oil prices ended higher despite a big selloff on Friday this past week, as optimism about a potential resolution to the US / China trade war had boosted prices earlier in the week...after ending $1.18 lower at $54.17 a barrel last week as trade war threats ratcheted higher, the contract price of US crude for October delivery initially opened 92 cents lower and fell to as low as $52.96 a barrel on Monday morning after French President Macron floated plans for a meeting between Iranian President Rouhani and Mr Trump, but then rose to as high as $55.26 after noon on prospects of US - China trade talks, before giving up those gains before the close to settle down by 53 cents, or 1%, at $53.64 a barrel, the fourth straight daily decline...oil prices then opened higher and rose steadily Tuesday, after Trump predicted a trade deal with China, with US crude closing $1.29 higher at 54.93 a barrel...oil prices rose again early on Wednesday after API data overnight had showed a big drop in U.S. crude inventories, and then continued higher after the EIA confirmed a large draw on supplies, with US crude for October ending 1.5% higher $55.78 a barrel on what was called "an incredibly bullish report"....oil prices pulled back early Thursday on mounting concerns over the US economy but quickly reversed on new optimism on a possible U.S./China trade dispute resolution, with US crude ending the day 93 cents higher at $56.71 a barrel...however, oil traded lower early on Friday on concerns about the economic impact of the approaching hurricane, and then dropped more than 2% after reports emerged that Russia’s oil output cuts in August would be smaller those agreed to under their deal with OPEC, with US prices ending the day down $1.61 at $55.10 a barrel, but still managing to post a 1.7% gain for the week on the easing of U.S.-China trade rhetoric....
natural gas prices also ended higher, as the approaching Category 4 hurricane apparently reminded traders that US Gulf Coast gas production is subject to disruption from tropical storms in the hurricane season that is just now getting underway...after falling 2.4% to $2.152 per mmBTU on a cool weather outlook last week, natural gas for September delivery rose 7.8 cents, or 3.6% on Monday as the spaghetti hurricane forecast models early in the week appeared to show a better than even chance that the tropical storm entering the Caribbean would end up as a hurricane in the Gulf of Mexico...September gas then gave up 2.8 cents on Tuesday but rose 4.9 cents again on Wednesday as trading of the September natural gas contract expired with its price at $2.251 per mmBTU....at the same time, the natural gas contract for October delivery, which had risen 7.7 on Monday, fallen 4.1 cents on Tuesday, and rose 3.0 cents to $2.222 per mmBTU on Wednesday, rose 7.4 cents with a largely neutral storage report on Thursday as a concurrently released report indicated maintenance issues put southern California's fall injections at risk, before prices slipped 1.1 cents to end the week at $2.285 per mmBTU on Friday, a 6.0% increase for that contract on the week..
the natural gas storage report for the week ending August 23rd from the EIA indicated that the quantity of natural gas held in storage in the US increased by 60 billion cubic feet to 2,857 billion cubic feet by the end of the week, which meant our gas supplies were 363 billion cubic feet, or 14.6% more than the 2,494 billion cubic feet that were in storage on August 23rd of last year, while still 100 billion cubic feet, or 3.4% below the five-year average of 2,957 billion cubic feet of natural gas that have been in storage as of the 23rd of August in recent years....this week's 60 billion cubic feet injection into US natural gas storage was a bit above the average 57 billion cubic feet injection forecast by analysts surveyed by S&P Global Platts, and also a bit above the average 57 billion cubic feet of natural gas that have been added to gas storage during the third full week of August over the past 5 years, the 22nd such average or above average storage build in the last 24 weeks...the 1,679 billion cubic feet of natural gas that have been added to storage over the 21 weeks of this year's injection season is the second most for the same period in the modern record, eclipsed only by the record 1736 billion cubic feet of natural gas that were injected into storage over the same 22 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 August 23rd indicated that because our oil imports fell significantly for the second week in a row, we had to pull oil out of storage for the ninth time in 11 weeks...our imports of crude oil fell by an average of 1,290,000 barrels per day to an average of 5,928,000 barrels per day, after falling by an average of 497,000 barrels per day over the prior week, while our exports of crude oil rose by an average of 216,000 barrels per day to an average of 3,019,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,909,000 barrels of per day during the week ending August 23rd, 1,506,000 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 200,000 barrels per day higher than the prior week at a record 12,500,000 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 15,409,000 barrels per day during this reporting week..
meanwhile, US oil refineries were reportedly processing 17,408,000 barrels of crude per day during the week ending August 23rd, 295,000 fewer 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 1,433,000 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 566,000 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 (+566,000) 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 obviously 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 7,002,000 barrels per day last week, now 12.3% less than the 7,987,000 barrel per day average that we were importing over the same four-week period last year...the 1,433,000 barrel per day decrease in our total crude inventories was all pulled 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 200,000 barrels per day higher at a record 12,500,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states rose by 100,000 barrels per day to a record high of 12,100,000 barrels per day, and because a 61,000 barrels per day increase to 400,000 barrels per day in Alaska's oil production also bumped up the final rounded national production total by another 100,000 barrels per day...last year's US crude oil production for the week ending August 24th was rounded to 11,000,000 barrels per day, so this reporting week's rounded oil production figure was 13.6% above that of a year ago, and 48.3% 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...
with the weekly data showing our estimated weekly oil production is now at a record high, we'll include a graph of what that production looks like compared to its recent history...
the above graph is the later part of the historical US crude oil production graph that accompanies the online spreadsheet of the historical data, and we've cut it off to show US oil production from 2005 to the current week...as you can can see, our production had fallen to around 5 milllion barrels per day before horizontal drilling and fracking took hold (from over 10 million barrels per day in the early 70s) and it has now climbed to more than twice that, reaching an unconfirmed 12.5 million barrels per day this reporting week...while most of those downward spikes in production that you can see above were due to disruptions caused by major hurricanes in the Gulf, the million barrel per day drop that occurred earlier this summer was due to tropical storm Barry, which was but a tropical storm during most of the time it spent meandering through the Gulf...
meanwhile, US oil refineries were operating at 95.2% of their capacity in using 17,408,000 barrels of crude per day during the week ending August 23rd, down from 95.9% of capacity the prior week, but still a refinery utilization rate that is fairly typical for mid summer...the 17,408,000 barrels per day of oil that were refined this week were 0.9% below the 17,566,000 barrels of crude per day that were being processed during the week ending August 24th, 2018, when US refineries were operating at 96.3% of capacity....
even with the decrease in the amount of oil being refined, gasoline output from our refineries was much higher, increasing by 763,000 barrels per day to a near record 10,660,000 barrels per day during the week ending August 23rd, after our refineries' gasoline output had decreased by 524,000 barrels per day over the prior 2 weeks...as a result of that big jump in output, this week's gasoline production was 4.1% above the 10,237,000 barrels of gasoline that were being produced daily over the same week of last year, but still short of the record 10,699,000 barrels per day produced during the week ending July 6th 2018....on the other hand, our refineries' production of distillate fuels (diesel fuel and heat oil) fell by 147,000 barrels per day to 5,193,000 barrels per day, after our distillates output had increased by 263,000 barrels per day the prior week....but even with this week's decrease, our distillates production was still a bit more than the 5,179,000 barrels of distillates per day that were being produced during the week ending August 24th, 2018....
even with the big increase in our gasoline production, our supply of gasoline in storage at the end of the week fell for the 7th time in 11 weeks and for the 21st time in twenty-seven weeks, decreasing by 2,090,000 barrels to 231,982,000 barrels during the week to August 23rd, after our gasoline supplies had risen by 312,000 barrels over the prior week....our gasoline supplies decreased this week because the amount of gasoline supplied to US markets increased by 274,000 barrels per day to 9,900,000 barrels per day, while our exports of gasoline fell by 24,000 barrels per day to 700,000 barrels per day, and while our imports of gasoline rose by 73,000 barrels per day to 965,000 barrels per day...after this week's decrease, our gasoline supplies were fractionally lower than last August 24th's inventory level of 232,774,000 barrels, and have slipped to roughly 3% above the five year average of our gasoline supplies at this time of the year...
with the decrease in our distillates production, our supplies of distillate fuels fell for the 14th time in the past 24 weeks, decreasing by 2,063,000 barrels to 136,060,000 barrels during the week ending August 23rd, after our distillates supplies had increased by 2,610,000 barrels over the prior week...our distillates supplies decreased this week because the amount of distillates supplied to US markets, a proxy for our domestic demand, increased by 290,000 barrels per day to 4,048,000 barrels per day, and because our imports of distillates fell by 85,000 barrels per day to 125,000 barrels per day, and because our exports of distillates rose by 146,000 barrels per day to 1,565,000 barrels per day....but even after this week's inventory decrease, our distillate supplies were still 4.7% higher than the 130,001,000 barrels of distillates that we had stored on August 24th, 2018, while at the same time they fell to around 4% below the five year average of distillates stocks for this time of the year...
finally, with much less oil being imported even as our refineries pulled back a bit, our commercial supplies of crude oil in storage fell for the ninth time in eleven weeks but for just the fifteenth time in 32 weeks, decreasing by 10,027,000 barrels, from 437,778,000 barrels on August 16th to 427,751,000 barrels on August 23rd...that decrease was enough to lower our crude oil inventories back to the five-year average of crude oil supplies for this time of year, and to less than 30% higher than the prior 5 year (2009 - 2013) average of crude oil stocks for the 4th Friday of August, 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 since last Fall up until the most recent 11 weeks, after generally falling until then through most of the prior year and a half, our oil supplies as of August 23rd were still 5.4% above the 405,792,000 barrels of oil we had stored on August 24th of 2018, but at the same time were 6.6% below the 457,773,000 barrels of oil that we had in storage on August 25th of 2017, and 13.6% below the 495,238,000 barrels of oil we had in commercial storage on August 26th of 2016...
This Week's Rig Count
the US rig count fell for the 24th time in 28 weeks over the week ending August 30th, and is now 16.5% below where it began the year at....Baker Hughes reported that the total count of rotary rigs running in the US fell by 12 rigs to a 21 month low of 904 rigs this past week, which was also down by 144 rigs from the 1048 rigs that were in use as of the August 31st report of 2018, and 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 12 rigs to 742 rigs this week, which was a 19 month low for oil rigs and 120 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 was unchanged at 162 natural gas rigs, tying last week's 28 month low for gas rig drilling activity and down by 22 rigs from the 184 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 August 29th, 2008...
the rig count in the Gulf of Mexico was unchanged at 26 rigs this week, with one rig operating off the shore of Texas and 25 rigs offshore from Louisiana, a net increase of 10 Gulf of Mexico rigs from the 16 rigs that were deployed in the Gulf in the same week a year ago, when 14 rigs were drilling in Louisiana waters and two were deployed offshore from Texas...in addition, there continues to be two rigs deployed off the coast of the Kenai Peninsula in Alaska this week, same number as were drilling off the Alaskan shore a year ago, for a total US offshore rig count of 28, up from the total of 18 offshore rigs that were deployed a year ago...however, the rig that had started drilling through an inland body of water in southern Louisiana two weeks ago was shut down this week, and now there are no inland water rigs deployed, in contrast to a year ago, when there were two...
the count of active horizontal drilling rigs was down by 13 to 784 horizontal rigs this week, which was the least horizontal rigs deployed since November 17th, 2017 and hence is a new 21 month low for horizontal drilling...it was also 133 fewer horizontal rigs than the 917 horizontal rigs that were in use in the US on August 31st of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...meanwhile, the vertical rig count was unchanged at 50 vertical rigs this week, and those were down by 16 from the 66 vertical rigs that were operating during the same week of last year...on the other hand, the directional rig count was up by 1 to 70 directional rigs this week, and those were up by 5 from the 65 directional rigs that were in use on August 31st 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 August 30th, the second column shows the change in the number of working rigs between last week's count (August 23rd) and this week's (August 30th) count, the third column shows last week's August 23rd 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 31st of August, 2018...
as you can see, the 5 rigs that were shut down in the Permian again led the decrease this week, following the 7 Permian rigs that were idled last week...in the Texas Permian, 4 more rigs were shut down in Texas Oil District 8, or the core Permian Delaware, and 3 more rigs were shut down in Texas Oil District 8A, encompassing the northern part of the Permian Midland, while at the same time two rigs were started up in Texas Oil District 7C, or the southern part of the Permian Midland....with Texas Permian rigs thus down 5, that means that the rig that was shut down in New Mexico had been operating in one of the other basins in the state...meanwhile, since Texas Oil District 10 shows no change, that means the Granite Wash rig that was shut down had been drilling in Oklahoma, along with the rig that had been drilling in the Ardmore Woodford, offset by the increase of an oil rig in the Arkoma Woodford, which otherwise has rigs targeting gas...at the same time, the two rigs that were shut down the Denver-Julesburg Niobrara chalk of the Rockies front range appear to account for the rig count drops in Wyoming and Colorado, while the 3 rig increase in the Williston matches the 3 rig increase in North Dakota...among rigs targeting natural gas, there were rigs shut down in the Pennsylvania Marcellus and in the Texas portion of the Haynesville shale (District 6), while 2 natural gas rigs began operating in "other" basins not tracked separately by Baker Hughes...we should also note that other than the changes shown above for the major producing states, the Mississippi rig count was cut by 2 back to one rig, after being as high as 6 rigs just two weeks ago; that's the least rigs running in Mississippi since February 23, 2018; a year ago, the state had 6 rigs deployed...
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Eight Permits Issued for Utica/Point Pleasant Shale – The Ohio Department of Natural Resources issued eight permits for horizontal well drilling in the Utica/Point Pleasant shale play for the week ended Aug. 24, the agency reports. Ascent Utica Resources was granted four permits in Jefferson County, while EAP Ohio LLC was awarded three permits for wells in Harrison County. XTO Energy LLC was granted one permit in Belmont County.The ODNR reported 16 rigs in operation across the state.As of Aug. 24, the agency has awarded 3,148 drilling permits for the Utica/Point Pleasant shale play, the most lucrative area for natural gas production in the state. Of those permits, 2,678 wells had been drilled and 2,240 were in production. No permits were issued in Mahoning, Trumbull or Columbiana counties, nor were any issued by the Pennsylvania Environmental Protection Agency in Lawrence or Mercer counties.
US DGO to snap up gas wells from bankrupted firm - Diversified Gas & Oil (DGO) is set to acquire the upstream gas assets of bankrupted fellow US firm EdgeMarc Energy for $50mn. DGO first announced the deal on July 25, and on August 29, it reported that the transaction had secured approval from the US bankruptcy court. EdgeMarc filed for chapter 11 bankruptcy in May.The assets include 12 unconventional wells producing gas from the Utica shale in the Monroe and Washington counties of Ohio, as well as rights to other undeveloped land in the Utica region. Output currently stands at 46mn ft3/day or 7,700 boe/day, while proved-developed-producing reserves are assessed at 13.5mn boe, according to DGE. Lease operating expenses are estimated at $1.56/boe, and the wells brought in $30.5mn in Ebitda last year.DGE said the assets were near its existing operations in the Appalachian basin, creating a benefit from economies of scale. They also comprise 10 undeveloped drilling sites that DGO could sell or decide to develop. “The wells are consistent with our acquisition strategy in terms of adding high-quality, long-life assets to the portfolio,” CEO Rusty Hutson said in a statement. “We are acquiring these wells at a fraction of the cost incurred to develop them and yet given their long-life nature, we will reap the margin-enhancing benefit from them for years to come.” According to Hutson, the assets’ zero-cost capital outlay made the deal even more attractive.
The fight to end land leasing at Wayne National Forest - - Ohio’s only national forest is at the center of a heated debate, garnering the attention of national and hyper-local environmental conservation and anti-fracking groups. At the foothills of the Appalachian Mountains, Wayne National Forest sits on 833,900 acres across 12 Ohio counties, including Athens County. The land has historically been exploited for its rich natural resources like coal, iron minerals and now, natural gas. Under two 20th-century acts — the Multiple-Use Sustained-Yield Act of 1960 and the Mineral Leasing Act of 1920 — Wayne is legally permitted to lease parcels of land for extracting minerals for a defined period of time through a competitive bidding process. The purpose of such sales is so citizens can benefit from mineral holdings and to encourage nonrenewable, domestic energy development, including hydraulic fracturing, a controversial method for extracting natural gas or oil from deep shale rock formations using highly pressured water, said Kelly Miller, Wayne public affairs specialist. Land leasing was dormant for decades until in 2011, when the Bureau of Land Management (BLM) and the U.S. Forest Service announced 3,000 acres of land were being auctioned off at Wayne. Following the announcement, members of environmental conservation organizations cited numerous concerns about how BLM executed the land leases.They claimed that the BLM violated the National Environmental Policy Act (NEPA) by approving oil and gas leases without addressing risks to watersheds, public health and climate pollution. NEPA is a 1970 act that requires federal agencies to assess the environmental effects of proposed actions prior to making decisions regarding oil or gas extraction. “It’s problematic in our view to see federal agencies leasing out land for fracking development over parts of Wayne,” said Taylor McKinnon, senior public lands campaigner for the Center of Biological Diversity (CBD). “It will completely and forever change the character of that place.”The CBD is an environmental protection nonprofit based in Arizona. CBD filed a lawsuit against the U.S. Forest Service and BLM to end land leasing in national forests, including in Wayne, arguing BLM relied on outdated plan proposals to approve the leases. The lawsuit is still ongoing and has since expanded to challenge another lease sale in March 2017 at Wayne.
Pipeline Permit Scandal Highlights Confusion Amid Push to Build Plastics Plants – DeSmog --In a scathing audit issued on August 15 by state regulators, the Beaver County Conservation District (BCCD) earned exceptionally low marks, after auditors found troubling problems that may have played a role in a major pipeline explosion last year. The Pennsylvania Department of Environmental Protection (DEP) audit highlights what can go wrong when state and local regulators are unprepared for the arrival of a powerful industry, illustrating the pressures when once-unobtrusive offices suddenly take on outsized importance amid a push to promote rapid development. Its findings could also spell trouble for Shell, which currently relies on permits authorized by the district for at least two pipelines connecting the company’s plastics plant to natural gas wells that will supply it with the raw materials to make plastics from fracked gas in the Marcellus Shale. The district, auditors wrote, “has shown a lack of sound judgement in recent years,” grading the program overall “unsatisfactory.” On August 20, the DEP yanked the Beaver County District’s authority to be involved in erosion and sediment control permits entirely, and said it would review the district’s authority over other permits.“DEP staff identified significant and consistent problems with BCCD’s recordkeeping, permit review, and inspections,” DEPSecretary Patrick McDonnell said in a statement announcing the termination of the district’s authority. Environmental groups expressed outrage. “The improper issuance of pipeline construction permits in Beaver County without the proper review is an egregious offense,” said Joseph Otis Minott, executive director and chief counsel for environmental group Clean Air Council, “that put residents’ safety and the environment at great risk.” One Beaver County District Commissioner came under fire in the local press for failing to attend the organization’s meetings. Auditors reported that the Beaver County District had “reviewed and authorized” an erosion and sediment control permit for the Revolution pipeline. The problem? The district had no legal authority to authorize the permit, which “should have been reviewed by DEP’s Oil and Gas Management program,” auditors wrote. The Revolution pipeline is considered a “gathering line,” which gathers gas from individual gas wells, and not a “transmission line,” which carries gas long distances, auditors wrote — and the district had no authority over gathering lines. On September 10, 2018, the Revolution pipeline burst, unleashing a column of fire 150 feet tall, destroying a home, a barn, several cars, and prompting the evacuation of over two dozen homes. One family barely escaped with their lives, according to neighbors. The pipeline had only carried fossil fuels for eight days before igniting. While an official investigation by the Public Utility Commission remains underway, reports indicate that the steep hillside where the explosion occurred had slipped, causing Revolution to rupture in Beaver County.
PUC’s review of pipeline safety regulation prompts attacks by residents, groups and lawmakers - Pennsylvania’s Public Utility Commission is being accused by elected officials, citizens’ groups and individuals of not doing enough to protect the public from any failure in Sunoco’s controversial Mariner East pipelines.In written responses for the PUC’s current review of pipeline safety regulations, they urge the regulator to impose many new requirements on Sunoco and any other operator of highly volatile liquids pipelines so that the public is given more protection against any leak or explosion.Two days before the PUC’s Aug. 28 deadline for receipt of comments on the review, 36 comments had been posted on the PUC’s docketfrom people including state lawmakers from both parties, township supervisors, a labor union, and private individuals.Some commenters, including a chamber of commerce and a labor union local, urged the PUC not to add regulations. But most submissions called for tighter curbs on the pipeline industry. Many called on the PUC, the state’s main pipeline safety regulator, to sharply step up enforcement. Their demands included:
- That PUC should require pipeline operators to hold regular public outreach meetings;
- That PUC should require operators of pipelines with 1,000 feet of schools to provide ‘non-sensitive’ information to school officials to allow them to plan for a leak;
- That PUC should require operators to disclose emergency response plans to the PUC, which would then share it with county emergency-planning officials;
- That aging pipelines like the 1930s-era Mariner East 1 should be required to undergo an “end of life” study to determine whether they can safely carry highly volatile liquids.
The PUC announced the review in June. It didn’t name a specific project, but said “the time is ripe” for such a review. The agency had been the focus of months of criticism by pipeline opponents who said it hasn’t done enough to prevent the spills,, sinkholes and punctured aquifers that have plagued the cross-state Mariner East project since it began construction in February 2017.
DEP fines Sunoco/Energy Transfer $313K for Mariner East construction violations -Energy Transfer/Sunoco Logistics will pay a combined $313,000 for two penalties related to Mariner East 2 construction violations in 2017 and 2018.This latest assessment brings the total financial penalties assessed to the company for Mariner East construction to more than $13 million.One penalty stems from the pipeline company’s horizontal directional drilling activities, which caused drilling mud spills in 16 streams and wetlands in 10 counties in 2018. Drilling mud consists of bentonite clay, which is not toxic but can damage aquatic life. The company’s actions violated the Clean Streams Law and the Dam Safety and Encroachment Act. The penalty assessed for that violation is $240,840.“DEP is committed to ensuring that Sunoco and other companies are held to the highest standard possible. These actions, which resulted in violations of permits and laws that are meant to protect our waterways, are unacceptable,” DEP Secretary Patrick McDonnell said in a statement. “DEP will maintain the stringent oversight that we have consistently exercised by monitoring Sunoco and taking all steps necessary to ensure that the company complies with its permits and the law.”The company also violated the Clean Streams Law during 2017 pipeline construction, which led to erosion and sedimentation at a number of waterways in Cumberland County. The company will pay $78,621 to the state and the Cumberland County Conservation District. Construction on the $2.5 billion Mariner East project began in February 2017, after the Department of Environmental Protection identified hundreds of deficiencies in its water-crossing and earth-moving permits. Since then, the DEP has issued more than 80 violations to the company for polluting wetlands, waterways, and destroying about a dozen private water wells.
Enterprise Begins Open Season for ATEX Ethane Pipeline - Enterprise Products Partners today announced the start of a binding open season to determine demand for expanded capacity on the partnership’s Appalachia-to-Texas (“ATEX”) ethane pipeline. The 1,200-mile ATEX pipeline transports ethane from the Marcellus/Utica Basin of Pennsylvania, West Virginia and Ohio to Enterprise’s natural gas liquids storage complex in Mont Belvieu, Texas, and features pipeline access to petrochemical plants along the Gulf Coast. Subject to sufficient customer commitments during the open season, Enterprise would add up to 50,000 barrels per day of incremental capacity through a combination of pipeline looping, hydraulic improvements and modifications to existing infrastructure. The expanded capabilities would be in service by 2022.
Expanding NGL markets likely to affect Appalachian producer decisions — Expanding markets for natural gas liquids produced in the Appalachian Basin should provide an extra financial incentive for Appalachia natural gas producers to maintain robust production in the long term, although concerns over low gas and NGL prices continue to dominate short-term planning. S&P Global Platts Analytics finds that while gas production in the Northeast is not directly linked to NGL demand, the latter factor does impact producers' break-evens on drilling. Low NGL prices will pressure well economics and may cause producers to look elsewhere for higher returns. Demand for NGLs produced in association with gas production in the basin is expected to increase dramatically in the next several years. In the short term, the demand growth will come from NGL pipeline projects being built or expanded to take NGLs such as ethane, propane and butane to markets far removed from Appalachia. In the longer term, in-basin NGL demand is expected to be generated by the construction of large-scale NGL manufacturing projects, such as the ethane cracker being built by Shell in Monaca, Pennsylvania. On Monday, Enterprise Products Partners began soliciting shipper interest in a proposed expansion of its ATEX ethane pipeline that would move more supplies from the Appalachian Basin to its NGL storage complex in Mont Belvieu, Texas. The 1,200-mile ATEX, or Appalachia -to-Texas, pipeline transports ethane from the Marcellus and Utica shale plays in Pennsylvania, West Virginia and Ohio to Enterprise's Mont Belvieu complex. Depending on demand, Enterprise would add up to 50,000 b/d of incremental capacity by 2022, through a combination of pipeline looping, hydraulic improvements and modifications to existing infrastructure. Another pipeline option to transport NGLs out of the Appalachian Basin is Energy Transfer's 350-mile Mariner East 2 pipeline. The pipeline, which went into service late last year, has a 345,000 b/d capacity to carry a mixture of ethane, butane, pentane, propane from the tristate gas producing region to the Marcus Hook petrochemical complex and export facility in eastern Pennsylvania. A second source of NGL demand, this time in-basin, is being created with the development of a petrochemical manufacturing industry in the region identified by industry advocates as the Shale Crescent, the area surrounding the northern stretch of the Ohio River, comprising parts of the states of Pennsylvania, West Virginia and Ohio.
Equipment supplier for Mountaineer Express Pipeline claims it is owed more than $800,000 – A Texas company that supplied equipment for the Mountaineer Express Pipeline Project in West Virginia has filed suit against the project's owners and a contractor claiming it is owed more than $800,000 in past due invoices. According to the filing in Marshall Circuit Court, Sunbelt Tractor & Equipment Co. filed a civil action against Columbia Gas Transmission LLC, TransCanada USA Services Inc. and Welded Construction LP alleging breach of contract and unjust enrichment. Sunbelt alleges it supplied equipment and machinery to Welded for use in the construction of Mountaineer Express Pipeline, which is owned by Columbia and TransCanada. The suit states after the defendants failed to pay Sunbelt's invoices, a mechanic's lien was placed on the property for $825,977.03 and in October 2018, Welded filed for Chapter 11 bankruptcy. In July, a bankruptcy court granted Sunbelt relief "but only to the extent required" to allow it to go ahead with its current suit. The plaintiff seeks $825,977.03 in relief.
More Midwestern fuel to flow into Pennsylvania thanks to a new pipeline deal --Pennsylvania regulators on Thursday approved a pipeline agreement that gives Midwestern fuel producers greater access to Pennsylvania markets, a fundamental market shift that comes at the expense of East Coast suppliers. The Pennsylvania Public Utilities Commission approved a settlement between Buckeye Partners LP, which operates the Laurel pipeline that crosses Pennsylvania, to operate the pipeline in both directions at different times. The pipeline was historically used by Philadelphia refineries to transport gasoline, diesel, and heating oil across Pennsylvania. Buckeye sought the change, saying coastal refiners and fuel importers underutilized the pipeline, and low-cost Midwestern producers were pressing to sell more fuel into Pennsylvania.Philadelphia refiners and several large Western Pennsylvania retailers, including Sheetz Inc. and Giant Eagle stores, had fiercely resisted the change, but they agreed to the settlement after Philadelphia Energy Solutions closed its refining complex in South Philadelphia in June and declared bankruptcy. The refinery, the largest on the East Coast, was a major shipper on the pipeline.
Former CEO of shut Philadelphia refinery seeks to buy the plant - (Reuters) - The former chief executive officer of Philadelphia Energy Solutions is seeking to buy and restart the 335,000 barrel-per-day PES refinery, which closed after a June fire, the former CEO and backers of the plan said in a statement on Wednesday. Philip Rinaldi, who retired from PES in 2016, formed Philadelphia Energy Industries (PEI) as a vehicle to pursue the purchase, the statement said. “We can reinvigorate the site as an economic juggernaut that generates billions of dollars of revenue and provides thousands of high-paying jobs for our skilled professional and labor workforce,” Rinaldi said in the statement. PEI and RNG Energy Solutions, LLC have entered into a mutual cooperation agreement for the prospective development of renewable fuels and other projects together with the restart of the oil refinery “should PEI be ultimately successful in its acquisition efforts,” the statement said. “My focus and drive in pursuing this acquisition is to revitalize, modernize, and develop the site and the strategic refinery business that has existed there for decades to their full potential,” Rinaldi said. Rinaldi said he had spoken with the leadership of the refinery’s local union about the plan to acquire the refinery, the largest and oldest on the U.S. East Coast. The financial details of the proposal were not made available.
New uses, even non-use, will complicate PES refinery cleanup - Pennsylvania’s Department of Environmental Protection offered an update on — and a possible complication in — the ongoing Sunoco-era cleanup at the Philadelphia Energy Solutions complex during the latest meeting of the city’s Refinery Advisory Group.Toxic pollutants have poured onto the 1,300 acres in South Philadelphia — home to what are now the PES refineries — for over 150 years. The list of contaminants of concern found in the soil, groundwater and surface water include hard-to-pronounce compounds such as methyl tert-butyl ether. The late June fire and explosion at PES that spurred the creation of the Refinery Advisory Group underlined the environmental dangers of having heavy industry in the middle of a city.Cleanups were underway long before the fire and its ripple effects got the city looking in that direction. Sunoco (now Energy Transfer), the previous owner of the site, is responsible for addressing the historic contamination there. The company has been remediating the site since 1993 under various agreements overseen by the DEP and the Environmental Protection Agency. Post-2012 contamination resulting from operations of the complex falls to PES to address, under a buyer-seller agreement between the two companies.But with the possibility of either the permanent shutdown of the complex — PES ceased operations because of damage caused by the fire, then filed for Chapter 11 bankruptcy and laid off much of its workforce — or its sale for new uses to be determined by future buyers, all of that work might have to change, a DEP official said at Tuesday’s Refinery Advisory Group session, which focused on environmental issues.“All the work that has been going on in the last 30 years has been under conditions of an operating refinery,” said David Brown, of the agency’s Bureau of Environmental Cleanup & Brownfields. “That has meant that there have been some areas that have not been investigated.”
Officials: Gov. Justice committed to WV's oil and gas industry — Gov. Jim Justice will make promoting and protecting the state’s oil and gas industry his top priority during the reminder of his time in office, according to two members of his administration. Speaking before a crowded room of business leaders from across the state during the West Virginia Chamber of Commerce’s Annual Meeting and Business Summit on Wednesday, state Department of Environmental Protection Secretary Austin Caperton and Department of Revenue Secretary Dave Hardy talked about the current state of West Virginia’s extractive industries and plans for development of a petrochemical manufacturing industry.
FERC backs water crossing changes for Mountain Valley Pipeline — The Federal Energy Regulatory Commission on Tuesday approved Mountain Valley Pipeline's request to change crossing methods for nine waterbodies over a conservation group's objections alleging the project is seeking to change conditions of its certificate while circumventing standard review processes. FERC's quick sanctioning of the proposed changes as environmentally beneficial comes amid legal battles with environmental groups over Endangered Species Act protections and US Army Corps authorizations for water crossings for the project. The 300-mile, 2 Bcf/d natural gas pipeline project would transport Appalachia Basin-produced gas from West Virginia to Virginia and to markets in the Mid-Atlantic and Southeast. Commission staff in a letter order Tuesday said the proposed changes would lower impact to aquatic resources and backed the shift from the dry open-cut method of crossing for crossing nine waterbodies and one wetland to the conventional bore method, as MVP requested August 23. Moreover, FERC said the resources in question are outside areas where MVP voluntarily suspended construction to avoid affecting the candy darter and Roanoke logperch, following a lawsuit filed by environmental groups over species protections. FERC also said the US Army Corps of Engineers confirmed no permits were needed to allow the altered crossings under Section 404 of the Clean Water Act, and that the waterbodies and wetland do not come under jurisdiction of Section 10 of the Rivers and Harbors Act. In urging FERC to deny MVP's request Monday, before FERC granted approval Tuesday, the Indian Creek Watershed Association noted that MVP's request was not accessible to the public until Monday morning. It contended that through a host of variance requests, MVP has sought to change crossing methods for more than 40 streams "while circumventing standard agency review and approval processes, as well as public review and comment." "There is no evidence that any regulatory body has seen, commented on, or approved the revised crossing plans for any of these proposed changes," the conservation group said. Further, it contended the approach circumvents a 4th US Circuit Court of Appeals order in October 2018 vacating MVP's 404 permit to cross streams and wetlands.
FERC asks for new review of endangered species in the path of the Mountain Valley Pipeline - The fate of endangered species is becoming more of a danger to the Mountain Valley Pipeline. In a letter Wednesday, the lead federal agency overseeing construction of the natural gas pipeline asked the U.S. Fish and Wildlife Service to reconsider its earlier finding that the project would not significantly harm protected fish and bats in its path. The request from the Federal Energy Regulatory Commission, and word from the Fish and Wildlife Service that it will comply, came two weeks after the Sierra Club and other environmental groups filed a legal challenge to the service’s 2017 opinion. Although the two agencies’ actions appear to do what the legal challenge had asked for, at least partially, it was not clear Wednesday whether ongoing work on the pipeline would have to stop. Because the project does not have a valid biological opinion and incidental take statement, the two permits now being reconsidered, “all work on the pipeline should halt until a new one is issued,” the Sierra Club coalition said in a statement. But there was no official word from FERC or the Fish and Wildlife Service that construction of the pipeline must stop while the permits are reviewed. Last week, attorneys for the Sierra Club asked the 4th U.S. Circuit Court of Appeals to issue a stay of the service’s approvals, pending a legal review of claims that they do not adequately protect about a half-dozen endangered or threatened species. The Fish and Wildlife Service and Mountain Valley indicated that they would oppose a stay, and the court gave them until Thursday to file written arguments. Nothing had been filed by Wednesday evening. A Mountain Valley spokeswoman also did not answer questions about whether it would be forced to stop construction.
Green groups say no high court review needed on Atlantic Coast Pipeline hurdle - Alternative paths possible for projects and new pipes, groups say. Warning of 2,200-mile barrier is 'hyperbole,' they argue. — Environmental groups weighed in against US Supreme Court action to free up the 600-mile, 1.5 Bcf/d Atlantic Coast Pipeline, countering assertions that an appeals court ruling left unchecked could have widespread implications for eastern US energy projects. The natural gas project, intended to move Appalachian gas to Mid-Atlantic markets, has faced a series of legal setbacks, including a 4th US Circuit Court of Appeals decision that struck federal authorizations allowing the pipeline to cross the Appalachian National Scenic Trail and national forests. Dominion Energy and the US Department of Justice in June asked the Supreme Court take up the case, challenging the part of the ruling that found the US Forest Service lacked authority under the Mineral Leasing Act to grant the right of way to cross the trail because the land is under exclusive authority of the National Park Service. Dominion had argued that, if left to stand, the decision would have "dramatic consequences," converting the Appalachian Trail into a 2,200-mile barrier to critical infrastructure (US Forest Service, et al., v. Cowpasture River Preservation Association, 18-1584, 18-1587). Disputing that sense of urgency for the Supreme Court to hear the case, environmental groups in a brief to the Supreme Court Wednesday noted that there are three remaining bases for the 4th Circuit judgment that threaten to make a Supreme Court decision irrelevant to the pipeline. For instance, the 4th Circuit required the Forest Service on remand to "study routes that avoid national forests and required a reroute if those alternatives can accommodate the pipeline," the groups said. If there is such an alternative, that would make any Supreme Court ruling "purely advisory," they said. "Atlantic will require right of way across the Appalachian Trail on the national forest only if the Forest Service properly approves the same route following a remand, and only if the Forest Service resolves all remaining issues in favor of ACP," they wrote. ALTERNATIVE PATHS Further, they asserted that ACP made a hyperbolic argument that the 4th Circuit decision threatens to choke off the flow of natural gas to the East Coast. Numerous sites remain available for new pipeline construction across state and private lands, or co-located within existing easements, they said. Existing pipelines are also unaffected by the ruling, they wrote, because none were authorized by the Forest Service to cross the Appalachian Trail under the MLA. "In the 51 years since Congress designated the Appalachian Trail, the Forest Service had never granted a new right-of-way to an oil or gas pipeline to cross the Trail in a national forest," they said. The decision had at most one consequence, that Atlantic must reroute the pipeline to avoid crossing the trail on federal land, they contended. They also made the case that the decision does not conflict with other circuits. Finally, they argued that Atlantic has publicly assured investors that its current route is viable without Supreme Court review. The only other pipeline affected, Mountain Valley Pipeline, also believes it has an administrative path forward, the environmental groups said.
As Pipeline Construction Booms, Citizens Take Inspections Into Their Own Hands -On a recent hot, August weekend, about a dozen citizens spent three days along the route of the Mountain Valley Pipeline. Armed with cameras, smartphones and drones the volunteers traveled portions of the pipeline’s route under construction from Monroe to Doddridge counties. “There was several things that we saw,” said Summers County resident and organic farmer Neal Laferriere. Laferriere organized the three-day “violations blitz.” He said volunteers documented small problems like poorly-maintained erosion controls as well as much larger ones. “Sediment-laden water in one situation was overflowing the controls and going directly into a creek,” he said. “So, definitely affecting the waterways of the state, which is a big violation.”In total, the volunteers collected about 60 examples of what they deemed to be permit violations by the pipeline. Their efforts are part of a citizen monitoring program run by conservation group the West Virginia Rivers Coalition. In 2012, West Virginia Rivers and Trout Unlimited created a program that trained volunteers how to monitor their local trout streams to determine if they were being affected by the state’s booming oil and gas industry. As more natural gas pipelines have been approved for construction in West Virginia, the program expanded to include pipeline construction monitoring. “Pipeline construction releases a lot of sediment and sediment-laden water -- muddy water -- into what would otherwise be clear and pristine streams,” said Autumn Crowe, senior scientist with West Virginia Rivers. “That sediment, when it gets into the water body, it has multiple negative impacts on aquatic life and water quality.”West Virginia Rivers collects the complaints and submits them to the West Virginia Department of Environmental Protection. The group worked with WVDEP’s enforcement department to develop the training materials. Crowe said citizen monitoring, including this most recent “violations blitz,” fills an enforcement gap in West Virginia. “What the vio-blitz was showing us is that there were multiple issues along the entire route that were not being addressed,” she said. “And if not for our volunteers, a lot of those issues would have gone unnoticed.”
A step too far for the Appalachian Trail - Dominion Energy wants to run a massive pipeline across America’s treasured Appalachian National Scenic Trail and some of the least developed wildlands remaining in the East. This isn’t just a bad idea, it’s an unprecedented one. Dominion, the Virginia-based power giant that serves customers in 18 states, wants to do something that has never been done in the half century since the iconic hiking path was enshrined in law: force a pipeline across the Appalachian Trail on federal land managed by the Forest Service.To get its way, the company must persuade lawmakers to overturn a federal court decision and change a law that has protected important parts of the trail for almost 50 years. Congress should say no.The conservation of the American landscape is a deeply patriotic tradition to which I have dedicated my life. I grew up in the Shenandoah Valley of Virginia where my experiences along the Appalachian Trail and in the Blue Ridge Mountains fostered my love of the outdoors and my career in conservation. I climbed every mountain within sight of my home and fished every river. From 2009 to 2017, I served as director of the National Park Service, capping 40 years at the agency working to ensure—as Congress required when it passed the National Park Service Organic Act in 1916—that our national parks remain “unimpaired for the enjoyment of future generations.” The Appalachian Trail has been one of the jewels of our national park system since its creation in 1968. Every year, it draws millions of visitors, offering the opportunity to explore scenery and solitude from Georgia to Maine. Lands adjacent to the trail also provide important habitat for wildlife and plants. Like the creation of the trail itself, conservation has traditionally transcended politics. As a nation, we have decided to set aside some areas as national parks or designated wilderness and establish an American vision of conservation that resonates around the world. The writer and historian Wallace Stegner called our national parks “absolutely American” and “the best idea we ever had.”
Cause of pipeline explosion still a question. Preliminary findings list previous failures of same gas line - --The cause of a fatal pipeline explosion in Lincoln County has not yet been determined, according to preliminary findings released by the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA). The findings state the possibility of damage to two more gas pipelines that run near the line that exploded cannot be ruled out. The pipeline exploded in the Indian Camp neighborhood in Moreland Aug. 1, killing one person and destroying five homes. PHMSA’s findings are included in a corrective action order issued by the agency. They show that the blast blew 30 feet of pipeline out of the ground, resulting in a crater that is 50 feet long, 35 feet wide and 13 feet deep. PHMSA says it is estimated that 66 million cubic feet of natural gas was released by the failure, with the resulting fire destroying multiple structures and burning vegetation over approximately 30 acres of land. The Texas Eastern transmission line is owned by Spectra Energy Partners, which is owned by Enbridge Inc., based in Calgary, Canada. The entire system is 9,100-miles long, carrying natural gas from northeastern America to the Gulf Coast region. PHMSA says the failure happened at 1:24 a.m. Aug. 1. At 1:25 a.m., Enbridge’s Gas Control in Houston, Texas, received a rate of change alarm on Line 15, on the south side of the Danville Compressor Station. Then within minutes, public reports came in of a fire in the area. The report says a Danville Compressor Station operator also received the rate of change alarm and observed the rupture fire from the window of the compressor station control room. During the minutes that followed, other Enbridge employees confirmed the reported fire, indicating the failure of Line 15. Personnel at the compressor station then closed the line discharge valve, located north of the failure site. Texas Eastern field personnel responded by closing the Line 15 main block valve, then “further isolated a portion of the affected segment” and also shut down Lines 10 and 25, which it says were blocked in between the Danville Compressor Station and the Tompkinsville Compressor Station. When the pipeline blew out of the ground, it landed approximately 460 feet from the failure site. Aside from the death of Lisa Derringer, 58, of Stanford, the explosion also resulted in the hospitalization of six people.
Michigan tribes consider suit to prevent Line 5's 'unacceptable risk' - If the state’s bid to decommission Enbridge’s Line 5 oil pipeline falls short, Michigan’s Indian tribes say they’re ready to launch their own lawsuit. Michigan’s five tribes with fishing rights in the Straits of Mackinac have penned their opposition to the dual pipeline in formal resolutions, held kayak rallies in the straits to protest it and have been kept informed about ongoing negotiations between Gov. Gretchen Whitmer and the Canadian oil company. They say they won’t hesitate to double down on their Wisconsin neighbors’ July lawsuit seeking the closure of a portion of the line running through the Bad River Band Reservation. Or, at the least, they want to find a way to intervene in the state’s lawsuit against Enbridge. “If and when the time comes where the state’s answer, the federal government’s answer, is to keep the pipeline in place, we view that as an unacceptable risk. We’ll do anything we have to, including taking it to court,” said Bryan Newland, chairman of the Bay Mills Indian Community in the Upper Peninsula. Bay Mills is one of five tribes named in an 1836 treaty with the federal government that guarantees them a continued right to fish in the Great Lakes and a legal stake in the Straits of Mackinac. The dual span across the straits is part of a pipeline that carries light crude and natural gas liquids shipped from Superior, Wisconsin, across the Upper Peninsula of Michigan, south through the lower Peninsula and then across the St. Clair River into Sarnia, Ontario. The pipeline has long prompted concern among activists because of the catastrophic effects a potential leak in the Straits would have on Lakes Michigan and Huron. Enbridge maintains its pipeline is safe but would be safer in a tunnel 100 feet below the lake bed.
Business groups urge Cuomo to approve gas line, end moratorium - A day after Gov. Andrew M. Cuomo called for a stepped-up probe into potentially “improper” gas shut-offs by National Grid, five Long Island business and building-trade groups sent a letter urging the governor to approve a pipeline at the center of the gas company’s moratorium. Local businesses and homeowners seeking new gas hookups have been receiving letters from National Grid since earlier this year saying the company can’t commit to any firm new service without the proposed Northeast Supply Enhancement project, a $1 billion pipeline that will travel 24 miles under New York waterways. Environmental groups say National Grid has fabricated a gas shortage to tie the region to a fossil-fuel future. The two-page letter to Cuomo from the largest developer, building trade and business groups on Long Island makes no mention of the reason the state Department of Environmental Conservation in May rejected developer Williams Co.’s request for a water quality permit for the project. Instead, the letter, from the Association for a Better Long Island, the Long Island Association, the Long Island Builders Institute, the Building and Construction Trades Council of Nassau and Suffolk and the Long Island Federation of Labor, cites the groups’ “tremendous concern” over the moratorium, calling it “widespread and all-encompassing.” Cuomo's office didn't immediately respond to a request for comment on the letter. The latest moves come after a summer of contention over the pipeline that would bring vast new gas supply to the National Grid service area at a time when Cuomo is steering the state toward exclusively green energy. New York State has twice rejected a water-quality permit for the project, citing toxic sediment impacts from laying the line 24 miles under New York Bay. Developer Williams Co. has resubmitted its applications and the state issue a final ruling by next May.
FERC puts Constitution Pipeline back on track, finding New York waived water authority | S&P Global Platts— The Federal Energy Regulatory Commission has found that New York waived its water quality authority for Williams' Constitution Pipeline, giving new life to a natural gas project stalled since April 2016 when state regulators denied a permit. The 124-mile project is designed to ship up to 650 MMcf/d of northeastern Pennsylvania gas production to interconnections with the Iroquois Gas Transmission and Tennessee Gas Pipeline in upstate New York.The commission, by a 4-0 vote late Wednesday, reversed its earlier finding -- that the New York review could not be waived -- in light of a recent DC Circuit Court of Appeals ruling in Hoopa Valley v. FERC. The Hoopa case had involved a hydropower project for which states and PacifiCorp agreed to defer the Clean Water Act's one-year statutory deadline by annually withdrawing and resubmitting the water permit.The commission interpreted the ruling to "stand for the general principal" that states waive their CWA Section 401 authority when a project application is withdrawn and resubmitted to avoid the act's one-year time limit for state decisions, and the state fails to act in that timeframe, the commission said.FERC rejected arguments from New York and environmental groups that differing circumstances in the Constitution case weighed against granting a waiver."The record [for Constitution] indicates that the state encouraged Constitution's withdrawal and resubmission of its application for the purpose of avoiding the waiver period," FERC concluded. The start of construction is unlikely to be imminent. Williams in a statement said Constitution sponsors "are evaluating next steps for advancing the project," and asserted the project represents much needed infrastructure for a region confronting natural gas supply constraints that have elevated prices for consumers.
As colder months approach, debate heats up over natural gas expansion – Business groups and environmentalists are ratcheting up their rhetoric in the ongoing battle over a proposed expansion of a natural gas pipeline under New York Harbor. Environmental advocates are looking to draw a line in the sand in opposing the $1 billion underwater pipeline extension, arguing that the project is in conflict with the state’s pledge to switch to renewable energy sources. At the same time, business groups and developers maintain they are being hurt by National Grid’s self-imposed moratorium on new natural gas customers, which the utility says it can’t lift until the pipeline project is allowed to move forward. At stake, opponents say, is the health of the environment, while supporters say killing the project threatens the region’s economic wellbeing. National Grid says the pipeline expansion, also known as the Northeast Supply Enhancement Project, would increase capacity in the area by 14 percent, delivering 400 million cubic feet of natural gas per day. The utility insists that without it, a natural gas shortage is likely this winter. The project, a 24-mile expansion of the existing Williams-Transco pipeline, would run 17 miles underwater, stretching from New Jersey under New York Bay to another existing pipeline off the Rockaways. However, the state Department of Environmental Conservation denied the project’s application in May, causing the utility to immediately impose a moratorium on new natural gas service.
Study Finds Climate Emissions Higher in the Northeast — Gas leaks are a still a big problem and perhaps worse than initially believed.A new study of Northeast cities such as Providence and Boston found that emissions of natural gas and methane were higher than previous estimates, including projections by the Environmental Protection Agency (EPA).The study Large Fugitive Methane Emissions From Urban Centers Along the U.S. East Coast conducted by researchers at the University of Michigan and the National Oceanic and Atmospheric Administration used airplane surveillance of downwind gas blooms to measure greenhouse gases. It found that Boston and New York are emitting twice as much methane as projected, likely from leaks called “end-of-use” emissions from pipes beneath streets, from service lines, and from appliances inside homes. Providence also measured for greenhouse gases higher than previous surveys. However, the city is the smallest of the six surveyed and therefore the volume of emissions was considered insufficient to be accurate.“Providence was the hardest one we sampled to get very robust conclusions,” said Eric A. Kort, co-author of the study and an assistant professor in the Climate and Space Sciences and Engineering department at the University of Michigan. Nevertheless, the conclusions reached from the five other urban areas reinforce pleas for repairing gas leaks in and around homes. According to the EPA, methane has up to 36 times the global warming impact as carbon dioxide over 100 years. Southboro, Mass., resident Bob Ackley, of Gas Safety Inc., has been tracking gas leaks in neighborhoods across southern New England for 10 years, sounding the alarm about tree damage and other environmental impacts. Ackley, a retired leak-detection contractor for utilities, said the biggest leaks, called “super emitters,” are 7 percent of leaks but account for 50 percent of all discharges. He said climate impacts from gas leaks are avoidable, while the damage to trees can be fatal, costing communities untold money for tree care and removal. “National Grid is paying towns for damage to trees, but they don't want to tell anyone,” Ackley said.
Air Monitoring Reveals Troubling Benzene Spikes Officials Don’t Fully Understand — Standing behind the podium at a jam-packed City Council meeting in South Portland, Maine, Danielle Twomey is in an unenviable position. She is a chemist with the state, and she swore to herself she wouldn't reveal the extent to which potentially hazardous chemicals are polluting the air unless there was an expert on hand to explain the public health implications. "I was expecting the state toxicologist to be here," she says to the group. "I'm a little disturbed he isn't." Twomey and her colleagues from the Maine Department of Environmental Protection have come to deliver the first results of a nascent air sampling effort. It combines snapshot samples taken by residents with "grab" canisters and 24-hour samples obtained at a few air monitoring stations set up across the city. Twomey hasn't had time to analyze many samples yet, but the work she has done is starting to paint a picture of the air in South Portland. And it's not pretty. People in South Portland have always wondered about their air. Some days, an industrial stench fills the skies. When the fumes aren't bad, the smell is a nuisance. When they're bad, they can sting the eyes and nose and cause headaches.With 120 petroleum storage tanks scattered along the city's shores and a regular stream of tankers coming and going, it's no secret that the fossil fuel industry has a big presence here. But no one really started asking questions about the health implications of the fumes until March, when the city learned that Global Partners was being fined by the EPA for violating the Clean Air Act. Its tanks, which contain asphalt and bunker fuel, had the potential to emit twice the amount of volatile organic compounds (VOCs) than its permit allowed. It wasn't long before the city learned that a second company, Sprague, had been issued a notice of violation for the same thing. City leaders, caught off-guard by the announcement of a settlement between the EPA and Global Partners, jumped into action. They met with the state and the companies, and they launched the air monitoring program to start to understand the scope of the problem.
Heard for miles: Gas explosion hits office, shopping complex - A powerful natural gas explosion badly damaged a Maryland office complex and shopping center Sunday morning, ripping away part of the facade and exposing twisted metal, authorities said. No injuries were reported in the thundering blast, which occurred at about 8 a.m. It came after authorities said they had evacuated the area around the complex because of a suspected early morning gas leak near the complex in Columbia, Maryland. Fire crews responded about an hour before the explosion because of a fire alarm that was upgraded to a report of a gas leak in the parking lot, officials said. When fire personnel arrived, they immediately evacuated everyone from the surrounding area and made sure the building was vacant. The subsequent explosion ripped away a significant part of the facade, scattering debris. “It was so powerful it could be heard in communities many miles away,” said Howard County Executive Calvin Ball in a statement. No businesses were open, said Stephen Hardesty, the battalion chief of the Howard County Department of Fire and Rescue Services. He said the time of day played a major role in the lack of injuries, and he described it as one of the worst explosions he’s seen.
Tropics Finally Come To Life - It has been a very slow hurricane season so far, but as we head now into what is typically peak season, things are coming to life. We are tracking a couple of systems out in the Atlantic basin, with the focus being on Tropical Storm Dorian, entering the eastern Caribbean Sea. natural gas commodity weather The storm is moving off to the west-northwest, which is predicted to continue the next few days by the National Hurricane Center. natural gas commodity weather A couple of things stand out here. The most obvious is the track which heads up into the Bahamas and then to the east coast of Florida this weekend. But you will also notice that it is forecast to stay a tropical storm. It has a big fight ahead of it in the near term, battling dry air, and then perhaps contending with the island of Hispaniola, notorious for tearing tropical systems apart, so there is some risk it doesn't even survive beyond that point. If it is able to do so, the environment once into the Bahamas would become more favorable for development, and that's where it could intensify more than forecast, again, if it survives. Needless to say, all interests in the Bahamas and Florida need to watch this one. What about the Gulf of Mexico? We can't write that off as a risk, as some members of the ensemble modeling do bring the system across Florida and into the Gulf early next week. natural gas commodity weather So, yes, even Gulf interests should keep one eye on Dorian. Risk is low right now due to how far away it is, and the battles in front of it. We will know more in 2-3 days after it clears the big islands of the Caribbean. We also have Tropical Depression Six off the Southeast coast, expected to become Tropical Storm Erin later today, but this one poses no risk for an impact here in the United States. natural gas commodity weather We will closely be watching these systems, as well as the rest of the Atlantic basin as we move through the climatologically favored time of year for development to gauge possible impacts to the U.S, and of course, energy interests.
Why Hurricane Dorian is lifting natural-gas prices - Natural-gas futures logged their highest close in more than five weeks Thursday as Hurricane Dorian, which poses no big threat to energy production in the Gulf of Mexico, serves as a wake-up call that the worst of Atlantic hurricane season may be yet to come. The season officially runs from June 1 through Nov. 30. “The peak isn’t until closer to mid-September,” said Marshall Steeves, energy markets analyst at IHS Markit. “Traders are now more sensitive to tropical developments.” Dorian is forecast to intensify into a Category 4 hurricane and poses a major threat to the southeastern U.S., especially Florida, over the Labor Day weekend, according to Weather.com. It’s forecast to hit the Southeast U.S., mostly likely somewhere between Florida and southeast Georgia, from Sunday to Monday. “The hurricane looks likely to make landfall in Florida and move north rather than into the Gulf from what I’ve seen, so [there’s] no reason to expect shut-in production from this,” said Steeves. Still, natural gas has seen sharp price gains over the last two sessions. On Thursday, October natural gasin its first full session as the front-month contract, tacked on 7.4 cents, or 3.3%, to settle at $2.296 per million British thermal units. That was the highest for a front month since July 23, according to Dow Jones Market Data. Traders will continue to keep an eye on the storm’s path. “Should the forecasted path take a turn toward the Gulf, crews [from oil and natural-gas platforms] will be evacuated, and production will decrease for a short period of time,” according to a report issued Thursday from energy data analytics company, Enverus Drillinginfo.
US natural gas in underground storage rises 60 Bcf: EIA — US natural gas in storage increased 60 Bcf to 2.857 Tcf for the week ended August 23, the US Energy Information Administration reported Thursday morning. The injection was more than an S&P Global Platts' survey of analysts calling for a 57 Bcf injection. Wider responses to the survey ranged from 53 Bcf to 60 Bcf. The build was less than the 66 Bcf injection reported during the corresponding week in 2018 but more than the five-year-average injection of 57 Bcf, according to EIA data. It marked the largest injection since the week ended July 26. As a result, stocks were 363 Bcf, or nearly 15%, above the year-ago level of 2.494 Tcf and 100 Bcf, or about 3%, below the five-year average of 2.957 Tcf. The NYMEX Henry Hub October contract dipped about 1 cent immediately after the report's release but edged up in afternoon trading to settle at $2.30/MMBtu, or about 5 cents higher day on day. Infographic: SoCal gas storage shoulder-season injections at risk The US supply-demand balance tightened about 400 MMcf/d during the week ended August 23, thanks largely to gains in LNG feedgas demand and an uptick in gas-fired electric generation. An apparent end to maintenance at Cheniere Energy's Sabine Pass liquefaction facility helped lift total US feedgas demand by 1 Bcf/d last week. Power burn demand also climbed 600 MMcf/d, led mostly by warmer temperatures in the US Northeast. On the supply side, relatively flat domestic output last week was bolstered by a 500 MMcf/d uptick in gas imports from Canada, largely concentrated in the Northeast. For the week in progress, Platts Analytics' supply-demand model is forecasting another bearish injection of 72 Bcf, which would outpace the 64 Bcf injection reported during the corresponding week last year, as well as the five-year-average injection of 66 Bcf. The most recent seasonal forecast, now calling for end-October storage levels to reach 3.5 Tcf, could see some downside risk, though, as export demand for US gas continues to ramp up. Mexican President Andres Manuel Lopez Obrador confirmed publicly Tuesday that the federal government and state-owned power generator CFE had reached an settlement agreement with pipeline developers Grupo Carso, IEnova and TC Energy that could see the long-awaited 2.6 Bcf/d Sur de Texas-Tuxpan pipeline enter service soon. Upon startup, Platts Analytics expects that US gas exports to Mexico could quickly rise about 500 MMcf/d and potentially by as much as 1 Bcf/d, depending reconfiguration at Cempoala -- a key compressor station along Mexico's central coast that will help move gas into the country's southeast.
North America Tops LNG New-build Ranking - Nearly three-fourths of growth in new-build liquefaction capacity worldwide through 2023 will be in North America, GlobalData concludes.North America will account for approximately 73 percent of growth in new-build liquefaction capacity in the global liquefied natural gas (LNG) industry through 2023, according to a new report from the data and analytics firm GlobalData.“North America is expected to add 26 new-build LNG liquefaction terminals during the outlook period,” GlobalData Oil and Gas Analyst Soorya Tejomoortula said in a written statement emailed to Rigzone.The report – “Global LNG Liquefaction Industry Outlook to 2023 – Capacity and Capital Expenditure Outlook with Details of All Operating and Planned Liquefaction Terminals” – assumes 243 million tonnes per annum (mtpa) of new-build North America’s liquefaction capacity by 2023. The firm notes that announced projects make up the majority of the region’s new-build capacity.Tejomoortula added that North America’s largest new-build liquefaction terminal will be NextDecade Corp.’s 27-mtpa Rio Grande LNG project near Brownsville, Texas. The facility, set to begin operations four years from now, will produce LNG from low-cost natural gas from the Permian Basin and Eagle Ford Shale, Rigzone reported in May. The Middle East follows North America as the second-highest region in terms of liquefaction capacity growth, GlobalData also finds. The firm stated the region will add 32 mtpa of capacity by 2023 in the form of the Qatar LNG facility – the only announced terminal in the Middle East. Ranked third is the Former Soviet Union, with Russia accounting for entire region’s 29 mtpa of new-build capacity during the period. A chart provided by GlobalData breaks down planned and announced new-build capacity through 2023 by region.
Commonwealth LNG files for Louisiana export facility » - Texas-based Commonwealth LNG has filed paperwork with the Federal Energy Regulatory Commission to build and operate a liquefied natural gas liquefaction/export facility in southwest Louisiana, Kallanish Energy reports. The plans call for six trains that together could produce 8.4 million tons per year (Mtpa) of LNG. That capacity could be expanded to 9.2 Mtpa. The LNG facility is scheduled to begin service in the first quarter of 2024. A final investment decision is expected by late 2020. The company, with headquarters in Houston, has asked Ferc to approve the $4 billion project by early 2021. The project includes connecting pipelines. It filed preliminary paperwork with Ferc in 2017. The facility, to be built on 400 acres in Cameron Parish, would be the among the second or third wave of U.S. LNG facilities to come online. The project would create up to 2,000 construction jobs. Privately-held Commonwealth LNG is a subsidiary of an investment firm owned by Paul Varello. Last June, it signed a heads of agreement with Gunvor Singapore Pte Ltd. to buy up to 1.5 Mtpa of LNG for 15 years.
US LNG Export Plans Hit Trade War Snags-- Liquefied natural gas may have dodged the latest round of Chinese tariffs on U.S. goods, but plans for new American terminals to ship the fuel abroad are under threat as the trade war escalates. Tellurian Inc. and other developers will probably delay final investment decisions on multibillion-dollar U.S. LNG export projects to 2020 from this year as the tensions complicate negotiations with potential Chinese gas buyers, according to Bank of America Corp. While LNG isn’t among the goods Beijing will target in retaliatory levies that take effect next month, a 25 percent duty imposed in June still stands, raised from 10 percent previously. The trade dispute is intensifying as roughly a dozen companies look to become part of the so-called second wave of U.S. LNG export terminals expected to start up in the next few years. Smaller developers face intense competition from deep-pocketed oil giants like Exxon Mobil Corp., Qatar Petroleum and Royal Dutch Shell Plc, which didn’t need to sign long-term contracts before greenlighting their projects. A collapse in global gas prices amid a glut of supply from the U.S. to Australia is also pressuring the industry. For an investment decision on Tellurian’s $28-billion Driftwood project in Louisiana, “we see delays as likely given current pricing headwinds, no resolution yet on the U.S.-China trade war, and minimal contract announcements in recent months,” Bank of America analysts led by Julien Dumoulin-Smith wrote Friday in a note to clients. Joi Lecznar, a spokeswoman for Tellurian, said the company is still targeting a final investment decision this year. Liquefied Natural Gas Ltd. will also likely push back a final investment decision on its Magnolia terminal in Louisiana to 2020 because of growing competition, and NextDecade Corp. may delay a decision on its Rio Grande project in Texas to next year, according to Cowen Inc. Toni Beck, a spokeswoman for NextDecade, said the company is still planning a final investment decision in 2019. LNG Ltd. declined to comment. Shares of Tellurian fell as much as 19 percent Friday, the most since March, after surging earlier in the month. NextDecade dropped as much as 13 percent, while LNG Ltd. slipped 2.6 percent. While China is a fast-growing market for gas, it hasn’t imported any U.S. LNG since February, according to vessel tracking data compiled by Bloomberg. The Asian nation has received 62 American cargoes since 2016, putting it behind South Korea, Mexico and Japan.
A Perfect Storm Is Brewing For US LNG - That the U.S. energy industry would be among those hardest hit by a full-blown trade war between Washington and Beijing was a no-brainer. Yet the extent of the fallout as the war continues is only becoming evident now, as some companies find it hard to secure the funding for their ambitious LNG projects. According to the Bank of America Merrill Lynch, a number of companies may delay their final investment decisions on new LNG capacity to next year because of U.S.-Chinese trade tensions. Bloomberg reports these include Tellurian and NextDecade, as well as other companies focused exclusively on LNG. While the companies themselves are not too talkative when it comes to possible obstacles to the so-called second wave of LNG projects in the U.S., the facts are not encouraging: China has imported no U.S. LNG since March, according to data from ClipperData. Bloomberg data is even gloomier: it suggests no U.S. LNG has made its way into China since February. No wonder, since Beijing first imposed a 10-percent tariff on the commodity and then upped this to 25 percent in retaliation for U.S. tariffs.Yet there is another aspect of the trade war that is more damaging to U.S. LNG producers. To secure funding for these projects that typically cost billions, U.S. companies need long-term commitments to convince banks the projects are viable. Chinese buyers were the natural choice for these long-term commitments but this is no longer the case as Chinese investors shun U.S. projects amid the war.To add insult to injury, the gas price context is increasingly unfavourable and could add justification to delays in final investment decisions. U.S. energy companies are producing too much gas at a time when domestic demand is stalling and global demand is being met by a growing number of countries. LNG projects are also suffering the effects of low gas prices. As RBC recently forecast, this year, the natural gas market will remain oversupplied, and this oversupply will extend into 2020 as well. U.S. LNG exports were hailed as a double blessing: on the one hand, expanding U.S. companies global presence on the LNG market and on the other, relieving a persistent natural gas glut resulting from the growth of the shale oil and gas industry. The size of this relief grewfrom just 2.92 billion cu ft in 2013 to 1,083 billion cu ft last year. Now, its further growth that could turn the United States into the world’s top LNG exporter by 2024 is under threat.
U.S. Gulf Coast refinery operators keep an eye on Hurricane Dorian - (Reuters) - Chevron Corp’s 356,440 barrel-per-day Pascagoula, Mississippi, refinery is closely monitoring the progress of Hurricane Dorian, a company spokesman said on Thursday. Dorian is churning across the Atlantic Ocean toward landfall on the Atlantic coast of Florida over the weekend and may enter into the eastern Gulf of Mexico next week, according to some computer models. “Pascagoula is following hurricane procedures and paying close attention to the track and forecast of the storm,” Chevron spokesman Braden Reddall said in an email. Refineries in Louisiana were not making preparations on Thursday for the storm, said people familiar with operations at Valero Energy Corp’s Meraux, Louisiana, refinery and PBF Energy Inc’s Chalmette, Louisiana, plant. Royal Dutch Shell Plc refineries in Norco and Convent, Louisiana, had no preparations under way on Thursday, a spokesman said. Marathon Petroleum Corp’s Garyville, Louisiana, refinery did not respond to a request for comment about operations. Dorian is predicted to have winds reaching 130 mph (209 kph) in 72 hours, the Miami-based National Hurricane Center said on Thursday. That would make it a Category 4 storm, the second-strongest on the Saffir-Simpson scale for measuring hurricane intensity. Forecast tracks show the hurricane either remaining over land and moving north into Georgia, or entering the Gulf and making a second landfall in either the Florida panhandle, Alabama or Mississippi. The Gulf Coast is home to more that 45% of U.S. national refining capacity. The Gulf of Mexico accounts for about 16% of U.S. oil and 3% of natural gas production. Most offshore production platforms are in the central and western areas of the Gulf.
The US is about to send a lot more oil into an already oversupplied world market - The oil market is already struggling with too much supply, and the U.S. is about to flood the world with a lot more.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. But the infrastructure needed to transport that crude out of Texas oil fields and onto the world market has been lacking. This month marks a big change for the industry with the start of the Plains All American Pipeline’s Cactus II, a 670,000 barrel a day pipeline, connecting the Permian Basin to Corpus Christi, Texas, and from there to the world. That pipeline, and another, named Epic, are just the start, with more to follow. The new pipelines are expected to take more Texas crude to the Gulf Coast, and from there it can be shipped out to the world, but the world is now well supplied, and even more U.S. oil could help depress prices, especially if the trade wars continue to suppress demand.According to Citigroup, the new pipelines could help grow U.S. oil exports from the current 3 million barrels a day by 1 million barrels more by year-end and another million barrels next year. Exports have already grown by an average 970,00 barrels a day this year over last year, according to Citigroup. “It will be 4 million barrels a day by six or eight months. Four million barrels a day is a lot bigger than the North Sea as a whole. That crude oil is going to go everywhere. It goes to Asia, Europe, to India,” said Edward Morse, Citigroup global head of commodities research. “If the U.S. gets to 6 million barrels a day in three years, it will be hands-down the world benchmark.”The surge in pipeline capacity will help unlock a bottleneck of oil in the Permian Basin, which Citi has forecast could double its production to about 8 million barrels a day by 2023.As the pipelines are being built, there will be a need for increased export capacity. Shipping facilities are being expanded all along the Gulf Coast, in Texas and in Louisiana. The U.S. will soon have the export capacity for 6 million barrels a day, and even more is planned, according to Citi.
Texas Crude Exports Might Have To Go Elsewhere In Light Of China’s New 5% Tariff – MP3 audio -The trade war between the U.S. and China escalated over the weekend. At the G-7 meeting on Sunday, President Donald Trump claimed he could “declare a national emergency” over the trade war if he wanted to. And China’s currency, the yuan, hit an 11-year low on Friday following the Trump administration’s announcement of the latest round of tariffs on Chinese goods.But the trade war is also affecting the energy market. West Texas Intermediate Crude futures fell last week after China retaliated, slapping its own tariffs on American goods.Matt Smith, director of commodity research at ClipperData, says this tit-for-tat dynamic puts U.S. oil exports in a precarious position.“With the announcement of this 5% tariff on U.S. crude going in [to China], that either means one of two things: either these guys have to pay up that 5% … or it has to find another destination, and China has to source their crude from elsewhere,” Smith says. “We’re gonna have to wait and see.”What you’ll hear in this segment:
- – How China’s new 5% tariff on U.S. crude oil could affect shipments already en route
- – Where U.S. suppliers can ship crude, besides China
- – Why new pipelines in Texas means even more U.S. oil is available for export
The public should have a say before anyone cuts a pipeline through the Texas Hill Country -- A few weeks ago, construction on the Mopac Expressway near Slaughter Lane in Austin came to an abrupt halt when the workers encountered a larger than normal karst feature. Karst features are essentially holes in the limestone underneath our feet that channel water from the surface into our underground aquifers. They stopped because construction around karst features has to be done carefully to ensure both that surface water can reach the aquifer and that the water isn’t contaminated on its way there. Any construction project that disturbs five acres or more of land in the Edwards Aquifer region requires coordination and permitting from the Texas Commission on Environmental Quality (TCEQ) to protect our groundwater and karst features — except oil and gas projects, including pipelines. This is because of one section in the Texas Water Code that places jurisdiction over oil and gas activity under the Texas Railroad Commission instead of TCEQ. When these protections for the Edwards Aquifer were established in the 1990s, no one anticipated they’d need to apply to oil and gas. The region doesn’t produce fossil fuels, and no new pipeline had crossed the Hill Country and our vulnerable aquifers since the 1950s. But today, Kinder Morgan hopes to build a 42-inch pipeline across the Hill Country and the Edwards Aquifer, and those of us in the pathway are personally experiencing the state’s lack of oversight. Kinder Morgan is making all kinds of statements about safety and environmental protection and treating landowners decently. But here’s what they won’t tell you:
- There will be no state oversight to protect karst features during the construction of the Permian Highway Pipeline.
- While the company says its current plans are to only transport natural gas (which poses less water contamination risk than crude oil) in the Permian Highway Pipeline, nothing in the law prevents them from retrofitting the pipeline to transport crude oil or another liquid if they deem it profitable. This exacerbates concerns about groundwater, especially in light of recent leaks in the nearby Longhorn Pipeline.
- Kinder Morgan is taking a permanent 50-foot-wide easement with an additional 75 feet for a temporary construction easement. This means an up to 125-foot-wide swath will be cleared of trees for the length of the pipeline, and 50 feet of that will be kept permanently clear of large vegetation. That will constitute an unprecedented scar across the Hill Country.
- Instead of going through the standard U.S. Fish and Wildlife Service process and getting an individual permit for damaging critical habitat, Kinder Morgan is trying to take a shortcut by rolling its project into an existing nationwide permit that doesn’t address the specific ecological concerns of the Hill Country.
- There is no public process in Texas for determining where one of these large common carrier pipelines should go. The state gives these pipeline builders authority to take people’s land with no process to determine if the individual pipeline or the planned route makes sense. This is less transparency and accountability than what the state itself is required to do when building a road.
- There are no minimum standards for surface mediation after pipeline construction, and no oversight to ensure it was done correctly. If landowners want to protect the wildlife or agricultural value of their land with native seed or double trenching, they have to negotiate that into their easements with Kinder Morgan. If the company doesn’t live up to its end of the bargain, the landowners’ only option is to sue.
US Drillers Drop 11 Rigs - The U.S. dropped 11 oil rigs this week. The U.S. saw yet another week of rig declines, shedding 11 oil rigs, according to weekly data from Baker Hughes, a GE Company. This follows last week’s loss of a total of 19 oil and gas rigs. The number of current active rigs for the U.S. is now 904, which is 144 fewer than the count 1,048 a year ago. Several states lost rigs this week. They are: Texas (-5), Oklahoma (-2), Colorado (-1), Kansas (-1), Louisiana (-1), New Mexico (-1), Pennsylvania (-1), Utah (-1), and Wyoming (-1). North Dakota and Alaska added three rigs and one rig, respectively. Among the major basins, the Permian led for the second consecutive week with a loss of five rigs. However, at 429 active rigs, the Permian still accounts for almost half of the nation’s total. The following basins also shed rigs this week: DJ-Niobrara (-2); Ardmore Woodford (-1); Granite Wash (-1); Haynesville (-1); and Marcellus (-1). The Williston and Arkoma Woodford added three rigs and one rig, respectively.
Flaring, or Why So Much Gas Is Going Up in Flames: - If you take a drive along the well-worn highways of West Texas, orange flames will punctuate your journey. Those are gas flares, and they’re lighting up the skies above West Texas oilfields like never before as drillers produce crude faster than pipes can be laid to haul the attendant natural gas away. Oil drillers say flaring is the most environmentally friendly way to get rid of excess gas they can’t sell. Environmentalists say that in many cases what flaring is friendly to is oil drillers’ profits. They think regulators in states including Texas and North Dakota should be tougher on a practice thatharms air quality and contributes to climate change. When an oil well begins to spew, less-valuable natural gas comes up alongside crude. Pipelines can capture that gas, but when they’re not available, producers often get rid of the gas so they don’t have to stop pumping oil. They do that by either igniting the gas, in the case of flaring, or releasing it directly into air, known as venting. Flaring is preferred because methane, an especially potent greenhouse gas, is burned off, though carbon dioxide is released into the air. The World Bank estimated that globally in 2018,145 billion cubic meters of gas was flared, about as much as Central and South America use in a year. The amount is rising because of the oil boom in the U.S., which is fueled by the use of hydraulic fracturing — fracking — to unlock fuel from shale rock. Increased flaring in the U.S. is concentrated in the shale oil basins known as the Eagle Ford in Texas, the Permian in Texas and New Mexico, and the Bakken in North Dakota. Permian flaring rose about 85% last year, according to data from Oslo-based consultant Rystad Energy. The volume flared in Texas by the end of 2018 was greater than residential gas demand in the entire state. The Texas Railroad Commission, the main oil and gas regulator in the state, has never denied a request for a flaring permit. Gas flaring globally emits more than 350 million tons of carbon dioxide in a year, according to the World Bank. That’s the equivalent of the carbon emissions from 90 coal-fired power plants. In the U.S., flaring accounts for an estimated 9% of the greenhouse gas emissions of the oil and gas industry. In addition, the practice spews particulate matter, soot and toxins into the air that have been shown to be hazardous to humans. Isn’t the gas worth something? The short answer is no, not in oil-dominated basins where what matters is the ability to keep pumping black gold. In the Permian, local gas prices have gone negative multiple times this year, meaning drillers were actually paying customers to haul their gas.
Permian State Faces Methane Test - Gushing shale production has brought boot-clad workers from all over the world to this Permian Basin city less than an hour north of the Texas border. White F-150s filled the parking lot of the Pecos River Cafe on a recent morning after a light rain lifted the smell of concrete cooked by days of triple-digit heat. Like a broad swath of West Texas, this sage-covered corner of New Mexico sits atop America's fastest-growing oilfield. On the Texas side, oil and gas producers can drill and frack with relatively few bureaucratic hurdles. In New Mexico, 90% of Permian production takes place on lands owned by federal or state government, meaning companies need additional approvals from either the U.S. Bureau of Land Management or the state’s Land Office and Oil Conservation Division. That sets up a classic test in a state that turned politically blue this year. New Mexico has to decide how far it’s willing to go with a proposed rule to limit methane emissions, a key part of the new Democratic governor’s efforts to fight climate change. She must balance concern for the environment with the possibility that stricter regulation could tap the brakes on accelerating production that, thanks to royalties and taxes, funds nearly half the state budget. Already, some drillers expect slower growth in Permian output. Cerny knows where she stands. Drilling “is good for the economy, it’s good for Carlsbad.” She said she worries that tighter rules could send companies packing across the border to Texas. It’s a topic getting special attention on this hot August morning. “We don’t want all these workers to leave,” said Rosemary Madsen, 64, a bartender at the Stevens Inn. Governor Michelle Lujan Grisham, a former congresswoman who took office this year, is spearheading one of the country’s most aggressive plans to combat climate change: a move to 100% carbon-free power generation in 25 years. Now she's targeting methane, the main component of natural gas and a greenhouse gas that’s far more potent than carbon dioxide.
'Extraordinarily Harmful' Trump Rule Would Gut Restrictions on Methane Emissions - Amid dire scientific warnings that the international community must act immediately to slash greenhouse gas emissions, President Donald Trump's U.S. Environmental Protection Agency (EPA) is reportedly set to take another step in the opposite direction Thursday by unveiling a rule that would gut restrictions on the fossil fuel industry's methane pollution. According to The Wall Street Journal, which first reported the proposed rule change Thursday, the EPA's plan would scrap regulations requiring the oil and gas industry to "install technologies that monitor and limit leaks from new wells, tanks and pipeline networks and to more frequently inspect for leaks.""It would also forestall legal requirements that would have forced the EPA to set rules on emissions from thousands of pre-existing wells and industry sites," the Journal reported.The Trump administration expects the rule, which must go through a 60-day public comment period, to take effect early next year. The rollback was immediately praised by the American Petroleum Institute, a major trade group representing the fossil fuel industry. Because of methane's potency — some estimates suggest the greenhouse gas has more than 80 times the warming power of carbon dioxide — environmentalists and scientists have warned the Trump administration's efforts to gut methane regulations could have disastrous consequences. "This is extraordinarily harmful," Rachel Kyte, United Nations special representative on sustainable energy,said of the Trump administration's proposed rule change. "Just at a time when the federal government's job should be to help localities and states move faster toward cleaner energy and a cleaner economy, just at that moment when speed and scale is what's at stake, the government is walking off the field." Trump administration officials, and the president himself, have gleefully touted the White House's success in ramping up American production of methane-emitting natural gas, which Assistant Secretary for Fossil Energy Steven Winberg infamously described as "molecules of U.S. freedom."During the G20 summit in Japan in June, Trump said he is "not willing" to take action to curb greenhouse gas emissions because such a move would harm corporate profits.A report published earlier this year by Oil Change International in collaboration with over a dozen other environmental groups warned that U.S. fossil fuel production has the potential to single-handedly imperil global efforts to combat the climate crisis.
Trump Admin Methane Proposal Spurs Mixed Industry Response -- The Trump administration is seeking to abandon regulations designed to stop methane leaks from oil and gas wells, a move opposed not just by environmentalists but even some energy companies that worry it will undermine the appeal of natural gas as climate-friendly fossil fuel. Although methane is the chief component of natural gas and therefore a valuable energy source in its own right, it is also a powerful heat-trapping pollutant. And the methane that escapes from pipelines, compressor stations and from oil wells has been blamed for as much as a quarter of the planet’s warming. The Trump EPA was already moving on a separate track to relax requirements put in place by the Obama administration that forced energy companies to use specialized equipment at wells and search out methane leaks at the sites. The new measure would go much further, by scrapping those mandates altogether. EPA Administrator Andrew Wheeler said the proposal “removes unnecessary and duplicative regulatory burdens from the oil and gas industry.” “The Trump administration recognizes that methane is valuable, and the industry has an incentive to minimize leaks and maximize its use,” Wheeler said in an emailed news release. “Since 1990, natural gas production in the United States has almost doubled while methane emissions across the natural gas industry have fallen by nearly 15%. Our regulations should not stifle this innovation and progress.” Independent oil producers applauded the EPA’s move, which would short-circuit a legal requirement that similar methane curbs be imposed on a million existing wells, disproportionately affecting smaller companies. Under the EPA’s change, “hundreds of thousands of existing, small business-owned low-production wells wouldn’t be subject to inappropriate regulations” and be compelled “to use technology requirements” geared toward new facilities, said Lee Fuller, executive vice president of the Independent Petroleum Association of America.However, the EPA proposal comes against the wishes of several global energy companies, such as BP Plc and Royal Dutch Shell Plc, which have warned the administration’s retreat on methane threatens to undermine the sales pitch for natural gas as a source of electricity that burns cleaner than coal. Executives from both companies criticized the proposal Thursday.
Oklahoma Hub Drain Propels Crude in New York-- Crude in New York clung to gains as investors focused on depleting oil stockpile levels at Cushing, Oklahoma, the largest commercial oil depot in the U.S. Futures in New York climbed as much as 1.6% on Thursday, while Brent’s gain remained limited. Data from the Energy Information Administration on Wednesday showed stockpiles at the Cushing storage hub at the lowest level since December 2018 as the startup of new pipelines from the Permian help to relieve inventory pressure. These Permian conduits enable oil supplies to bypass Cushing and head straight for markets overseas, which is allowing WTI to rally and is holding back Brent, according to Michael Loewen, director of commodity strategy at Scotiabank. Crude futures in New York are poised for the biggest weekly gain since mid-July as U.S. government data this week showed declines in crude and fuel stockpiles. Investor sentiment has also improved as statements from China’s Commerce Ministry signaled the country wouldn’t immediately retaliate against the latest U.S. tariff increase. President Donald Trump said Thursday that the U.S. and China are scheduled to have a conversation about trade today. West Texas Intermediate for October delivery advanced 83 cents to $56.61 a barrel at 11:15 a.m. on the New York Mercantile Exchange. Futures are on track for a 4.5% rise this week. Brent for October settlement added 33 cents to $60.82 a barrel on the ICE Futures Europe Exchange. The global benchmark crude traded at a $4.20 premium to WTI. Since the startup of Plains All American Pipeline LP’s Cactus II crude pipeline and EPIC Pipeline Co.’s line this quarter, Cushing stockpiles have drained around 12 million barrels. Meanwhile, domestic net crude imports for last week dropped to nearly half of what they were a year ago.
US oil and gas rig count drops by 11 to 987 — The US oil and gas rig count continued to drop Thursday and was down 11 to 987 on the week, as industry continues to wait for more data points to gauge its own uncertain trajectory amid oil prices that have stalled. Rig losses this week came almost entirely from the oil side which dropped 10 rigs week on week ended Wednesday, leaving 783. Rigs chasing natural gas remained steady at 199. There was also a net loss of one rig that was not classified as oil or gas. Most major basins fell by at least one rig or stood still, according to data supplied by Enverus' RigData segment. The biggest basin movements came in the SCOOP-STACK play in Oklahoma, down 4 to 66 and in South Texas' Eagle Ford Shale where the rig count fell 3 to 73. Colorado's Denver-Julesburg Basin lost 2 rigs, leaving 27. Losing one rig apiece were the Permian Basin of West Texas and southeast New Mexico, falling to 433, and the Wet Marcellus mostly sited in Pennsylvania, down to 19. Holding firm with last week were the Dry Marcellus, also mostly in Pennsylvania, at 29 rigs, and the Haynesville Shale in Northwest Louisiana and East Texas at 52. Two basins gained a rig - the Williston Basin in North Dakota and Montana, up to 58, and the Utica Shale mostly in Ohio, up to 16. Many observers predict the rig count will continue to drop as oil prices remain in the mid-$50s/b for WTI and around $60/b for Brent. E&P operators are meeting their production goals as they adhere to capital discipline pledges and devise better well completion techniques, and now seek ways to further pare expenses. Oil prices dropped a bit on average, according to Platts average assessments. WTI was down 75 cents this week to $54.75/b, while WTI Midland was down 84 cents to $54.67/b. The Bakken Composite price was down 53 cents to $48.27/b. "A drop in the oil-directed horizontal rig count last week ... should be closely watched as investors remain keenly focused on the needed rationing of upstream capital and the potential support this could lend to 2020 balances," Evercore ISI Group Stephen Richardson said in a late Wednesday note. Richardson added that the Baker Hughes rig count was down by 18 week on week, the second-largest weekly decline since early 2016. Baker Hughes uses Enverus RigData in its own rig count calculations.
Nebraska Supreme Court upholds route of controversial Keystone XL pipeline — The long-delayed Keystone XL pipeline cleared a legal hurdle in Nebraska on Friday, but other hurdles remain that could further delay or derail the $8 billion project. The Nebraska Supreme Court on Friday affirmed the route across Nebraska of the 36-inch crude oil pipeline, rejecting a lawsuit by pipeline opponents that maintained that the Nebraska Public Service Commission lacked the authority to approve an alternative route across the state. But three federal lawsuits in Montana still stand in the way of the start of construction, and the leader of an anti-pipeline group vowed to continue its 11-year fight. “We still have some tools (available),” said Jane Kleeb of Bold Nebraska. “We plan on making sure that this pipeline never touches our soil.” An oil industry observer, Mark LaCour, editor of Houston-based Oil and Gas Global Network, said Friday that he expects the Keystone XL to eventually be built because of the demand for the heavy crude oil that is pumped out of the tar sands region of western Canada. But exactly when that will happen is up in the air, he said. “There’s still a bunch of hurdles to jump through,” LaCour said, pointing to the federal lawsuits. He added that since the XL was first proposed in 2008, other pipelines have been built or upgraded to handle shipping demands from Canada. As a result, LaCour said he wouldn’t be surprised if the XL pipeline will be smaller when it’s built. Whether the company can begin construction next spring hinges on the outcome of the federal court cases. TC Energy had hoped to begin construction of the Keystone XL segment from Canada to a terminal at Steele City, Nebraska, this spring, but was delayed by the pending litigation. The Nebraska Supreme Court, in a 59-page opinion that was nine months in the making, ruled that the Public Service Commission’s selection of the “mainline alternative route” was in the public interest and that the commission had the authority to choose such an alternative. The alternative route shifts the path eastward and aligns the XL with the existing Keystone pipeline for about 90 more miles. The commission ruled that the alternative route produced “many benefits,” including less impact on endangered whooping cranes, fewer river crossings and faster response times for potential leaks.
Colorado’s attorney general vows to sue Trump administration over methane rule rollbacks – Colorado Attorney General Phil Weiser on Thursday vowed to sue the Trump administration over its decision to roll back methane rules aimed at curbing the release of potent greenhouse gases from oil and gas sites. The Environmental Protection Agency moved on Thursday to rescind the regulations, put in place under President Barack Obama and modeled after rules enacted by Colorado on the state level in 2014. Weiser, a Democrat, said in a written statement that “the EPA’s proposal to reverse these standards to curb methane emissions is misguided and ignores the requests from the oil and gas industry to keep them in place.” He argues that even though Colorado’s methane rules will remain in place, the effect of methane gas on the state from increased emissions elsewhere makes it imperative to challenge the rollback in court. “Methane emissions don’t stop at state lines,” Wesier’s statement said. “As such, Colorado has a strong interest in regulating the release of this harmful greenhouse gas on a national level.”
PDC to buy Wattenberg peer SRC Energy for $1.7 billion, bulk up in Colorado shale — PDC Energy, a growing operator in two key US unconventional basins, moved to beef up its Wattenberg Field position in Colorado on Monday by agreeing to buy SRC Energy, a pure-play producer in the basin, for $1.7 billion in an all-stock deal. The transaction, which includes $685 million of SRC net debt, would make PDC the second-largest Denver-Julesburg Basin producer, with 166,000 b/d of oil equivalent, behind the former Anadarko Petroleum, acquired earlier this month by Occidental Petroleum, which has 301,000 boe/d."SRC's complementary, high-quality assets in the core Wattenberg, coupled with our existing inventory and track record of operational excellence will create a best-in-class operator with the size, scale and financial positioning to thrive in today's market," PDC CEO Bart Brookman said."We believe that this transaction will establish the combined company as a leader in the Colorado energy industry," said SRC CEO Lynn Peterson. "The transaction also provides SRC shareholders with the opportunity to participate in the significant upside potential created by a larger-scale DJ Basin producer with complementary assets in the prolific Delaware Basin."The acquisition, which is expected to close in Q4, comes with about 61,000 boe/d of SRC production across that company's 86,000 net acres in Weld County and about 306 million boe of oil and gas reserves.
North Dakota pledges improvement to spill reporting site (AP) — North Dakota’s Health Department for the second time this decade is pledging to provide easily accessible information on oilfield and agriculture-related spills, a move that comes after a liquid natural gas pipeline leak that was much bigger than publicly reported and could take another decade to clean up.According to records obtained by The Associated Press, the department logged more than 8,000 “reported releases” since 2014 but did not make public updates on a spill’s severity or its cleanup status.“We’re looking at how best to get that information to the public,” North Dakota Environmental Quality Chief Dave Glatt said Tuesday. “We are looking at revamping our webpage to let people search so they don’t have to ask us about it.” The agency came under criticism last week for disregarding its own policy in updating the volume of a pipeline spill at a natural gas processing plant in western North Dakota.In July 2015, Oneok Partners reported a 10-gallon (about 38 liters) spill of natural gas condensate from a pipeline at a plant near Watford City. The estimated size of the spill was never updated, even as Oneok updated the state on cleanup. In October, Oneok told the state it had recovered 240,000 gallons (about 908,000 liters) of the liquid gas.Glatt said a report should have been made public to reflect the severity of the spill.The larger-than-publicized spill was first reported by DeSmog, a blog dedicated to fighting climate change misinformation. It cited an unnamed person who provided a document that said the spill could be as large as 11 million gallons.
As abandoned oil wells climb, regulators consider ways to stop problem from worsening - The number of abandoned oil and gas wells in North Dakota has grown 10% over the past two years to more than 700 amid low oil prices, and state regulators are considering new rules to try to keep the problem from getting worse. “It’s starting to become out of control, and we want to rein this in,” Oil and Gas Division Assistant Director Bruce Hicks said Wednesday at a meeting of the state’s Industrial Commission. Officials say they don’t want to see North Dakota face the same challenges as other states such as Pennsylvania. A 160-year legacy of oil and gas drilling there has led to hundreds of thousands of abandoned wells and complaints from regulators that the cost of plugging and reclaiming the sites falls to the state. The Industrial Commission on Wednesday advanced a series of draft rules surrounding abandoned wells for public comment and scheduled hearings for October. The changes come as part of a package of updates to state rules on numerous oil and gas issues. Among the changes under consideration, the Oil and Gas Division is proposing that abandoned wells sold by one company to another must be fully bonded by the purchaser. Companies sometimes buy abandoned wells and could decide to restart them one day under the right conditions, like higher oil prices. A bond is an assurance of money to pay for plugging and reclamation should the company abandon a well site and ignore its responsibility to clean it up. Hicks said some companies with “junk” wells in North Dakota have tried to unload them by selling them to another operator. “They’re wells that are not economic, and another company picks it up, and it’s a tremendous liability,” he said.
Standing Rock requests to intervene in proposed DAPL expansion decision - The Standing Rock Sioux Tribe on Wednesday requested to intervene as the North Dakota Public Service Commission considers approvals for a new pump station to help send more oil through the Dakota Access Pipeline. As an intervenor, the tribe would be able to call witnesses and cross-examine pipeline developer Energy Transfer at a public hearing Nov. 13 in Linton. The Standing Rock Reservation is located less than a half-mile from the pipeline's Missouri River crossing. "DAPL’s proposed pipeline expansion magnifies the potential disaster in the event of an oil spill," Standing Rock Chairman Mike Faith said. "The Standing Rock Sioux Tribe looks forward to expressing its concerns during the upcoming PSC hearing." Energy Transfer is proposing to nearly double the capacity of its pipeline to carry 1.1 million barrels of oil per day by adding pump stations in North Dakota and South Dakota, as well as in Illinois. The company wants to build one of those stations on 21 acres 5 miles west of Linton. The facility would extend beyond the pipeline's existing footprint permitted by the PSC in 2016.
Conclusions of oil-by-rail study encourages ND officials seeking to overturn Washington law - A federal study examining the volatility of Bakken oil is giving North Dakota officials encouragement in their petition to overturn a Washington state law that targets oil train shipments. A study completed by Sandia National Laboratories concluded this month that “vapor pressure is not a statistically significant factor” in determining the fiery characteristics of oil train crashes. “The net result is Bakken oil is no different than any other kind of oil with respect to volatility,” Attorney General Wayne Stenehjem said. Over the past few years as trains carrying Bakken crude have derailed and erupted in fireballs, oil from North Dakota has come under scrutiny for having a high vapor pressure. Washington state passed a law earlier this year placing a cap on the vapor pressure allowed in oil unloaded from trains. The restriction would limit the ability of refiners there to accept oil from North Dakota. Stenehjem and Montana’s attorney general last month submitted a petition to the federal Pipeline and Hazardous Materials Safety Administration requesting the agency overturn Washington’s law. Speaking at a meeting of the state’s Industrial Commission on Wednesday, Stenehjem said the study “vastly undermines the reasoning behind the state of Washington enacting this statute because they assume without evidence that Bakken oil is more volatile.” Washington Gov. Jay Inslee’s office said in a statement that the state will defend its law. Officials plan to submit comments to the Pipeline and Hazardous Materials Safety Administration. “Every governor has a responsibility and a right to protect the health and safety of their communities and environment,” spokeswoman Tara Lee said. “As Washington has experienced an enormous spike in the numbers of oil trains traveling through our state, this legislation is a reasonable approach to anticipated increased volumes of volatile crude oil.”
California attorney general slams EPA over emissions rollback - The Trump administration plans to roll back regulations on leaks of natural gas from wells, pipelines and other equipment, a move that could significantly increase emissions that cause global warming.The plan announced Thursday by the Environmental Protection Agency would eliminate rules on methane emissions that even some major oil and gas companies have told the administration should be kept in place. Methane, the main component of natural gas, is an extremely powerful greenhouse gas, as much as 80 times more potent than carbon dioxide in its impact on the climate, according to some estimates, although it breaks down relatively quickly in the atmosphere. Leaks from equipment and pipelines release it into the atmosphere. Environmental groups and other administration critics sharply denounced the move, which marked the administration’s latest effort to dismantle Obama-era environmental regulations that were put in place to confront climate change.“The Trump EPA is eager to give the oil and gas industry a free pass to keep leaking enormous amounts of climate pollution into the air. We simply cannot protect our children and grandchildren from climate catastrophe if EPA lets this industry off scot-free. If EPA moves forward with this reckless and sinister proposal, we will see them in court,” David Doniger of the Natural Resources Defense Council said in a statement Thursday.California Atty. Gen. Xavier Becerra called the EPA proposal a “monumentally stupid decision” and said that the state, which has already sued the Trump administration at least 49 times over environmental policy issues, was “ready to fight this senseless decision.” The oil and gas industry is the primary source of methane emissions in the U.S., accounting for nearly one-third of all emissions in 2016, according to the EPA.
Natural gas soon to be outlawed in almost all new Menlo Park buildings - At the front line of a growing movement to fight climate change, Menlo Park will be ushering in one of the most restrictive natural gas bans in California. By Jan. 1, 2020, heating systems in all new homes and buildings in the city must run on electricity, and all new commercial, office and industrial buildings, as well as high-rise residences, must rely entirely on electricity, the Menlo Park City Council decided Tuesday night. Although new one- and two-story homes will be allowed to have natural gas stoves, they must be built “electric ready” with the proper wiring to enable all-electric operation in the future. The council’s decision, to be adopted through an official vote at its next meeting on Sept. 10, comes about a month after Berkeley became the first city in America to ban natural gas from new buildings entirely. “When we put this into our council priorities, I actually expected this to be a tougher meeting,” Mayor Ray Mueller said during Tuesday night’s meeting. “…It’s really great to see everyone coming together and trying to make this work.” Menlo Park is among more than 50 California communities considering radical measures — known formally as “reach codes” — to substantially reduce greenhouse gas emissions by exceeding the state’s mandated steps toward that goal. About 10 residents voiced their opinions on the proposed ban at Tuesday night’s council meeting. While all supported phasing out natural gas, most urged the council to go further than the ordinance staff had proposed. Only one person encouraged the council to adopt a less restrictive ordinance.
State Launches Probe Into Oil Field Spills – Including One That's Been Flowing Since 2003 -- (see video) State oil and gas regulators say they're launching an investigation of operations in a Kern County oil field after a series of large, uncontrolled crude petroleum releases near Chevron wells — including one that has continued on and off for more than 16 years and may have spewed out more than 50 million gallons of crude oil. The state Division of Oil, Gas and Geothermal Resources, known as DOGGR, served Chevron with a notice of violation on Friday, ordering the company to stop major, uncontrolled surface flows at a site called Gauge Setting 5, or GS-5, in the Cymric oil field. Oil has been flowing from the location since March 2003. The order comes as DOGGR says it's stepping up enforcement of a regulation that took effect in April banning the uncontrolled surface flows, which the agency and petroleum operators call "surface expressions." One such release occurred over the last three months near a damaged and abandoned Chevron well in an area of the Cymric oil field designated 1Y. The flows in that incident, which began in May and stopped earlier this month, dumped about 400,000 gallons of crude into a dry creek bed. DOGGR has issued two notices of violation so far in connection with the 1Y episode, the precise origin of which is still under investigation. 'Putting an End' to Surface Expressions In an email Sunday, agency spokeswoman Theresa Schilling said that in light of the April rules barring surface expressions, "DOGGR is looking to put an end to their occurrence." Schilling also acknowledged that the driving force behind the surface expressions is an oil extraction method that Chevron and other operators in the Cymric field rely on. The roughly 11,000-acre Cymric field, in the Temblor Range foothills about 35 miles west of Bakersfield, is the scene of extensive steam injection operations— a technique in which high-pressure steam is forced deep into the ground to free oil trapped in underground formations. Normally, that freed crude petroleum is pumped to the surface through well bores and shipped by pipelines or tankers for processing. But that's not what's been happening around the leaking Chevron wells, where crude oil, steam and water have apparently moved laterally underground until they find a vent or create a sinkhole that allows the material to come to the surface. "The steam injection wells are the source of heat and pressure that drive surface expressions," Schilling said Sunday. But she added that further investigation is needed to understand exactly how that underground heat and pressure is resulting in the surface flows.
California orders halt to oil spill flowing since 2003 (AP) — California state regulators say they're making new attempts to stop persistent oil spills in the oil-rich Central Valley, including one that has been flowing intermittently for 16 years and may have spilled more than 50 million gallons (189 million liters). The problems stem from the production method used in the oil field about 35 miles (55 kilometers) west of Bakersfield, where steam is injected into the ground to soften the thick crude oil. It is a different process from fracking, which breaks up underground layers of rock. It's blamed for a surface flow of crude oil since May from near a Chevron well into a dry creek bed. State regulators have now served Chevron with a notice of violation ordering it to halt surface flows at a second site, this one flowing off and on since 2003, KQED News reported Monday. The two sites are about 1,500 feet (460 meters) apart. Officials at the state Division of Oil, Gas and Geothermal Resources, known as DOGGR, said it's part of a broader effort to enforce a regulation that took effect in April and bans such surface flows. "DOGGR is looking to put an end to their occurrence," division spokeswoman Theresa Schilling told KQED in an email. The division "is exploring swift next steps to evaluate and investigate the oil field as a whole," including bringing in independent experts. Gov. Gavin Newsom fired the previous head of DOGGR in July over a recent increase in hydraulic fracturing permits and amid a conflict-of-interest investigation of other division employees. Chevron spokeswoman Veronica Flores-Paniagua said in a statement that the company's goal is "the prevention of all seeps" including the one flowing for more than a decade. But she said there has been no harm from that surface flow to people, groundwater, surface water, wildlife or agriculture. The flow has been going on so long that Chevron built a collection facility in 2012. Spilled oil is pumped into a pipeline or sucked up by vacuum trucks. Chevron said about 84 million gallons (318 million liters) have flowed since 2003, of which about 60% to 80% is crude. The rest is water from steam, but the company's lower estimate means about 51 million gallons of oil has spilled. State regulators said in an email Monday to The Associated Press that the flow "is fully confined to a concrete containment structure and the area is actively vacuumed out by Chevron. This expression is several miles from any community and does not pose a threat to drinking water. Additionally, appropriate actions have been taken to protect the health and safety of workers and the community, as well as the wildlife and the environment." Regulators ordered Chevron to stop injecting steam into the ground near the spills, among other steps.
State Says It Has No Idea How Long It Will Take to Clean Up Chevron's Kern County Oil Spill -State regulators say they don't know how long it will take for crews to clean up contaminated soil from a Kern County creek bed in the wake of the biggest California oil spill in decades.While the massive release of crude petroleum from a Chevron oil well near the town of McKittrick seems to have ended, the timeline for hauling away soil contaminated by the spill is unclear. "The full extent of the required site remediation is not known at this time and will be fully scoped with appropriate regulatory agencies," Eric Laughlin, a spokesman for the state Department of Fish and Wildlife, said in an email Thursday.State officials say the flow of crude oil and water stopped on Aug. 2. Chevron says 1.34 million gallons of oil and water have been recovered in the area since the spill began in early May. About 30 percent of that total, about 400,000 gallons, was petroleum.For weeks, contractors have been hauling away contaminated soil from the site and taking it to San Joaquin Valley dumps -- including two facilities that handle hazardous waste. Recently posted drone video (below) suggests the job is far from complete.The footage gives a detailed view of the roughly 1,000 feet of stream bed that was fouled after oil began flowing to the surface near a damaged Chevron well in the Cymric oil field, 35 miles west of Bakersfield. The most recent footage, from earlier this week, shows heavy equipment continuing to work on an extensive section of the oil-soaked channel.A Kern County environmental activist called the video "eye-opening". "This just shows a different perspective of ... what we're dealing with here locally," Gustavo Aguirre Jr., a Bakersfield project coordinator at Central California Environmental Justice Network, said after viewing the footage. "You see the flow of this toxic crude and wastewater. God knows what it has in it."
Oregon regulators flag violations at Zenith oil terminal - The Oregon Department of Environmental Quality has sent a warning letter flagging violations at the Zenith Energy oil terminal in Portland.The company moves crude oil from rail cars to storage tanks and outbound ships in Portland’s northwest industrial district. The facility has drawn fierce opposition from environmental groups and the company has been criticized for hiding its plans to offload and ship diluted bitumen, a form of crude oil that comes from tar sands in Canada and is more complicated and expensive to clean up after a spill.According to a warning letter sent earlier this month, oil spill prevention officials with DEQ recently found several of the company’s storage tanks haven’t been inspected in more than five years, putting the facility behind schedule under the industry standard Zenith agreed to follow to comply with state law. “Failure to conduct regular testing of tanks and associated piping can increase the probability of spills that may have been preventable,” the letter states. “DEQ is concerned that additional tanks may be out of compliance with their inspection schedule including several tanks which are long overdue for inspection but not listed as out of service.” Officials also found the person the company appointed to be in charge of its oil spill response plan lives about four hours away.“A lot happens in the first couple hours of a spill,” said Scott Smith, the DEQ emergency response planner who wrote the warning letter. “We need to have someone at the facility who’s going to be local and say this is exactly what’s going on. We need those eyes in the field.”
Jordan Cove opponents worry about federal surveillance - The Douglas County Sheriff's Office isn't involved in monitoring anti-Jordan Cove Energy Project activists' social media accounts, according to Brad O'Dell, spokesman for the Sheriff's Office. The project, which is owned by Canadian energy company Pembina, includes the construction of a 229-mile natural gas pipeline through Southern Oregon to a proposed export terminal in Coos Bay, where liquified natural gas would be shipped markets primarily in Asia. The pipeline would cross 64 miles of public, private and tribal land in Douglas County. Landowners and environmental groups have used social media to organize against the project since it was first proposed more than a decade ago. On Aug. 8, London-based newspaper The Guardian published a story describing an effort by federal, state and local law enforcement agencies to monitor public social media posts by groups, individuals and Native American tribes who oppose the pipeline. Civil liberties groups and landowner advocates say the monitoring might violate surveillance laws. Attorneys say they're seeking more information from government agencies to determine whether to take legal action. According to Oregon law, no law enforcement agency may collect or maintain information about people or groups unless such information directly relates to an investigation of criminal activities, and there are reasonable grounds to suspect the subject of the information may be involved in criminal conduct. Oregon State Police take a banner from protesters with the group Southern Oregon Rising Tide, which opposes the proposed liquified natural gas pipeline and Jordan Cove export terminal in Southern Oregon. They briefly interrupted Gov. Kate Brown near the end of her inaugural speech at the Oregon State Capital on Jan. 14, 2019, shouting “stop the pipeline.” Oregon State Police take a banner from protesters with the group Southern Oregon Rising Tide, which opposes the proposed liquified natural gas pipeline and Jordan Cove export terminal in Southern Oregon. They briefly interrupted Gov. Kate Brown near the end of her inaugural speech at the Oregon State Capital on Jan. 14, 2019, shouting “stop the pipeline.” Activists say they’re unnerved by the monitoring. “Landowners are incensed, especially if we find out that we’re on some kind of list,” said Stacey McLaughlin, a Douglas County landowner who has been an outspoken critic of the project for years. “I don’t think we’re going to let it stand. There’s been enough oppression of the people who are opposing this project.”
SHALE STOCK CARNAGE: August Was A Bad Month For Frackers --August turned out to be a terrible month for shale stocks. Several of the shale companies suffered huge single-day price declines at the beginning of the month due to poor earnings. Unfortunately, for investors, I believe this is just the beginning for more bad news and lower stock prices in the shale industry over the next few years.While many of the shale stocks took a shellacking in August, the major oil companies held up relatively well, even though oil price declined about $5. For example, ExxonMobil’s stock price was only down 9%, based on an 8% drop in the oil price. Below, we can see that Whiting Petroleum was hit hard the most, by losing 63% of its value since the beginning of the month, followed by Oasis, (-44%), Concho (-30%), Laredo (-27%), and Continental Resources (-26%): So, we can clearly see that Continental Resources, the best of the worst in the group, saw it’s stock price fell nearly three times more in percentage terms versus ExxonMobil. Thus, the shale stocks continue to underperform against the major oil companies.And, if we look at a longer-term chart, the situation for many of these stocks looks like it has gone from BAD to HORRIBLE:This chart shows the change in the stock performance of these companies since their peaks in 2014. ExxonMobil is on the top showing that it is down 13% since 2014. However, the biggest LOSERS are Whiting (-97%), Oasis (-93%), and Laredo (-90%).Whiting Petroleum’ stock before the company issued a 1-4 Reverse Split, was trading at a high of $90 in 2014. Today the stock closed at $6.78. But, if we remove the 1-4 reverse split, the stock is truly only worth $1.69, based on that $90 price in 2014. If we look at the chart today, the reverse split pushed Whiting’s stock price up to $360 in 2014…LOL.
Recession Alarm- Crude Processing At US Refiners Falls The Most Since Financial Crisis - There are more signs the US economy is rapidly deteriorating. This time it's coming from the energy sector.A new report from Reuters' Senior Market Analyst John Kemp reveals how US refiners have cut the volume of crude processed this year to levels not seen in a decade as fuel stockpiles remain at elevated levels, suggesting a manufacturing and freight re cession could be materializing.US refineries slashed an average of 247,000 barrels per day since January 2019 compared with the same period in 2018, according to data from the US Energy Information Administration (EIA).In the latest EIA report titled "Weekly petroleum status report," Kemp said YTD processing rates have fallen for the first time since 2011, and by the most since the recession of 2008/09. Refinery crude consumption has dropped by 56 million barrels so far compared with the same period in 2018.Kemp noted that refiners cut processing volumes during the regular maintenance season in March and April and have never recovered since.And here's evidence that the consumer could be weakening even though fuel prices and interest rates remain low: "Processing has remained at or below prior-year rates throughout the summer driving season, normally the highest demand of the year," Kemp said.This could suggest that manufacturing and freight slowdowns are starting to have spillover effects on consumer spending habits.
Can Trump Re-Industrialize America Without Blowing-Up The World? Kunstler - - What’s at stake in all these international confabs like the G-7 are the tenuous supply lines that keep the global game going. The critical ones deliver oil around the world. China imports about 10 million barrels a day to keep its operations going. It produces less than 4 million barrels a day. Only about 15 percent of its imports come from next door in Russia. The rest comes from the Middle East, Africa, and South America. Think: long lines of tanker ships traveling vast distances across the seas, navigating through narrow straits. The Chinese formula is simple: oil in, exports out. It has worked nicely for them in recent decades. Things go on until they don’t. That game is lubricated by a fabulous stream of debt generated by Chinese banks that ultimately answer to the Communist Party. The party is the Chinese buffer between banking and reality. If the party doesn’t like the distress signals that the banks give off, it just pretends the signals are not coming through, while it does the hokey-pokey with its digital accounting, and things appear sound a while longer. The US produces just over 12 million barrels of oil a day. About 6.5 million of our production is shale oil. We use nearly 20 million a day. (We’re not “energy independent.”) The shale oil industry is wobbling under the onerous debt load that it has racked up since 2005. About 90 percent of the companies involved in shale oil lose money. The capital costs for drilling, hauling a gazillion truckloads of water and fracking sand to the rig pads, and sucking the oil out, exceed the profit from doing all that. It’s simply all we can do to keep the game going in our corner of the planet, but it’s not a good business model. After you’ve proved conclusively that you can’t make a buck at this using borrowed money, the lenders will quit lending you more money. That’s about where we are now. Europe is near the end of its North Sea oil bonanza and there’s nothing in the on-deck circle for them. Germany tried to prove that they could run the country on “renewables” and that experiment has flopped. They have no idea what they’re going to do to keep the game going in their patch of nations. They must be freaking out in their charming capital cities. The next economic bust is going to amount to the crack-up of the oil age, and the “global economy” that emerged in its late stage. It was all about moving fantastic quantities of things around the planet. The movements were exquisitely tuned, along with the money flows that circulated freely, like blood carrying oxygen to each organ. All of that is coming to an end. The nations of the world must be feeling desperate, despite the appearance of good manners at meetings like the G-7. What’s at stake for everybody in the dark background is the ability to maintain high standards of living only recently attained. And the fear behind that is not knowing just how far backward these high standards of living may have to slide.
Feds take step to advance big ConocoPhillips prospect - Anchorage Daily News - The Trump administration has chosen a preferred development plan for a big ConocoPhillips project that could significantly boost Alaska oil production, according to an environmental report unveiled Friday for public comment.The Willow project in the northeastern National Petroleum Reserve-Alaska could produce up to 130,000 barrels of oil daily, if developed, according to a draft environmental report released by the Bureau of Land Management. Alaska oil production is averaging about 500,000 barrels of oil daily this year.About 375 workers would be employed annually for a nine-year construction period starting in 2020, on average. The project could last 30 years, producing about 590 million barrels of oil, the report says.The company’s plan, an option preferred by the agency, calls for five drill sites linked by seven bridges, an airstrip, 38 miles of gravel roads, and a central processing facility where crude oil would be prepared for shipment. It would include 267 miles of individual pipeline, and an application with the state for construction of a temporary gravel sea island for barges delivering building materials.Oil production would begin in late 2024. The state would collect $1.7 billion in taxes, plus $2.5 billion in royalties related to the NPR-A impact mitigation fund, where the primary objective is providing grants tovillages in the region and the North Slope Borough. The federal government would collect $4.4 billion in taxes and royalties, and the borough $1.9 billion in property taxes. Conservation groups swiftly condemned the Willow project on Friday. Audubon Alaska said development would affect migrating caribou, fish, nesting yellow-billed loons and Alaska Native subsistence hunters.
Alaska Well Sets Onshore Record - An undisclosed supermajor reportedly has set an onshore North American drilling record for longest extended-reach well, Houston-based technology startup Corva reported Friday. The undisclosed international oil and gas producer drilled a 32,468-foot (9,896-meter) well in July in the National Petroleum Reserve of Alaska’s North Slope, according to Corva, whose real-time drilling and completion analytics technology was used during the operation. Extreme torque and pressure conditions create complex challenges to drilling long lateral wellbores. Corva noted the North Slope operator used real-time analytics to monitor and respond to hazardous conditions while drilling and tripping pipe – the critical process of removing and replacing the entire drill string. Although longer extended-reach horizontal wells maximize wellbore distance through a producing pay zone and enhance production and economic return, long horizontal well sections create extreme torque and drag conditions, Corva explained in a written statement emailed to Rigzone. Such conditions strain a drilling rig’s operational limits and can lead to a drill string break or other catastrophic events, the firm stated. According to Corva, the Alaska operator used a mobile torque and drag (T&D) application to avoid the time-consuming process of manually plotting T&D conditions by automating data collection and analysis while drilling. Monitoring hole conditions in real-time enabled the drilling team to rapidly adjust weight on bit and torque transfer as needed to prevent stuck pipe and twist-offs, the tech firm continued. Also, the app reportedly provided higher torque and drag data frequency while tripping-in casing, allowing the crew to quickly identify trends and spot deteriorating hole conditions.
BP Leaving Alaska - BP plc reported Tuesday that it has agreed to sell all of its operations and interests in Alaska to Hilcorp for $5.6 billion, ending a six-decade run in the state. With the deal, Anchorage-based Hilcorp Alaska – already the largest private operator in the state – will gain ownership of BP’s interests in high-profile upstream and midstream assets such as the giant Prudhoe Bay field and the Trans Alaska Pipeline (TAPS). “Alaska has been instrumental in BP’s growth and success for well over half a century and our work there has helped shape the careers of many throughout the company,” BP CEO Bob Dudley said in a written statement. “We are extraordinarily proud of the world-class business we have built, working alongside our partners and the State of Alaska, and the significant contributions it has made to Alaska’s economy and America’s energy security.” Nevertheless, Dudley added that other opportunities in the U.S. and internationally “are more closely aligned with our long-term strategy and more competitive for our investment.” Hilcorp’s $5.6 billion acquisition will comprise $4 billion payable in the near term and $1.6 billion through a subsequent earnout, BP stated. In addition, BP noted the transaction – part of its plan to divest $10 billion in assets through 2020 – should close next year and is subject to state and federal regulatory approval. BP also stated that it is “committed to providing clarity … as soon as possible” about the future of the approximately 1,600 employees associated with BP Alaska. For 2019, BP expects its net Alaska oil production to approach 74,000 barrels per day. In addition to its 26-percent interest in the Prudhoe Bay oil field that it operates, BP owns non-operating interests in the producing Milne Point (50 percent) and Point Thomson (32 percent) fields, the shallow-water Liberty Energy Project off the North Slope (50 percent) and exploration lease interests in the Arctic National Wildlife Refuge (ANWR), the company noted. Besides its shares in TAPS, BP operates the Alyeska Pipeline Service Co. and holds stakes in the Milne Point and Point Thomson pipelines. Hilcorp, which operates more than 75,000 barrels of oil equivalent per day of gross production in Alaska, purchased interests from BP in four operated North Slope oilfields five years ago, BP added. The fields include Endicott, North Star, Milne Point and Liberty.
BP's Selling Off Its Alaska Oil Assets. The Buyer Has a History of Safety Violations. - One of Alaska's biggest oil producers—BP—announced Tuesday that it is selling all of its Alaska operations to Hilcorp, a privately-owned company with a troubled safety and environmental track-record.The $5.6 billion sale includes BP's stakes in the Trans Alaska Pipeline and the Prudhoe Bay oil field, one of the nation's largest and once its most productive oil field, which BP currently operates.Hilcorp is a relatively new player in Alaska's oil and gas industry. The Houston-based company's business strategy has been to purchase older oil and gas fields and try to make them profitable—a track-record experts say it hopes to repeat with its new acquisitions. Since entering Alaska in 2012, Hilcorp has rapidly expanded across the state, from the underwater gas fields in Cook Inlet to the oil fields along the North Slope.As it has done so, it has amassed a long list of safety and environmental violations. Among the most egregious incidents: three workers were nearly killed in an accident in 2015; a methane leak from an underwater pipeline was not stopped for months in 2017; and in late 2018, an oilfield worker was killed at Milne Point on the North Slope. The company's litany of violations led to unusually strong language from state regulators, who wrote in a letter to Hilcorp in 2015 saying that a disregard for regulatory compliance was "endemic to Hilcorp's approach to its Alaska operations," and that "Hilcorp's conduct is inexcusable.""Hilcorp has had a terrible record during its time in Alaska," said Lois Epstein, an engineer and Arctic Program director at The Wilderness Society. "None of those things should have happened." In the most recent of those incidents, a 36-year-old contract worker, Shawn Huber, was killed when he was struck by a drilling pipe while working on a drilling rig. Hilcorp owned 50 percent of the Milne Point facility and was the main operator at the time of the accident. With the sale announced Tuesday, it becomes the full owner and operator. The sale also includes BP's 50 percent share in the Liberty Project, an ambitious plan to construct a gravel island five miles off Alaska's northern coast for drilling rigs and production facilities. A reservoir there holds an estimated 150 million barrels of oil, but the project has proven to be more complicated and costly than BP expected when it began the permitting process two decades ago. That project is awaiting final permits related to its oil spill contingency plan. According to the Liberty Development and Production Plansubmitted by Hilcorp in 2014, a worst-case accident there could initially spill more than 90,000 barrels a day into a remote location that is covered with ice most of the year.
Hilcorp sale will cost state $30 million annually in lost revenue, former tax officials say - Two former directors of Alaska’s tax division and a former state legislator say a gap in Alaska’s corporate income tax system could cost the state millions in lost revenue once a new multibillion-dollar deal between Hilcorp and BP is finalized.The loss could be more than $30 million per year, said Ken Alper, director of the state’s tax division under former Gov. Bill Walker.“This is a big deal,” Alper said.Under Alaska’s existing corporate income tax system, publicly traded corporations are taxed. Privately held corporations are not. On Tuesday, Hilcorp — which calls itself the “largest privately owned oil and natural gas producer in the United States” — announced that it will buy the Alaska assets of BP, a publicly traded London-based company.Dan Dickinson, tax division director under multiple governors before Alper, said of the four types of state levies on oil production — property taxes, production taxes, royalties and corporate income taxes — the income tax is the most likely to change significantly as a result of Tuesday’s announcement. While Alaska does not have a personal income tax, it collects money — just as the federal government does — from many corporations. Limited liability corporations and “S corporations” (so-called after a particular part of IRS tax code) with fewer than 75 shareholders are not taxed, according to a 2004 explanation from the nonpartisan Legislative Research Service.
AMLO Says Pipeline Deal to Save $4.5B-- A deal that will save Mexico $4.5 billion has been reached with with three pipeline companies to carry natural gas throughout the country, according to President Andres Manuel Lopez Obrador. Carlos Slim’s Grupo Carso SAB was the first to reach agreement with the country’s Federal Electricity Commission, or CFE, Lopez Obrador said during his morning news conference on Tuesday. Sempra Energy’s Mexico unit IEnova and Canada’s TC Energy Corp. then “acted responsibly” by also agreeing to contracts, the president said. The highest profile project -- IEnova and TC Energy’s $2.5 billion Sur de Texas Tuxpan marine conduit -- will be the first in operation, CFE Chief Manuel Bartlett said at the news conference. Lopez Obrador said it would come online in about a week. The tariff rate on the pipeline was reduced by 33% to 38%, while the rate reduction for some of the other contracts was between 19% and 32%, said Miguel Reyes, a director at CFEnergia. Fermaca Enterprises is still in talks with the state-owned power company. “In the end, the silver lining of this is there’s an improved level of communication” with business leaders, said economist Rogelio Ramirez de la O, who advised Lopez Obrador in his 2006 presidential campaign. What’s changed, he said, “is that contracts need to have the best interest of Mexico.” Ienova shares rose 5.3% after the announcement, their biggest gain since January. Shares of Grupo Carso also rose 1.7%. At the heart of the months-long dispute are seven take-or-pay contracts signed with the previous administration that saw CFE covering the cost of natural gas that was never delivered due to force majeures caused by permitting problems and social conflicts. CFE had threatened the companies with arbitration proceedings for at least $3 billion. The agreement extends the contracts for the Guaymas El Oro and Sur de Texas Tuxpan pipelines by 10 years and “puts an end to the international arbitration processes of the designated pipelines,” IEnova said in a statement.
Pipeline Deal Means More U.S. Natural Gas for Mexico Power Plants Mexico is preparing to import more U.S. natural gas to supply the country’s gas-fired power plants and industrial facilities after the Mexican government reached a deal that will allow several stalled pipeline projects to be completed. Mexican President Andres Manuel Lopez-Obrador on Aug. 27 said his administration’s deal with Canadian pipeline operator TC Energy; IEnova, a Mexican subsidiary of San Diego, California–based utility company Sempra Energy; and Mexican construction firm Grupo Carso ends a $3 billion stalemate over contracts for a handful of pipelines that will bring natural gas to Mexico from the Eagle Ford Shale of South Texas and the Permian Basin of West Texas.Grupo Carso is owned by Mexican billionaire Carlos Slim. He said Tuesday that the agreement will give Mexico access to cheap natural gas, some of which can be used to further the development of natural gas-fueled vehicles in Mexico.“This will allow us to substitute diesel and gasoline, which are not only more expensive but more polluting,” Slim said. “Natural gas is one-third the cost but there are also environmental benefits.”The deal comes one month after Texas Gov. Greg Abbott sent a letter to Lopez-Obrador asking the Mexican president to end the political stalemate around the pipelines. Abbott said the deal was needed to get more natural gas moving from Texas to Mexico. Sener, Mexico’s Ministry of Energy, earlier this year said the country expects to add an estimated 29,294 MW of combined-cycle gas-fired power generation capacity over the next 15 years. The forecast was published in Sener’s 2019-2033 Prodesen power sector development plan. Prodesen is the Program for the Development of the National Electrical System, which was introduced in 2015. The projected capacity additions are up slightly from the forecast of 28,105 MW for the 2018–2032 period outlined in last year’s Prodesen plan under the previous Nieto administration. Sener is required to update the Prodesen document each year.
UK fracking site experiences second tremor in a week - The UK’s only active fracking site experienced a magnitude-1.05 tremor on Friday night. It came two days after a magnitude-1.55 tremor, which was the largest ever tremor at the site run by Cuadrilla in Preston New Road, Lancashire. Friday’s tremor was detected at 11.22pm. The company said it lasted for less than a second. Cuadrilla said: “The measured vibration at ground level during the event was approximately 0.4 mm/s. This micro-seismicity followed today’s pumping operations. The integrity of the well has been confirmed.” A smaller 0.53-magnitude tremor occurred just after 5am on Saturday and also lasted for less than a second, the company added. Fracking was temporarily stopped at the Cuadrilla site after Wednesday’s tremor. Pausing work for 18 hours is the routine response for any tremor over 0.5 magnitude. A Cuadrilla spokesman said on Thursday that most people who lived near the Preston New Road facility would not have noticed Wednesday’s movement, which would have felt similar to someone dropping a large bag of shopping on the floor. He said: “Minor movements of this level are to be expected and are way below anything that can cause harm or damage to anyone or their property,” he said. Labour’s shadow business secretary, Rebecca Long Bailey, has called for fracking to be banned, saying it causes air and water pollution and contributes to climate change. Environmental campaign group Friends of the Earth said that in 60 days of fracking last year there were 57 tremors in Lancashire and that it could not be carried out without triggering earthquakes. Jamie Peters, a campaigner for the organisation, said: “Even small vibrations at ground level can be the sign of far more damaging impacts deep underground.”
Offshore UK Forecasted to Support 10K More Jobs in 2019 -The offshore UK oil and gas industry is forecasted to support around 10,000 more jobs in 2019, a new report from industry body Oil & Gas UK (OGUK) has revealed. Total supported employment - including direct, indirect and induced jobs - is estimated to rise for the first time since 2014 to hit 269,100 this year, according to the report, which was released on Friday. The offshore UK oil and gas industry supported a total of 259,900 jobs in 2018, OGUK’s report highlighted. This figure marked a five percent drop on 2017, the report revealed. From 2016 to 2017, this figure dropped 14 percent. In 2018, 56 percent of total industry employment was based in England, 39 percent was located in Scotland, and four and one percent was situated in Wales and Northern Ireland, respectively, the report revealed. Fifteen percent of the workforce was aged below 30 in 2018, which was a decrease from 2017, and women represented three percent of the offshore workforce last year, according to the report.
Dutch to end Groningen gas production quicker than predicted: minister - (Reuters) - The Dutch government will end production at the vast Groningen natural gas field sooner than previously announced, Dutch Economy Minister Eric Wiebes said on Tuesday. “I expect the Groningen field to no longer be necessary very soon”, Wiebes said in an interview on Dutch public radio. “Things are moving very fast, a lot faster than anyone would have predicted some time ago.” Output at Europe’s largest onshore gas field, operated by Royal Dutch Shell Plc and Exxon Mobil Corp, has been slashed in recent years as tremors blamed on drilling have damaged buildings and sparked unrest in the region. Following a 3.4 magnitude earthquake, the government vowed last year to halt output at Groningen by 2030 and lower production as quickly as possible in the coming years. Wiebes indicated on Tuesday the end of extraction would come a lot sooner than by the end of the next decade and said he would inform parliament soon on the exact date. “We used to think that production would go on forever, then I said it would end by 2030, and I will soon say when it will end exactly”, the minister said.
Will Europe Ever Shake Its Dependence On Russian Energy? - Much of the current discourse over Europe’s economic “independence” has revolved around its increasingly-tense relationship with the Trump administration over foreign policy issues such as trade and Iran. This focus has sidelined another important development, however: portions of the European energy industry - a major pillar of the single market - are increasingly coming into Russian and Chinese hands. In spite of impending American sanctions and widespread opposition including from within the European bloc, Nord Stream 2—Gazprom’s $11 billion natural gas pipeline running underneath the Baltic Sea between Russia and Germany— is nearing completion. Meanwhile, China has gone after energy prizes all over the union. As just one noteworthy example, state-owned utility China Three Gorges— already the largestshareholder in Energias de Portugal— mounted a colossal $10.8 billion bid to take over the entire Portuguese grid. The uptick in Moscow and Beijing’s investments in nearly every aspect of Europe’s energy industry—from fossil fuels to renewables and power generation to energy infrastructure—have drawn criticism from both within the EU and abroad. Particular concerns have been raised over European unity and unfair competition. If unaddressed, these geopolitical and commercial implications could drive a wedge between the U.S. and Europe while sowing serious divisions within the single European market. Longstanding geopolitical conflicts and Cold War-era rhetoric have fueled the uneasiness around Russian energy investment in Europe. In May, U.S. Energy Secretary Rick Perryproposed a sanctions bill which would target companies, including a number of European firms, involved in the Nord Stream 2 project in an effort to stall construction on the controversial pipeline. Although Gazprom has obtained authorization from Russia, Finland, Sweden and Germany, it has encountered resistance from Denmark, which has yet to grant permission for the pipeline to pass through its territory. The project is also vehemently protested by most Central and Eastern European countries, including Poland and the Baltic states—to say nothing of Ukraine’s steadfast opposition. The European Commission has sounded the alarm as well, wary of increasing the region’s energy dependence, both on gas and on Russia—a politically unfriendly state which remains under EU sanctions for its aggression in Ukraine. In an effort to mitigate the risks of this dependence, the Commission has made policy changes to subject Nord Stream 2 to the EU’s regulatory umbrella. The reforms are currently being challenged by Gazprom at the European Court of Justice.
Pertamina involves foreign workers in handling oil spill - Pertamina’s incident commander for YYA I Project, Taufik Adiyawarman, said the state-run oil and gas company recruited foreign workers to help handle the oil spill incident in the firm's Offshore North West Java (ONWJ) in Karawang. “As we have said that we do our utmost to expedite the spill recovery. So we call in human resources from outside [of the country],” said Taufik at the PGE Tower office, Jakarta, Monday, August 26. ADVERTISING He said that the corporate had communicated the matter with related authorities, such as the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) and the Directorate General of Sea Transportation. According to him, his side has sought capable domestic workers but to no avail. In addition, Pertamina will shut off the well in a bid to stop the spill in October 2019. “We have targeted to kill the well on October 8. Hopefully, we can intersect it on 6. It can be on October 8 or 1,” said Taufik. He admitted that the incident had not been resolved yet to date. The closing will begin after the drilling reaches 9,030 feet. He said this morning, August 26, the drilling reached 6,939 feet. “We are getting there. We have several optimistic, realistic, and pessimistic plans,” he said, adding that the well would be closed before October if the handling of oil spill went without a hitch.
Eni Wins Offshore Indonesia Block - Eni S.p.A. reported Monday that it has won the West Ganal exploration block in Indonesia’s offshore Kutei Basin in the country’s second conventional oil and gas bidding round for 2019. In a written statement emailed to Rigzone, Italy-based Eni stated that it will operate and own a 40-percent interest in the block. The company added that its partners include state-owned PT Pertamina (30 percent) and Neptune Energy (30 percent). According to Eni, West Ganal is a new gross split production sharing contract (PSC) that encompasses approximately 436 square miles (1,129 square kilometers) adjoining the Eni-operated Muara Bakau and East Sepinggan PSCs in the Makassar Strait off Indonesia’s East Kalimantan province. Eni added that the West Ganal award reinforces its strategic cooperation in the Kutei Basin with Pertamina and Neptune – its partners in the producing Jangkrik field in the Muara Bakau block. West Ganal includes the Maha discovery that boasts in-place gas resources in excess of 600 billion standard cubic feet, Neptune said in a separate written statement. Neptune added that the consortium has committed to drilling four exploration wells during the first exploration period. Moreover, the firm stated that the group will acquire 232 square miles (600 square kilometers) of 3D and 373 miles (600 kilometers) of 2D seismic data. Eni noted that Maha’s development and time-to-market will benefit from its proximity to the deepwater Jangkrik field, which achieved first gas in May 2017 and supplies the domestic and LNG export markets.
Saga authorities confirm huge oil spill - Authorities in Saga Prefecture, southwestern Japan, have confirmed reports of a huge oil spill from an ironworks plant in Omachi Town. The spill was reported on Wednesday morning. Prefectural officials and firefighters say torrential rains likely caused water to flow into the plant and back out with as much as 114,000 liters of oil. Oil spilled into nearby rice fields and residential areas. Authorities are putting up barriers and working to remove it. Authorities say that they confirmed that no oil has reached the nearby Rokkaku River or the Ariake Sea.
Heavy Oil Premiums Shrink-- A plunge in fuel oil margins driven by impending environmental rules for shipping is beginning to take its toll on heavier grades of crude. The value of sludgier varieties of oil, typically used to make dirty products such as fuel oil to power ships, is eroding before the standards that take effect in January. International Maritime Organization rules, known as IMO 2020, will mandate the use of cleaner alternatives like gasoil or very low-sulfur fuel oil. IMO 2020 has spurred a plunge in profit margins from turning Dubai crude into fuel oil in Asia from a premium of $5.47 at the end of July to a discount of $10.16 on Aug. 14. That’s translating into waning demand for viscous oil, with Iraq selling an October-loading shipment of Basrah Heavy, a heavy-sour grade, on Wednesday at a premium of only a third of the last sale a week earlier. The current market dynamics are in-line with market expectations ahead of IMO 2020. In June and July, however, high-sulfur fuel oil enjoyed a surprising surge in prices that stemmed from a temporary supply shortage due to upgrading works that led to a rise in output of lighter types of fuels. While the spot differential for the heavy-sweet Van Gogh has also fallen, the Australian grade’s premium to London’s Dated Brent price remains supported due to its low sulfur content. That’s because it can be blended to make fuel that’s IMO 2020-compliant. Santos Ltd. sold a cargo for October loading last week at a premium of between $8 and $8.30 a barrel over Dated Brent, lower than the company’s initial expectations for a premium of $13.70 or more. Some West African grades loading in September and October have also been rising in relation to regional benchmarks due to healthy demand from Chinese buyers, say the traders. Angola’s Cabinda and Nemba tend to yield more gasoil when refined, lifting buying interest for the grades.
China Big Oil Bet on Upstream Pays Off-- China Big Oil wrapped up a first half that rewarded exploration & production and punished refining. PetroChina Co. and Cnooc Ltd. on Thursday posted stronger earnings, while Sinopec, the fuel-making behemoth, said earlier in the week that profit slid 24% from a year ago. All three delivered on commitments to increase spending, seeking to fulfill President Xi Jinping’s demand for higher energy output. Investors seemed pleased, especially with Cnooc’s cost cutting. The company led gains on the Hang Seng Index in Hong Kong on Friday, rising as much as 6.5%. PetroChina added as much as 4.5%. Here are some highlights from their January-June results: Unlike global titans such as Royal Dutch Shell Plc and Chevron Corp., who are keeping a tight rein on spending and returning cash to investors, China’s state-owned giants are splurging to expand output. While the trio aren’t yet at the midway mark of their annual capex targets -- spending tends to be concentrated in the second half -- they have significantly increased from last year. All three are steadily increasing output, which hasn’t come easy considering that many of their oil fields back home are old and costly. That helps explains why they’re betting big on natural gas. Cnooc’s net production rose to a record in the first half, while PetroChina posted a double-digit growth in domestic gas supply. Gas output by Sinopec, officially known as China Petroleum & Chemical Corp., gained 7% despite overall production rising just 0.9%.
US Uses New Sanctions to Crack Down on N. Korean Oil Imports-- The U.S. cracked down on illicit North Korean oil imports, sanctioning a handful of Taiwan- and Hong Kong-based companies for helping Pyongyang evade international restrictions on its petroleum trade. The Treasury Department said in a statement on Friday that North Korea has continued to use ship-to-ship transfers at sea to evade United Nations restrictions on its oil imports. Treasury also alleged that North Korea has received deliveries of refined petroleum directly from ships flagged under other countries, and said those countries hadn’t reported the deliveries to the UN. The statement didn’t name the countries involved. U.S. and North Korean negotiators haven’t met since President Donald Trump and Kim Jong Un promised to restart working-level talks in “two to three weeks” during their June 30 meeting at the Demilitarized Zone. Kim has resumed missile launches in recent months and has given the Trump administration until the end of the year to make a better offer on sanctions relief. Treasury’s announcement Friday suggested the U.S. isn’t poised to lift the penalties anytime soon. “The cumulative effect of these deliveries,” Treasury said in its statement, is that the UN’s official accounting of North Korea imports “vastly underrepresents the volume of refined petroleum products that actually enter the DPRK via its fleet of oil tankers and other associated vessels.” In addition to ship-to-ship transfers of fuel, the UN says North Korea, which is formally the Democratic People’s Republic of Korea, has mastered hacking into both old and new financial systems to funnel billions of dollars to its nuclear weapons program. North Korean agents have amassed about $2 billion by stealing money from financial institutions and cryptocurrency exchanges, a panel monitoring the enforcement of UN sanctions said in a report this month to the Security Council.
OPEC Oil Demand Forecast Needs A Christmas Miracle - OPEC’s latest communique to an oil market mostly on vacation (or wishing it was) is almost a master class in positive spin. Almost. It begins with all the right phrases: “critical value”, “commitment”, “market stability”. These tee up the main message, which is that OPEC+ members are going above and beyond their pledge to withhold supply in order to support oil prices. Compliance was a robust 159% in July, according to the group, bringing the average for the year so far to 134%. In other words, fret not oil bulls, OPEC & Co. have your back. Things run into trouble soon after that: The JMMC [Joint Ministerial Committee] underscored the growing importance of the Declaration of Cooperation in supporting oil market stability, which along with ongoing healthy oil demand so far has arrested global oil inventories growth and should lead to significant draws in the second half of the year. It’s that “ongoing healthy oil demand” that sets a bell tinkling faintly somewhere in the back of the brain. Because global oil demand increased by only about 650,000 barrels a day in the first half of 2019, year over year, according to figures from the International Energy Agency. That is the weakest showing since the latter half of 2016, which was when OPEC+ first agreed to its six-months-going-on-three-years cuts. Even worse, none of that growth pertains to crude oil, with refinery runs having actually declined by about 100,000 barrels a day in the first half of the year compared with the same period in 2018. OPEC rounds out the upbeat message by noting that forecasts for oil-market fundamentals remain robust for 2019 and 2020. It’s worth noting OPEC’s own forecast for growth this year has dropped by 400,000 barrels a day since January. More importantly, forecasts from OPEC and the IEA are starting to feel a little like letters to Santa. Because the first half sucked wind, those “robust” full-year figures now bank implicitly on a big finale. The IEA’s projection has demand rising by 1.6 million barrels a day in the second half, and maintaining solid growth of 1 million-plus through the first and second half of 2020: Even on a percentage basis, those figures for the second half of 2019 and 2020 would be the highest since 2012.
Iran’s Zarif holds surprise talks with Macron at G7 summit Iran's top diplomat has held talks with France's President Emmanuel Macron at the sidelines of the G7 summit following a surprise invite to the gathering. Mohammad Javad Zarif landed on Sunday in the French seaside town of Biarritz, where leaders of the G7 nations - Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States - were meeting to discuss a host of issues, including global trade, climate change and Iran's nuclear programme. Zarif immediately went into a three-and-a-half-hour meeting with French foreign minister, Jean-Yves Le Drian, according to Reuters news agency. He spent half an hour with Macron, the second meeting in a week after the two leaders had met in Paris on Friday. Zarif did not meet Trump, who was also at the G7 meeting. "Iran's active diplomacy in pursuit of constructive engagement continues," Zarif said in a post on social media. "Road ahead is difficult. But worth trying."
Iran's Zarif leaves G7 talks, unclear if progress made to ease tensions (Reuters) - Iran’s foreign minister made a flying visit for talks with host France at the G7 summit on Sunday, as Paris ramped up efforts to ease tensions between Tehran and Washington, a dramatic diplomatic move that the White House said had surprised them. European leaders have struggled to tamp down the brewing confrontation between Iran and the United States since Trump pulled Washington out of Iran’s internationally-brokered 2015 nuclear deal and reimposed sanctions on the Iranian economy. Foreign Minister Mohammad Javad Zarif, who is under U.S. sanctions, flew to the southwest French town of Biarritz where the Group of Seven leaders are meeting. He held more than three hours of talks, including with Macron, before heading back to Tehran. “Road ahead is difficult. But worth trying,” Zarif tweeted, adding that in addition to meeting French leaders he had given a joint briefing to officials from Germany and Britain.
Possible Currency War Would Be A Disaster For Oil - Oil prices plunged on Friday after the U.S. and China both announced tariff hikes in tit-for-tat fashion. At the same time, markets opened on a positive note early Monday after President Trump struck a more conciliatory tone. But the respite could be brief. Global financial markets are completely at the mercy of Trump’s twitter account these days. On Friday, stocks and commodities fell sharply after China announced an increase in tariffs on U.S. goods. In response, Trump announced yet another 5 percent increase in the suite of tariffs on Chinese goods, although, notably, he waited until after financial markets had closed for the week.Over the weekend at the G-7 Conference in France, Trump sent mixed messages on the trade war, suggesting he had “second thoughts,” with his team subsequently clarifying that his second thoughts regarded his regret he hadn’t hiked tariffs by an even greater amount. Nevertheless, traders took comfort in his comments about wanting to make a deal with China, in addition to his assertion that China had called him up asking for a return to negotiations.Stocks opened up on a positive note on that news. However, it should be noted that Chinese officials said that they were “not aware of” the phone call that Trump alluded to. When pressed by reporters about the nature of the phone call, Trump said: “I don’t want to talk about calls. We’ve had calls. We’ve had calls at the highest levels.”If we’ve learned anything over the past few months, it is that these events turn on a dime. The incoherent strategy from the White House, and the complete lack of an official policymaking process, makes it impossible to predict how events will unfold. It is odd then that financial markets were so sanguine at the start of the week. One particular area of risk to watch is the further weakening of the yuan to the dollar. The yuan depreciated to 7.15 yuan to the greenback, the weakest rate since prior to the global financial crisis 11 years ago. “As long as China can ensure that yuan weakness is well controlled, i.e. it does not provoke strong outflows, expect to see further depreciation in the currency.” Allowing the currency to depreciate is not without risks, even for China. With mountains of debt, a weaker yuan could make debt repayment at the company level more painful for Chinese firms.
Oil funds sidelined by economic uncertainty- Kemp - (Reuters) - Hedge fund managers cut short positions in petroleum last week amid slow vacation trading and continued conflicting signals about the health of the economy and the outlook for oil supply. Hedge funds and other money managers increased their net long position in the six most important petroleum futures and options contracts by 8 million barrels in the week to Aug. 20. Portfolio managers were net buyers of NYMEX and ICE WTI (+18 million barrels), U.S. heating oil (+2 million) and European gasoil (+1 million) but sold Brent (-7 million) and U.S. gasoline (-5 million). Buying was mostly driven by the covering of previous short positions rather than the initiation of new long ones, according to an analysis of regulatory and exchange data (https://tmsnrt.rs/2Zkqq6Z). Funds cut short positions by 34 million barrels, including 39 million barrels in NYMEX and ICE WTI. Fund buying of WTI seems to have been driven mostly by local factors, principally the commissioning of new pipelines, easing congestion and pressure on prices in the Permian region of Texas and New Mexico. Hedge fund positioning is broadly neutral, with the fund community holding a dynamic long position (excluding structural longs and shorts) of just 60 million barrels. There is plenty of scope for fund managers to add to long positions if fears about a global recession prove unfounded - or increase short positions if the economic outlook deteriorates. Net positions have changed relatively little since the middle of June, partly because senior staff are on holiday over the summer, and partly because of uncertainty about the macro outlook.
Oil steadies as US-Iran optimism faces US-China trade deal hopes - Oil prices steadied on Monday after France’s president lifted hopes for a deal between the United States and Iran, while optimism for easing U.S.-China trade tensions supported prices. Brent crude fell 53 cents to $58.82 a barrel, after earlier hitting a session high of $60.17. U.S. West Texas Intermediate (WTI) crude futures slipped 38 cents to $53.80 a barrel, after reaching $55.26 a barrel. Prices fell after French President Emmanuel Macron said preparations were underway for a meeting between Iranian President Hassan Rouhani and U.S. President Donald Trump in the coming weeks to find a solution to a nuclear standoff. “The prospect for talks between President Trump and President Rouhani is a tantalizing, bearish element for oil prices,” said John Kilduff, founder of Again Capital. “Any thawing in the U.S.-Iran relationship would naturally expect to involve easing of sanctions on Iran, resulting in increased oil sales. The market can barely handle current supply levels.” Trump last year abandoned Iran’s 2015 nuclear deal with world powers, arguing that he wanted a bigger deal that not only limited Iran’s atomic work, but also reined in its support for proxies in Syria, Iraq, Yemen and Lebanon, and curbed its ballistic missile program. Trump also tightened sanctions on Iran in May to try to choke off its oil exports. “Now the market is pondering the possibility that we’ll see a flood or Iranian oil come onto the market if there’s progress made,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “We have to be admittedly cautious because we’ve heard of deals one minute only to be tweeted down the next minute.” Buoying prices, Trump said he believed China was seeking a trade deal after he said Beijing contacted U.S. officials overnight to say it wanted a return to talks.
Oil falls, gives up earlier gains on trade dispute-related volatility - Oil prices gave up earlier gains to finish lower on Monday, as traders weighed demand uncertainty in the wake of the latest news on the U.S.-China trade dispute. Prices had been moving higher early Monday after last week’s tumble, as China and the U.S. both appeared to attempt to tamp down rising trade tensions. “Uncertainty around trade has been responsible for the volatility” on Monday, Marshall Steeves, energy markets analyst at IHS Markit, told MarketWatch. “In the first instance, President [Donald] Trump’s statement regarding the supposed contact between Chinese and U.S. officials sent the market higher in anticipation of a trade deal, but since then there were questions around whether a call actually took place and just what might come next,” he said. “As it stands, new tariffs are due to be introduced on Sept. 1, so the near-term implications for demand are likely bearish.” “Given all this, we are probably in for a volatile, sideways trading week,” said Steeves, pointing out that the October West Texas Intermediate crude contract has been trading in the mid-$50s this month “and likely will continue to do so.” WTI crude for October delivery edged down by 53 cents, or 1%, to settle at $53.64 a barrel on the New York Mercantile Exchange, posting a fourth straight session decline. October Brent crude fell by 64 cents, or 1.1%, to $58.70 a barrel on ICE Europe. Trump said U.S. officials had received calls from Chinese negotiators and that the two sides would return to the table. China’s top trade negotiator, Vice Premier Liu He, on Monday said that Beijing hopes to resolve the trade war through “calm” negotiations and isn’t seeking to escalate tensions, according to Reuters. CBS News, meanwhile, reported that Beijing did not confirm any weekend phone calls between Chinese trade representatives and U.S. officials.
Oil rises as US-China trade comments calm markets - Oil prices rose on Tuesday after U.S. President Donald Trump predicted a trade deal with China after positive comments by Beijing, calming nerves after a round of tit-for-tat tariff hikes had sent markets reeling. Brent crude was up by 25 cents, or 0.4%, at $58.95 a barrel by 0214 GMT, after falling 1% in the previous session, dropping for a third day in a row. U.S. crude was up by 30 cents or 0.6% at $53.94 a barrel, having also dropped 1% on Monday for a fourth day of declines. Trump on Monday said he believed China was sincere about wanting to reach a deal, while Chinese Vice Premier Liu He said China was willing to resolve the dispute through “calm” negotiations, settling global markets. “For now, the street is in thrall to the President’s comments, with financial markets doing abrupt changes of direction on his words that wouldn’t look out of place in Fast and the Furious film,” said Jeffrey Halley, senior market analyst at OANDA. Oil prices have fallen around 20% from a 2019 high reached in April, in part because of worries that the U.S.-China trade conflict is hurting the global economy, which could dent demand for oil. China’s Commerce Ministry said last week it would impose additional tariffs of 5% or 10% on a total of 5,078 products originating from the United States, including crude oil, agricultural products and small aircraft. In retaliation, Trump said he was ordering U.S. companies to look at ways to close operations in China and make products in the United States. “Unless you believe a trade deal will happen the slowdown in the global economy continues ... and earnings all over the globe will be under pressure,” said Greg McKenna, strategist at McKenna Macro. The measures are prompting reactions from Chinese companies, with Sinopec seeking a tariff exemption for importing U.S. oil in the coming months, sources told Reuters.
Trump Feeds Oil Markets False Hope -Mixed messages from President Trump at the G-7 summit in France have left investors guessing on what happens next regarding the trade war. Shifting from a hard line to a more conciliatory and upbeat note, Trump sowed confusion as higher tariffs are days away from taking effect. But with the two leaders trapped in a cycle of escalation, there is little face-saving room for a deal at this point. “The likelihood of any sort of sustainable deal was already a long-shot a week ago. And now the political terrain on which you could create a deal is just so infinitesimal,” Jude Blanchette, a China expert at the Center for Strategic and International Studies, told Bloomberg. The G-7 summit produced very few deliverables, but one interesting development was the possibility that Trump would meet with Iranian President Hassan Rouhani. French President Emmanuel Macron invited Iranian foreign minister Javad Zarif to the summit, and also angled to convince Trump to negotiate with Iran. Trump suggested he was open to the idea even as he was non-committal, while the Iranian side said that a future meeting depended on the removal of sanctions. The idea appears likely to go nowhere, but the atmosphere is notably different from two months ago, when Trump was on the verge of launching a military strike. While financial markets were left confused but hopeful after Trump’s seemingly softer line regarding China, the fact is that tariffs are set to rise next week. Also, China’s currency has weakened further, dropping to its weakest point since prior to the 2008 financial crisis. That will put deeper pressure on emerging market currencies, which could slow oil demand and prompt central banks to take more aggressive action to cut interest rates. The Mexican government has reached a preliminary agreement with private companies that could result in the startup of the South Texas-Tuxpan marine gas pipeline. The project was completed in June but gas flows have been stalled due to disagreements over pricing. The pipeline could increase gas flows in Mexico by 40 percent.
Oil Prices Finish Higher --West Texas Intermediate (WTI) crude oil finished higher for the first time in five trading days. The October WTI contract price gained $1.29 Tuesday to settle at $54.93 per barrel. The light crude marker traded within a range from $53.69 to $55.09. Brent crude oil for October delivery ended the day at $59.51, reflecting an 81-cent increase. Tuesday’s settlement ends a three-trading-day string of declines for the Brent. WTI and Brent had stabilized after Iran’s foreign minister virtually quashed the notion of meeting with U.S. officials in an effort to ease tensions, states a Bloomberg article posted to Rigzone earlier Tuesday. Reformulated gasoline (RBOB) also settled higher Tuesday. September RBOB added three cents to close at $1.65 per gallon. One day after posting a nearly four-percent gain, Henry Hub natural gas futures stumbled during Tuesday’s session. The September gas benchmark shed three cents, settling at $2.20.
WTI Extends Gains Above $55 After Huge Crude Draw - After tumbling on trade talk doubts, WTI crude prices spiked back above $55 this afternoon after Russian Energy Minister Alexander Novak told reporters in Moscow that Russia is committed to complying with OPEC+ production-cut deal.Additionally, an OPEC+ committee said it expects stockpiles to decline sharply in the second half of the year. API:
- Crude -11.1mm (-2.25mm exp) - biggest draw since June
- Cushing -2.4mm
- Gasoline -349k
- Distillates -2.5mm
After a brief period of small builds, Crude stocks have resumed their drawdowns, with API reporting a massive 11.1mm plunge in inventories. In fact, there were drawdowns across the board... “The resolution of the U.S.-China rift will take time,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. “Economic uncertainty has not been lifted, which still leaves a fair degree of hesitancy in going long oil.”WTI hovered around $55 ahead of the API print and spiked on the big draw, running to the pre-Trump highs from Friday...
Oil prices rise on drop in US crude inventories - Oil prices rose on Wednesday after industry data showing a fall in stockpiles of U.S. crude somewhat eased worries about subdued demand due to the China-U.S. trade war. Brent crude futures climbed 2.13% to $60.78 a barrel. West Texas Intermediate (WTI) crude futures gained 2.88% to $56.51 a barrel. The two benchmarks are headed for monthly losses of around 8% and 5%, respectively, weighed down by trade barriers between the world’s two biggest oil consumers. U.S. crude stockpiles plummeted by 11.1 million barrels last week as imports dropped, compared with expectations for a 2-million-barrel draw, data from the American Petroleum Institute (API), an industry group, showed. “Overnight, the energy complex was given a shot of bullish adrenaline by a supportive API report,” PVM analysts said in a note. The U.S. government’s weekly inventory report is due at 10:30 a.m. EST. If the official numbers confirm the API data, it would be the biggest weekly decline in nine weeks. U.S. President Donald Trump said on Monday that he believed China was sincere about wanting to reach a trade deal, while Chinese Vice Premier Liu He said China was willing to resolve the dispute through “calm” negotiations. On Tuesday, however, concerns resurfaced after China’s foreign ministry said it had not heard of any recent telephone call between the United States and China on trade, and that it hoped Washington could create conditions for talks. Crude prices have fallen about a fifth from 2019 highs hit in April, partly because of worries that the trade war is hurting the global economy and could dent oil demand.
DOE Confirms Major Crude Draw, Oil Algos Confused As Production Hits Record High - Oil prices have extended yesterday's gains, following last night's surprisingly huge crude draw (reported by API) and OPEC+ saying they expect a “significant” decrease in global crude stockpiles in the second half of this year after they trimmed output more than planned. “Oil markets are broadly balanced at the moment, benefiting from the typical seasonal acceleration in demand,” said Martijn Rats, global oil strategist at Morgan Stanley. DOE
- Crude -10.03mm (-2.25mm exp; Whisper -5.47mm)
- Cushing -1.98mm
- Gasoline -2.09mm
- Distillates -2.063mm
Following the massive crude draw reported by API, official government data reported a large draw of 10.03mm barrels (slightly below API but well above expectations) along with draws across the rest of the energy complex... Crude stockpiles fell to their lowest levels since Oct 2018 but Gasoline and Distillates are relatively flat...
Oil rises 1.5% on steep drop in US crude inventories - Oil prices were up more than 1% on Wednesday after data showing a steep fall in U.S. crude stockpiles helped ease worries about weakening oil demand caused by the trade war between Washington and Beijing.Brent crude futures were up 1.7% to $60.52 a barrel. WTI crude futures rose 1.5%, to $55.75 a barrel.Although the two benchmarks recorded their biggest daily gains in eleven sessions on Wednesday, they are headed for monthly losses of around 7% and 4%, respectively, weighed down by trade barriers between the world’s two biggest oil consumers.U.S. crude oil inventories fell last week by 10 million barrels, compared with analysts’ expectations for a decrease of 2.1 million barrels, as imports slowed, the Energy Information Administration said.Gasoline stocks fell by 2.1 million barrels, compared with analysts’ expectations in a Reuters poll for a 388,000-barrel drop.“It was an incredibly bullish report, one of the more bullish we’ve had in a while, with draws across the board and of course the massive crude oil drop, which was generated by another drop in imports,” said John Kilduff, a partner at Again Capital in New York. That draw down was likely due to a drop in Saudi exports to the U.S, Kilduff said.U.S. President Donald Trump said on Monday that he believed China was sincere about wanting to reach a trade deal, while Chinese Vice Premier Liu He said China was willing to resolve the dispute through “calm” negotiations.On Tuesday, however, concerns resurfaced after China’s foreign ministry said it had not heard of any recent telephone call between the United States and China on trade, and that it hoped Washington could create conditions for talks. Crude prices have fallen about a fifth from 2019 highs hit in April, partly because of worries that the trade war is hurting the global economy and could dent oil demand.
Oil prices pegged back by mounting concern over US economy - Oil prices fell on Thursday for the first time in three days after San Francisco Federal Reserve President Mary Daly sounded a note of concern about the strength of U.S. economy. Brent crude was down 30 cents, or 0.5%, at $60.19 a barrel by 0202 GMT while U.S. crude was down 15 cents, or 0.3%, at $55.63 a barrel. Oil prices rose around 1.5 percent in the previous session. Concerns about a slowdown in economic growth due to the trade war raging between the United States and China, along with the potential hit to oil demand, are keeping prices in check. Daly said on Thursday she believes the U.S. economy has “strong” momentum, but uncertainty and a global growth slowdown are having an impact. Daly was speaking to reporters after a speech in Wellington, New Zealand and said she was in “watch and see” mode in assessing the need for another U.S. interest-rate cut. U.S. President Donald Trump said on Monday he believed China was sincere about wanting to reach a trade deal, but concerns arose on Tuesday after China’s foreign ministry declined to confirm a telephone call between the two countries on trade. “Trade tensions (are) hanging like a dark cloud threatening to rain over oil prices,” said Jeffrey Halley, senior market analyst at OANDA. The market shrugged of a big drop in U.S. inventories, which fell last week by 10 million barrels, compared with analysts’ expectations for a decrease of 2.1 million barrels, the Energy Information Administration said. U.S. gasoline stocks fell by 2.1 million barrels, compared with analysts’ expectations in a Reuters poll for a 388,000-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels, versus expectations for a 918,000-barrel increase, the EIA data showed. The crude draw down confirms “that OPEC supply cuts are effectively working by depleting U.S. reserves,”
Oil Prices Buoyed by Renewed Trade Optimism - West Texas Intermediate (WTI) and Brent crude oil closed higher Thursday.The October WTI added 93 cents Thursday, settling at $56.71 per barrel. It peaked at $56.89 and bottomed out at $55.88.Brent crude for October delivery ended the day at $61.08 per barrel, reflecting a 59-cent gain.“Oil continued its rally today as equities moved higher on new optimism on a possible U.S./China trade dispute resolution,” said Tom Seng, Assistant Professor of Energy Business with the University of Tulsa’s Collins College of Business. “Yesterday’s rally was sparked by an unexpectedly high inventory withdrawal, exceeding analysts’ forecasts considerably.”As Rigzone reported Wednesday, figures from the American Petroleum Institute and U.S. Energy Information Administration showed particularly sharp drops in domestic crude oil stocks and in turn boosted the WTI and Brent at midweek.Now oil traders will increasingly watch the path of Hurricane Dorian, said Seng. He noted the potentially major storm heading toward Florida could re-emerge in the eastern Gulf of Mexico (GOM). Should that occur, offshore oil and gas interests to the west could be affected.“Today is the fourth straight ‘up’ day after last week’s lower pricing based upon perceived weakness in global demand,” Seng continued. “Technically, WTI is above all three of its moving averages but neutral in terms of buy/sell indicators.”Posting a more modest gain Thursday was reformulated gasoline (RBOB). The September RBOB contract finished just two-tenths of a cent higher, settling at $1.68 per gallon.“Gasoline is flat today despite the rally in crude oil as we approach Labor Day Weekend, the ‘official’ end of the summer driving season,” Seng noted.Henry Hub natural gas futures also rose during Thursday’s trading. The October gas contract added seven cents to close at $2.30. Seng pointed out the latest EIA’s Weekly Natural Gas Storage Report disappointed market-watchers, showing a higher-than-forecasted injection of 60 billion cubic feet (Bcf). “Analysts were looking for a build of 56 Bcf,” he explained. “Countering this bearish signal is concern over GOM natural gas supply due to Hurricane Dorian as well.”
Oil Prices Crash As Hurricane Hurts Bullish Sentiment -- Oil prices looked set for their biggest weekly gain since July, but demand fears caused by Hurricane Dorian hitting Florida sent prices crashing on Friday morning. Oil prices were pushed up this week by cautious language from the U.S. and China, falling oil inventories, and also by a major Hurricane heading for the U.S. southeast. Despite an apparent cooling in the trade war, already-announced tariffs are set to jump on Sunday. “Upside momentum should not be taken for granted. Recession fears are casting a shadow on sentiment and oil prices should keep dancing to the tune of the U.S.-China trade saga,” Stephen Brennock of oil broker PVM told Reuters. Hurricane Dorian, which could yet strengthen to a powerful Category 4, is heading for Florida. “There’s a storm premium in the WTI price,” Phil Flynn, an analyst at Price Futures Group in Chicago, told Reuters. “The track of the storm is kind of dangerous for Gulf of Mexico production.” The storm could impact fuel supplies in Florida at the retail level. Florida is not an oil producer. The storm is expected to turn up the Atlantic Coast, so Gulf of Mexico production probably won’t be impacted. There could be a significant demand impact though. There have been 26 bankruptcies in the U.S. shale industry this year, nearly as much as the 28 bankruptcies in all of 2018. The default rate of 5.7 percent is at its highest level since 2017, according to the Wall Street Journal. Investors have lost faith in shale E&Ps, and bankruptcies are on the rise. But this may pale in comparison to the debt wave that comes due over the next few years. Roughly $9 billion in debt is set to mature over the remainder of 2019 – but a massive $137 billion matures between 2020 and 2022. Tariffs are still set to jump starting in September, but both President Trump and China have dialed down the rhetoric in recent days. China said that it would not immediately respond to last week’s announced tariff increase from Trump. Saudi Aramco may pursue a public offering in two stages, one on the Saudi stock exchange later this year, followed by an international offering in 2020 or 2021, according to the Wall Street Journal. The WSJ says that Aramco is considering Tokyo, spurning London and Hong Kong because of political uncertainty. Saudi Aramco Trading Company, an arm of the Saudi oil giant, sold its first-ever cargo of U.S. West Texas Light oil to a refinery in South Korea, according to Reuters. The move is a sign that Aramco is expanding its relationship with the U.S. and boosting trade volumes.
Oil Narrows Weekly Advance - - Oil gave back much of the week’s gains ahead of a long weekend in the U.S., with investors eyeing simmering U.S.-China trade tensions. Futures in New York fell below $55 a barrel Friday, extending the month’s drop to more than 6%. China is set to impose a 5% tariff on American crude from Sept. 1 that may slow the flow to a key market just as U.S. output hits fresh records. Also, Russia indicated that it reduced crude output in August less than promised in the agreement with OPEC and its allies. “It’s simply positioning ahead of the long weekend,” said Bob Yawger, futures director at Mizuho Securities USA in New York. “It’s been the best week in the past seven. If you were long, would you want to go home this weekend still long, really no idea what kind of twitter feed the POTUS is going to unload while you hanging out at the beach bar?” Oil remains under pressure as the outlook for the global economy continues to be weak and the U.S. pumps out crude at record-high levels. The Organization of Petroleum Exporting Countries and its allies said this week they expect to deplete the global oil surplus with their cuts, and falling inventories in America are indicating some level of success. West Texas Intermediate for October delivery declined $1.70 to $55.01 a barrel on the New York Mercantile Exchange as of 11:56 a.m. local time. Brent for October settlement, which expires Friday, lost 76 cents to $60.32 a barrel on the ICE Futures Europe Exchange. The more-active November contract sank $1.62 to $58.87. Traders are also keeping an eye on Hurricane Dorian that’s now expected to become a Category 4 storm and make landfall on Florida’s east coast, the first major hurricane to hit the area in 15 years. If the storm only strikes Florida it will likely be bearish for crude prices as it will stymie fuel demand, according to UBS Group AG analyst Giovanni Staunovo. However, if it moves into the Gulf of Mexico, it could cut U.S. output and lift prices, he added.
Oil drops as Russia reportedly cuts output less than expected; U.S. prices lose 6% in August - Oil futures settled sharply lower Friday, contributing to a loss for the month, after reports emerged that Russian Energy Minister Alexander Novak said Russia’s oil output cuts in August will be slightly smaller those agreed to under the deal between OPEC and non-OPEC producers. Novak said the countries under the deal will discuss the agreement and the market situation at the Monitoring Committee meeting on Sept. 12, Reuters reported, citing RIA and Interfax news agencies. The reports quoted Novak as saying Moscow still aims to fully comply with the deal. But the report shook confidence. Now with Russia “faltering,” it’s possible the output-cut deal between the Organization of the Petroleum Exporting Countries and non-OPEC member Russia “may not be taken for granted,” said Phil Flynn, senior market analyst at Price Futures Group. “Still, Russia has over-complied last month.”OPEC oil output rose in August for the first month this year, with members of the group pumping 29.61 million barrels a day, up 80,000 barrels a day from July’s revised figure, according to the results of a Reuters survey reported Friday.Earlier this week, OPEC’s Joint Ministerial Monitoring Committee, which monitors OPEC and non-OPEC member compliance with the cuts, pegged overall conformity at 159% in July, up 22% from June. OPEC and other major oil producers, including Russia, pledged to cut supplies at the start of this year by a total of 1.2 million barrels a day from late 2018 levels. The deal was extended through March 2020. West Texas Intermediate crude for the October delivery fell $1.61, or 2.8%, to settle at $55.10 a barrel on the New York Mercantile Exchange. It’s been a tough August for crude, with the commodity slipping into a bear market. Front-month prices for the U.S. benchmark suffered a 5.9% monthly decline, according to Dow Jones Market Data. Still, the front-month WTI contract saw a 1.7% weekly rise after a large fall in U.S. inventories and some cautious optimism on trade. Also, data Friday from Baker Hughes implied a slowdown in U.S. oil-drilling activity, with the number of active oil rigs down 12 to 742 this week. That followed last week’s drop of 16 oil rigs. Global benchmark October Brent crude which expired at the end of the session, ended at $60.43, down 65 cents, or 1.1%, on ICE Futures Europe. The contract saw a weekly rise of 1.8% and a monthly decline of 7.3%. November Brent crude,, which became the front-month at the settlement, lost $1.24, or 2.1%, to settle at $59.25 a barrel.
Aramco IPO Could be Heading to Asia -- The battle for a stake in Saudi Aramco keeps fueling a feverish investment sentiment.Grand scale (ad)ventures or Mega Projects have been making headlines for decades, while looking at Dubai, Doha or Riyadh. Still, the Aramco IPO story, proponed by Saudi Crown Prince Mohammed bin Salman, beats them all.The battle for a stake in the oil world’s largest cookie-jar, Saudi Arabia’s national oil company Saudi Aramco, keeps fueling a feverish investment sentiment. After years for preparations, delays and possible disappointments, international investment bankers are again courting the oil giant’s management, and the Saudi government, to get a stake in the IPO. At the same time, the world’s largest stock exchanges, LSE, NYSE and HKEC, have been pitching to the giant again recently. The possibility of listing of Aramco, which is expected to raise around $100 billion, would be a major boon for the respective bourses, currently confronted by low trading volumes and volatility in the financial markets.Western finance markets still seem to expect that the Kingdom’s Treasure Trove will be heading to them, but this could be a real "fata morgana" (mirage) in the end. Without leaving the Western options, especially LSE and NYSE, the real price could be heading to Asia. The latter move would be consistent with Saudi Arabia’s ongoing Eastern Orientation, as most investments and clients of the Kingdom are in China, India and the other Asian markets. It would be very functional to list Aramco at least for a major part on Asian bourses, as it fits a major geopolitical-economic strategy. Locking in markets, clients and financial backing in Asia, Aramco’s power position for its future developments would be much stronger. At the same time, in looking to Asian investors to take the lead in the IPO, Aramco will also be able to be more flexible in its overall transparency strategy. Chinese, Indian or SK/Japanese investors will be less inclined to ask the typical western questions about reserves, financials, political interference and the role of the Saudi Royal Family, than would be the case with European institutional or pension funds.
Mohammed bin Salman’s Collapsing Coalition in Yemen Means Trouble for Trump -- On Aug. 7, fighting broke out in Yemen’s de facto capital, the port city of Aden. The battle pitted the Southern Transitional Council (STC), a coalition of secessionist militia forces that has been supported and trained by the United Arab Emirates, against the internationally recognized government of President Abed Rabbo Mansour Hadi, which is backed by Saudi Arabia. The dispute brings to light long-subsumed tensions between Emirati and Saudi objectives in Yemen. This in turn has exposed a broader rift between the regional policy approaches of these two key U.S. security partners, which could enmesh Washington in yet another regional dispute and complicate the Trump administration’s stance on Iran. While Saudi and Emirati leaders have tried to play down the rift, the recent fighting in Aden demonstrates that Saudi and Emirati approaches to the Yemen conflict have differed since the beginning of the coalition’s intervention in Yemen’s civil war, in March 2015. Saudi Arabia’s overriding priority is securing its southern border against the Houthis, who have received support from Saudi Arabia’s regional rival, Iran. It has therefore focused its efforts on fighting the Houthis in the north and supported the Hadi government as the sole governing entity deserving of international recognition. The UAE, by contrast, has sought to leverage its role in the conflict to expand its military and economic access to the Horn of Africa and the Bab el-Mandeb strait, a vital link in global trade routes. While both Saudi and Emirati leaders view Iran as a serious threat, the UAE remains more vulnerable to a confrontation due to its geographic proximity and more substantial commercial ties to the Islamic Republic. This has encouraged a more pragmatic Emirati approach to Iran: While the UAE joins Saudi Arabia in condemning Iranian influence and military activity in the region, it maintains diplomatic ties (albeit downgraded since 2016) with Iran. The open break between Saudi- and Emirati-backed forces in Aden confirms the UAE’s recent efforts to distance itself from Saudi Arabia’s regional policy. Emirati leaders are worried that escalating tensions with nearby Iran could spiral out of control and inflict serious damage on the UAE’s economic model, which seeks to diversify away from a reliance on oil by developing other sectors like tourism and the financial industry. Additionally, Emirati leaders appear tired of getting part of the blame for the wide-scale civilian casualties, human rights violations, and devastating humanitarian crisis in Yemen; whileEmirati-sponsored militias have been accused of serious human rights violations, the indiscriminate Saudi-led air campaign has led to the majority of civilian casualties in Yemen.
Britain sold more than £6 billion in arms for Saudi-led coalition’s deadly war in Yemen - The British government, by supplying arms, personnel and expertise, has played a crucial role in the Saudi-led coalition in Yemen. The coalition has been accused of hundreds of indiscriminate bombing operations against civilians since the start of the war in March 2015. Saudi Arabia assembled a coalition to reinstate President Abd Rabbu Mansour Hadi, whom Riyadh and Washington had installed after widespread protests forced the resignation of long-term dictator Ali Abdullah Saleh in 2011-12, after Houthi rebels drove out his corrupt government. The coalition has the full backing of both Washington and London. In addition to Saudi Arabia it consists of Egypt, Sudan, Jordan, Kuwait, Bahrain and the Academi corporation, formerly known as Blackwater. The United Arab Emirates (UAE) and Morocco were coalition members but pulled out earlier this year. The support of Qatar for the coalition was suspended in 2017. Britain has licensed the sale of at least £6.2 billion ($7.6 billion) worth of arms to the coalition, selling £5.3 billion of arms to Saudi Arabia, including £2.7 billion ($3.4 billion) worth of aircraft and £1.9 billion ($2.4 billion) worth of missiles, bombs and grenades, £657 million to the UAE, £85 million to Egypt, £72 million to Bahrain, £40 million to Kuwait and £142 million to Qatar, before it withdrew from the coalition. But the real level of arms sales is probably much higher, as many are transferred under the opaque system of “Open Licences” that is used to sanction arms sales to blood-soaked regimes in the Middle East, such as el-Sisi’s in Egypt and the barbaric House of Saud. According to Middle East Eye, there has been a 22 percent rise in the use of secretive open licences since ministers pledged to increase Britain’s arms exports after the Brexit vote. As well as supplying arms, Britain has sent more than 80 Royal Air Force personnel to Saudi Arabia, some working within the command and control centre that selects targets in Yemen for bombing and others training the Saudi air force. A further 6,200 British contractors work at Saudi military bases, training pilots and maintaining aircraft. It also emerged that—unbeknownst to the UK population—there are British troops on the ground in Yemen. The Mail on Sunday reported in March that at least five British Special Forces commandos had been wounded in gun battles as part of a top-secret UK military campaign in Yemen.The troops from the elite Special Boat Service (SBS), whose activities are never reported to Parliament, suffered gunshot injuries in fierce clashes with Houthi forces in the Sa’dah area of northern Yemen, where up to 30 British troops are based. British Special Forces are thus fighting on the same side as jihadis and militia linked to al-Qaeda that are part of the Saudi-led coalition and use child soldiers as young as 13 and 14 years old.
UAE: 'Terrorist militias' targeted as fractures with Saudi grow - The United Arab Emirates (UAE) said it carried out air raids against "terrorist militias" in southern Yemen as the UN-recognised government accused the UAE of killing and wounding hundreds of people in the attacks. "Precise and direct air strikes" on Wednesday and Thursday targeted the militias, said the UAE's Ministry of Foreign Affairs in a statement late on Thursday. The armed groups planned to target the Saudi-led military coalition - of which the UAE is a key member - backing the Yemen government against the Houthi rebels who control northern Yemen, it said. The UAE acted in "self-defence" after attacks by "armed groups affiliated with terrorist organisations," the ministry said. The statement came hours after Emirati-backed separatists on Thursday regained control of Aden - the Yemeni government's de facto capital - forcing government troops who entered the city a day early to withdraw. The government on Wednesday said it had seized back Aden from separatists who captured the strategic city on August 10 after a fierce battle that killed dozens. In further violence in the port city on Friday, the Islamic State of Iraq and the Levant (ISIL, also known as ISIS) group claimed a suicide bombing that killed three separatist fighters, while a separatist military chief survived a roadside bomb that wounded five of his guards, security sources said. Meanwhile, Yemen's Ministry of Defence said more than 300 people were killed and wounded in the UAE's air raids. The casualty tolls could not be independently verified.
Yemen’s Houthis attack Saudi Arabia’s Abha airport: spokesman - (Reuters) - Yemen’s Iran-aligned Houthis attacked Saudi Arabia’s Abha airport with a cruise missile on Wednesday, the group’s military spokesman said in a tweet.Spokesman Yahya Saria said the missile targeted plane hangars and led to air traffic being halted at the airport.The Saudi-led coalition fighting Houthis in Yemen said a “hostile projectile” fired by the Iran-aligned group landed in Abha airport late Wednesday but caused no injuries, Saudi state news agency quoted the coalition military spokesman as saying early on Thursday.
23 Nigerians To Be Executed In Saudi Arabia - The Nigerian Voice - At least 23 Nigerians are on death roll in Saudi Arabia over drug-related offenses. This was revealed in a statement released by the Saudi Arabian Government on Saturday. According to the statement, the suspects were arrested between 2016 and 2017 at King Abdul-Aziz International Airport, Jeddah, and Prince Muhammad Bin Abdu-Aziz International Airport, Madinah. The suspects were said to have concealed the narcotic substance in their rectum, an act the Saudi Government says contravenes its narcotic and psychotropic substances rules. The offense is punishable by death. The latest case is coming few weeks after Saudi authorities executed Kudirat Afolabi for drug trafficking and Saheed Sobade, another Nigerian, reportedly nabbed with 1,183 grams of cocaine in Jeddah. They were said to have been arrested between 2016 and 2017 at King Abdul-Aziz International Airport, Jeddah and Prince Muhammad bin Abdu- Aziz International Airport, Madinah having concealed the banned substances in their rectums, the Saudi document revealed. The names of the convicted persons were given as:
China's Oil Imports From Iran Are Rising, New Customs Data Shows --Much anticipated data by China's General Administration of Customs (GAC) detailing the country's oil imports has been released on Tuesday, and shows that China has not cut its Iranian supply after the US waiver program ended on May 2nd, but has steadily increased Iranian crude imports since the official end of the waiver extension, up from May and June levels. It's been no secret that China continues to play a large part in preventing Trump's desire to take Iran's crude exports down to zero, despite a noticeable drop on its Iran oil imports compared to the summer prior (sinking almost 60% in June compared to a year earlier). The new GAC data shows China imported over 900,000 barrels per day (bpd) of crude oil from Iran in July, which is up 4.7% from the month before. On a metric-ton basis, Iranian inflows rose 8.2% from June, but this marked a drop of 71.9% on the year, according to S&P conversion figures (China's GAC releases customs data in metric tons). China's June crude shipments from Iran totaled 855,638, averaging to 208,205 barrels per day (bpd) two months after Trump ended the waiver program, compared with 254,016 bpd in May, according the July GAC figures. Simultaneously, China's oil purchases from Iran's rival Saudi Arabia have during this hot summer of "tanker wars" soared to record volume, in June reaching an all-time high of 1.89 million barrels a day, and in July dipping slightly to 1.65 million b/d. Thus far for the first seven months of 2019 Saudi Arabia has been China's top crude supplier, with Russia and Iraq second and third. Meanwhile, the United States hit the top ten list of China's suppliers for the first time since August 2018, the eighth largest supplier in July, jumping 45% year on year to 1.53 million metric tons, according to S&P analysis of the Chinese customs figures.
Iran Deploys 2 Warships To Escort Commercial Vessels As Zarif Flies To Beijing After G-7 - The threshold to an armed conflict around the Persian Gulf just got even smaller. On Monday, Iran said it had deployed two warships - a destroyer and a helicopter carrier - to protect the country's commercial vessels around the Gulf of Aden, located between the Arabian Peninsula and Africa, and Persian Gulf region amid a growing US-driven military build-up in the volatile region, which recently culminated with several tanker seizures on both sides, the navy times reports. Iran's brand new destroyer Sahandand the supply ship/replenishment carrier Kharg whiuch has a helicopter pad and services as lositics support, were deployed to the Gulf of Aden and Sea of Oman and tasked with escorting ships in international waters. The "Sahand" commissioned in December 2018, is Iran’s most advanced home-made warship. It has a stealth hull and can travel a further than the previous class destroyers without refueling. It is equipped with surface-to-surface and surface-to-air missiles as well as anti-aircraft batteries and radar and radar evading capabilities. Tehran’s decision to escort its cargo vessels comes at a time of escalating tensions in the Gulf, with US and UK warships operating in and around the Persian Gulf under the "defensive" premise that Iran is the aggressor behind June’s attacks on two tankers in the Strait of Hormuz. Accusing Tehran of ‘sponsoring terrorism’ and running a secret nuclear program, Washington has beefed up its military in the region with more troops and hardware, including an aircraft carrier and bombers.In early July, the Iranian tanker Adrian Darya, previously known as Grace 1, was seized off the coast of Gibraltar for allegedly carrying oil to Syria in violation of EU sanctions. It was later released, despite US demands that it be detained again. In retaliation, Iran detained a British oil tanker in the Persian Gulf; it remains in Tehran’s custody.The United States’ most devoted ally in Europe, the UK, is the only country, so far, to support Trump’s call for an international anti-Iran armada in the region. It has sent three new warships to reinforce its presence there in recent weeks, with the stated goal of protecting shipping lanes. Meanwhile, after Iran's foreign minister Javad Zarif made a surprise appearance at the G-7 summit in Biarritz over the weekend where he failed to achieve any notable diplomatic breakthroughs, he then darted off to Beijing, where he met with China's Foreign Minister Wang Yi in Beijing. This was s the third time the Iranian FM has visited China this year, as the Iranian tries to reinforce Chinese support of Iran in its conflict with the US.
Satellite photos show burning Iran space center launch pad - WaPo — A rocket at an Iranian space center that was to conduct a satellite launch criticized by the U.S. apparently exploded on its launch pad Thursday, satellite images show, suggesting the Islamic Republic suffered its third failed launch this year alone. State media and officials did not immediately acknowledge the incident at the Imam Khomeini Space Center in Iran’s Semnan province. However, satellite images by Planet Labs Inc. showed a black plume of smoke rising above a launch pad there, with what appeared to be the charred remains of a rocket and its launch stand. In previous days, satellite images had shown officials there repainted the launch pad blue. On Thursday morning, half of that paint apparently had been burned away. “Whatever happened there, it blew up and you’re looking at the smoldering remains of what used to be there,” said David Schmerler, a senior research associate at the Middlebury Institute of International Studies. Schmerler told The Associated Press that the images of the space center suggested that the rocket either exploded during ignition or possibly briefly lifted off before crashing back down on the pad. Water runoff from the pad, likely from trying to extinguish the blaze, could be seen along with a host of vehicles parked nearby. NPR first reported on the satellite images of the apparent failed launch at the space center, some 240 kilometers (150 miles) southeast of Iran’s capital, Tehran. Iranian satellite launches had been anticipated before the end of the year.
U.S. should honor nuclear deal if it wants talks: Iran foreign minister - Iran’s Foreign Minister Mohammad Javad Zarif said on Thursday the United States must observe the 2015 nuclear deal and stop engaging in “economic terrorism” against the Iranian people if Washington wants to meet for talks. Tensions between Tehran and Washington have risen since U.S. President Donald Trump’s administration last year quit an international deal to curb Iran’s nuclear ambitions and began to ratchet up sanctions. Iran, which has slowly been breaching the nuclear deal in retaliation for U.S. sanctions, has threatened further violations in early September unless it receives sanctions relief. “The United States is engaged in an economic war against the Iranian people and it won’t be possible for us to engage with the United States unless they stop imposing a war and engaging in economic terrorism against the Iranian people,” Zarif told reporters in Kuala Lumpur after addressing a forum on security in the Islamic world. “So if they want to come back into the room there is a ticket that they need to purchase and that ticket is to observe the agreement,” he said, referring to the 2015 nuclear deal.
Iran Sold Oil Wanted by US-- Iran said it sold an oil cargo on board a contested tanker sailing the Mediterranean Sea but didn’t know where the vessel was going amid U.S. efforts to block delivery of the crude. The Adrian Darya 1, the tanker that the U.S. sought to seize in Gibraltar last week, was sailing more than halfway into the Mediterranean Sea on Monday without declaring any destination. Iran didn’t identify the buyer of the roughly 2 million-barrel cargo. The buyer will determine where the oil is delivered, Iranian government spokesman Ali Rabiei said announcing the sale. He didn’t say when Iran sold the crude in comments carried by state-run IRNA news agency. Iran’s tanker fleet is under intense scrutiny as the U.S. seeks to cut off the Islamic republic’s ability to sell crude, normally the country’s main export earner. Iran’s oil sales have tumbled under U.S. sanctions threatening to punish most interactions with the Iranian government over its nuclear program. French President Emmanuel Macron renewed efforts over the weekend to save the 2015 nuclear agreement with the Islamic Republic. Both Iran and other signatories to the deal oppose the U.S. President Donald Trump’s tougher measures and Macron proposed allowing the Middle Eastern producer to sell more crude in exchange for returning to full compliance with the agreement. Macron discussed the idea in meetings with Trump and Iranian Foreign Minister Javad Zarif in Biarritz, the site of the Group of Seven summit. Those discussions would likely do little to solve the immediate problem of the Adrian Darya 1. The Trump Administration is seeking to block the tanker’s voyage by threatening sanctions to stop the ship from being able to call in any port or offload any oil. The tanker on Sunday changed the signal sent from the vessel’s satellite transponder to “For Order,” a designation meaning the ship isn’t disclosing any destination, according to Bloomberg tanker-tracking data. The Adrian Darya 1, which last week changed names from Grace 1, was sailing south of the Greek mainland, according to tanker-tracking data.
'Mystery Buyer' Has Purchased The 2.1M Barrels Of Iranian Oil Aboard The Adrian Darya -As the previously detained Grace 1 tanker, since renamed the Adrian Darya 1, continues its voyage toward a port in southern Turkey, there's been a significant development regarding the 2.1 million barrels of Iranian crude aboard which the US has sought to capture, claiming the ship is engaged in illegal sanctions busting. On Monday an Iranian government spokesman announced the 2.1 million barrels have been sold to an unnamed buyer while en route across the Mediterranean. In statements made to reporters in Tehran, spokesman Ali Rabiei, said of the oil's as yet unmentioned unloading point, “The buyer of the oil decides where its destination is.” He added that the world is “witnessing the wrong policy by the U.S. in monitoring and intervention in others’ internal affairs.” The Associated Press noted that "At market rates, the crude oil aboard the Adrian Darya would be worth about $130 million" and further that "anyone buying it likely would be targeted by U.S. financial sanctions."Over the weekend the real-time ship tracking website MarineTraffic showed a change in the Iran-flagged Adrian Darya's destination. This after the US State Department threatened that should Greece provide any aid or facilities to the vessel carrying 2.1 million barrels of Iranian oil, it would be tantamount to "material support to terrorism". The Unites States says the tanker is controlled by the Iranian Revolutionary Guards and thus deems any state's interaction with it support of a formally designated terrorist group. There's still an active US seizure warrant for the vessel. The tanker's data initially had as its intended destination Kalamata, Greece, but later changed it during the voyage to Mersin, Turkey.Tracking data now shows it plans to dock at the southern Turkish port on Aug. 31 — an interesting choice given Washington-Ankara relations are at a low point over Turkey's purchase of the Russian S-400 anti-air defense systems, and resulting cancellation of the US F-35 transfer.
Iranian Tanker Showdown Heads To Turkey - The Iranian tanker which had been detained for the past five weeks in Gibraltar has suddenly switched its ship data to show it is headed to a Turkish port, instead of arriving at waters off southern Greece, as previously planned. Reuters has cited real-time ship tracking website MarineTraffic to show the change in the Adrian Darya's (formerly called Grace 1) destination. This after the US State Department threatened that should Greece provide any aid or facilities to the vessel carrying 2.1 million barrels of Iranian oil, it would be tantamount to "material support to terrorism". The Unites States says the tanker is controlled by the Iranian Revolutionary Guards and thus deems any state's interaction with it support of a formally designated terrorist group. There's still an active US seizure warrant for the vessel. While the vessel never planned to actually enter a Greek port, listed as the port of Kalamata — especially given the overladen supertanker sits too low in the water — it's been widely reported that a ship-to-ship transfer of the oil was to occur off its southern coast. A US Statement Department statement issued Monday had warned Greece's help could be considered “providing material support to a US-designated foreign terrorist organization” — this according to a State Department official who spoke to Reuters.
Turkey Says Adrian Darya Tanker Bound For Lebanon -- A day after the Iranian oil-laden supertanker Adrian Darya 1 made a complete u-turn just as it made its way into Turkish territorial waters, Turkey has denied that it will enter port there; instead, top Turkish officials say it is bound for Lebanon. Turkish Foreign Minister Mevlut Cavusoglu said Friday the tanker and its 2 million barrels of oil are headed to "the main port in Lebanon," as reported by Reuters. It has changed course several times since being released by UK/Gibraltar custody weeks ago, and now appears to be circling in waters west of Cyprus. Interestingly, in all the maneuvering it has actually come in the vicinity of its original suspected destination for which it was accused of busting EU sanctions in the first place, the Syrian port of Baniyas: According to Refinitiv tracking data, the Adrian Darya, formerly called Grace 1, made a U-turn on Friday and headed for Turkey's Iskenderun port - 200 km (124 miles) north of Syria's Baniyas refinery, the tanker's suspected original destination. Also on Friday the Iranian-flagged tanker again switched its destination, this time to the Bay of Iskennderun, Turkey; but analysts dismissed the likelihood of its actually going there. Instead, the tanker is widely believed to be biding its time until it makes a hasty ship-to-ship transfer of the oil, likely "a few days away," according to the best estimate of TankerTrackers.com.
Iranian Tanker Still Bound For Syria; US Working To Disrupt Oil Transfer- Report - As the Iranian oil tanker Adrian Darya 1 still appears to be circling in Mediterranean waters off western Cyprus after it turned away from approaching Turkey's coast this week, a new Wall Street Journal report says it will ultimately attempt to offload its 2.1 million barrels of oil to Syria after all, in contravention of EU sanctions. The WSJ report issued late Friday cites US officials who describe a plan already in place to disrupt any ship-to-ship transfer that would get the oil into Syrian hands — precisely what UK/Gibraltar authorities detained the ship for in the first place, at the request of the United States: The U.S. State Department is working to disrupt what it sees as the vessel’s Syrian plan, according to a U.S. official. The State Department has been monitoring two other Iranian tankers in the Mediterranean that could pick up the cargo...The US has further warned Egypt against letting the tanker cross into the Suez canal, according to the report, especially given Washington still has an active seizure warrant out for what the US has described as an IRGC-controlled vessel. As we observed before, all the erratic maneuvering and circling by the Adrian Darya 1 in the past two days between Turkey and Cyprus has actually put the vessel in the vicinity of its original suspected destination for which it was accused of busting EU sanctions in the first place — the Syrian port of Baniyas. As Reuters described based on tracking data, the vessel "made a U-turn on Friday and headed for Turkey's Iskenderun port - 200 km (124 miles) north of Syria's Baniyas refinery, the tanker's suspected original destination." "The vessel’s plan, the people said, is to deliver its crude to smaller tankers near Syria. The new itinerary, with the stated destination of Iskenderun, comes after a failed attempt to offload the cargo near Greece, the people said," according to the WSJ.
Syrian troops surround Turkish military post near Idlib - Syrian government forces surrounded a Turkish military observation post in the northwest on Friday after overrunning nearby areas, upping the stakes with Ankara in its Russian-backed offensive against the jihadist-ruled Idlib region. The move angered Turkey, with Foreign Minister Mevlut Cavusoglu saying his country’s troops will not quit the observation post as Moscow said that it has agreed with Ankara to “activate mutual efforts” to ease the situation in Idlib. The town of Morek, where the Turkish troops have been cut off, lies in the north of Hama province, part of a jihadist-ruled region centred on neighbouring Idlib province that has been under government assault since late April. Government forces took control of Morek and other nearby towns including Kafr Zita on Friday, Syrian state news agency SANA said. Jihadists and allied rebels withdrew from the area ahead of the army’s entry into the strategic town of Khan Sheikhun on Wednesday and government forces took control without resistance, according to the Syrian Observatory for Human Rights. “Regime forces have surrounded the Turkish observation post in Morek after capturing other towns and villages in this pocket,” said the Britain-based monitor. Speaking at a new conference in the Lebanese capital, Cavusoglu said “our observation point there is not cut-off and nobody can isolate our forces and our soldiers.” “We are there, not because we can’t leave but because we don’t want to leave,” he told reporters, adding that the issue was being discussed with Damascus allies Russia and Iran. The Morek observation post, established under a deal with Moscow, is one of 12 the Turkish army set up along the front line between government forces and the jihadists and their rebel allies last year. On Tuesday Cavusoglu vowed that the Turkish army “will do whatever is necessary” to defend these positions. The troops’ mission was to oversee the establishment of a buffer zone agreed by Ankara and Moscow in September. But the jihadists failed to pull back from the zone as agreed and in April, government and Russian forces resumed intense bombardment of the region. Turkish President Recep Tayyip Erdogan spoke with his Russian counterpart Vladimir Putin by phone Friday in a bid to de-escalate tensions over the Idlib offensive.
Erdogan and Putin meet as Syria offensive pummels Idlib - Turkish President Recep Tayyip Erdogan is meeting with his Russian counterpart, Vladimir Putin, on Tuesday to discuss a Syrian military offensive against the jihadi-dominated province of Idlib, where Moscow and Ankara had set up a demilitarized zone. Syrian troops backed by Russian airpower have advanced in recent weeks against jihadi forces in the last major rebel enclave in northwestern Syria, and encircled a Turkish military post. The fierce fighting has all but unraveled a fragile truce deal struck in September by Russia and Turkey as the Syrian regime pushes north to gain control of strategic highways connecting the government-controlled cities of Aleppo and Hama and the regime's Alawite heartland in Latakia on the Mediterranean coast. Last week, a Turkish military convoy heading to an observation post in Idlib came under attack in an air raid conducted either by the Syrian government or Russian warplanes. The airstrike killed three civilians and wounded a dozen more. The Turkish Defense Ministry "strongly condemned" the August 19 attack and said it ran counter to "existing agreements as well as our cooperation and dialogue with Russia." Turkey is a major backer of some rebel groups in Idlib, which is dominated by jihadi factions led by Hayat Tahrir al-Sham, al-Qaida's former Syria affiliate. Hayat Tahrir al-Sham is not part of the September de-escalation agreement and has carried out attacks on forces allied to the Syrian government, as well as Russia's Hmeimim air base using drones and missiles.
Turkey Affirms Its Claim On Cyprus Oil And Gas - Turkey will continue exploring for oil and gas in the eastern Mediterranean waters around disputed Cyprus, and “No project can be realised if Turkey and the Turkish Republic of Northern Cyprus are not involved,” President Recept Erdogan said, as quoted by Cypriot media. “We will continue to defend the rights of Turkish Cypriots with the same dedication,” Erdogan said following a meeting with the head of the Cypriot Turks. Turkey, which recognizes the northern Turkish Cypriot government and doesn’t have diplomatic relations with the internationally recognized government of EU member Cyprus, claims that part of the Cyprus offshore area is under the jurisdiction of Turkish Cypriots or Turkey, and they are entitled to part of the potential oil and gas resources in the area. Turkey doesn’t recognize the agreements that Cyprus has signed with other countries in the Mediterranean over the exclusive maritime zones either. Last month, tensions between Turkey and Greece regarding the Cyprus drilling rights spiked again when Greece’s newly elected government said Turkey undermined the security of the eastern Mediterranean with its drilling operations off the Cypriot shores. “The illegal actions of Turkey, which defy international law are placing the security of the region at risk. As such, they are absolutely condemnable,” Foreign Minister Nikos Dendias said, adding “We discussed this flagrant violation of the sovereignty and the sovereign rights of the Republic of Cyprus perpetrated by Turkey.” A string of natural gas discoveries in the waters around Cyprus have turned the divided island into one of the new hot spots for gas, along with Egypt and Israel. Just recently, the island greenlit a consortium involving Eni and Total to drill for gas in a new part of its exclusive economic zone.
Iraqi bloc calls for US troop withdrawal after Israeli air raids - A powerful bloc in Iraq's parliament has called for the withdrawal of US troops from the country, following a series of air raids targeting Iran-backed Shia militias in the country that have been blamed on Israel.The Fatah Coalition said on Monday that it holds the United States fully responsible for the alleged Israeli aggression, "which we consider to be a declaration of war on Iraq and its people".The coalition is a parliament bloc representing Iran-backed paramilitary militias known as the Popular Mobilization Forces.The coalition's statement came a day after a drone attack in the western Iraqi town of Qaim killed a commander with the Forces - the latest in attacks apparently conducted by Israel against the Iranian-backed militias in Iraq. It added that US troops are no longer needed in Iraq. Israeli also launched a similar attack against Iran-backed Hezbollah in Lebanon, which Beirut called a "declaration of war".The Iran-backed movement said late on Monday that the drones were carrying explosives.The Shia militia group, meanwhile, held a funeral procession in Baghdad for the commander killed on Sunday."There is no greater God but God!" the mourners shouted as they marched behind a banner with the words "Death to America" and "Death to Israel." Some trampled on an American flag as they marched.The Pentagon issued a statement Monday denying responsibility for the recent attacks and promising to cooperate with Iraqi investigations. "We support Iraqi sovereignty and have repeatedly spoken out against any potential actions by external actors inciting violence in Iraq, " Pentagon spokesman Jonathan R Hoffman said. Anger is mounting in Iraq following a spate of mysterious air raids that have targeted military bases and a weapons depot suspected of belonging to Iran-backed militias. The drone attacks have not been claimed by any side but US officials have said Israel was behind at least one of the attacks.
Iraqi political bloc calls alleged Israeli strikes 'a declaration of war' --A powerful bloc in Iraq’s parliament called for the withdrawal of US troops from Iraq following a series of airstrikes blamed on Israel that targeted Iran-backed Shiite militias in the country.The Fatah Coalition said on Monday it holds the United States fully responsible for the reported Israeli strikes, “which we consider to be a declaration of war on Iraq and its people.”The coalition is a parliament bloc representing Iran-backed paramilitary militias known as the Popular Mobilization Forces.The coalition’s statement came a day after a drone strike in the western Iraqi town of al-Qaim killed a commander with the forces — the latest in strikes allegedly conducted by Israel against the Iranian-backed militias in Iraq.The statement added that US troops are no longer needed in Iraq. The field commander killed in the strike was buried Monday morning near Baghdad. Kazem Mohsen was killed on Sunday “in an Israeli drone strike in Al-Qaim while on duty,” the Popular Mobilization Forces said in a statement, adding that he was a “logistical support chief” for the group’s Brigade 45.“Hundreds participated… in the funeral procession this morning for Kazem Mohsen,” also known as Abu Ali al-Dabi, it said.The PMF said one other fighter was severely wounded in the attack on Brigade 45, a unit based about 15 kilometers (10 miles) from Iraq’s western border with Syria. Two officials from the group said the vehicles targeted in the strike were being used to transport weapons. The officials spoke on condition of anonymity because they were not authorized to speak to journalists about the matter.Iraq’s PMF accused Israel of the deadly drone attack on Sunday, the first time it directly blamed the Jewish state after a series of blasts hit bases run by the paramilitary force.“As part of the string of Zionist attacks on Iraq, the evil Israeli crows have returned to target the Hashed al-Shaabi [PMF], this time with two drones inside Iraqi territory,” the statement said. The Israeli military refused to comment on the matter.
Israel Launched Failed Overnight Drone Attack On Hezbollah In South Beirut - Last night for the first time in over a decade Israel tried to carry out a targeted airstrike over the southern suburbs of Beirut. The apparent assassination attempt failed, however, when one Israeli drone fell from the sky, crashing into a south Beirut neighborhood, and another exploded near the ground in the early hours of Sunday. Hezbollah indicated its forces had "downed" the first drone, possibly through electronic intercept. The second drone struck near Hezbollah's media center, and may have either been targeting this building or possibly had been seeking to take out Hezbollah commanders. Footage from #Beirut Southern Suburb and #Hezbollahstronghold. Citizens says they saw a 'drone missile' target what they say was a vehicle. pic.twitter.com/liA8d53MGI — Riam Dalati (@Dalatrm) August 24, 2019 Lebanon has slammed the Israeli aggression after the invasion of its airspace, and will take the case before the UN, while Israel has yet to comment. According to a statement cited in Reuters, the second drone had been packed with explosives: Hezbollah spokesman told Lebanon’s state news agency NNA the second drone was rigged with explosives causing serious damage to the media center. Hezbollah is now examining the first drone, he said. The Lebanese army said that one Israeli drone fell and another exploded at 02:30 am local time (2330 GMT), causing only material damage.
Lebanon's President Announces Israeli Attacks Are Declaration Of War - After pro-Iran allies in Lebanon, Syria and Iraq were all hit in suspected Israeli strikes in the space of less than 24 hours, signalling a new aggression out of Tel Aviv and willingness to risk yet another major Middle East war, Arab capitals are now alerting their armed forces to be on a war footing. Lebanese President Michel Aoun on Monday condemned the "Israeli assault on the southern suburbs of Beirut" and told the country's United Nations Special Coordinator, that the recent spate of drone strikes on Lebanon amount to a "declaration of war". Especially in Lebanon, where the most powerful military force is not the Army but Shiite paramilitary group Hezbollah, tensions are soaring after Hezbollah media offices in Beirut were targeted by Israeli drones overnight Sunday. New Video of alleged Israel strikes in east Lebanon ~ an hour ago, targeting Palestinian Group PFLP. If true, this may be 4th military incident in Lebanon-Syria-Iraq involving Israel in 24 hours. Via @tobiaschneider pic.twitter.com/RGLjEaWFyw— Joyce Karam (@Joyce_Karam) August 26, 2019 A separate Israeli operation the day following reached deep into Lebanon, killing a PFLP-GC leader in Lebanon's Bekaa Valley (a Palestinian paramilitary group). Hezbollah leader Hassan Nasrallah described the weekend aggression during televised remarks addressing the crisis as marking the first Israeli attacks inside Lebanon since the devastating month-long 2006 war; however, Israel has yet to claim the Beirut attack.
Israel Warns Any Hezbollah Attack Will Bring Reprisal On Whole Lebanese State - There's been a flurry of threats and counter-threats after pro-Iran allies in Lebanon, Syria and Iraq were all hit in suspected Israeli strikes in the space of less than 24 hours, signalling a new aggression out of Tel Aviv and willingness to risk yet another major Middle East war. Indeed Lebanon's southern border with Israel is heating up once again in the worst tensions since the devastating 2006 war. Hezbollah secretary general Hassan Nasrallah has vowed to shoot down any Israeli aircraft violating Lebanon's sovereign airspace after early Sunday a pair of drones targeted Hezbollah offices in south Beirut, and further after a follow-up drone strike reached deep into Lebanon, killing a Palestinian paramilitary commander (of the PFLP-GC) in the Bekaa Valley.“Hezbollah will endeavor to down all Israeli drones, which may violate Lebanon’s airspace,” Nasrallah pledged in a televised speech. “The era of the Israeli military’s undeterred attacks on Lebanon has come to an end. Hezbollah will tolerate no more Israeli drones penetrating Lebanese airspace,” Nasrallah said. Simultaneously, Lebanese President Michel Aoun on Monday said the drone strikes amount to a "declaration of war" and convened an emergency meeting of the country's top military and security chiefs. Meanwhile in a potential return to the precise lead-up to the month-long 2006 war, which saw the Israel Defense Forces conduct a heavy bombing campaign across southern Lebanon all the way into Beirut, including the international airport, Tel Aviv is now signaling its forces won't differentiate between Hezbollah and the Lebanese state.
Israeli plan for new West Bank homes branded ‘war crime’ A leading human-rights activist has branded an Israeli scheme to build 300 new homes in the occupied West Bank a “war crime”. Revealing the development plans, prime minister Benjamin Netanyahusaid in a statement: “We will deepen our roots and strike at our enemies. We will continue to strengthen and develop settlement.”But Omar Shakir, Israel and Palestine director of Human Rights Watch, asked the International Criminal Court to note the plans to add to a case file on Mr Netanyahu. The announcement, he said, was “indisputable evidence of ordering commission of a war crime (facilitating transfer of one’s civilian population to occupied territory in violation of Article 49 of 4th Geneva Convention)”.The new Israeli settlement would be in Dolev, near western Ramallah, 17 miles north-west of Jerusalem, where on Friday a terrorist attack killed a 17-year-old girl and wounded her father and brother. At the end of last month Israel announced it would build 6,000 new homes for Jewish settlers in the occupied West Bank, which Palestinian leaders condemned as showing Tel Aviv’s “colonial mentality”.
Gaza 'State Of Emergency' As Blasts Blamed On Israel Were Actually ISIS Suicide Bombers - A strange series of blasts at Gaza police checkpoints that rocked Gaza City Tuesday evening has resulted in a rare admission by the Hamas-run Palestinian territory's health ministry that a prior statement blaming Israel for the new attacks was inaccurate. It now says Islamic State cells active in the strip are responsible. On Wednesday morning Hamas declared a 'state of emergency' amid a crackdown on both Islamic State supporters and renegade Salafist organizations after at least three Gazan police officers were reported killed in twin suicide explosions on separate checkpoints after motorcycles detonated at the sites. A handful of others were wounded in the attacks from the rival Islamist outlawed group. Currently "mass arrests" are underway according to local reports, yet Hamas officials are calling for calm while describing the attacks as an isolated incident. An Interior Ministry spokesman described that, “Mobilization of all police and security forces has been declared to follow-up on security developments in the aftermath of the two explosions.”This comes at a moment of continued heightened tensions between Hamas and Israel after last May hundreds of rockets were launched from Gaza into Israel, with corresponding IDF retaliatory strikes, and as deadly incidents involving Palestinian clashes with Israeli security forces along the border increased.
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