights under treaties from the mid-1800s. “They’re saying we can’t sue the president, and the tribes’ treaties essentially mean nothing. We completely disagree,” said Matthew Campbell, a Native American Rights Fund attorney representing the tribes. “The treaties were agreed to by the president of the United States and ratified by the Senate, so the treaties clearly apply.”
DNA from cigarette leads to Dakota Access arrest warrant 3 years later - North Dakota authorities relying on DNA collected from a cigarette butt have charged a man with engaging in a riot for his involvement in a Dakota Access pipeline protest three years ago. Morton County prosecutors also charged 23-year-old Lawrence Malcolm Jr. with felony conspiracy to commit criminal mischief. The charges relate to a Sept. 6, 2016, protest on the Standing Rock Indian Reservation. An affidavit says more than 100 demonstrators, many with their faces covered, halted construction and vandalized equipment. North Dakota crime lab officials notified investigators last month that DNA from a cigarette butt found at the scene was a match for Malcolm, of Sisseton, South Dakota, whose DNA profile was on file from an earlier arrest.
50 barrels of oil spill in Orcutt- Cleanup operations continue at the scene of a reported oil spill south of Orcutt in northern Santa Barbara County. The Santa Barbara County Fire Department responded to the spill of about 50 barrels of light crude early Thursday evening from a pipe at 7275 Graciosa Road. County Fire says the spill was in a riparian area at the oil lease location west of Highway 135. The pipe was clamped off and shut down Thursday night and no further oil was reported to be spilling, according to the Santa Barbara County Fire Dept. California Fish and Wildlife representatives were called in to supervise the cleanup. 50 barrels of light crude is equivalent to about 2,000 gallons. No official word on who owns and operates the pipe involved in the oil spill. There is a Greka Energy sign on the gate at the entrance to the oil lease location a 7275 Graciosa Road.
A last-ditch bid to keep Big Oil out of Arctic Wildlife Refuge - Democrats in the House and U.S. Senate are launching an 11th hour effort to spare the Arctic National Wildlife Refuge, America's greatest wilderness, from a hurry-up Trump Administrations bid to sell oil and gas leases. A back-door provision in Congress' 2017 tax cut opened the coastal plain of the 19-million acre Refuge to oil drilling. Oil development would take place in what is the calving ground for 100,000-plus animals of the Porcupine Caribou herd. It is a land of prey -- the caribou -- and such predators as wolves and barren ground grizzly bears. Offshore ice flows in the Beaufort Sea are prime polar bear habitat. Along with five other Senate Democrats, Sen. Maria Cantwell, D-Wash., will introduce legislation on Wednesday that would designate the coastal plain a wilderness are off-limits to haul roads, pipelines and drilling platforms. RELATED: Saying it's 'Moving Forward,' SDOT axes $52 million Seattle streetcar contract The cause is dear to Cantwell, who has trekked and rafted in the Refuge. She tried to block the tax bill from green-lighting oil development, but lost in a 52-47 Senate vote. The Democratic-controlled House will vote this week on a bill called the Arctic Cultural and Coastal Plain Protection Act, which would repeal the tax bill provision opening the Refuge to drillers. The action in Congress comes as the Trump Administration seeks to rush completion of a draft environmental impact statement. The administration seeks to hold a lease sale in 2020, before the presidential election. The Senate legislation, and the House bill if it passes, will likely be blocked by Senate Majority Leader Mitch McConnell. But growing public concern about global warming -- most acutely felt in the Arctic -- makes Refuge drilling unpopular in the "lower 48" States.
'Expect some volatility' in oil price as US output flows back, IHS Markit's Yergin says --A rise in U.S. shale oil output and lackluster global demand will create volatility for oil markets, according to Dan Yergin, IHS Markit’s vice chairman.“The pipeline bottlenecks are in the process of being resolved, so a lot more oil is going to come onto the market by the end of the year. We expect the U.S. (crude oil output) to be up to 13 million barrels a day. And at least we’re looking right now at fairly weak demand,” he told CNBC’s Hadley Gamble in Abu Dhabi Tuesday.“We’re in one of the weakest periods since 2008 and we think demand growth this year is under a million barrels per day. So you have that factor at the same time as you have more oil coming to the market. So expect some volatility.”Yergin projected that benchmark Brent crude, currently trading at $62.86 Tuesday, could stay within the $55 to $65 range.Yergin said IHS Markit came to its conclusion about lower oil demand growth having looked at weaker manufacturing data. “We see a strong consumer economy in the U.S. but worry about the weakness in the economy.” The direction of the oil price, which is largely dictated by supply and demand dynamics, is uncertain.On the one hand, an alliance of OPEC producers and non-OPEC producers (including Russia) decided in late 2016 to curb their daily oil output in order to balance markets following a glut in supply and slumping prices. The U.S., which is now the biggest oil producer in the world, is not a part of that agreement, however, and has seen its oil production surge.The U.S. Energy Information Agency (EIA) estimates that U.S. crude oil production averaged 11.7 million barrels a day (b/d) in July; it will release August data later on Tuesday. The EIA forecasts U.S. crude oil production will average 12.3 million b/d in 2019 and 13.3 million b/d in 2020, “both of which would be record levels,” it noted in its last monthly outlook. President Donald Trump’s trade dispute with China, and the mutual import tariffs both country’s have applied, are widely seen as a dampener on global economic growth and the demand outlook for oil. Combine the factors of rising oil supply and lower global demand growth, and the oil price declines.
Shale Slowdown Could Trigger Major New Oil Price Rally - Two weeks ago, Oilprice.com published my notes which supported my belief that U.S. oil production has “hit a wall”. Last week, EIA confirmed my conclusion. The EIA’s 941 report shows that after U.S. crude oil production peaked in April at 12,123,000 barrels of oil per day (“BOPD”) production declined 8,000 BOPD in May and another 33,000 BOPD in June. Preliminary estimates say that when actuals are available for July, they will show an even larger decline. These are not big declines, but with the active drilling rig count continuing to fall, I feel confident in telling you that U.S. oil production over the second half of this year is not going higher. When EIA reports actual production figures for July at the end of this month, they are surely going to be lower because of the well shut-ins due to Hurricane Berry in the Gulf of Mexico. Barring another GoM hurricane, oil production should rebound a bit in August and September. However, I don’t see anything that will return U.S. oil production to the peak set in April.Note that EIA’s weekly U.S. oil production “guestimates” have been around 12.3 to 12.5 million barrels per day recently, but most of you should know by now that EIA’s weekly numbers are based on flawed formulas. The Department of Energy has a long history of missing the change in trends of supply and demand. We need much higher oil prices soon or the global market will soon be undersupplied. On September 3rd Raymond James published an Energy Industry Brief that contained a statement that all of you should read carefully: “We believe the single most important longer-term driver of oil prices and the energy market over the next five years will be the change in U.S. well productivity.” I agree with this statement 100%. So, what has happened to dash the “expert opinions”? The simple answer is that lower oil prices as a result of the shale production surge has caused upstream oil & gas companies to slash drilling & completion budgets. That’s true, but it is only half of the reason for lower U.S. oil productivity. We are completing a lot fewer wells and the newer wells are declining faster. Part of the reason for the faster decline rate (60% to 70% during the first year for the average horizonal well) is because upstream companies drill their best leasehold first. All oilfields go on decline after the Tier One drilling locations are fully developed. The Tier Two wells cannot offset the declines of the Tier One wells.
US is closing in on Saudi Arabia to become the world's top oil exporter, IEA says - The International Energy Agency (IEA) expects the U.S. to challenge Saudi Arabia’s position as the world’s leading oil exporter, after briefly overtaking the OPEC kingpin to claim the number one spot earlier this year.“Booming shale production has allowed the U.S. to close in on, and briefly overtake, Saudi Arabia as the world’s top oil exporter,” the IEA said in its closely-watched monthly report on Thursday.“The installation of the necessary pipelines and terminals is continuing apace, which will ensure that the trend continues.”The U.S. momentarily surpassed Saudi Arabia as the leading oil exporter in June, after crude exports surged above 3 million barrels per day (b/d), the IEA said Thursday. That lifted total exports of crude and products to nearly 9 million b/d.At the same time, Saudi Arabia cut back on both crude and refined product exports.The oil-rich kingdom reclaimed the top spot in July and August, as the U.S. was affected by hurricane disruptions. The ongoing trade dispute also made it difficult for U.S. shale shipments to find markets in recent months, the IEA said.The Paris-based energy agency’s monthly report comes at a time when the U.S. is actively pursuing “energy dominance,” regardless of what happens to oil prices.Speaking to CNBC in Abu Dhabi earlier this week, the U.S. deputy energy secretary said President Donald Trump “often talks about energy dominance.”“The world often asks: what does that mean? It just simply means that we are going to produce as much energy as we can, as cleanly as we can and as affordably as we can.” “And whatever happens to the world price of oil, whatever happens to the world price of whatever, electricity, it doesn’t really matter, then so be it,” Dan Brouillette said.
US wants energy dominance regardless of what happens to oil prices, dep. energy secretary says - The U.S. deputy energy secretary told CNBC Monday that America wants to achieve energy dominance regardless of what happens to oil prices. OPEC has struggled to shore up crude futures this year, amid a deteriorating outlook for global growth and a protracted trade dispute between the U.S. and China. It has once again raised questions about whether the Middle East-dominated group really wields that much influence over world crude markets. “Our energy policy is not designed to affect price, that’s not we do for a living. And yet it does because of our production numbers,” Dan Brouillette told CNBC’s Hadley Gamble at the World Energy Congress in Abu Dhabi. “The president has an ‘all of the above’ strategy. He talks often about energy dominance and the world often asks: what does that mean? It just simply means that we are going to produce as much energy as we can, as cleanly as we can and as affordably as we can.” “And whatever happens to the world price of oil, whatever happens to the world price of whatever, electricity, it doesn’t really matter, then so be it,” Brouillette said. In the last decade, the U.S. has more than doubled oil production to 12.3 million barrels a day, making it the world’s largest producer. It now appears set to flood the oil market with even more crude, putting downward pressure on prices at a time when it is already struggling to cope with too much supply. International benchmark Brent crude traded at $62.12 Monday morning, up around 0.9%, while U.S. West Texas Intermediate (WTI) stood at $57.17, up more than 1.1%.
Extinction Rebellion blocks UK fracking site in climate protest --- Extinction Rebellion has blocked the entrance to the UK’s only active fracking site in a demonstration against what it called the “burgeoning catastrophe” of global warming.Protesters from the environmental group gathered outside the shale gas site on Preston New Road, near Blackpool, on Tuesday morning alongside a yellow boat bearing the words: “Planet before profit”.The energy firm Cuadrilla said its operations were not affected by the protest. The action comes 15 days after the UK’s biggest fracking-related earthquake to date was triggered at the site, causing houses to shake for miles around.A spokesperson for Extinction Rebellion said its latest action was to highlight “the conscious, cynical inaction of the government in response to a climate and ecological emergency”.They added in a statement: “We will stand with those communities which have tenaciously and peacefully resisted this for years. They have sought to defend against the threat fracking poses to their air and water, their health, their land, including their homes, as demonstrated by the recent tremors. “There is a yawning chasm between words and deeds. The science is clear: the world must move urgently away from a system of ever-increasing consumption and destruction, totally founded and dependent on fossil fuels.”
BP hit with £400k fine after oil spill in Shetland - BP Exploration Operating Company has been fined £400,000 after pleading guilty yesterday for an oil spill in Shetland nearly seven years ago.The UK Health and Safety Executive (HSE) said Lerwick Sheriff Court heard the oil spill took place at Sullom Voe Terminal during maintenance work to drain a surge relief pipeline in December 2012.Around 3.8 tonnes of “extremely flammable, unstabilised crude oil” spilled on to the ground, it added. BP said while there was no injury to people or impact on the environment, the incident “should never have happened”.An investigation by HSE found between 12th November and 13th December 2012, BP Exploration Operating Company had “failed to take all measures necessary” to prevent major accidents and to limit their consequences to people and the environment.It also failed to identify and assess the hazards and risks arising from the undertaking of a “non-routine job”, namely the task of draining water from a drain valve on a surge relief line.HSE Principal Inspector Greg Haywood said: “This incident could so easily have been avoided by simply carrying out correct control measures and safe working practices. “Companies should be aware that HSE will not hesitate to take appropriate enforcement action against those that fall below the required standards.”
Fire breaks out on oil tanker at Sture oil terminal in Norway - (Reuters) - A fire has broken out in the engine room of an oil tanker during loading at Equinor's Sture oil terminal on Norway's west coast, local police and the oil firm said on Friday. The crew of the oil tanker, named by police as Dubai Harmony, is still onboard and assisting the fire service. The Sture oil terminal is being evacuated, the police said.
Colombia court maintains moratorium on fracking -(Reuters) - Colombia’s top administrative court maintained a temporary moratorium on the use of fracking on Tuesday, stymieing potential pilot projects amid ongoing arguments in a wider case regarding the use of the technique to extract oil and gas. A wall with the carved phrase that reads "Superior Council of the Judiciary, Council of State" is seen on the facade of the Palace of Justice in Bogota, Colombia September 10, 2019. REUTERS/Luisa Gonzalez The decision by three magistrates from the Council of State, which is tasked with ruling on administrative matters, comes amid a larger case about the use of hydraulic fracturing, which breaks up rock formations with pressurized liquid. Regulations for development of non-conventional oil deposits were suspended in the Andean country late last year as part of the ongoing lawsuit filed against the energy ministry by an environmental lawyer. While there is no law against fracking, which is not yet widely used in Colombia, the government says regulations are needed. Fracking’s possible use has sparked vitriolic debate among lawmakers, activists, officials and regular citizens. “The measure that proposed giving an open road to the exercise of fracking has been defeated while it is decided whether its regulation is legal or not,” the court said in a statement about its decision. The statement outlined the arguments submitted in favor of lifting of the moratorium but did not say why the magistrates decided to maintain it.
EPA undertaking oil spill assessment for national response plan - With oil production estimated to begin in approximately six months, the Environmental Protection Agency (EPA) is moving to prepare an assessment that will identify the possible risks to Guyana should an oil spill occur and it is expected to take several months.The risk assessment will help to form part of government’s National Oil Spill Response Contingency Plan, which Director-General of the Civil Defence Commission (CDC) Lieutenant-Colonel Kester Craig says is about 90% done and “will be in place before first oil.” “There is need for a more detailed risk assessment and we have outlined it with the EPA and they are working on having the assessment done. This is because we want to be able to say ‘This area range here and here, this is what will be affected. If it involves mangroves, sea turtles, fishes, farms… whatever it is, we want to know and to plan accordingly,” Craig told Sunday Stabroek in an interview last week.
The World's Oil Glut Is Much Worse Than It Looks - A meeting of ministers from OPEC states and their oil-producing allies will take place in Abu Dhabi this week. It will probably be a subdued affair. Oil prices remain stubbornly low despite big output cuts by the so-called OPEC+ group and geopolitical factors such as the U.S. sanctions on Iran.The meeting of the Joint Ministerial Monitoring Committee, a body set up by OPEC+ to oversee its production-cutting strategy, won’t reset the group’s approach but it might provide some clearer guidance on its goals. The ministers insist that they don’t have a target for how far they want the price of crude to rise, and say instead that their aim is to reduce excess stockpiles.But for market-watchers it’s tough to even get a sense of how big that stockpile is, and hence when the output-cutting exercise may be seen to have done its job.The original target of the output cuts back in November 2016 was to get stockpiles back to their five-year average level. That was never going to be enough, though. The problem is that this average has been inflated by the very excess stockpile that OPEC+ is trying to drain (as the chart below shows).As such, it’s been relatively easy to cut the inventory to close to this inflated figure but that has still left a huge amount of unwanted crude sloshing around. Not a very useful outcome when you’re trying to boost prices.Khalid Al-Falih, the departing Saudi oil minister, has acknowledged that the group needs a new target. The OPEC+ ministerial group concluded at its last meeting in July that the moving five-year average wasn’t working and it has been considering using a new benchmark from the more “normal” period (in global oil inventory terms) of 2010-2014. That leaves the producers with a lot more excess crude to drain. OPEC assessed that commercial oil stockpiles in the industrialized countries of the OECD totaled 2.955 billion barrels at the end of June. That’s 258 million barrels more than the 2010-2014 average for the same month.Using this figure would certainly be a step in the right direction in terms of truly managing the market’s excess inventory. Better still would be having a target that takes into account the growth in oil demand every year, by measuring stockpiles in terms of the number of days’ worth of demand they represent rather than in simple volumes.Measuring the number of barrels held in storage is all well and good, but with demand rising year after year (even if the rate of increase is slowing) the world now needs a bigger stockpile to provide the same amount of forward cover.Still, whether you measure them as simple volumes or in terms of cover for future demand, OECD stockpiles are rising. Admittedly, much of the recent increase comes from natural gas liquids (light oils produced in large quantities from U.S. shale) which are used widely as petrochemical feedstocks. When you strip these out of the numbers, OECD inventories of crude oil plus the major fuel products – gasoline, middle distillates (diesel, heating oil and jet fuel) and fuel oil – are below their five-year average level.
Russia Considers Possibility Of $25 Oil Next Year - Russia is considering the notion that oil prices may be as low as $25 per barrel in 2020, the country’s central bank said in its new forecast published on Monday, as cited by Reuters.Russia’s Central Bank has forecast in its macroeconomic forecast that oil could possibly hit that low due to falling demand for oil and oil products worldwide, as well as from disappointed global economic growth.The doom and gloom scenario was just one proposed by the bank. If that risk scenario actually materializes, Russia’s inflation could increase to 7% or 8% next year, on the back of falling gross domestic product to 1.5%– 2%.Russia is perhaps uniquely positioned to withstand low oil prices, although $25 per barrel is pretty bleak.One of the reasons why Russia is more impervious to low oil prices compared to its competition is that its currency weakens when oil prices fall. This provides some type of a cushion—at least to some extent—for its lower oil revenues. Russian oil companies can pay their expenses in this weaker ruble, but still rakes in US dollars for its oil exports. Further allowing it to withstand lower prices, are that Russia’s oil company’s taxes are designed to be less as oil prices fall.So much so is Russia’s ability to adapt to lower oil prices, that it actually struggles with higher oil prices, which dent demand for its oil. Russia’s budget for 2019 was based on $40 oil. Meanwhile, Saudi Arabia needs $80—some say even $85—per barrel. In August, Russia said its 2019 budget breakeven was at a Urals price of $49.20—the lowest breakeven in more than a decade. This has Russia and Saudi Arabia—colleagues in the current production quotas designed to rebalance the market—at odds, and likely working toward perhaps different goals.
Russian energy minister looks to long term factors, not Trump tweets, for oil price forecasts - Russian Energy Minister Alexander Novak has his focus on longer-term market factors rather than President Donald Trump’s tweets, he said Thursday. Asked about his reactions to the U.S. president’s social media missives, which often target OPEC policies and are known to move markets without warning, Novak told CNBC’s Hadley Gamble: “You know, we are looking at all the factors that one way or another effect the prices. But in particular for us, it’s the balance between supply and demand.” “With regards to (Trump’s) statement, we see that at the time of the statement the price goes up or down but after a while returns to where it was,” he added in the exclusive interview. “Therefore, in my view, these are not fundamental factors. Fundamental factors do not lie in words but actions.” His comments come shortly after the conclusion of the Joint Ministerial Monitoring Committee (JMMC) in Abu Dhabi, with OPEC allies agreeing to ask over-producing members to bring production back in line with their targets.The full coalition of OPEC and non-OPEC partners — sometimes referred to as “OPEC+” — will next meet in Vienna in early December to decide whether any further action to stabilize oil markets is required for 2020.The group has struggled to shore up oil prices this year, amid booming U.S. production and a slowing global economy.It has called into question whether OPEC+ really wields that much influence over oil markets.
Russia says it wants a relationship with US on energy but 'ball not in our court'— Russia is always open to a relationship with the U.S. on oil, its Energy Minister Alexander Novak told CNBC in Abu Dhabi on Thursday. "With regard to the possibility developing relations with the minister of energy for the United States, I am in contact with him, we are always ready to develop a dialogue on energy between our countries," Novak told CNBC's Hadley Gamble in an exclusive interview. "But the ball isn't in our court." When asked to elaborate on what kind of relationship, the minister replied, "That's not a question for me." Many major oil producers have struggled to bring in oil revenue to meet their budget needs as prices remain depressed in a low demand environment. The U.S.-China trade war and increased supply coming in from America's shale fields have kept a lid on crude futures, despite production cuts orchestrated by OPEC and its non-OPEC partners, the latter of which have been led by Russia. Still, Novak seemed confident that the U.S. shale boom's days could end once the easily accessible resources were plundered. "First of all, I'd like to say that sooner or later any boom ends," he said. "And that's just a historic truth. Then we will see what happens with shale oil, it's fairly difficult to extract from the mineral deposits." Earlier in the day, Novak told reporters that U.S. shale output growth will slow as it struggles to attract finances for investment and raise its output. The International Energy Agency (IEA) expects the U.S. to challenge Saudi Arabia's position as the world's leading oil exporter, after briefly overtaking the OPEC kingpin to claim the number one spot earlier this year. The minister's comments come shortly after the conclusion of the Joint Ministerial Monitoring Committee (JMMC) in Abu Dhabi, with OPEC allies agreeing to ask over-producing members to bring production back in line with their targets.
President Trump can tweet 'anything he wants,' Saudi energy minister says — Saudi Arabia’s recently appointed Energy Minister Prince Abdulaziz bin Salman is unfazed by President Donald Trump’s tweets about OPEC and the oil market, he indicated Thursday during a meeting of the Joint Ministerial Monitoring Committee (JMMC) in Abu Dhabi.When asked how OPEC planned to navigate President Donald Trump’s social media missives on the oil market, Abdulaziz replied: “The president is the president. He is entitled to tweet anything he wants.”The American president has taken to Twitter scores of times to express his disdain for the 14-member organization’s output cutting plans that have aimed to boost prices amid a high supply and low demand environment. In mid-June, after OPEC and its non-OPEC allies agreed to extend their output cuts into 2020, Trump tweeted: “Oil prices are too high, OPEC is at it again. Not good!”Lower oil prices translate to more affordable gas prices for American consumers, something the president wants to ensure ahead of an election year.Abdulaziz said Thursday that OPEC and non-OPEC partners would consider deeper production cuts at its next full meeting.A seasoned veteran of the kingdom’s delegation to OPEC with years of experience in the industry, Abdulaziz is the first member of the ruling Al Saud family to hold a position in the massive energy ministry. He told reporters on Monday during the World Energy Congress that there would be no changes to the oil policy of Saudi Arabia, which has taken on the brunt of the OPEC cuts, pumping well below its 10 million barrel per day (bpd) target.Pushing oil prices higher does not seem feasible at this point, even with production cuts, many analysts agree — the International Energy Agency recently announced its lowest growth forecasts for oil demand in a decade,with demand growth for the first half of 2019 at a paltry 500,000 bpd. Most see Brent crude hovering in the $50 to $60 per barrel range.
New Saudi energy minister faces unpalatable crude market choices: Russell (Reuters) - Saudi Arabia’s new Energy Minister Prince Abdulaziz bin Salman faces a series of fairly bleak options as the world’s largest exporter of crude oil tries to engineer higher prices amid a faltering global economy beset with geopolitical risks. So far the word from the Saudis is that the appointment of one of the king’s sons doesn’t imply a reset of the current policies being pursued. This means that, for now at least, the Saudis will stick to their output cutting agreement with the rest of OPEC and allied producers such as Russia. But Salman will know as a highly experienced energy leader that the current policies aren’t exactly working, and worse than that, have very little chance of delivering the higher prices his country needs. Saudi Arabia needs crude prices around $80 a barrel, some $20 above current levels, to balance the government budget, while higher prices will also help boost the valuation of state oil company Saudi Aramco ahead of a possible initial public offering next year. OPEC and its allies agreed in November 2017 to restrict output in a bid to arrest falling prices, and have extended that deal, but the problem for the exporters’ club is that their efforts have largely been in vain.
Saudi Arabia says deeper OPEC cuts will be considered in December - Saudi Arabia’s newly appointed energy minister said Thursday that OPEC and non-OPEC partners would consider deeper production cuts at its next full meeting. Speaking shortly after the conclusion of the Joint Ministerial Monitoring Committee (JMMC) in Abu Dhabi, Prince Abdulaziz bin Salman said the Middle East-dominated group had a clear readiness to be responsive. His comments come at a time when OPEC and non-OPEC partners, sometimes referred to as OPEC+, have struggled to shore up crude futures this year. It has once again raised questions about whether the group, which consists of some of the world’s most powerful oil-producing nations, really wields that much influence over oil markets. The full coalition will next meet in Vienna, Austria in early December to decide whether any further action to stabilize oil markets is required for 2020. ‘A new reality’ Abdulaziz, who replaced Khalid al-Falih as Saudi Arabia’s energy minister on Sunday, described Thursday’s JMMC meeting as “productive,” “fruitful” and “transparent.” Sitting alongside his Russian counterpart, Abdulaziz said the talks had “awakened” Riyadh and Moscow to a “new reality.” He explained the two countries had not been “inclusive” enough to other OPEC members in previous meetings, promising that this would change over the coming months. “I think our colleagues have welcomed this change,” he added.
OPEC Needs A Miracle To Push Prices Higher - It’s not a secret: OPEC has painted itself into a corner by relying exclusively on supply control to be able to manipulate international oil prices in a way that is favorable for its members. Right now, prices are depressed and that has nothing to do with supply. Could OPEC’s grip on oil prices be slipping irreparably? When OPEC first announced that its members had agreed to put a cap on their production to reverse a steep drop in prices, it worked. Prices had been pushed to lows last seen more than a decade ago by the U.S. shale boom and OPEC’s own attempt to halt it by turning the taps on to maximum flow. When OPEC said it would reduce this flow, prices rebounded, providing much-needed relief to oil-reliant economies in the Gulf—it also provided relief to oil producers around the world, including the U.S. shale patch.The shale patch recovered so well that now U.S. oil production is at an all-time high with the country last year becoming the world’s largest producer. Meanwhile, OPEC and its partners led by Russia decided to cut again. This time, however, the cuts didn’t work. Prices remained subdued save the occasional short-lived rally. While it’s true Brent and WTI are both higher than they were before the second round of cuts was announced, the international benchmark is much lower than OPEC’s largest producers, notably Saudi Arabia, need it to be.The reason these cuts aren’t working is that market movers are not watching them. They are watching the tariff match between Washington and Beijing—a match that could hurt global oil demand. According to forecasters, it is already hurting it and as a result, it is hurting prices. “OPEC’s burden is to show that it still has the appropriate tools to arrest price declines driven in no small part by White House policy,” RBC’s head of commodity strategy, Helima Croft, said in a note to clients as quoted by CNBC this week. “It may prove easier to clean up the physical market than to overcome skepticism about the ultimate efficacy of its strategy in the age of Trump,” Croft added.
Iraq will cut oil production, comply with OPEC cuts 'this month,' minister says — Iraq will immediately comply with OPEC production cuts after months of overproduction, its oil minister told CNBC on Tuesday. The second-largest crude producer in the 14-member organization is often labeled OPEC’s ‘problem child’ for chronically overproducing even as the group tries to curb output during a time of low oil prices. In August, Baghdad reported its highest oil production on record at 4.6 million barrels per day (bpd), a volume that has increased steadily over the past few years despite nearly two decades of war and a bloody three-year battle to drive out the so-called Islamic State (IS). “We are trying to adhere to our commitment that we have agreed on the third of December last year with our colleagues in OPEC and outside OPEC, but with difficulties, of course,” Iraqi Oil Minister Thamer Ghadhban told CNBC at the 24th annual World Energy Congress in Abu Dhabi. Among those difficulties are disputes with the semi-autonomous Kurdish Regional Government (KRG), which holds roughly 30% of Iraq’s proven oil reserves, as well as the country’s high domestic power demand during Iraq’s hot summer months. “Right away from now, from this month, we will go back to normal and... crude oil for power generation will be down to about 80,000, 85,000 (bpd) instead of 205,000,” the minister said. In recent weeks, Iraq has had to refine some 200,000 bpd for local power generation, Ghadhban explained, compared to the domestic demand in winter of about 75,000 bpd. This production came in addition to the increase in production and export capacity from the KRG, he said. “That is why our numbers look higher or inflated,” Ghadhban added. “So this, and also I ordered the deduction in the refining capacity, and there would be a drop in our exports.”
OPEC+ deal can last 'until death do us part,' Saudi energy minister says - OPEC’s deal to curb oil production with non-OPEC allies, including Russia, can last the test of time, Saudi Arabia’s new energy minister said Monday.“Now we have a bigger family, which is OPEC plus,” Prince Abdulaziz bin Salman, Saudi’s new energy minister, told an audience of delegates at the 24th World Energy Congress in Abu Dhabi.“And very soon we will celebrate the charter that will continue putting us together, so until death do us part,” he said.It was announced on Sunday that Saudi Arabia’s King Salman had replaced Energy Minister Khalid al Falih with Prince Abdulaziz, a former deputy minister with decades of experience in Saudi’s OPEC delegation.Abdulaziz was part of the OPEC team that negotiated the current deal with non-OPEC producers (collectively known as OPEC+) to curb production which was struck in late 2016. The deal was extended in July to March 2020. The Kremlin said Monday that it sees no impact on the so-called “OPEC+” deal following the change of leadership at Saudi Arabia’s energy ministry and that it expected “business as usual,” Reuters reported.An expectation that Saudi’s approach to the so-called “OPEC+” deal will continue as before has buoyed oil prices Monday. Benchmark Brent crude was trading at $61.99 per barrel while U.S. West Texas Intermediate (WTI) was trading at $56.99 per barrel.The OPEC+ alliance’s policy to curb production has had to confront ample supply from U.S. shale oil producers and a potential fall in demand amid U.S.-Sino trade tariffs seen as subduing global growth. Prince Abdulaziz said he was “by nature an optimist” and that the “jury is out” when it comes to the outlook for oil demand, adding that if he took IEA (International Energy Agency) projections forecasting slowing demand to heart, he would “probably be on Prozac all the time.”
Oil gets boost as new Saudi minister commits to output cuts - Oil prices rose on Monday after the new Saudi energy minister, Prince Abdulaziz bin Salman, confirmed expectations that there would be no radical change in his country’s oil policy. Prince Abdulaziz, son of Saudi King Salman and a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries, replaced Khalid al-Falih on Sunday. Global benchmark Brent crude futures were up 63 cents at $62.17 a barrel, while U.S. West Texas Intermediate gained 89 cents to $57.41. Speaking on Monday, Prince Abdulaziz said the pillars of Saudi Arabia’s policy would not change and that a global deal to cut oil production by 1.2 million barrels per day would survive. He added that the so-called OPEC+ alliance between OPEC and non-member countries including Russia, a partnership he helped cement, was staying for the long term. He declined to comment on oil prices. Russia’s oil output in August exceeded its quota under the OPEC+ agreements. OPEC oil output in August rose for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by Saudi Arabia and losses caused by U.S. sanctions on Iran. Abdulaziz also said the kingdom’s aim was for an Initial Public Offering of Saudi Aramco to happen “as soon as possible”. “I expect no deviation from Saudi policy. If anything, maybe more of a push in the direction of getting inventories down and getting the market into shape for the (Aramco) IPO,” said Robert Ryan, Chief Energy Strategist at BCA research. The United Arab Emirates’ energy minister, Suhail bin Mohammed al-Mazroui, said on Sunday that OPEC and non-OPEC producers were “committed” to achieving oil market balance. The OPEC+ deal’s joint ministerial monitoring committee meets on Thursday in Abu Dhabi. Trade and geopolitical tensions are affecting the market, Mazrouei said, but he was quick to rule out hasty steps influenced by the trade war between the United States and China. “The fear of slower (oil) demand is only going to happen if that tension is escalating and I am personally hopeful that is not the case,” Mazrouei told Reuters. Prices on Monday were also supported by a rise in oil imports in China in August, with shipments to the world’s biggest importer up 3% from July and nearly 10% higher in the first eight months of 2019 from a year earlier.
Oil Hits Near 6-Week Highs on New Saudi Oil Minister Appointment - - The oil rally has got an unexpected shot in the arm from Saudi Arabia’s surprise replacement of its oil minister. Crude prices jumped about 2% Monday after Saudi King Salman appointed one of his own sons, Prince Abdulaziz bin Salman, to take over from Khalid al-Falih to run the most important ministry in the country that leads OPEC. Known as ABS by his initials, Abdulaziz is a long-time Saudi delegate to OPEC and brother to Mohamad bin Salman, or MBS, another of King Salman’s sons and arguably the most powerful man in Saudi Arabia after the monarch. New York-traded West Texas Intermediate crude, the U.S. benchmark blend, settled up $1.33, or 2.4%, at $57.85 per barrel. Last week, WTI rose 2.6%, its biggest weekly advance since July. London-traded Brent crude, the international benchmark blend, extended its perch further above the key $60 level, rising $1.05, or 1.7%, to $62.59. “Oil bulls are greeting ABS’ appointment as a sign that Saudi Arabia is going to get better in its game of pushing up crude prices, something that Khalid al-Falih, unfortunately, never got to achieve in his time,” “Then, there’s also the question of the pending listing of Saudi Aramco, which has suffered for a host of reasons, some beyond Falih’s control. There’s renewed hope that ABS will be better at sorting out all these.” Aramco, the kingdom’s state oil company, is preparing to sell up to a 5% stake by 2020-2021, in what could be the world’s biggest IPO, Reuters reported on Monday. The OPEC+ joint ministerial monitoring committee, known as JMMC, will meet on Thursday in Abu Dhabi to review the cartel’s commitment to reduce 1.2 million barrels per day of supply since December. ABS helped negotiate the OPEC+ agreement between the established producer cartel and non-members led by Russia to cut global crude supply in order to support prices and balance the market.
Energy's recent rally is just a head fake, say options traders --Oil’s three-month-long roller-coaster ride still isn’t over. On Tuesday, it looked like crude was on its way to its first five-day winning streak since July, but then President Donald Trump fired national security advisor John Bolton – a well-known Iran hawk – and black gold immediately fell into the red. Oil looks like it’s on the road to recovery Wednesday, but if options traders are to be believed, energy stocks might not share in the comeback. Optimize Advisors President Michael Khouw stopped by “Fast Money” to explain why Tuesday evening. “Looking at XLE, the energy sector ETF, we saw about two times the average daily put volume today,” Khouw said. With many of those puts being bought to open, it’s no surprise that the largest trade of the day was a bearish bet. “One of the trades that I was looking at was the Oct. 11 weekly 60.5-strike puts. Somebody spent about $1.30 for those,” noted Khouw. The XLE closed Tuesday at $60.92, meaning that this trader expects the ETF to drop at least 3%, or below $59.20, during the next month. “Energy stocks tend to track oil, and oil often has a tendency to move further, farther along, than you normally would expect,” said Khouw, “But in this case, we’re still trading well within the band of its 52-week highs and lows.
Oil drops after Trump says he fired national security advisor Bolton - Oil futures fell on Tuesday, losing early gains, after President Donald Trump announced that he fired national security advisor John Bolton. U.S. West Texas Intermediate (WTI) futures settled 45 cents lower, or 0.8%, at $57.40 a barrel. Brent futures dropped 34 cents, or 0.5%, to $62.25 a barrel. Trump said Tuesday he fired national security advisor John Bolton, saying on Twitter he had “disagreed strongly with many of his suggestions.” “I informed John Bolton last night that his services are no longer needed at the White House. I disagreed strongly with many of his suggestions, as did others in the Administration, and therefore I asked John for his resignation, which was given to me this morning,” Trump said in a tweet.But minutes later, Bolton in his own tweet said that he “offered to resign” Monday night, and that Trump told him, “Let’s talk about it tomorrow.While Bolton’s exit stunned Washington, it also weighed on markets as his removal “dials back fears of an attack on Iran,” John Kilduff of Again Capital told CNBC.Before Trump’s announcement, oil markets were headed higher on Tuesday toward its longest run of gains since late July.The commodity had been rising on the updated outlook from Prince Abdulaziz bin Salman, Saudi Arabia’s new energy minister and a long-time member of the Saudi delegation to the Organization of the Petroleum Exporting Countries (OPEC). Prince Abdulaziz said the kingdom’s policy would not change and a global deal to cut oil production by 1.2 million barrels per day would be maintained. He added that the so-called OPEC+ alliance, made up of OPEC and non-OPEC producers including Russia, would be in place for the long term.
WTI Rebounds From Bolton-Drop After API Reports Big Crude/Gasoline Draw -- WTI tumbled today thanks to neocon warmonger John Bolton being fired (and removing some hawkish premium from the market):“The Bolton news is bearish as Bolton is a known hawk on Iran and the market is assuming that opens the door for talks with Iran,” said Phil Flynn, senior market analyst at Price Futures Group Inc. But all eyes are likely to pivot back to fundamentals and supply tonight and tomorrow. API:
- Crude -7.23mm (-2.8mm exp)
- Cushing -1.4mm (-980k exp)
- Gasoline -4.5mm (-800k exp) - largest draw since April
- Distillates +600k (+100k exp)
Another week, another larger than expected crude draw reported by API (and big gasoline inventory drop) WTI tumbled on the Bolton headlines early on but bounced very modestly on the bigger-than-expected API-reported crude draw. Finally, while hope remains high for more OPEC action, Bloomberg reports that oil prices would have to fall to $40-$45 a barrel for OPEC to make deeper production cuts, Equatorial Guinea’s Minister of Mines and Hydrocarbons Gabriel Mbaga Obiang Lima said in an interview, while attending the World Energy Congress in Abu Dhabi.
What Bolton's exit means for the oil market - The exit of National Security Advisor John Bolton from the White House makes it less likely the situation between the U.S. and Iran will escalate to a military conflict, analysts said. Oil prices traded lower after President Donald Trump tweeted Tuesday that he asked Bolton to resign. Seen as the most hawkish member of the president’s cabinet, Bolton told NBC News that he was resigning on his own volition and that Trump had not asked him to leave. The White House said there were several reasons for Bolton’s departure and said it was not due to the recent leaks about disagreement within the administration about a failed idea to hold talks with the Taliban at Camp David. “This dials back fears of an attack on Iran,” said John Kilduff, partner of Again Capital. “His desire to attack Iran goes back to George W. Bush. The oil market was always on tenter hooks with him on the scene.”
Sluggish Oil Demand To Keep A Lid On Oil Prices Amid Global Recession Fears - John Kemp, senior market analyst of commodities at Reuters, cites a new report via B.P.'s finance chief that indicates global oil consumption will be less than 1 million barrels per day this year, an ominous sign that the global economy is quickly deteriorating.Kemp said growth is expected to be less than one million barrels per day (bpd) would represent an increase of less than 1% in global oil consumption and the lowest level of growth since 2014 and before that 2012.Back then, declining demand was due to elevated oil prices averaging above $100 per barrel in real terms. Now prices trend in the $50-$60 range for WTI, confirming that even with low oil prices, demand is nowhere to be seen.B.P.'s global oil consumption is the most bearish among other predictions from the International Energy Agency (+1.1 million bpd), OPEC (+1.1 million) and the U.S. Energy Information Administration (+1.0 million).Waning demand for oil across the world is the result of a global manufacturing recession festering underneath the surface. The global synchronized decline is structural and started in 4Q17, several months later, the trade war between the U.S. and China erupted in 1Q18. Since global GDP drives oil consumption. Kemp shows that the World Bank ("Global economic prospects," June 2019) data is indicating world growth will be in a slump this year. Estimates show global GDP has been revised lower from 3.0% in 2018 to just 2.6% in 2019.Global GDP growth is at the same level as 2014 and before that 2012. So it makes sense why oil consumption has dropped to a five year low, it's because the global economy has lost tremendous amounts of momentum, now reversing into a vicious downturn. Kemp notes that the World Bank data is three months old, and since, numerous global indicators have shown a rapid deceleration in global data into late summer, especially coming out of Europe, the U.S., and Asia.
Strong Crude Inventory Draw Sends Oil Higher - Oil prices jumped higher after the Energy Information Administration reported a draw in crude oil inventories of 6.9 million barrels for the week to September 6. A day earlier, the American Petroleum Institute estimated inventories had shed 7.23 million barrels in the reporting period.A week earlier, the EIA said inventories had fallen by 4.8 million barrels.As the market prepares for the next OPEC meeting later this week and many expect an extension and possibly a deepening of production cuts, prices continued to be depressed by the global economic growth fears plaguing the market and the continued rise in U.S. oil production.The relief granted Brent and WTI by bullish reports about OPEC considering deeper cuts while industry insiders expect healthy demand has been temporary and likely to continue this way until either the trade conflict between the United States and China is resolved or a production outage in any of the less politically stable producing countries makes a dent in global supply.In the meantime, the weekly EIA reports continue to draw the attention of traders every Wednesday, not jut in crude oil but in gasoline and distillate fuels as well.Last week, the EIA said, gasoline inventories shed 700,000 barrels, which compared with a 2.4-million-barrel draw a week earlier. Production averaged 10.4 million bpd, versus 10.3 million bpd a week earlier.Distillate fuel inventories increased by 2.7 million barrels last week, which compared with a decline of 2.5 million barrels a week earlier. Distillate fuel production rose to 5.3 million barrels daily, from 5.2 million bpd in the previous week.Refineries processed 17.5 million barrels daily, compared with 17.4 million barrels daily in the last week of August. At the time of writing, Brent crude was trading at $62.83 a barrel and West Texas Intermediate was changing hands at $57.51 a barrel, both modestly up from yesterday’s close.
WTI Tumbles Below Bolton's Bottom After Mixed Inventory Data - Oil prices have erased the overnight gains sparked by API's bigger-than-expected crude and gasoline builds as ministers from OPEC+ are gathering in Abu Dhabi with deeper production cuts off the agenda for now."The market is expecting a gasoline draw as Dorian made its way up the East Coast affecting gasoline imports, while accelerating demand during the report period," according to Andy Lipow, president of Lipow Oil Associates DOE:
- Crude -6.91mm (-2.8mm exp)
- Cushing -798k (-980k exp)
- Gasoline -682k (-800k exp)
- Distillates +2.704mm (+100k exp)
For the third week in a row Crude, Cushing, and Gasoline saw inventories decline but distillates saw a significant build in the last week. Bloomberg Intelligence's Energy Analyst Fernando Valle explains that another large drop in crude should be supportive of prices, although the disappointing refined products numbers may take some of the optimism away. Gasoline disappointed slightly as refiners continued to clear out summer grade. Distillate had a large build as refinery utilization ramped and exports fell. Crude production was flat in the last week, holding near record highs as oil rig counts stumble lower...
US oil prices fall after EIA data shows larger-than-expected drop in crude inventories - U.S. oil prices fell on Wednesday after a reported sharp drop in U.S. crude stocks and OPEC member Iraq said the producer group would discuss deepening output cuts amid ongoing demand concerns. Brent crude gained 0.38% to $62.62 a barrel, while U.S. West Texas Intermediate dropped 0.17% to $57.32 a barrel. Oil prices have risen more than 7% this month, supported by declines in global inventories and signs of an easing in trade tensions between the United States and China, the world’s two largest economies and energy consumers. Prices rose this week after Prince Abdulaziz bin Salman, Saudi Arabia’s new energy minister, said oil policy would not change and said an OPEC deal with Russia and other producers to cut output by 1.2 million barrels per day (bpd) would be maintained. Iraqi Oil Minister Thamer Ghadhban said the Organization of the Petroleum Exporting Countries would discuss whether to deepen cuts, when ministers meet on Thursday. He said OPEC had discussed cuts of 1.6 million to 1.8 million bpd, when considering output curbs last year. Russia’s Energy Minister Alexander Novak said the alliance of OPEC and other producers, known as OPEC+, would discuss global oil demand, but added that there were no fresh proposals to change production cut volumes. Crude inventories fell by 6.9 million barrels from the previous week, according to the Energy Information Administration. This is compared with analysts’ expectations for an decrease of 2.7 million barrels.
Oil Tumbles On Report Trump Discussed Easing Iran Sanctions, Leading To Bolton Eruption And Subsequent Termination - WTI crude was sliding after mixed inventory data, but accelerated the losses, breaking below yesterday's lows, after headlines suggesting Bolton was fired after disagreeing with Trump's desire to ease Iran sanctions to get a meeting with Rouhani.As Bloomberg reports, President Trump discussed easing sanctions on Iran to help secure a meeting with Iranian President Hassan Rouhani later this month, prompting now former National Security Advisor John Bolton to erupt, and "argue forcefully" against such a step, according to the report.More notably, there already was support for de-escalation of sanctions with Iran, because during the Monday Oval Office meeting, Treasury Secretary Steven Mnuchin voiced his support for the move as a way to restart negotiations with Iran, the Bloomberg sources said. At this point, Bolton exploded.“Bolton made sure to block any and all avenues for diplomacy w/ Iran, including a plan being brokered by Macron,” Suzanne DiMaggio, a senior fellow at the Carnegie Endowment for International Peace, said on Twitter.“The French are offering Trump a facing-saving way out of a mess of his creation. He should grab it.”The reaction in crude (more supply) was instant...As Bloomberg further notes, the White House has started preparations for Trump to meet with Rouhani this month in New York on the sidelines of the annual United Nations General Assembly the week of Sept. 23, according to the people. It’s far from clear if the Iranians would agree to talks while tough American sanctions remain in place.According to sources, one floated scenario would be that Trump joins a meeting between Rouhani and French President Emmanuel Macron. The people said they had no indication it would actually happen.Whether or not Iran and the US e nd up meeting this month, or next, is irrelevant: the implicit signal for an olive branch is now in the open. More importantly, we now know how Bolton's attempt to scuttle the de-escalation ended: one day later, Trump announced Bolton's termination.
Oil ends with a loss as OPEC+ puts talk of deeper output cuts on hold until December - Oil futures finished with a loss on Thursday as OPEC and its allies reiterated their commitment to current output cuts, but failed to announce bigger production cuts as some had expected in the wake of easing tensions between the U.S. and Iran.In a press release, the Joint Ministerial Monitoring Committee, or JMMC, which monitors compliance with output reductions set by an OPEC+ agreement that began at the start of this year, “underscored the critical need for continued commitment” to the pledged cuts. It said compliance with the cuts stood at 136% in August.Oman’s oil minister Mohammed bin Hamad al-Rumhy said OPEC+ would discuss the possibility of deepening the existing output cut deal when the group meets in December, according to a news report from Argus. The JMMC will hold its next meeting in Vienna on Dec. 4, ahead of the OPEC and non-OPEC meetings on Dec. 5-6.West Texas Intermediate crude for October delivery 66 cents, or 1.2%, to settle at $55.09 a barrel on the New York Mercantile Exchange, after falling nearly 3% on Wednesday, marking the lowest close for a front-month contract since Sept. 3, according to Dow Jones Market Data. November Brent crude lost 43 cents, or 0.7%, to $60.38 a barrel on ICE Futures Europe, after shedding 2.5% a day ago. Market participants had raised the likelihood that OPEC+, a group of OPEC members that includes Russia, would act to stem recent bearish developments for crude prices, amid reports by Bloomberg News that President Donald Trump discussed easing sanctions on Iran in a move to ensure a meeting with Hassan Rouhani, Iran’s president, later this month.“The challenges for OPEC are now more daunting as the cartel and its playing hard to get counter partner Russia is now having to face the reality that stored Iranian oil could flood the market,” Flynn said that compliance to the OPEC production limit has been starting to slip. “To date, support for the agreement rate has been high,” but before Thursday’s meeting, data for August showed the compliance rate slipping to 116%, he wrote. “In August, three major countries Russia, Nigeria and Iraq, produced 0.6 mb/d more than their allocations. Saudi Arabia, on the other hand, produced 0.6 mb/d less than allowed, and it is clearly the lynchpin of the whole deal,” he said.
Oil declines on global demand worries despite hopes on trade talks - Oil futures fell on Friday as concerns about global growth and slowing demand lingered despite hints of progress on U.S.-China trade talks, setting up prices for weekly losses after days of swinging back and forth. Brent crude was down 18 cents, or 0.3%, at $60.20 a barrel by 0442 GMT, while U.S. West Texas Intermediate (WTI) was off by 14 cents, or 0.3%, at $54.95. Brent has traded in a range of nearly $5 this week and is heading for its first weekly loss in five. U.S. crude has traded similarly and is heading for its first loss in three weeks. Gloom over the economic impact of the trade dispute between Washington and Beijing has left investors shrugging off a strong commitment from Organization of the Petroleum Exporting Countries (OPEC) producers to trim output. “Again it is a battle between the forces of OPEC and those of slowing global growth and thus demand,” said Greg McKenna, strategist at McKenna Macro. The weak confidence in the markets was reflected by economists in a Reuters poll who predicted the U.S.-China trade spat will worsen or at best stay the same over the coming year. Nearly 80% of more than 60 economists said U.S.-China trade relations would either worsen or stay the same by the end of next year. The median probability of a U.S. recession in the next two years held at a high of 45%, and the chance of one in the next 12 months held at 30%. Still, President Donald Trump said on Thursday he would not rule out an interim deal with China on trade, though he prefers a comprehensive agreement. Asian stocks advanced on Friday on the signs of progress in U.S.-China trade talks, while aggressive stimulus from the European Central Bank also helped counter worries about a global economic slowdown. In oil markets, however, concern over whether Trump can achieve progress on the trade dispute has overshadowed OPEC’s Thursday agreement to trim output by asking members Iraq and Nigeria to bring their production back in line with targets.
Oil dips as demand concerns counter U.S.-China trade hopes – (Reuters) - Oil prices edged lower on Friday and posted weekly losses, as concerns about slower global economic growth outweighed hints of progress in the U.S.-China trade dispute. Brent crude LCOc1 futures fell 16 cents to settle at $60.22 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures delivery fell 24 cents to end at $54.85 a barrel. Brent fell 2.1% for the week, its first decrease in five weeks. WTI lost about 3% loss for the week, its first decrease in three weeks. The world’s two largest economies have been making conciliatory gestures as they prepare for new talks. China will exempt some U.S. agricultural products from additional tariffs, China’s official Xinhua News Agency said. Oil prices, however, remained under pressure by concern about a weaker demand outlook. “Oil appears to be suggesting that global economic growth has already been impacted by the tariffs while other markets such as the equities appear more focused on future progress,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. Both the Organization of the Petroleum Exporting Countries and the International Energy Agency (IEA) this week said oil markets could end up in surplus next year, despite a pact by OPEC and its allies to limit supplies that is largely being offset by growing U.S. production. U.S. energy firms this week reduced the number of oil rigs operating for a fourth week in a row, cutting five rigs this week and bringing the total down to 733, the lowest since November 2017, General Electric Co’s (GE.N) Baker Hughes energy services firm said. Brent prices have risen about 12% so far in 2019, helped by the deal between OPEC and allies, known as OPEC+, to cut output by 1.2 million barrels per day. An OPEC+ monitoring committee this week secured pledges from OPEC members Nigeria and Iraq to deliver their share of the cut, something they have failed to do so far, but so far the group has not decided to deepen the curbs.
Oil posts biggest weekly drop since July amid supply concerns - Oil fell to a two-week low as the International Energy Agency warned of a looming supply glut. Futures in New York ended the week 3 per cent lower after four straight days of declines. Sentiment continues to be dominated by an International Energy Agency report highlighting the challenge facing Opec and its allies in balancing the market as production surges from their competitors. US crude production is set to grow 1.3 million barrels a day next year at current prices, IEA’s executive director Fatih Birol said at an event in Washington DC Friday.West Texas Intermediate crude for October delivery declined 24 cents, or 0.4 per cent, to settle at $54.85 a barrel on the New York Mercantile Exchange.Brent for November fell 16 cents to $60.22 a barrel on the ICE Futures Europe Exchange, and traded at a $5.42 premium to WTI for the same month. The contract declined 2 per cent for the week. Also fuelling oversupply concerns, US President Donald Trump was said to weigh easing sanctions on Iran, a move that RBC Capital Markets estimated could bring back around 700,000 barrels a day to the market. Meanwhile, the US and China showed signs of rapprochement in their trade war and Saudi Arabia’s new energy minister downplayed oil-demand concerns, leaving any talk of deeper output cuts to OPEC’s next ministerial meeting in December. Lacklustre investor positioning, potential thawing of the trade war and concerns of an Iran deal have clouded both investor appetite as well as the fundamental market outlook,” said Michael Tran, a commodity strategist at RBC Capital Markets. “Oil prices are caught in a cycle of trendless volatility.”
MbS Consolidates Immediate Family Control Of Saudi Oil Industry -- Saudi Oil Minister al Falih, who also ran ARAMCO, has been replaced by Abdulaziz bin Salman bin Abdulaziz al Sa’ud, half brother of Crown Prince Mohammed bin Salman bin Abdulaziz al Sa’ud, (MbS),who was Ambassodor to the US untile the Khahoggi murder got hot between USA and KSA. The New York Times claims that this is part of an effort by MbS to modernize the Saudi economy, an ongoing line of th Saudi PR machine. However more specifically how al Falih got in trouble with MbS is that oil prices are too low and there has not yet been an IPO for ARAMCO. These probably are issues for MbS, although I think at this point the Saudi Oil Minister’s ability to make oil prices go up has become limited. But the lack of an ARAMCO IPO clearly has cost variouis members of the Saudi royal family money. But the problem has been that to issue an IPO ARAMCO will have to make public information that apparently it does not want to. Whether MbS and his brother are really ready to do that is unclear. Anyway, I think all this talk about modernizing is just baloney. This is just a further move to consolidate power and also make money for the Salmans, the king and his sons.
Saudi Aramco pursues IPO with local listing plan as lines up banks: sources (Reuters) - Saudi Arabia plans a gradual listing of Aramco on its domestic market, sources familiar with the matter said on Monday, as it finalizes the roles banks will play in the initial public offering (IPO) of the world’s biggest oil company. The kingdom intends to list 1% of the state oil giant on the Riyadh stock exchange before the end of this year and another 1% in 2020, the sources said, as initial steps ahead of a public sale of around 5% of Aramco. Based on the indicated $2 trillion valuation that Saudi Aramco had hoped to achieve, a 1% float would be worth $20 billion, a huge milestone for the local stock market. Aramco’s flotation, which could be the world’s biggest IPO, is crucial to raise money for Crown Prince Mohammed bin Salman’s plans to diversify the Saudi economy away from oil revenues and has rapidly regained momentum over the past few days. Saudi Energy Minister Prince Abdulaziz bin Salman said on Monday Saudi Arabia was aiming for the Aramco IPO “as soon as possible”, speaking on the issue for the first time since replacing Khalid al-Falih at the ministry.
Saudi Aramco CEO confirms IPO will list locally 'very soon' — Saudi Aramco, the world’s biggest oil company, is prepared for a listing on the Riyadh stock exchange and it will take place “very soon,” its CEO said Tuesday. “What we have always said is that Aramco is ready for listing whenever the shareholders make a decision to list,” Aramco President and CEO Amin Nasser told reporters at the World Energy Conference in Abu Dhabi. “And as you heard from His Royal Highness Prince Abdulaziz yesterday, it is going to be very soon. So, we are ready — that is the bottom line.” Nasser also confirmed the state oil giant’s aims to list internationally in addition to Saudi Arabia, though did not specify which other locations are under consideration. “The primary listing is to list locally but we are ready also for listing outside in other districts,” Nasser said. When asked whether he would prefer to see Aramco list in Tokyo, Japan, he replied: “We are ready to list wherever shareholders decide.” Reuters reported on Monday that the kingdom plans to list 1% of Aramco on its local stock exchange before the end of this year and another 1% in 2020, citing sources, as first steps ahead of a public sale of roughly 5% of the company. The oil giant has delayed its IPO, originally scheduled for 2018, reportedly over Saudi concerns about public scrutiny over its finances and because of the complexity of its corporate structure. The listing would be the largest public offering in history.
Saudi Shakedown 2.0- Kingdom Asks Country's Billionaires To Be Anchor Investors In Aramco IPO - On an otherwise silent Saturday night, Saudi Arabia shocked the energy world when it announced that the country's energy minister, Khalid al-Falih was suddenly and unceremoniously replaced by Abdulaziz bin Salman (or AbS), half-brother to Crown Prince Mohammed bin Salman (or MbS), and since the last time the Saudi energy minister was replaced marked the dramatic change in Saudi energy strategy (see here for our take on the last days of Ali al-Naimi), we were wondering just what major evnrt was hiding up Saudi Arabia's sleeve this time. We didn't have long to wait for the answer, because less than two years after the historic Saudi purge and arrest of the country's billionaires in November 2017, most notably Prince Bin Talal, in an unprecedented shakedown meant to refill the kingdom's rapidly emptying coffers, moments ago Bloomberg reported that MbS was preparing for shakedown #2, as "Saudi Arabia held discussions with some of the kingdom’s wealthiest families about becoming anchor investors in Aramco’s mammoth stake sale." And by "discussions", they mean King Salman's administration made them an offer they simply couldn't refuse.In retrospect, with Softbank in dire straits after the WeWork fiasco, and few oligarchs outside of Saudi Arabia willing to stake their wealth on higher oil prices at a time when the world is headed for recession, Chinese oil demand is slumping and shale is set to flood the world with excess oil, Riyadh had few other options. And so, as Bloomberg reports, Saudi officials made initial contact with some top business families on behalf of the oil giant.Why the shakedown? According to the report, the kingdom is aiming to raise at least 1% to 2% of Aramco from these investors, and the amount each family invests will likely hinge on the company’s valuation, another person said.
Saudi Energy Minister Confirms Plan To Enrich Uranium - Among the most underreported but explosive stories of the past six months has been growing signs of Saudi Arabia's nuclear ambitions. But now there are new questions over whether the kingdom's future planned two nuclear power reactors will be limited to purely energy-related and peaceful purposes. On Monday the kingdom's nuclear energy minister said Saudi Arabia wants to enrich uranium for its nuclear power program, Reuters reports — an announcement likely to hinder talks with Washington over American companies' potential help in establishing its atomic energy program. "The world’s top oil exporter says it wants to use nuclear power to diversify its energy mix, but enrichment also opens up the possibility of military uses of uranium," Reuters noted. “We are proceeding with it cautiously... we are experimenting with two nuclear reactors,” Energy Minister Prince Abdulaziz bin Salman said in reference to a proposed plan to issue a tender for the country's first nuclear reactors, preliminary talks of which are underway for the multi-billion-dollar project.Reactors even for peaceful energy purposes require that uranium be enriched to around 5% purity, but once the technology is in place, it becomes ease to go beyond that. As Reuters describes:Reuters has reported that progress on the discussions has been difficult because Saudi Arabia does not want to sign a deal that would rule out the possibility of enriching uranium or reprocessing spent fuel - both potential paths to a bomb. International concerns about the dual technology helped lead to the 2015 nuclear deal between Iran and global powers. Under the deal Iran can enrich uranium to around the normal level needed for commercial power production.In April, American lawmakers voiced alarm over the kingdom's possibly secretly pursuing nuclear weapons and questioned the US Department of Energy over the degree to which they've already received any level of assistance from the United States. This after in November of last year crown prince Mohammed bin Salman said, “if Iran developed a nuclear bomb, we will follow suit as soon as possible.”
Yemeni medics say 130 bodies pulled after deadly airstrike - Yemeni medics said Saturday they have pulled at least 130 bodies from the rubble of a rebel-run detention center that was hit earlier this month by Saudi-led coalition airstrikes in the country's southwest. The attack was one of the deadliest in more than four years of war in Yemen that have claimed tens of thousands of lives, thrust millions to the brink of famine and spawned the world's worst humanitarian crisis. The Saudi-led coalition, which has fought the Iran-backed Houthis since 2015, has faced international criticism for airstrikes that have hit schools, hospitals and wedding parties, killing thousands of civilians. Bashir al-Dawrani, a spokesman for the Yemeni Red Crescent, told The Associated Press that the death toll has yet to be confirmed as search efforts are ongoing for more bodies at the site in the Dhamar province. The complex of buildings was part of the local community college before Iran-backed Houthi rebels turned it into a detention center, one of dozens in areas under their control. Families have begun to take the bodies from a hospital in Dhamar, al-Dawrani said. The Saudi-led coalition said it had bombed a "legitimate military target," and blamed the Houthis for using the former college as a detention center for forcibly disappeared Yemenis. Houthi and medical officials have said the detention center was holding at least 170 people when it was hit. The detainees were captured forces loyal to Yemen's internationally recognized government as well as civilians who had been arrested for criticizing the Houthis in recent years.
Saudi Oil Output Cut in Half After Drones Strike Aramco Site -Saudi Arabia’s oil production was cut by half after a swarm of explosive drones struck at the heart of the kingdom’s oil industry and set the world’s biggest crude-processing plant ablaze. Saudi Aramco has had to cut production by as much as 5 million barrels a day after the attack on the Abqaiq plant, according to a person familiar with the matter. Iran-backed Houthi rebels in Yemen, who have launched several drone attacks on Saudi targets, claimed responsibility. The biggest attack on Saudi Arabia’s oil infrastructure since Iraq’s Saddam Hussein fired scud missiles into the kingdom during the first Gulf war, the drone strike highlights the vulnerability of the network of fields, pipeline and ports that supply 10 percent of the world’s crude oil. An prolonged outage at Abqaiq, where crude from several of the country’s largest oil fields is processed before being shipped to export terminals, would jolt global energy markets. “Abqaiq is the heart of the system and they just had a heart attack,” said Roger Diwan, a veteran OPEC watcher at consultant IHS Markit. “We just don’t know the severity.” Facilities at Abqaiq and the nearby Khurais oil field were attacked at 4 a.m. local time, state-run Saudi Press Agency reported, citing an unidentified interior ministry spokesman. It didn’t give further details and no further updates have been released. The attacks were carried out with 10 drones and came after intelligence cooperation from people inside Saudi Arabia, rebel-run Saba news agency reported, citing Houthi spokesman Yahya Saree. “Our upcoming operations will expand and would be more painful as long as the Saudi regime continues its aggression and blockade” on Yemen, he said. Yemen’s Houthi rebels have been battling a Saudi-led coalition since 2015, when mainly Gulf forces intervened to restore the rule of President Abd Rabbuh Mansur Hadi and his government after the Houthis captured the capital, Sana’a. The conflict has killed thousands of people and caused one of the world’s worst humanitarian crises.
Huge fires at Saudi Aramco oil facilities after alleged drone attacks (VIDEOS) RT - Houthi rebels in Yemen say they deployed 10 armed drones which hit two large Saudi Aramco oil facilities on Saturday morning, causing massive fires and huge clouds of smoke on the sites.The attack was carried out by the Houthi Air Force, the spokesperson for the Yemeni rebel group, Brigadier Yahya Serai, said on Al Masirah TV, vowing to “expand the operations against the Saudi regime in the future.”The drones targeted a refinery in the city of Abqaiq in the kingdom’s oil-rich Eastern Province, which state-run giant Aramco describes as the world’s largest oil processing plant, and a refinery at the vast Khurais oil field, around 150km from Riyadh. Multiple videos posted on social media show an Aramco compound engulfed in flames and thick black smoke billowing from the site. In some footage, loud bangs resembling the sound of explosions can be heard in the background, along with apparent sounds of gunfire.
UK condemns Houthi drone attack on Saudi oil facilities - (Reuters) - Britain condemned a drone attack on Saudi Arabian oil facilities on Saturday, and said that Yemen’s Houthi rebel group should stop targeting Saudi civilian and commercial infrastructure. Yemen’s Iran-aligned Houthi group attacked two plants at the heart of Saudi Arabia’s oil industry, including the world’s biggest petroleum processing facility, in a pre-dawn strike that several sources said had disrupted output and exports. “Totally unacceptable attack on oil facilities in Saudi Arabia this morning,” Andrew Murrison, the British foreign affairs minister responsible for the Middle East and North Africa said on Twitter. “The Houthis must stop undermining Saudi Arabia’s security by threatening civilian areas and commercial infrastructure,” Murrison added.
$100 Oil? Drone Strikes Halt Half Of Saudi Crude Production - Half of Saudi Arabia's oil production has gone offline following a surprise drone strike.Drones attacked Abqaiq facility in Saudi Arabia and the Khurais oil field run by Saudi Aramco early Saturday morning, the kingdom's interior ministry said, sparking a massive fire at a crude processing plant essential to global oil supplies.The closure will impact nearly 5 million barrels of crude processing per day, affecting 5 percent of the world's daily oil production. And while Aramco is confident that it can recover quickly, if it can't, however, the world could face a production shortage of as much 150MM barrels per month. An outcome which could send oil prices into the triple digits.Houthi rebels-- who are backed by Iran in a yearlong Saudi-led battle in Yemen-- have apparently asserted responsibility for the strikes and pledged that more assaults can be expected in the future.A Houthi spokesperson explained, “We promise the Saudi regime that our future operations will expand and be more painful as long as its aggression and siege continue," adding that the attack involved ten drones. The Iran-backed Houthis have recently been behind a number of assaults on Saudi pipelines, vessels and other energy infrastructure as tensions grow in the region. There have been no details on the severity of the damage but Agence France-Presse quoted interior ministry spokesperson Mansour al-Turki as saying that there were no human casualties as a result of the attack.This latest strike highlights the risk posed by the Houthis to Saudi Arabia's oil infrastructure as tensions between the groups continues to escalate. The growing power of the Houthis' drone operations is likely to reignite the debate on where the militant group is securing these weapons. It could very well be that the group has weaponized noncombatant drones, or in a darker scenario, they are receiving the militarized drones from Iran.
Iran Will Be A Full Nuclear Power By End Of 2020- Report - French President Emmanuel Macron failed to promote successfully his Iranian initiative with the US administration despite the initial blessing of his US counterpart. This failure led Iran to make a third gradual withdrawal from its JCPOA nuclear deal commitment, raising two main issues.Iran has become a regional power to be reckoned with, so we can now scrap from reactions to its policies the words “submit,” or “bow to the international community”. Moreover, since Europe is apparently no longer in a position to fulfill its commitments, Iran will now be headed towards a total pull-out following further gradual withdrawal steps. Just before the US elections due in November 2020, Iran is expected to become a nuclear country with the full capability of producing uranium enriched to more than 20% uranium-235, weapons-usable and therefore in a position to manufacture dozens of nuclear bombs (for which uranium must be enriched to about 90%). However, this does not necessarily mean that this is Iran’s ultimate objective.Industry data shows that half of the effort goes into enriching from 0.7% to 4%. If Iran reaches the level of 20%, the journey towards 90% is almost done. A few thousand centrifuges are needed to reach 20% enrichment while a few hundred are enough to cross from 20% to the 90% needed for a nuclear bomb.When Iran announces it is reaching a level which is considered critical by the west, there is the possibility that Israel might act militarily against Iran’s capability as it did in Iraq in 1981, in Syria in 2009, and in assassinating nuclear scientists. If this happens, the Middle East will be exposed to a mega earthquake whose outcome is unpredictable. But if Israel and the US are not in a position to react against Iran’s total withdrawal from the JCPOA (nuclear deal), Iran will no longer accept a return to the 2015 deal. Its position will become much stronger and any deal would be difficult to reach. Sources within the decision-making circle have said “Iran will become a state with full nuclear capability. It is also aiming for self-sufficiency and is planning to move away from counting solely on its oil exports for its annual budget. It is starting to generate and manufacture in many sectors and it will certainly increase its missile development and production. Missile technology has proved to be the most efficient and cheapest deterrent weapon for Iran and its allies in Lebanon, Syria, Iraq and the Yemen.”
Our maximum pressure campaign on Iran is working: US Treasury - video - Sigal Mandelker says there is “no question” that America’s maximum pressure campaign has resulted in “massively decreasing” the amount of oil that Iran has been able to sell.
Iran says tanker last seen off coast of Syria has reached its destination, and oil has been sold - Iran has announced that oil from the once-detained tanker Adrian Darya-1 “has been sold” after the ship was photographed by satellite off the coast of Syria in recent days. A US official said America would continue to impose sanctions on whoever purchases oil from Iran, or does business with the Islamic Republic’s Revolutionary Guards. “We will continue to put pressure on Iran and as President [Trump] said there will be no waivers of any kind for Iran’s oil,” said Sigal Mandelker, US treasury under secretary for terrorism and financial intelligence. The Adrian Darya 1, which went dark off the coast of Syria earlier this week, was photographed by satellite very close to the Syrian port of Tartus. The ship appeared to have turned off its transponder in the Mediterranean Sea west of Syria, Refinitiv ship-tracking data showed on Tuesday. The vessel, formerly named Grace 1, was detained by British Royal Marine commandos off Gibraltar on 4 July as it was suspected to be en route to Syria in violation of European Union sanctions. In retaliation, Iran seized a British-flagged tanker in the Strait of Hormuz two weeks later. Gibraltar released the Iranian vessel on 15 August after receiving formal written assurances from Tehran the ship would not discharge its 2.1 million barrels of oil in Syria.
Iran Confirms Adrian Darya Has Offloaded All Its Oil, Likely To Syria - It's official: Iran says its Adrian Darya tanker has finally offloaded its 2.1 million barrels of Iranian oil Sunday after it was days ago spotted off the Syrian port of Tartus, bringing a lengthy standoff with the US and UK which sought to capture the vessel's valuable cargo to an end. "The Adrian Darya oil tanker finally docked on the Mediterranean coast... and unloaded its cargo," Foreign Ministry spokesman Abbas Mousavi said according to state-run IRNA. He didn't name the country which purchased the oil, but satellite images reveal the IRGC-controlled vessel hasn't left Syria's coast. Part of the US case for pressing UK/Gibraltar authorities to not release the vessel from detention last month was that it would ultimately attempt an 'illegal' delivery of its Iranian crude worth about $130 million to Syria.Gibraltar's Aug. 15th release of the vessel came only after Iran issued a written assurance it would not deliver the Iranian oil to Syria, in violation of EU sanctions.At the start of this weekend after the Iranian tanker was observed within a few nautical miles of Syria's coast, John Bolton issued an 'I told ya so' type tweet, saying, "Anyone who said the Adrian Darya-1 wasn't headed to Syria is in denial." Washington has done everything short of military action to thwart and detain the vessel, including issuing a seizure warrant and bribing the ship's captain with millions of dollars to steer it into a US-allied port.
Britain Furious Iran Tanker Broke 'Promise' Not To Sell Its Oil To Syria -- Britain has slammed Iran for what it says is a breach in assurances regarding the previously detained Grace 1/Adrian Darya 1 tanker. Specifically a condition of the vessel's release from UK/Gibraltar captivity last month was that it would not offload its 2.1 million barrels of Iranian oil to Syria in violation of EU sanctions. But the UK can do little beyond merely issuing a formal complaint to the United Nations, which it plans to do next month, according to Reuters. London was also reported to have summoned Iran's ambassador on Tuesday to condemn the move. “Iran has shown complete disregard for its own assurances over Adrian Darya 1,” foreign minister Dominic Raab said in a statement. “This sale of oil to (Syrian President Bashar al-Assad’s) brutal regime is part of a pattern of behavior by the Government of Iran designed to disrupt regional security.” The diplomatic row comes days after over the weekend Iran's foreign ministry confirmed the tanker had unloaded its valuable cargo, estimated at $130 million in crude, "on the Mediterranean coast," according to state media. Just prior the Iranian tanker was observed within a few nautical miles of Syria's coast via satellite images. “Iran’s actions represent an unacceptable violation of international norms,” the UK statement said. However, we should point out it's also not within "international norms" - indeed it's unprecedented - for Royal Marines to raid a foreign vessel in international waters at the bidding of Washington, which is precisely what happen when the tanker was detained in the first place. Currently, Tehran is rumored to be preparing the release the British-flagged Stena Impero, captured in the Strait of Hormuz on July 19 in retaliation for Britain's prior capture of the Grace 1 off Gibraltar on July 4.
Iran seizes ship with Filipino crew for alleged fuel smuggling in Gulf- Iran seized a tugboat and arrested 12 Filipino crewmen as it busted a suspected fuel-smuggling ring in the Strait of Hormuz on Saturday, state media reported. State television aired footage of an orange-and-white tugboat docked at Bandar Abbas port, with at least three armed guards on board, AFP reported. "Coast guards successfully seized a foreign ship in the Strait of Hormuz," said Major Hossein Dehaki, the coast guard chief in the southern province of Hormozgan. Reports said the tugboat was carrying almost 284,000 litres of diesel, Reuters said. They did not say what national flag the vessel was flying. Iran, which has some of the world's cheapest fuel because of state subsidies, has been fighting rampant fuel smuggling overland to neighbouring countries and by sea to Gulf Arab states. It has frequently seized boats it says are being used for smuggling fuel in the Gulf. The incident comes at a time of tensions between Iran and the West in the Gulf that have been rising since the United States exited a 2015 nuclear deal between world powers and Tehran last year and reimposed sanctions. The escalation has seen ships mysteriously attacked, drones downed and oil tankers seized in the Strait of Hormuz - a chokepoint for a third of the world's seaborne oil. While Iranian media reports say about 10 million litres of fuel are smuggled per day, Tehran has been promoting legal gasoline exports through its energy bourse.
The Meaning Of The Iran-China Deal - Reports that China has signed a long term agreement to buy large quantities of Iranian oil in defiance of US sanctions will weigh on global crude prices and further complicate US-China talks, reducing the chances of a deal before the 2020 US election. In effect, the world is now facing a four-way tug of war over the oil price. . Iran’s position is relatively straightforward: it desperately needs to sell its oil. Since the US withdrew from the Iran nuclear deal in May 2018, and following the tightening of US sanctions in May this year, Opec data shows Iranian oil production has slumped from 3.8mn bpd to 2.2mn bpd in July. Assuming domestic consumption has remained constant, this implies Iran’s exports have fallen from 2.3mn bpd to roughly 700,000 bpd.Much of this oil is being shipped to China. Customs data shows that China imported some 220,000 bpd in July. However, the actual size of shipments is likely to be greater, given that some Iranian oil will have been transshipped at sea, likely disguising its origin, while more will have been held in bonded storage, without passing through Chinese customs. Hence the significance of reports last week that Tehran has fleshed out its 2016 “comprehensive strategic partnership” with Beijing. Under a 25-year deal reportedly sealed in August, Iran will agree to sell its oil and gas to China at a guaranteed discount to prevailing market prices of at least 12%, plus an additional discount of up to 8% to reflect risk. In addition, to bypass the US dollar-denominated international financial system, China will pay for its purchases in renminbi.In return, China will invest some US$80bn over the next five years to upgrade Iran’s energy production facilities and infrastructure (and possibly much more over the following 20 years). And to safeguard its investments, Beijing will deploy “up to 5,000 Chinese security personnel on the ground in Iran,” as well as protecting shipments of Iranian oil from the Persian Gulf to China.The benefits of such a deal to Tehran are manifold. It gets much-needed inward investment. It secures a market for its oil and gas. It breaks its dependence on the US dollar. It gets a deterrent against possible US or Israeli military strikes against its energy industry. And it reduces its economic dependence on powers that would otherwise insist it curtail its nuclear program. In short, it gets to thumb its nose at the West, and at Washington in particular. This leaves China’s position. Discounted energy imports are always enticing, but in this case they come at a cost. A deal to buy Iranian oil in defiance of US sanctions is only likely to antagonize Washington, further complicating already knotty trade talks and reducing any chance of a resolution to the tariff war. On the other hand, China’s leaders may well have already concluded that the probability of an advantageous deal with the US is small, and that they are better off making the best of a bad job.
US Warplanes Drop 40 Tons of Bombs on ‘ISIS-Infested Island’ in Iraq - — US warplanes attacked and virtually destroyed the tiny island of Qanus in the Iraqi Salahuddin Province on Tuesday, with officials bragging that they’d dropped nearly 80,000 pounds of explosives on the island.US officials presented Qanus Island as a hiding place for ISIS forces, and said that the massive attacks would “bring stability to the region” as well as disrupting ISIS’s ability to hide in vegetation by destroying pretty much all of the vegetation.The Iraqi military participated in the attack as well, parking what officials termed “water boats” around the Tigris River near the island with an eye for shooting anything on the island that was still alive after the US bombings. Locals reported firing continued late into the day. There simply must have been casualties, though how many seems to be anyone’s guess. Officials aren’t saying, and it seems to depend largely on how many ISIS were managing to hide on a small, largely inconsequential island in the middle of a river.
Hundreds Of Russian Troops Deploy To Idlib In Case Ceasefire Collapses- Report - Hundreds of Russian troops are being sent to the Idlib Governorate in northern Syria, the Russian publication Lenta.Ru reported this weekend. According to the publication, hundreds of Russian troops belonging to the Yevgeny Prigoshin private military contractors were deployed to the Idlib Governorate, despite a pause in offensive operations. “The plan is for groups of 50 people each, with the support of Russian aviation, to take part in street battles necessary to clear the populated city from thousands of militants associated with Al-Qaeda (banned in Russia),” Lenta.Ru reported. “Today, Idlib is being kept under control only by the presence in the region of hundreds of thousands of civilians. Having evacuated them, the military operation against the militants can be continued, and in a completely different way,” they added. As of now, the Syrian Arab Army (SAA) has paused all offensive operations in the Idlib Governorate as they adhere to a ceasefire that was proposed by the Russian Armed Forces. However, this new ceasefire in the Idlib Governorate is contingent on Turkey dissolving the jihadist group Hay’at Tahrir Al-Sham. While the Syrian Army has paused their ground offensive, they have not let up their artillery strikes on Hay’at Tahrir Al-Sham’s positions in southern and western Idlib. The Syrian Army is likely to resume their offensive if Hay’at Tahrir Al-Sham remains at the front-lines in the Idlib Governorate, as they have refused all previous ceasefire deals.
Erdogan Breaks Silence- Says The US Sent 30,000 Truckloads Of Weapons To Syria - Turkish President Tayyip Erdogan has called out the US for delivering more than 30,000 weapon-laden trucks to Syria to support the PKK-linked People's Protection Units (YPG) terrorist group, reported Press Tv. Speaking at the Justice and Development Party's meeting in Eskişehir, a city in northwestern Turkey, Erdogan said he wouldn't sit back in the shadows anymore about a superhighway of weapons supplied by the US, amounting to more than 30,000 truckloads of weapons, equipment, and ammunition to northern Syria to support YPG terrorists. Erdogan further criticized the Trump administration for its "lack of commitment" to construct a safe zone in Syria along the Turkish border. He added that he would "sort out" the issue with President Trump at a meeting later this month. Washington and Ankara have been at odds with one another of who should control northeast Syria, where YPG terrorist and other Kurdish militias have had the luxury of receiving American weapons. Ankara has viewed the YPG as an extension of its own Kurdish militancy, insisting the US needs to cut ties with the terrorist organization. Erdogan also criticized the European Union for the lack of support regarding the millions of Syrian refugees.He said Ankara has already spent $40 billion hosting four million Syrian refugees, adding that a new project could be announced momentarily to resettle one million refugees in northern Syria."Our goal is to settle at least one million Syrian brothers and sisters in our country in this safe zone," said Erdogan. "If needed, with support from our friends, we can build new cities there and make it habitable for our Syrian siblings."The European Union has given Turkey $7 billion since 2015 to restrict the flow of migrants. But with Turkey granting millions of refugees asylum status, the migrant problem is worsening through 2019.
Israel approves 2300 new homes for settlers in West Bank: NGO - Israel has advanced plans for more than 2,300 illegal settlement homes in the occupied West Bank, the latest in a surge of such approvals since US President Donald Trump took office in 2017, according to an NGO. Israel's Higher Planning Committee issued the approvals while meeting over the past couple of days, Peace Now said in a statement on Monday. The 2,304 housing units are at various stages in the approval process, according to Peace Now, an Israeli group closely monitoring settlement building. "The approval of settlement plans is part of a disastrous government policy designed to prevent the possibility of peace and a two-state solution, and to annex part or all of the West Bank," the group said. Israel's illegal separation wall 'imprisons' Palestinians (2:22) Israeli Prime Minister Benjamin Netanyahu pledged before April elections to annex settlements in the West Bank, a move long supported by nearly all legislators in his alliance of right-wing and religious parties. Annexing settlements on a large-scale in the West Bank could prove to be a death knell for the two-state solution, long the focus of international efforts to resolve the Israeli-Palestinian conflict. Issa Amro, a Palestinian rights activist who is based in Hebron, a West Bank city at the heart of Israeli settler seizure of Palestinian land, said that since Trump took office, Israel has been expanding its settlement project "even faster". It has also been demolishing Palestinian homes at a faster rate, he added. "Israel and the settlers feel they have full impunity to work more and more towards annexation," Amro told Al Jazeera.
Netanyahu announces post-election plan to annex Jordan Valley- Israeli Prime Minister Benjamin Netanyahu has promised to annex the Jordan Valley in the occupied West Bank if he wins next week's general election, drawing sharp criticism from Middle Eastern countries including Saudi Arabia. "Today, I announce my intention, after the establishment of a new government, to apply Israeli sovereignty to the Jordan Valley and the northern Dead Sea," Netanyahu said in a speech broadcast live on Israeli TV on Tuesday. That step, he said, could be taken "immediately after the election if I receive a clear mandate to do so from you, the citizens of Israel". Netanyahu plays race card: Israel is 'Jewish nation' (2:23) The Jordan Valley and the northern Dead Sea constitute almost 30 percent of the West Bank. Some 65,000 Palestinians and about 11,000 illegal Israeli settlers live in the area - most of which is under Israeli military control in what is referred to as Area C. Netanyahu - who is fighting for his political life in a closely contested election - reaffirmed the pledge to annex all Jewish settlements throughout the West Bank, but said such a move would not be made before publication of a long-awaited United States peace plan and consultations with President Donald Trump. "There is no change in United States policy at this time," a US official said when asked whether the White House supported Netanyahu's move.
Netanyahu vows to annex large parts of occupied West Bank - Benjamin Netanyahu has announced he will annex large swathes of occupied Palestinian territories if he is re-elected, a decision that for decades has been considered an endgame scenario for Palestinians’ aspirations of statehood. The Israeli prime minister said on Tuesday that he planned to make the move, which would permanently seize up to one-third of the West Bank, after the election next week and hinted it may have been approved by Washington. “I am waiting to do this in maximum coordination with [Donald] Trump,” he said in a speech broadcast live on Israeli television. Netanyahu said the US president was likely to release his long-touted Middle East peace plan soon. US officials have suggested the plan will not include a Palestinian state, something Netanyahu has promised to never let happen. A White House official said there had been no change in its policy and would not comment further. Netanyahu, Israel’s longest-serving leader, is battling for his political survival and the announcement was interpreted as a rallying cry to his hardline rightwing base. The prime minister stood in front of a large map on an easel that showed Israeli sovereignty extended over the vast majority of the Jordan Valley. It appeared to display Israeli territory completely encircling the West Bank, slicing off the eastern border with Jordan. Jericho, a Palestinian city, and smaller Palestinian villages were displayed as enclaves that would not be annexed.
Lebanon's Hezbollah shoots down Israeli drone - Iran-backed Hezbollah said it downed an Israeli drone in southern Lebanon early on Monday, a week after the group’s leader said it would shoot down Israeli drones in Lebanese airspace. The drone is now in Hezbollah’s possession, the group said in a statement. An Israeli military statement said one of its drones “fell inside southern Lebanon during routine operations.” It did not say why the drone crashed, but said “there is no concern information could be taken from it.” An Israeli military spokeswoman said it was a “simple drone” without elaborating. Hezbollah said its fighters had used “appropriate weapons” to bring down the drone on the edge of the southern Lebanese town of Ramyah. A correspondent for Hezbollah’s Al-Manar television reporting from the border said the drone had not sustained much damage, and had been in Lebanese airspace for around five minutes. A week ago, after a drone attack in a Hezbollah-controlled Beirut suburb, Hezbollah and the Israeli army exchanged cross-border fire that marked their fiercest shelling exchange since the 2006 Lebanon war. Hezbollah leader Sayyed Hassan Nasrallah, as well as Lebanon’s government, blamed Israel for the drone attack and had vowed to target Israeli drones entering Lebanon’s airspace. Nasrallah said while last Sunday’s flare-up with Israel at the border was over, the episode had launched a “new phase” in which the Iran-backed group no longer had red lines it would not cross. In that brief exchange of fire, Hezbollah said it destroyed an Israeli armored vehicle, killing and wounding those inside, and broadcast what it said was footage of two missiles hitting a moving vehicle.
Netanyahu: Israel Will Probably Launch Full-Scale War in Gaza Soon — Israeli Prime Minister Benjamin Netanyahu appears ready to risk launching a major Middle East war rather than see his chances of re-election to a record fifth term dwindle.Desperately trying to shore up more votes ahead of Tuesday’s election by trying to “out-hawk” his opponents in the center-right Blue and White Party, he said Thursday Israel will probably launch a full-scale war on Gaza “before the elections.”In his comments, which came just after returning from Sochi, Russia where he met with President Vladimir Putin, Netanyahu asserted, “An operation in Gaza could happen at any moment, including four days before the elections.” He immediately followed with the dubious assertion, “The date of the elections does not factor [into a decision to go to war].”And the day before he said similarly during an Israeli radio interview that Israel will be left with no choice but to “topple the Hamas regime” should such a military campaign begin.As part of a media blitz five days before the elections, he said, “There probably won’t be a choice but to topple the Hamas regime. Hamas doesn’t exert its sovereignty in the Strip and doesn’t prevent attacks.” However, so far it doesn’t appear his hawkish rhetoric is substantially moving the polls — unlike past successful appeals to far-right and nationalist sectors.Starting Tuesday Hamas militants and the Israeli Defense Forces (IDF) engaged in a small scale exchange of fire after multiple rockets were launched from Gaza, which briefly interrupted a Netanyahu campaign speech in the southern city of Ashdod, where he was rushed off the stage amid inbound rocket siren warnings. More broadly, the IDF has over the past weeks struck targets in Iraq, Syria, and Lebanon to disrupt what it says are “Iran-backed” operations, in a dangerous gambit that has brought Israel on the brink of war with Hezbollah.
Facebook Suspends Netanyahu Page Function For Hate Speech - As Benjamin Netanyahu fights for his political survival, seeking a record 5th term as prime minister during the upcoming Sept. 17 elections, he and his Likud party have suffered a huge public embarrassment while attempting to out-hawk their political rivals.In an unprecedented move Facebook said Thursday it suspended a key function of Netanyahu's official Facebook page due to "a violation of the company’s hate speech policy." The sanction will be in effect for 24 hours, according to a company statement. The offending campaign message urged voters to avoid bringing into power a government composed of— “Arabs who want to destroy us all — women, children and men.” The page is considered a crucial part of his election campaign, given it has over 2.4 million followers and is his team's prime social media outreach tool. The xenophobic post identifying "Arabs" as seeking to "destroy" all Israelis resulted in an immediate uproar and backlash among opposition politicians and supporters. The message also said Netanyahu's opponents in the center-right Blue and White Party will "allow a nuclearized Iran that will annihilate us" if they win the crucial election. Facebook ultimately agreed a chatbot operated by the official account of the Israeli prime minister had produced hate speech. The Hebrew language post appeared, ironically enough, on September 11. "After careful review of the Likud campaign’s bot activities, we found a violation of our hate speech policy," the company said in a statement. "We also found that the bot was misusing the platform by contacting people outside the time period allowed. As a result, we temporarily suspended the bot for 24 hours. Should there be any additional violations, we will continue to take appropriate action."
Al-Qaeda Chief Issues 9/11 Video Urging New Attacks On US, Europe, Russia, & Israel - Perhaps trying to stay relevant and feared after eighteen years in hiding following the September 11, 2001 terror attacks, 68-year old Egyptian cleric and al-Qaeda chief Ayman al-Zawahri has released a new video message urging his followers to attack the US, Europe, Russia and Israel. Multiple jihad monitoring and analysis sites, including SITE Intelligence Group, reported Wednesday the new video was released as al-Qaeda's own "positive" commemoration of the 9/11 anniversary wherein the terror leader touted and celebrated "severe blows dealt to America". Zawahri, who alongside ISIS leader Abu Bakr Al Baghdadi remains one of the two most wanted terrorists in the world, and has a bounty of up to $25 million offered by US authorities for information leading to his capture. The al-Qaeda chief, who took up the mantle of the group's leadership after the 2011 death of Osama bin Laden in Pakistan, further condemned 'backsliding' and 'backtracker' jihadists who had softened in their stance on jihad. He also addressed and decried supposed statements by some jihadists voicing regret for all the civilians killed on 9/11, saying they should keep up the fight against the "crusaders". The video message entitled, "And They Shall Continue to Fight You," also details how the terror group hopes to first use attacks on Israel as a launchpad for further offensive operations against American, French, British, and other western allies. He also repeated the usual jihadist line that the US military was still waging "a global crusader campaign against Muslims everywhere" and further that America only "understands the language of force."
The US Embassy in Afghanistan was hit by a rocket just after the clock struck midnight on the anniversary of 9/11 - A rocket narrowly missed the US Embassy compound in Kabul, Afghanistan, on Wednesday during the first few minutes of the 18th anniversary of 9/11. Loudspeakers inside the office broadcast a warning that "an explosion caused by a rocket has occurred on compound," The Associated Press reported.A US State Department official told Radio Free Europe/Radio Liberty: "We can confirm there was an explosion near the US Embassy in Kabul. US mission personnel were not directly impacted by this explosion." Nosrat Rahimi, a spokesman for the Afghan Ministry of the Interior,told Gulf News that the rocket hit a wall at the defense ministry and that no one was hurt.
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