Sunday, October 13, 2019

global oil shortage at 3.38 million barrels per day in Sept as OPEC output fell 1.32 mbpd, non OPEC output fell 0.45 mbpd

oil prices ended higher this past week, as prospects for a US-China trade deal rallied financial ​and ​commodity markets worldwide....after falling more than 5% to $52.81 a barrel on weak economic data and the Saudi's production recovery last week, prices for US light sweet crude for November delivery initially rose more than $1 on Monday, as deadly anti-government demonstrations gripped Iraq, but gave up those gains to close 6 cents lower at $52.75 a barrel, pressured by prevailing worries over energy demand, despite reports of a drop in OPEC output....with U.S.-China trade talks looming over oil markets, oil prices fell again on Tuesday as US blacklisting of more Chinese companies dampened hopes for a quick trade deal, but closed down just 12 cents at 52.63 a barrel, as unrest in Iraq and Ecuador lent support to prices... oil prices slipped for a third consecutive session on Wednesday as the prospect of the United States and China striking a trade deal in talks this week dimmed, and ended 4 cents lower at 52.59 a barrel, as minutes from the Fed’s September meeting raised economic worries and the weekly EIA data revealed a fourth straight rise in domestic crude supplies...oil prices initially fell more than $1 on Thursday on concerns of trade-war related lower fuel demand, but then rallied on comments by OPEC Secretary-General Barkindo that they would take action to balance oil markets at their December meeting and closed 96 cents higher at $53.55 a barrel...oil prices edged slowly higher early on Friday, on hopes for deeper OPEC output cuts and hopes for a US-China trade pact, then jumped more than 2% after Iranian media said a state-owned oil tanker was attacked near Saudi Arabia, and went on to close $1.15 higher at $54.70 a barrel, on reports that the U.S. and China had reached partial agreement that could lead to a truce in the trade war...oil prices were thus able to log a weekly gain of nearly 4%, in their first weekly increase since the September 14th drone strikes on Saudi oil facilities..

natural gas prices, on the other hand, fell every day this past week and ended lower for a 4th consecutive week, as record production and weak demand continued to weigh on prices...after falling 2.2% to $2.352 per mmBTU on record production and weak demand last week, the contract price of natural gas for November delivery fell 4.9 cents or more than 2% on Monday after natural gas production had increased to a new all-time high over the weekend and the weather pattern shifted to indicate below normal demand...​gas ​prices ​then ​fell 1.5 cents on Tuesday and another 5.4 cents on Wednesday, as forecasts lessened the odds of a durable early season cold snap, ​thus ​pushing prices lower...prices slipped another 1.6 cents on Thursday on an EIA natural gas storage report that was higher than expected but still within the range of the various market estimates and then inched down another four-tenths of a cent on Friday to end the week at $2.214 per mmBTU, down 5.9% from the prior Friday and down 18.6% from its September 16th close...

the natural gas storage report for the week ending October 4th from the EIA indicated that the quantity of natural gas held in storage in the US increased by 98 billion cubic feet to 3,415 billion cubic feet by the end of the week, which meant our gas supplies were 472 billion cubic feet, or 16.0% more than the 2,943 billion cubic feet that were in storage on October 4th of last year, while still 9 billion cubic feet, or 0.3% below the five-year average of 3,423 billion cubic feet of natural gas that have been in storage as of the 4th of October in recent years....this week's 98 billion cubic feet injection into US natural gas storage was more than the consensus forecast for a 94 billion cubic feet injection from analysts surveyed by S&P Global Platts, and it was also above the average 89 billion cubic feet of natural gas that have been added to gas storage during the first week of October over the past 5 years, the 28th such average or above average storage build in the last 30 weeks...the 2,237 billion cubic feet of natural gas that have been added to storage over the 28 weeks of this year's injection season is the second most for the same period in the modern record, eclipsed only by the record 2294 billion cubic feet of natural gas that were injected into storage over the same 28 weeks of the 2014 natural gas injection season, a coolish 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 October 4th showed that because of a deepening slowdown in our oil refining, we were left with surplus oil to add to storage for the fourth week in a row...our imports of crude oil fell by an average of 67,000 barrels per day to an average of 6,224,000 barrels per day, after falling by an average of 87,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 534,000 barrels per day to an average of 3,401,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,823,000 barrels of per day during the week ending October 4th, 601,000 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 at a record 12,600,000 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 15,423,000 barrels per day during this reporting week..  

meanwhile, US oil refineries were reportedly processing 15,656,000 barrels of crude per day during the week ending October 4th, 496,000 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 average of 389,000 barrels of oil per day were being added to 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 and from oilfield production was 623,000 barrels per day less than what was reportedly added to storage plus 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 (+623,000) 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 much  oil unaccounted for again this week, it calls into question all the other oil metrics that the EIA has reported and that we have just transcribed (for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....  

further details from the weekly Petroleum Status Report (pdf) indicated that the 4 week average of our oil imports fell to an average of 6,486,000 barrels per day last week, now 16.8% less than the 7,797,000 barrel per day average that we were importing over the same four-week period last year....the 389,000 barrel per day net increase in our total crude inventories included 418,000 barrels per day that were added to our commercially available stocks of crude oil, which was offset by a withdrawal of 29,000 barrels per day from our Strategic Petroleum Reserve....this week's crude oil production was reported to be 100,000 barrels per day higher at a record 12,600,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at a record 12,100,000 barrels per day, while a 8,000 barrels per day decrease to 473,000 barrels per day in Alaska's oil production ha no impact on the final rounded national production total...last year's US crude oil production for the week ending October 4th was rounded to 11,200,000 barrels per day, so this reporting week's rounded oil production figure was 12.5% above that of a year ago, and 49.5% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 86.4% of their capacity in using 15,656,000 barrels of crude per day during the week ending October 4th, down from 86.4% of capacity the prior week, & well below the normal refinery utilization rate for mid-September, possibly due to the residual effects of tropical storm Imelda's track through southeastern Texas...whatever the reason, the 15,656,000 barrels per day of oil that were refined this week was 3.6% less than the 16,239,000 barrels of crude per day that were being processed during the week ending October 5th, 2018, when US refineries were operating at 88.8% of capacity....

with the decrease in the amount of oil being refined, gasoline output from our refineries was a bit lower, decreasing by 15,000 barrels per day to 10,066,000 barrels per day during the week ending October 4th, after our refineries' gasoline output had decreased by 159,000 barrels per day the prior week...but even with that decrease in gasoline output, this week's gasoline production was 3.7% higher than the 9,711,000 barrels of gasoline that were being produced daily over the same week of last year....at the same time, our refineries' production of distillate fuels (diesel fuel and heat oil) rose by 22,000 barrels per day to 4,835,000 barrels per day, after our distillates output had decreased by 528,000 barrels per day over the prior 3 weeks....​hence, after those​ prior​ larger decreases, our distillates production was 3.8% below the 5,028,000 barrels of distillates per day that were being produced during the week ending October 5th, 2018.... 

with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the 11th time in 17 weeks and for the 25th time in thirty-two weeks, falling by 1,213,000 barrels to 228,763,000 barrels during the week to October 4th, after our gasoline supplies had decreased by 228,000 barrels over the prior week....the decrease in our gasoline supplies was larger this week because the amount of gasoline supplied to US markets increased by 223,000 barrels per day to 9,460,000 barrels per day, and because our imports of gasoline fell by 201,000 barrels per day to 642,000 barrels per day while our exports of gasoline fell by 124,000 barrels per day to 796,000 barrels per day....after this week's decrease, our gasoline supplies were 3.1% lower than last October 5th's inventory level of 236,172,000 barrels, and slipped back to roughly 2% above the five year average of our gasoline supplies for this time of the year...

even with the small increase in our distillates production, our supplies of distillate fuels fell for the 18th time in the past 30 weeks, decreasing by 3,943,000 barrels to 127,324,000 barrels during the week ending October 4th, after our distillates supplies had decreased by 2,418,000 barrels over the prior week...the decrease in our distillates supplies was more extreme this week because our exports of distillates rose by 205,000 barrels per day to 1,454,000 barrels per day  while our imports of distillates rose by 42,000 barrels per day to 92,000 barrels per day, and because the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 76,000 barrels per day to 4,036,000 barrels per day....after this week's inventory decrease, our distillate supplies were 4.6% less than the 133,465,000 barrels of distillates that we had stored on October 5th, 2018, and fell to around 9% below the five year average of distillates stocks for this time of the year...

finally, with the increase in oil production and the refinery slowdown, our commercial supplies of crude oil in storage rose for the sixth time in seventeen weeks and for the twenty-first time in 38 weeks, increasing by 2,927,000 barrels, from 422,642,000 barrels on September 27th to 425,569,000 barrels on October 4th...that increase still left our crude oil inventories near the five-year average of crude oil supplies for this time of year, but more than 25% higher than the prior 5 year (2009 - 2013) average of crude oil stocks as of the first weekend of October, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories had generally been rising over the past year up until the most recent seventeen weeks, after generally falling until then through most of the prior year and a half, our oil supplies as of October 4th were still 3.8% above the 409,951,000 barrels of oil we had stored on October 5th of 2018, but at the same time were 7.9% below the 462,216,000 barrels of oil that we had in storage on October 6th of 2017, and 10.2% below the 473,958,000 barrels of oil we had in commercial storage on October 7th of 2016...     

OPEC's Monthly Oil Market Report

Thursday of this past week saw the release of OPEC's October Oil Market Report​, which cover​s September OPEC & global oil data, and ​hence serves to give us the first snapshot of the impact that the September 14th drone attack on Saudi oil infrastructure had on their crude oil production, OPEC's oil output, and global oil supplies....as you’ll see, this report shows there was again a large shortfall in the amount of oil produced globally in September, almost twice the large shortfall seen in August...

the first table from this monthly report that we'll look at is from the page numbered 58 of that report (pdf page 68), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate...for all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thus avert any potential disputes that could arise if each member reported their own figures...

September 2019 OPEC crude output via secondary sources

as we can see from the above table of oil production data, OPEC's oil output fell by 1,318,000 barrels per day to 28,491,000 barrels per day in September, from their revised August production total of 29,809,000 barrels per day...however that August figure was originally reported as 29,741,000 barrels per day, which means that August​'s production​ was revised 68,000 barrels per day higher and hence September's production was, in effect, a 1,250,000 barrel per day decrease from the previously reported production figures (for your reference, here is the table of the official August OPEC output figures as reported a month ago, before this month's revisions)...

we can also see that the 1,280,000 barrel per day decrease in production from the Saudis, largely due to the attack on their facilities, was the reason for ​OPEC's ​September output drop, as decreases of 82,000 barrels per day in output from Venezuela and 60,000 barrels per day in the output from Iraq were largely offset by the 104,000 barrel per day increase in output from Libya and the 24,000 barrel per day increase by Angola, while the oil output from most other OPEC members was​ comparatively​ little changed....we should note that the Saudis reported to OPEC that their production was only lower by 660,000 barrels per day, or only by half as much as the official figures....this can be seen in the the table below, also from the supply section of the report:

September 2019 OPEC crude output as reported

this table is also from the page numbered 58 of OPEC's October Oil Market Report (pdf page 68), and it shows the oil production totals that several of the OPEC members reported directly to the OPEC Secretariat...usually, these self reported totals are pretty close to the official output totals shown in the first table we posted, but as you see here, in September there was quite a divergence between the official production totals and what several of the OPEC members reported they produced...most notable, of course, is the much smaller output decrease that the Saudis reported...one would think that sophisticated producers such as the Saudis would have a better idea what they produced than outside agencies, but the Saudis have been putting a lot of ​​effort into minimizing the perceived effects of the attack on their output, with repeated reassurances in the media that ​their ​production quickly recovered, since they are still planning to go ahead with the IPO of Saudi Aramco, and are trying to reverse any bad publicity that would effect the eventual pricing of their stock offering...

production from most other OPEC members, other than Iraq and Nigeria, also remains below the output allocation as originally determined for each OPEC member after their December 7th, 2018 meeting, when OPEC agreed to cut 800,000 barrels per day as part of a 1.2 million barrel per day cut agreed to with Russia and other oil producers, and which were extended at their July 1st meeting a little over three months ago...this can be seen in the table of OPEC production allocations we've included below:

February 6 2019 Platts on OPEC allocations

the above table came from a February 6th post on Saudi cuts and OPEC allocations at S&P Global Platts, and it shows average daily production quota in millions of barrels of oil per day for each of the OPEC members as was agreed to at their December 2018 meeting and has now been extended through March 2020 as of their recent meeting....note that Venezuela and Iran, whose oil exports are being sanctioned by the Trump administration, and Libya, which has been beset by a civil war, are exempt from any production quotas, and that only Libya among those exempt countries is producing more than they did in the 4th quarter of 2018, which you can see in the third column of the first, official OPEC production table above...​we should note that there are media reports that ​OPEC has ​agreed to ​raise the quota for Nigeria to 1.774 million ​barrels per day, but there was no official policy statement to that effect...

the next graphic from the report that we'll include shows us both OPEC and world oil production monthly on the same graph, over the period from October 2017 to September 2019, and it comes from page 59 (pdf page 69) of the September OPEC Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale... 

September 2019 OPEC report global oil supply

including the 1.32 million barrels per day decrease in OPEC's production from what they produced a month ago, their preliminary estimate now indicates that total global oil production fell by 1.77 million barrels per day to 97.32 million barrels per day in September, and that reported decrease came after August's total global output figure was revised down by 150,000 barrels per day from the 99.24 million barrels per day global oil output that was reported a month ago, as non-OPEC oil production fell by a rounded 450,000 barrels per day in September after that revision, with lower oil production from Canada, Norway, Kazakhstan, and Russia the major reasons for the non-OPEC output decrease in September...the 97.32 million barrels per day produced globally in September was also 2.00 million barrels per day, or 2.0% lower than the revised 99.32 million barrels of oil per day that were being produced globally in September a year ago (see the October 2018 OPEC report (online pdf) for the originally reported September 2018 details)...with this month's decrease in OPEC's output, their September oil production of 28,491,000 barrels per day fell to 29.3% of what was produced globally during the month, down from the revised 30.1% share they contributed in August....OPEC's September 2018 production was reported at 32,761,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year, excluding Qatar from last year's total and new member Congo from this year's, produced 3,989,000 fewer barrels per day of oil than they produced a year ago, when they accounted for 33.1% of global output, with a 1,948,000 barrel per day drop in output from Saudi Arabia, a 1,288,000 barrel per day decrease in the output from Iran, and a 553,000 barrel per day decrease in the output from Venezuela from that time more than offsetting the small year over year production increases of 111,000 barrels per day by Nigeria, 111,000 barrels per day by Libya, 78,000 barrels per day by the United Arab Emirates and 74,000 barrels per day by Iraq...

with the 1,770,000 barrels per day decrease in global oil output that was seen during September, there was a substantial shortfall in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us...     

September 2019 OPEC report global oil demand

the table above came from page 32 of the October OPEC Monthly Oil Market Report (pdf page 42), and it shows regional and total oil demand in millions of barrels per day for 2018 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2019 over the rest of the table...on the "Total world" line in the fourth column, we've circled in blue the figure that's relevant for September, which is their revised estimate of global oil demand during the third quarter of 2019...

OPEC has estimated that during the 3rd quarter of this year, all oil consuming regions of the globe have been using 100.70 million barrels of oil per day, which was revised from their estimate of 100.63 million barrels of oil per day for the 3rd quarter a month ago....meanwhile, as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were only producing 97.32 million barrels per day during September, which means that there was a shortage of around 3,380,000 barrels per day in global oil production when compared to the demand estimated for the month... 

in addition, the downward revision of 150,000 barrels per day to August's global output that's implied in this report, combined with the 70,000 barrel per day upward revision to 3rd quarter demand, means that the 1,450,000 barrel per day shortfall that we had originally figured for August based on last month's figures would now have to be revised to a deficit of 1,670,000 barrels per day...similarly, the 70,000 barrel per day upward revision to 3rd quarter demand means that the 2,220,000 barrel per day shortfall that we had originally figured for July would have to be revised to a deficit of 2,290,000 barrels per day....thus, the oil supply deficit for the 3rd quarter as a whole has averaged nearly 2,440,000 barrels per day...

however, demand figures for both the first quarter and 2nd quarter were also revised lower with this report, as you can see encircled by the green ellipse on the table above...the 150,000 barrels per day downward revision to 2nd quarter demand would mean that we'd have to revise our global oil deficit for June from 620,000 barrels per day to 470,000, that we'd have to revise our May deficit from 990,000 barrels per day to 840,000 barrels per day, and we'd have to revise our global oil deficit for April from 860,000 barrels per day to 710,000 barrels per day...hence, for the 2nd quarter as a whole, even after those downward revision to demand, the world's oil producers were producing 617,000 barrels per day less than what was needed...

encircled in green is also a downward revision of 100,000 barrels per day to first quarter demand, a period when supply exceeded demand....that means that the global oil surplus of 190,000 barrels per day we had previously figured for March would have to be revised to a global oil surplus of 290,000 barrels per day...similarly, the 640,000 barrel per day global oil output surplus we had for February would now be a 740,000 barrel per day global oil output surplus, and the 550,000 barrel per day global oil output surplus we had for January would be revised to a 650,000 barrel per day oil output surplus.. so as you can see, we have gone from a global oil surplus averaging over 550,000 barrels per day in the first quarter to an oil shortage of 2,440,000 barrels per day by the third quarter, a swing of 3 million barrels per day....however, most of the media, including industry websites, is still reporting as if we still have a global glut of oil...

This Week's Rig Count

the US rig count rose for the first time in 8 weeks and for the 4th time in 34 weeks over the week ending October 11th, but is still down by nearly 21% since the beginning of this year....Baker Hughes reported that the total count of rotary rigs running in the US rose by 1 rig to 856 rigs this past week, which was still down by 193 rigs from the 1063 rigs that were in use as of the October 12th report of 2018, and well less than half of the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began an attempt to flood the global oil market...

the count of rigs drilling for oil increased by 2 rigs to 710 rigs this week, which was still 157 fewer oil rigs than were running a year ago, and quite a bit below the recent high of 1609 rigs that were drilling for oil on October 10th, 2014...at the same time, the number of drilling rigs targeting natural gas bearing formations fell by 1 rig to 143 natural gas rigs, a 32 month low for gas rig drilling activity and down by 50 rigs from the 193 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition, a vertical rig classified as miscellaneous continued to drill on the big island of Hawaii this week, which is equal to the "miscellaneous" rig count of a year ago..

Gulf of Mexico offshore drilling activity was increased by 1 rig to 23 Gulf rigs running this week, with all of those drilling offshore from Louisiana... that's one more rig than the Gulf of Mexico rig count of a year ago, when 21 rigs were drilling in Louisiana waters and one was drilling offshore from Texas...in addition to the Gulf, one rig continues to drill offshore from the Kenai Peninsula in Alaska, which matches the offshore Alaska count of a year ago...hence, the national total of 24 offshore rigs is up by 1 rig from the 23 rigs that were deployed offshore a year ago...

the count of active horizontal drilling rigs was up by 1 rig to 750 horizontal rigs this week, which was still 177 fewer horizontal rigs than the 927 horizontal rigs that were in use in the US on October 12th of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014...likewise, the directional rig count was up by 1 to 55 directional rigs this week, but those were still down by 15 from the 70 directional rigs that were operating during the same week of last year...on the other hand, the vertical rig count decreased by 1 to 51 vertical rigs this week, and those were also down by 15 from the 66 vertical rigs that were in use on October 5th 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 October 11th, the second column shows the change in the number of working rigs between last week's count (October 4th) and this week's (October 11th) count, the third column shows last week's October 4th 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 12th of October, 2018...   

October 11 2019 rig count summary

as you can see, rig activity managed its first increase in eight weeks on the back of that six rig increase in the Permian basin, which is currently being targeted for oil...in the Texas Permian in the western part of the state, 4 rigs were added in Texas Oil District 8, or the core Permian Delaware, 2 rigs were added in Texas Oil District 8A, or the northern Permian Midland, and another rig was added in Texas Oil District 7C, which corresponds to southern Permian Midland...hence, with the Texas Permian seeing a 7 rig increase, it's clear that the rig pulled out of New Mexico this week had been operating in the western reaches of the Permian Midland...those oil rig increases were offset by the 3 oil rigs pulled out of the Cana Woodford in Oklahoma, and an oil rig in another basin not tracked separately by Baker Hughes...among rigs drilling for natural gas, this week saw two rigs added in the Haynesville (one in northwest Louisiana and the other in Texas Oil District 6) and three rigs added in West Virginia's Marcellus, while four natural gas rigs were shut down in Pennsylvania's Marcellus, another was shut down in Ohio's Utica, and one more was pulled from offshore of the Kenai Peninsula in Alaska, where they had been targeting natural gas at a depth of more than 15,000 feet...

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ODNR Issues 10 Permits in Utica-Point Pleasant Shale - – The Ohio Department of Natural Gas issued 10 permits for horizontal drilling in the Utica-Point Pleasant shale last week. Half were awarded to Antero Resources Corp. for wells in Seneca Township in Noble County. Three were awarded to Equinor USA Onshore Properties Inc. for sites in Salem Township in Monroe County. And two were granted to EAP Ohio LLC for wells in the German Township, Harrison County. As of Oct. 5, the ODNR had issued 3,177 permits for horizontal drilling in the shale play, with 2,707 wells being drilled. Of those, 2,339 are active. No permits were awarded in Mahoning, Trumbull or Columbiana counties. Nor were any permits issued in Mercer or Lawrence counties in Pennsylvania, according to the state’s Department of Environmental Protection.

Report: Ohio Counties Have Received Nearly $142 Million in Real Estate Property Taxes from Utica Shale Production - Eight of Ohio’s top Utica Shale development counties collected more than $141.9 million in real estate property taxes on oil and natural gas production since 2010, according to an updated report by Energy In Depth and the Ohio Oil and Gas Association.The Utica Shale Local Support Series report entitled, “2019 Update: Ohio’s Oil and Gas Industry Property Tax Payments,” analyzes the economic impacts of oil and natural gas real estate property (or ad valorem) taxes paid in these counties from 2010-2017: Belmont, Carroll, Columbiana, Guernsey, Harrison, Jefferson, Monroeand Noble.Data was collected through Freedom of Information Act requests, and builds on EID and OOGA’s previous 2017 reports on real estate property taxes and road use management agreements.The Utica Shale Local Support Series shows the real dollars being paid to Ohio’s communities. As Harrison Hills Superintendent Dana Snider said:  “Harrison Hills has experienced a great working and supportive relationship with the oil and gas industry. Part of that support comes from the ad valorem tax, which in large part comes to the district. Those dollars have allowed us to reinvest in our students, staff and facilities to provide a state of the art, nurturing and creative learning environment that our community is proud of.”  Here are the key findings of the 2019 updated report:

Pipeline protection bill stomps on civil rights - Columbus Dispatch - You’d think the oil and gas industry would be satisfied, now that it has pushed all of its measly opposition aside, crisscrossed Ohio with pipelines and fracked up the countryside with its well pads. But no, there are still citizens to be muzzled. Senate Bill 33 has been oozing its way around the Statehouse for months. It passed the Senate in May and now resides in the House Public Utilities Committee. It aims to bolster laws already on the books by tailoring them to specifically address “critical infrastructure facilities” and to target interlopers at those facilities with enhanced penalties.Critical infrastructure, according to the bill, includes everything from water plants to telecommunications towers. But it is the gas and oil industry that is driving legislation like SB 33 across the U.S. Since high-profile protests of the Dakota Access crude oil pipeline in 2016, the industry’s full-court press is working; nine states have increased criminal penalties by drafting legislation very much like SB 33. If SB 33 were to become law, it would be a first-degree misdemeanor to “knowingly enter or remain on a critical infrastructure facility,” a crime that is punishable by up to six months in jail and a $1,000 fine. If violators “knowingly destroy or improperly tamper with a critical infrastructure facility,” they would face a third-degree felony punishable by up to three years in prison and a $10,000 fine. That’s the same punishment faced by a felon caught carrying a gun.   And in what would have the most chilling effect on free speech if SB 33 becomes law, organizations that are deemed “complicit” with any acts of destruction or tampering could face a fine of as much as $100,000. That might be chump change to a natural-gas pipeline operator, but it could be a lethal blow to a local grassroots environmental group.“This is designed to discourage protest,” Gary Daniels, chief lobbyist for the American Civil Liberties Union of Ohio, told Dispatch Reporter Marty Schladen last week.  The wording of SB 33 is as murky as that gray sludge the pipeline companies spilled all over the landscape back when they were assembling their lines with all the care of a sugar-addled toddler cramming and jamming his way through a bucket of giant Legos. Is it tampering to block a driveway to a well pad? To hang a protest banner on a section of pipeline, or to simply stick a sign in the ground? Is it tampering to scuff your boots in the dust of a pipeline right of way when the industry doesn’t particularly like what you’re saying through that megaphone of yours?

Clean-up process begins at former injection well site in Alex Township - Athens NEWS - A state-ordered clean-up of an oilfield waste disposal site in Alexander Township is under way, a spokesperson for the Ohio Department of Natural Resources’ Division of Oil & Gas Management confirmed on Friday.“Vac (vacuum) trucks are in the process of that clean-out,” Adam Schroeder confirmed in an email Friday morning. “They’re moving along, and our inspector is watching and making sure it’s done to the letter of the law.”This past summer, the ODNR oil and gas division ordered operators of temporary injection-well storage pits to take steps toward draining them of residual oilfield and fracking wastes, properly disposing of the “technologically enhanced naturally occurring radioactive material” in the pits, and ensuring the pits’ physical integrity going forward. One of these “concrete pits constructed below ground surface for temporary storage of saltwater and oilfield wastes” is the Ginsberg well, an open-air cement storage pit located a stone’s throw away from Ladd Ridge Road in Athens County’s Alexander Township. The NEWS was alerted to the clean-up process last week after receiving word from a neighbor who reported seeing renewed truck traffic going to and fro the Ginsberg site.  After the ODNR Oil & Gas division’s order in July, a news release from the Athens County Future Action Network (ACFAN, sometimes using the term “Fracking Action Network”) appeared to applaud the move toward stronger regulation of the temporary storage pits such as the Ginsberg well, with the release’s headline declaring “Constant Pressure Constantly Applied Finally Made a Difference.” However, in the same release, Roxanne Groff, a member of ACFAN, cautioned that “final victory” won’t happen “until these pits and wells are closed.” She added, “Drilling holes and injecting toxic radioactive waste in our ground must stop. We hope that this long overdue ODNR mandate will result in operators shutting down their dangerous waste dumps.”  ODNR’s Schroeder said Friday that the clean-up of the Ginsberg well, during which waste material is sucked out of the temporary storage pits, “is progressing well” and should be completed in a matter of weeks, providing the weather doesn’t interfere. (That was before the heavy rain earlier this week.) Asked Monday morning where the waste material will be taken, Schroeder responded, “The waste will be taken to an approved facility, Austin Masters Services in this case, where it will be processed and solidified before being sent to a landfill. The division (or Oil and Gas Resource Management) will receive a manifest of these activities once they occur.”

Utica Summit hears Shell cracker update - Thousands of workers continue to build Shell’s new petrochemical plant in western Pennsylvania. When completed, the plant will turn ethane gas produced by Utica and Marcellus shale wells into plastic pellets used in everything from packaging films to hardhats. Michael Marr, business integration lead for Shell Appalachia, said workers had finished erecting major parts of the plant, but some 6,000 electricians, pipefitters and welders would be there for the foreseeable future connecting the pieces. Marr declined to give a more precise completion date. Shell is the first company to start building a cracker in the region. Thailand-based PTT Global Chemical is exploring a similar project in Belmont County. Charles Zelek, senior economist for the U.S. Department of Energy’s Office of Fossil Energy, said the Appalachian Basin isn’t getting the most value from its ethane. In January, the region sent some 900,000 barrels of ethane per day into natural gas pipelines to be burned as fuel — enough to supply 10 multi-billion-dollar crackers, Zelek said, citing data from the U.S. Energy Information Administration. Another 250,000 barrels of ethane per day will be exported from the region this year, he said. But for the Appalachian Basin to support more cracker plants, it has to have large-scale storage facilities. Several have been proposed, but none have been built, Zelek said. The Shell cracker is supplied by a system of pipelines that act as virtual storage. Cracker capacity is projected to grow over the next decade, with $227 billion worth of projects up for grabs. The Appalachian Basin is competing with the Gulf Coast and Canada for those projects, and will need to have crackers in place by 2030 to capture that market, Zelek said. Because it takes seven to 10 years to design and build a cracker, “we need to be starting on new facilities sooner than later to beat the market,” he said.

Report: Amount of Marcellus, Utica natural gas higher than in 2011 - The amount of recoverable natural gas in the Marcellus and Utica shale formations in the Appalachian Basin is significantly greater than previously thought, according to a new estimate by the U.S. Geological Survey. The USGS said in its latest assessment that the shale formations, both of which cover Western Pennsylvania, contain an estimated mean of 214 trillion cubic feet of “undiscovered, technically recoverable continuous resources of natural gas.”The 2019 estimate represents a significant increase from previous USGS assessments of both shale formations. In 2011, the USGS estimated a mean of 84 trillion cubic feet of natural gas in the Marcellus shale, and in 2012 the USGS estimated about 38 trillion cubic feet of natural gas in the Utica shale. Advancements in drilling techniques and new geological knowledge account for the increased estimates, USGS said.“Since our assessments in 2011 and 2012, industry has improved upon their development techniques for continuous resources like the shale gas in the Appalachian Basin,” said Walter Guidroz, program coordinator for the USGS Energy Resources Program. “That technological advancement, plus all of the geological information we’ve gained from the last several years of production, have allowed us to greatly expand our understanding of these formations.”The natural gas is defined as continuous because, in both formations, it is spread throughout the assessed rock layers instead of being concentrated in discrete accumulations, USGS said. Production techniques like directional drilling and hydraulic fracturing, or fracking, are required to produce these resources. The USGS assessments are for “undiscovered, technically recoverable resources,” meaning they have been estimated to exist based on geology and other data, and they can be produced using current standard industry practices and technology.

USGS: Appalachian Formations Hold Estimated 214 Tcf of Gas - Journal of Petroleum Technology - The Marcellus Shale and Point Pleasant-Utica Shale formations of the Appalachian Basin hold an estimated mean of 214 Tcf of undiscovered, technically recoverable continuous resources of natural gas, according to an updated assessment from the US Geological Survey (USGS).  The Marcellus, Point Pleasant, and Utica extend into parts of Kentucky, Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia. USGS assessments are for remaining resources and exclude known and produced oil and gas. The new numbers—about 97 Tcf of gas for the Marcellus and 117 Tcf of gas for the Utica-Point Pleasant—represent large increases from previous USGS assessments of both formations. In 2011, the USGS estimated a mean of 84 Tcf in the Marcellus, and in 2012 the agency estimated about 38 Tcf in the Utica.  Seeing the USGC estimates for the Marcellus rise from 2 Tcf to almost 100 Tcf in less than 20 years shows “the effects American ingenuity and new technology can have,” said USGS Director Jim Reilly.  The Marcellus also holds an estimated 1.5 billion bbl of natural gas liquids (NGLs), while the Point Pleasant-Utica also has an estimated 1.8 billion bbl of oil and 985 million bbl of NGLs, according to the USGC estimates. Undiscovered resources are those that have been estimated to exist based on geology and other data but have not yet been proven to exist by drilling or other means. Technically recoverable resources, meanwhile, are those that can be produced using today’s standard industry practices and technology. This is different from reserves, which are quantities of oil and gas that are currently profitable to produce. The latest assessment of the Marcellus can be found here.

Pennsylvania Cancer Patients: They Were Fracking Directly Across From School - – Former Pennsylvania elementary school classmates Nicole Stewart and Grace Lipscomb were shocked when they learned that they had both been diagnosed with the same rare childhood cancer. Stewart, now 19, found out that she had Hodgkin’s lymphoma at age 16. After finishing chemotherapy, she heard that her former grade-school classmate Lipscomb, also now 19, had just been diagnosed with the same extremely rare disease. Because only about 8,000 cases of Hodgkin’s are diagnosed in the United States each year, both girls found it odd that cancer could afflict two kids at the Fort Cherry Elementary School in the small town of McDonald, Pennsylvania, which has a population of only around 2,000 people Stewart and Lipscomb are not alone. Since 2008, at least 67 cases of childhood cancers, many of them rare, have been documented in their home county of Washington and the neighbouring counties of Greene, Fayette and Westmoreland.Such uncanny coincidences have led many residents of these rural communities to question whether something in the environment is making children sick. Many residents of their town and nearby rural communities southwest of Pittsburgh are concerned that the fracking industry, which has exploded in the area since 2008, could be causing such illnesses. Lipscomb was told she had Hodgkin’s just two years after her own mother had been diagnosed with a rare, non-genetic breast cancer. "It's all happening in the same school district. There's also a lot of people who have asthma in our school district too", she said. Hydraulic fracturing is a highly volatile process in which a toxic mix of chemicals is injected at high pressure into the earth to break up rocks and extract the natural gas trapped inside. The process produces waste that includes multiple substances that are known to be harmful to human health, including benzene, toluene, xylene and ethylbenzene. Washington County now has nearly 1,200 active fracking wells, and production here has helped transform Pennsylvania into the nation’s No. 2 natural gas state. But Pennsylvania’s Department of Environmental Protection has documented more than 4,000 fracking violations in Washington County, including failure to properly dispose of residual waste and pollution, hazardous well venting and pollution of local waters with toxic substances.

Canon-Mac parents want deeper investigation of suspected childhood cancer cluster - Holding the funeral-home portrait of her son Curtis who died in 2011 from Ewing's sarcoma, Cindy Valent came to a hearing Monday night about the suspected cancer cluster in Washington County with a direct request: Find out why so many youth in southwestern Pennsylvania have contracted the rare and deadly form of cancer, and whether it has anything to do with the natural gas industry.  Valent, who now lives in Beaver County, used to live in Cecil less than a mile from two other youth with Ewing's. Curtis Valent was diagnosed in 2008 with the form of bone cancer. He died at age 23 on Jan. 1, 2011, soon to graduate from Robert Morris University and recently engaged. “They've got to do an investigational study of all these kids that had it to find out what they have in common," Valent said of the recent rise in Ewing's sarcoma that led the Pennsylvania Department of Health to investigate whether there's been a definable cluster of Ewing's and other cancers in Washington and Westmoreland counties. The Health Department study found that there wasn't a definable cancer cluster nor a significant rise in the number of childhood cancers at Canon-Mac or in the region. There have reportedly been six cases of Ewing's in the Canon-McMillan School District since 2008. Valent and a number of other parents, including family members of others with Ewing's, say they want to know whether the drilling of natural gas wells and hydraulic fracturing have had an impact. They spoke out at a hearing Monday night at Canon-McMillan High School that featured two Department of Health officials and a UPMC researcher, questioning the study's methodology, whether all cases were accounted for in the study, and also the fact that environmental factors weren't taken into account in the investigation. The causes of Ewing's remain unknown. Janice Blanock and Kurt Blanock lost their 19-year-old son,Luke Blanock, three years after being diagnosed with Ewing's. Janice Blanock urged Gov. Tom Wolf and the Pennsylvania Department of Health to dig deeper. "We don't know what caused our son's cancer. However, taking into consideration the high number of rare cancers in Washington, Greene, Westmoreland and Fayette counties ... It should seem obvious to anyone with an ounce of common sense, sincere heartfelt concerns, and true courage that we need to be looking at environmental issues and triggers," Janice Blanocksaid.Luke Blanock's sister, Carla Marratto, expressed concern that drilling and hydraulic fracturing could be a factor.  "What came into this area that boomed, right before that," Marratto said. "No one was going to say it anyone's speech. No one's going to say it ... This area was polluted by fracking."

State suspends gas driller’s license for failure to pay impact fees - Pennsylvania suspended a Texas energy company’s license to operate two Somerset County gas wells because it has failed to pay almost $95,000 in impact fees and related costs for 2014, 2015 and 2016. The state Department of Environmental Protection on Wednesday ordered Xtreme Energy Co. of Victoria to cease operations immediately on its two wells — Hillegas and Menhorn — located south of Somerset in Brothers Valley Township. The suspension will remain in effect until the impact fees and penalties are paid, the state said. This is the first time the department ordered a gas well owner to cease operations over not paying the impact fees, said Lauren Fraley, a spokeswoman for the DEP in Pittsburgh. The state distributed almost $252 million in impact fees in 2018, according to the Pennsylvania Public Utility Commission, which collects the fees. The impact fees, distributed to state, local and county governments, are determined on a multi-year fee schedule based on the average price of natural gas, according to state Act 13 which authorized the fees. “They (municipalities) rely on those fees,” Fraley said. The PUC recommended to DEP on Sept. 10 that it withdraw Xtreme Energy’s permit to operate those two wells. The PUC’s enforcement and investigation bureau had investigated the matter, dating back to April 2017. Xtreme Energy had agreed in a May 2019 settlement with the PUC to pay $94,684 by July 17. Xtreme did not pay the fees nor did it appeal a June 17 order requiring the payment, the PUC said.

Pennsylvania Senator Daylin Leach Proposes Constitutional Amendment To Ban Fracking - (KDKA) — A Pennsylvania senator says the damage caused by fracking outweighs any economic benefit. Fracking for natural gas in the Marcellus shale has been a source of jobs and dollars for many in Southwest Pennsylvania. Pennsylvania State Sen. Daylin Leach, a Philadelphia Democrat, is proposing a constitutional amendment to ban fracking throughout the commonwealth after a visit to this area. He said toured Washington County fracking sites, met with people who live near those sites and heard their stories. “At the end of the day, we want industry to do well,” Leach told KDKA money editor Jon Delano on Thursday. “But that can’t be our top priority. We can’t do that at the expense of people’s health.” Leach cites cases of cancer, skin and respiratory problems, and even dead animals. But the president of the Marcellus Shale Coalition disputes those claims. “The Department of Health has studied and will continue to study it. To date, they’ve not found a single link that would provide validity to that kind of report or that kind of a statement,” said Dave Spigelmyer. Spigelmyer says the abundant natural gas here has reduced home gas bills by 70 percent. “We’ve got incredible job growth in our commonwealth,” Spigelmyer said. Spigelmyer says this constitutional amendment is short-sighted and has broad implications. “You not only kill the natural gas industry, you kill the oil industry as well,” Spigelmyer said.

Gas drillers, owner of pipeline that exploded in Beaver County stuck together, even as they spar - Hours after Energy Transfer’s new Revolution pipeline slid down a steep Beaver County hillside and exploded — bringing sudden daylight to a Center Township neighborhood before sunrise on Sept. 10, 2018 — the company drafted two letters. Energy Transfer’s senior vice president for business development signed his name and sent copies of each to its clients, PennEnergy Resources LLC and EdgeMarc Energy Holdings LLC. The first letter announced that Revolution, a 40.5-mile natural gas gathering pipeline, had begun commercial operations on Sept. 9, thereby satisfying the deadlines set in the company’s contracts with the drillers. The second said that commercial operations on the pipeline had been suspended by what in legal terms translates to an “act of God,” an event outside of the company’s control. Neither of those things made sense to Greg Muse, PennEnergy’s COO, whose Moon-based company was awaiting the start of the Revolution pipeline service to ferry gas from wells in Beaver and Butler counties. Two days later, he told the pipeline firm that he disagreed with each premise. This kicked off a year of negotiations with Texas-based Energy Transfer, whose inability to stabilize the ground after the Beaver County explosion prompted environmental regulators to suspend the review of all new and pending permits. The 24-inch-wide Revolution pipeline remains out of commission with no timeline for a restart. As PennEnergy tried to work things out with Energy Transfer behind the scenes, the case against the pipeline firm was being built in different corners of the state. Pennsylvania environmental regulators were conducting discovery in two cases dealing with the Revolution pipeline. The Pennsylvania attorney general’s office launched an investigation into the explosion, the scope of which is “unknown,” Energy Transfer disclosed to investors in August. And Canonsburg-based EdgeMarc filed for bankruptcy — citing the Revolution explosion and Energy Transfer’s treatment of it as the precipitating event. Proving that the letters Energy Transfer had sent on the day of the explosion were false quickly became the centerpiece of EdgeMarc’s bankruptcy proceedings. Now PennEnergy has joined the fray. It filed a lawsuit asking a judge to declare, once and for all, that Energy Transfer hadn’t in fact placed the new pipeline into commercial operations and that the damage to the pipeline lays at the hands of the company. “The explosion was not an ‘act of God,’” PennEnergy’s complaint, filed in the Court of Common Please of Allegheny County, asks a judge to declare. “The explosion occurred in an area where the pipeline was constructed on a dangerously steep slope, which was a known landslide area, when fill material that [Energy Transfer] had placed on top of its pipeline slid, causing a landslide that ruptured the pipeline — all circumstances within ETC’s reasonable control.”

Hellbenders have their day in court - Six years after a plan for a drilling waste-disposal injection well was first revealed in northern Indiana County and after area residents banded together against it, lawyers waged another battle Friday in Pennsylvania Commonwealth Court. The dispute centers now on whether a home rule form of government passes Constitutional muster and empowers Grant Township to prohibit the dumping of fracking waste in its environment. Pennsylvania Department of Environmental Protection sued the community of 700 people in 2017 and after two years of trading arguments on paper — a case log that now extends 11 pages — attorneys argued their points in a 17-minute hearing at the state’s courtroom in Pittsburgh. Lawyer Rick Watling asked the judges to rule that the ban on oil and gas waste fluid disposal in Grant’s Home Rule Charter is unlawful because Grant only has police powers to limit land uses through its zoning powers (under the Municipalities Planning Code). The DEP’s position is that its guiding laws, in this case the state Gas and Oil Act, have the upper hand over regulations imposed at the local level. Watling asked the judges to dismiss the township’s counter claims in the case. Karen Hoffman, a Philadelphia-based attorney representing Grant Township and its board of supervisors, argues that home rule invokes state statues as its basis of authority. Pennsylvania General Energy (PGE) prevailed late last year in a federal lawsuit charging that the township violated the company’s civil rights when it enacted a “community bill of rights” ordinance that included a ban on injection wells. Township residents including an environmental protection group, the East Run Hellbenders Society, have warred against the uncertain integrity of a depleted former natural gas well as a vessel for holding the waste from other drilling operations. Without a guarantee that injected waste wouldn’t leak into underground water supplies that feed the residents’ drinking water walls, and into the surface water streams known as favorite for fishermen in the region, the township has taken up the expense of a legal fight to protect its irreplaceable resources.

Courts Question Pipeline Builders’ Use of Eminent Domain to Take Land - A recent federal court ruling could give states more authority to oppose natural gas pipeline projects by limiting the controversial use of eminent domain—the mandatory sale of private or state-owned land for public use. That ruling and two others involving eminent domain come amid growing opposition to pipeline projects, whose benefits to the public and risks to the environment and climate are increasingly being questioned. As the Trump administration tries to clear the way for more fossil fuel pipeline construction, a diverse coalition of environmental advocates and landowners are gaining traction in their efforts to fight new pipeline projects by focusing on property rights. They argue that pipeline developers should not be allowed to take land through eminent domain because the developers are private companies and the shipment of oil or gas shouldn't be considered a public use or benefit. The most significant of the recent rulings involves the question of whether a state can be forced to sell state-owned land to a private company for a proposed pipeline. The case involves New Jersey and the PennEast pipeline, which would transport natural gas from the Marcellus shale region of Pennsylvania.In January 2018, the Federal Energy Regulatory Commission (FERC) determined the PennEast project would serve the public interest and approved it. New Jersey Attorney General Gurbir Grewal challenged the decision and later joined six other attorneys general in urging the commission to consider the climate impacts of new pipelines as part of the certification process.  The proposed route for the PennEast pipeline would cross two parcels of state-owned land in New Jersey. When the state refused to grant easements for the pipeline, PennEast sued to try to take the land under the power of eminent domain.  In its lawsuit, PennEast argued that allowing New Jersey to deny the sale of state land "would leave states with unchecked veto power over interstate natural gas pipeline projects." A federal appeals court sided with the state, ruling on Sept. 10 that PennEast cannot force the sale of state-owned land on the grounds that private parties cannot sue states in federal court. The judges wrote that their determination applies not only to two parcels of land that the state owns outright, but also to 40 additional parcels of land where the landowner has an "easement" agreement with the state to preserve the land for recreational, conservation or agricultural use.

U.S. Supreme Court takes up fight over $7.5 billion natural gas pipeline - (Reuters) - The U.S. Supreme Court on Friday agreed to hear an appeal by Dominion Energy Inc and President Donald Trump’s administration of a lower court ruling that halted construction on a $7.5 billion natural gas pipeline due to run underneath a section of the popular Appalachian Trail in rural Virginia. The administration and companies involved in the project have asked the justices to overturn a ruling that found that the U.S. Forest Service lacked the authority to grant a right of way for the pipeline. Environmental groups had sued to stop the pipeline after the Forest Service gave the green light for the project through protected National Park Service land. The December 2018 ruling by the Richmond, Virginia-based 4th U.S. Circuit Court of Appeals put a stop to construction of the 600-mile (965-km) Atlantic Coast Pipeline, intended to run from West Virginia to North Carolina. Dominion Energy leads a consortium of companies in the project that also includes Duke Energy Corp. At issue is the Forest Service’s decision to allow the pipeline to cross underneath the 2,200-mile (3,500 km) long Appalachian Trail - a popular hiking route in the eastern United States stretching from Georgia to Maine - in the George Washington National Forest. “The Supreme Court’s acceptance of our petition is a very encouraging sign and provides a clear path forward to resolve this important issue,” said Aaron Ruby, a Dominion spokesman.

Supreme Court denies appeal of eminent domain for Mountain Valley Pipeline - The U.S. Supreme Court will not hear an appeal from a group of Virginia landowners whose property was taken by eminent domain for the Mountain Valley Pipeline. (Roanoke Times)

Supreme Court won't hear cases on pipelines' eminent domain, ban on Calif. utilities putting wildfire costs in rates - The U.S. Supreme Court has declined to hear two cases closely watched by environmentalists.The first one concerns Mountain Valley Pipeline developers' use of eminent domain. "The high court declined to consider landowners' plea that the builders of the 300-mile pipeline through West Virginia and Virginia should not be able to begin construction on their property without first paying 'just compensation,' as guaranteed under the Constitution," Niina Farah and Pamela King report for Energy & Environment News. The second case involves whether privately owned utilities that states have held liable for wildfires can recoup damages by raising rates on their customers. "The case stems from the California Public Utilities Commission's denial of San Diego Gas & Electric Co.'s request to recover $379 million in costs from wildfires that the company said have become the 'new normal' in the Golden State," Farah and King report.

Police remove, arrest protester who attached himself to Mountain Valley Pipeline helicopter - Virginia State Police say they arrested a Mountain Valley Pipeline protester Monday morning. Police found the protester attached to a contracted pipeline helicopter at a work site on Cove Hollow Road, near Route 460 in Montgomery County, according to the Virginia State Police. Authorities removed and arrested Galen Sol Shirman-Grabowski, 24, of Tuscon, Arizona. Pipeline security found Grabowski masked and attached to the rotor mast of the helicopter by a Sleeping Dragon device, refusing to leave. There was a banner on the helicopter that said, "DOOM TO THE PIPELINE," according to Appalachians Against Pipelines. Grabowski is the 18th "pipeline fighter" to lock his or her body to Mountain Valley Pipeline equipment in 2019, according to Appalachians Against Pipelines. Grabowski was charged with the following:

  • Tamper/damage an aircraft (felony)
  • Prohibition of wearing of masks in certain places (felony)
  • Obstructing justice, without force (misdemeanor)
  • Entering property of another for the purpose of damaging it (misdemeanor)
  • Breaking, injuring, defacing, destroying or preventing the operation of vehicle, aircraft or boat (misdemeanor)
  • Injuring property (misdemeanor)

Officials catch Mountain Valley Pipeline workers transporting water to seed grass during drought - A senator and delegate catch Mountain Valley Pipeline officials transporting thousands of gallons of water to seed grass during drought. Senator Stephen Baldwin and Delegate Jeff Campbell received word that Mountain Valley Pipeline was transporting thousands of gallons of water multiple times a day up the mountain to seed grass. Right now, the state of West Virginia is experiencing a drought and the State is currently in State of Emergency, due to dry grounds and low water. Industrial water usage is required to be restricted, due to the state of emergency that is in effect. Both Baldwin and Campbell contacted West Virginia State Police who visited the site today. The company told them they would not be using the limited local water any longer during this drought. Baldwin says, “When our citizens and farmers are conserving water for the common good, it’s a shame that anyone would so blatantly disrespect our communities. I want to thank the WVSP for their quick response.”

Gas-fired power projects on the rise in WV - — While the old adage says coal is king in West Virginia, natural gas is beginning to play a larger role in the state’s energy generation landscape. Plans for a significant natural gas-fired power plant project are underway in Harrison County, and Longview Power has recently announced its intention to construct a new facility housing one gas-fired and one solar-powered plant in Monongalia County. The Harrison County project, developed by ESC Harrison and Caithness Energy, will be a 625-megawatt combined-cycle facility with one combustion turbine generator connected to a heat recovery steam generator. The facility will occupy 13 acres of a planned 110-acre industrial park on a former 212-acre surface and underground mining site in the Montpellier area of Clarksburg. Construction will cost about $615 million and is estimated to be complete in 2020. ESC Harrison projects it will produce an $880 million economic impact during construction and $287 million per year thereafter. It will provide 400 construction jobs, 30 full-time plant operations jobs and about 700 jobs tied to maintaining and servicing the plant. It’s expected the plant will provide enough power for about 425,000 homes through the PJM Interconnect grid. PJM is the regional transmission organization that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia. In June, developers announced they had entered into an engineering, procurement and construction services contract with Connecticut-based Gemma Power Systems. Caithness President Ross Ain said the company was chosen based on its experience with similar projects.Longview’s proposed facility, to be called the Longview Power Clean Energy Center, is planned for a piece of property near Maidsville in Monongalia County adjacent to the property of a current Longview coal-fired plant.

Duke climatologist seeks a halt on gas-fired power plants, Atlantic Coast Pipeline - One of the world’s leading climate scientists said the state’s long-range clean energy plan doesn’t go far enough to curb a potent greenhouse gas.In a letter to Gov. Roy Cooper dated Thursday, Drew Shindell, Nicholas Professor of Earth Science at Duke University, takes aim at methane, a gas more efficient than carbon dioxide at holding heat. Shindell said in the letter that the state should place a “permanent moratorium” on natural gas infrastructure in the state, including new gas plants planned by Duke Energy and the Atlantic Coast Pipeline, which the power company is developing with other partners. Natural gas is mostly methane, and it can leak when it is extracted from the ground or flows through pipes. “In addition to causing possibly irreparable climate damage, such infrastructure is likely to saddle consumers with much greater costs than would a more rapid transition to 100% renewable energy, while also causing additional harm to already vulnerable communities,” wrote Shindell, one of the scientists who helped coordinate sections of International Panel on Climate Change reports in 2013 and 2018. About two dozen former U.S. Environmental Protection Agency scientists and administrators endorsed the letter.Shindell co-wrote the letter with two former U.S. Environmental Protection Agency administrators and NC WARN, a nonprofit focused on climate change and a Duke Energy critic.

Will Virginians be able to resist the Atlantic Coast Pipeline? -- When the government has seized Virginians’ land and homes in the past, communities suffered. -- This week, the U.S. Supreme Court announced it will consider Dominion Energy’s much-delayed bid to construct the Atlantic Coast Pipeline, a 600-mile, $7.5 billion project that would carry natural gas from West Virginia to the East Coast. At the heart of the case is a request from Dominion to run its pipeline across the federally protected Appalachian Trail. In 2018, the U.S. Forest Service granted Dominion permission to cross the trail, but later that year, a lower court overturned the permit. If the Supreme Court decides the Forest Service acted within its jurisdiction, Dominion will be allowed to continue construction of its pipeline.Dominion Energy praised the court’s decision to hear the case, saying it now sees “a clear path forward to resolve this important issue.” The Trump administration has backed the energy giant’s efforts.Backers of projects like the pipeline frame this as a chance to get the government out of the way of private industry operating for a public good (energy independence). But for people in central Virginia, the push for a pipeline is a story of government interference, part of a century of struggle between government authorities and vulnerable populations that have been displaced from the land.ADOne of the largest land seizures in the history of the state took place in the same forest that Dominion now contests. In the late 1920s and early 1930s, the state of Virginia used eminent domain — which allows the government, or private companies in conjunction with the government, to seize land, compensate the owner and then use that land to benefit the public good — to acquire 190,000 acres in the Blue Ridge Mountains. Promising public good in the form of wilderness protection and tourism revenue, the state seized or condemned the homes and farms of about 465 families in rural Appalachia. Two thousand people were removed from land they had tended for generations. The state donated the forest to the federal government, and in 1936, the government opened Shenandoah National Park. Young men from the Civilian Conservation Corps, the New Deal work relief program, cleared the property and left the Cliser family’s belongings on the side of the road. For the descendants of those homesteaders pushed out of the hills, the sting of eviction still lingers. The pipeline has sparked resistance from environmental groups, which have emphasized that construction would require a clear-cut path as wide as a football field to slice through the protected parkland. The Southern Environmental Law Center has argued that the project “threaten[s] people’s health, endangered species, iconic landscapes, and clean water.”But the environmental arguments are entwined with the same anxieties over property rights and land use that have animated Virginians for decades. Urban and rural communities alike have their own collective memories of the encroachment of government-backed industry. Those memories are reflected in the diverse coalition that has come together to fight the pipeline.That unusual coalition is up against powerful forces: the Trump administration, a big energy company and a Supreme Court dominated by conservative justices. But for more than a century, the people of central Virginia have been battling the government over their right to control their land, farms, parks and city neighborhoods. Whatever happens in the Supreme Court this term, they’ll keep fighting.

GOP Lobbyists Behind Gas Industry 'Empowerment Alliance' Oppose Green New Deal - The Real News Network - Steve Horn -  There is a new group in support of hydraulic fracturing (“fracking”) and in opposition to the Green New Deal—and it’s run by figures with long-held institutional ties to the Republican Party and fossil fuel industry. Called The Empowerment Alliance, it joins a few other campaigns funded by the fossil fuel industry lobbying against Green New Deal. Registered as a 501(c)(4) political action committee (PAC) and incorporated in Delaware on August 23, The Empowerment Alliance has not revealed its funders, but its Executive Director James Nathanson and its spokesman Terry Holt have ties to the upper echelon of the national Republican Party. “The American people deserve to know the consequences of radical and unachievable polices [sic] like the Green New Deal, and The Empowerment Alliance is going to advance that dialogue through the media with research and voter engagement,” said Nathanson in a press release announcing the group on September 27.  Nathanson is a veteran of Republican Party politics who formerly served as the political director of the Republican National Committee and the Ohio director for the 1988 George H.W. Bush campaign.  On its website, The Empowerment Alliance touts gas as a cleaner, greener fossil fuel. “Natural gas is the cleanest of fossil fuels and can be used in many ways to help reduce the emissions of pollutants into the atmosphere,” reads the site. “Burning natural gas in the place of other fossil fuels emits fewer harmful pollutants, and an increased reliance on natural gas can potentially reduce the emission of many of these most harmful pollutants. But natural gas production is a major emitter of methane, a greenhouse gas more 84 times more potent than carbon dioxide during its first 20 years in the atmosphere, and 28 times more potent over a 100 year period. According to an article about The Empowerment Alliance published by Politico, the group’s spokesman is Terry Holt, a lobbyist and former press secretary for  Rep. John Boehner, who works for the firm HDMK. Holt has previously served as a spokesman for the coal industry public relations group Americans for Clean Coal Electricity (ACCCE),and also worked as the spokesman for the George W. Bush 2004 re-election campaign. From 2000-2004, Holt served as a senior advisor for the Republican National Committee, according to his LinkedIn profile. The Alliance has chosen not to disclose its funders, Holt said, out of fear of potential “eco-terrorists.” “Because of violence and trespassing and other criminal behavior, the Empowerment Alliance is going to protect its donors from that kind of risk,” he told the publication EnergyWire. “We are offering donors this protection out of the concern that we would have should they come forward and the scrutiny of some of these eco-terrorists.”

US Natural Gas Reserves Continue To Soar - Ever since the U.S. shale revolution took flight in 2008, it's been a consistent theme: not just rising natural gas production but also rising proven natural gas reserves. In fact, over the past decade, the U.S. Department of Energy reports that our proven gas reserves have ballooned nearly 85% to almost 450 trillion cubic feet (Tcf). It's all turned the previous pre-shale notion that reserves were dwindling and production was in permanent decline on its head.Not even the industry itself ever envisioned how fast our natural gas business would be transformed, thanks to shale. ExxonMobil CEO Lee Raymond infamously stated in 2005: "Gas production has peaked in North America." Not quite good sir: led by shale, North American output is up 50% since then to past 105 Bcf/d, or some 30% of the global total. What's even more amazing is that this boom in gas production and reserves has happened under a low-price environment, which typically work to hamper both. In other words, we have even more natural gas than advertised. Indeed, don't forget that reserves are just subsets of the massive gas resource that we have. Reserves only illustrate what can be produced today under prevailing technologies and prices. As time goes along, and technologies advance and prices rise, more of the resource gets lifted into the reserve category, able to be produced today. Just like renewables, the oil and gas industry is always getting better. A shout out to my alma mater: Penn State "Researchers unearth cost-effective method for finding shale gas."For example, the U.S. Geological Survey (USGS) last week announced that our primary production area of the Marcellus and Point Pleasant-Utica Shale plays in the Appalachian Basin contains an estimated 214 Tcf undiscovered, technically recoverable continuous resources of natural gas. What's amazing is that the latest USGS data on Appalachia is more than 75% higher than its most recent study in 2011, which concluded that the Marcellus held 84 Tcf and the Utica 38 Tcf. This is just another example of how quickly our assessments of U.S. oil and gas fields continue to grow, as our appraisal technologies improve and our ability for E&P expands. To illustrate perfectly, nearly 25 years ago, the USGS estimated that the Bakken shale oil play in North Dakota had just 150 million barrels to produce...in total. Incredibly, however, as development has ensued, the mighty Bakken is now producing more than three times that amount...every year!

Appalachian natural gas production growth could be reaching its zenith— Amid continued tepid natural gas prices, producers in the Appalachian Basin region have begun reducing their drilling, although the lower activity has not yet slowed the pace of continued strong production from the basin. But this trend could change, as operators facing the prospect not only of "lower for longer" gas prices, but possibly weaker oil prices as well in 2020, could begin to plan for even more dramatic decreases in drilling activity in coming months. As far as production, both the Marcellus and Utica are showing somewhat similar growth trends, S&P Global Platts Analytics data shows. The Marcellus Shale has seen its production grow by about 1 Bcf/d from the start of 2019, from 23.56 Bcf/d in January to 24.54 Bcf/d October 9. In the Utica Shale play, production is just about back up to levels seen in late August before output fell off in early September. The play saw 7.12 Bcf/d of production October 9, up from 6.57 Bcf/d in early January, according to Platts Analytics. The production gains in the basin have continued even as natural gas prices in the region have tanked over the same period, with no signs of a rally occurring anytime soon. Spot prices at two of the region's most important pricing points, Columbia Gas Appalachia and Dominion South, have declined from around $2.50/MMBtu to a little more than $1.00/MMBtu currently. The number of rigs operating in the Marcellus and Utica plays has begun to decline, although the Utica rig count decline has flattened out a bit, with the basin having the same number of rigs, 15, as in early September, Platts Analytics data shows. However, the rig count decline isn't expected to have any meaningful impact on production trends in the near term, partially because of the ability of producers to bring into production the backlog of drilled but uncompleted wells, or DUCs, in the basin. Improved initial production rates for those wells that are brought online also appears to be driving the sustained production gains, Platts Analytics found. The continued strong production coming out of the Appalachian Basin, coupled with robust gas production in the Permian Basin, where most of the gas is produced in association with oil production, is leading to an abundant supply of gas across the continent, which in turn is helping to continue to suppress gas prices.  Yet there are signs that the continued production growth in the Appalachian Basin is nearing its zenith, as earlier this year producers in the region announced they would begin to cut back on their drilling activities in the second half of the year. In announcing its Q2 results, Southwestern Energy said it planned to lower its average rig count from six rigs in the first half of the year to two rigs by the end of the third quarter.  Last month, EQT announced it was laying off almost a quarter of its workforce, eliminating 196 positions and reducing the number of departments within the company from 58 to 15.

Michael Bloomberg's $500 million plan to halt the growth of gas is 'irresponsible,' BP boss says - Outgoing BP Chief Executive Bob Dudley believes Michael Bloomberg’s $500 million plan to halt the building of gas-fired power plants in the U.S. is “irresponsible.” Speaking to CNBC’s Steve Sedgwick at the Oil & Money conference in London Wednesday, Dudley said: “Every scenario I look at, we cannot carpet the world with renewables fast enough.” In June, Michael Bloomberg, the former mayor of New York City, said that he would donate $500 million to a co-ordinated campaign called “Beyond Carbon.” The campaign, according to its website, is designed to get the U.S. “on the path to a 100% clean energy economy.” In doing so, it plans to prevent the growth of natural gas and close every coal-fired power plant in the U.S. In a separate speech to those in attendance at the Oil & Money conference, Dudley said that while Bloomberg’s efforts “may be well intentioned,” they were also “misguided.” “They rest on a false equivalence between gas and coal. And an assumption that an all-electric economy will emerge just as soon as we close the alternatives,” Dudley said. When asked by CNBC why he referenced Bloomberg in his speech, Dudley replied: “Because I think it is irresponsible.” “I think it means well (but) it is not going to work in so many countries.” A spokesperson for Michael Bloomberg was not immediately available for comment when contacted by CNBC Wednesday afternoon.

Natural Gas Fell Back Into The Buy Zone - Natural gas is one of the most volatile commodities that trade on the futures exchange. The range since 1990, when the energy commodity began trading on the NYMEX division of the CME, has been from a low at $1.02 to a high at $15.65 per MMBtu. The market has matured dramatically over the past three decades. Massive discoveries of natural gas reserves in the Marcellus and Utica shale regions of the US and technological advances in extracting the gas from the crust of the earth have increased the supply side of the fundamental equation. Since necessity is the mother of invention, natural gas demand has moved significantly higher at the same time. Gas has replaced coal when it comes to generating electricity in the US. At the same time, natural gas in liquid form now travels by ocean vessel around the globe, whereas it was confined to travel by pipeline in past years. The demand side of the equation has grown alongside the supply side. Increased liquidity in the natural gas market has compressed the price range. However, the price traded in a range from a high at $4.929 to a low at $2.029 per MMBtu between November 2018 and August 2019. As we move closer to the peak season for demand each day, the price was below the $2.30 per MMBtu level at the end of last week. Natural gas is back in the buy zone as the injection season will end in mid-November, and inventories will begin to decline. In early August, the price of nearby natural gas futures on the NYMEX division of the CME dropped to a low at $2.029 per MMBtu. During the injection season, when inventories were climbing, many market participants believed that the price would fall below the $2 level for the first time since 2016 and challenge the March 2016 low at $1.611 per MMBtu. However, the price never probed below the psychological level, and it took off on the upside. By mid-September, the price of the energy commodity recovered to a high at $2.71, a move of over 33.5% in six weeks. Natural gas is combustible in its physical form, and the price action reflected the characteristics of the energy commodity. The weekly chart highlights that the price fell as fast as it climbed, reaching a low at $2.207 per MMBtu last week. The move to the downside caused the price momentum and relative strength indicators to trend lower, but they remain on either side of neutral territory on the weekly chart as of Friday, October 4. The total number of open long and short positions in the natural gas futures market at 1.215 million contracts is has moved lower over the past weeks.

Odds Of Durable Early Season Cold Lessen, Sending Natural Gas Prices Lower - Various weather model runs late last week hinted at a potential pattern change to a colder regime, giving some life to natural gas prices in the wake of Thursday's EIA report. The prompt month November contract at one point had moved nearly 20 cents off its Thursday intra-day low. But over the weekend, odds of a sustainable colder pattern took a hit, as models shifted toward a warmer pattern once again by the 20th. There is still a cold shot focused in the middle of the U.S. late this week into the early part of next week, but it is expected to lift out rather quickly. The reason for the change lies in a big shift in the projected pattern on the Pacific side of the pattern. Here is what the 12-16 day upper air forecast from the GFS-Ensemble looked like 3 days ago: natural gas commodity weather Notice the low heights (blue colors) back near the Aleutians, and a downstream warm ridge over the West, which pushes a colder trough into the eastern U.S. Now let's look at the same model's forecast from today, valid the same dates: natural gas commodity weather As you can see, that is a very different look compared to the prior image, with a cooler trough now in the West, which allows the East to warm back up. After a bump up in demand centered on this weekend, forecast GWDDs drop off quickly again thereafter. natural gas commodity weather This lack of durability in any colder pattern helped send natural gas prices back lower today, with the November contract closing nearly 5 cents lower on the day. natural gas commodity weather We recognize that it is still early for weather to be the primary driver of price action, but in this particular case, it is applicable, given that there has been no major change in the supply / demand balance as of yet, so it stands to reason that lower risks of cold when compared to weather models back on Friday can have a market impact.

Weaker Cash And Unimpressive Demand Keeps Pressure On Natural Gas Prices - After a couple of "up" days at the end of last week, natural gas prices declined for the second day in a row this week, with the prompt month November contract settling back under the $2.30 level today. Prices initially were slightly higher early this morning, as the overnight weather models gained some forecast demand. Here, you can see the forecast demand profile from those overnight runs compared to 24 hours earlier: One thing that sticks out is that even with the gain in demand, it remains rather unimpressive overall. We also are finally seeing cooler weather in the South, contributing to weaker daily cash prices. In our morning outlook to clients, we highlighted both the tame demand picture along with the risk of weaker cash prices, maintaining a "slightly bearish" stance, feeling like the bump in prices was not likely to last. This worked out well, as prompt month prices moved as low as $2.266, but did close off those intra-day lows. The midday weather models also gave back some of their overnight demand gains, which we had mentioned as a risk as well. Here is the 12-16 day pattern from the overnight GFS Ensemble: The midday run shifted warmer in this time frame: Now that we are closer to the time of year when weather becomes the primary factor that drives natural gas volatility, keeping up to date with potential weather changes is very important in the world of natural gas.

EIA Report Meets Expectations, But Natural Gas Prices Continue To Fall - Today's EIA report showed an injection of 98 bcf for the week ending 10/4. This was almost dead-on our forecast. It was well within the range of the various market estimates as well, so we should expect prices to have no reaction to this report, right? Well, not exactly. While it was the market expectation, it confirms very loose supply / demand balances remain in place, as seen by looking at the last 10 weeks' demand vs storage change. In short, we simply have too much supply. Production has returned back near its all time highs. Weather demand has been stout more often than not dating all the way back to the end of June, but has been unable to prevent large builds in natural gas storage thanks to these record supply levels. And even the weather demand is set to tail off significantly, with well below normal demand projected out in week two. Is this simply a hopeless scenario for natural gas bulls? Perhaps not, as prices around the 2.20 level in prompt month are quite low with the full winter season still to come, but the weather pattern needs to deliver some enhanced demand in the not-too-distant future in order to stimulate any buying in the commodity. In addition, the lower prices could alter the supply / demand balances enough to stop the bleeding, again, pending what happens with the upcoming season's weather pattern.

NYMEX November natural gas inches lower after bearish storage report - The NYMEX November natural gas futures contract inched lower Thursday following the latest bearish weekly US storage report. November traded 1.6 cents lower Thursday, settling at $2.218/MMBtu, trading in a range between $2.202/MMBtu and $2.274/MMBtu. The US Energy Information Administration reported an injection of 98 Bcf into storage facilities in the week that ended October 4. A survey of analysts by S&P Global Platts found consensus expectations for an injection of 94 Bcf. "[We] saw a big number this morning, and it showed that the market is oversupplied," said Kent Bayazitoglu, senior market analyst at Gelber & Associates. "We think that the opening of the Gulf Coast Express Pipeline is a big part of that. It's allowing for more production and we're starting to see the impact of it." Kinder Morgan's Gulf Coast Express Pipeline entered full commercial service on September 25, adding takeaway capacity for the Permian Basin and making another 2 Bcf/d of supply available to the market. US dry gas production is predicted to gradually increase over the coming weeks, averaging 90.3 Bcf/d in the period eight to 14 days hence, according to S&P Global Platts Analytics. Dry gas production continues to hover above the year-to-date average of 88.1 Bcf/d. The National Weather Service predicted warmer-than-average temperatures across the entire US in its most recent outlook for November, December and January, with those prospects adding to the pressure on prices. Total US demand is forecast to decrease over the next few weeks. Demand is expected to total 70 Bcf Thursday, according to Platts Analytics, and average 67.3 Bcf/d in the period eight to 14 days forward.

Kentucky gas pipelines: Noise investigated in Adair County - Officials in Adair County, Kentucky, said they are investigating noises coming from a natural gas pipeline that runs through the area. The Adair County Emergency Management agency said in a news release Thursday the county sheriff was notified Sept. 24 of a noise coming from the Columbia Gulf Transmission Pipeline in the area of Knifley Road and Robinson Ridge Road. That area, in the unincorporated community of Knifley, is approximately 100 miles southeast of Louisville. The Columbia Gulf Transmission Pipeline is owned by TC Energy, a Calgary, Alberta-based energy infrastructure firm that was formerly known as TransCanada. TC Energy is the firm behind the controversial Keystone XL pipeline and is trying to advance that project after several years of delays stemming from lawsuits and protests over its anticipated environmental impact. The Columbia Gulf Transmission Pipeline carries natural gas over 3,300 miles through Louisiana, Mississippi, Tennessee and Kentucky and is interconnected to "virtually every major pipeline system in the Gulf Coast" and to additional Midwestern lines, according to TC Energy's website. A TC Energy spokesperson told The Courier Journal in an email Friday afternoon that engineers conducting tests on site "determined that the sound heard by nearby residents is being caused by sound waves reverberating along the pipe." "These sound waves do not pose a safety issue, and we want to ensure residents that after extensive assessment, the integrity of our pipe and system are safe to operate," the spokesperson said. "…We will continue to actively monitor the situation and investigate possible ways to address the noise levels." Adair County officials said they have met with TC Energy personnel on several occasions since the initial noise notification and are in "constant contact" with the firm's government relations and community affairs division.

350NH holds rally against Granite Bridge gas pipeline - - Opponents of the proposed Granite Bridge pipeline held signs and rallied Saturday in front of the old Town Hall. The effort led by 350NH pushed back against Liberty Utilities’ proposed 27-mile, 16-inch liquefied natural gas pipeline from Manchester to Exeter. The project would include a 150- to 170-foot high, 200-foot diameter tank capable of storing 2 billion cubic feet of gas in an abandoned quarry in Epping. According to Liberty’s estimates the project cost is $414 million. The project is before the state’s Public Utilities Commissions and a consultant it hired is not recommending approval of the pipeline, saying Liberty Utilities had not done enough to demonstrate it was the best option for meeting future energy needs. “That cost will be passed on to taxpayers,” said Annette Hanson, a 350NH member. “And why would we build such a project? Pipelines are dangerous - they explode. There have been incidents in Keene, Lawrence, Mass., and Farmington, Maine, to name a few. The project would cross the Lamprey River two times and if there are leaks, it will contaminate not only the river, but also the Great Bay estuary.” Heather Warr of 350NH said the group is working to create regional chapters including one in Exeter to fight the project.

Mayor, Lawmakers Object to $143M Gas Explosions Settlement   (AP) — Elected leaders in Massachusetts are demanding revisions to a plan to divide up a $143 million class action settlement from last September's natural gas disaster.Lawrence Mayor Daniel Rivera and four state lawmakers have proposed a new payout plan that includes $20 million for public safety improvements in light of a recent major gas leak in Lawrence.But utility company Columbia Gas says the settlement proposal is "not related at all" to the most recent leak.And lawyers who filed the class action lawsuit say they "do not have the option" to reallocate funds to government agencies since they aren't a party in the suit and have already settled their claims with Columbia Gas. An Essex County Superior Court judge heard arguments in the case Monday and is expected to rule later.

Hurricane Dorian spilled more than a million gallons in the Bahamas - Nearly 1.5 million gallons of oil have spilled since Hurricane Dorian destroyed an oil storage facility on Grand Bahama Island last month. The worst part? Equinor, the company that owns the oil facility, still isn’t done cleaning up the mess, which means the final total will be higher than it is right now. Erik Haaland, a press officer with Equinor, confirmed to Earther on Monday that the Norway-based company had recovered 35,000 barrels of oil as of Sunday. That amounts to 1.47 million gallons—and the company still hasn’t released a final estimate of oil lost.The number of barrels recovered thus far is nearly three times the amount the company said it had lost a week ago. The amount of lost oil stood at 12,000 barrels, which equals 504,000 gallons, Eskil Eriksen, another company press spokesperson, told Earther last week.The Equinor South Riding Point oil facility sits on the southern coast of Grand Bahama Island near the town of High Rock. It stored 75 million gallons of oil, Romauld Ferreira, the Bahamas’ environment and housing minister, told local news. But it remains unclear how much of that oil has been spilled into the environment. Enough has spilled to paint the on-site containers and leave a pungent smell throughout the area, according to those who have visited. And he clean-up effort has required 250 people and heavy machinery (such as vacuum trucks) on the ground. At more than a million gallons, the Grand Bahama Island spill one of the more significant single spills in recent history.  So far, authorities have noted that some birds and a goat were “impacted,” as local news reported. The facility sits along the ocean, and the company had spotted some oil offshore, though it hasn’t confirmed that the oil belongs to its facility. Oil is no good for marine ecosystems, especially the coral reefs that exist along the island’s coast. It’s no good for terrestrial ecosystems, either. Oil is toxic as hell—for plants, animals, and people.

5 million gallons of oil spilled from Bahamas storage facility... {weather New numbers released by an oil company in the Bahamas show that an estimated 5 million gallons of oil spilled from a Grand Bahama Island storage facility damaged during Hurricane Dorian.Equinor, the Norwegian company that owns the facility, revealed the numbers in a press release Wednesday. The company had previously said about 1.5 million gallons of oil had been recovered in cleanup efforts at the site, but had not released an estimate of the overall scope of the spill. Dorian's 185 mph winds blew the lids off six crude oil storage tanks at the Equinor facility. The company said the amount of oil spilled equaled about 6% of the total amount stored there."Most of the spilled volumes are within or near the terminal area," the news release said. "More of the oil will be recovered over the coming weeks as work progresses to empty containment berms surrounding the tanks."The calculation of oil spilled versus oil recovered will likely never fully match. This is due to the evaporation of oil and other natural processes."The Bahamas government has said that what was believed to be an oil slick in the ocean nearby was actually seaweed, and Equinor said aerial surveys have not shown any oil in the ocean. The statement from the government earlier this week said oil had spread to wooded areas 7 miles inland.  A reporter from WSVN.com who recently visited the area saw plants and insects covered in oil. Workers from Equinor were using backhoes and rakes to remove the damaged trees. The company said it had 250 workers involved in the cleanup. Both the national government and Equinor have come under fire in the wake of the spill. Environmentalists say it's a sign of things to come, and that facilities like Equinor's pose hazards in the wake of climate change.  "We're increasingly being shown that the behavior of these climate-linked extreme weather events is breaking records all the time," Jack Shapiro, project leader with Greenpeace's climate change leadership campaign, told the Huffington Post. "And with that is the evidence that there's no fossil fuel infrastructure that can truly be considered safe."

US Plans GOM Lease Sale for March 2020 - The Department of the Interior's Land and Mineral Management and Bureau of Ocean Energy Management are proposing a regionwide lease sale in March 2020 for 78 million acres in the federal waters of the Gulf of Mexico.The U.S. Department of the Interior’s Land and Mineral Management and Bureau of Ocean Energy Management (BOEM) are proposing a regionwide lease sale in March 2020 for 78 million acres in the federal waters of the Gulf of Mexico.Lease Sale 254 will include about 14,585 unleased blocks, located from three to 231 miles offshore, in the Gulf’s Western, Central and Eastern planning areas in water depths from nine to more than 11,115 feet. The following are excluded from the lease sale:

  • Blocks subject to the congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006
  • Blocks adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap
  • Whole blocks and partial blocks within the current boundaries of the Flower Garden Banks National Marine Sanctuary

It will be the sixth offshore sale under the 2017-2022 Outer Continental Shelf Oil and Gas Leasing Program. The program includes 10 regionwide lease sales for the Gulf. Lease Sale 253, which was held Aug. 21, yielded almost $159.4 million in high bids for 151 tracts. “Offshore energy development is about furthering America’s energy security, ensuring fair market value to the taxpayers and producing domestic energy in an environmentally responsible manner,” said acting assistant secretary for the Department of Land and Minerals Management Casey Hammond. “We all benefit from a strong offshore energy program, which provides thousands of well-paying jobs, as well as affordable and reliable energy Americans need to heat homes, fuel our cars and power our economy.”

Oil leak reported at Belle Chasse refinery; more than 50,000 gallons spilled, contained -  More than 50,000 gallons of crude oil leaked last week from the Phillips 66 Alliance Refinery in Belle Chasse, about 25 miles south of New Orleans, authorities said Tuesday. The leak, discovered Oct. 2, has been contained and is undergoing cleanup. Much of the oil seeped into the refinery's stormwater system. On Tuesday, the Louisiana Oil Spill Coordinator's Office said that nearly all the oil had been recovered. None of the oil escaped the refinery site, and no injuries were reported, state oil-spill responders said. The refinery's response team had located and secured the leak by Thursday morning, a refinery spokesman said. No impacts to the Mississippi River or to any wildlife were reported. The refinery is working with state wildlife officials to minimize the impact. The cause is under investigation. The 2,400-acre facility was built in 1971. It can process 10 million gallons of crude oil per day. It receives oil from the Gulf of Mexico via pipeline and ships.

Coast Guard responding to October 7 oil spill in North Pass (Reuters) - The U.S. Coast Guard (USCG) on Wednesday said it is responding to an oil discharge, which occurred earlier this week, in North Pass, Louisiana. “An estimated 840 gallons of oil was released into the marsh and surrounding waterway. The source of discharge has been secured,” the USCG said in a statement. The Coast Guard said it received a report of oil discharged from a pipeline seal owned by Texas Petroleum Investment Co. in North Pass on Monday.

Oil spill at ITC Deer Park facility closes Houston Ship Channel for three hours - An oil spill at Intercontinental Terminals Co.'s Deer Park facility closed the Houston Ship Channel for nearly three hours on Saturday afternoon.The Coast Guard was called at 1:30 p.m. to ITC's Dock 1 near Deer Park, where inspectors found a punctured locomotive fuel tank had spilled up to 300 gallon of diesel into the waterway.Vacuum trucks, skimmers and a containment boom were deployed to the area, and the Houston Ship Channel from Tucker's Bayou to Lt. 133 was closed between 1:45 p.m. and 4:35 p.m. on Saturday. "At this time, there is no impact to the Houston Ship Channel," according to the Coast Guard, which added it will continue to monitor recovery efforts.

EP Energy files for bankruptcy amid struggles - Houston's EP Energy filed for bankruptcy protection Friday morning, the latest of a recent string of energy companies to pull the trigger on Chapter 11 bankruptcy.EP Energy is a Texas oil and gas producer that has struggled for years, finally reaching the tipping point amid continued depressed crude oil pricing and looming debt payments.EP Chief Executive Russell Parker said the company has debt restructuring deals with several creditors and will work with the remaining ones to develop a complete reorganization so the company can cut down on its debt load and return to viability. EP Energy, which focuses on South Texas' Eagle Ford shale and West Texas' Permian Basin, was warned near the beginning of the year that it had six months to develop a plan and regain compliance while continuing to trade on the world's largest stock exchange. Instead, EP's stock plunged further from just below $1 per share in January down to just pennies for most of this year. EP Energy still employed about 370 people in March, but that's less than half of the nearly 800 employees back in 2014.

US buyers seek crude grades that once made up blended WTI | S&P Global Platts (podcast) - International buyers of US crude exports are increasingly seeking specific grades that once made up the blended pool of West Texas Intermediate.Buyers can request these "neat" barrels, thanks in part to new pipelines from the Permian to the Texas Gulf Coast that allow shippers to separate different grades into batches. Jenna Delaney, S&P Global Platts Analytics' team lead of North American oil analytics, and Laura Huchzermeyer, Platts managing editor for America's crude oil, tell us how the US crude stream is getting lighter, what international buyers want in a WTI barrel, and about the emergence of new streams like West Texas Light and West Texas Condensate.

Texas Pipeline Expansion Would Avoid Aquifer --- Enterprise Products Partners L.P. (EPD) reported Friday that it will expand its Midland to ECHO crude oil pipeline system. The firm stated the project will link its 6 million-barrel Midland, Texas, storage facility to its ECHO Terminal in Houston through its Eagle Ford system in South Texas. EPD noted that its wholly owned affiliate, M2E4 LLC, has secured long-term agreements supporting the new pipeline construction. “The proposed route for this pipeline would originate from our Midland terminal and tie into our Eagle Ford system in South Texas,” A.J. “Jim” Teague, CEO of Enterprise’s general partner, said in a written statement. Teague added the new pipeline would bypass a major Texas groundwater source. “The route would avoid the Edwards Aquifer, including its recharge and contribution zones,” he said. According to EPD, the pipeline – set to begin service in the first half of 2021 – will boast an initial capacity of 450,000 barrels per day (bpd) but can be expanded to 540,000 bpd. The company added that its Houston crude oil distribution system includes more than 45 million barrels of storage and roughly 4 million bpd of export capacity via EPD’s marine terminal network. Also, EPD noted the system links to approximately 4.5 million bpd of refining capacity in the Houston, Texas City and Beaumont/Port Arthur areas. Besides providing new Permian crude takeaway capacity, the pipeline will help EPD to optimize its entire four-pipeline Midland to ECHO system, the company stated. It noted that it expects to achieve $60 million in annualized cost savings primarily by significantly reducing the use of costly drag-reducing agents and managing pump operations. 

New Permian Oil Pipelines Fail to Deliver Immediate Export Boost - Newly commissioned Permian Basin crude pipelines have yet to boost U.S. crude exports, as the ongoing U.S-China trade war weighs on demand from Asia. The U.S. Census Bureau said exports averaged 2.73 million barrels a day in August, up just 40,000 barrels from a month before. That’s despite the start of two widely anticipated crude pipelines from West Texas to the Gulf Coast. Plains All American LP’s began service on its Cactus II crude pipeline in August and loaded cargoes for export that month. EPIC Pipeline Co LP started operations on its oil pipe in August as well. But the lines, with a combined capacity of over 1 million barrels a day, may not be in full use.“A lot of capacity will eventually be online from those pipes, but it would take some time before all of that becomes available. We shouldn’t expect to see all of that show up in one month,” said John Coleman, an analyst at consultant Wood Mackenzie.Also, the U.S.-China trade war which has in part weakened global oil prices is affecting demand as well as production. Total U.S. crude production in July fell to the lowest levels since February, according to government data. Chinese buyers reduced their purchases in U.S. crude for August ahead of the start of a 5% tariff on American oil. “The U.S.-China trade war is adding to concerns of a weakening economic cycle,” said Fernando Valle, an oil analyst at Bloomberg Intelligence. “Chinese auto sales and industrial production are slowing and consequently the demand for crude from the single-largest importer in the world.”

Goodnight Midstream lands $500 million to expand oil field water operations - Dallas pipeline operator Goodnight Midstream landed $500 million in private equity funds to expand the company's oil field water operations. Tailwater Capital, a Dallas-based private equity firm has committed more than $500 million for Goodnight Midstream to expands its operations. Focused on moving freshwater and oilfield wastewater, Goodnight is active in Bakken Shale of North Dakota, the Permian Basin of West Texas and Eagle Ford Shale of South Texas. "With this capital flexibility, we will continue to meet the increasing demand from our customers for scalable produced water infrastructure solutions and remain focused on providing safe, reliable and environmentally sustainable produced water logistics services to our customers," Goodnight Midstream Co-Founder and CEO Patrick Walker said in a statement. The $500 million investment comes at a time when more oilfield wastewater — which is known in the industry as either produced water or saltwater — is being moved to disposal sites by pipeline rather than 18-wheelers. /p>

City of Kyle Reaches Settlement with Kinder Morgan — A multi-billion-dollar natural gas pipeline will soon be to coming to Central Texas. On Friday during a special called meeting, Kyle City Council approved a settlement agreement with the Permian Highway Pipeline, LLC, and Kinder Morgan Texas Pipeline, LLC. The agreement allows Kinder Morgan to construct the Permian Highway Pipeline (PHP) through the boundaries of the City of Kyle. It also provides protections for the city regarding how the pipeline affects existing infrastructure and future development projects. In July, Kinder Morgan filed a lawsuit against the City of Kyle for passing an ordinance regulating how pipelines can be installed in the city. The ordinance required Kinder Morgan to bury the pipeline 13-feet deep, to allow the city to put its wastewater lines or water lines streets over the top of the pipeline. Kinder Morgan sued the city saying that state and federal law prohibits cities from regulating pipelines. The City of Kyle amended the ordinance on September 11 to address some of the claims that its ordinance was inconsistent with state and federal law. “To be clear, this settlement has nothing to do with re-routing the pipeline out of the Hill Country,” said Travis Mitchell, Mayor, City of Kyle. “We still share in the concerns of thousands in our community who fear the impacts of the PHP on our safety and our environment. Settling this case has no bearing on those risks, which would have remained in full force either way.” “In a perfect world, this pipeline would have been routed through unincorporated areas of Texas — preferably those areas already established with oil infrastructure — minimizing the effect on landowners, local governments and our environment,” said Mitchell. “Unfortunately, we don’t live in a perfect world. Our city council and city staff have worked diligently with Kinder Morgan to develop this framework that will provide protections to the city that otherwise are not granted through current state and federal regulations. One such protection born from the settlement is that Kinder Morgan is no longer legally allowed to convert the pipeline from natural gas to crude oil. As I see it, this negotiated point can be celebrated by all who have stood with us for the last year.”

Why an oil and gas giant paid millions to a small Texas town --An American oil and gas pipeline giant paid millions to a small suburb of Austin, Texas to run a pipeline through the city after a settlement was reached last week. Houston-based Kinder Morgan agreed pay the City of Kyle, Texas $2.7 million, intended to protect the City from “undue” financial burdens associated with the Permian Highway Pipeline (PHP) which would run from the Permian Basin in Midland to the export markets along the Gulf Coast.In July, the Kyle City Council passed an ordinance that placed stricter regulations on the pipeline’s construction within the city limits, and Kinder Morgan subsequently sued the city while pointing to federal law that allegedly prohibits municipalities from regulating pipelines. The settlement was approved by the City on Oct. 4, but Kyle Mayor Travis Mitchel said the local residents still have concerns as to the line’s impact on the local community.“To be clear, this settlement has nothing to do with re-routing the pipeline out of the Hill Country,” said Mitchell said. “We still share in the concerns of thousands in our community who fear the impacts of the PHP on our safety and our environment.“Settling this case has no bearing on those risks, which would have remained in full force either way.”  Mitchell said he and the City would have preferred the line be routed through unincorporated areas of Texas rather than the town of about 39,000 per a 2016 estimate from the U.S. Census.  The settlement also calls on Kinder Morgan to work on alleviating remaining concerns for impacts to local infrastructure and bars the company from converting the natural gas line to crude oil.

Shale Jobs Drying Up in Permian Basin- It’s right there on country-music station 96.1 FM in Odessa, Texas, where commercials for shale-patch jobs used to fill the airways. Those kinds of radio ads have fallen by two-thirds, said Marks, the general manager for ICA Broadcasting LLC, which runs five stations in the area. Signs of a slowdown permeate the Permian Basin, the 55 million acres (22.3 million hectares) in West Texas and New Mexico whose abundant oil and widespread fracking fueled America’s quest for energy independence. Dragged into the downdraft of this year’s 19% drop in drilling are orders for everything from giant earth movers that build well-site roads to chemicals used to kill bacteria during hydraulic fracturing. Rig counts are down, hotel proceeds are declining, home sales are slowing and fewer jobs are available than just last year. “If you can’t wring out any costs savings then you’ve got to buy less stuff if you want to get your costs down, and that’s the phase we’re entering into,” said Jesse Thompson, senior business economist at the Houston branch of the Federal Reserve Bank of Dallas. “You’ve seen this work its way through on the manufacturing side as quickly if not more quickly than we saw in the rig count on the oilfield services side.” Through August, Permian employment has grown at an annualized rate of 0.7%, far less than the 11.4% growth of the same period last year, the Dallas Fed said Wednesday in its latest monthly report. Unemployment in August, the latest period available, is at 2.3%, inching up from the region’s low of 2% in May. Caterpillar Inc., which makes a wide range of equipment for the industry, such as generators and pumps used by drillers in the field, blamed the Permian for its lower second-quarter sales in oil and gas equipment. The company warned investors in July that annual profit will probably come in at the lower end of its forecasted range, in part because it has cut expectations for West Texas revenue. Last month, oil explorers slashed drilling work by the most in a single week since January 2016, when crude prices were headed to their lowest in 12 years. The number of Permian crews, who come in after the drilling teams to get wells ready for production, has tumbled every week since the end of July and now sits at a 30-month low. With fewer workers drilling and fracking, hotels are taking a hit. Revenue per available room declined 32%, year over year, in August, and year to date is down 21%, according to STR Inc., a research and consultant firm that tracks tourism data. By comparison, the figure for the U.S. as a whole, year to date, is a rise of 1.1%.

More Than 50% Of The Mighty Permian’s 2018 Oil Production Has Vaporized - As dark clouds gather on the financial horizon, big trouble is brewing in the U.S. Shale Oil Industry.  While most Americans are focused on the Mainstream media’s coverage of the ongoing Washington D.C. circus, the real threat to the domestic economy lies in the country’s oil heartland.  And, if we look at what is taking place in the United States’ largest shale oil region, the signs are troubling. The Permian Oil Basin in Texas and New Mexico accounts for nearly half (46%) of the total U.S. shale oil production.   According to the data from Shaleprofile.com, Permian’s oil production peaked in May at 3.43 million barrels per day.  Due to the massive decline rate, production in the Permian has stalled this year.The chart below shows the Permian oil production declining even though more wells continue to be brought online.  Unfortunately, there aren’t enough wells being added to offset the tremendous decline rate.  You will notice how quickly the oil production that was added in 2018 (Light Blue color) has declined in just half a year:  To give you a better idea of the huge decline rate in Permian oil production, let’s only focus on 2018 and 2019 in the following charts.  But, before doing so, I wanted to let everyone know that this information would not be possible without the data from Shaleprofile.com.  I highly recommend that you check outShaleprofile.com and consider subscribing to the service if you want to be able to access more details in the shale industry.  It’s worth its weight in gold.Let’s look at the Permian oil production just for 2018.  Permian oil production brought on in 2018 peaked in December at 2,136,000 barrels oil per day (bopd) or 2,136K bopd, and declined to 1,056K bopd by July 2019. That is a STUNNING 50.5% decline in just seven months: The next chart shows the Permian oil production that was brought online from Jan-July 2019 increased to 1,308K bopd, or 1.3 million barrels per day:  Unfortunately, the 2,493 wells completed so far in 2019 haven’t been enough to show much overall oil production growth in the Permian.  If we combine both 2018 and 2019, here is the result: Even though the companies drilling and completing wells in the Permian added 2,493 new wells so far in 2019, overall production from these two years only increased by a net 221K bopd (221,000 bopd).  Thus, of the 1,308K bopd of the new output brought on in 2019, 1,087K bopd was already lost due to the massive decline rate of 2018’s production.

Chevron CEO touts Texas growth, urges industry improvements on emissions - The CEO of Chevron touted the company's Texas growth - from the Permian Basin to Houston refining and chemicals - and urged the energy sector to take the lead on emissions reductions to help combat climate change. Speaking at the Greater Houston Partnership's annual "State of Energy" luncheon, Chevron Chief Executive Mike Wirth praised the Houston area as a place to do business and grow. "I think this area will be the center of the energy universe for a long time to come," Wirth said. Chevron just recently bought the Pasadena Refinery in the region, continues to expand its petrochemical footprint in Baytown and Sweeny through its Chevron Phillips Chemical joint venture, and keeps growing offshore in the deepwater Gulf of Mexico. Another major area of growth is in the booming Permian Basin in West Texas and southeastern New Mexico. Noting that Chevron was criticized a few years ago for moving slowly in the Permian on its large legacy acreage, Wirth said that was by design. "What is in our wheelhouse is methodically planning and executing," he said, and doing "factory drilling – the same thing over and over again." Chevron has emerged as the second-largest producer in the Permian. Chevron would have claimed the top spot this year if it had won the bidding against Houston's Occidental Petroleum to buy The Woodlands-based Anadarko Petroleum. Instead, Oxy paid $38 billion for the honor and Chevron walked away with a $1 billion breakup fee from Anadarko. Rival Exxon Mobil is by far the most active driller in the Permian and quickly playing catch up. Wirth also noted that Chevron took it slow in the Permian in part so it could have all the pipeline hookups in place to reduce emissions and flaring - the burning off of associated natural gas collected during oil production. Chevron in recent years already has reduced its flaring of methane from natural gas production from about 4 percent down to less than 1 percent - better than industry averages in the region. "The industry should be out and in front on this," Wirth said about reducing emissions 

Recent decrease in U.S. crude oil production was geographically isolated, likely temporary --Monthly U.S. crude oil production fell by 276,000 barrels per day (b/d) in July 2019, based on the latest data in the U.S. Energy Information Administration’s (EIA) Petroleum Supply Monthly. This hurricane-related decrease was the largest decline in monthly crude oil production in more than a decade. The decline was temporary and geographically isolated to the Federal Offshore Gulf of Mexico. EIA expects that U.S. crude oil production will continue to increase through the remainder of 2019.Crude oil production in the Federal Offshore Gulf of Mexico fell by 332,000 b/d in July when some production platforms were evacuated in anticipation of Hurricane Barry. According to information from the U.S. Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE), 283 offshore oil and gas platforms in the Gulf of Mexico (about 42% of the regional total) were evacuated in mid-July as Barry approached.BSEE estimated that about 70% of Gulf of Mexico crude oil production was shut in (i.e., not operating) at the peak of the disruption as a result of the evacuation. Excluding the Federal Offshore Gulf of Mexico, U.S. crude oil production in the rest of the United States rose by a combined 56,000 b/d in July, partially mitigating the disruption. Historically, many of the largest monthly declines in U.S. crude oil production were the result of hurricanes. Hurricanes Gustav and Ike led to crude oil production falling by more than 1 million barrels per day in September 2008. Hurricanes Katrina and Rita led to a similar month-on-month decline in September 2005.By comparison, Hurricane Barry’s disruption occurred relatively early in the hurricane season and had less of an effect on total U.S. crude oil production. As onshore U.S. crude oil production has grown, the Gulf of Mexico’s share of the national total has fallen from a high of 29% in 2009 to 16% in 2018.

US oil, gas rig count falls by 12 this week to 919: Enverus/DrillingInfo— The US oil and gas rig count fell by 12 rigs to 919 this week, continuing a downward trend since late 2018 as drilling activity gradually slowed in most of the domestic large unconventional basins, according to Enverus/Drilling Info data, released Thursday. And with the prospect of stagnant or slightly lower oil prices going forward, analysts believe the rig count could continue ticking down, analysts said, even though operators have increasingly been able to produce more oil with fewer rigs. "Operators are finding themselves now in a similar spot to when we started the year: a weaker crude price environment coupled with the continued push to satisfy investors," through reining in capital budgets and returning more cash to shareholders, said analyst Sami Yahya of S&P Global Platts Analytics. Since the recent US rig count peak of 1,233 last November, more than 300 oil and gas rigs, or 25%, have left domestic fields as oil prices have zig-zagged and in the last couple of months, dropped from former levels in the high $50s/b to low $60s/b. In the last four weeks alone, industry has dropped 30 rigs. Oil prices have dropped in October to the low $50s/b as demand remained jittery after a drone attack on Saudi oil infrastructure last month sent prices up to the high $50s/b. This week, WTI averaged $52.65/b, down $1.89, while WTI Midland averaged $53.50/b, down $1.90, according to S&P Global Platts Analytics data. The Bakken Shale Composite price was $47.04/b on average, down $1.01. Gas at Henry Hub in Louisiana averaged $2.25/MMBtu, down 12 cents, while at Dominion South, the price averaged just $1.10/MMBtu, down 30 cents. The latest Dallas Federal Reserve Bank energy survey in late September found low crude and natural gas prices to be respondents' biggest concern, followed by limited capital and credit. "Unless there is a material pullback, the environment is static around $55/b,"  This week, just three of the eight large named US basins saw rig gains. The gas-prone Haynesville Shale in East Texas/Northwest Louisiana picked up three rigs ro 56, while the Denver-Julesburg Basin in Colorado and Utica Shale of Ohio each gained one rig. That raised the total in the DJ to 25 and the Utica to 16, Enverus said. Otherwise, decreases were seen in all other basins. The largest this week was in the Permian Basin of West Texas/New Mexico, which fell by five rigs to 412. Two other basins, the SCOOP-STACK in Oklahoma and the Williston Basin in North Dakota/Montana, each fell by three rigs. That left the Oklahoma play with 53 rigs and the Williston with 56. The Eagle Ford Shale of South Texas declined by two rigs, leaving 70, while one rig left each of the Marcellus Dry and Marcellus Wet basins, for a total 25 in Dry and 17 in Wet.

Wisconsin tribe says 'remove Line 5' despite Enbridge offer of $24M - A tribe in Northern Wisconsin still wants Line 5 off their land, despite a $24 million offer from Enbridge.The Bad River Band of Lake Superior Chippewa sued Enbridge Energy earlier this year, asking them to immediately shut down the portion of the Line 5 oil pipeline that runs through their reservation.The tribe says easements allowing Enbridge to operate the pipeline have expired. The company disputes that. Last week, Enbridge offered Bad River $12 million to settle the lawsuit and $2 million a year to keep operating the pipeline on their land for the time being. The company also said it’s exploring rerouting Line 5 outside the reservation and promised an extra $10 million to the tribe if that happens. In an email statement, Enbridge spokesman Ryan Duffy said the company would also still be interested in keeping Line 5 on the reservation permanently. "Enbridge remains open to discussing a settlement with the band based on a longer-term operation of Line 5 within the reservation where the band and Enbridge could commit to on-going cooperation on maintenance, including band employment and economic development opportunities," But the Bad River Band just wants the company to leave the watershed. In a statement on his Facebook page, Tribal Chairman Mike Wiggins says he won't use the term "rejection" in regards to the settlement offer, because that might imply there was some kind of negotiation process. "When it comes to the Bad River Tribe and Enbridge’s latest public manipulation strategy, to throw monetary terms around in the media, our Tribal Council's position has never wavered," says Wiggins. "Enbridge’s expired leases were rejected and our litigation is rooted in the protection of the Bad River Watershed hydrology. Whatever that ends up looking like for Enbridge is their problem. Decommissioning and removing the whole of Line 5 sounds like a great start."

Fires, explosions and toxic releases: Front Range residents fight fracking boom - For Barb Binder, the bad news arrived with a knock on the door. That’s when she learned from a local activist that a patch of open public space across from her “forever home” in Broomfield County, theDenver suburb where she and her husband planned to retire, was about to become an industrial site. Initially, she was comforted by the thought that state officials would not possibly allow residential hydraulic fracturing – or fracking, as it is known – to begin if it was not safe. But two years on Binder feels naive for being so trusting. She believes her asthma has become worse since the construction near her home began, and blames the drilling mud that has been used on the site. And then there is the constant worry. “I had to educate myself about exactly what’s involved in industrial-scale fracking,” she says. “It meant looking at the dangers – the fires, the explosions, the toxic releases, and recognising: ‘Oh my God, I am going to be living right next to this.’” Binder now spends most of her free time opposing the plans of Extraction Oil and Gas, the Denver-based company that has plans to construct 84 wells around her neighbourhood, 16 of them “literally” – she says – in her backyard.She is not alone. Since the advent of the fracking boom in oil-rich Colorado – where there has been a fivefold increase in oil and gas production since 2008 – new wells and production sites have sprung up around residential neighbourhoods in the Front Range faster than environmental researchers can track them.There are 40,000 active and inactive wells across the Denver basin, and new permits issued every month for more. They are built close to schools, playgrounds, and clusters of family homes. The boom has coincided with anecdotal tales of ill-effects – from children’s nosebleeds to asthma – and a health study that shows more children being born with congenital heart defects in areas of Colorado with high-intensity oil and gas activity compared with areas where there is low or no activity.  And there have been accidents. In 2017, two men were killed, and a woman and child injured, after a house in Firestone, Colorado, exploded because of a leak of “fugitive gas” from an uncapped pipeline that was connected to a gas well near the home. Erin Martinez, who lost her husband and brother in the blast, has moved house again after a new well began construction across from her home.

Trump's fast-tracking of oil pipelines hits legal roadblocks – (Reuters) - The Trump administration’s effort to cut red tape and speed up major energy projects has backfired in the case of the three biggest U.S. pipelines now planned or under construction.  All three have been stalled by successful legal challenges by environmental groups alleging the administration failed to apply the regulatory scrutiny required under the law. The Republican administration tried to accelerate permits for two multi-billion-dollar natural gas lines and jumpstart the long-stalled Keystone XL crude oil pipeline that would start in Canada. Judges halted construction on all three over the past two years, ruling that the administration granted permits without conducting adequate studies or providing enough alternatives to protect endangered species or national forests. The delays have caused the two giant gas pipelines - Dominion Energy Inc’s Atlantic Coast and EQM Midstream Partners LP’s Mountain Valley - to increase their cost estimates by hundreds of millions of dollars, according to the companies. The Atlantic Coast pipeline may never be completed unless the U.S. Supreme Court overturns a lower-court decision blocking its planned route, analysts said. Lawsuits alleging regulatory lapses are not new, but they were unsuccessful during the administration of Trump’s predecessor, Democrat Barack Obama. Plaintiffs lost five separate lawsuits alleging regulatory failures during Obama’s administration, according to a Reuters review of court filings for major interstate gas pipes built since 2010. “Environmental groups definitely have been going after these pipelines more aggressively,” said Amy Vazquez, Houston-based partner at the law firm of Jones Walker, who specializes in energy litigation. “It’s probably because they’re having a fair bit of success.”

Flurry of Keystone XL pre-construction activity resumes - The Canadian company that wants to build the Keystone XL crude-oil pipeline has informed a court that it will spray weeds, haul pipe, move work-camp modular housing and cut down trees beginning this month in South Dakota and Montana in preparation for construction of the pipeline next year. On Sept. 20, TC Energy filed a status report with a federal court in Montana that is handling an ongoing lawsuit about the proposed pipeline. The status report notes that a federal appeals court lifted the Montana court's injunction against the project in June. "Thereafter TC Energy (formerly TransCanada) returned to planning for the pre-construction activities so that construction of the Keystone XL pipeline could begin in 2020," the status report says. Meanwhile, litigation concerning the project remains pending, and opponents of the project have pledged to keep fighting against it. In South Dakota, the state Water Management Board began two days of hearings Thursday on several water permits requested for the project, for purposes such as directional drilling, hydrostatic testing, dust control and work-camp supply. The status report filed in Montana federal court says some pre-construction activities, which had been suspended while the injunction was in effect, will resume on privately owned land this month. TC Energy plans to eradicate weeds along the pipeline right-of-way in South Dakota and Montana by dispatching workers to hand-spray herbicides. At pipe yards in South Dakota, TC Energy plans to resume groundskeeping activities and transportation of pipe to the yards by train and truck.

For Indigenous Women, More Pipelines Mean More Threats of Sexual Violence Later this month, the South Dakota Water Management Board will be holding five hearings on water permits needed for the Keystone XL pipeline expansion, which will cross several rivers as it makes its way from the tar sands in Alberta to Steele City, Nebraska. If the pipeline expansion is approved — it’s been on hold for nearly a decade — it will affect several tribal and First Nations communities along its route. Tribal activists fear this will bring not only economic and environmental impacts, but also sexual violence. Angeline Cheek, a community advocate on the Fort Peck Reservation in Northeastern Montana, is vehemently opposed to the extension. As proposed, Keystone XL would cross just a few miles from the western side of the reservation. On the eastern side, across the North Dakota border, are the Bakken oil fields.Cheek’s organization provides workshops and information to reservation residents on the dangers of man camps in the Bakken area. Man camps are large company-owned housing units that people who come to work in the oil fields can move into. With the Bakken oil boom, these man camps have increased in the region. Population growth because of an extractive industry leads to a surge of individuals — mostly men — who are paid well and living temporarily in rural areas they aren’t otherwise connected to. Since the boom, violent crime, sex trafficking, and rape cases have increased, according to tribal police and local activists. Though the group has received support from some tribal programs and the broader community, tribal leadership has not signed onto the community safety plan. “I have relatives here who I don’t want to go missing,” Cheek said. “The tribe needs to start thinking ahead. …The tribe should be doing the work I’m doing. They should be thinking of preventative ways to keep the community safe.” National attention turned to the Bakken in 2012, when Sherry Arnold, a white teacher, was raped and murdered by two men who came to the Bakken in search of work. Yet many Native victims don’t receive this kind of support,  Cheek said. “When something happens to an Indigenous person, to a Native person, why isn’t that being heard? We’re just another number.”

Keystone construction activities put on hold - Many Keystone XL pipeline pre-construction activities that were scheduled for this month have now been put on hold, attorneys for TC Energy have reported.Late last month, attorneys for the Canadian company filed a status update in a lawsuit in Montana federal court. The update said the company would soon begin spraying weeds, hauling pipe, moving work-camp modular housing and cutting down trees in South Dakota and Montana in preparation for construction of the pipeline next year. That update, which was filed Sept. 20, noted that an injunction against the project had been lifted in June. On Thursday, lawyers for TC Energy backtracked and wrote, "Subsequently, TC Energy informed counsel that it is continuing to assess the appropriate timeline for conducting preconstruction activities.""With the exception of weed eradication," the new status update said, "which is already complete, and the orderly winddown of certain road upgrade work," further preconstruction work will not occur until, at the earliest, after a hearing scheduled today in a related lawsuit in federal court.

Montana AG Fox seeks to intervene in lawsuit in support of Keystone XL pipeline ~ Montana Attorney General Tim Fox petitioned U.S. District Court in Great Falls Monday to intervene in a lawsuit that seeks to stop the Keystone XL pipeline. Fox wants to enter the lawsuit in support of the pipeline. In a written statement, Fox – who is running for the Republican nomination for governor – said the pipeline “will bring jobs and economic development to Montana.” “The obstructionist litigation against it has dragged on for far too long,” he said. “It’s time to settle the matter and begin construction.” If eventually constructed, the pipeline would begin in Alberta, Canada, and connect to an existing pipeline in Nebraska. It Montana, it would run through Phillips, Valley, McCone, Dawson, Prairie and Fallon counties and would include an “on ramp” allowing transport of Montana oil to refineries. In July, conservation groups sued the Army Corps of Engineers for its “rubber-stamp approval” of a permit for the pipeline. Filed by Northern Plains Resource Council, Bold Alliance, Natural Resources Defense Council, Sierra Club, Center for Biological Diversity and Friends of the Earth says wildlife, the lawsuit contends that streams and wetlands would be harmed by the Keystone XL. The lawsuit contends “that no federal agency has yet completed the requisite analysis” of the 1,200-mile pipeline and infrastructure.

Swedish teen climate activist rallies crowd in South Dakota (AP) — A 16-year-old environmental activist from Sweden urged politicians Monday at a South Dakota appearance to listen to indigenous people on climate change. Greta Thunberg spoke at a rally in Rapid City that attracted hundreds of people. She spoke out against the proposed path of the Keystone XL pipeline through South Dakota, which she said is “not morally defensible.” “Indigenous peoples have been leading this fight for centuries,” Thunberg said. “They have taken care of the planet and they have lived in balance with nature and we need to make sure that they’re voices are being heard. We need to listen to them because they have knowledge that is valuable right now.” Also speaking was Tokata Iron Eyes, a 16-year-old from Pine Ridge who planned the rally and invited Thunberg to speak at the Pine Ridge and Standing Rock reservations. “We are marching for our lives, we are marching for climate justice and we are marching for indigenous rights at the same time — because those two things go hand in hand,” Iron Eyes said. “There’s no one without the other. Indigenous people need to be in the forefront of the climate movement because we are the frontline communities who are suffering the most from this crisis and Greta knows that.”

We’re Just Starting to Learn How Fracking Harms Wildlife - In January 2015 North Dakota experienced one of the worst environmental disasters in its history: A pipeline burst, spilling nearly 3 million gallons of briny, saltwater waste from nearby oil-drilling operations into two creek beds. The wastewater, which flowed all the way to the Missouri River, contained chloride concentrations high enough to kill any wildlife that encountered it.It wasn't the first such disaster in the state. In 2006 a spill of close to 1 million gallons of fracking wastewater into the Yellowstone River resulted in a mass die-off of fish and plants. Cleanup of that spill was still ongoing at the time of the 2015 spill, nearly a decade later. Spills like these highlight the dangers that come with unconventional fossil-fuel extraction techniques that go after hard-to-reach pockets of oil and gas using practices like horizontal drilling and high-volume hydraulic fracturing (otherwise known as fracking). But events like these massive spills are just the tip of the iceberg. Other risks to wildlife can be more contained, subtle or hidden.   But those consequences are very real for a vast suite of animals including mussels, birds, fish, caribou and even fleas, and they're as varied as the species themselves. In some places wildlife pays the price when habitat is destroyed. Elsewhere the damage occurs when water is sucked away or polluted. Still other species can't take the traffic, noise and dust that accompany extraction operations.All this damage makes sense when you think about fracking's outsized footprint. It starts with the land cleared for the well pad, followed by sucking large volumes of water (between 1.5 and 16 million gallons per well) out of rivers, streams or groundwater.Then there's the sand that's mined for use during the fracturing of underground rock to release natural gas or oil. There are also new pipelines, compressor stations and other related infrastructure that need to be constructed. And there's the truck traffic that surges during operations, or the disposal of fracking wastewater, either in streams or underground. "Studies show that there are multiple pathways to wildlife being harmed," said ecologist Sandra Steingraber, a distinguished scholar in residence at Ithaca College who has worked for a decade compiling research on thehealth effects of fracking. "Biodiversity is a determinant of public health — without these wild animals doing ecosystem services for us, we can't survive."

Oil spill reported in McKenzie County -- The North Dakota Department of Environmental Quality has reported a produced water and oil spill in McKenzie County. A leak in a tank resulted in about 400 barrels of produced water, which is a by-product of oil and gas development, and about 200 barrels of oil to be released. The tank is located on a well pad about 11 miles Northeast of Grassy Butte and is operated by White Rock Oil & Gas. Most of the spill was contained to the well pad, but an unknown amount of the spill did leave the pad, impacting Badlands terrain. The cause of the leak is unknown at this time. Personnel from the NDDEQ are inspecting the site and will continue to monitor the investigation and remediation.

As the Bakken booms, North Dakota eyes plastics - As pump jacks pull more and more oil out of shale rock buried deep below the western part of the state, an increasing amount of natural gas travels up through the wells with few obvious destinations in North Dakota.  Oil producers burn off some of the gas at well sites because the state has maxed out its processing plants and pipelines that carry the rest of it to market, often out of state. While the bulk of North Dakota gas is methane, it’s also rich in hydrocarbons like ethane, propane and butane, which are known as “natural gas liquids” because they can take on a liquid form under certain pressures and temperatures.  “If you look at the other shale plays, the Bakken is at the top of the pack,” North Dakota Pipeline Authority Director Justin Kringstad told the state’s Industrial Commission last week.  The Bakken might be richer in natural gas liquids than gas produced in places such as the mid-Atlantic and the Gulf Coast, but North Dakota lacks something that those areas do have: a petrochemical industry that uses substances such as ethane to make products like plastics or fertilizers.   The potential to do the same in North Dakota has a lot of people involved in energy here talking. “What you hear from the companies when you start poking around is there’s somewhere between five and 10 companies that are actively looking for projects over the next five to 10 years worldwide,” Lt. Gov. Brent Sanford said. North Dakota faces competition from places like Texas, where a company could leverage an old, defunct industrial site and tap into existing infrastructure, he said. Then there’s the Utica and Marcellus shale plays in Pennsylvania, Ohio and West Virginia that produce vast quantities of natural gas.  Alberta, Canada, is home to the petrochemical industry as well, and state officials have not only made trips there this year but are in talks with “a few” companies about setting up shop in North Dakota, Sanford said. He declined to name the companies, citing nondisclosure agreements.

Trump Admin to Open 725000 Acres of California to Oil & Gas Drilling - Democracy Now! -  In the United States, the Trump administration moved Friday to open more than 720,000 acres of California land to oil and gas drilling. Environmentalists have vowed to sue to block what would be the first federal fossil fuel lease sales since 2013. Clare Lakewood, senior attorney at the Center for Biological Diversity, said, “Turning over these spectacular wild places to dirty drilling and fracking will sicken Californians, harm endangered species, and fuel climate chaos.”

US government opens California land to oil, gas drilling — The federal government has opened 725,000 acres in Central California to oil and gas drilling on land that has been off-limits since 2013. The Bureau of Land Management issued its final decision Friday to allow oil and gas leases on plots that are mostly in the Central Valley, but also include parts of the Central Coast. The plan announced in May is part of a Trump administration goal to make the U.S. energy independent that has been criticized as a giveaway to industry. Environmentalists who successfully blocked the Obama administration from opening the land to drilling criticized the new development. The Center for Biological Diversity called the effort reckless and says it will continue to fight the government. The BLM says additional approval will be required for before any drilling.

Trump opening California public land to fracking, gas leases. Is it 'reckless'? - The Trump administration has finalized its plans to open hundreds of thousands of acres of federal land in Central California to oil and gas leasing, paving the way for more fracking to soon begin in the state. The Bureau of Land Management (BLM) approved the oil and gas exploration plan "based on the administration's goal of strengthening energy independence and the BLM support of an all-of-the-above energy plan that includes oil and gas underlying America's public lands," it said in its record of decision released Friday. The agency received more than 400 objections of its proposed leasing plan over a 30-day protest period, according to its final report. BLM officials ruled that none of them was valid. According to the decision, oil and gas drilling can move forward on more than 700,000 acres of public land and mineral estate in Alameda, Contra Costa, Fresno, Merced, Monterey, San Benito, San Joaquin, San Mateo, Santa Clara, Santa Cruz and Stanislaus Counties. The agency's plan could result in up to 37 new oil and gas wells drilling on new land leases over the next 20 years, primarily in Fresno, Monterey and San Benito counties. BLM estimates that the oil and gas industry directly supports 3,000 jobs and $623 million in tax revenue within those counties. BLM, which is a division of the Department of Interior, is also considering a proposal to conduct new oil and gas development on 1.6 million acres of public land in Southern California. The planning area, which covers Fresno, Kern, Kings, Madera, San Luis Obispo, Santa Barbara, Tulare and Ventura counties, includes about 400,000 acres of public land and 1.2 million acres of federal mineral estate, according to the report. BLM has not yet finalized that proposal. While California remains one of the largest oil producing states in the nation, production has steadily declined over the last three decades. Clare Lakewood, a senior attorney at the environmental group Center for Biological Diversity, called the decision on the Central California leasing proposal "reckless." "Turning over these spectacular wild places to dirty drilling and fracking will sicken Californians, harm endangered species and fuel climate chaos. We'll fight tooth and nail to make sure it doesn't happen," Lakewood said in a statement from the group. The Center for Biological Diversity was behind the lawsuit that effectively halted BLM oil and gas leasing in California since 2013. A U.S. District Court ruled that BLM failed to consider the environmental impacts of fracking when evaluating drilling leases, forcing the federal government to restart the planning process.

Will California’s Brand As The Denizen Of Green Energy Be Tarnished By Allowing New Drilling In Its Coastal Areas? The Trump administration has decided once again to butt heads with the state of California. The issue now is not over vehicle fuel standards but rather, it is about drilling off-shore in public areas. The measure would give oil and gas producers access to 725,500 acres from central to northern California. The move is consistent with the president’s positions on increasing domestic oil and gas supplies. But it makes a stronger political statement than it does a practical one: while companies can apply for leases to drill, they must still overcome legal and regulatory hurdles. In other words, environmental groups will contest this in court even before any entity may try and get a permit to drill. And all that risks is topped by the fact that drilling is unproven in those waters. Moreover, “In California, we're already well on our way to energy independence and we're doing it in the smart way. This is 2019, not 1920. We don't need to jeopardize our health or our environment to develop the energy sources we need,” California’s Attorney General Xavier Becerra said.   Specifically, the Department of Interior’s Bureau of Land Management said on Friday that up to 37 new oil and gas leases will be developed over 20 years in the contested region. The move would end a six-year moratorium that began in 2013 when a federal judge ruled that the fossil fuel companies had not given adequate attention to the environmental impact from hydraulic fracturing. In May 2019, though, the bureau completed its examination and concluded that any future drilling would be both safe and wildlife-friendly. It emphasized that its decision does not authorize any production — just the ability to apply for leases. The bureau also said that 3,000 jobs and $620 million in tax revenue could be generated from allowing drilling off the coast of central California.

Northwest fight creates 'big fear' in U.S. oil industry -- Oil companies and several states are pressing federal officials to overturn a Washington state law aimed at improving the safety of crude shipped by rail, saying it could create chaos in the nation's transportation system and affect other industries. But environmentalists say the law is critical for preventing fires and deadly explosions.

Elizabeth Warren’s Fracking Proposal Has Shale Investors Weighing E&P Risk - The prospect of Elizabeth Warren becoming the 2020 Democratic presidential nominee, or the 46th president of the U.S., has energy investors worrying about risks to hydraulic fracturing. “What happens if Elizabeth Warren becomes president and bans fraccing?” was the most common question Sanford C. Bernstein received during recent marketing, analysts led by Bob Brackett said in note Tuesday. They don’t currently have a good answer. Concern on Wall Street has been rising along with Warren’s poll numbers, with sectors such as financials, health care and industrials as well as energy identified among those at risk from her policy proposals. In early September, Warren tweeted that she would ban fracking “everywhere” if she becomes president: The former part of Warren’s plan would have a modest longer-term impact given the “mature state” of areas such as onshore Alaska or the federal Gulf of Mexico, according to Bernstein. However, a fracking ban would offer “much more immediate consequences,” and be “incredibly bullish for both global oil prices and U.S. natural gas prices.” Federal leasing changes could have the most impact on shale drillers such as EOG Resources Inc. and Devon Energy Corp., Brackett said. Kosmos Energy, Hess Corp., Apache Corp. and ConocoPhillips may have little to worry about from a fracking ban, however. Still, any impact from a Warren win may be short-lived. “We have a government with checks and balances,” Brackett noted, pointing to processes which have caused executive orders to be moderated. He also highlighted the ability of E&Ps to re-allocate capital to mitigate effects. And, as RBC Capital Markets wrote earlier this week, most of the sectors seen to be at high risk “are already deeply undervalued versus the broader market.”

Capital Flight Is Killing The US Shale Boom - The growth in U.S. shale production is grinding to a halt as low prices put drillers in a financial vice.The slowdown has been unfolding for much of 2019, but the latest slide in oil prices is another blow to cash-strapped companies. Share prices for many E&Ps are down sharply. For instance, Devon Energy’s stock is down 20 percent since mid-September; EOG Resources is off by 17 percent and Pioneer Natural Resources is down by more than 13 percent. Many other companies have seen similar declines.Rig counts have fallen by 20 percent since last year, drilling is down, hotel rates are down, and employment is in decline. “If you can’t wring out any costs savings then you’ve got to buy less stuff if you want to get your costs down, and that’s the phase we’re entering into,” Jesse Thompson, senior business economist at the Houston branch of the Federal Reserve Bank of Dallas, told Bloomberg.As Bloomberg noted, annualized employment grew only 0.7 percent through August, compared to 11.4 percent for the same period in 2018. The unemployment rate has ticked up from 2 to 2.3 percent. The number of fracking crews has fallen to its lowest level in 30 months.For embattled shale drillers, there is another imminent hurdle that they must clear. For the first time since 2016, Permian shale drillers could see their access to borrowing slashed. Lenders periodically reassess the borrowing base that they offer to oil and gas producers, a so-called “credit redetermination” period. According to a survey of financial institutions as well as oil and gas firms by law firm Haynes and Boone, the industry is set to see “a decrease in credit availability for producers and a strong interest in alternative sources of capital.”In other words, lenders are turning o ff the spigots.

Will the Fracking Revolution Peak Before Ever Making Money? - This week, the Wall Street Journal highlighted that the U.S. oil and gas shale industry, already struggling financially, is now facing “core operational issues.” That should be a truly frightening prospect for investors in American fracking operations, but one which DeSmog has long been warning of.  This one line from the Journal sums up the problems: “Unlike several years ago, when shale production fell due to a global price collapse, the slowdown this year is driven partly by core operational issues, including wells producing less than expected after being drilled too close to one another, and sweet spots running out sooner than anticipated.”  As we have reported at DeSmog over the last year and a half, the shale oil and gas industry, which has driven the recent boom in American oil and gas production, has been on a more than decade-long money-losing streak, with estimated losses of approximately a quarter trillion dollars. Those losses have continued in 2019.  This failure to generate profits led to the Financial Times recently reporting that shale investors are having a “crisis of faith” and turning away from U.S. oil and gas investments. That’s been bad news for frackers because the entire so-called “shale revolution” was fueled by massive borrowing, and these companies are increasingly declaring bankruptcy, unable to pay back what they borrowed because they haven’t been turning a profit. Scott Forbes, a vice president with leading energy industry research firm Wood Mackenzie, also has noted the structural problems in the finances of the fracking industry, referring to the current business model as “unsustainable.”  When DeSmog first began reporting on the failed finances of the fracking industry, publications like the Wall Street Journal were writing about the optimistic financial future for shale companies. A year and a half later, that optimism has died. But all of these dynamics played out before the industry ran up against “core operational issues.” Over the last 10 years, the fracking industry has made impressive gains with technological improvements that have resulted in lower costs and higher performing wells. But despite these improvements, shale companies have failed to be profitable, and two years ago, industry analysts at Wood MacKenzie were warning about the limits of technology in overcoming geology. More recently, the industry’s attempts to extract more oil and gas out of the shale — dubbed Fracking 2.0 by the Wall Street Journal — have flopped. Even the longest drilled wells have not made money, indicating a limit to optimal well length. Likewise, attempts to drill many wells in the same area — so-called cube development — haven’t been the financial savior the industry needs either.

TD raises fracking concerns in Port of Cork's deal with US firm for LNG imports - The Port of Cork says there is "a lot of groundwork to complete" when it comes to finalising a deal to import gas through Cork harbour. In 2017, the port signed a memorandum of understanding with US company Next Decade and its partners to explore a joint development opportunity for a new Floating Storage Regasification Unit (FSRU) and associated liquefied natural gas (LNG) import terminal infrastructure in Ireland. The LNG would be sourced from Next Decade’s proposed Rio Grande LNG export facility at the Port of Brownsville in South Texas. Announcing the deal in 2017, the Port of Cork said it would provide "a source of competitively-priced energy to Ireland and its partners". Last week, the Government was accused of hypocrisy as it backed proposals for a Kerry-based Liquefied Natural Gas (LNG) import terminal that would, if approved, facilitate the import of fracked gas from the United States. It came just a short time after the country introduced a domestic ban on gas fracking. Cork North-Central TD, Mick Barry, has raised further concerns about existing agreements, specifically raising the matter of the Port of Cork's deal with Next Decade. The Solidarity TD said: "People in Cork have a particular interest in this issue. The privatised Port of Cork has signed a Memorandum of Understanding with a US company to explore the question of importation of LNG from the US to Cork.

Equinor starts production at giant Johan Sverdrup oilfield (Reuters) - Oil and gas firm Equinor has started production at its giant Johan Sverdrup oilfield in the North Sea, the largest offshore development in Norway since the 1980s, the Norwegian company said on Saturday. The Phase 1 development of the 2.7 billion barrels of oil equivalents field is expected to reach plateau production of 440,000 barrels of oil equivalents per day (boepd) during the summer of 2020, the company added in a statement. Sverdrup is expected to reach its full output of 660,000 boepd when its Phase 2 development is put on stream at the end of 2022. “At peak, this field will account for around one third of all oil production in Norway and deliver very valuable barrels with record low emissions,” said Eldar Sætre, president and chief executive of Equinor. Equinor has previously said it expected cash flow from operations of around $50 a barrel in 2020, based on a real oil price of $70 a barrel, partly as a result of the phasing of tax payments in the ramp-up phase. Equinor’s Chief Financial Officer Lars Christian Bacher told Reuters in September that Sverdrup, with expected operating costs below $2 a barrel, was “probably the best oilfield development in the world”.

Pipelines From Russia Cross Political Lines - The New York Times — President Trump said “it really makes Germany a hostage to Russia.” Senator Ted Cruz, Republican of Texas, said it would encourage Russian “military adventurism.” Radoslaw Sikorski, the former Polish defense minister, compared it to the infamous 1939 Molotov-Ribbentrop Pact that allied the Nazis with Stalin’s Soviet Union.That seems like a lot of heavy breathing for a pair of natural gas pipelines known as Nord Stream 2, which follow the route and would double the capacity of an existing pair of pipelines, Nord Stream, which started working in 2011 and are running at full capacity.The pipelines run from Russia directly under the Baltic Sea to Germany, bypassing Poland and Ukraine and denying those countries some transit fees. Gazprom, which is majority owned by the Russian government, owns 51 percent of Nord Stream 1 and all of Nord Stream 2 AG, which is developing and will operate the new pipelines.Critics, including those from the United States, which would like to sell Europe more liquefied natural gas, say they are not simply concerned that Germany will become too dependent on Russian gas as it weans itself from nuclear power and coal. They also fear that Russia’s larger intention is to starve Ukraine of an important chunk of income. Russia is waging a kind of war in the eastern part of Ukraine after annexing Crimea in 2014.So the play of politics and geopolitics is as much a part of the Nord Stream story as any argument made about economics, climate change or the diversity of European energy supplies. “Nord Stream is politically sensitive because it fractures Europe strategically between the interests of Germany and the interests of everyone else,” said Kristine Berzina, a senior fellow at the German Marshall Fund in Brussels. “That creates a lot of mistrust and tensions with Poland and Ukraine.”While Mr. Trump and Mr. Cruz have threatened to impose economic sanctions on companies involved in building Nord Stream 2, the project is likely to be completed close to schedule early next year. More than 2,000 kilometers (about 1,240 miles) out of a total of about 2,400 kilometers of pipe have already been laid, according to Sebastian Sass, who represents Nord Stream 2 AG, the pipeline company, to the European Union.

India's Reliance to resume Venezuela oil loadings after four-month pause - (Reuters) - Indian refiner Reliance Industries Ltd (RELI.NS) is scheduled to resume loading Venezuelan crude in October after a four-month pause, according to sources and internal documents from PDVSA seen by Reuters, a move that could help Venezuela’s state-run company drain its large oil inventories. The United States in January imposed the toughest sanctions yet on Venezuela’s oil industry, depriving the OPEC member of the main destination for its crude exports. In August, Washington added to the sanctions pressure by threatening non-U.S. companies with punitive action if they “materially assist” Venezuelan President Nicolas Maduro’s government. The measures have scared away several of PDVSA’s largest customers and tanker operators, causing a fast accumulation of unsold crude that forced the Venezuelan company last month to reduce output. A Reliance representative said on Wednesday it has been supplying Venezuela with fuels permitted under U.S. sanctions, including diesel, and thus it “is able to recommence crude sourcing” in exchange for the refined products. “These are actions compliant to U.S. sanctions as crude sourcing against supply of permitted products is allowed,” the representative said in a email to Reuters.

Petrobras removes 133 tonnes of oil from Brazils beaches (Reuters) - State-run oil company Petroleo Brasileiro has collected 133 tonnes of oil along Brazil’s northeastern shoreline, Chief Executive Roberto Castello Branco said on Tuesday, in an unexplained mystery he said was worrying. Speaking with lawmakers, he said the company had not identified any of its own oil in its analyses. He also said that, in order to maintain stable production, Petrobras, as the company is known, needed new reserves of 1 billion barrels per year, at a cost of $3 billion.

Petrobras says Brazilian beaches polluted by Venezuelan oil - Xinhua | English.news.cn: (Xinhua) -- Brazil's state-controlled oil and gas giant Petrobras has concluded that the oil polluting over 100 beaches in Brazil's northeastern coast originates from Venezuela, said local media on Tuesday. After a one-month analysis of samples from the oil, Petrobras found that the oil is not of any type produced, transported or sold in Brazil, but a blend of Venezuelan oil. Petrobras CEO Roberto Castello Branco called the oil spill "something extraordinary," ruling out a tanker cleaning operation as the possible cause due to the amount of crude collected. Brazilian President Jair Bolsonaro said on Monday that there is a country "in the government's radar" as the probable origin of the oil, but did not specify the name of the country. Earlier on Tuesday, he reaffirmed his stance but still did not name Venezuela or any other country as the source. Within a month, 140 beaches in northeastern Brazil were affected by an oil spill. Brazilian authorities have collected over 100 tons of oil from the beaches, and investigated ships recently passing Brazil's northeastern coast.

Colombia Trasandino pipeline damaged in bombing (Reuters) - Colombia’s Trasandino pipeline was damaged in a bomb attack, state-run oil company Ecopetrol (ECO.CN) said on Saturday, spilling crude into a nearby river. The attack took place in Orito municipality in Putumayo province, the company said in a statement. The pipeline was not functioning at the time of the attack, which affected the Guamues River, Ecopetrol said. It is the nineteenth attack this year on the Trasandino. Although Ecopetrol did not name the group responsible for the attack, the leftist National Liberation Army (ELN) rebels, considered a terrorist organization by the United States and the European Union, regularly bomb oil infrastructure.

Oil pipeline attacked in Colombia, Guamues River contaminated -- An attack on the Transandino pipeline in Colombia has caused an oil spill that is contaminating the Guamues River, Colombia's oil giant Ecopetrol has announced. According to the company, the attack was carried out at around 1:39 pm local time (18:39 GMT) on Saturday, in the municipality of Orito, in Colombia's Department of Putumayo. "The attack caused a rupture of the pipeline and oil spill in the sector, which affected the Guamues River," Ecopetrol said in a statement, released on Twitter. The company has notified the local Risk and Disaster Management authorities and is taking emergency measures to prevent a further contamination of the environment. Ecopetrol did not say who was behind the attack. According to the company, the Transandino pipeline has come under 19 attacks this year. 

Ecuador’s Petroamazonas suspends operations at three oilfields amid protests (Reuters) - Ecuadorean state-run oil company Petroamazonas EP suspended operations at three oil fields in the Amazon region on Monday, the country’s energy ministry said, as protests against austerity measures convulse the country. Taken together, the suspensions could reduce crude output by 59,450 barrels per day (bpd) if not lifted, the ministry said in a statement posted on Twitter. It added that the suspension took place after the fields were “taken” by “individuals not affiliated with the operation,” without providing any details. “At the moment no staff have been retained, as those responsible for each field are maintaining conversations with the people in a peaceful manner,” the statement read. A removal of fuel subsidies by market-friendly President Lenin Moreno has sparked the Andean country’s worst unrest in years, with 477 people arrested in five days of protests and thousands of indigenous demonstrators marching toward the capital Quito from the countryside. At the Sacha field, Petroamazonas shut wells because it was unable to transport crude, which the ministry said would result in a loss of 45,600 bpd. The company also shut wells at several locations in the Auca field in Orellana province, and closed down a power generation facility at the Libertador field.

Oil Thieves Cause Fire On Nigerian Oil Block - A fire has broken out on an oil lease in the southeastern state of Imo in Nigeria, during what preliminary investigation believes to be illegal bunkering activity by thieves, Nigerian media reported on Friday. The Nigerian Petroleum Development Company Limited (NPDC), the upstream unit of the Nigerian National Petroleum Corporation (NNPC), has reported a fire at its Oil Mining Lease (OML) 20 in the state of IMO, NNPC said on Friday, as carried by the news outlet This Day. According to the preliminary investigation, illegal oil theft has caused a spark that ignited the fire in the oil block, Mansur Sambo, the Managing Director of NPDC, said in statement. The fire has been put out, NPDC said. Neither NNPC nor NPDC disclosed how much oil has been leaked or stolen and whether there have been shut-ins of oil production on the oil lease as a result of this incident. Earlier this week, NNPC raised the alarm that oil pipeline vandalism in Nigeria is soaring, with the number of incidents of breached pipelines surging by 115 percent in July compared to June. Pipeline vandalism, as well as pipeline sabotages by militants in Nigeria’s oil-rich Niger Delta area, has plagued Nigeria’s oil production and exports for years. Over the past year and a half, militant activity has subsided, allowing Nigeria to boost its crude oil production, and also making Africa’s largest oil producer a full-fledged participant in the production cuts of the OPEC+ coalition. But since it became part of the pact in January 2019, Nigeria has been one of the largest overproducers and non-compliant OPEC members in the deal. 

S.Sudan warns of more oil spills after pipeline rupture - South Sudan's petroleum ministry warned Monday of more oil spills from poorly maintained facilities, after a pipeline leaked 2,000 barrels of oil in the north of the country.Activists have long warned of the consequences to residents and the environment fromoil spills in the area, where facilities have been battered by war and some lay dormant for years until a peace deal was signed in 2018.Petroleum Minister Awou Daniel Chuang told journalists that 2,000 barrels of oil had leaked two weeks ago from a pipeline in the Unity Oil Fields, managed by a consortium of Chinese, Malaysian, Indian and local oil companies.He said the leak had been contained and "what is left for us now to clean is the soil in that area.""Of course we know that the production has been down for the last five years and the pipeline was empty and probably was filled with water (that) can expedite the process of corrosion within the pipeline," said Chuang."That is why we will all suspect that ruptures will happen from time to time..." he added.The area in question is remote and the extent of the spill difficult to verify.While the minister mentioned only an area of 400 square metres was impacted, local officials told AFP a river used by residents of three counties has been heavily polluted."It affected all three counties of greater Rubkona that is Gwit East Rubkona, Budang County, and Bentiu and the oil has polluted the main river," said regional lawmaker Gabriel Tap.Gatiek Both, the commissioner of Budang county, confirmed steps have been taken to control the leak leakage but said the impact was devastating."This spill is badly affecting the area. Trees and the grass are dying and fish and some animals because it is rainy here, the water washes the oil into water sources where there are fish and animals."

OPEC crude output plunges on Saudi attacks, sanctions -- OPEC's crude production in September registered its steepest month-on-month fall in almost 17 years, according to an S&P Global Platts survey. Attacks on Saudi Arabia's Abqaiq processing facility and Khurais field caused its crude output to plummet to 8.45 million b/d in September, which, combined with the effects of US sanctions on Iran and Venezuela, caused OPEC production to tumble to 28.45 million b/d, according to the survey. That is a 1.48 million b/d fall from August, the largest month-on-month shrinkage for the producer group since a Venezuelan strike in December 2002 caused much of state-owned oil company PDVSA's operations to grind to a halt. The September figure, which measures production at the wellhead, is also OPEC's lowest since May 2009, which came five months after the organization agreed at an extraordinary meeting to implement its deepest output cuts to shore up cratering oil prices due to the global financial crisis. OPEC is almost three years into its latest commitment to cut production -- forged with Russia and nine other non-OPEC allies. Though Saudi Arabia, as the group's de-facto leader, has in most months voluntarily slashed its output more than it pledged to, the attacks on September 14 caused the biggest involuntary outage in its history and brought its production down to its lowest since January 2011, according to Platts survey archives. As a result, compliance among the 11 OPEC members with quotas under the 1.2 million b/d OPEC/non-OPEC production cut accord, which runs through March 2020, surged to 308%. Saudi officials have sought to reassure the market in recent days its production has now been restored to pre-attack levels of around 9.9 million b/d, but the initial aftermath took some 5.7 million b/d of output capacity offline, forcing the kingdom to draw on its considerable oil inventories to keep customers supplied. With the repairs at the Abqaiq crude processing facility -- the world's largest -- expected to take months, Saudi Arabia has already begun to inform customers that some cargoes of Arab Light and Arab Extra Light may be substituted with lower value grades of Arab Medium and Arab Heavy. The kingdom has blamed the attacks on Iran, which has denied involvement. Iran has threatened crude flows through the Persian Gulf in retaliation for harsh US sanctions -- backed by Saudi Arabia -- that have crippled its oil exports.

OPEC Oil Production Drops After Attacks On Saudi Installations - The OPEC oil cartel saw its crude production fall in September, mostly due to production falling in Saudi Arabia following attacks on its oil infrastructure, according to its monthly oil report released on Thursday.The Organization for the Petroleum Exporting Countries said its production fell to an average of 28.49 million barrels per day (mbd) in September, a drop of nearly 1.32 mbd, according to secondary sources. Production by Saudi Arabia, the cartel's biggest producer and the world's top exporter, fell by 1.28 mbd to just over 8.56 mbd.September 14 attacks on Saudi state-owned Aramco facilities in Abqaiq and Khurais initially halved the kingdom's crude output and sent global energy markets into a tailspin. Abqaiq is the world's largest oil processing facility and Khurais is a major oil field.The attacks were claimed by Yemen's Huthi rebels. Saudi leads a military coalition against the Iran-backed Huthis, which have carried out dozens of cross-border drone and missile attacks on Saudi targets, including oil facilities.Washington has concluded that the strikes were launched from Iranian soil and that cruise missiles were used. Tehran denies its involvement.OPEC also once again trimmed its forecast for the growth in global oil demand, to 0.98 mbd from 1.02 mbd, although that was due to downward revisions to demand in the first half of the year.Also revised lower was demand for petrol and diesel in the United States. The cartel held its forecast for demand growth next year steady at 1.08 mbd.

OPEC Monthly Oil Market Report October 2019 -- The OPEC Monthly Oil Market Report (MOMR) for October released Thursday provides OPEC's outlook for crude oil market developments for the coming year with key developments impacting oil market trends in world oil demand and supply.  MOMR Highlights:

  • In 2019 world oil demand growth revised down marginally by 0.04 mb/d to 0.98 mb/d
  • In 2020 world oil demand is forecast to grow by 1.08 mb/d, in line with last month’s projections.
  • Non-OECD countries are projected to be the largest contributor to world oil demand growth
  • Total world oil demand isanticipated to average 99.8 mb/d in 2019 and 100.88 mb/d in 2020.
  • Non-OPEC oil supply growth forecast for 2019 revised down by 0.16 mb/d from the previous assessment to a level of 1.82 mb/d. This is due to downward revisions mainly in the US, as well as in Norway and the UK
  • US oil supply growth has now been revised down to 1.67 mb/d y-o-y.
  • 2020 non-OPEC supply forecast remains subject to many uncertainties including oil price levels, capital spending, infrastructure constraints, as well as drilling and completion activities, particularly in the US.
  • In September, OPEC crude oil production decreased by 1,318 tb/d to average 28.49 mb/d, according to secondary sources.
  • Demand for OPEC crude in 2019 was revised up by 0.1 mb/d from the previous report to stand at 30.7 mb/d, which is 0.9 mb/d lower than the 2018 level.
  • Demand for OPEC crude in 2020 was also revised up by 0.2 mb/d from the previous report to stand at 29.6 mb/d, which is around 1.2 mb/d lower than the 2019 level

OPEC’s Largest ‘Overproducer’ Just Got Its Production Quota Raised Nigeria may face an easier task to finally fall in line with its share of the OPEC+ production cuts after OPEC has recently raised the African producer’s oil output ceiling.  OPEC has raised the quota for Nigeria to 1.774 million bpd, three OPEC delegates familiar with the matter told Reuters.Until now, Nigeria’s cap as part of the deal was 1.685 million bpd.According to one of OPEC’s sources, the higher quota given to Nigeria is due to the fact that the cartel had not factored in the newly launched production from the Egina ultra deepwater field which Total started up at the beginning of the year, expecting to pump 200,000 bpd at peak output.Nigeria has argued that production from Egina is not part of the OPEC+ cuts.   Africa’s largest oil producer was formally included in the OPEC+ production cuts and compliance tracking this January, after being exempt from those cuts in the previous two years because of militant violence that frequently crippled its oil production and exports. But since it became part of the deal, Nigeria has been one of the largest overproducers and non-compliant OPEC members in the deal. Nigerian overproduction has offset some of the cuts of its fellow OPEC members at a time when the oil market continues to be oversupplied with rising U.S. production and faltering oil demand growth.. Iraq and Nigeria—the two rogue members of OPEC that haven’t been complying with their share of the production cuts in recent months—pledged in September to fall within their respective caps while the cartel and its allies are trying to rebalance the oil market. Nigeria has promised to reduce its oil production by 57,000 bpd.  Nigeria is ready to make the sacrifice and cut its oil production deeper if OPEC and allies decide in December that it is necessary to deepen the cuts, Nigerian Minister of State for Petroleum Resources, Timipre Sylva, told Bloomberg in an interview last week, vowing that Nigeria would fully comply with its share of the cuts from October.

Saudi Aramco says full oil production capacity will return by end of November — Saudi Arabia’s full oil production capacity will be recovered by the end of November, Saudi Aramco CEO Amin Nasser told CNBC on Wednesday. “By September we will be, in terms of production capacity, at 11.3 (million barrels per day), by end of November we will be at 12 million barrels per day (bdp), which is our maximum sustained capacity,” Nasser told CNBC’s Steve Sedgwick during the Oil & Money Conference in London. Saudi Arabia is the world’s largest exporter of oil. The OPEC kingpin has been pumping significantly below that 12 million bpd level as part of a coordinated agreement OPEC and non-OPEC producers to lower output and keep a floor under falling oil prices. Aramco’s revenues were not reduced in the wake of the attacks, Nasser noted, and put its October production figure at 9.9 million bpd. The CEO of the world’s largest oil company expressed his concern over an “absence of international resolve” against the perpetrators of September 14 drone and missile attacks on Aramco facilities that forced the company to shut down half of its production and sent crude prices up nearly 20%. “An absence of international resolve to take concrete action may embolden the attackers and indeed put the world’s energy security at greater risk,” Nasser said. The attacks had “no impact” on the planned public listing of the state oil giant, the CEO added, saying that if anything, they strengthened the company’s position with regard to the offering. The Saudi Aramco initial public offering (IPO), which has seen multiple delays since it was first suggested in 2016, would be the world’s largest. “We are ready whenever the shareholders decide it is the time to list,” Nasser said. Aramco is expected to file its IPO prospectus by the end of this month, according to reports.

China's CNPC pulls out from $4.8 bil Iranian gas project — China's CNPC has pulled out from Iran's $4.8 billion South Pars gas project, Iran's oil minister said on Sunday, after France's Total abandoned the deal last year amid looming US sanctions on Tehran. Iran's Petropars will now develop the Phase 11 of the gas project, which was signed in 2017. CNPC was supposed to take Total's 50.1% stake in the project on top of its initial 30% share. "The phase 11 of South Pars gas field has been decided. Petropars alone will continue development of this phase," Bijan Zanganeh was quoted as saying by the ministry's Shana news service. "Yes, it has stepped aside," Zanganeh said when asked if the Chinese company had pulled out of the project. Total left the project last year as the US re-imposed sanctions on Iran after Washington pulled out from a nuclear deal with Tehran. The project is aimed initially at meeting domestic gas demand, with potential for exports in later years. Production capacity is forecast at around 2 Bcf/d of gas, coming on stream in 2021. When fully operating, the scheme is also expected to deliver around 70,000 b/d of condensate. Zanganeh said that the Iranian contractor will install the first jacket in phase 11 by March in addition to a platform with gas extraction capacity of 500 MMcf/d. When asked why Iran had not abandoned the CNPC deal after Total's pull-out, Zanganeh said: "We wanted to attract foreign investment for this phase. In addition, the pressure boosting platform was important for us and Petropars was due to learn the job alongside these companies." Iran shares the giant offshore South Pars gas field with Qatar, where it is called the North Field.

Iranian oil exports hinge on US-China trade talks This week, should high-stakes negotiations between Beijing and the Trump administration fail to produce a breakthrough on trade, blacklisted Iran could stand to benefit from the decoupling.“The degree to which they [the Chinese] are willing to openly defy the US sanctions is a function of larger US-China trade issues,” said James Dorsey, a senior fellow at the S Rajaratnam School of International Studies and Middle East Center in Singapore.  “The more the US and China move towards ‘decoupling’ – or less interdependence, greater self-reliance and ultimately, perhaps, separate economic worlds – the easier it gets to defy the sanctions.” The Trump administration broke with the Beijing-backed Iran nuclear accord in May of last year, granting six months notice before sanctions on Tehran’s petroleum sector would be reimposed for a goal of “zero” exports.Eight governments, including China – long Tehran’s chief oil customer, were granted temporary waivers to import Iranian oil. Those expired in May.Since then, Beijing has worked to circumvent the sanctions, first publicly via the state-owned Bank of Kunlun. Kunlun announced it would halt those transactions in December, but Iranian petroleum continues to reach Chinese ports. Iran’s supreme leader, Ayatollah Ali Khamenei, long expressed his lack of trust in the West, even as he begrudgingly accepted the brokering of the Joint Comprehensive Plan of Action in 2015.But last year, as major European companies like Total ran for the exits before the snap-back of US sanctions, Khamenei issued a stern directive.“The supreme leader directed the diplomats, the armed forces – all the branches of the Islamic Republic of Iran – that you must go and make our best relations with the East,” said Hesam Razavi, former senior international editor at Iran’s Tasnim news agency. Of all the eastern powers, from Moscow to Delhi, it is Beijing that is most critical to Iran’s ability to move its oil.

COSCO Dalian's ships shut off tracers after U.S. sanctions announced (Reuters) - About one-third of the oil tankers owned by COSCO Shipping Tanker (Dalian) have shut off their ship-tracking transponders since the United States imposed sanctions on the company for allegedly shipping Iranian crude, shipping data showed. From Sept. 30 to Oct. 7, a total of 14 COSCO Dalian ships, six of which carry some oil, stopped sending location data from their automatic identification system (AIS), ship tracking data on Refinitiv Eikon showed. The U.S. imposed the sanctions on Sept. 25. The International Maritime Organization (IMO) requires AIS transceivers be fitted to commercial and passenger vessels for safety and transparency purposes. The devices can be turned off manually by a ship’s crew for legitimate reasons such as avoiding detection in piracy or high-risk zones. However, the transponders are often shut off to conceal a ship’s location when illicit activities occur. “It is becoming a cat-and-mouse game, with the U.S. ratcheting up the sanctions while the Iranians (and their Chinese or other buyers) find novel ways to circumvent these” including frequent ownership changes, complex corporate structures and shutting off the AIS transponders, said Bruno Vickers, the senior director for Asia at political risk group GPW in Singapore. “Turning off transponders is a tried and tested tactic that the Iranians have used before, creating a fleet of ghost ships that cannot be tracked. It’s not ideal for ship safety and undoubtedly there will be increased U.S. surveillance of suspect cargoes,” he said.

OPEC leaves 2020 oil-demand forecast unchanged, cuts 2019 view - The Organization of the Petroleum Exporting Countries in its monthly report on Thursday forecast world oil demand to grow by 980,000 barrels a day in 2019, down 4,000 barrels a day from its September estimate. OPEC, however, left its outlook for 2020 demand growth unchanged at 1.08 million barrels a day. OPEC sees total world oil demand averaging 99.8 million barrels a day in 2018 and 100.88 million barrels a day in 2020. OPEC, meanwhile, revised down its forecast for non-OPEC oil supply growth by 160,000 barrels day to 1.82 million barrels a day, mainly reflecting downward revisions for the U.S., as well as Norway and the U.K. For 2020, non-OPEC oil supply growth was revised down by 5,000 barrels a day to 2.2 million barrels a day year-over-year due to downward revisions for Kazakhstan and Russia.

Saudi Arabia confounds with September output figure - Saudi Arabia has told the Opec Secretariat that its crude production fell by 660,000 b/d last month to 9.13mn b/d, underlining its swift recovery from the 14 September drone and missile attacks on key oil infrastructure. The average estimate from secondary sources, including Argus, pegged Saudi output at 8.56mn b/d in September. Argus' estimate was 8.4mn b/d. The divergence between Saudi Arabia's self-reported figure and secondary sources is unusually wide in Opec's latest Monthly Oil Market Report (MOMR). Opec's previous 12 MOMRs have shown a much closer correlation, with the average secondary sources' estimates of Saudi production ranging from 99.1pc to 100.3pc of the official figure. For September, the secondary sources were at 93.8pc of the Saudi direct communication. State-owned Saudi Aramco chief executive Amin Nasser admitted yesterday that the pace of the output recovery "surprised many" and that "optimum flexibility and fail-safe redundancy built in… proved essential". The mid-September air strikes on the Abqaiq processing plant and the 1.45mn b/d Khurais field briefly shut in 5.7mn b/d of production. Saudi Arabia said its crude production capacity has reached 11.3mn b/d and that it is on track to hit pre-attack levels of 12mn b/d by the end of November. "Considering the progress so far we might even beat that target", Nasser said. Beyond the Saudi production number, Opec's latest MOMR has little in the way of surprise revisions, although there is a notable 160,000 b/d cut in the forecast for non-Opec supply growth for this year, to 1.82mn b/d. This is driven by a downward revision in the US. "A further slowdown in US oil production is likely as shale producers, under pressure from their investors, continue to cut spending, in particular for exploration and production and seem to be pacing their drilling plans for the rest of the year," the MOMR said. Opec revised lower its forecast for non-Opec supply growth for next year, by 50,000 b/d from the previous report to 2.2mn b/d. It pared back its projection for global oil demand growth this year by 40,000 b/d from last month's MOMR to 980,000 b/d, and kept its 2020 growth forecast unchanged at 1.08mn b/d. This would take average total demand above 100mn b/d. Opec now forecasts demand for its crude at 30.7mn b/d this year, around 100,000 b/d higher than last month's MOMR. It revised up its forecast for call-on-Opec crude next year, by 200,000 b/d to 29.6mn b/d. Argus' estimated total Opec production at an average of 29.9mn b/d in the first nine months of this year.

Nigeria lands higher oil output target in OPEC+ cut deal - (Reuters) - OPEC has granted Nigeria a higher oil output target under an OPEC-led deal to limit oil supply in a move unannounced by the group, following efforts by Africa’s largest exporter to tweak the agreement to accommodate its expanding oil industry. The country’s allocation was increased to 1.774 million barrels per day (bpd) from 1.685 million bpd at the last OPEC meeting in July, three OPEC delegates with knowledge of the matter said. “It’s happened,” one of the delegates said. “I’ve not heard of any other changes to the agreement.” The quota increase will mean Nigeria will see an improvement in its compliance with the supply cut accord, but it is still pumping more crude than the new target according to OPEC’s own figures and industry surveys. Nigeria’s petroleum ministry and OPEC did not immediately reply to a Reuters request for comment. Abuja has had a dismal record in delivering its share of the cut, overshooting by 400% in August according to the International Energy Agency. OPEC put Nigerian production at 1.866 million bpd in August - far above the new quota.

Hedge funds sell more oil as economic outlook worsens: Kemp (Reuters) - Hedge funds sold petroleum futures and options for the second week running as the post-attack bounce in oil prices evaporated and attention shifted to the deteriorating condition of the global economy. Hedge funds and other money managers sold the equivalent of 96 million barrels in the six most important futures and options contracts linked to oil prices in the week to Oct. 1, the largest reduction in nearly four months. Fund managers have sold a total of 111 million barrels in the two most recent weeks, reversing purchases of 144 million barrels in the two weeks before that, a period that included the attack on Saudi oil installations. If the attacks on oil processing facilities had a relatively modest and fleeting impact on oil prices and positions, it was entirely unwound in just a fortnight (https://tmsnrt.rs/2VlK8dx) . In the most recent week, portfolio managers sold NYMEX and ICE WTI (-64 million barrels), Brent (-17 million), U.S. gasoline (-6 million), U.S. heating oil (-5 million) and European gasoil (-4 million). Fund selling in NYMEX and ICE WTI was the highest in any one-week for more than two years, as managers abandoned expectations of a sustained post-attack spike in prices. After the sales, funds held a net long position across all six contracts amounting to 532 million barrels, essentially back to their position at the end of August and the start of September. If relatively passive structural long positions in crude are stripped out, the fund community’s dynamic net long position was just 41 million barrels, not much different from 8 million at the beginning of September. Concerns about the prospects for oil consumption are dominating the market rather than fears about output disruptions. Traders are becoming more pessimistic about the prospects for an early truce in the trade conflict between China and the United States – with mounting fears continued skirmishing will push both economies into recession. Political tensions look set to remain high throughout the remainder of 2019 and 2020 as the United States enters a bitter impeachment investigation and then a presidential election campaign. At the same time, global motor manufacturers are reporting weakening production and sales, depressing both global economic growth and oil consumption.

Bullish Oil Bets Hit 8-Month Low-- As temperatures cool, so does enthusiasm for oil. With the end of the summer-driving period taking away a key factor supporting demand, hedge fund bets on a crude price rally in New York and London have plunged to the lowest in eight months, data released Friday show. Meanwhile, U.S. gasoline consumption is at its lowest since March. “We are heading into a seasonally weak demand period,” said Rob Haworth, who helps oversee $151 billion at U.S. Bank Wealth Management in Seattle. “The biggest driver is gasoline consumption.” The prospect of less crude being processed into fuel in the coming months comes amid mounting concern that global growth is slowing down, with the U.S. and China locked in a tit-for-tat trade war. West Texas Intermediate futures in New York and Brent crude in London have slumped more than 15% since an attack on Saudi premises sent prices surging in mid-September. The combined net-bullish position on both benchmarks, or the difference between wagers on a rally and bets on their rout, shrank 17% to 388,710 futures and options in the week ended Oct. 1, according to data from the U.S. Commodity Futures Trading Commission and ICE Futures Europe. That’s the least bullish since February. Further price declines may put Saudi Arabia and Russia in the tough position of weighing further production cuts that would compromise their market share. “Can they afford to cut more?” Haworth said. “That will be determined by prices.”

Oil prices up more than 1% as US-China trade talks loom, supply issues mount -- Oil prices rose around $1 on Monday, buoyed by hopes of progress in U.S.-China trade talks and supported by challenges to supply facing major exporters. Brent crude rose 91 cents or 1.5% to $59.25 a barrel, while U.S. West Texas Intermediate (WTI) crude was at $53.73, up 92 cents or 1.7%. Both futures contracts ended last week with a more than 5% decline after dismal manufacturing data from the United States and China, with the trade row between the world’s top economies undermining global economic prospects. U.S. and Chinese officials meet in Washington on Oct. 10-11 in a fresh effort to work out a deal, which U.S. President Donald Trump said his administration had a “very good chance” of achieving. On the supply side, deadly anti-government unrest has gripped Iraq, the second-largest producer among the Organization of the Petroleum Exporting Countries. Iraq’s oil exports of 3.43 million barrels per day (bpd) from Basra terminals could be disrupted if instability lasts for weeks, Ayham Kamel, Eurasia Group’s practice head for Middle East and North Africa, said in a note. “Any oil production disruption would occur at a time when Saudi Arabia has lost a significant part of its energy system redundancies (spare capacity),” he said. The major Buzzard oil field in the British North Sea was also shut for pipe repair work, China’s CNOOC said on Friday, while Shell maintains force majeure remains on exports of Bonny Light crude in Nigeria. Still, Total’s giant Johan Sverdrup offshore oil field started up in the North Sea this month with a goal of achieving 440,000 bpd at peak production. Libya’s National Oil Corporation (NOC) said on Sunday it would close the Faregh oil field at Zueitina port for scheduled maintenance from Monday until Oct. 14. But analysts said the resumption in Saudi Arabian production after Sept. 14 attacks could undermine a price rally.

EIA cuts global oil demand expectations, lowers oil-price forecasts - The U.S. Energy Information Administration on Tuesday cut its growth expectations for global oil demand and lowered 2020 price forecasts on West Texas Intermediate and Brent crude oil prices. In its monthly energy outlook report, the government agency said it revised its expected global oil demand growth to 840,000 barrels per day this year, about 50,000 barrels per day lower than the September forecast. For 2020, it cut the oil demand growth estimate to 1.3 million barrels per day, down 100,000 barrels from the previous view. The EIA also forecast an average WTI price of $54.43 a barrel for 2020, down 3.7% from the forecast issued in September. For Brent, it cut its forecast by 3.3% to $59.93 for next year. U.S. domestic crude output, meanwhile, is forecast at 13.17 million barrels a day next year, down 0.5% from the previous view. November WTI crudeCLX19, -0.55% was down 63 cents, or 1.2%, at $52.12 a barrel. December Brentuk:lcoz19 lost 54 cents, or 0.9%, to $57.81.

Trade Talks Loom Over Oil - U.S.-China trade talks resume on October 10, a high stakes negotiation that leaves the global economy in the balance. Bloomberg reported that China is likely going to attempt to narrow the talks, removing any proposal of reforms to industrial policy and intellectual property. With the Trump administration on the backfoot due to a weakening economy and a mushrooming impeachment investigation, Beijing may believe it has the upper hand. That does not bode well for a trade breakthrough.   Turning back on a longstanding partnership with Kurdish allies, President Trump said that Turkey was free to launch an invasion to sweep aside Kurdish fighters in Northern Syria. The move sparked a bipartisan rebuke, denouncing Trump for abandoning allies.  CNCP has exited a $5 billion natural gas project in Iran due to pressure from U.S. sanctions. Iran had hoped that CNPC would take over from Total, which withdrew in the face of sanctions last year. The departure of CNPC is another blow to the Iranian economy.  Secretary of Energy Rick Perry reportedly attempted to install two U.S. executives onto the board of Ukraine’s Naftogaz, sweeping him into the center of the impeachment inquiry in the United States. He has denied any involvement.. Saudi Arabia and Iran are tentativelyopening a diplomatic avenue to de-escalate tension, dramatically reducing the odds of a hot war. The New York Times reports that the Trump administration’s refusal to attack Iran led to the thaw, as Riyadh came to the conclusion that it cannot count on Washington. “The anti-Iran alliance is not just faltering, it’s crumbling,” Martin Indyk, a distinguished fellow at Council on Foreign Relations and a former senior diplomat, said Thursday on Twitter. “MBZ has struck his deal with Iran; MBS is not far behind.” While oil futures over the next few years remain subdued, a new report says that the market could tighten up significantly in the 2020s, cutting against a narrative of peak demand and oversupply. “[W]e are increasingly confident that failure of demand growth to crater, much less peak, constitutes the next big 'surprise' in the oil market,” Rapidan Energy said in a note. Spare capacity is “too low to cap prices, much less mitigate geopolitical risk.” The consultancy is skeptical of the mass adoption of EVs and says demand will continue to rise. 

Oil falls slightly on concerns over US-China talks, weak demand signals - Oil prices fell slightly on Tuesday as Washington’s blacklisting of more Chinese companies dampened hopes for a trade deal between the two countries, although unrest in Iraq and Ecuador lent some support to crude prices. Both Brent crude and U.S. West Texas Intermediate crude had risen by more than 1% earlier in the day. Brent was down 45 cents, or 0.8%, at $57.90 a barrel and WTI was down 12 cents, or 0.2%, at $52.63. Investors are treading cautiously before U.S.-China trade talks in Washington on Thursday. Prospects for progress dimmed after U.S. President Donald Trump said a quick trade deal was unlikely. Washington is also moving ahead with discussions over possible restrictions on capital flows into China, with a focus on investments by U.S. government pension funds, Bloomberg reported. “The (energy) complex will be forced to focus more succinctly on global oil demand deterioration as it negotiates through the monthly series of Agency reports the rest of this week,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. “We are not ruling out a quick upward price reversal.” Oil prices were also pressured by weak economic data after U.S. producer prices fell unexpectedly in September, weighed down by lower costs of goods and services, which could give the Federal Reserve room to cut interest rates again this month. The U.S. Energy Information Administration (EIA) on Tuesday cut its 2020 world oil demand growth forecast by 100,000 barrels per day (bpd) to 1.30 million. International Monetary Fund Managing Director Kristalina Georgieva on Tuesday warned of a risk of complacency among countries. Without action to resolve trade conflicts and support growth, global economic deceleration could turn into “a more massive slowdown,” she said. “The market’s focus remains on trade tensions and oil demand concerns, ignoring the elevated geopolitical tensions in the Middle East and lower OPEC production in September,” said UBS oil analyst Giovanni Staunovo. “Growing recession risks have capped the upside of oil prices.”.

Oil eases on concerns over U.S.-China talks, weak demand signals (Reuters) - Oil prices slid on Tuesday as Washington’s blacklisting of more Chinese companies dampened hopes for a trade deal between the two countries, although unrest in Iraq and Ecuador lent some support to crude prices. Early in the session, both Brent crude LCOc1 and West Texas Intermediate (WTI) CLc1 rose more than 1%. But at settlement, Brent was down 11 cents, or 0.2% at $58.24 a barrel while WTI CLc1 fell 12 cents, or 0.2%, at $52.63. Prices extended losses slightly in post-settlement trade after American Petroleum Institute data showed U.S. crude inventories rose by 4.1 million barrels in the week ended Oct. 4, far surpassing the 1.4 million barrels analysts had forecast. Investors were cautious ahead of U.S.-China trade talks in Washington on Thursday. U.S. President Donald Trump said a quick trade deal was unlikely. Washington is moving ahead with discussions over possible restrictions on capital flows into China, with a focus on investments by U.S. government pension funds, Bloomberg reported. The U.S. Energy Information Administration (EIA) cut its 2020 world oil demand growth forecast by 100,000 barrels per day (bpd) to 1.30 million. The oil market “will be forced to focus more succinctly on global oil demand deterioration as it negotiates through the monthly series of agency reports the rest of this week,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. Oil prices were also pressured by an unexpected decline in U.S. producer prices in September, which could give the Federal Reserve room to cut interest rates again this month.

Oil prices extend slide to 3rd straight day, US-China trade doubts grow - Oil prices slipped for a third consecutive session on Wednesday as the prospect of the United States and China striking a trade deal in talks this week dimmed, raising uncertainties for global economic growth and oil demand. U.S. industry data showing a bigger-than-expected rise in stockpiles at the world’s top oil producer also depressed prices: Brent crude futures fell 27 cents, or 0.5%, to $57.97 a barrel by 0148 GMT, while U.S. West Texas Intermediate crude was at $52.38, down 25 cents or 0.5%. Negotiators from the world’s top two economies will meet in Washington on Thursday and Friday in the latest effort to hammer out a deal aimed at ending a long-running trade dispute that has slowed global economic growth. But tensions between the pair rose this week after the United States imposed visa restrictions on Chinese officials for the detention or abuse of Muslim minorities, while a row escalated over comments by a leading U.S. National Basketball Association official in support of protests in Hong Kong. The issues have set markets on a risk-aversion course, said Howie Lee, an economist with Singapore’s OCBC bank, even though the global oil market remains in a supply deficit which should in theory support prices at above $60 a barrel. “The market is just over-bearish at the moment, too focused on the demand side of the equation,” Lee said. That has even overshadowed the threat of losing at least a third of Ecuador’s oil supply amid anti-government protests in the member of the Organization of the Petroleum Exporting Countries that have seriously affected oil output. Ecuadorean state-run firm Petroamazonas estimates it could lose some 188,000 barrels per day (bpd), or more than a third of its crude production, due to unrest at its facilities. In the United States, meanwhile, crude stockpiles rose by 4.1 million barrels in the week ended Oct. 4 to 422 million, data from industry group the American Petroleum Institute showed on Tuesday. Analysts had expected an increase of 1.4 million barrels, a Reuters poll showed.

WTI Holds Overnight Gains After Record Crude Production, Big Product Draws --Oil prices extending gains from API's reported big product draws overnight and hopes of progress in US-China talks:  Market will also be looking out for impact of higher global freight rates on U.S. crude exports because of U.S. sanctions on Cosco, says Bob Yawger, director of the futures division at Mizuho Securities USA.  “The tanker shortage has increased tanker rates by 100% in many cases, and hence prices out U.S. exports” But for now, all eyes (and algos) will be on inventory data.  API

  • Crude +4.13mm (+1.7mm exp)
  • Cushing +1.24mm
  • Gasoline -5.94mm
  • Distillates -3.98mm

DOE:

  • Crude +2.93mm (+1.7mm exp, +1.4mm whisper)
  • Cushing +941k
  • Gasoline -1.213mm (-900k exp)
  • Distillates -3.943mm - biggest draw since March 2019

As refinery maintenance season starts, product inventories should remain subdued and distillates saw a notable inventory draw (the biggest since March) as the crude build came in lower than API reported (4th crude build in a row)... In fact, while crude inventories rose, almost all others fell.

Syria Fears Send Oil Prices Higher - Turkey’s military invasion into northeastern Syria has moved crude prices higher after this week’s trading failed to move WTI below the $52 per barrel mark. With a further Middle Eastern imbroglio looming, the list of geopolitical risks continues to increase – Iran’s occasional overtures towards the United States have been falling on deaf ears, while Venezuela seems to have no chance of sanctions being removed while Maduro is in place. Following a somewhat unexpected flareup, the global heavy sour shortage might witness a further aggravation as Ecuador struggles to placate its rioting populace, triggered by President Moreno’s move to end fuel subsidies – the situation is so bad that Moreno has already moved his administration out of the capital (Quito remains overruns by riots) into Guayaquil.  Some 0.2mbpd of heavy sour will be gone from the global markets if Ecuador cannot regain control of its Petroamazonas oil subsidiary. Wednesday afternoon saw global benchmark Brent trading at $58.5-58.8 per barrel, whilst US benchmark was assessed around $53-53.2 per barrel.  Chinese crude imports have dropped month-on-month to 9.92mbpd, down from 9.97mbpd in August 2019, on the back of an overall (much larger) Asian crude imports decrease.  Aggregate Asian crude imports have suffered more from the Saudi production outage, reaching a 6-month low of 24.04mbpd in September, down 1.09mbpd month-on-month.

U.S. oil settles with a loss as Fed minutes raise economic worries, crude supplies rise a 4th week - U.S. oil futures settled slightly lower Wednesday, giving up earlier gains, as minutes from the Federal Reserve’s September meeting raised worries about the economy and government data revealed a fourth straight rise in domestic crude supplies.Prices had moved higher earlier in the trading session on the back of optimism over U.S.-China trade negotiations, and as the U.S. government also reported a fall in petroleum-product stocks.A news report said Beijing was open to a limited trade deal, but analysts noted that sentiment around the negotiations, with high-level talks set to resume in Washington on Thursday, has tended to swing sharply between optimism and negativity.West Texas Intermediate crude for November delivery  on the New York Mercantile Exchange fell by 4 cents, or 0.08%, to settle at $52.59 a barrel on the New York Mercantile Exchange after trading as high as $53.74 during the session. December Brent crude BRNZ19, +2.03% added 8 cents, or 0.1%, to end at $58.32 a barrel on ICE Futures Europe. Prices for the U.S. benchmark turned lower right around the release of the minutes from the Federal Open Market Committee’s September meeting. The minutes showed that Fed officials were more worried about the U.S. economy. There was even talk about possible recession, with several Fed officials noting that the probability of a recession “had increased notably in recent months.” The minutes “reflected rising concern for global growth and suggested that geopolitical threats, uncertainties in business outlook and sustained weak investments could damp[en] income and consumption,”Manish Raj, chief financial officer at Velandera Energy Partners, told MarketWatch. “Concern for slowing consumption weighed in on already weak market sentiments in light of [the] EIA reported crude inventory build-up.” The Energy Information Administration reported that U.S. crude supplies climbed for a fourth week in a row, by 2.9 million barrels for the week ended Oct. 4. They were forecast to increase by 2.4 million barrels, according to analysts polled by S&P Global Platts. The American Petroleum Institute on Tuesday reported a rise of 4.1 million barrels, according to sources. “A drop in refining activity to the lowest level since mid-February has yielded a build to oil inventories, despite lowly net imports,” said Matt Smith, director of commodity research at ClipperData. “We are in the depths of fall maintenance, but both strong exports and weak imports have helped limit the build.”

Oil prices drop as hopes for US-China trade progress wilt - Oil prices fell on Thursday on concerns of lower fuel demand as talks this week between the United States and China, the world’s two largest oil users, are not expected to help end the trade war between them, adding to anxieties about the global economy. China, the world’s biggest oil importer, has lowered their expectations for talks on Thursday and Friday to end the 15-month-old trade dispute with the United States. U.S. President Donald Trump is set to raise the tariff rate on about $250 billion of Chinese goods to 30% from 25% on Oct. 15 if some signs of progress are not seen. The trade dispute between the world’s two largest economies has disrupted global supply chains and slowed the growth of both countries, limiting the growth of their fuel consumption. Global benchmark Brent crude futures fell 11 cents, or 0.2%, to $58.21 a barrel by 0354 GMT, while U.S. West Texas Intermediate (WTI) futures were down 11 cents, or 0.2%, at $52.48 per barrel. “Should U.S.-China trade negotiations take a turn for the worst, market pessimism will impose sharp negative pressures on oil prices, said Benjamin Lu, commodities analyst at Phillip Futures in Singapore. Prices were also weighed down by a report of rising stockpiles in the United States, which is also currently the world’s biggest oil producer. U.S. crude stocks rose 2.9 million barrels in the week to Oct. 4, the Energy Information Administration (EIA) said on Wednesday, more than double analysts’ expectations of an increase of 1.4 million barrels. Additionally, the Organization of the Petroleum Exporting Countries (OPEC) quietly adjusted its production pact to allow Nigeria to raise its output, adding more supply. OPEC granted Nigeria raised the quota to 1.774 million barrels per day (bpd) from 1.685 million bpd, three OPEC delegates with knowledge of the matter said. OPEC member Venezuela will also increase its exports despite U.S. economic sanctions that have curtailed shipments from the country. .

Oil prices steady as latest U.S.-China trade talks loom - (Reuters) - Oil prices rose on Thursday, buoyed by comments by the head of OPEC that the organization could take action to balance oil markets and will decide in December on supply for next year. Secretary-General Mohammad Barkindo did not specify whether the Organization of the Petroleum Exporting Countries would extend a pact to rein in production to stabilize prices, but the comments appeared to inspire hope in the market. “Barkindo was sending a signal that OPEC was serious about supporting prices,” said Phil Flynn, an analyst at Price Futures Group. “Between this and a possible China trade deal, the momentum has shifted.” Global benchmark Brent crude futures settled up 78 cents or 1.3% at $59.10 a barrel. In post-settlement trade, Brent extended gains to rise $1 on the day to $59.32 a barrel. U.S. West Texas Intermediate (WTI) futures were up 96 cents, or 1.8%, at $53.55 a barrel. A December meeting between OPEC plus allies including Russia would take “decisions that will set us on the path of heightened and sustained stability for 2020,” Barkindo said. “Barkindo’s comment reminds markets that if oil prices do not fall off a cliff over demand concerns, we could ... see OPEC+ extend their production cuts throughout the majority of 2020,” said Edward Moya, senior market analyst at OANDA in New York. Separately, Saudi Arabia told OPEC its monthly oil output fell by 660,000 bpd in September after major attacks on its energy facilities, while OPEC lowered its 2020 forecast for non-OPEC supply growth.

Oil rises on hopes for deeper OPEC output cuts, US-China trade talks - Oil prices climbed early on Friday, building on gains in the previous session, after producer club OPEC hinted at making deeper cuts in supply while optimism was revived over talks between the United States and China to end their trade war. International benchmark Brent crude futures were at $59.26 a barrel by 0251 GMT, up 16 cents, or 0.3%, from their previous settlement. Brent settled up 1.3% at $59.10 a barrel on Thursday. U.S. West Texas Intermediate (WTI) crude futures rose 16 cents, also up 0.3%, from their last close to $53.71 per barrel. In the previous session, WTI settled 1.8% higher at $53.55 a barrel. On Thursday Mohammad Barkindo, Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), said all options were on the table, including a deeper supply cut to balance oil markets. A decision would be taken at a December meeting between the OPEC and its partners, he said. OPEC lowered its 2019 global oil demand growth forecast to 0.98 million barrels per day (bpd), while leaving its 2020 demand growth estimate unchanged at 1.08 million bpd, according to OPEC’s monthly report. Beyond OPEC, trade talks between the United States and China also remained on the market’s radar as the world’s top two economies seek to resolve a more-than-a-year-long trade row that has slowed global economic growth and curbed fuel consumption. “Oil bought into the upbeat tone from the bilateral talks as well, for better or for worse, and was also boosted by fighting talk on prices by the OPEC secretary-general,” said Jeffrey Halley, a senior market analyst at OANDA in Singapore. Top U.S. and Chinese negotiators wrapped up the first of two days of scheduled trade talks on Thursday, with business groups expressing optimism that the two sides might be able to ease tensions and delay a U.S. tariff hike set for next week. “The United States is the largest global consumer of oil while China, the biggest driver of year-on-year oil demand growth,” said Stephen Innes, Asia Pacific market strategist at AxiTrader. “The most significant sentiment driver hinges on the outcome of the trade talks which, if (they) end on a positive note, could go along way to begin to repair the economic damage done ... these economic powerhouses would need more oil,

Iran oil tanker hit by two missiles off Saudi coast: Iranian state media (Reuters) - An Iranian-owned oil tanker was struck by two missiles off the Saudi port of Jeddah on Friday, Iranian state television reported, quoting the National Iranian Oil Company (NIOC) which owns the vessel. The tanker was set ablaze and suffered heavy damage and was leaking crude about 60 miles (96 km) from Jeddah, according to Iranian media. The alleged attack is the latest incident involving oil tankers in the Red Sea and Gulf region, and is likely to ratchet up tensions between Iran and Saudi Arabia. The U.S. Navy’s Fifth Fleet, which operates in the region, said it was aware of media reports about the tanker, but did not have any further information at this time.

Explosion sets ablaze Iranian oil tanker off the coast of Saudi Arabia, Iranian state media says - An explosion damaged an Iranian oil tanker traveling through the Red Sea near Saudi Arabia on Friday, Iranian media reported. There was no immediate word from Saudi Arabia on the reported blast. State television said the explosion damaged two storerooms aboard the unnamed oil tanker and caused an oil leak into the Red Sea. It did not elaborate. The state-run IRNA news agency and others relied on an online news report for their stories, while the semi-official ISNA news agency quoted an anonymous source with direct knowledge of the incident. All reports said the reported explosion happened off the coast of Jiddah on the Red Sea. Lt. Pete Pagano, a spokesman for the U.S. Navy’s 5th Fleet overseeing the Mideast, said authorities there were “aware of reports of this incident,” but declined to comment further. The reported explosion comes after the U.S. has alleged that in past months Iran attacked oil tankers near the Strait of Hormuz, at the mouth of the Persian Gulf, something denied by Tehran. The explosion could push tensions between Iran and the U.S. even higher, more than a year after President Donald Trump unilaterally withdrew America from the nuclear deal and imposed sanctions now crushing Iran’s economy. The mysterious attacks on oil tankers near the Strait of Hormuz, Iran shooting down a U.S. military surveillance drone and other incidents across the wider Middle East followed Trump’s decision.

Oil rises 2% after reports of Iranian tanker attack -  (Reuters) - Oil prices rose more than 2% on Friday after Iranian media said a state-owned oil tanker was attacked in the Red Sea near Saudi Arabia, while optimism surrounding the U.S.-China trade war lifted sentiment. Brent crude futures LCOc1 gained $1.41, or 2.4%, to settle at $60.51 a barrel. West Texas Intermediate (WTI) crude CLc1 futures rose $1.15, or 2.2%, to settle at $54.70 a barrel. The gains were tempered by the International Energy Agency’s forecast for weakened demand in 2020. Still, Brent and WTI were headed for their first weekly increases in three weeks. Brent rose 3.7% for the week, while WTI gained 3.6%. The Iranian Suezmax crude tanker was struck in the Red Sea off Saudi Arabia’s coast on Friday, Iranian media said, with various reports differing on the level of damage caused. The National Iranian Tanker Company (NITC) said the ship was damaged but stable and denied reports it had been set ablaze. “We estimate that the tanker event is worth about $1/bbl of risk premium that could easily be erased within a couple of sessions if no blame is assessed and no follow up incidents develop,” Jim Ritterbusch, president of oil trading advisory firm Ritterbusch and Associates, said in a note. Iranian oil exports are under U.S. sanctions that have diminished Iran’s impact on the global supply picture. Tensions in the Middle East have escalated in the wake of attacks on tankers and U.S. drones in the Strait of Hormuz, a key shipping artery for the global oil trade. The United States is sending more troops - potentially thousands - to Saudi Arabia in the wake of the attacks on Saudi Aramco facilities. It did not specify how those troops would be used. Both benchmarks recorded their biggest daily rise since Sept. 16, the first trading day after attacks on Saudi installations knocked out more than half of the kingdom’s crude output and temporarily pushed oil prices up by about 20%.

Oil up nearly 4% for week on reported progress in U.S.-China trade talks, rise in Middle East tensions - Oil prices climbed Friday to tally a weekly gain of nearly 4%, as reported progress in U.S.-China trade negotiations eased worries about energy demand, and news of an explosion on an Iranian tanker fed tensions in the Middle East, raising the potential for crude-output disruptions in the region.West Texas Intermediate crude for November delivery climbed $1.15, or 2.2%, to settle at $54.70 a barrel on the New York Mercantile Exchange—a two-week high—with the front-month contract ending 3.6% higher for the week.The global benchmark, December Brent crude added $1.41, or 2.4%, to $60.51 a barrel on ICE Futures Europe, for a weekly gain of 3.7%. Both benchmarks had posted losses in each of the previous two weeks in a row.The U.S. and China reached a tentative, partial agreement on Friday that may lead to a truce in the trade war, according to a Bloomberg News report, citing people familiar with the matter. Under the pact, China would agree to some agricultural concessions, while the U.S. would provide some tariff relief, the report said. The news provided an added boost to U.S. stocks, feeding risk-on sentiment that further fueled a rise in oil prices.Prices had already been moving higher on news of an explosion on an Iranian tanker, which sustained damages after being hit by missiles that were launched from the Saudi Arabian port of Jeddah, according to the state-run IRNA news agency, citing Iran’s National Iranian Tanker Co. The stricken vessel was identified as the Sabity, according to those reports. Reports of the Iran tanker blast come amid allegations that the country has been behind attacks in recent months on oil tankers close to the Strait of Hormuz, a well-known oil choke point. Officials in the U.S and Saudi Arabia believe Iran was behind a missile attack on Saudi oil facilities last month, though Tehran has denied involvement in any attacks.

Coalition airstrikes on Yemen decrease after Saudi positive signal at Houthi truce offer -(Xinhua) -- Airstrikes by the Saudi-led coalition against Iran-allied Houthi rebels in Yemen have largely declined over the past three days, according to official reports from both sides on Sunday, just two weeks after the rebels offered a truce to the kingdom to end war. The number of coalition airstrikes have declined from an average of 40 each day in the previous weeks to nearly six during the past three days, the reports showed. There were no reports of casualties during the past three days. On Friday, Saudi Defense Minister Khalid bin Salman said on Twitter that "the truce that announced from Yemen is viewed positively by the kingdom, and that what the kingdom seeks." The Houthis two weeks ago offered a truce initiative to Saudi Arabia, saying they were halting missiles and drone attacks against Saudi Arabia as a gesture of "good will" towards what the Houthis called "a comprehensive halt of war." The offer came a week after the Sept. 14 missile-and-drone attack on the Saudi-owned largest oil producer Aramco that knocked out half of Saudi oil outputs. Riyadh blamed Iran for standing behind the attack, which Tehran denied. Saudi Arabia has been leading an Arab military coalition against Iran-allied Houthis in Yemen for more than four years in support of the exiled internationally-recognized government of Yemeni President Abd-Rabbu Mansour Hadi.

US To Send 'Thousands' More Troops To Saudi Arabia - Reuters reports, citing defense or administration sources, that the US is set to send thousands of additional troops to Saudi Arabia in the wake of last month's Aramco attacks.  "The United States is planning to send a large number of additional forces to Saudi Arabia following the Sept. 14 attack on its oil facilities, which Washington and Riyadh have blamed on Iran," according to a breaking Reuters report.  Though the Pentagon has yet to officially confirm the report with comment, Reuters noted the "sources did not specify exactly how many troops would be deployed but said it was expected to be in the thousands. And Bloomberg reports this could be as many as 1,800 new personnel, pending an official Pentagon statement:Defense Secretary Mark Esper is expected to announce a new deployment of U.S. forces to the Middle East as tensions rise over Turkey’s military operations in northern Syria and an explosion on an Iranian oil tanker. As many as 1,800 military personnel, including two air squadrons, are expected to be deployed to the region, including to Saudi Arabia, according to a defense official.Since last month the Pentagon has already deployed up to 3,000 troops to the kingdom in coordination with King Salman and crown prince MbS for "regional stability" and to counter Iran. Ironically this comes as Trump has promised to "slowly" get "out of the Middle East". One journalist and MidEast analyst aptly questioned, "Is this to prop up the House of Saud internally, or warn off Iran?"

The Saudi Crown Prince’s Final Option -  Since the emergence of MBS as a main power player in the Kingdom, the crown prince has been under fire from his ultra-conservative religious opponents inside Saudi Arabia. More recently, more liberal voices such as former minister of energy Khalid Al Falih have been criticizing some of the Crown Prince’s policies. MBS has responded emphatically to this dissent, first with the Ritz Project and then with the removal of Khalid Al Falih and several other major power players. The strategy currently being implemented is designed to support the long-awaited Aramco IPO, an event that MBS sees as solidifying his power in the Oil Kingdom. The consolidation of MBS’ power all seemed to be going to plan until the recent drone attacks on Abqaiq. The severity of these attacks seems not to be fully understood by media and analysts as most are still taking the word of Aramco and the Saudi minister of energy as gospel when it comes to the impact. To call the updates coming out of Saudi Arabia optimistic is an understatement, an attack of that size cannot be undone in a matter of days. And even if the damage done to Abqaiq is technically restored, and Saudi oil is flowing at the same rates as before, the world has changed. We now know that with a small amount of low intensity advanced weapon systems, the heart of the global oil sector can be significantly disrupted. Saudi Arabia’s pivotal position as the main stabilizer of the oil markets has been at best dented or, at worst, destroyed. No repair shop will be able to bring back the unquestioned confidence in Saudi Arabia as the eternal swing producer upon which the security of energy supply can depend. With less than 30 drones and cruise missiles, Saudi’s spare production capacity was removed from the market. And, contrary to what many analysts believe, it is yet to come back online The Iran-Saudi conflict has entered a new phase, with the real threat of a full-scale conflict. The situations in Iraq and Libya will also suffer from the instability created by this stand of. And despite this instability, Saudi Arabia’s important ally, the United States, has refused to be fully drawn into the conflict. The link between Trump and MBS appears to be weakening as the geopolitical pressure cranks up. Washington appears will to bark but not to bite when it comes to Iran’s actions against Saudi Arabia. U.S. analysts and policy makers don’t seem to understand that this stance not only weakens US influence in the region, but directly opens the doors for opposition to MBS inside of the Kingdom. A possible Aramco IPO presentation at FII2019, followed by a 1% listing at the Saudi Tadawul, would put MBS firmly back in the spotlight and weaken any opposition. With the current stalemate in the region, more than 4000 investment funds, sovereign wealth funds and corporations will be sitting in the conference halls of the Ritz, willing to hand over the much needed cash and multibillion projects to solidify MBS’ position. Open support for MBS will be in place very soon, with Russian president Vladimir Putin expected to head to Riyadh very soon. In stark contrast to the waning Trump-MBS friendship, Putin is openly a big supporter of the crown prince’s strategy and dreams. Russian sovereign wealth fund RDIF and others are flocking to Riyadh’s hotels as further evidence of Russian support. Moscow appears set to capitalize on Washington’s weak response to the recent attacks in Saudi Arabia, and MBS will be eager to take advantage. A closer Saudi-Russian relationship may end up helping to restrain Iran, as the Islamic Republic is heavily dependent on Moscow’s support.

Nearly 100 Protesters Dead as Calls Grow for Iraqi Government to Resign — As the death toll nears 100 people killed and with thousands injured in a week of intense demonstrations, the Iraqi government on Saturday announced the lifting of a curfew in Baghdad as calls came for it to resign.In the worst violence seen since the declared defeat of the Islamic State group in March, security forces fired live ammunition into crowds of people protesting across Iraq against corruption, unemployment and a lack of services. According to the government-backed Iraqi Human Rights Commission, at least 93 people have been killed so far, while nearly 4,000 people have been injured.  Reuters reported police snipers shooting at protesters on Friday, escalating the death toll. Security sources have also accused gunmen of hiding among the demonstrators, while a number of police officers have been killed.  Demonstrations have taken place in numerous regions across the country in the past week, including Baghdad, Basra, Nasiriya and Mosul. Concrete barriers have been erected in the capital Baghdad in areas where police clashed with protesters, a significant move in a period when many of the previous concrete barriers erected to prevent IS car bombings were being removed.The Iraqi government has also imposed a blackout by blocking internet access across the country. Prime Minister Adel Abdul Mahdi was set to convene an emergency meeting on Saturday to discuss the protesters’ demands. However, former prime minister Haider al-Abadi on Friday became the latest to join a chorus of voices calling on the government to resign. Abadi, whose own political career was torpedoed by his response to similar protests in Basra last year, also called for the “formation of a criminal court of corruption” and warned that the reforms demanded by protesters needed to be swiftly implemented. Influential Shia cleric Muqtada al-Sadr has also called for the resignation of the government, and called on his Sairoun parliamentary group, the largest group in the parliament, to suspend its activities. On Friday, the National Axis alliance, the largest Sunni parliamentary bloc, also announced the suspension of its parliamentary activities in response to the protests.

Death toll in Iraq protests tops 105 - Scattered protests continued on Sunday as a tense calm settled over much of Baghdad following five days of mass demonstrations that left at least 105 dead and more than 6,100 wounded as of early Sunday. These are the figures released by Iraq’s Interior Ministry, and the real number of casualties is no doubt far higher. A combination of police, soldiers, counter-terrorism operatives and militiamen have unleashed live ammunition, rubber bullets, tear gas and water cannon against unarmed demonstrators, in their great majority young unemployed workers and university graduates. As the protests grew larger, snipers were deployed on rooftops in the Iraqi capital to pick off demonstrators. Protesters arrested by security forces have been beaten and humiliated, while at least in one case, a young activist couple was shot to death by a masked death squad. By late Sunday night, another eight protesters were reportedly gunned down in eastern Baghdad’s impoverished Sadr City district, where Shia guerrillas battled US troops more than a decade ago. The intensity of the last five days of state violence is a direct manifestation of the crisis and instability of the regime headed by Abdul Mahdi, which has sought to rule by means of a sectarian appeal to Iraq’s Shia majority, while attempting to balance between Washington and Tehran. This government sits atop a social powder keg. Iraqi society has been ravaged by three decades of US wars, economic blockades and occupation, whose net effect has been the decimation of what was once the most advanced social infrastructure—including public education and healthcare as well as popular living standards—in the Middle East. What has replaced the authoritarian Ba’athist regime overthrown by the 2003 US invasion, with its leader Saddam Hussein put to death, was not the “democracy” promised by Washington, but a kleptocracy run by a collection of sectarian-based parties which came to power on the backs of American tanks. Abdul Mahdi is representative of this ruling clique, named finance minister in the first puppet government installed by the US occupation after a political career that saw him evolve from Ba’athism to the Stalinist Iraqi Communist Party, to the Islamic Supreme Council of Iraq (ISCI), a pro-Iranian exile militia, and finally Washington’s stooge. The mass uprising has centered in Baghdad and the heartland of the majority Shia population in southern Iraq, and its fury has been directed at both the government and the Shia sectarian parties.

Why Is Iraq Blowing Up Now? - Yes, Iraq.  It has not made front page headlines with so much else going on, but over the last several days there has been an escalating series of protests against corruption in various parts of Iraq and culminating yesterday in Baghdad with one being met by soldiers firing openly upon the demonstarters with the result being about 104 dead and 6,100 wounded.  The government of Adel Abdul al Mahdi appears in danger of facing a no confidence motion and falling as it has lost the support of fellow Shia leader al-Sadr, who has a large faction of supporters in the parliament and how apparently is supporting the demonstraters. Corruption has become an increasingly widespread problem around the world, so much so that we increasingly take it for granted and remain unimpressed by it.  And we are tired of hearing about Iraq, a nation we made a mess of, are now mostly not much bothered with, and especially since it appears that ISIS has been largely defeated.  Indeed, opposition to the deep government corruption there laid low while the war against ISIS was on.  But now with its defeat, many want something done about it. The way to realize the scale of it is Iraqi oil production has finally seriously recovered from all these wars and is now up to about 4.5 million barrels per day.  That makes it fourth in the world with a bit less than half of that the top three have: US, Russia, and Saudi Arabia.  Of course, the US still consumes more than it produces. Other major producers, including many nations producing much less than Iraq, have large state funds accumulated from their oil export earnngs, and much of which is being used to fund many useful things in their respective nations.  No such fund exists in Iraq and billions of dollars worth of earnings have simply disappeared.  Nobody knows where it has gone to and is going to.  The scale of this is truly immense; and when one stops to think about it, it becomes clear why there is such anger in Iraq now.  The nation has suffered decades of repression and war and destruction.  Peace has finally more or less arrived, and all this money is flowing in.  But none of it seems to be being used to fix up all the messes. This is likely to get worse before it gets better.

Death Toll In Iraq Soars As Pro-Iran Gunmen Start 'Shooting Protesters' - Iraqi paramilitary groups close to Iran are suspected of joining attacks on protesters in Baghdad and other cities, leading to heavy loss of life among demonstrators. Some 107 people have been killed and over 6,000 wounded in the last six days, though hospital doctors say the government is understating the true number of fatalities.“The pro-Iranian militia have each taken a sector of Baghdad and are responsible for its security,” a source, who does not want his name published, told The Independent. He said that snipers belonging to these groups had fired live rounds at protesters, often aiming for the head or heart. Eyewitnesses say that Iraqi soldiers are also firing directly into crowds of the protesters, who are demanding the fall of the government, jobs and an end to corruption.The gunmen shooting protesters come from pro-Iranian factions of the Hashd al-Shaabi or Popular Mobilization Units, an 85,000-strong strong body that came into being to stop the Isis advance on Baghdad after the fall of Mosul in 2014. It is a coalition of about 30 groups, many of them predating Isis, which is paid for by the Iraqi government and nominally under its control, but with widely varying political loyalties. They includes powerful units, such as Ketaeb Hezbollah, which say opening that their first loyalty is to the Iranian leadership.The demonstrations in Baghdad and in much of Shia southern Iraq are largely spontaneous, but where there are local leaders they have sometimes been singled out for killing.Haider Karim Al-Saidi, a leading organiser of the protests, was shot dead by a sniper near Al-Mudhafar Square late on Sunday night. Earlier, witnesses had reported that they had seen snipers taking up positions on roof tops overlooking the square. Footage shows how snipers, allegedly belonging to Iran-backed militias, were targeting peaceful protesters in Baghdad in cold blood. Who holds these militias accountable for this heinous crime? #Iraq pic.twitter.com/nNobrvXoz7

US Troops Will Withdraw From Northeast Syria to Avoid Imminent Turkish Invasion -  — In a surprise announcement late Sunday night, the White House Press Secretary released a statement that said, “Today, President Donald J. Trump spoke with President Recep Tayyip Erdogan of Turkey by telephone. Turkey will soon be moving forward with its long-planned operation in Northern Syria. The United States Armed Forces will not support or be involved in that operation, and the United States forces, having defeated the ISIS territorial “Caliphate,” will no longer be in the immediate area.”The statement does not make it clear if U.S. troops will fully withdraw from Syria or if they will just relocate. The statement also says, “Turkey will now be responsible for all ISIS fighters in the area captured over the past two years.” The U.S.-backed Syrian Democratic Forces (SDF) said on Saturday that it would “not hesitate to turn any unprovoked attack by Turkey into an all-out war” to defend the region of northeast Syria that it controls. The SDF responded to a threat by Turkish President Reccep Tayyip Erdogan, who said on Saturday that Turkey will soon launch an “air and ground military operation” in northeastern Syria and warned it could happen “as soon as today or tomorrow.” The SDF is led by the Syrian Kurdish Militia YPG, who the Turkish government considers to be a terrorist organization. In August, Turkey and the U.S. agreed to create a safe zone in Kurdish controlled Syria along the Turkish border to settle some two million Syrian refugees. Part of the deal was to clear the area of all the Kurdish fighters, which Erdogan complains the U.S. military has failed to do. Erdogan and President Trump also agreed to meet in Washington next month to discuss the issues with the safe zone in northeastern Syria. Washington has always hoped to avoid a military confrontation between Turkey and the YPG. The shortsighted policy of arming and backing an enemy of Turkey so close to their border was bound to have dangerous consequences.

Analysis: President Trump hands over northern Syria to Turkey - President Trump's announcement to withdraw all U.S. forces from northern Syria came as a bombshell for the Syrian Democratic Forces who sacrificed many of their ranks on the bloody battlefields of northeast Syria, to defeat fanatical ISIS combatants prepared to fight to the last man and woman.The top Kurdish commander of U.S.-backed SDF forces, Mazlum Kobone, said himself that more than 11,000 of his soldiers were killed in the war against ISIS. The U.S. supplied essential aerial bombardments and logistical advice but it was the local fighters on the ground who bore the brunt of the bloodshed.  The latest White House statement never once mentioned the contribution of those SDF combatants – the vast majority made up of Syrian-Kurdish YPG fighters -- and took sole U.S. credit for defeating the ISIS territorial "Caliphate."  Now it appears the Trump administration is abandoning those Kurdish allies altogether, in favor of the Kurds' nemesis, the Turkish government. Turkey has been fighting separatist Kurds across the border inside its own territory for decades, and in recent years has incurred several times into Syria to fight against Syrian Kurds. For Donald Trump to hand the fate of Syria's Kurds over to their sworn enemy Turkey not only represents a major disservice to the people who did more to defeat ISIS in Syria than anyone else, but it also sends an ominous message to any group who would ever consider allying themselves to the United States in the future.  The Kurds are not likely to roll over and accept this without a fight. Perhaps anticipating the White House move, YPG spokesman Mustafa Bali said just two days ago the SDF, "is committed to the security mechanism framework and has been taking necessary steps to preserve stability in the region. However we will not hesitate to turn any unprovoked attack by Turkey into an all-out war on the entire border to DEFEND ourselves and our people."

Washington green lights Turkish attack on Kurdish forces in Syria - On Sunday night, in a major shift in US war policy, the White House gave a green light for a Turkish invasion of northern Syria. In doing so, it has abandoned to their fate Kurdish nationalist militias that have fought since 2015 as Washington’s main proxy force in the NATO war in Syria, and which the Turkish government denounces as terrorists to be bloodily suppressed. After Trump called Turkish President Recep Tayyip Erdoğan, the White House issued a statement at 11 p.m. Sunday declaring: “Turkey will soon be moving forward with its long-planned operation into Northern Syria. The United States Armed Forces will not support or be involved in the operation, and United States forces, having defeated the ISIS territorial ‘Caliphate,’ will no longer be in the immediate area.” Yesterday, as US troops withdrew from positions along the Turkish-Syrian border, Erdoğan said the Turkish attack could begin any time. “We made a decision," he declared. "We said, ‘one night we could come suddenly.’ We continue with our determination... It is absolutely out of the question for us to further tolerate the threats from these terrorist groups.” Turkish armored vehicles patrol as they conduct a joint ground patrol with American forces in the so-called "safe zone" on the Syrian side of the border with Turkey, near the town of Tal Abyad, northeastern Syria, Friday, Oct.4, 2019. With US approval, the Turkish government is preparing a bloodbath against Kurdish forces in Syria. Washington and Ankara have agreed that Turkish troops are to control a zone in northern Syria 30 kilometers deep, along 480 km of the Turkish-Syrian border (19 miles by 300 miles). Ankara plans to forcibly resettle in this zone 1 to 2 million of the 3.6 million Syrian refugees who fled to Turkey during the eight-year NATO proxy war in Syria, and has threatened to pursue its offensive outside this zone if necessary. US troops are reportedly withdrawing from a 100 km stretch of the border from Tal Abyad to Ras al-Ain to allow Turkish troops to attack through this gap. However, the BBC reported that in light of Ankara’s threats of a broader invasion, “British and American special forces have for months been making preparations for a partial or full withdrawal from the area if the situation escalates.”

Erdogan's Syria Invasion Begins: Turkish Jets Filmed Bombing Kurdish Targets - Erdogan's promised Turkish military operation in northeast Syria has begun, as confirmed by regional media and video footage. On Monday night Turkish fighter jets commenced bombing the Semelka Border Crossing in far northeast Syria on the border with Iraq.  Both Hezbollah-affiliated al-Mayadeen television channel and Israeli media are also reporting Turkish jets have attacked Kurdish targets in northern Syria. This as the US claimed to have effectively shut down Northern Syria airspace to Turkey, and while Russian jets have reportedly been observed patrolling southern Syria, presumably to ensure the Turkish incursion comes nowhere near Syrian Army positions. The Semelka crossing since 2016 acted as a key SDF supply point between Kurdistan Regional Government in Iraq and the Kurdish-led Autonomous Administration of North and East Syria. Turkey's Anadolu Agency also reports Turkish officers have been expelled from the Joint Air Operations Center which was the heart of coordinated anti-ISIL activities among the allies, meaning US surveillance and reconnaissance data are no longer shared with Ankara. In northeast Syria a rapid US withdrawal from border observation posts at Tel Abyad and Ras al Ain has reportedly already occurred, paving the way for the imminent Turkish incursion.  Citing Pentagon spokeswoman Carla Gleason, Anadolu noted, howeverShe stopped short of saying that the air space has been shut down to Turkey, but noted "if you’re not on the air tasking order, it’s really hard to coordinate flights in that area." We might note that when it comes to the Kurds, Erdogan has never suffered qualms about having to "coordinate" his actions with allies.  It appears Trump's dire Twitter warning to "obliterate" Ankara's economy, directed both at the Turks and at US hawks who accuse the president throwing Kurdish partner forces to the wolves, was ineffective, given by all indicators a Turkish aerial campaign has commenced.

10,000 ISIS Unleashed: Syrian Kurds Warn Of Mass Prison Break If Turkey Invades - Syria's US-backed Kurdish militias are warning that over 10,000 jihadists, among these thousands of ISIS terrorists, could go free as a result Turkey's 'imminent' invasion of northeast Syria. The numbers of ISIS terrorists unleashed in the wake of the Turkish military incursion could be the biggest since the height of the Islamic State caliphate's existence, per Syrian Kurdish official statements reported by Fox News:Aside from the existential threat to the Kurdish fighters posed by Turkey, Syrian Kurdish forces are also warning that ISIS sleeper cells are actively plotting to free about 12,000 militants currently detained by the Kurds and may take advantage of the Turkey-triggered turmoil to aid their plans.Those in custody include about 2,500 foreign fighters from Europe and elsewhere whose native countries have been reluctant to take them back — and about 10,000 other captured fighters from Syria and Iraq.One major but relatively underreported fact is that over at least the past two years makeshift Kurdish/SDF prisons have held many of the region's most dangerous terrorists with the Pentagon's help. Kurdish forces have blamed Turkey for unleashing ISIS jihadists on northern Syria in the first place. Despite a US statement late Sunday saying that Turkey will now take custody of the thousands of militants after Washington announced it "will not support or be involved in the [Turkish] operation" and "will no longer be in the immediate area," a rapid US withdrawal from border bases such as at Tel Abyad and Ras al Ain in northeast Syria (which has already happened at both locations), leaves the fate of ISIS prisoners in the area in question.

Syrian Kurds Say 'Partnership' With Assad Or Russia Likely If Turkey Invades -As we predicted in the wake of the White House's late Sunday announcement that “Turkey will soon be moving forward with its long-planned operation into Northern Syria” and that American troops will withdraw from the "immediate area" this will ensure that the United States' Kurdish proxies in Syria, now in Erdogan's cross hairs, will quickly do a deal with "the devil we know" that is, come under the protection of Assad and the Syrian Army. On Monday the commander of the US trained and armed Syrian Democratic Forces (SDF), Mazlum Abdi, indicated just that in a bombshell statement. “We are considering a partnership with Syrian President Bashar al-Assad, with the aim of fighting Turkish forces,” he said. "This is one of the options we have on the table," the top SDF commander added. In the statement he further called on the American people to put pressure on President Donald Trump to stay the course in northeast Syria. No doubt this is sure to get the immediate attention of the top Pentagon brass, given current and former defense officials (in both the Obama and Trump administrations) have routinely said that among US goals in Syria is ensuring Syria's Kurdish militias do not seek rapprochement with Damascus. In most places were the Kurdish YPG/SDF are dominant, they simply inherited control of territory which the Syrian Army had in 2013 and 2014 rapidly withdrew from amid an intense al-Qaeda/ISIS onslaught. Thus throughout the war in many local areas along the Euphrates Kurdish and pro-Assad forces have entered into pragmatic and tacit cooperation, despite being official "enemies" based on Kurdish-US partnership.  Of the possible looming US troops withdrawal, or at least a withdraw from crucial border posts in the north, Abdi said in an interview with NBC News: “Frankly, this makes us disappointed. The decision harms Syrian trust in the United States and the credibility of the United States.”

Turkey opens ground assault on Syria's Kurds; U.S. Republicans turn on Trump (Reuters) - Turkish troops and their Syrian rebel allies attacked Kurdish militia in northeast Syria on Wednesday, pounding them with air strikes and artillery before starting a cross-border ground operation that could transform an eight-year-old war. The assault began days after U.S. President Donald Trump pulled American troops out of the way, prompting denunciations from senior members of his own Republican Party who say he abandoned the Syrian Kurds, loyal allies of Washington. “The Turkish Armed Forces and the Syrian National Army have launched the land operation into the east of the Euphrates river as part of the Operation Peace Spring,” the Turkish defense ministry tweeted after nightfall, following a day of pounding the area from the air. Turkish media reported troops entering Syria at four points, two of them close to the Syrian town of Tel Abyad and two close to Ras al Ain further east. Turkey told the United Nations Security Council in a letter seen by Reuters that its military operation would be “proportionate, measured and responsible.” The 15-member body will meet on Thursday to discuss Syria at the request of the five European members, Britain, France, Germany, Belgium and Poland. Thousands of people fled Ras al Ain toward Hasaka province, held by the Kurdish-led Syrian Democratic Forces (SDF). The Turkish air strikes killed at least five civilians and three fighters from the SDF and wounded dozens of civilians, the SDF said. Reuters journalists at Akcakale on the Turkish side of the frontier watched as explosions struck Tel Abyad. After dark, the red flare of rockets could be seen fired across the border into Tel Abyad, and flames burned near the town. Explosions from Tel Abyad could be heard eight hours into the bombardment. A witness reached by telephone said civilians were fleeing en masse.

Thousands flee, hundreds reported dead in Turkish attack on U.S.-allied Kurds in Syria - The offensive against the Syrian Democratic Forces (SDF) led by Kurdish YPG militia, which began days after Trump pulled U.S. troops out of the way and following a phone call with Turkish President Tayyip Erdogan, opens one of the biggest new fronts in years in an eight-year-old civil war that has drawn in global powers. “We have one of three choices: Send in thousands of troops and win Militarily, hit Turkey very hard Financially and with Sanctions, or mediate a deal between Turkey and the Kurds!” Trump said in a Twitter post on Thursday. “I hope we can mediate,” Trump said when asked about the options by reporters at the White House. Without elaborating, Trump said the United States was “going to possibly do something very, very tough with respect to sanctions and other financial things” against Turkey. The SDF have been the main allies of U.S. forces on the ground in the battle against Islamic State since 2014. They have been holding thousands of captured IS fighters in prisons and tens of thousands of their relatives in detention. SDF forces were still in control of all prisons with Islamic State captives, a senior U.S. State Department official said in a briefing with reporters on Thursday.

Erdogan threatens to flood Europe with 3.6 million refugees as Syria offensive forces tens of thousands to flee  - Turkey’s president has threatened to send millions of Syrian refugees to Europe in retaliation for stinging world criticism of his military operation in northern Syria that has left 17 civilians dead, including several children.Lashing out at the European Union and others that joined a global chorus of condemnation, President Recep Tayyip Erdogan warned he would “open the gates” if anyone called his offensive “an invasion”. Seventeen civilians and dozens of fighters on both sides, have been killed since Turkish troops and its Syrian rebel allies launched a cross-border incursion against Kurdish-led Syrian Democratic Forces (SDF) on Wednesday.  Among the dead in Syria are three children, rights groups have reported. The Turkish authorities meanwhile said that that six people, including a nine-month-old baby had been killed on the Turkish side. Over 60,000 people have since fled their homes as Ankara’s military advanced, capturing nine Syrian villages and encircling two Kurdish-held towns. Under airstrikes and heavy artillery, panicked residents of the Syrian border towns told The Independent they had “nowhere to hide”.

US soldier in Syria: 'I am ashamed for the first time in my career' -- A U.S. special forces member serving with the Kurdish-led Syrian Democratic Forces (SDF) in Syria said Turkey is inflicting atrocities as it invades northeastern Syria. “I am ashamed for the first time in my career,” the unidentified soldier, who has been involved in the training of indigenous forces on multiple continents, told Fox News Wednesday.“Turkey is not doing what it agreed to. It’s horrible,” the soldier added. “We met every single security agreement. The Kurds met every single agreement [with the Turks]. There was no threat to the Turks — none — from this side of the border.”Turkey launched an offensiveagainst Kurdish groups Wednesday in northern Syria after President Trump announced that U.S. troops would withdraw from the area in anticipation of the operation, removing the chief deterrent to Ankara's offensive. Trump sparked a firestorm in Washington over the decision, saying he does not want to fight “endless wars.” “The Kurds fought with us, but were paid massive amounts of money and equipment to do so. They have been fighting Turkey for decades. I held off this fight for almost 3 years, but it is time for us to get out of these ridiculous Endless Wars, many of them tribal, and bring our soldiers home,” Trump tweeted on Monday. “WE WILL FIGHT WHERE IT IS TO OUR BENEFIT, AND ONLY FIGHT TO WIN.”  Sen. Lindsey Graham (R-S.C.), a staunch Trump ally and defense hawk, fired back, saying the decision was a “disaster in the making” that “ensures [an] ISIS comeback” and “will be a stain on America’s honor for abandoning the Kurds.”

US Special Forces in Syria ‘Mistakenly’ Bombed by Turkey -  In a surprise Treasury Department press briefing early Friday afternoon, Steven Mnuchin said the president hasauthorized” new sanctions on NATO member Turkey over its ongoing assault on US-backed Syrian Kurdish groups in northern Syria, also as bipartisan legislation targeting Turkey has been introduced in both the House and Senate.  Turkey has now given Trump every reason to unleash the newly authorized sanctions, as Newsweek reports that American special forces troops have come under Turkish fire.According to the breaking exclusive: “A contingent of U.S. Special Forces has been caught up in Turkish shelling against U.S.-backed Kurdish positions in northern Syria.” It was “apparently by mistake,” the report adds. The Newsweek report cites an “Iraqi Kurdish intelligence official and senior Pentagon official” to say that “Special Forces operating in the Mashtenour hill in the majority-Kurdish city of Kobani fell under artillery fire from Turkish forces” amid operations related to ‘Operation Peace Spring’.It will be interesting to see what Ankara’s defense will be no doubt claiming the attack on Americans was ‘accidental’ and ‘inadvertent’ given that, as Newsweek continues:The senior Pentagon official said that Turkish forces should be aware of U.S. positions “down to the grid.” While the official could not specify the exact number of personnel present, but indicated they were “small numbers below company level,” so somewhere between 15 and 100 troops.No US casualties were mentioned in initial reports, however, this will likely be enough to trigger Washington sanctions in 3, 2, 1… But in the meantime Russia Responds- All Foreign Troops With Illegal Presence Should Leave Syria -- Russia's response to the White House's late Sunday shock announcement saying “Turkey will soon be moving forward with its long-planned operation into Northern Syria” has been relatively muted. Though Trump reportedly told Erdogan the US won't back the operation in a 'last minute' weekend phone call, it still appears a tacit US green light, considering American forces have now moved away from the Turkish border with northern Syria and are in a “wait and see” position. While a Kremlin spokesman said in reaction that all foreign military forces ‘with illegal presence’ should leave Syria, and that "Syria’s territorial integrity must be preserved," a looming American exit from the theater no doubt has Russian officials breathing a sigh of relief in terms of their number one defined priority — preserving and defending the Assad government.  Russia has proven it can deal with Erdogan's expansionist policies, but not the United States' presence in Syria. Over the past years going back to 2015 US and Russian forces have on multiple occasions been on the brink of directly clashing, igniting a possible WWIII scenario.

ISIS Jail Break Begins- Riots At Sprawling Al-Hol Prison Camp As Turkey Invades - There's growing concern that over 10,000 jihadists, among these thousands of ISIS terrorists, could go free as a result of Turkey's ongoing invasion of northeast Syria. This is especially the case at the sprawling al-Hol prison camp, administered and guarded by US-backed Syrian Democratic Forces (SDF), home to over 70,000 people - mostly families of known ISIS fighters. This as the White House seems to have washed its hands of the matter, leaving the question up to local and regional powers, especially Turkey. Al-Hol is considered ground zero for a potential resurgent ISIS, ready to explode as SDF security was already severely undermanned even months prior to this week's Turkish Army attack, and now there's large scale rioting breaking out, per SDF official reports and video footage.   Months ago, the BBC reported of the refugee city in the desert: "Al-Hol is a nightmare, a camp that has grown from 11,000 people, to more than 70,000. It is swollen with the dark aftermath of the collapsed pseudo-caliphate. It is ready to burst."It appears the remnant ISIS insurgents are taking advantage of the Turkish operation to regroup, and to gain freedom from the many makeshift detention centers across northeast Syria maintained by the SDF.Crucially, the SDF announced days ago that under Turkish attack they can no longer maintain appropriate level of security guarding their ISIS prisoners. And though American special forces personnel are still present at a number of bases in the region (after having fallen back from border observation posts amid the Turkish operation), it doesn't appear the Pentagon has any sort of contingency plan.

Dramatic Video Shows ISIS Prison Break Under Turkish Artillery Fire In Syria --  After President Trump days ago revealed the US military in northeast Syria had moved some of the “most dangerous” ISIS terrorists amid fears they could escape as Turkish forces invade US allied Kurdish areas, saying “We’re putting them in different locations where it’s secure,” a Syrian Democratic Forces (SDF) official has told reporters that at least 5 ISIS members have escaped after a mortar struck their prison. This comes after a separate earlier 'riot' and escape attempt incident filmed at al-Hol prison camp. CCTV footage released by Syrian Kurdish authorities appears to confirm this, at a moment Qamishli continues to be under severe bombardment through late Friday:  The Independent (UK) reports of the incident in Qamishli city, which is now under attack by Turkey: Five Isis militants have broken out of a prison in northern Syria after Turkish shelling nearby, a spokesman in the Kurdish-led Syrian Democratic Forces (SDF) has said. The detainees escaped from a prison in Qamishli city, Marvan Qamishlo said.The official statement from the SDF's Coordination and Military Ops Centers said that "5 ISIS detained militants fled Jirkin prison in Qamishli as a result of Turkish shelling."Separate video released showed the moments Turkish artillery shells rained down on the prison:

Reports: Up to 35 Russian Mercenaries Killed in Libya  As many as 35 Russian mercenaries are reported to have been killed in Libya while they were fighting for Khalifa Haftar, the military general most associated with the rule of the late leader Muammar Gaddafi, who launched an offensive earlier this year on the Libyan capital of Tripoli, home to the country’s internationally-recognized government, according to a Russian media. The mercenaries are thought to work for the Wagner Group, a military contractor run by Yevgeny Prigozhin, a businessman nicknamed Putin’s Chef because he holds lucrative Kremlin catering contracts. Asked by VOA about the reports of the fatalities in an airstrike on the outskirts of Tripoli, where Haftar’s forces have been bogged down for months, Maria Zakharova, the Russian foreign ministry spokeswoman, said she had “no detailed information” and suggested directing questions to Russia’s defense ministry. The spokeswoman later dismissed any notion the mercenaries are Kremlin-linked, saying there’s little Russia can legally do to prevent “private Russian citizens from acting as bodyguards overseas.” 

New Clashes Erupt in Libya; Fighting Reported in South Tripoli - — Launched in April, Khalifa Hafter’s bid to take over Libya, and the capital of Tripoli, looks to be breaking out again, with his forces attacking fighters from the UN-backed unity government over the past couple of days.The Hafter forces opened fire on the unity force fighters in southern Tripoli, and heavy fighting is reported in parts of the city. The unity government’s office is claiming to have retaken parts of the city lost in the early push.Details are scant, but the unity government is accusing the UAE of having gotten involved, and that they captured and destroyed a UAE-provided armored vehicle from Hafter forces. The UAE is one of several nations that is seen as backing Hafter’s takeover of Libya, with many believing that the takeover by a military dictator would stabilize the country. This faction is led by Egypt’s military junta, which seems to want to replicate its own coup there.

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