oil prices hit three month highs on three days this week on their way to rising for the 6th time in seven weeks, but gave up most of their gains for the week in Friday profit taking ahead of the holidays...after rising 1.5% to a three month high at $60.07 a barrel on hopes for a US-China trade deal last week, the benchmark price of US light sweet crude for January delivery opened lower and slipped to $59.17 as confidence about the U.S.-China trade deal was tempered by the agreement’s limited nature and lack of details, but then recovered later in the session to settle 14 cents higher at a three-month closing high of $60.21 a barrel on renewed trade optimism boosted by the better U.S. manufacturing and services data released earlier...oil prices then moved higher for a fourth consecutive day on Tuesday in a positive response to further details on the trade agreement between the U.S. and China and finished 73 cents higher at another 3 month high of $60.94 a barrel after Trump's economic adviser Larry Kudlow predicted U.S. exports to China would double under the deal...after a Tuesday evening report from the API indicated surprise large build of crude inventories, oil prices opened lower on Wednesday, but recovered midday after the EIA reported crude oil inventories had actually decreased by an expected 1.1 million barrels and ended down just a penny at $60.93 a barrel ...oil prices were back at three-month highs again on Thursday as thawing US-China trade relations supported financial markets, as trading in the January oil contract ended 29 cents higher at $61.22 a barrel, while the contract for February US oil finished 33 cents higher at $61.18 a barrel...however, oil prices moved sharply lower on Friday after Baker Hughes reported that the number of active U.S. rigs drilling for oil rose by 18, the biggest jump in 22 months, and as oil traders took profits ahead of upcoming holidays and oil ended down 74 cents, or 1.2%, at $60.44 a barrel...nonetheless, oil prices still finished up slightly for the week, with US crude 37 cents or less than one percent higher when compared to last Friday’s close, while the February oil contract was 46 cents higher on the week...
natural gas prices also ended a bit higher this week, after hitting an all time low the prior Monday...after recovering from $2.158 per mmBTU to close the week 1.6% lower at $2.296 per mmBTU last week, the price of natural gas for January delivery rose 4.5 cents to $2.341 per mmBTU on Monday on forecasts confirming cold weather and high heating demand this week, despite an outlook showing next week would be warmer than previously expected...but trading on the longer term forecast came to the fore on Tuesday, as natural gas prices slid 2.2 cents, and then fell another 3.3 cents on Wednesday as a forecast for this December's total demand (GWDD) to be very close to the warm December of a year ago hit prices again....prices even fell another 1.3 cents on Thursday, despite an EIA report that withdrawals from natural gas inventories were much greater than expected...but natural gas prices reversed on Friday when the forecasts did, rising 5.5 cents to close the week 1.4% higher at $2.328 per mmBTU, as weather models began to feature colder changes through early January...
the natural gas storage report for the week ending December 13th from the EIA indicated that the quantity of natural gas held in storage in the US decreased by 107 billion cubic feet to 3,411 billion cubic feet by the end of the week, which left our gas supplies still 618 billion cubic feet, or 22.1% higher than the 2,793 billion cubic feet that were in storage on December 13th of last year, but 9 billion cubic feet, or 0.3% below the five-year average of 3,420 billion cubic feet of natural gas that have been in storage as of the 13th of December in recent years....the 107 billion cubic feet that were withdrawn from US natural gas storage this week was somewhat more than the average forecast for a 93 billion cubic feet withdrawal by analysts surveyed by S&P Global Platts, but was below the average 112 billion cubic feet of natural gas that have been pulled from natural gas storage during the second week of December over the past 5 years. as well as below the 132 billion cubic feet withdrawal reported during the corresponding week in 2018...
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending December 13th indicated that because of an increase in our oil exports and a decrease in our oil imports, we had to pull oil out of our stored commercial supplies to meet our refining needs for the fourth time in the past fourteen weeks...our imports of crude oil fell by an average of 308,000 barrels per day to an average of 6,579,000 barrels per day, after rising by an average of 899,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 233,000 barrels per day to an average of 3,633,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,946,000 barrels of per day during the week ending December 13th, 541,000 fewer barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly unchanged at 12,800,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production totaled an average of 15,746,000 barrels per day during this reporting week..
meanwhile, US oil refineries were reportedly processing 16,562,000 barrels of crude per day during the week ending December 13th, 35,000 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 155,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....hence, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was still 661,000 barrels per day less than what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA inserted a (+661,000) 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", thus suggesting an error or errors of that magnitude in the oil supply & demand figures we just transcribed...however, since the media treats these figures as gospel and since they drive oil pricing and hence decisions to drill for oil, we continue to report them, just as they're seen & believed by most everyone else (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 rose to an average of 6,411,000 barrels per day last week, still 15.1% less than the 7,549,000 barrel per day average that we were importing over the same four-week period last year....the 155,000 barrel per day net withdrawal from our total crude inventories was due to a withdrawal of 155,000 barrels per day from our commercially available stocks of crude oil, while the quantity oil stored in our Strategic Petroleum Reserve was unchanged......this week's crude oil production was reported to be unchanged at 12,800,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at 12,300,000 barrels per day, while a 7,000 barrel per day decrease to 481,000 barrels per day in Alaska's oil production was not large enough to impact the final rounded national total...last year's US crude oil production for the week ending December 14th was rounded to 11,600,000 barrels per day, so this reporting week's rounded oil production figure was 10.3% above that of a year ago, and 51.9% 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 90.6% of their capacity in using 16,562,000 barrels of crude per day during the week ending December 13th, the same capacity utilization as the prior week, and well below the recent normal for the second week of December...as a result, the 16,562,000 barrels per day of oil that were refined this week was 4.9% below the 17,408,000 barrels of crude per day that were being processed during the week ending December 14th, 2018, when US refineries were operating at 95.4% of capacity....
with US refinery inputs consistently below those of a year ago, we'll include here a graph of those, so we can try to see what has been happening...
the above graph of US refinery throughput came from a newsletter emailed daily by John Kemp, senior energy analyst and columnist with Reuters, which you can sign up for free here; it shows US refinery throughput in thousands of barrels per day by "day of the year" for the past ten years, with the past ten year range of our refinery throughput for any given date shown as a light blue shaded area, and the median of our refinery throughput, or the middle of the 10 year daily range, traced by the blue dashes over each day of the year....the graph also shows the number of barrels of oil refined for each week in 2018 traced by a yellow line, with our year to date oil refining for each week of 2019 traced by the red graph...we can thus see that with a few exceptions, 2018's refining in yellow had been at the top of the historical range for most of the year, and that pace of refining in 2018 was generally beating the records set in 2017 (not shown)...however, with the sanctions imposed on Venezuelan crude at the end of January of this year, US Gulf coast refineries, which are configured to process the heavy sour crude that Venezuela produces, could not come up with adequate replacements for that crude to run at their optimum pace, and as you see, US refineries ran nearly 5% below the prior year's pace through winter and spring, ultimately buying boatloads of Urals crude from the Russians to replace the Venezuelan crude they'd lost...then, just when those refineries were starting to get back to near normal early this fall, the Keystone pipeline carrying heavy sour crude from Canada sprung a leak and was shut down, again interrupting the flow of the type of crude those refineries need to run at their optimum...there has been an effort to replace that loss with releases from the Strategic Petroleum Reserve, but that was only marginally successful...but even though the Keystone pipeline has been up and running again for weeks now, US refinery utilization still continues nearly 5% below the prior year's seasonal norms......
even with the decrease in the amount of oil being refined, gasoline output from our refineries was higher, increasing by 87,000 barrels per day to 9,840,000 barrels per day during the week ending December 13th, after our refineries' gasoline output had decreased by 188,000 barrels per day the prior week....but even with this week's increase in gasoline output, our gasoline production was 4.8% lower than the 10,334,000 barrels of gasoline that were being produced daily over the same week of last year....on the other hand, our refineries' production of distillate fuels (diesel fuel and heat oil) fell by 156,000 barrels per day to 5,072,000 barrels per day, after our distillates output had decreased by 35,000 barrels per day over the prior week...hence, after this week's decrease in distillates output, our distillates' production for the week was 6.0% below the 5,393,000 barrels of distillates per day that were being produced during the week ending December 14th, 2018....
with the increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the 6th time in twelve weeks and for the 12th time in 26 weeks, rising by 2,529,000 barrels to 237,297,000 barrels during the week to December 13th, after our gasoline supplies had increased by 5,405,000 barrels over the prior week....our gasoline supplies increased by less this week even though our exports of gasoline fell by 326,000 barrels per day to 590,000 barrels per day, because our imports of gasoline fell by 60,000 barrels per day to 519,000 barrels per day and because the amount of gasoline supplied to US markets increased by 529,000 barrels per day to 9,411,000 barrels per day....after this week's increase, our gasoline supplies were 3.1% higher than last December 14th's inventory level of 230,103,000 barrels, while they remained roughly 5% above the five year average of our gasoline supplies for this time of the year...
even with the decrease in our distillates production, our supplies of distillate fuels rose for the 3rd time in 12 weeks and for 13th time in the past 37 weeks, increasing by 1,509,000 barrels to 125,096,000 barrels during the week ending December 13th, after our distillates supplies had increased by 4,118,000 barrels over the prior week...the increase in our distillates supplies was less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 389,000 barrels per day to 4,120,000 barrels per day, while our exports of distillates fell by 156,000 barrels per day to 915,000 barrels per day, and while our imports of distillates rose by 16,000 barrels per day to 178,000 barrels per day....after this week's inventory increase, our distillate supplies were 4.3% higher than the 119,900,000 barrels of distillates that we had stored on December 14th, 2018, while remaining 7% below the five year average of distillates stocks for this time of the year...
finally, this week's decrease in oil imports, combined with the increase in oil exports, meant our commercial supplies of crude oil in storage fell for the fourteenth time in twenty-seven weeks and for the nineteenth time in 47 weeks, decreasing by 1,085,000 barrels, from 447,918,000 barrels on December 6th to 446,833,000 barrels on December 13th...even after that decrease, our crude oil inventories were nearly 4% above the five-year average of crude oil supplies for this time of year, and were over 34% higher than the prior 5 year (2009 - 2013) average of crude oil stocks after two weeks of December, 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 this past year, except for the summer, after generally falling until then through most of the prior year and a half, our oil supplies as of December 13th were still 1.2% above the 441,457,000 barrels of oil we had stored on December 14th of 2018, and 2.4% above the 436,491,000 barrels of oil that we had in storage on December 15th of 2017, but at the same time were 8.0% below the 485,449,000 barrels of oil we had in commercial storage on December 16th of 2016...
This Week's Rig Count
the US rig count increased for just the 2nd time in the past 18 weeks over the week ending December 20th, but still remains 24.9% below the count at the end of last year....Baker Hughes reported that the total count of rotary rigs running in the US increased by 14 to 813 rigs this past week, which was still down by 267 rigs from the 1080 rigs that were in use as of the December 21st report of 2018, and 1,116 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began their attempt to flood the global oil market...
the number of rigs drilling for oil increased by 18 rigs to 667 oil rigs this week, which was the biggest oil rig increase since February 9 2018, but still left 198 fewer oil rigs than were running a year ago, and much less than 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 decreased by 4 rigs to 125 natural gas rigs, which was the least number of natural gas rigs deployed since December 9th, 2016, an hence a 3 year low for natural gas drilling, down by 72 gas rigs from the 197 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 to those rigs drilling for oil & gas, three rigs classified as 'miscellaneous' continued to drill this week; one on the big island of Hawaii, one in Washoe County, Nevada, and one in Lake County, California, in contrast to a year ago, when there were no such "miscellaneous" rigs deployed..
offshore drilling activity in the Gulf of Mexico increased by one rig to 24 rigs this week, with the addition of another rig in Louisiana waters...as a result, the 23 rigs that are drilling in Louisiana waters plus the one that was drilling offshore from Texas this week matches the Gulf of Mexico rig count of a year ago, when 23 rigs were drilling offshore from Louisiana waters and one rig was drilling in Texas waters...since there are no rigs deployed off US shores elsewhere, nor were there a year ago, the Gulf of Mexico count for both years is also equal to the national total in both cases..
in addition to the rigs drilling in offshore waters, one rig also started drilling through an inland body of water in southern Louisiana this week, the first such inland waters rig in 7 weeks...however, that was still down by 2 from the inland waters count of a year ago, when three such rigs were drilling in southern Louisiana...
the count of active horizontal drilling rigs was up by 13 rigs to 706 horizontal rigs this week, which was still 234 fewer horizontal rigs than the 940 horizontal rigs that were in use in the US on December 21st of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014....at the same time, the vertical rig count was up by 2 to 56 vertical rigs this week, but those were still down by 13 from the 69 vertical rigs that were operating during the same week of last year....on the other hand, the directional rig count was was down by 1 to 51 directional rigs this week, and those were down by 20 from the 71 directional rigs that were in use on December 21st of 2018...
the details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us 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 December 20th, the second column shows the change in the number of working rigs between last week's count (December 13th) and this week's (December 20th) count, the third column shows last week's December 13th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running before the same 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 21st of December, 2018...
as you can see from the above, the return of oil rigs to Texas's Permian and Eagle Ford was what made the difference this week, in contrast to the falling rig count we've seen over most of this past year...25 oil rigs were started up in those two basins alone, while 4 natural gas rigs were shut down at the same time, with three of those gas rigs coming out of the Eagle Ford, which has 3 natural gas rigs remaining, while the Permian saw it's only natural gas rig stacked...meanwhile, a net of ten rigs were added in Texas Oil District 8, or the core Permian Delaware, and another 5 rigs began operating in Texas Oil District 7B, which is usually thought of as east of the main Permian play but which now has 6 rigs deployed...with another rig added in New Mexico, we can figure that two of that total of 16 rigs were not actually targeting the Permian, but outside of digging thru the North America Rotary Rig Count Pivot Table (xls) for the individual well records, we can't say for sure which ones on the basis of the summaries we're provided with...outside of the natural gas rigs pulled from those two Texas basins, another gas rig was shut down in Pennsylvania's Marcellus, while a natural gas rig was added in a basin not tracked separately by Baker Hughes (most likely in Louisiana or Oklahoma, as those are the states with unaccounted for increases)...we should also note that another rig was shut down in Mississippi this week, and the state now has 4 rigs operating, which puts their count below the 6 rigs that were operating in Mississippi a year ago, a reversal from last week when the year ago total was lower, as the rig count in Mississippi has been quite volatile, ranging from 1 rig to 6 rigs and back again over the past year...
DUC well report for November
Monday of this past week saw the release of the EIA's Drilling Productivity Report for December, which includes the EIA's November data for drilled but uncompleted oil and gas wells in the 7 most productive shale regions...for the ninth month in a row, this report showed a decrease in uncompleted wells nationally in November, as both drilling of new wells and completions of drilled wells decreased.....for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 131 wells, falling from a revised 7,705 DUC wells in October to 7,574 DUC wells in November, which now represents 2.1% fewer DUCs than the 7,740 wells that had been drilled but remained uncompleted as of the end of November of a year ago...this month's DUC decrease occurred as 1,069 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during November, down by 36 from the 1,148 wells that were drilled in October and the lowest number drilled since June 2017, while 1,200 wells were completed and brought into production by fracking, a decrease of 155 well completions from the 1,355 completions seen in October and the least completions since January, and the largest drop in completions since February 2015....at the November completion rate, the 7,574 drilled but uncompleted wells left at the end of the month now represents a 6.3 month backlog of wells that have been drilled but are not yet fracked, up from the 5.6 month backlog of a month ago...
both oil producing regions and natural gas producing regions saw DUC well decreases in November, while 2 of the major basins saw minor DUC increases...the number of DUC wells remaining in the Oklahoma Anadarko decreased by 58, falling from 737 at the end of October to 679 DUC wells at the end of November, as 61 wells were drilled into the Anadarko basin during November while 119 Anadarko wells were being fracked....meanwhile, DUC wells in the Eagle Ford of south Texas decreased by 24, from 1,421 DUC wells at the end of October to 1,397 DUCs at the end of November, as 154 wells were drilled in the Eagle Ford during November, while 178 already drilled Eagle Ford wells were completed....in addition, the Permian basin of west Texas and New Mexico saw its total count of uncompleted wells fall by 20, from 3,579 DUC wells at the end of October to 3,559 DUCs at the end of November, as 468 new wells were drilled into the Permian, while 488 wells in the region were being fracked....at the same time, the drilled but uncompleted well count in the Niobrara chalk of the Rockies' front range decreased by 10 to 490, as 160 Niobrara wells were drilled in November while 170 Niobrara wells were completed....on the other hand, DUC wells in the Bakken of North Dakota increased by 2, from 758 DUC wells at the end of October to 760 DUCs at the end of November, as 100 wells were drilled into the Bakken in November, while 98 of the drilled wells in that basin were being fracked...
among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 25 wells, from 497 DUCs at the end of October to 472 DUCs at the end of November, as 81 wells were drilled into the Marcellus and Utica shales during the month, while 106 of the already drilled wells in the region were fracked....however, the natural gas producing Haynesville shale of the northern Louisiana-Texas border region saw their uncompleted well inventory increase by 4 wells to 217, as 45 wells were drilled into the Haynesville during November, while 41 Haynesville wells were fracked during the same period....thus, for the month of November, DUCs in the five major oil basins tracked by in this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) decreased by a net of 110 wells to 6,885 wells, while the uncompleted well count in the natural gas basins (the Marcellus, Utica, and the Haynesville) decreased by 21 wells to 689 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...
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Columbia Gas planning $135 million pipeline project for central Ohio-- Columbia Gas is proposing construction on a new $135 million pipeline to be built in central Ohio. The company says a new supply of gas is needed in order to keep providing reliable service to old and new customers in the region. The project, which is called the Columbus Northern Loop project, is designed to bring natural gas from pipelines east of where supplies are plentiful to areas north and west of Columbus. The company says several other recent projects have already been finished, which have set the stage for the Northern Loop project. A company spokesperson says the project will cost $135 million, but could not offer any further breakdown regarding exact costs, stating that the project is in the early planning stages. The final phase is currently in the planning stages and will run from southern Delaware County to southwest Union County, where it will connect to the existing gas distribution system. Another part of the initiative, called the Marysville Connector project, is designed to bring natural gas to Union County. Columbia Gas says it will meet with property owners, public officials and other community members during the construction. Crews are planning to conduct land surveys and meet with property owners to gather information regarding where the new line could be located. The company says it hopes to have approval for the complete project secured by 2021. Construction would start in 2022 and the gas lines would go into service sometime during that same year.
Exxon Well Blast Caused Huge Methane Leak in Ohio, Study Shows --An Exxon Mobil Corp. natural gas well in Ohio released more methane into the atmosphere during a blowout in 2018 than some countries do in a year, according to a team of American and Dutch scientists. Using data from satellites, the researchers found that a well explosion in Belmont county on Feb. 15 of that year discharged the potent greenhouse gas at a rate of about 80 tons an hour and lasted for nearly 20 days. The end result was more methane in the air than the oil and gas industries of France, Norway and the Netherlands emit over a 12-month period, according to a study published Monday in the Proceedings of the National Academy of Sciences. “We deeply regret the event occurred and have instituted systematic well design and monitoring procedures to prevent it from happening again,” Exxon said in response to questions. Methane is 84 times more conducive to global warming than carbon dioxide over a 20-year period. All the world’s biggest oil and gas companies, including Exxon, have pledged to reduce methane emissions, which they see as an Achilles Heel for the industry.Satellites are beginning to track large accidental emissions that until recently remained undetected. A similar study this year unveiled a giantmethane plume in Asia. “Our work demonstrates the strength and effectiveness of routine satellite measurements in detecting and quantifying greenhouse gas emission from unpredictable events,” the scientists said in the study. “In this specific case, the magnitude of a relatively unknown yet extremely large accidental leakage was revealed.”
A Methane Leak, Seen From Space, Proves to Be Far Larger Than Thought - The first satellite designed to continuously monitor the planet for methane leaks made a startling discovery last year: A little known gas-well accident at an Ohio fracking site was in fact one of the largest methane leaks ever recorded in the United States. The findings by a Dutch-American team of scientists, published Monday in the Proceedings of the National Academy of Sciences, mark a step forward in using space technology to detect leaks of methane, a potent greenhouse gas that contributes to global warming, from oil and gas sites worldwide. The scientists said the new findings reinforced the view that methane releases like these, which are difficult to predict, could be far more widespread than previously thought. “With a single observation, a single overpass, we’re able to see plumes of methane coming from large emission sources,” Scientists also said the new findings reinforced the view that methane emissions from oil installations are far more widespread than previously thought. The blowout, in February 2018 at a natural gas well run by an Exxon Mobil subsidiary in Belmont County, Ohio, released more methane than the entire oil and gas industries of many nations do in a year, the research team found. The Ohio episode triggered about 100 residents within a one-mile radius to evacuate their homes while workers scrambled to plug the well. At the time, the Exxon subsidiary, XTO Energy, said it could not immediately determine how much gas had leaked. But the European Space Agency had just launched a satellite with a new monitoring instrument called Tropomi, designed to collect more accurate measurements of methane. The satellite’s measurements showed that, in Ohio in the 20 days it took for Exxon to plug the well, about 120 metric tons of methane an hour were released. That amounted to twice the rate of the largest known methane leak in the United States, from an oil and gas storage facility in Aliso Canyon, Calif., in 2015, though that event lasted longer and had higher emissions overall.
New satellite technology reveals Ohio gas leak released 60K tons of methane - A new report revealed that the first satellite designed to monitor the earth with a new instrument called TROPOMI for methane leaks discovered that an accident at a fracking site in Belmont County, Ohio, in February 2018 resulted in one of the worst methane leaks ever recorded in the US. The methane released into the atmosphere from the Ohio fracking site exceeded the annual output of all but three European countries.The findings were published on Monday in the Proceedings of the National Academy of Sciences by scientists from the EDF, SRON Netherlands Institute for Space Research, Vrije Universiteit Amsterdam, the Netherlands Organization for Applied Scientific Research, and Utrecht University.The article is titled, “Satellite observations reveal extreme methane leakage from a natural gas well blowout.” Methane is a potent human-made greenhouse gas that is responsible for more than 25% of global warming. The oil and gas industry is the largest source of methane. In the first two decades after its release, methane is 84 times more potent than carbon dioxide.As the Environmental Defense Fund (EDF) reports, “Emissions from the Ohio event would have totaled about 60,000 tons. That figure is comparable to one-quarter of the entire state of Ohio’s reported annual oil and gas methane emissions.”The EDF continues: For example, a five-year series of studies organized by EDF recently concluded that emissions from the US oil and gas sector were a full 60% higher than EPA estimates. These factors underscore the importance of regular, widespread monitoring and measurement, and explain the rapidly growing interest in space-based instruments, which have the potential to provide comprehensive estimates of methane emissions, how much, and where. TROPOMI provides a more accurate way to track methane leaks. And bravo to the Dutch and American scientists for uncovering the truth about the extent of the Ohio leak’s damage. The bad news: This leak was incredibly damaging to the environment. Further, the fact that emissions from fossil fuels turned out to be much worse than we originally thought, in general, is extremely alarming.
Scientists Say Blowout At Ohio ExxonMobil Site Was Worst Methane Leak In US History - Details are finally being revealed about a terrible blowout that occurred last year at a natural gas site in Ohio. The incident happened at a site owned by an ExxonMobil subsidiary known as XTO Energy, and was reportedly one of the largest leaks of its kind in the history of the country.The full extent of the blowout was never reported by the company but was discovered later by a group of scientists looking over satellite data of the area. A team of 15 Dutch and American researchers found that a blowout occurred on Feb. 15, 2018, at a natural gas well in Belmont County, Ohio. The leak that caused the blowout was reportedly the result of controversial fracking practicing at the well. The data showed that the methane emission rate of the leak was about 120 ± 32 metric tons per hour, which is twice the emission rate of the largest accidental methal leak in United States history, the Aliso Canyon event that took place in California in 2015.At the time of the leak, over 100 residents who were within a mile of the site were forced to evacuate their homes as workers rushed to get the situation under control. Meanwhile, XTO Energy did their best to downplay the severity of the situation, and insist that it was not possible for them to calculate exactly how much methane was leaked.Steven Hamburg, EDF’s chief scientist and one of the new study’s co-authors told the New York Times that these types of incidents probably occur on a regular basis, and researchers are hoping to be able to better understand precisely when they do happen so they can form a better opinion about whether or not fracking natural gas is safe and environmentally friendly. “Is this a once a year kind of event? Once a week? Once a day? Knowing that will make a big difference in trying to fully understand what the aggregate emissions are from oil and gas,”Hamburg said.
A Fracking Explosion In Ohio Created One Of Worst Methane Leaks In History – WOSU - In February 2018, an explosion at a fracking site in Belmont County, near the Ohio-West Virginia border, forced residents within a 1-mile radius to evacuate their homes for several weeks. A study this week in the Proceedings of the National Academy of Sciences revealed that the accident resulted in one of the largest methane leaks ever recorded in the U.S. Powhatan Point fire chief Tom Nelms was among the first to respond after the explosion. "At that time, that day, there were probably 50-80 people," Nelms said. The fire lasted for three days, but some people weren't able to return to their homes for weeks. Nelms says he knew the methane leak was a big deal, but at the time no one really understood the magnitude of it. Until now. A satellite designed to monitor Earth for methane leaks revealed that accident was one of the largest leaks recorded in the U.S.“The blowout and the period of time it was occurring contributed 60,000 tons of methane to the atmosphere, and it represents in the case of Ohio one-quarter of the annual emissions coming from the oil and gas industry,” says Steven Hamburg, one of the study authors and the chief scientist at the Environmental Defense Fund.In fact, the Belmont County incident released more methane than the reported emissions of oil and gas industries of entire European countries.“Methane is responsible for one-quarter of the warming that we’re currently experiencing,” Hamburg says. “It’s a very potent but short lived green house gas, so reducing those emissions will have the biggest impact on slowing the rate of warming.” He says because of the nature of the odorless, colorless gas, it’s really hard to know when a leak has occurred. “None of us pay attention to that which we can’t see or measure,” he says. “We’re giving the tools to be able to measure and quantify emissions around the globe which we didn’t have before.” The fracking site is owned by Exxon Mobil subsidiary XTO Energy. In an emailed statement, a spokeswoman for Exxon says they “regret the incident occurred, and have instituted systematic well design and monitoring procedures to prevent it from happening again.” Hamburg says this satellite can be used not just to hold companies like Exxon accountable, but also to help them reduce their methane emissions. That, he says, is in everyone’s best interest.
Gulfport Energy Corporation Announces Divestiture of Non-Core Assets for a Total Value in Excess of $100 Million and Provides an Update on Accretive Debt Repurchases -- Gulfport Energy Corporation announced today that the Company has entered into agreements to divest certain non-core assets and provided an update on the continuation of discounted debt repurchases. Gulfport recently entered into a definitive agreement to divest its water infrastructure assets across its SCOOP position to a third-party water service provider. Gulfport expects to receive $50 million in cash upon closing and has an opportunity to earn potential additional incentive payments in excess of $50 million over the next 15 years, subject to Gulfport’s ability to meet certain thresholds which will be driven by, among other things, the Company’s future development program and future water production levels. The agreement contains no minimum volume commitments. The Company anticipates closing the transaction during January 2020. Scotiabank served as financial advisor to Gulfport on the divestiture of its water infrastructure assets. Separately, Gulfport also recently entered into an agreement to divest certain non-operated interests in the Utica Shale for approximately $29.0 million in cash. The Company anticipates closing the transaction prior to year-end 2019. In addition, the previously announced sale of certain overriding royalty interests associated with assets Gulfport held in the Bakken closed on December 11, 2019 and, net of purchase price adjustments, Gulfport received approximately $7 million of total proceeds.
The Plastics Pipeline: A Surge of New Production Is on the Way - - As public concern about plastic pollution rises, consumers are reaching for canvas bags, metal straws, and reusable water bottles. But while individuals fret over images of oceanic garbage gyres, the fossil fuel and petrochemical industries are pouring billions of dollars into new plants intended to make millions more tons of plastic than they now pump out. Companies like ExxonMobil, Shell, and Saudi Aramco are ramping up output of plastic — which is made from oil and gas, and their byproducts — to hedge against the possibility that a serious global response to climate change might reduce demand for their fuels, analysts say. Petrochemicals, the category that includes plastic, now account for 14 percent of oil use, and are expected to drive half of oil demand growth between now and 2050, the International Energy Agency (IEA) says. The World Economic Forum predicts plastic production will double in the next 20 years.“In the context of a world trying to shift off of fossil fuels as an energy source, this is where [oil and gas companies] see the growth,” said Steven Feit, a staff attorney at the Center for International Environmental Law, an advocacy group. And because the American fracking boom is unearthing, along with natural gas, large amounts of the plastic feedstock ethane, the United States is a big growth area for plastic production. With natural gas prices low, many fracking operations are losing money, so producers have been eager to find a use for the ethane they get as a byproduct of drilling.“They’re looking for a way to monetize it,“ Feit said. “You can think of plastic as a kind of subsidy for fracking.”America’s petrochemical hub has historically been the Gulf Coast of Texas and Louisiana, with a stretch along the lower Mississippi River dubbed “Cancer Alley”because of the impact of toxic emissions . Producers are expanding their footprint there with a slew of new projects, and proposals for more. They are also seeking to create a new plastics corridor in Ohio, Pennsylvania, and West Virginia, where fracking wells are rich in ethane. Shell is building a $6 billion ethane cracking plant — a facility that turns ethane into ethylene, a building block for many kinds of plastic — in Monaca, Pennsylvania, 25 miles northwest of Pittsburgh. It is expected to produce up 1.6 million tons of plastic annually after it opens in the early 2020s. It’s just the highest profile piece of what the industry hails as a “renaissance in U.S. plastics manufacturing,” whose output goes not only into packaging and single-use items such as cutlery, bottles, and bags, but also longer-lasting uses like construction materials and parts for cars and airplanes.
Environmentalists Question Future Gas Storage Hub In Light Of Federal Spending Language - Language included in the federal spending deal Congress passed this week could imperil a major natural gas storage project planned for the Ohio Valley that is seeking a $1.9 billion federal loan guarantee, according to environmental advocates. In June, an amendment by Democratic Reps. Ilhan Omar from Minnesota and Pramila Jayapal of Washington, sought to clarify requirements for the Department of Energy’s Title XVII Innovative Energy Loan Guarantee Program. The program was designed to finance clean energy and advanced technology projects. The amendment stipulates the program should only be used “for projects that avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases and employ new or significantly improved technologies as compared to commercial technologies in service in the United States upon issuance of the loan guarantee.” Language from the amendment was included in the guidance document, or manager’s report, associated with the $1.4 trillion spending package snaking its way through Congress this week. The newly-passed spending package, which the president is expected to sign, provides $29 million to the Title XVII program. A screenshot of the manager's report associated with the 2020 federal spending bill package, H.R. 1865. Some environmental groups argue the new language makes it clear the so-called Appalachian Storage and Trading Hub, a fossil fuel storage project, should not qualify. The project, which has been in the works for nearly a decade, would provide underground storage for natural gas liquids like ethane, which are used to make plastics and other products. It has the support of West Virginia's Congressional delegation and Justice administration. Project developers are currently seeking a federally-backed $1.9 billion loan under the Title XVII program.
Pennsylvania correlates natural gas fracking with quakes – Pennsylvania environmental regulators say there‘s a likely correlation between a natural gas company‘s fracking operation and a series of minor earthquakes in western Pennsylvania last year. The state‘s Department of Environmental Protection revealed its findings Friday. The quakes were recorded in April in Lawrence County, about 50 miles north of Pittsburgh and three-quarters of a mile from a natural gas well owned by Houston-based Hilcorp Energy Co. They were too weak to be felt by humans and no damage was reported. Fracking is a method to extract gas or oil from underground shale rock. It has been tied to earthquakes in neighboring Ohio and other states, but never in Pennsylvania, the nation‘s No. 2 natural gas-producing state. Hilcorp stopped fracking at the well pad after the quakes.
Pa. rule to tackle air pollution from oil and gas wells advances — A proposed rule to cut down on air pollution released by Pennsylvania’s thousands of existing oil and gas wells is expected to eliminate tens of thousands of tons of methane emissions each year — but it won’t target the greenhouse gas directly nor will it require leak surveys at the vast majority of the state’s older wells.The state’s environmental rule-making board voted to advance the proposal on Tuesday for a period of public comment that will open early next year.The long-anticipated rule was promised by Gov. Tom Wolf in 2016 as part of a broader strategy to shrink the amount of climate-warming gases wafting out of both new and existing equipment used for producing Pennsylvania’s oil and gas.Instead of directly curbing methane, the regulation builds on a federal rule that targets smog-forming gases called volatile organic compounds released from tanks, pumps, compressors and leaky parts.Natural gas is mostly methane — a greenhouse gas that is 86 times more damaging at trapping heat in the atmosphere than carbon dioxide in the first two decades after it is released. Tamping down methane leaks from the oil and gas sector is seen as a relatively quick, cheap and effective step among more dramatic shifts in energy use that will be necessary to avoid the worst effects of climate change.“The new regulations will help identify and prevent leaks from existing wells and infrastructure, while protecting the environment, reducing climate change and helping businesses reduce the waste of a valuable product,” Mr. Wolf said. Unprocessed gas from Marcellus and Utica shale wells in Pennsylvania can range from 75% to 98% methane and from 0.1% to 10% volatile organic compounds by volume, according to state Department of Environmental Protection data.Volatile organic compounds are building blocks for ground-level ozone pollution, or smog, “a public health and welfare hazard that contributes to asthma and other lung diseases such as emphysema and chronic bronchitis,” DEP Secretary Patrick McDonnell said.DEP says the proposed controls will reduce volatile organic compound emissions by about 4,400 tons per year and methane emissions by about 75,600 tons per year.The annual methane reductions are the greenhouse gas equivalent of taking 364,000 passenger vehicles off the road for a year.
Pa. DEP and major oil companies agree: Trump administration shouldn't roll back methane rules - Pittsburgh Post-Gazette - Several groups that often are at odds over environmental rules are on the same side when it comes to easing methane regulations at oil and gas sites.The Pennsylvania Department of Environmental Protection joined major oil and gas companies, environmental groups and lawmakers from both parties last week in urging the Trump administration not to go through with itsproposal to eliminate methane control requirements from well sites and pipelines across the country.The U.S. Environmental Protection Agency is proposing to roll back rulesadopted in 2016 that require companies to identify and stop methane leaks from new and modified oil and gas production, pipeline and storage equipment.The agency said existing controls on a separate class of chemicals that is also present in oil and gas — called volatile organic compounds, or VOCs — make direct regulation of methane redundant and unnecessary.The agency is also proposing an alternate rule to exempt the oil and gas storage and transmission sector from both the methane and volatile organic compound regulations.But major companies that would see restrictions lifted on their operations if EPA finalizes the rule — including Royal Dutch Shell, ExxonMobil, Total, Equinor and Canonsburg-based Equitrans Midstream — wrote that they want national rules directly targeting methane. Several of the companies said that easing methane regulations will erode public confidence in natural gas as a cleaner fossil fuel at a time when addressing climate change is an international priority. Comments on the proposals were due last week.
U.S. Chamber of Commerce warns of 'catastrophic' consequences of a potential fracking ban in Pa. - A new report from the U.S. Chamber of Commerce warns that Pennsylvania could lose as many as 600,000 jobs if the state ever moved to ban fracking, the controversial practice used to extract natural gas from the earth.Such a policy would have “catastrophic” consequences, according to Marty Durbin,president of the chamber’s Global Energy Institute.The study, which does not take into account climate or public health concerns, concluded Keystone State would lose 65,000 oil and natural gas jobs alone between 2021 and 2025, and take a $261 billion hit to the state GDP. That’s roughly a third of the state’s current GDP, according to federal data.The document also looked at a number of other oil and gas-producing swing states that will play a critical role in the 2020 elections. Nationally, the study predicted higher energy prices, a $7.1 trillion GDP hit, and 19 million jobs lost by 2025, if the U.S. banned the industrial process. The numbers include both direct and indirect effects. “In 2016, the notion was considered an extreme position, but today unfortunately we’ve seen many mainstream presidential candidates join in,” Durbin said in a press call.
DEP Sounds Alarm Over Revised Climate Change Predictions - In a new sobering report on climate change, the state Department of Environmental Protection on Thursday suggested the impact of rising seas could be much more dramatic along the New Jersey coast than previously projected, and twice as severe as elsewhere on the globe. The study, commissioned by DEP and prepared by Rutgers University and leading climate-change experts, portrayed a scenario that might force state policymakers to take more aggressive actions to deal with rising ocean levels. Whether that includes potential limits on building in coastal areas — as advocated by some conservation groups — remains to be seen. But the increasing likelihood coastal areas will be flood-prone in the future may boost those prospects. ‘’New Jersey has much to lose if we do not act quickly and decisively to adapt to the realities of climate change,’’ said DEP Commissioner Catherine McCabe. “These projections now serve as important baselines for developing policy directions, including changes to land use regulation that New Jersey adopt to address these challenges.’’ The report examines a variety of scenarios, based on differing greenhouse-gas emission rates. The highest — consistent with current global greenhouse gas-emission scenarios — projects a rise in sea levels ranging from 2.3 feet to as much as 6.3 feet by 2100, under the most aggressive carbon-pollution scenario. Perhaps more worrying, McCabe suggested so much greenhouse gas has already been spewed and baked into global warming predictions that severe effects by mid-century are inevitable.
Permanent ban on fracking proposed - A bill introduced Friday by Sen. Jennifer Metzger, D-Middletown, in the state Senate would permanently ban horizontal drilling, hydraulic fracturing and gelled propane hydraulic fracturing in New York state. New York is home to the Marcellus Shale, a source of oil and gas that also lies beneath much of Ohio, West Virginia and Pennsylvania. Roughly 18,700 square miles of the shale formation are in New York state. Metzger’s legislation also bans a practice called gelled propane fracturing, which uses propane gas because it is heavier than air.Metzger writes in her legislative justification that the legislation codifies the findings of the state DEC’s 2015 State Environmental Quality Review act findings statement on horizontal drilling and hydraulic fracturing. Metzger said since 2015, there have been additional studies that show public health harms related to hydraulic fracturing and horizontal drilling, including increased hospitalization rates, respiratory illness, reproductive risks including low birth weight and preterm births and dangers to at-risk populations. “The evidence is clear: Horizontal drilling and HVHF pose significant and unacceptable risks to New York’s drinking water, air quality, environment, climate, and public health,” Metzger wrote.“The legislative ban on Horizontal Drilling and High-Volume Hydraulic Fracturing (HVHF) and Gelled Propane Hydraulic Fracturing (GPHF) aligns with New York’s long tradition of pioneering leadership on environmental protection, public health, and climate change.” Metzger also cites the 2016 EPA report, “Hydraulic Fracturing for Oil and Gas: Impacts from the Hydraulic Fracturing Water Cycle on Drinking Water Resources in the United States,” as evidence of environmental issues. In 2010, Congress asked the EPA to investigate the safety of hydraulic fracturing. A draft report was issued in 2015 followed by the final report in 2016.
U.S. denies N.Y. rehearing request on Constitution natgas pipe permit - (Reuters) - U.S. energy regulators have denied New York’s request for a rehearing on its decision that state environmental regulators waived their authority to issue or deny a water quality certification for Williams Cos Inc’s Constitution natural gas pipeline: * The U.S. Federal Energy Regulatory Commission (FERC) last week reaffirmed its prior decision, which New York had challenged. FERC had ruled that the New York Department of Environmental Conservation (NYDEC), because it took more than a year to reach a decision, waived its authority under section 401 of the U.S. Clean Water Act. * Officials at the NYDEC and Williams were not immediately available for comment. * Analysts at Height Capital Markets in Washington, D.C., said “the project still has a long road ahead given New York’s resistance to fossil fuel infrastructure development.” * Constitution and other gas pipelines into New York have been stuck in a nationwide battle between energy companies seeking more pipelines and environmental groups and New York Governor Andrew Cuomo, who favor boosting investment in energy efficiency and renewables. * In addition to Constitution, other gas pipelines have also been held up due to state opposition, including National Fuel Gas Co’s Northern Access from Pennsylvania to New York and Williams’ Northeast Supply Enhancement from Pennsylvania to New Jersey and New York. * Constitution is designed to transport 0.65 billion cubic feet per day of gas 125 miles (201 kilometers) from the Marcellus shale in Pennsylvania to New York. In 2018, New York state consumed about 3.7 bcfd of gas, up from 3.4 bcfd in 2017, according to federal energy data.
Fracking ban: Massive win or missed opportunity? - Tuesday marked five years since Gov. Andrew Cuomo’s administration first said it would ban large-scale hydraulic fracturing, the controversial method used to free gas from underground rock formations like the Marcellus Shale that stretches across the Southern Tier and Catskills. New York’s decision made it the first shale-bearing state to back a ban. And it put an end to a remarkable six-year period of debate, study and protest, where activists, landowners and gas companies clashed everywhere from small-town board meetings in the Southern Tier to the halls of power in Albany. The announcement — slowly unveiled at the state Capitol during a two-hour meeting of Cuomo’s cabinet a month after he was re-elected — was a huge victory for environmentalists and activists who galvanized across the state to fight for a ban. They warned the chemicals injected deep underground in the fracking process, as well as the associated boost in truck traffic and industrial activity, had the potential to wreak havoc on the state’s pristine waters, air and landscape. This is the story of how a single governmental decision five years ago has helped shape energy policy in New York and continues to affect the landowners, activists, regulators and energy industry representatives who spent years working to make their case.
U.S. natgas futures rise 2% on cold forecasts for this week and in January - U.S. natural gas futures rose 2% on Monday on forecasts confirming cold weather and high heating demand this week, despite an outlook showing next week will be warmer than previously expected. Traders noted the latest weather forecast also called for a likely return of cold in January. Front-month gas futures for January delivery on the New York Mercantile Exchange (NYMEX) rose 4.5 cents, or 2.0%, to settle at $2.341 per million British thermal units, the highest since Dec. 5. For the year, the front-month was on track to drop about 20%, which would be its third annual decline in a row and its biggest fall since 2017, when the contract lost about 21%. Meteorologists projected the weather in the U.S. Lower 48 states will turn from colder than normal from Dec. 17-19 to warmer from Dec. 21-29 before turning colder again on Dec. 31. That is much warmer than last week, when the outlook was for colder from Dec. 17-22 and Dec. 27-28. With the weather expected to moderate, Refinitiv predicted demand in the Lower 48 states, including exports, would fall from an average of 127.0 billion cubic feet per day this week to 121.4 bcfd next week. That is much lower than Refinitiv’s forecast on Friday of 127.4 bcfd for this week and 127.6 bcfd for next week. Gas flows to liquefied natural gas (LNG) export plants rose to 8.0 bcfd on Sunday from 7.9 bcfd on Saturday, according to Refinitiv data. That compared with an average of 8.0 bcfd last week and an all-time high of 8.2 bcfd on Dec. 8 with the ramp-up of new liquefaction trains at Freeport LNG’s plant in Texas and Cameron LNG’s plant in Louisiana. Separately, Kinder Morgan Inc’s Elba Island LNG export plant in Georgia sent out its first cargo over the weekend. Pipeline flows to Mexico, meanwhile, eased to 5.0 bcfd on Sunday from 5.1 bcfd on Saturday, according to Refinitiv data. That compares with an average of 5.4 bcfd last week and an all-time daily high of 6.2 bcfd on Sept. 18.
Warmer Weather Hits Natural Gas Prices Again --The natural gas market did well in shrugging off warmer changes in the weather forecast since last week, but yet another day with a lowering of projected weather demand finally sent prompt month prices back under the 2.30 level, at least as of this writing. Daily warmer forecast adjustments have been a common theme recently, with last night's weather models making no exception to this "rule". Last night's forecast demand profile from the GEFS and ECMWF EPS, compared to 24 hours prior: All of the warmer changes now have us projecting this December's total demand (GWDD count) to be very close to the warm December one year ago. This has been quite the change from the anomalous cold seen back in November, but the warming was something we had alerted clients to even back in early November, as the cold pattern was in full stride. With less than two weeks left in December, and the holidays looming, attention is now on January, and whether cold makes a triumphant return to give a boost to natural gas prices, or if warm continues to win out.
US natgas production projected to slow considerably - The just-released EIA December Drilling Productivity Report (DPR) forecasts natural gas production from the U.S.’s seven most productive basins/plays will rise just 77 million cubic feet per day from December to January – a month-to-month increase that in previous reports neared 1 billion cubic feet per day. Total gas production from the seven basins/plays in January will creep up to 85.60 billion cubic feet per day (Bcf/d), from 85.52 Bcf/d in December, the Energy Information Administration’s monthly projection shows. (All numbers are rounded.) The oil and gas industry slowdown manifests itself in another jaw-dropping way within the new DPR, Kallanish Energy reports. Gas production in Appalachia (the Marcellus and Utica Shale plays combined) is expected to actually drop 74 Mmcf/d from December to January. Total production will slide to 33.43 Bcf/d, from 33.51 Bcf/d. Other basins/plays seeing production dialed back from December to January include the Anadarko, down 132 Mmcf/d, to 7.52 Bcf/d, and the Eagle Ford Shale play, down 69 Mmcf/d, to 6.78 Bcf/d in January. The Permian Basin’s natural gas production during the December-to-January timeframe is projected to increase by 213 Mmcf/d, to 17.08 Bcf/d, from 16.86 Bcf/d in December. The Haynesville Shale is expected to rise 123 Mmcf/d from December to January, to 12.09 Bcf/d, from 11.96 Bcf/d. The Niobrara gas production is projected to increase 13 Mmcf/d, to 5.59 Bcf/d, from 5.58 Bcf/d. Bakken natural gas production should barely move, according to the new DPR, increasing just 3 Mmcf/d, to 3.12 Bcf/d in January from 3.12 Bcf/d in December.
US working natural gas in underground storage decreases by 107 Bcf: EIA — US working natural gas volumes in underground storage dropped by 107 Bcf last week, which was more than market expectations, as NYMEX Henry Hub futures made only modest gains following the announcement. Storage inventories fell to 3.411 Tcf for the week ended December 13, the US Energy Information Administration reported Thursday morning. The pull was more than an S&P Global Platts' survey of analysts calling for a 93 Bcf draw. Responses ranged for a draw of 80 Bcf to 102 Bcf. The withdrawal was below the 132 Bcf pull reported during the corresponding week in 2018, as well as the five-year average draw of 112 Bcf, according to EIA data. As a result, stocks were 619 Bcf, or 22.1%, above the year-ago level of 2.793 Tcf and 9 Bcf, or 0.3%, below the five-year average of 3.420 Tcf. The balance-of-winter NYMEX Henry Hub strip continues to reflect an oversupplied market, although historically the market has been quick to rebalance when prices move too much in either direction. Between last week and this week, prices got as high as $2.31/MMBtu Monday, but quickly retreated on mild weather forecast updates. The draw was more than the 73 Bcf pulled from working gas in storage reported for the week ended December 6. US supply-demand fundamentals for the week ended December 13 were roughly 3.4 Bcf/d tighter than the week before as colder weather boosted demand from the residential and commercial and power sectors while LNG feedgas demand continued higher, according to S&P Global Platts Analytics. Balances moved much tighter on a rise in weather-driven heating demand. Total supplies are up 0.7 Bcf/d on the week to an average 96.6 Bcf/d, with much of the increase driven by a rise in net Canadian imports to meet higher demand. Downstream, total demand is up 7.4 Bcf/d on the week at an average 116.8 Bcf/d, with gains driven primarily by higher home heating demand and a roughly 1.6 Bcf/d increase in power plant deliveries, according to Platts Analytics. LNG feedgas demand hit new highs in recent weeks on increased deliveries in the Gulf Coast region, setting a record of 8.5 Bcf/d Wednesday. LNG feedgas demand is up 0.1 Bcf/d for the week ending December 20 compared with the week prior. A Platts Analytics forecast calls for a massive draw of 143 Bcf for the week ending December 20, which would be more than 40 Bcf stronger than the five-year average.
EIA's 107 Bcf Storage Draw Trims Losses for Natural Gas Futures - The U.S. Energy Information Administration (EIA) on Thursday morning reported a massive 107 Bcf withdrawal from natural gas storage for the week ending Dec. 13.The reported draw was far above consensus estimates of a pull in the low 90s Bcf and was even several Bcf above the highest projection in market surveys. However, the 107 Bcf withdrawal was still far below the 132 Bcf withdrawal EIA recorded in the year-ago period and several Bcf below the 112 Bcf five-year average draw.Nevertheless, the triple-digit pull took the natural gas market by surprise, with prices responding immediately to the latest EIA data. About five minutes before the 10:30 a.m. ET report, the January Nymex gas futures contract was trading at $2.257, down 2.9 cents from Wednesday’s settle, as weather models extended the coming span of mild temperatures further into January. As the EIA print crossed trading desks, however, the prompt month strengthened to trade less than penny lower at $2.278. February was also nearly flat at $2.261. By 11 a.m., the January contract was just two-tenths of a cent lower at $2.284. February was up fractionally to $2.266. “A massive draw. Way beyond expectations,” Ahead of the report, a Reuters poll of 16 analysts estimated withdrawals ranging from 68 Bcf to 102 Bcf, with a median draw of 92 Bcf. NGI expected to see a draw of 86 Bcf.Broken down by region, the Midwest reported the largest withdrawal of 40 Bcf, and the East came in second with a 29 Bcf pull, according to EIA. The South Central withdrew 26 Bcf out of storage, including a stout 24 Bcf pull from nonsalt facilities and a 2 Bcf pull from salts.“The South Central is the biggest miss here,” said independent weather forecaster Corey Lefkov. “Don’t mess with Texas.”Total working gas in storage as of Dec. 13 stood at 3,411 Bcf, 618 Bcf higher than the year-ago period and 9 Bcf below the five-year average, according to EIA.Looking ahead, the combination of low cash prices, max power burns and record liquefied natural gas demand could make for some volatile days ahead. However, “if we torch up the first two weeks of January, my view is that weather always wins in wintertime,” Paltrinieri said.NatGasWeather meteorologist Rhett Milne agreed and said although weather models are starting to tease at colder air arriving in early January, it’s “going to be a painful stretch of weather to get through during the next 10-12 days.”
Elizabeth Warren’s Massachusetts Loves Natural Gas – Forbes - Elizabeth Warren has pledged to ban fracking when she becomes president of the United States. This would cause real problems for her home state. The Massachusetts economy depends on imported natural gas. In a single year, methane supplies around 465 trillion Btu of energy, or some 50% more than second place gasoline. Massachusetts, however, produces no natural gas itself, making energy imports as integral to the state’s functioning as anywhere. Since the 1970s, Massachusetts has seen a steady shift to heating with natural gas in households, from a greater reliance on heating oil. Especially in the shale revolution era since 2008, natural gas is cheaper, less volatile, and has lower greenhouse gas emissions. Over 1.5 million homes in Massachusetts use gas as the primary source of heating.Mass.gov reports that over 50% of Massachusetts households use gas for heating, with 15% using electricity, which is becoming more gas-based as well. Oil though still supplies 27% of heating, meaning that there is room for more gas when it is cold outside, via both gas heating and electricity heating. Natural gas is surely a beloved product in The Bay State: on average per capita, Massachusettsans use 64,000 cubic feet of gas each year. Up from 50% a decade ago, natural gas supplies almost 70% of Massachusetts’ electricity, one of the highest gas reliances in the country and nearly double the national average of 38% (heck, gas producing juggernaut Texas is only at 50%!). This extension of gas power’s share in Massachusetts, however, has nicely helped reduce the state’s power sector CO2 emissions by 45% since 2010. Eight of the top 10 generation plants in Massachusetts are gas-based. In contrast, wind supplies less than 1%, with solar at 15%. And officials in Massachusetts have outlined a goal to end the sale of gasoline vehicles in the state by 2040. The goal for more electric cars, for instance, could surge the state’s gas power demand by 40-50%.
Natural Gas And Oil Industry Stalwarts Fueling Biden Campaign - Former Vice President Joe Biden, 77, has a multitude of people tied to the oil and gas industry on his campaign staff, according to a new report by Real Sludge. Heather Zichal, the climate advisor for the Biden campaign, used to be a board member at Cheniere Energy, a natural gas company. Andrew Goldman, a former adviser to Biden and a current fundraiser, is the co-founder of natural gas company Western LNG. And Unite the County, the SuperPac that is supporting him, has a former gas lobbyist on its board, Sludge said. But the most dangerous connection to the gas and oil industry is Biden’s campaign co-chairman Louisiana Democratic Rep. Cedric Richmond. Richmond has been a steady vote in favor of the expansion of the production and exporting of natural gas and oil. He voted in favor of the Keystone XL pipeline and “voted in favor of a bill from Rep. Bill Johnson (R-Ohio) that would undermine the environmental review process for natural gas pipelines by stating that all pipelines that transport 0.14 billion cubic feet per day or less should be immediately approved,” Sludge reported. Richmond also voted for bills to exempt cross-border pipelines from environmental review, reverse the crude oil export ban, expand offshore drilling and block the EPA from regulating the disposal of toxic coal ash. “This is all deeply concerning,” Stephen O’Hanlon, the communications director of Sunrise Movement told Sludge. “No presidential candidate is going to get taken seriously on climate change if they’re funded by and taking advice from current and former fossil fuel executives, and choosing to take cues from members of Congress who’ve put the interests of oil and gas donors above the health and well-being of their constituents.”
Joe Biden's Campaign Co-Chair is a Big Oil and Gas Booster - Former Vice President Joe Biden has surrounded himself with people tied to the natural gas industry for his 2020 presidential campaign. His climate adviser, Heather Zichal, is a former board member of natural gas company Cheniere Energy, while one of his fundraisers is a cofounder of natural gas company Western LNG. In addition, the super PAC supporting his candidacy has a former gas lobbyist on its board. But there is another Biden campaign figure whose oil and gas industry connections have not been examined: Louisiana Democratic Rep. Cedric Richmond, whom Biden selected in May to serve as his campaign co-chairman. Despite representing a low-lying Louisiana district that could be one of the areas in the U.S. most immediately impacted by climate change, Richmond has voted reliably in favor of expanding production and exports of natural gas and oil. His voting record is one of the most fossil fuel industry-friendly of all Democrats in Congress. In 2015, Richmond was one of 28 House Democrats to vote in favor of approving construction of the Keystone XL pipeline, which will transport crude oil from Alberta, Canada to the Gulf Coast. Last year, he voted in favor of a bill from Rep. Bill Johnson (R-Ohio) that would undermine the environmental review process for natural gas pipelines by stating that all pipelines that transport 0.14 billion cubic feet per day or less should be immediately approved. Richmond, a member of the moderate New Democrat Coalition, has voted in favor of many Republican bills opposed by environmentalists over the years, including Rep. Markwayne Mullin’s (R-Okla.) bill to exempt cross-border pipelines from environmental review, Rep. Joe Barton’s (R-Texas) billto reverse the crude oil export ban, Rep. Doc Hastings’ (R-Wash.) bill to expand offshore drilling, and Rep. David McKinley’s (R-W.V.) bill to block the Environment Protection Agency from regulating the disposal of toxic coal ash.
EQT Head Tells W.Va. Lawmakers Natural Gas Drillers May Need Some ‘Help’ - The head of natural gas driller EQT Corporation told members of the West Virginia Legislature the company intends to ramp up the size of drilling projects to hedge against projected low natural gas prices. To accomplish that, the company may need help from lawmakers when it comes to "fractured mineral interests." Toby Rice, EQT’s new president and CEO, testified Monday to the Joint Committee on Natural Gas Development and Joint Standing Committee on Energy. “Gas prices are down. It has a big impact, the difference between $2.75 gas and $2.50 gas,” he said. “A lot of this development doesn’t work as well at $2.50 gas.” EQT is one of the largest natural gas producers in the country, with a focus in Pennsylvania, Ohio and West Virginia. Rice told lawmakers the company is moving toward “combo development,” or the practice of drilling multiple wells on multiple well pads adjacent to one another. “This allows us to do economies of scale in terms of low gas prices,” he said. Rice argued larger natural gas developments will ultimately be less disruptive to local communities because multiple wells will be drilled simultaneously. He said EQT sees “room for a lot more development in West Virginia.” But to accomplish that, Rice told the Legislature that EQT and other natural gas drillers may need “help at some point.” Large-scale development may require the company to sign deals with up to 1,000 landowners, instead of a few hundred. In West Virginia, often rights to the surface of a property and minerals below it have been severed and do not belong to the same person. Mineral rights are sometimes owned by multiple people. In 2018, the Legislature passed a co-tenancy bill that lessened the burdens on drillers by allowing companies the ability to enter into leases with co-tenants owning 75 percent of the interest in the minerals. Rice said he expects fractured ownership could be an issue to the company’s larger development strategy in some cases, “and maybe co-tenancy doesn’t get us there.”
Lack of Safety System Led to Fatal West Virginia Blasts, CSB Says
- Safety board’s report points to reactive chemical hazards
- Federal rules don’t require comprehensive safety management system
The U.S. Chemical Safety and Hazard Investigation Board blames the lack of an effective safety management system for a pair of explosions that killed three workers at a Midland Resource Recovery facility in Philippi, W.Va., in 2017. The CSB released its final investigation report Dec. 17 on the two pressure vessel explosions that occurred at the natural gas odorization contractor. Midland’s founder and president was one of the workers killed in the explosions, which also injured a worker employed by another contractor. Midland performs odorant work on client sites, transports odorant and odorant equipment, and decommissions and removes obsolete odorization equipment from client sites.
Dominion still sees U.S. Atlantic Coast natgas pipe online in 2022 despite Morgan Stanley's doubts - (Reuters) - Dominion Energy Inc said on Monday it was confident it will complete the proposed $7.3-$7.8 billion Atlantic Coast natural gas pipeline from West Virginia to North Carolina by early 2022, in response to a prediction by investment bank Morgan Stanley that a court decision would likely scuttle the project. “We remain committed to completing the project for the good of our economy and the environment,” Dominion spokesman Aaron Ruby said, noting the company expected to complete construction in late 2021 with final in-service in early 2022. Dominion made its comments after Morgan Stanley said in a report that “Atlantic Coast will likely not be completed given the Fourth Circuit’s likely (in the bank’s view) rejection, for the third time, of a newly issued Biological Opinion and Incidental Take Statement that we expect to come by the first quarter of 2020.” In July, the U.S. Fourth Circuit Court of Appeals vacated the Fish and Wildlife Service’s (FWS) second Biological Opinion because the court found the agency’s decisions were arbitrary and would jeopardize the Rusty Patched Bumble Bee and other endangered species. Federal agencies use Biological Opinions when authorizing projects that could adversely affect threatened or endangered species or critical habitats, and issue take statements to limit the number of those species that could be harmed. Ruby said Dominion expects the FWS will issue a new Biological Opinion in the first half of 2020. Dominion suspended construction of the 600-mile (966-kilometer) project in December 2018 after the Fourth Circuit stayed the FWS’ second Biological Opinion. Dominion and its partners, Duke Energy Corp and Southern Co, are also working through a dispute over where the pipeline can cross the Appalachian Trail. The U.S. Supreme Court has agreed to take up the Appalachian Trail case, which is also important for the construction of EQM Midstream Partners LP’s Mountain Valley gas pipe from West Virginia to Virginia. Analysts at Height Capital Markets said they expect the Supreme Court will issue a ruling in May or June 2020. Analysts at Morningstar said they expect the Appalachian Trail dispute will be resolved by a favorable Supreme Court decision or an administrative or legislative solution.
Dominion seeks permits to build new power plant in Chesterfield - Dominion Energy has filed an air permit application with the Virginia Department of Environmental Quality to build a $600 million combustion turbine peaking power plant in Chesterfield County near Dutch Gap. The four proposed natural gas peaking units – also known as peakers – would only produce electricity during periods of high demand. The plant would generate nearly 1,000 megawatts, enough to power 250,000 homes, and would be built in two phases. The first phase would be operational by spring 2023 and the second phase would be operational by spring 2024. According to Dominion officials, the new plant is necessary to supplement energy produced by renewable resources during periods when energy usage is highest, such as the early morning and early evening hours. For example, solar photovoltaic energy is generated while the sun is shining, but drops off as electricity demand peaks in the evenings when people return home from work and use electric appliances. As the utility company moves toward renewable energy and shutters coal-fired units, officials say peaking units are needed to augment the power generated by renewable resources – those that essentially have an endless supply, such as wind, solar and geothermal – when there’s a lack of sunlight or low wind speed. .
Kalamazoo County parks ban oil, mineral and other natural resource extraction - -- After Kalamazoo County Park Commission was approached by an oil company with an interest in geotechnical exploration at Scotts Mill County Park last year, the county took a look at what preservation policies were needed to protect the future of the parks. On Tuesday, Dec. 17, the county commissioners unanimously approved an 11-point list of preservation efforts outlined by an oil and gas subcommittee and Parks Director David Rachowicz. “For them [the board] to give us clear direction and then empower us to go out and do it and support us along the way, I think we’re going to end up with something that is really a great thing for Kalamazoo County," Rachowicz said. The county has never allowed exploration, production, or extraction of natural resources in parks, Rachowicz said. However, being approached by the oil company brought attention to potential future threats to preserving that county land, and prompted action from commissioners like Vice Chairperson Tracy Hall. “Our parks are our crown jewels and we need to protect them as best we can,” Hall said. The county commissioner said she was surprised with how forward-thinking the policy could be, rather than functioning solely as an immediate solution to oil proposals. Hall and Rachowicz agreed that the policy was designed to make sure there were no unintended consequences in the future that would compromise the park system.
What a Line 5 shutdown could mean for Michigan energy - If a state lawsuit succeeds in shutting down Enbridge Energy Co.’s controversial Line 5 oil pipeline, Michigan consumers could experience price hikes for fuel, natural gas and propane while increasing the risk of a spill on land, industry experts said. Fuel industry officials and independent experts estimate closing the dual pipelines beneath the Straits of Mackinac would cut off not only thousands of gallons of propane a day in the Upper Peninsula but also light crude shipments to Detroit, Toledo and Sarnia, Ontario, refineries that convert the oil into gas, diesel and jet fuel. The 66-year-old pipeline has been targeted for shutdown by environmentalists who fear the implications of a spill in the Straits of Mackinac could be similar to the 2010 oil spill near the Kalamazoo River in Marshall. Enbridge ended up paying $1.2 billion for the cleanup and restoration of the southern Michigan area that experienced the largest inland oil spill in U.S. history. Michigan Attorney General Dana Nessel's lawsuit seeking the shutdown of Line 5 is pending before an Ingham County circuit judge. In the meantime, Enbridge continues pre-engineering work on a planned $500 million tunnel to house the controversial pipeline, saying it would take four years to build and nearly eliminate any environmental impact of a potential rupture. A cutoff of the Straits segment would likely have an unknown impact on regular unleaded gas prices in Michigan depending on market conditions, according to industry experts. But it would be more likely to spike the price of propane, which many residents in the Upper Peninsula and northern Michigan rely on for heat during the six-month-long cold season. Such a shortage would require a flotilla of trucks to replace the 540,000 barrels-a-day capacity of Line 5, a logistical nightmare that would drive up costs and increase the likelihood of an oil spill on Michigan roads, Enbridge and independent energy analysts said. The price increase for Michigan consumers likely would depend on other circumstances in the industry and the timing of a potential shutdown, said Tom Kloza, global head of energy analysis for the Oil Price Information Service, an energy consulting firm based in Rockville, Maryland. Environmental groups have questioned the dire industry predictions, arguing that Line 5 is not critical energy infrastructure and could be replaced easily by a handful of extra trucks or rail cars. The shutdown would have a minimal effect on cost, they contend. “While you don’t want to see any oil and gas spill, if a truckload spills, it’s limited to one truckload,” said Sean McBrearty, state legislative and political director for Clean Water Action. Relative to a pipeline spill in the Straits, he said, “one truck spill is orders of magnitude smaller."
'We could get by' — U.P. considers alternatives to Line 5 propane - Tribal nations, Michigan’s governor and environmental groups are all calling for a shutdown of Line 5: the pipeline that carries oil underneath the Straits of Mackinac. They say the pipeline, which is 60-plus years old, poses too great a risk of rupturing. The pipeline doesn’t just carry oil — its liquid mix includes propane that is delivered to Michigan’s Upper Peninsula. So, what would happen to U.P. households using propane if Line 5 shut down? The majority of households in the Upper Peninsula heat their homes with natural gas, but it’s often not available in rural areas, like where James Ball lives. About 18 percent of U.P. households heat primarily with propane. Some of those are summer cottages or hunting camps, but many are not. It isn’t unheard of for a family to spend $2,000 filling their propane tanks over a winter. Ball says one winter a few years ago, there was a propane shortage in the U.P. Many states in the Midwest declared propane emergencies in the winter of 2013-14. Farmers needed a lot of propane for crop drying during the harvest season of 2013. There were also infrastructure issues, and it was just a really cold winter. “When I called to order propane, they said that there was a possibility that it would not be available by the time that my tank ran out,” says Ball. It concerned him so much that now, he only uses propane as a last resort. He put a wood pellet stove in his basement, and he also has a standard wood stove in his living room. The bags of pellets weigh 40 pounds each, and he has to haul them to the basement. Ball is worried about how that will work for him as he gets older. “There'll come a time when I'll no longer be able to cut wood,” he says. “There's costs. Pellets are fairly expensive. You have to transport those and haul them in.” He might have to rely on propane again, and he’s concerned about anything that might change its price. That includes a possible shutdown of Enbridge’s Line 5, which delivers propane to a facility just a few miles from his house.
Public forum in Duluth on Enbridge Line 3 - Minnesota regulators will hold a forum in Duluth on Thursday for members of the public to comment on additions to the state’s environmental review for Enbridge Energy’s plan to replace its Line 3 crude oil pipeline across northern Minnesota. The update became necessary after the Minnesota Court of Appeals declared in June that the previous version was inadequate because it failed to specifically address the potential impacts of a spill into the Lake Superior watershed. The state Commerce Department then conducted additional modeling, and concluded that there’s no serious threat to Lake Superior if crude oil ever leaks from the pipeline. Line 3 carries Canadian crude from Alberta to Enbridge’s terminal in Superior, Wisconsin. The replacement would double the capacity of the existing line, which was built in the 1960s and is increasingly subject to cracking and corrosion. Environmental and tribal groups that have been fighting the project plan to make their opposition heard at the meeting, The Public Utilities Commission has imposed strict security protocols to try to prevent disruptions.
Pre-filed bill aims to ban offshore drilling for good from S.C. coast - Offshore drilling has become a big topic on the state, local and national levels, and one South Carolina state senator has taken a step to keep offshore drilling far away from our coastline. South Carolina state Sen. Chip Campsen (R) said after working in the Gulf of Mexico for many years, he believes people don’t understand the reality of having offshore drilling along our coast and what this could do to the communities near the beach. “That if you’re going to have offshore drilling, your coast is going to be industrialized. There is a massive amount of onshore infrastructure that is needed to support offshore drilling,” Campsen said. Campsen believes this type of growth would harm the $17 million tourism industry, which is the main source of revenue for the coastal areas of the state. “Refineries and tank farms and oil spills don’t go well with the vacationers on the Grand Strand beaches. Louisiana, Texas, and parts of Alabama decided we’re going to dig for oil. They don’t have the tourism, the coastal tourism, we have, they don’t have the coastal real estate values we have because that oil industry affects all of that," Campsen said. Earlier this year, a provision was passed by the state Senate, preventing the Department of Health and Environmental Control or local government entities to use funds to approve licenses or permits associated with offshore drilling or for seismic testing. This bill was passed on a year-to-year basis.
Deepwater Gulf enters next phase of growth - For the first time since the Deepwater Horizon tragedy of a decade ago, the British oil major BP will ship a major oil platform to the Gulf of Mexico, where it will operate in some 4,500 feet of water nearly 200 miles south of New Orleans.The Argos platform, which will reach its destination in the fall of 2020, is part of the next wave of oil production in the Gulf of Mexico as companies learn to reduce costs while operating with new technologies in more complex, deeper waters. Even as the onshore shale boom starts to slow and companies cut back onshore, global deepwater spending is back on the rise for oil and gas producers.That has driven a mini-resurgence in the Gulf, where mix of legacy production and the development of new mega projects has offshore platforms pumping out record volumes of oil to the tune of about 2 million barrels a day.“There’s quite a bit of potential in the ultra-deepwater,” said George Laguros, a senior analyst the global research and consulting firm IHS Markit.On HoustonChronicle.com: As energy world focuses on Permian, Gulf makes its own comebackJust this month, Chevron authorized the $5.7 billion first phase of the Anchor project, which is considered the first ultra-high-pressure development in the Gulf. Anchor, located in the ultra-deepwater Lower Tertiary region about 140 miles off the coast of Louisiana, would be the first project to use subsea equipment and technology capable of withstanding pressures of 20,000 pounds per square inch — enough to crush concrete — compared to the previous highs of roughly 15,000 pounds per square inch.Other companies plan to follow with their own projects at similar pressures in the Lower Tertiary area, including the French energy major Total, which is doing engineering work for the North Platte field, and the Louisiana company LLOG Exploration, which is buying equipment for its Shenandoah project — both about 200 miles southwest of New Orleans.
Coast Guard responding to crude oil discharge near New Orleans - The Coast Guard is responding to a crude oil discharge near New Orleans today. Authorities received a report shortly before 7:30 a.m. on Saturday that approximately 1,050 gallons of crude oil discharged into Garden Island Bay from the Whitney Oil and Gas Garden Island Bay Tank Battery 49 facility due to mechanical issues. The source of the spill has been secured after personnel at the facility shut down the pump and isolated the line, according to the Coast Guard. The discharge is all within previously placed containment boom, and caused a 180-foot by 60-foot dark black sheen on the water's surface in Garden Island Bay. Whitney Oil and Gas hired OMI Environmental Solutions as the oil spill response organization. OMI has two skimmers, two boats, and personnel currently working on active recovery of the product, with 420 gallons of oily water mixture recovered. Sector New Orleans deployed two incident management division personnel to the site with personnel from Whitney Oil and Gas and Louisiana Oil Spill Coordinators Office. The cause of the discharge is under investigation.
Freeport LNG Train 2 ships first commissioning cargo - Freeport LNG has shipped the first commissioning cargo on Train 2 of its liquefaction plant on Quintana Island, Freeport, Tex. McDermott International Inc., along with partners Chiyoda International Corp. and Zachry Group, reported production of LNG from Train 2 on Dec. 6 (OGJ Online, Dec. 6, 2019). First cargo is a precursor to substantial completion of Train 2. The project includes three pretreatment trains, a liquefaction plant with three trains, a second loading berth, and a 165,000-cu m full-containment LNG storage tank. Zachry Group, as the joint-venture lead, engaged McDermott for the pre-front-end engineering and design in 2011, followed by FEED. Chiyoda joined the partnership later and the joint team provided engineering, procurement, and construction, as well as commissioning and initial operations for the project. Freeport LNG anticipates adding a fourth train by 2021, bringing total plant capacity to more than 20 million tpy. Freeport LNG Trains 2 and 3 remain on schedule with Train 3 initial production of LNG scheduled for first-quarter 2020.
US was net energy exporter in November, new API statistics say - The US became a net energy exporter for the first time in 60 years during November and produced a record 12.9 million b/d of crude oil, the American Petroleum Institute said Dec. 19 as it released its 2019 fourth quarter industry outlook and latest monthly statistical report. “Never before has a major energy-consuming nation also become a top global exporter of total energy – usually it’s the other way around,” API Chief Economist Dean Foreman said. “The fact that US production has been able to simultaneously satisfy strong domestic demand and supply continued international demand for US exports while maintaining relatively low and stable prices is remarkable and historic in magnitude.” With solid productivity and expanded pipeline infrastructure, the nation is in a position to continue its oil and gas production growth in 2020 as predicted by the US Energy Information Administration, the quarterly industry outlook said. It found that US energy exports have continued to grow despite trade frictions. “Nationwide, natural gas demand for electricity generation increased 5.65 year-to-year so far in 2019, reflecting its cost competitiveness,” the outlook indicated. Domestic petroleum demand remained near record peaks throughout 2019, it said. The US refining system is well-positioned to meet 2020 International Maritime Organization (IMO) sulfur reduction requirements due to its relatively complex plant, access to attractive crude feedstocks, abundant and inexpensive natural gas, and the best refining workers globally, API’s latest quarterly industry outlook said. “Motor gasoline and diesel fuel prices have generally moved with crude oil, and EIA expects limited impact from IMO 2020,” API’s latest quarterly industry outlook said. “Since 2000, US distillate stocks have remained above 100 million bbl with an increasingly interconnected supply chain and pipeline network.”
Whistler Pipeline moves forward with three public meetings - A pipeline project to move natural gas from the Permian Basin of West Texas to Corpus Christi is moving forward with three public meetings in Odessa, Uvalde and Alice.Developers of the Whistler Pipeline held a public meeting for the project on Tuesday evening at the Odessa Marriott in Odessa. A second public meeting is planned for 5 p.m. Wednesday at the Herby Ham Activity Center in the Hill Country town of Uvalde. The third meeting is planned for Thursday at the Alice Country Club in the South Texas town of Alice, the Texas Condemnation Rights website reported. Spanning some 475 miles, the proposed 42-inch pipeline will move 2 billion cubic feet of natural gas per day from the Waha Hub in the Permian Basin to the Agua Dulce Hub of South Texas. The Whistler Pipeline is being developed as a joint venture between Ohio-based MPLX LP, Austin pipeline operator WhiteWater Midstream, New York private equity firm Stonepeak Infrastructure Partners and Midland pipeline operator West Texas Gas.Developers announced that they had made a final investment decision on the project in June. An open season for booking capacity on the pipeline ended on Monday. If approved by regulators and supported by the market, the pipeline is expected to be in service by the third quarter of 2021.
Hazardous Liquids Training for First Responders Available in Texas -- ExxonMobil is teaming up with the Texas A&M Engineering Extension Service (TEEX) to provide a hazardous liquids emergency response training course for firefighters. A $200,000 grant from the oil giant funded development of the course and participation of 150 firefighters at sessions in August and October. A third session is set for January 11-12, and 50 firefighters have already signed up to participate. Nicolas Medina, public and government affairs manager for ExxonMobil Pipeline, is hoping to see firefighters from West Texas participate in the January session or additional sessions in 2020. The company’s support of the course is part of its commitment to the communities where it operates, he said. In addition to the $200,000 grant that funded the development of the program, ExxonMobil will make another $200,000 grant for the program next year. Municipal and volunteer firefighters “do an awesome job at what they do, they are well-trained for what they do, which is primarily house fires, car fires, rescues like that,” said John Burge, director of the industrial firefighting program at TEEX. But training for large plant fires such as at Port Neches recently, or tank battery fires or pipeline fires costs more than their budgets allow he said. The funding from ExxonMobil will allow municipal and volunteer firefighters to receive that training, he said. “They pay for everything – hotel rooms, meals, the training, the fuel used in the training, that’s very expensive, the foam used in the training, that’s very expensive,” Burge said in a phone interview.
Emissions Soar As Permian Flaring Frenzy Breaks New Records - The flaring and venting of natural gas in the U.S. continues to soar, reaching new record highs in recent months. The volume of gas that was burned or simply released into the atmosphere by oil and gas drillers reached 1.28 billion cubic feet per day (Bcf/d) in 2018, according to the EIA, up from 0.772 Bcf/d in 2017. The practice is a disaster on many levels. It is wasteful, it worsens air quality and it exacerbates climate change. Venting gas is much worse than burning it since it releases methane into the atmosphere, a potent greenhouse gas.The New York Times documented several “super emitters” in the Permian, using infrared cameras to visually capture the epidemic. The NYT even recorded an oil worker walking into an invisible plume of leaking methane. But shale drillers continue the practice and regulators have shown little interest in regulating them. Even though venting is off limits in North Dakota and restricted in Texas, flaring has largely gone unchecked while methane leaks at virtually every stage of the extraction process. In the third quarter of 2019, the Permian basin alone vented and flared 752 million cubic feet of natural gas per day, up sharply from 661 mcf/d in the first quarter, according to Rystad Energy. “This represents a new all-time high. Oil production in the Permian Basin is growing at an accelerated pace again, and we observe high, sustained levels of flaring and venting of associated gas in the basin,” Artem Abramov, head of shale research at Rystad, said in November. “It’s a black eye for the Permian basin,” Pioneer Natural Resources Chief Executive Officer Scott Sheffield said earlier this year. “The state, the pipeline companies and the producers -- we all need to come together to figure out a way to stop the flaring.” One thing that could be done would be for the Texas Railroad Commission, which regulates the industry in the state, to deny permits to companies that allow them to flare. But the Railroad Commission has not denied a single request from an oil producer for a flaring permit in years, despite the spike in flaring. The number of permits granted has shot up from around 500 in 2010 to 5,500 in 2018, according to the EIA. There is essentially no cop on the beat. The situation reached absurd levels a few months ago when the Texas Railroad Commission approved a company’s request to flare even though the company had pipeline access readily available. One of the main reasons that flaring has reached astronomical levels is because pipeline capacity has not kept up with the surge in gas production. Because the industry is really chasing oil, all of the gas is surplus. And because there is nowhere to put it, they flare it..
Report: As TCEQ Sits Idle, Polluters Double Illegal Air Pollution in 2018 - The oil and gas industry in Texas is largely responsible for doubling the amount of illegal air pollution in the state last year, according to a reportreleased Wednesday. The Texas Petroleum Chemicals (TPC) plant in Port Neches—the same facility that caught fire last month, injuring three and prompting multi-day evacuations—was listed as a major emitter of butadiene, a known human carcinogen. That and other emissions, innocuously referred to as “upset events,” lead to the premature deaths of 42 Texans and $241 million in health care costs each year.Last year, approximately 270 companies, including Chevron, Dow Chemical, and ExxonMobil, reported 4,590 unauthorized emissions incidents in the state, according to the report from advocacy group Environment Texas. Those resulted in 135 million pounds of illegal air pollution, double the amount emitted in 2017. Contaminants spewed into the sky include human carcinogens butadiene and benzene; smog-forming nitrogen oxides; and particulate matter, which can cause heart attacks, strokes, and congestive heart failure.The biggest release occurred on August 29, 2018, when the Beaumont Gas to Gasoline Plant belched 53 million pounds of carbon dioxide over five days. The event made up the lion’s share of the 63.9 million pounds of air pollution in the Beaumont region, the most polluted area in Texas that year. TheMidland region, which is the locus of the state’s fracking boom, saw 39.5 million pounds of air pollution, the second most in the state. “Texans are sick and tired of oil refineries and petrochemical plants catching fire, exploding, and pumping out harmful pollution,” said Catherine Fraser, an air pollution fellow at Environment Texas. “The data show the problem is getting worse, not better. We need our state leaders to crack down on illegal pollution, and stop putting the interests of polluters over the rest of us.” The Texas Commission on Environmental Quality (TCEQ) has a laissez-faire approach to enforcing federal air pollution laws, especially when dealing withmonied rulebreakers. According to the report, the agency fined companies in only 1.2 percent of illegal emission events, a rate Fraser called “shockingly low.” On Wednesday, she and other environmental activists and Beaumont-area residents gathered in front of TCEQ’s offices in North Austin to demand stricter enforcement. They took particular issue with TPC’s massive butadiene release in 2018, for which TCEQ proposed fining the company a paltry $22,000.
Industry, enviros contrasting accounts over flaring - Environmentalists and the natural gas industry have issued contrasting accounts about flaring, the practice of burning off excess natural gas in the Permian Basin and other shale plays across the United States. Over the past week, the Washington, D.C.-based environmental group Earthworks and the industry-funded group Texans For Natural Gas released online statements that offer contrasting viewpoints of the issue. In a public letter, Earthworks criticized the Texas Commission on Environmental Quality, the state's top environmental agency, as being lax on enforcement and "uncooperative" in response to citizen complaints about the issue. Texans For Natural Gas posted a Tuesday morning report stating that methane emissions intensity, the amount of methane vented or flared for each barrel of oil equivalent produced, has fallen in the United States over the past seven years and remains at rates far below other nations such as Russia.With natural gas viewed as a byproduct of drilling for much more valuable oil, companies that don't have their wells connected to natural gas pipelines can receive permits to either release it into the atmosphere in practice known as venting or burn it off on site in another practice known as flaring.Oil companies vented or flared a record 1.28 billion cubic of natural gas per day during 2018, a recent report from the Energy Information Administration shows. At the current market prices, that's roughly $1 billion worth of natural gas burned off or wasted per year.Texas oil wells accounted for 51 percent of the flaring and venting activity while oil wells in North Dakota accounted to 31 percent. Vented and flared natural gas increased to 1.25 percent of overall U.S. production from 0.84 percent reported in 2017. In its public letter, Earthworks criticized TCEQ for failing to follow up on citizen complaints regarding flaring and venting in the Permian Basin and elsewhere across the state. The environmental group vowed to step up its pressure on the agency and that it would be attaching more videos and scientific information with future complaints. Working with two partner organizations, the report released by Texans For Natural Gas went nation by nation comparing the amounts of natural gas vented or flared compared to crude oil production. Smaller nations with considerably smaller crude oil production such as Syria, Yemen and Mozambique had the worst rates.
US oil, gas rig count rises for second straight week: Enverus— The US oil and gas rig count rose for the second straight week, according to energy researchers Enverus' drilling statistics released Thursday, on what analysts say may be a final push to spend the last bit of 2019 drilling budgets at WTI prices that have cracked the $60/b mark. The domestic rig count totaled 860, up five for the week ended December 18 following an unusually large 15-rig jump the previous week, Enverus said. As a result, the US gained 20 rigs in the past two weeks, a reversal of the past year's general southward direction. Since mid-November 2018, when the recent US rig count peak totaled 1,237, industry has lost 30% or nearly 400 rigs. This week's land rig count totaled 831, up by four but down from 1,144 this same week in 2018, Enverus' data show. Evercore is forecasting the US land rig count to fall 10% in 2020 year on year, which is greater than its US capex spending forecast decline of 7% for next year. The rig count gains are likely traceable to year-end drilling here and there as needed, possibly fueled by higher oil prices that finally mounted the $60/b milestone not seen in months, observers said. This week's total rig count gains came from oil-directed rigs, which moved up 10 to 695. Conversely, natural gas-oriented rigs moved down six to 160. In addition, a one rig rise came from basins classified as neither oil nor gas. As a result, drilling ticked up in two of the largest domestic oil basins — the Permian in West Texas/New Mexico, and Eagle Ford Shale in South Texas as each added several rigs. The biggest boost came from the Eagle Ford, which rose by four rigs to 77 week on week while the Permian was up three to 404. But the Bakken Shale in North Dakota/Montana fell by three rigs, leaving 50, while the SCOOP-STACK plays of Oklahoma and the Denver-Julesburg Basin remained static week on week at 41 and 23, respectively. In gas basins, the Haynesville Shale in East Texas/northwest Louisiana dropped four to 47 while Appalachia — the Marcellus Shale, mostly found in Pennsylvania and the Utica Shale mostly in Ohio — declined two rigs, leaving 49. That basin comprises the Wet Marcellus which lost one rig for a total of 19; the Utica, which also fell by a rig, leaving 12; and the Dry Marcellus, which was unchanged week on week at 18.
U.S. shale oil output to rise 29,000 bpd to record 9.14 million in January (Reuters) - U.S. oil output from seven major shale formations is expected to rise about 29,000 barrels per day (bpd) in January to a record 9.14 million bpd, the U.S. Energy Information Administration said in a monthly forecast on Monday. Output at the largest formation, the Permian Basin of Texas and New Mexico, is expected to rise 48,000 bpd to a new record 4.74 million bpd, the smallest increase since July. Production from North Dakota and Montana’s Bakken region is expected to rise by about 3,000 bpd to a fresh peak of about 1.53 million bpd. That would be the smallest increase since production from the region declined in September, the data showed. The agency forecast production declines in the Eagle Ford and Anadarko basins. The Permian and Bakken regions have been the biggest drivers of a shale boom that has helped make the United States the biggest oil producer in the world, ahead of Saudi Arabia and Russia. However, the rate of growth has slowed as independent oil producers cut spending on new drilling and completions and focus more on earnings growth. The oil rig count, an early indicator of future output, has already declined for a record 12 months in a row. Separately, U.S. natural gas output in the big shale basins was projected to increase to a record 85.6 billion cubic feet per day (bcfd) in January. That would be up less than 0.1 bcfd over the December forecast, its smallest monthly increase since January 2019 when production in the big shale basins declined. Growth was slowing as the number of rigs in each region has declined since the start of the year.
Permian Drillers Are Struggling To Keep Output Flat - Newer wells in the Permian see their oil and gas production declining much faster than older wells, and operators will need to drill a large number of wells just to keep current production levels, an IHS Markit analysis showed on Thursday. IHS Markit has analyzed what it calls the “base decline” rate, calculating the actual or expected production of all the operating wells at the start of the year and tracking their cumulative decline by the end of the year. Over the past decade, the base decline rate of the more than 150,000 producing oil and gas wells in the Permian has “increased dramatically,” according to the analysis.“Because of the large increases of recent years, the base decline production rate for the Permian Basin has increased dramatically, and we expect those declines to continue to accelerate. As a result, it is going to be challenging, especially for some companies with cash constraints, just to keep production flat,” Raoul LeBlanc, vice president of Unconventional Oil and Gas at IHS Markit, said in a statement.“Now that capital markets have closed for many companies and investors are requiring returns, a critical objective for these companies is to slow production growth, significantly moderating their base declines,” LeBlanc said.Last month, IHS Markit said it expects U.S. production growth to be 440,000 bpd in 2020, “before essentially flattening out in 2021.”“Going from nearly 2 million barrels per day annual growth in 2018, an all-time global record, to essentially no growth by 2021 makes it pretty clear that this is a new era of moderation for shale producers,” LeBlanc said in early November. With capital discipline required by investors and WTI Crude prices expected to average around US$50 in 2020 and 2021, IHS Markit expected in November capital spending for onshore drilling, and completions to have fallen by 10 percent to US$102 billion this year, by a further 12 percent to US$90 billion next year, and by another 8 percent to US$83 billion in 2021.
From Boom To Bust: Permian Shale Towns Face Exodus -Perhaps it’s not evident to anyone who is not an oil-worker living in America’s biggest shale towns, but signs of the shale slowdown predicted by many analysts, and the EIA itself, are already surfacing in the form of vacant hotels, a dip in home prices, a noticeable reduction in overtime hours for oil workers, and a change in standards for hiring. Texas’ Permian basin lost 400 jobs in the first 10 months of this year, according to the Dallas Morning News, and fracking contractor Superior Energy Services Inc. alone announced in late November that it had cut 112 jobs from its Permian Pumpco unit. This is in stark contrast to the first 10 months of 2018, when the Permian added 16,700 jobs. According to the Dallas Federal Reserve’s “Permian Basin Economic Indicators” from November 27 this year, oil production reached a new high in September, though the rig count slipped and drilling has dropped to its lowest level in nearly two years. Not only are frack crews for well completions in the Permian down more than 20% this year, according to the Dallas Morning News, citing Primary Vision Inc., but oilfield services companies are firing people--from National Oilwell Varco to Halliburton and RPC. The Greater Houston Partnership said in a December report that Houston is facing a situation that is “eerily similar to what it faced after the 1980s bust -- an oversaturated real estate market, a bleak outlook for oil and gas, and the need for innovation to drive the economy forward”.
U.S. energy chief shrugs off Permian oil slowdown as a ‘pause’ -The golden age of U.S. shale is far from over, with an expected slowdown in the Permian Basin likely to be temporary, according to the new U.S. Energy Secretary. The shale boom helped transform the U.S. into a net exporter of crude and petroleum products in September from a major importer a decade ago. Even as growth is set to slow next year in the Permian and elsewhere as drillers respond to investor demands for capital restraint, Dan Brouillette said the shale boom has further to run. “Maybe there are some folks who -- for whatever reason -- thought they could make some quick money in this and they are learning that production is not as easy as you might think,” Brouillette said Tuesday in an interview in Washington. “You may see some of them go by the wayside.” Brouillette, who replaced Rick Perry at the beginning of the month, said improvements in drilling technology meant companies are better equipped to respond to price fluctuations than in the past. And prices are less volatile than they used to be, given the new status of the U.S. as a major producer. “The recent events in Saudi Arabia, the recent events with OPEC -- none of those had any sort of dramatic or extraordinary move of the market associated with them,” he said. “We’re just not subject to the same types of price shocks that we used to be subjected to.” According to Brouillette, one risk to the growth of U.S. production and exports comes from Democratic presidential candidates including Elizabeth Warren and Bernie Sanders who have promised to ban hydraulic fracturing, the process by which shale rock is broken apart to release oil and gas.
House Dems propose halt to drilling on public lands in broad climate bill -- House Democrats introduced sweeping climate legislation Tuesday that would halt fossil fuel production on public lands for at least a year as the nation prepares to drastically cut climate-warming pollution from its own land holdings. The bill from the House Natural Resources Committee requires the Department of the Interior to reach net-zero greenhouse gas emissions on public lands by 2040. “The Trump administration is handing out drilling and coal mining leases like candy, and no thought is ever given by this administration to the climate change impacts,” said Rep. Raul Grijalva (D-Ariz.) a sponsor of the bill as well as chair of the committee. “Our bill is about what’s right for the whole country and not just polluting industries,” he added. Grijalva said the yearlong moratorium on fossil fuel production would be meant to give Interior time to assess how to meet the 2040 goal of net-zero emissions, though the bill also sets targets in five year increments that the department must meet. The department would be barred from issuing new leases until they came into compliance with the targets. The plan would ratchet up the royalties paid by fossil fuel companies that drill and mine on the nation’s more than 600 million acres of public land, raising fees from roughly 12 percent to 18 percent. That increased cost of doing business would be used to create a transition fund to help communities that are largely dependent on the fossil fuel industry.
Residents pack Boulder County forum in search of tips to implement fracking ban – The Denver Post - Three grassroots groups in Boulder County cohosted a public forum Thursday night to discuss what could be done to extend the county’s moratorium on fracking, which is set to expire in the spring.During “The Fracking Threat to Boulder County: What We Can Do About It,” speakers from 350 Colorado, The Lookout Alliance and Colorado Rising discussed the sunset date of a countywide fracking moratorium on March 28, and the signing of Senate Bill 181, which allows local governments more authority to regulate oil and gas. Speakers cited the 6-month-old law as a tool for implementing a ban on fracking and they urged the more than 100 people who packed a room at Unity of Boulder Church to help them on that mission. In the wake of recent fracking site fire in Weld County that hospitalized seven, and many seeing the operations crop up near schools and neighborhoods, those in the audience seemed largely in favor of an outright ban. Gabrielle Katz, a member of Lookout Alliance, walked forum participants through some background and fracking numbers, citing Weld County as the site of 88% of the state’s oil production and 35% of gas production. Since 2000, she said gas production has doubled in the state. With 55,000 wells across the state and 6,000 permits pending before the Colorado Oil and Gas Conservation Commission that trend is likely to continue, she said. With it, comes increased health risks, threats to the environment and accelerating climate change with the mass release of carbon dioxide and methane, Katz said.“This unconventional oil and gas development is now colliding with neighborhoods like my own, Broomfield, Erie, all around us, where we have people living on top of these oil an gas reserves,” Katz also addressed two projects proposed for eastern Boulder County, including Crestone Peak Resources’ seeking to drill 140 wells north of Erie. A company called 8 North also is seeking to set up a fracking operation in Erie. Boulder County Commissioners filed lawsuits against both oil and gas operations. While claims for both were shot down in Boulder County District Court, the county plans to appeal the rulings in an effort to the prevent large-scale operations.
South Dakota governor plans revision of riot-boosting laws (AP) — South Dakota Gov. Kristi Noem is planning to have another try at so-called riot-boosting laws next year, despite previously drawing criticism for supporting such laws ahead of protests related to the Keystone XL pipeline. The Republican governor has written to lawmakers with proposed changes to laws passed earlier this year that were later blocked by a federal judge. The state eventually settled a lawsuit brought by the American Civil Liberties Union by agreeing not to enforce parts of the laws. Noem is proposing changes in the law to repeal parts that the judge deemed unconstitutional and change the definition of “incitement to riot” to meet constitutional protections of free speech, according to her memo. It would charge people with “incitement to riot” if they “urge” three or more people to force or violence. The proposed law defines “urging” as “instigating, inciting, directing, threatening, or other similar conduct,” but excludes oral and written advocacy that does not urge force or violence. Noem drew criticism from Native American tribes in the state for pushing the laws last year ahead of expected protests on Keystone XL pipeline construction. The Oglala Sioux Tribe banned her from tribal lands after Noem signed the legislation.
Tribes: Oil companies should pay for pipeline spills (AP) — South Dakota lawmakers are proposing legislation that would require oil companies to pay for cleaning up any pipeline spills or leaks as plans are being made to construct the Keystone XL pipeline in the state. The State-Tribal Relations Committee on Wednesday agreed to sponsor the bill in the 2020 legislative session at the request of South Dakota Native American tribes. Crow Creek Tribal Chairman Lester Thompson Jr. said the bill would hold pipeline companies accountable. “As a citizen of South Dakota, I really hate to see our local farmers, ranchers, tribal members, just the common citizen who doesn’t make that big dollar like that company does, be hung with a bill for clean up that isn’t their fault,” Thompson said. The bill would require companies to contribute to a state fund based on the pipeline’s length with a cap of $100 million, the Argus Leader reported. Opponents of the Keystone XL pipeline point to a recent spill in northeastern North Dakota in raising concerns about management of the pipeline. Crude began flowing through the $5.2 billion pipeline in 2011. It’s designed to carry crude oil across Saskatchewan and Manitoba, Canada and through North Dakota, South Dakota, Nebraska, Kansas and Missouri on the way to refineries in Patoka, Illinois and Cushing, Oklahoma.
North Dakota oil output growth to improve moderately on OPEC+ cuts: state regulator — The OPEC+ decision to deepen output cuts will cause "slow to moderate" growth in Bakken production, North Dakota's top oil and gas regulator said Friday. Without a deeper cut, North Dakota production, which set a record of 1.52 million b/d in October, would likely have "flat lined" throughout 2020, Lynn Helms, director of North Dakota's Department of Mineral Resources, told reporters Friday. Helms said that the decision will likely lead to an increase in capital available to producers. "It was going to be a struggle just to match this 1.5 million b/d," Helms said. The OPEC+ decision "should result in small increments of production growth through the year 2020." Last week, OPEC, Russia and nine other allies announced last week that they will deepen collective output cuts by 503,000 b/d to 1.7 million b/d from January through March. In its Short-Term Energy Outlook Tuesday, the US Energy Information Administration said, assuming the cuts stay in place through 2020, global liquids fuel supply from non-OPEC sources will increase by 1.5 million b/d, offsetting OPEC's decline in production. North Dakota's oil output in October was up more than 74,500 b/d from September and more than 37,300 b/d from August, when the previous monthly record was set. Roughly 72% of oil produced in October was shipped out of the state by pipeline, 16% was shipped out by rail, 6% was trucked or railed to Canada, and 6% was refined in state, the North Dakota Pipeline Authority said Friday. The state reported that there were 126 well permits issued in October, up from 92 in September and 885 wells are waiting on completion, down from 916 in September. Helms said that statewide, breakeven prices averaged $12/b in Q3 2019, unchanged from Q2, averaging $12/b in McKenzie, Dunn and Mountrail counties and $16/b in Williams County. Nearly all of North Dakota's active rigs are in those four counties. Statewide breakeven prices have fallen by $10/b, a roughly 45% decline, since Q2 2017, according to the agency. Helms has called the state's breakeven estimates a "pure breakeven," which only accounted for recovering drilling and completion costs and did not consider return on investment.
State, tribe to develop Dakota Access pipeline spill plan (AP) — North Dakota will work with the Standing Rock Sioux Tribe to help develop a response plan for a potential spill of the Dakota Access pipeline, a state official said Monday. State Emergency Services Director Cody Schulz said tribal leaders recently requested a response plan and resources to prepare for a spill near the Standing Rock Sioux Reservation in the south-central part of the state. Schulz told a committee of state and tribal leaders headed by Gov. Doug Burgum that his agency would be happy to either “participate or facilitate” a training exercise. The state also would work with the tribe to obtain federal grant money for planning and equipment. Standing Rock Chairman Mike Faith, who sits on the panel, said oil spill response training would be “awesome” and that he appreciates the state’s effort to work collaboratively with the tribe. The cooperation comes as Texas-based Energy Transfer wants to double the capacity of the line to as much as 1.1 million barrels daily to meet growing demand for oil shipments from North Dakota. The $3.8 billion pipeline was subject to prolonged protests and hundreds of arrests during its construction in North Dakota in late 2016 and early 2017 because it crosses beneath the Missouri River, just north of the Standing Rock Sioux Reservation. The tribe draws its water from the river and fears pollution. Energy Transfer insists the pipeline and its expansion are safe. The pipeline has been moving North Dakota oil through South Dakota and Iowa to Illinois for about three years. Schulz said in an interview that the state has limited resources and personnel to deal with a major spill of the pipeline at present. Schulz, who also serves on the Morton County Commission, said the prolonged protests cost the county about $38 million for law enforcement, infrastructure repair, cleanup and legal costs. The state reimbursed the county for most of the cost. Schulz said his agency participated with railroad officials and others during a exercise to coordinate a plan if a train derailed and spilled oil in the Missouri River near Bismarck.
Truck crash spills 840 gallons of produced water; creek impacted - Bismarck Tribune staff Dec 13, 2019 A truck transporting produced water crashed in McKenzie and spilled about 840 gallons of the liquid. Produced water is a mixture of saltwater and oil that can contain drilling chemicals. The crash happened on an icy road about 9 miles southeast of Watford City on Thursday, according to the state Department of Environmental Quality. Truck operator Blackshirt LLC reported it the same day and estimated about 20 barrels of produced water were released, impacting a small unnamed creek on U.S. Forest Service property. The unnamed creek discharges into Elkhorn Creek about 4 1/2 miles downstream of the incident. State officials are inspecting the site and will continue to monitor the investigation and remediation.
Fine pending for TC Energy's oil spill that contaminated 4.8 acres of land outside Edinburg - — TC Energy has not yet been fined for the Keystone Pipeline oil spill outside Edinburg in October, but it will be, a North Dakota Department of Environmental Quality official said. The Oct. 29 Keystone Pipeline spill released about 383,000 gallons of crude oil and is estimated to have contaminated about 4.8 acres of land. The cause of the spill remains under investigation. DEQ Director Dave Glatt said that, because the spill came into contact with a wetlands area, it resulted in an automatic notice of violation. Penalties for oil spills are determined on a case-by-case basis and Glatt said he expects the process to take a couple months. DEQ Spill Investigations program manager Bill Seuss said a number of factors are taken into account before the amount of a fine is determined, including how much oil was spilled, how much damage it caused, how quickly the company reported the spill and responded to the scene and how fast the spill was contained. Glatt said past spills in North Dakota have resulted in fines ranging from a couple thousand dollars to several hundred thousand dollars, but Suess said, at this point in the process, it's difficult to know where in that range the Edinburg spill might fall. "Every spill is unique," Suess said. "Everything has its own set of conditions and that, to compare it to anything, it's hard to say that anything was similar." Now that DEQ has notified Canada-based TC Energy of the violation, Glatt said the company has about a month to respond to the allegations. From there, DEQ officials will sit down with TC Energy officials to discuss enforcement until a penalty is agreed upon. Glatt underscored that, while not every oil spill results in a fine, spills that come into contact with water are automatically fined. He added that the chance of contamination to the groundwater in the Edinburg spill is very low, however. "I don't see that as being a concern, because they got to it quickly, or quickly enough, and they dug out the contaminated soil," he said.
Rising Bakken gas production displacing western Canadian gas on pipes. -The run-up in crude oil production in western North Dakota brought with it huge increases in the production of associated gas — that is, the gassy brew of natural gas and mixed NGLs that emerge from Bakken wells with the crude. Oil & Gas Division stats show that, in October 2019, Bakken gas production (green area in right graph in Figure 1) averaged more than 3 Bcf/d for the first time ever (3.03 Bcf/d, to be exact); it’s up a whopping 106% from December 2016, in part because many of the most prolific wells for producing crude oil have high gas-to-oil ratios (GORs). But of that 3.03 Bcf/d of gas produced, nearly 530 MMcf/d (yellow line in right graph), or 17%, was burned off or flared, mostly due to a lack of sufficient gas processing capacity. We’ve written about gas flaring in the Bakken many times, most recently in Hard to Handle, when we said that bringing it under control has been akin to breaking in a wild horse: just when you start to think you’ve accomplished the task at hand, the bronco’s bucking again and you’re holding on for dear life. The way to rein in gas flaring, of course, is to put in place the infrastructure — gathering systems, gas processing plants, and gas and NGL takeaway pipelines — needed to handle all the associated gas that’s emerging from wells. The problem has been that while Bakken producers and their midstream-company partners may have been trying their best to anticipate what their upcoming gas-related infrastructure requirements will be, they’ve generally been behind the curve in adding gas processing capacity during the 2010-14 and 2017-19 boom periods. Now, they finally appear to be catching up.As shown in Figure 2, gas processing capacity in the Bakken has been increasing by fits and starts through the first two-thirds of this decade, from less than 500 MMcf/d at the end of 2010 to more than 2.0 Bcf/d at the end of 2016. But with the big slow-down in crude oil and gas production in 2015-16, plans for a number of additional processing plants were scrapped or delayed, and when production growth took off again in 2017, midstreamers once more were forced to play catch-up. Only 107 MMcf/d of new gas processing capacity was added in 2017, and another 215 MMcf/d came online in 2018. 2019 turned out to be the biggest year yet for new processing capacity in the Bakken: a record 710 MMcf/d has started up in the past 11 and a half months (yellow bar segment within dashed orange oval), giving the region a total of nearly 3.2 Bcf/d — seemingly enough to handle all the gas that the play produces.
Federal decision on fracking review reopens 1.2 million acres in California to oil leasing - After years of studying the environmental impacts of fracking, a decision this week by Bakersfield's office of the U.S. Bureau of Land Management allows federal officials to resume leasing 1.2 million acres of public land in Kern and other parts of California for the purposes of oil and gas production. The move, which was immediately criticized by climate-change activists, followed the release earlier this fall of an environmental review concluding the controversial well-completion technique also known as hydraulic fracturing poses no impacts that cannot be blunted by mitigation efforts. The review fulfilled the BLM's pledge in 2017 to take another look at the consequences of fracking. Environmentalists say the practice endangers air and groundwater quality. The oil industry says there is no evidence of that happening in California. No new public lands were opened to oil production or fracking as a result of the BLM's decision. BLM has not conducted a lease auction on the subject properties since at least 2016. The agency noted that such leases sustain about 3,500 jobs and generate $200 million per year in economic benefits. California gets half of the 12.5-percent royalty the BLM collects on oil and gas royalties in the state, while the other half goes to the U.S. Treasury.
Fuel-guzzling California threatens Trump administration over fracking plan | Fox News - California leads the nation in the consumption of gasoline and jet fuel. The oil and gas industry provides more than 360,000 jobs and fracking helps the sector to pump annually into the state economy more than $55 billion in tax revenues. Yet, today, state officials are threatening legal action after the Trump administration opened 1.2 million acres of federal land to drilling after a six-year moratorium. “The Trump Administration’s Bureau of Land Management (BLM) wants to expose more than a million acres of public land in Central California to drilling and fracking using a patently deficient environment impact study,” said Attorney General Xavier Becerra. “That’s not how we do things in California. We’re prepared to do whatever we must to protect the health and safety of our people. We intend to be good stewards of our public lands.” Unlike drilling on private or state lands, the federal government collects a 12.5-percent royalty on every barrel of oil and gas produced on federal lands, providing billions to programs Congress approves. The BLM says drilling on the newly approved lands could generate $200 million annually and create 3,500 jobs in the Central Valley. “This is a good thing, it gives California an opportunity to produce more of its own oil," said Bob Poole, of the Western State Petroleum Association."Currently, California uses 2 million barrels a day. Of those two million, we import over a million every day. This gives us the most opportunities available for us to produce our own energy under the most stringent environmental regulations.”
BP to pay penalty to EPA for inadequate insurance - The Environmental Protection Agency announced Monday that BP Exploration Alaska has agreed to pay a $125,100 penalty related to violations of its federal hazardous waste permit for activities on Alaska’s North Slope.BP, a major Alaska oil producer that’s asking regulators to approve the $5.6 billion sale of its Alaska assets to Hilcorp Alaska, in part did not “maintain adequate insurance for bodily injury and/or property damage to third parties” from the company’s storage and handling of hazardous waste, the EPA alleged in a statement to media Monday. Megan Baldino, a spokeswoman with BP in Alaska, said the company “worked closely with EPA to resolve its concerns with the insurance it had obtained for this facility.” She said BP is in compliance with the order. The penalty stems from a 14-page consent agreement between the federal agency and the oil company.It comes at a time when many Alaskans are asking regulators to pay close attention to whether BP and Hilcorp have provided adequate financial assurances that they can pay for future cleanup costs once the oil fields are abandoned and infrastructure must be dismantled. They also want financial guarantees that Hilcorp, a smaller, private company, can pay for an unexpected disaster, such as an oil spill. The EPA found that BP’s third-party liability coverage was inadequate over five years beginning in 2014, the consent agreement shows. The penalty followed an EPA inspection in June 2018 of a hazardous waste storage facility at Prudhoe Bay.The EPA said in its statement that it allows BP to store more than 200,000 pounds of hazardous waste, such as flammable and toxic byproducts from oil exploration, on leased state lands. BP must maintain a dedicated pool of funds so third parties can receive compensation for losses related to the storage or handling of the company’s hazardous waste. EPA describes the amount BP must maintain as “$1 million per occurrence with an annual aggregate of at least $2 million," through insurance policies or other means. The EPA said federal law requires this pool of funds to be kept separate from coverage for legal defense and cleanup costs. The protection is required so third parties can receive “compensation for losses related to the storage or handling of BPXA’s hazardous waste,” the EPA said.
Alaska turns focus to oil, gas infrastructure after spill - Alaska officials say they are going to take a look at Cook Inlet‘s aging infrastructure to get a better handle on oil and gas operations there following the recent discovery of an oil leak. The spill between two production platforms owned by Hilcorp Alaska LLC was spotted Saturday. The company removed all oil from the 8-inch (20.3-centimeter) diameter pipeline by Sunday. The state has yet to determine how much oil was dumped into the ocean, but Hilcorp has said it was less than three gallons. The leak is the second in Cook Inlet this year for Hilcorp Alaska. Processed natural gas continues to spew into the inlet from an underwater pipeline that supplies four other production platforms after the leak was discovered in February. Company officials estimate it has been leaking since mid-December. Kristin Ryan with the Alaska Department of Environmental Conservation said the state will compile a report on the inlet‘s oil and gas activity over the next year. The state may then decide to make regulation changes, Alaska‘s Energy Desk reported (http://bit.ly/2oAWTmk). State regulators will conduct the review to "try to have a better record of what pipes are where, who owns them, how old are they, what‘s their inspection frequency," said Ryan, director of the department‘s Division of Spill Prevention and Response. Much of the oil and gas infrastructure in Cook Inlet was first installed in the 1960s, although various pieces of equipment have been updated over the years. Hilcorp Alaska, a subsidiary of Houston-based Hilcorp, declined to comment on both the gas leak and the oil leak. Cook Inlet stretches 180 miles (290 kilometers) from the Gulf of Alaska to Anchorage and is home to an endangered population of beluga whales. It is also habitat for humpback whales, the western population of Steller sea lions and northern sea otters. Harbor seals, killer whales and porpoise use the inlet.
Goldman Sachs Is First U.S. Big Bank to Divest From Arctic Oil and Gas -- Goldman Sachs, one of the world's largest investment banks, gave a minor victory to the divestment movement by declaring that it will not fund an new arctic oil explorations, as CNN reported. Citing the importance of the Arctic's fragile ecosystem and its importance to indigenous populations, the investing giant said it will decline investing in any oil exploration in the Arctic, including the Arctic National Wildlife Refuge. "Oil development in the Arctic Circle is prone to harsh operating conditions, sea ice, permafrost coverage, and potential impacts to critical natural habitats for endangered species," Goldman Sachs said in itsEnvironmental Policy Framework. "The unique and fragile ecosystems of the Arctic region also support the subsistence livelihoods of indigenous peoples groups that have populated certain areas in the region for centuries."Goldman Sachs also said in its policy framework that it would not finance any new thermal coal mines or anymountaintop removal projects. It added that where it has already invested, it would work with companies to diversify their strategies and reduce their carbon emissions."Companies' diversification strategy and carbon emissions reduction initiatives will be a key consideration in our evaluation of future financings with the goal of helping their transition strategy," the Environmental Policy Framework says. "We will phase out our financing of thermal coal mining companies that do not have a diversification strategy within a reasonable timeframe."Goldman Sachs follows a dozen global banks, based largely in Europe and Australia, that pledged not to finance Arctic oil and gas development in the arctic. Several of the policies mention Arctic National Wildlife Refuge specifically, as NPR reported. Goldman is the first U.S. headquartered bank to make the same promise, as CNN reported.
Shell share price dips after warning Q4 income will be hit by impairment charges - Shares of Royal Dutch Shell dipped 0.7% in trade Friday after the firm announced that it will book additional charges against its income in the fourth quarter. The Anglo-Dutch energy giant said it expects to log a fourth-quarter impairment charge ranging between $1.7 billion and $2.3 billion after tax. Details on the impairment were not provided. Swiss bank UBS described the range as “relatively small,” although noted other charges which, when added on, would depress fourth-quarter earnings by around $3 billion in total. Capital expenditure expectations is also being trimmed and is now expected to sit close to around $24 billion from October to the end of December. Production of oil and gas is expected to rise from the third quarter. Upstream oil production is forecast to sit between 2,775 and 2,825 thousand barrels of oil per day. Royal Dutch Shell has two classes of share listed in both London and Amsterdam. On Friday, its ‘B’ share listing on the Amsterdam exchange had slid almost 1% from its Thursday closing price. Over 2019, the same class of share is higher by about 1.37%. Shell highlighted “materially lower” margins in its chemicals division and also warned on returns from liquified natural gas. The firm is due to publish fourth-quarter results on January 30.
Exxon and Chevron Targeted by Follow This-- The Dutch activist fund that has filed shareholder resolutions pressuring major oil companies in Europe to take action on climate change has set its sights on the U.S. Investor advocacy group Follow This has filed requests for shareholder votes at Exxon Mobil Corp. and Chevron Corp.’s annual meetings for the first time, asking the companies to align their plans with the Paris climate accord. It has also filed resolutions for Royal Dutch Shell Plc, BP Plc and Equinor ASA. Big Oil has come under increasing pressure from investors and environmental groups to invest in cleaner fuels as part of a wider energy transition. While Follow This resolutions have so far been defeated, the group has gained public support from investors such as Dutch insurer Aegon and M&G Investments. “We believe change comes from a small number of progressive investors, not the majority,” Follow This head Mark Van Baal said in a phone interview. Chevron said it was too early to comment and that its board would review all proposals. “We have established greenhouse gas emission intensity reduction goals for upstream oil and natural gas, methane and flaring,” spokesman Sean Comey said. “All shareholder proposals will go through the proper process in advance of the annual meeting,” said Exxon spokesman Casey Norton. Earlier this year, Exxon shareholders were denied a vote on publishing targets to align its business with the Paris climate agreement after the Securities and Exchange Commission ruled against a resolution brought forward by the Church of England and New York State. The SEC said that Exxon’s public disclosures “compare favorably” with its guidelines. Follow This’s Van Baal said that by substituting the word “targets” for “strategies” the resolution is less likely to be blocked on the grounds of micromanaging. Follow This buys shares in oil companies in order to press them over emissions. Its resolutions ask companies to align their investments with the 2016 Paris accord, which seeks to limit global warming to less than 2 degrees Celsius from pre-industrial levels. The group also says scope 3 emissions -- those produced by consumers of oil companies’ products -- should be included in targets. In May, BP investors voted in favor of the company reporting in greater detail how its investments are compatible with the Paris agreement. A second, more stringent filing proposed by Follow This was not successful.
How Much Oil Does The $1.5 Trillion Fashion Industry Use? - Chances are, Greta Thunberg is getting ready to push her ‘flight-shaming’ campaign into the realm of fashion, because this $1.5-trillion global fashion industry is said by some to be producing more CO2 than international flights and shipping. That’s because the fashion industry has turned its catwalk into a wildly fast and overproducing monster that emits some 1.7-billion tons of CO2 per year, or 10% of all man-made carbon emissions. It also ranks as the second-largest consumer of the global water supply. Hydraulic fracturing--which gets so much heat from environmentalists, for instance--ranks far lower in water supply use. If that isn’t enough, it’s polluting the oceans with microplastics. So for anyone fashionable who decries the fossil fuels industry pollution, there is some very selective thinking going on here. There is a ton of overlap between the two industries. A whopping two-thirds of our clothing is made from fossil fuel synthetics, and 85% of this material is sent to landfills, unable to decay or decompose.In other words, we’re wearing fossil fuels, and the use of synthetic fibers has doubled since 2000. This year, we’re walking around in 60% synthetic. Polyester, a material composed of greenhouse-gas-emitting fossil fuels and microfibers, costs about $10 per yard once manufacturers turn it into fabric. Also, the chemicals used to process leather, which costs about $15 per yard, send out textile waste into the environment. The fashion industry’s environmental footprint is growing commensurate with digital communications and an insatiable appetite. We want instant gratification, and that includes seasonal fashion. This has given rise to “fast fashion”, which ensures that the latest runway styles go from catwalk to retailer at the speed of light with cheap, mass, rapid production methods. It leads to phenomenally more waste. When it comes to fast fashion, low prices and cheap, synthetic materials, many consumers discard items of clothing after only one use. In other words, fast fashion is becoming disposable fashion. In the UK alone, consumers throw away over 300,000 tons of clothing every year.And part of the problem is over-production of clothing that is never sold. A power plant in Sweden has partly switched to H&M clothing instead of coal to generate energy. In 2017, the power plant incinerated 15 tons of H&M product, according to Bloomberg. High-end Burberry, on the other hand, was called out last year for burning some $37 million in clothing just to avoid selling it at a discount. The negative publicity forced them to shift their policy on that.
US greenlights sanctions on mega Russia-EU gas pipeline, but it’s probably too late -The U.S. Senate has approved a defense bill that will see sanctions imposed on companies working on Russia’s massive flagship gas pipeline project to Germany — but the sanctions might not have much effect given that the Nord Stream 2 pipeline is almost complete. The Senate voted overwhelmingly to pass the multi-billion dollar billion defense policy bill, formally known as the National Defense Authorization Act (NDAA), on Tuesday. The NDAA covers a broad range of defense policy and military spending. The annually-set NDAA is also significant for Europe’s energy scene, however, as the 2020 bill also contains provisions to impose sanctions on companies installing deep sea pipelines for Russia’s $10.5 billion Nord Stream 2 (NS2) gas pipeline linking Russia and Germany (via the Baltic Sea). The pipeline is Russia-led, under the aegis of the country’s state-owned energy giant Gazprom, but has been part-financed by several European energy companies, including Shell, OMV and Engie. The TurkStream project which stretches from Russia to Turkey, and estimated to cost around $12 billion, was also mentioned in the defense bill but the pipeline is set to launch early January so sanctions would be ineffectual. Sanctions The defense bill says that no later than 60 days after it’s enacted, a report should be filed to congressional committees identifying vessels that are “engaged in pipe-laying” for Nord Stream 2. Individuals who are identified as being involved in the projects could also have U.S. visas revoked and see transactions related to U.S. property blocked, although the bill allows a 30-day period for individuals to “wind-down” their operations in the project. The NDAA, which also greenlights the creation of a U.S. Space Force and paid parental leave for federal employees, was approved by the House of Representatives last week. It will now be sent to President Donald Trump to be signed into law; he signalled last week he would do so without delay.
U.S. Concedes Defeat on Nord Stream 2 Project, Officials Say - The U.S. has little leverage to prevent the Nord Stream 2 gas pipeline project between Russia and Germany from being completed, two administration officials said, acknowledging the failure of a years-long effort to head off what officials believe is a threat to European security. The massive $11-billion project is just weeks away from completion and has led President Donald Trump to call Germany “a captive to Russia.” He has criticized the European Union for not doing more to diversify imports away from the nation that supplies more than a third of its gas. Senior U.S. administration officials, who asked not to be identified discussing the administration’s take on the project, said sanctions that passed Congress on Tuesday as part of a defense bill are too late to have any effect. The U.S. instead will try to impose costs on other Russian energy projects, one of the officials added. relates to U.S. Concedes Defeat on Nord Stream 2 Project, Officials Say Nord Stream 2 is being laid on the bottom of the Baltic Sea to feed gas from Russia into Germany.Source: Gazprom The admission is a rare concession on what had been a top foreign-policy priority for the Trump administration and highlights how European allies such as Germany have been impervious to American pressure to abandon the pipeline. It also shows how the U.S. has struggled to deter Russia from flexing its muscles on issues ranging from energy to Ukraine to election interference. “It has been a commercial project, but with a huge geopolitical dimension attached to that,” Peter Beyer, who is German Chancellor Angela Merkel’s trans-Atlantic policy coordinator, told Bloomberg. “I’m expecting that the sanctions, if Donald Trump is going to sign that bill, will not have a big effect on that project.”
Exclusive: Illegally traded chemical halted Russian oil pipeline, tests show - (Reuters) - The substance that brought one of Russia’s longest oil pipelines to a halt in April was carbon tetrachloride, a lethal chemical meant to be tightly controlled by an international agreement, according to the results of three separate, undisclosed tests seen by Reuters. A summary of the results of a test carried out for Russia’s Ministry of Energy and for Transneft, the operator of the pipeline, by a Moscow-based state chemical laboratory seen by Reuters in May, which has not previously been reported, shows that the contaminant was 85 percent carbon tetrachloride. The presence of carbon tetrachloride suggests Russia has not stamped out illegal trade in the chemical, five oil industry sources said. Carbon tetrachloride is supposed to be strictly regulated by Russian law, these sources said. Russia’s energy ministry has blamed the stoppage in the Druzhba pipeline on a legally traded solvent called ethylene dichloride, an organic chloride compound used to clean oil wells, which can corrode equipment if it enters a refinery, according to industry experts. Two separate tests performed by two different companies, a European Union refiner and an international oil trading firm - which both told Reuters they unwittingly bought tainted crude from the pipeline - yielded almost identical results to the tests conducted by the Moscow state laboratory, two sources familiar with the findings told Reuters. Transneft said in June that 200 to 300 tonnes of an unnamed contaminant had entered the pipeline, but has not since made public any further details on the matter. Russia, the world’s second-biggest oil exporter, lost more than $1 billion in revenue due to the more than month-long stoppage of the pipeline, which carries about 1% of the global supply of crude oil from Russia to refineries in eastern and central Europe. The pipeline fully restarted normal operations on July 1.
Fracking leaves heavy footprint in Argentina's Patagonia - Pumpjack oil wells peck like giant birds at the ground, plumes of yellow flames flare from gas pipelines, lakes accumulate contaminated waste—Patagonia and its indigenous people are paying a heavy price for Argentina's economic progress. Vaca Muerta, a huge sweep of western Patagonian wilderness, sits on the world's second largest reserve of shale gas and its fourth largest oil reserves. A push to develop extraction amid Argentina's crippling economic crisis has made the area a magnet for international oil companies. Crucially, Vaca Muerta is also home to indigenous Mapuche communities who say their rights are being denied. "They came in as a state enterprise and just blew up the land. Without measuring the consequences or seeing that there were people living here—a Mapuche community living on the land," says Lorena Bravo, spokeswoman for the Mapuche community in Campo Maripe. "And from then on they denied our existence." The Mapuche claim that the burgeoning oil and shale gas industry, in particular the controversial fracking technique used to extract it, has irreversibly damaged their ancestral homelands, and with it their traditional way of life. "One day all this activity will cease, because the oil is going to run out, the gas is going to run out. We are going to be left only with polluted land," says Bravo. The Mapuche indigenous communities nearby claim an ancestral right to the land and say they have to daily cope with the pollution caused by fracking. "Fracking is an illegal activity in Mapuche territory. It doesn't comply with our rights to be consulted," said Jorge Nahuel, a leader of Neuquen's Mapuche Confederation. "Our territories are located over a lake of fuel. The result is pollution and death," said Nahuel, adding that farm animals were being "born with malformations." Other nearby communities like Allen and Fernandez Oro have seen their fruit crops diminish in the face of the oil companies' relentless advance across the land as exploration concessions increase.
Argentina Wants a Fracking Boom. The US Offers a Cautionary Tale -- Argentina’s President Alberto Fernandez takes office in the midst of an economic crisis. Like his predecessor, he has made fracking a centerpiece of the country’s economic revival.Argentina has some of the largest natural gas and oil reserves in the world and “possibly the most prospective outside of North America,” according to the U.S. Energy Information Administration. If some other country is going to successfully replicate the U.S. shale revolution, most experts put Argentina pretty high on that list. While the U.S.shale industry is showing its age, Argentina’s Vaca Muerta shale is in its early stages, with only 4 percent of the acreage developed thus far.The country feels a sense of urgency. Declining conventional production from older oil and gas fields has meant that Argentina has become a net importer of fuels over the past decade. Meanwhile, Argentina’s economy has deteriorated badly due to a toxic cocktail of debt, austerity, inflation, and an unstable currency.For these reasons — a growing energy deficit, a worsening economic situation, and large oil and gas reserves trapped underground — there is enormous political support for kick-starting an American-style fracking boom in Argentina.It has taken on a level of political significance that outstrips its immediate economic potential. In Argentina, Vaca Muerta is treated as the country’s chance at salvation, with fracking seen as doing everything at once — creating jobs, reducing the debt burden, plugging the energy deficit and turning Argentina into a major player on the global oil and gas stage.Astute followers of the American fracking experience will already recognize some similarities. Debt-financed drilling rapidly increased production in the U.S.but also crashed prices. Time and again, the financial losses mounted and companies returned to Wall Street for more capital, peddling stories to investors about how they just needed a little more time to figure things out. But the profits never arrived. Over the past decade, the 40 largest independent oil and gas companies burned through $200 billion more than they earned. Roughly 200 oil and gas companies in North America have declared bankruptcy since 2015. There has even been a rise in “Chapter 22s,” a reference to companies going through Chapter 11 bankruptcy more than once.The worst may yet lie ahead: an estimated $137 billion in debt held by North American oil and gas companies comes due between 2020 and 2022, the result of a wave of financing that was taken out during the 2014-2016 market downturn.“The business case for fracking has not been proven. It produces a lot of natural gas and oil. It doesn’t produce cash,” said Kathy Hipple, a Financial Analyst at the Institute for Energy Economics and Financial Analysis (IEEFA). “What we know is that it sucks in cash and produces a lot of bankruptcies.”More recently, operational problems have become harder to ignore. Companies are running out of the choicest spots to drill. The promise of densely drilling wells together has disappointed. Thousands of wells are not producing as much oil as the industry promised. “I personally think that we are going to discover massive amounts of fraud in the shale industry,” Hipple said. “That there have been probably a lot of overly robust assumptions that everyone has known were overly robust.”
Should The West Be Worried About The Power Of Siberia Pipeline? - A massive work of infrastructure has just been brought online, and its geopolitical implications are explosive. Last week, the presidents of Russia and China jointly inaugurated one of the biggest pieces of gas infrastructure in the world. The “Power of Siberia” pipeline is sending gas from eastern Siberia over 3,000 kilometers of tundra to northern China; and when it reaches its full capacity of 38 billion cubic meters a year, it will account for about one-sixth of China’s imported gas demand.To some, this is a minor amount and not a reason to worry. Yet a sixth of imports is a pretty solid portion for the world’s largest gas import market. What’s more, there is already talk about Power of Siberia 2, which will bring the Russian share in China’s imported gas market higher, if it comes to be.As is invariably the case with large-scale Russian projects, there are people who want to know: should the West be worried? To answer this question, we need to first clarify “the West”. In the past, the West was a unified concept including Western Europe and the United States. Now, the former is often at odds with the latter on topics spanning trade balance and free market practices. That’s what globalization has accomplished. There is no longer a unified West, at least in the area of trade and energy security, a fact made obvious by Germany’s unwavering support for another Russian project, the Nord Stream 2 pipeline, in the face of vocal U.S. opposition that at one point escalated to threats of sanctioning all companies involved in the project. So, to rephrase the original question, who should worry about Power of Siberia, and should anyone worry at all?The most immediate, knee-jerk answer would be: all other exporters of gas to China. It’s a no-brainer on the face of it: the Power of Siberia will bring into China 38 billion cubic meters of gas every year, which will unavoidably displace supply from other sources. Yet it pays to look beyond the face of things. In this case, Russian gas will first and foremost displace coal, not gas from other sources. The Power of Siberia will ship gas to northeastern China, which has so far been overwhelmingly dependent on coal for its energy needs, as Reuters’ Clyde Russell noted in a recent column. This part of China does not import LNG, Russell pointed out, so there will be no displacement of LNG imports. For now. A lot of LNG export capacity is being built with the future Chinese market in mind. There seems to be unanimity among energy forecasters that this market will only continue growing in the observable future, even if this growth moderates in pace. So everyone is betting on China specifically—and Asia more broadly. In this context, any other source of supply is a challenge, and if this source is a country on a strategic path of forging closer ties with its neighbor in the southeast, the challenge becomes more serious.
OPEC Deal Isn't Worth the Paper It's Written On – Bloomberg - There was an elephant in the room during the recent OPEC+ meeting: The record-breaking initial public offering of Saudi Arabia’s mammoth oil company Saudi Aramco occurring at exactly the same time. The coincidence meant that the output cuts agreed by OPEC and its allies were designed as much to bolster the share price of Saudi Arabian Oil Co., as they were to balance the oil market going into 2020. This will greatly complicate matters for Saudi Arabia when it finds itself having to impose discipline on fellow producers looking for ways to adhere to their targets without actually cutting production. The deal is much weaker than it looks. The headlines out of Vienna took markets by surprise. The group cut their collective output target by a further 500,000 barrels a day for the first quarter of 2020, taking the reduction from 2018 baselines to 1.7 million barrels a day. Saudi Arabia, the kingmaker in all oil matters, said it would reduce its own target by a further 400,000 barrels a day on top of that — as long as all the other participants adhered to their pledges. That appeared to indicate that OPEC+ output would be slashed by a very substantial 900,000 barrels a day, with 770,000 of them coming from OPEC and the rest from its partners. But in reality, the difference the agreement will make to physical production is really quite small, even if everyone sticks to their new goals. Saudi Arabia’s new voluntary target of 9.744 million barrels a day is just 5,000 barrels a day below what it pumped on average over the past nine months, according to the production numbers it supplies to OPEC. That’s no cut at all. In fact, by tying the 400,000 barrels a day to full compliance by everybody else, its offer was actually a thinly-disguised threat that the kingdom would increase output if any of the other countries fail to meet their commitment. Angola’s production will also go up rather than down in the coming months. The West African country has no new projects to offset steep decline rates at its deep-water fields after the 2014 price crash killed off foreign investment in its oil sector. In November, it pumped about 200,000 barrels a day below its target. So even if everybody else does what they have promised, the real cut in output from November levels will be closer to 385,000 barrels a day. And even that is optimistic.
Oil Steady as Trade Optimism Balanced by Caution - Oil was steady near a three-month high as optimism the U.S.-China trade deal will spur demand for crude was tempered by caution due to the agreement’s limited nature and lack of detail. Futures edged lower in New York after closing up 1.5% at the highest since Sept. 16 on Friday. The deal involves China buying more American farm products and making new commitments on intellectual property, while the U.S. will suspend new levies and halve existing tariffs on $120 billion of Chinese imports. It’s expected to be signed and released publicly in early January. While the partial trade deal leaves most of the tariffs built up over the 20-month conflict in place, it’s adding to a more positive outlook for oil prices as it followed deeper-than-expected output cuts by OPEC+ and signs American production growth may be slowing. Hedge funds increased net-bullish wagers on West Texas Intermediate crude by the most in three years in the week through Dec. 10. The lack of details on the trade deal could put oil under pressure this week, said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore. However, the upward trend in prices since early October will likely remain intact given the improved sentiment in the market, he said. WTI for January delivery fell 0.1% to $59.99 a barrel on the New York Mercantile Exchange as of 7:32 a.m. in London. It rose 89 cents to $60.07 on Friday, taking its weekly gain to 1.5%. Brent for February settlement declined 0.1% to $65.15 a barrel on the London-based ICE Futures Europe Exchange after rising 1.6% Friday and 1.3% last week. The global benchmark was at a $5.23 premium to WTI for the same month. President Donald Trump said he expects China’s buying of American agricultural goods to reach $50 billion a year “pretty soon.” While the U.S. halved 15% duties on $120 billion of Chinese imports, it will maintain 25% levies on another $250 billion of goods. Meanwhile, the International Energy Agency last week cut its forecast for U.S. oil supply growth to 1.1 million barrels a day for 2020, compared with 1.6 million this year.
Oil tops $60, settles near 3-month high - Oil prices rose slightly Monday on hopes energy demand will benefit from the trade deal between the United States and China announced last week, but prices remained below the previous session’s three-month highs. Brent crude oil futures rose 16 cents to $65.37 a barrel, while West Texas Intermediate crude rose 14 cents to settle near a three-month high of $60.21 a barrel. On Friday, Washington and Beijing announced a “phase one” agreement. U.S. officials said some tariffs would be reduced in exchange for a big jump in Chinese purchases of American farm products and other goods. Progress on trade could boost oil demand, but the market is still weighing the merits of the deal, said Phil Flynn, an analyst at Price Futures Group in Chicago. “The market is pausing to digest the U.S.-China trade deal,” Flynn said. “We’re trying to consolidate to see if we can hold above $60 before we get higher.” The agreement averted $160 billion in additional U.S. tariffs on Chinese goods that were to kick in over the weekend. “What the market needs now... is clarity around exactly what the deal entails,” analysts from ING Economics said. “The longer we have to wait for this detail, the more likely market participants will start to question how good a deal it actually is.” On Sunday, U.S. Trade Representative Robert Lighthizer said the deal would nearly double U.S. exports to China over two years and was “totally done” despite the need for translation and textual revisions. China’s State Council’s customs tariff commission said it had suspended additional tariffs on some U.S. goods.
Oil prices rise on optimism about economy in 2020 (Reuters) - Crude oil traders have become progressively more bullish about the outlook for prices since the beginning of October as the trade war between the United States and China has eased, lifting concerns about a global recession. Deeper production cuts by Saudi Arabia and its allies in the expanded OPEC+ group of oil exporters, announced at the start of this month, have probably accelerated the bullish shift. But production cuts are a second-order effect. The rise in oil prices has been primarily driven by greater optimism about the outlook for global trade and the economy next year (https://tmsnrt.rs/2PSMGgW). Manufacturing surveys and data on industrial production in the United States, China, India and Germany have all started to show tentative signs that the recent slowdown in global growth and trade may be bottoming out. In the United States, the Federal Reserve has cut interest rates three times by a total of 75 basis points since the middle of the year in a bid to extend the current expansion. In China and India, governments have announced stimulus packages and encouraged increased bank lending to revive their economies. Even Germany has started to discuss using fiscal policy to stimulate more growth. As it enters a re-election year, the Trump administration’s focus is shifting from trade war to stimulating the economy, accelerating growth and boosting jobs and wages. With so much fiscal and monetary stimulus around the world, and the electoral cycle entering a strongly pro-growth phase, crude traders are betting oil consumption will grow faster next year.
Oil Prices Head Higher Despite OPEC+ Skepticism - Oil has edged up to three-month highs and is holding firm. “The conditions for a rising oil price appear favorable at present,” Commerzbank said in Tuesday. “Economic optimism coupled with a weaker US dollar and growing investor demand have allowed Brent and WTI to climb to over $65 and to over $60 per barrel respectively.” However, the bank noted that the shine on the OPEC+ deal will wear off, which creates downside risk. Oil prices have hit three-month highs on the back of the OPEC+ cuts and the thaw in the trade war, but the rally has already slowed. Some analysts are skeptical that the lagging members of the OPEC+ cohort, including Iraq and Nigeria, will live up to their commitments. “Why would they change next year just because they made a pledge?” said Giovanni Staunovo, commodities analyst at UBS Global Wealth Management, according to the Wall Street Journal. Who are some of the best-performers and worst-performers of 2019? The “worst” list is riddled with energy names, while the “best” list contains bad performers from 2018 who managed to stage a rebound. A study from Carnegie Mellon University found that Pennsylvania, Ohio and West Virginia enjoyed economic benefits from the rise of shale gas, but the region also suffered premature deaths due to pollution. The economic boost between 2004 and 2016 totaled $21 billion, but the costs reached $23 billion. The EIA’s Drilling Productivity Report forecasts growth of 48,000 bpd in the Permian in January, compared to December. However, output falls by 15,000 bpd in the Anadarko and by 9,000 bpd in the Eagle Ford. On the gas side, output grows in the Permian, but contracts in the Anadarko, Appalachia and Eagle Ford. The contraction in Appalachia is notable since it is the largest source of gas in the country. But the basin has been plagued by poor finances amid low prices. Goldman Sachs revised its policy to exclude financing for projects based on coal or oil drilling in the Arctic. The Wall Street giant also said that it would mobilize $750 billion in financing for “climate transition and inclusive growth finance” over the next decade. The new policy is “now the strongest among the big six U.S. banks,” according to the Sierra Club and the Rainforest Action Network. Using satellites, scientists found that a shale gas blowout at an XTO gas well, a subsidiary of ExxonMobil emitted more methane into the atmosphere than some countries do in an entire year.
Oil poised near three-month highs on US-China trade hopes, supply cuts - Oil prices trickled a fraction lower on Tuesday but remained near a three-month high as investors kept the faith with hopes that a fully fledged U.S.-China trade deal is in the pipeline, set to stoke oil demand in the world’s biggest economies. Brent crude oil futures had slipped by two cents to $65.32 a barrel by 0422 GMT, while West Texas Intermediate crude was down four cents to $60.17 a barrel. Under a partial trade agreement announced last week, Washington will reduce some tariffs on Chinese imports in exchange for Chinese purchases of agricultural, manufactured and energy products increasing by about $200 billion over the next two years. “Oil prices are struggling to extend their gains as investors await further details regarding the U.S.-China ‘Phase One’ trade deal,” said Edward Moya, senior market analyst at OANDA. “Oil should be much higher, but the U.S.-China trade war is far from over.” The so-called ‘Phase One’ trade deal between both countries has been “absolutely completed”, Larry Kudlow, a top White House adviser said on Monday, adding that U.S. exports to China will double under the agreement. The agreement is yet to be signed and several Chinese officials told Reuters the wording of the agreement remained a delicate issue, with care was needed to ensure expressions used in text did not re-escalate tensions and deepen differences. JP Morgan and Goldman Sachs have revised their oil price forecasts for the next year upwards, with an OPEC-led agreement to curb output further dovetailing with the improving trade outlook between the U.S. and China. Lower supply next year due to a planned cut by the Organization of the Petroleum Exporting Countries (OPEC) and associated producers like Russia — a grouping known as ‘OPEC+’ — and stronger economic growth expected because of the improved trade outlook between United States and China will combine to tighten the oil supply-demand balance next year, analysts from JP Morgan said. Oil demand could see further improvements as U.S. President Donald Trump “tries to ... ensure the U.S. growth remains robust before voters turn to the polls in November,”
Crude Slides On Surprise Build As Oil Volatility Plunges To 8-Month Lows - Oil prices jumped notably intraday (near three-month highs at $61 for WTI) as US manufacturing data printed better than expected, building on post-trade-deal optimism.“The conditions for a rising oil price appear favorable at present,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt.But that could all change after inventory data. API:
- Crude +4.7mm (-1.5mm exp)
- Cushing -0.3mm
- Gasoline +5.6mm
- Distillates +3.7mm
Crude inventories rose unexpectedly in the prior week but were expected to draw again this week. However a 4.7mm build was a big surprise relative to the 1.5mm draw expected... WTI hovered just below $61 ahead of the data, but dropped on the surprise build... And all of this is occurring as Oil 'VIX' drops to its lowest in 8 months...
EIA: US crude inventories down 1.1 million bbl - US crude oil inventories for the week ended Dec. 13, excluding the Strategic Petroleum Reserve, decreased by 1.1 million bbl from the previous week, according to data from the US Energy Information Administration. Separately, the American Petroleum Institute on Dec. 17 reported a build in US crude supplies of 4.7 million bbl for the week. At 446.8 million bbl, US crude oil inventories are 4% above the 5-year average for this time of year, the EIA report indicated. EIA said total motor gasoline inventories increased by 2.5 million bbl and are 5% above the 5-year range for this time of year. Finished gasoline inventories decreased while blending component inventories increased last week. Distillate fuel inventories increased by 1.5 million bbl and are about 7% below the 5-year average for this time of year. Propane-propylene inventories decreased by 2.5 million bbl last week and are about 10% above the 5-year average for this time of year, EIA said. US refinery inputs averaged 16.6 million b/d for the week ended Dec. 13, about 35,000 b/d less than the previous week’s average. Refineries operated at 90.6% of capacity. Gasoline production increased, averaging 9.8 million b/d. Distillate fuel production decreased, averaging 5.1 million b/d. US crude oil imports averaged 6.6 million b/d, down 308,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 6.4 million b/d, 15.1% less than the same period last year. Total motor gasoline imports averaged 519,000 b/d. Distillate fuel imports averaged 178,000 b/d.
WTI Surges Above $61 On Crude Draw, Demand Rebounds From 3-Year Lows - Oil prices remain lower following last night's surprise crude inventory build reported by API but analysts continue to expect a draw in the official data this morning.“As much as the API has taken the wind out of bulls’ sails, the lull in upside is expected to be short-lived,” .“After all, recent positive developments have given oil fundamentals for next year a supportive shot in the arm.” DOE:
- Crude -1.085mm (-1.75mm exp)
- Cushing -265k
- Gasoline +2.529mm (+2mm exp)
- Distillates +1.509mm
Unlike API's data, DOE reported a crude inventory draw in the last week (though smaller than analysts expected) and gasoline inventories rose for the 6th week in a row... Cushing stocks have fallen for the past six weeks and the market will be looking for signs of improvement in refinery runs, particularly in the Gulf Coast, which have been low compared with previous years, says Bob Yawger, futures director at Mizuho Securities.Additionally, Gasoline stockpiles are the highest they've been this time of year in data going back to 1990. US oil production held near record highs...
Oil settles slightly lower after smaller-than-expected US inventory decline Oil prices steadied on Wednesday after U.S. government data showed a decline in crude inventories and on expectations for an uptick in demand next year on the back of progress in resolving the U.S.-China trade fight. Brent futures gained 12 cents to trade at $66.22 a barrel, while U.S. West Texas Intermediate lost 1 cent to settle at $60.93. U.S. crude fell by 1.1 million barrels in the week to Dec. 13 to 446.8 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.3 million-barrel drop, the Energy Information Administration said. Gasoline and distillate inventories grew last week by 2.5 million barrels to 237.3 million barrels, and 1.5 million barrels to 125.1 million barrels, respectively, EIA said. Oil pared losses after the data, which contradicted Tuesday’s report of a build in U.S. crude stockpiles from industry group American Petroleum Institute (API). API figures released showed U.S. crude inventories swelling by 4.7 million barrels last week to 452 million barrels, sparking a post-settlement sell-off in oil futures. “The market reaction was abruptly stronger due to the fact that we were so far away from industry estimations in the way of a net build,” said Tony Headrick, an energy markets analyst at CHS Hedging. “The upward trend from optimistic demand expectations such as from recent developments like U.S.-China trade deal has the ability to stay in tact after these figures,” Headrick said.
Oil prices surf US-China trade thaw to three-month highs - Oil prices remained atop three-month peaks on Thursday, extending a robust streak that began a week ago, as thawing trade relations between the United States and China supported global markets. Brent crude futures edged up 8 cents to $66.25 a barrel by 0645 GMT, while U.S. West Texas Intermediate (WTI) crude gained 4 cents to $60.97. Trading volume was thin, with not even news of President Donald Trump’s impeachment by the U.S. House of Representatives stirring the oil market. “We’re near the top of trading ranges for both Brent and WTI so it’s interesting to see them holding here,” While there is a clear uptrend in place on the daily technical price chart for WTI to potentially move towards $61.50 a barrel, there are also near-term risks — touching that price level may encourage traders to sell, ″(Trading) volumes are terrible. A lot of people have given up for the year with no scheduled events to push oil markets around,” he said. The trend leaves oil prices set to rise for a third consecutive week, surfing momentum from announcements this month about deeper output cuts by major producers as well as the ‘Phase One’ deal between the United States and China to resolve their long-running trade war. The deal between the world’s two largest economies has improved the global economic outlook, lifted the prospect for higher energy demand next year and underpinned oil prices. In a further sign of thawing relations, China’s finance ministry on Thursday published a new list of six U.S. products that will be exempt from tariffs starting Dec. 26.
Oil Prices Hold Steady Near Three-month Highs - Oil prices held steady near three-month highs in thin trade on Thursday ahead of the holiday season. Benchmark Brent crude edged up by 3 cents to $66.20 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were virtually unchanged at $60.85. A potential thawing in U.S.-China trade relations has improved the global economic outlook, raising the prospect for higher energy demand next year. China has announced a list of United States (US) chemicals that will be exempted from import tariffs starting Dec. 26. This comes under a week after Beijing and Washington agreed a 'phase one' trade deal. Meanwhile, traders seemed to have shrugged off the vote in the U.S. House to impeach President Donald Trump. The United States House of Representatives voted largely along party lines to impeach Trump for abuse of power and obstruction of Congress. The move to impeach Trump relates to his alleged efforts to coerce Ukraine into investigating former Vice President Joe Biden as well as his alleged attempts to obstruct the Congressional investigation. Republicans currently hold a 53 to 45 majority in the Senate, with two Democratic-leaning independents, and removing Trump from office would require a two-thirds vote in favor. Several Senate Republicans have already indicated they will not vote to remove Trump from office even before the Senate holds its trial on the House charges.
U.S. oil prices settle at a 3-month high; Brent gains a 6th straight session – Oil futures ended higher Thursday and logged their highest settlement since mid-September, with global benchmark prices stretching their gains to a sixth consecutive session. Oil’s climb came a day after data showed a weekly decline in U.S. crude inventories. On the New York Mercantile Exchange, West Texas Intermediate crude for January delivery rose 29 cents, or 0.5%, to finish at $61.22 a barrel. The contract expired at the end of the session. February WTI crude, the new front-month contract, rose by 33 cents, or 0.5%, to settle at $61.18. February Brent crude added 37 cents, or 0.6%, to settle at $66.54 a barrel on ICE Futures Europe. That stretched its streak of gains to a sixth consecutive session, the longest winning streak since Jan. 10 when the market rose for 10 straight sessions, according to Dow Jones Market Data. Oil on Wednesday bounced back from early losses after the Energy Information Administration on reported that U.S. crude supplies fell by 1.1 million barrels for the week ended Dec. 13. That was less than the 2.5 million-barrel average decline expected by analysts polled by S&P Global Platts, but came as a relief after the American Petroleum Institute on Tuesday had reported a 4.7 million-barrel climb. The market should see further supply declines “into the end of the year due to year-end tax consequences of destocking,” Prices for oil may move lower in the first quarter of 2020 “due to slow demand,” Zahir said. “Of course, any problems with the China phase one deal we could see an accelerated move to the downside” as worries about energy demand resurface. On Thursday, however, China revealed a list of import tariff exemptions for six chemical and oil products from the U.S., according to a report from CNBC. Chinese tariff concessions on six U.S. petroleum products are “boosting trade confidence, although the concessions actually announced are insubstantial,” In other energy trade, January gasoline RBF20, -0.29% rose 1.4% to $1.7068 a gallon, while January heating oil rose 0.5% to $2.0295 a gallon. January natural gas declined by 1.3 cents, or 0.6%, to settle at $2.273 per million British thermal units, giving up earlier gains seen in the wake of the latest U.S. supply figures. The EIA on Thursday reported that domestic supplies of natural gas fell by 107 billion cubic feet for the week ended Dec. 13. Analysts expected a fall of 93 billion cubic feet, on average, according to a survey conducted by S&P Global Platts.
Oil posts 5th positive session in 6, fueled by US inventories and trade progress - Oil prices hovered near the highest in three months in thin pre-Christmas trading on Thursday, buoyed by the previous day’s news that U.S. crude inventories declined and as U.S.-China trade tensions continued to ease. Brent crude gained 37 cents to settle at $66.54 per barrel, for its sixth straight day of gains. U.S. West Texas Intermediate crude gained 29 cents, or 0.48%, to settle at $61.22 per barrel. Trading volume was thin, with oil headed for a third consecutive weekly rise. Prices were buoyed by China’s Dec. 13 decision to cancel a plan to impose additional tariffs on U.S. imports on Dec. 15 and the Phase 1 deal between Washington and China, which has eased trade tensions. The deal between the world’s two largest economies has improved the global economic outlook, lifting prospects for higher energy demand next year and underpinning oil prices. “The market’s happy with (Dec. 15) tariffs out of the way and the trade truce, for now,” said Bill Baruch, president at Blue Line Futures in Chicago. In a further sign of thawing relations, China’s finance ministry on Thursday published a new list of six U.S. products that will be exempt from tariffs starting Dec. 26. Oil has also gained momentum from announcements about deeper output cuts by major crude producers. The Organization of the Petroleum Exporting Countries and non-OPEC producers such as Russia agreed earlier this month to deepen production cuts by a further 500,000 barrels per day (bpd) from Jan. 1 on top of previous reductions of 1.2 million bpd.
Oil Settles Notably Lower On Jump In Rig Count, Profit Taking - Crude oil prices declined sharply on Friday as data from Baker Hughes showed a sharp increase in rig count in the U.S., and traders looked to trim down positions ahead of upcoming holidays. West Texas Intermediate crude oil futures for February ended down $0.74, or about 1.2%, at $60.44 a barrel. Brent Crude oil futures declined $0.48, or about 0.7%, to 66.06 a barrel. On Thursday, WTI crude oil futures settled at a three-month high. WTI Crude oil futures gained about 0.5% in the week. According to a report released by Baker Hughes, rigs count in the U.S. increased for a second straight week, rising by as much as 18 to 685 this week. The report also said total rigs count have now risen to 813. Despite optimism on the trade front and the ongoing OPEC output cuts, oil prices drifted lower in the session as traders looked keen on taking some profits ahead of the year-end holiday period. After the U.S. and China agreed on a phase one trade deal, China announced a list of United States chemicals that will be exempted from import tariffs. U.S. Treasury Secretary Steven Mnuchin said on Thursday a trade deal with China was finished and is ready for signing after the holidays.
U.S. oil prices end 1.2% lower as rig-count data show weekly increase - Oil futures finished sharply lower Friday, with declines accelerating after a weekly report on drilling rigs showed a big increase. Baker Hughes reported that the number of active U.S. rigs drilling for oil rose by 18 to 685 this week, marking a second straight weekly rise in rigs. The total active U.S. rig count also climbed by 14 to 813, according to Baker Hughes. West Texas Intermediate crude for February delivery, the U.S. benchmark grade, fell 74 cents, or 1.2%, to settle at $60.44 a barrel on the New York Mercantile Exchange. Still, the most-active contract gained 0.8% for the week, according to Dow Jones Market Data. February Brent crude BRNG20, -0.06% shed 40 cents, or 0.6%, to end at $66.14 a barrel on ICE Futures Europe, snapping a sixth straight session of gains, its longest win streak since Jan. 10. Still, the international benchmark gained 1.4% for the week and has been up six of the past seven weeks. Both contracts logged a third weekly climb in a row. “I think the overall picture is that we’re down today mainly due to profit taking as traders go into the holiday nervous about remaining [long] oil,” Phil Flynn, senior market analyst at Price Futures Group told MarketWatch. “The losses accelerated a bit after the increase in rig counts,” he said. The analyst said crude futures have enjoyed a healthy weekly run-up, with a period of seasonally light volume expected to possibly yield outsize moves in either direction. “It’s Christmas next week,” Flynn said. “A lot of traders aren’t going to be here,” he said. “Along with the growth of stock indices, the growth of oil prices also attracts attention,” said Alex Kuptsikevich, senior market analyst at FxPro. “Avoiding sharp movements, it shows a strengthening for the last seven trading sessions, moving closer towards the heights since July.” Oil prices have been mostly bolstered by more optimistic expectations for the global economy and Sino-American trade developments, as well as the decision earlier this month by the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, to deepen production cuts.
Exclusive: Saudi Arabia, UAE swayed Russia for OPEC+ cuts at Abu Dhabi F1 race - (Reuters) - Saudi Arabia turned to its Gulf ally the United Arab Emirates when it needed help convincing Russia to sign on to deeper oil supply cuts at this month’s OPEC meeting. The UAE’s de-facto ruler, Sheikh Mohammed bin Zayed, hosted crucial talks between Saudi Arabia and Russia in Abu Dhabi, where the three nations ironed out what would become one of the deepest supply cuts in a decade, four sources familiar with the negotiations told Reuters. The UAE’s role in the talks marks a change from years past and highlights Russia’s rising clout in the region. Since Russia started cooperating with OPEC on supply agreements in 2016, Riyadh and Moscow have led oil supply decisions in advance of OPEC meetings without much involvement from other producers. This time, Riyadh wanted Abu Dhabi to help add pressure on Moscow to agree to the cuts, two sources said. Russia saw the agreement as a way to strengthen key relationships in the region. “The message Russia wanted to send is that it is supporting Saudi Arabia at a crucial moment and that the alliance is solid,” one of the sources said. “The UAE’s role shouldn’t come as a surprise. Russia has very strong ties with the UAE.” Russia and Saudi Arabia are the world’s top exporters, together accounting for 20 percent of global production. The involvement of the UAE, which produces 3 percent of global oil supply, came after Moscow signaled opposition to extending new supply cuts in advance of the OPEC meetings in Vienna on Dec. 5 and 6, three of the sources said. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman orchestrated the deeper oil cuts and had been discussing them with Russian officials since October, when Russian President Vladimir Putin visited Riyadh, according to three of the sources. Since then, Saudi and Russian officials have shuttled between Riyadh, Moscow and Abu Dhabi to negotiate the oil-supply deal, the sources said.
Exclusive: U.S. probe of Saudi oil attack shows it came from north - report - (Reuters) - The United States said new evidence and analysis of weapons debris recovered from an attack on Saudi oil facilities on Sept. 14 indicates the strike likely came from the north, reinforcing its earlier assessment that Iran was behind the offensive. A comparison of engines (L) involved in the September 14, 2019 attack on an Aramco oil facility in Saudi Arabia and from the Shahed-123, displayed in the Iranian Materiel Display, are shown in this handout image provided by a U.S. government source. U.S. government/Handout via REUTERS In an interim report of its investigation - seen by Reuters ahead of a presentation on Thursday to the United Nations Security Council - Washington assessed that before hitting its targets, one of the drones traversed a location approximately 200 km (124 miles) to the northwest of the attack site. “This, in combination with the assessed 900 kilometer maximum range of the Unmanned Aerial Vehicle (UAV), indicates with high likelihood that the attack originated north of Abqaiq,” the interim report said, referring to the location of one of the Saudi oil facilities that were hit. It added the United States had identified several similarities between the drones used in the raid and an Iranian designed and produced unmanned aircraft known as the IRN-05 UAV. However, the report noted that the analysis of the weapons debris did not definitely reveal the origin of the strike that initially knocked out half of Saudi Arabia’s oil production.“At this time, the U.S. Intelligence Community has not identified any information from the recovered weapon systems used in the 14 September attacks on Saudi Arabia that definitively reveals an attack origin,” it said. The new findings include freshly declassified information, a State Department official told Reuters. The United States, European powers and Saudi Arabia blamed the Sept. 14 attack on Iran. Yemen’s Houthi group claimed responsibility for the attacks, and Iran, which supports the Houthis, denied any involvement. Yemen is south of Saudi Arabia.
Officials fear stranded oil tanker off Yemen's coast - Yemen’s officials on Tuesday reiterated their fears that a stranded oil tanker could explode and cause serious pollution off the country’s Red Sea coast. Loaded with nearly 1.1 million barrels of oil, the tanker Safer has been stranded some 7 km off Yemen’s Ras Isa port, north of the city of Hodeidah. In August, the United Nations attempted to assess the Safer. But the Houthis rebels blocked the access to the derelict tanker that was being used as a floating storage for oil transfers. The Houthis placed submitting the revenues from the sale of the oil aboard the tanker to their bank in Sanaa as a precondition to allowing the UN inspection team to reach the Safer. Officials of the Saudi-backed Yemeni government, based in the southern port city of Aden, expressed their concern that the Houthis are still refusing to grant the international inspectors access to the decaying oil tanker. They said the tanker is at the risk of exploding as it has remained without maintenance since it fell under the control of the Iranian-backed Houthi rebels in 2015. “The tanker is in a pressing need for urgent maintenance,” as four years’ accumulation of flammable gases and the formation of hydrocarbon gases may lead to a blast, an official told Xinhua on condition of anonymity. He said, “For several times, the Yemeni government called for international assistance in preventing the potentially serious oil pollution threatening the Red Sea’s ecology but received no active response.” The international community should exert more efforts in pressuring and forcing the Houthi rebels to allow the UN’s technical team to carry out necessary maintenance of the tanker and aborting any environmental disaster, the official said.
New WikiLeaks documents expose phony claims of 2018 Syria chemical weapons attack - Documents published by WikiLeaks on Saturday confirm that there is significant dissent within the Organisation for the Prohibition of Chemical Weapons (OPCW), the global chemical weapons watchdog, over the doctoring of a public report on the alleged April 7, 2018 chemical weapons attack in Douma, Syria, which reportedly killed 49 people and wounded as many as 650. The latest round of revelations makes clear that the US-led regime-change operation in Syria which began in 2011 has been based on a pack of lies. And the role of WikiLeaks in exposing these lies demonstrates why the US government has been pursuing WikiLeaks founder Julian Assange so ferociously, along with Washington's partners in crime like Britain and Australia. Relying on video which showed alleged victims of the attack in a hospital gasping for air and foaming at the mouth, the Trump administration and its European allies launched missile strikes against Syria just one week later. The US-led attack was an act of war which threatened to spark a wider conflict with Russia and Iran, which both have military forces deployed to the country to back the Assad government in the eight-year regime-change war fueled by the CIA. While the Trump administration made no effort to seek independent confirmation of the allegations against Assad before taking military action, the OPCW report and the organization’s supposedly objective stance were deployed to justify the assault months after the fact.However, a series of internal OPCW files published by WikiLeaks and reporting by columnist Peter Hitchens in the Daily Mail show that serious concerns have been raised by members of the OPCW Fact Finding Mission (FFM) to Douma about evidence that was excluded from the final report in order to implicate Assad. Relying on Islamist terrorist groups as “moderate rebel” proxies, including Al Qaeda and its affiliates, the US and its European allies have fueled a war which has resulted in the deaths of 570,000 people and displaced more than 12 million. The years of carnage have been aimed at overthrowing Assad and installing a pliant Western puppet regime in order to neutralize the influence of Iran and Russia in the oil-rich Middle East. Claims of chemical weapons attacks and the use of “barrel bombs” by Syria’s military have been repeatedly deployed throughout the war in an effort to justify Western military action and call for the removal of Assad.
Deluge Of New Leaks Further Shreds The Establishment Syria Narrative - Caitlin Johnstone - WikiLeaks has published multiple documents providing further details on the coverup within the Organisation for the Prohibition of Chemical Weapons (OPCW) of its own investigators’ findings which contradicted the official story we were all given about an alleged chlorine gas attack in Douma, Syria last year. The alleged chemical weapons incident was blamed on the Syrian government by the US and its allies, who launched airstrikes against Syria several days later. Subsequent evidence indicating that there was insufficient reason to conclude the chlorine gas attack ever happened was repressed by the OPCW, reportedly at the urging of US government officials. The new publications by WikiLeaks add new detail to this still-unfolding scandal, providing more evidence to further invalidate attempts by establishment Syria narrative managers to spin it all as an empty conspiracy theory. The OPCW has no business hiding any information from the public which casts doubt on the official narrative about an incident which was used to justify an act of war on a sovereign nation. The following are hyperlinks to the individual OPCW documents WikiLeaks published, with some highlights found therein: A first draft of the OPCW’s July 2018 Interim Report on the team’s findings in Douma. Contains crucial information that was not included in either the final draft of the July 2018 Interim Report or the March 2019 Final Report, including:
- 1. The symptoms of the alleged victims of the supposed chemical incident were inconsistent with chlorine gas poisoning.
- 2. OPCW inspectors couldn’t find any explanation for why the gas cylinders supposedly dropped from Syrian aircraft were so undamaged by the fall.
- 3. The team concluded that either the victims were poisoned with some unknown gas which wasn’t chlorine, or there was no chemical weapon at all.
Sabra and Chatila taught me all massacres become ‘alleged massacres’ if we don’t pay attention - Robert Fisk. -Not that long ago, I spotted a report in an American newspaper which referred to the “alleged Sabra and Chatila massacre”. Up to 1,700 civilians, most of them Palestinians, were slaughtered in the two refugee camps in Beirut in just three days in 1982. They were killed by Israel’s Lebanese Christian Phalangist allies. The Israelis watched – and did nothing. Even Israel’s own commission of enquiry admitted this. With two colleagues, I entered the camps before the murderers had finished committing their war crimes. I hid with an American reporter in the back yard of a hut beside a newly executed young woman. I climbed over heaps of corpses. That evening, I burned my clothes because they smelled of decomposition. Photographs and film of the dead were later broadcast around the world. Yet more than two decades later, this mass killing was merely “alleged”. And when I spoke to a younger colleague scarcely a year ago, he did not know the location of Sabra and Chatila, nor the number killed – almost 400 more than those who were murdered in the North Tower of the World Trade Center on 9/11. But no international or world leaders visit the mass grave at Sabra and Chatila on the anniversary of the massacre of the Palestinians. The greatest enemy of all journalists – and all politicians – is the failure of institutional, historical memory. It’s one thing to claim that a Middle East war is imminent because Iran threatens America or America threatens Iran or because Israel warns that Iran is making nuclear weapons. But if you count up all the previous threats of war between Iran and the US – not to mention Israel’s eight warnings over 15 years, each giving different dates for the ‘doomsday’ of Iran’s nuclear possession — you would do well to downgrade the threat of war. These warnings are issued for us to trumpet like clowns on radio, television, on social media and in newspapers – which we are usually obedient enough to do. They do not represent any kind of reality. They are issued because the supposed warmongers believe – quite rightly – that we either do not remember the identical and equally fraudulent figures they issued years ago. Or because they are convinced (again, I fear, correctly) that we don’t care very much to ‘keep them to the record’. This is one reason why I have spent – cumulatively – years of my time as a Middle East correspondent cataloguing the accounts of survivors of the Armenian genocide of 1917 (all, of course, now dead), the deliberate ethnic cleansing and mass murder of the one and a half million Christian Armenians by the Ottoman Turks. They were shot into mass graves, suffocated in caves in the Syrian desert, the women raped and forced into marriage, the children spitted on bayonets or stakes or hurled into rivers.
Why Syria’s small oil reserves have become the linchpin for political control in the region —Akram Hassan remembers when the modest oil fields in the arid eastern Syrian province of Deir al-Zor attracted companies from around the world. As an engineer in the industry and Kurd from the northern city of Qamishli, he watched the revenue disappear into the government’s coffers. “Syrian people did not have any benefit from this oil. … All the money the regime kept in their pocket,” said Hassan. Most higher-up workers in fields were from Latakia, the homeland of Syrian President Bashar al-Assad’s family. “Arab petroleum is for Arabs,” they would tell him. It was a joke, but a revealing one, Hassan said. Times have changed in his country. The oil has attracted another foreign power — the U.S. military — and Kurdish-led forces are the ones controlling the area and collecting revenue. Syria was never a large oil producer compared to its resource-rich neighbors. But somehow the small reserves, barely pumping now after more than eight years of war, have become a linchpin for political control. The Syrian economy has collapsed, and significant outside help is unlikely. The country’s GDP has declined by more than 70% since 2010, according to the CIA’s World Factbook, and the unemployment rate is around 50%. The government’s budget decreased to around $1.162 billion in 2017 compared to $16.4 billion in 2010. The oil could be just enough to prop up the Syrian government — or a competing power. And who controls oil-rich stretches of the Syrian desert could determine who controls large regions of the country. In 2010, before conflict erupted, Syrian wells produced around 385,000 barrels per day, according to the BP Statistical Review of World Energy. That amounted to just 0.5% of global production — around what North Dakota produced that year.
Turkey says S-400 system ‘vital’, will retaliate any US sanctions - Turkish Foreign Minister Mevlut Cavusoglu has repeated a retaliation threat against any US sanctions over Ankara's purchase of a Russian missile defence system. Speaking at a conference in Qatar's capital, Doha, Cavusoglu said on Saturday that Turkey would not cancel its deal with Russia over the S-400 missile system "whatever the consequences". "Sanctions and threatening language never work. But if sanctions are placed, Turkey will have to reciprocate," Cavusoglu said at the Doha Forum, a two-day conference billed as a global platform for dialogue. NATO allies Turkey and the United States have been at odds over the purchase of the advanced Russian system, which Washington says is not compatible with NATO defences and poses a threat to its F-35 stealth fighter jets. This week, senators in the US-backed legislation to impose sanctions on Turkey over the S-400 deal earlier this year and its recent military operation in northern Syria. The vote, which was immediately condemned by Turkey, was seen as the latest move to push US President Donald Trump to take a harder line against Ankara. The Trump administration has so far not imposed sanctions despite the president in 2017 signing a sanctions law that mandates financial penalties for countries that do business with Russia's military. Amid already strained bilateral ties, Washington has suspended Ankara from the US F-35 stealth fighter jet programme, in which it was a producer and buyer, to penalise it for buying the Russian system. Cavusoglu said the S-400 purchase - the first such move between a NATO member and Russia - was a necessity. "We are very desperate for an air defence system. We tried to procure it from the US and others, but it didn't work. This is a defence system that is vital for us."
Turkey Gives NATO The Middle Finger, Threatens To Shutter Critical Military Bases Over Sanction Threats - Although Trump and Erdogan have tried to maintain at least the veneer of a personally amicable relationship, and though Trump has at times defied his own senior NatSec officials to offer a major sop to Erdogan (like when Trump pulled US troops out and stepped aside to allow the Turkish invasion, the the horror of Europe), Erdogan's increasingly tight relationship with Russia - a relationship built on defense and energy ties - is becoming impossible for many western leaders to countenance. Congressional hawks like Lindsey Graham (for the Republicans) and Chris Van Hollen (on the Democratic side) have already successfully pushed Trump to "announce" more sanctions against Turkey via Twitter. And they might be able to finally push him to follow through, too.In response to this and myriad other slights both perceived and real, Erdogan made it clear on Monday that he's had about enough of this harassment from his supposed "allies" in the West. Because when it comes to Trump cards, Erdogan still has one to play.According to Bloomberg, Erdogan warned that he could shutter two of the most important NATO bases in the world if more sanctions are imposed.In the minds of US NatSec officials, Erdogan's threat is an extremely low blow. An early-warning radar at Turkey's Kurecik air base is a critical component of NATO's early-warning defense system against ballistic missile attacks. And the Incirlik air base in southern Turkey is critical to tactical air strikes and drone attacks throughout the region. "If it is necessary to shut it down, we would shut down Incirlik," Erdogan told AHaber television on Sunday. "If it is necessary to shut it down, we would shut down Kurecik, too."[...]"If they put measures such as sanctions in force, then we would respond based on reciprocity," Erdogan said. "It is very important for both sides that the U.S. should not take irreparable steps in our relations."
Turkish Military Gets Drones WIth Machine Guns - The Turkish military is about to take delivery of a fleet of 55-lb. drones equipped with a machine gun and 200-rounds of ammunition. Made by Ankara-based firm Asisguard, the 'Songar' drone can strike a 6" target at roughly 650 feet and has a range of 6.2 miles, and can operate in groups. A newer version is expected to be able to hit targets from over 1,300 miles away. Accoridng to Ayhan Sungar of Asisguard, a swarm of three Songar drones can be operated from a single remote control - with all three firing simultaneously at a target. Held aloft by eight rotating blades, the drone uses a series of sensors, cameras and lasers to calculate distance, angle and wind speed - along with robotic arms that can help to deliver accurate fire on target with minimal recoil, according to New Scientist. It is hard for a drone to shoot accurately, partly because of the difficulty of judging range and angle, and partly because the recoil from each shot significantly moves the drone, affecting the aim for the next round. Songar has two systems to overcome these challenges. One uses sensors, including cameras and a laser rangefinder, to calculate distance, angle and wind speed, and work out where to aim. The second is a set of robot arms that move the machine gun to compensate for the effects of recoil. -New Scientist While critics such as Robert Bunker of the US Army's Strategic Studies Institute say the drones could end up in the hands of armed insurgents (which they will regardless), Songar says the drones will allow for new tactics, such as laying down suppressive fire while humans or other drones carry out attacks on other targets such as infrastructure or vehicles.
Turkey To Establish Military Base In Libya As Egypt Threatens Its Own Intervention - Turkey's involvement in the ongoing Libyan war between Benghazi-based General Khalifa Haftar and the UN-recognized Tripoli GNA government is set to grow. Following a recent military agreement between Turkey and Tripoli, and as Haftar's forces threaten attack on any Turkish plane or ship, it's expected the Turkish military will set up a base in the war-torn country. Middle East Monitor reports of the latest developments: Turkey is set to establish a military base in Libya, according to Turkish media reports earlier this week, as President Recep Tayyip weighs up the possibility of intervention in the country’s civil war. Yeni Shafak reported on Monday that the Foreign Affairs Committee of the Turkish parliament had approved a recent agreement between Turkey and Libya on military cooperation. It also includes provisions for launching a “quick reaction force” if requested by the Libyan government.The exact location for the proposed base has not been revealed, but it will likely be in the vicinity of Tripoli, given that's where they key front line fighting has been as part of Haftar's LNA forces offensive on the capital. The deal was initially touted by Ankara as primarily for oil and gas exploration off Libya's coast and in the eastern Mediterranean, but was later revealed to include close military cooperation agreements.Addressing the controversial deal in statements made early this week President Erdogan told a pro-government news channel, "We will be defending the rights of Libya and Turkey in the Eastern Mediterranean." Already there are unconfirmed reports in Arabic media that Turkish special forces have landed in Tripoli. But crucially, neighboring Egypt, which has long backed east Libyan strongman Haftar, has condemned the Turkey-Tripoli GNA deal as "illegitimate" and has even signaled its own military intervention could come. On Tuesday, Egyptian President Abdel Fattah el-Sisi warned in the wake of the Turkey-Libya agreement, "We will not allow anyone to control Libya... it is a matter of Egyptian national security."
Greece To Help Tripoli 'Block Turkish Ships' As Libyan War Spills Into Mediterranean - The years-long war for post-Gaddafi Libya now threatens to spill over into the Mediterranean as Turkey and Greece line up on either side of the conflict. Each side is now threatening the others' allied ships in southern waters after a controversial maritime deal expanded Turkish claims off Libya's coast. On Thursday Benghazi-based General Kalifa Haftar declared his Libyan National Army has begun its "final decisive battle" to wrest control of the capital of Tripoli from the UN-backed Government of National Accord (GNA). "Zero hour has come for the broad and total assault expected by every free and honest Libyan," Haftar said in a televised address, reports Al Jazeera. "Today, we announce the decisive battle and the advancement towards the heart of the capital to set it free... advance now our heroes." Beginning eight months ago Haftar launched a siege of Tripoli, which has been stalled in recent months. Turkey has been the closest military supporter to Tripoli's GNA, even recently signing a controversial maritime agreement, after providing heavy weaponry to repel Haftar's assault. Last summer the LNA even attacked Turkish naval ships, in what's an ongoing declared war with any Turkish vessel or aircraft. This "proxy war" element is now threatening to involve Greece. Days ago Erdogan confirmed his country signed a bilateral memorandum, finalized on Nov. 27, which would allow Turkish forces to enter Libyan territory or waters at the request of the GNA authorities. "With this new agreement between Turkey and Libya, we can hold joint exploration operations in these exclusive economic zones that we determined," Erdogan said. The agreement established a continental shelf and Exclusive Economic Zone (EEZ) boundary line of 18.6 nautical miles between the two countries.
Turkey Allows Hamas To Plot Attacks From Istanbul- Telegraph - Turkey is allegedly allowing Hamas operatives to plan attacks against Israel from the city of Istanbul, a new report from the Telegraph claimed on Wednesday. Citing transcripts from Israeli police interrogations with suspects, the Telegraph alleged that senior Hamas operatives were using the large city of Istanbul to direct operations in Jerusalem and the occupied West Bank. The report said that one such case was the assassination attempt against the mayor of Jerusalem. “Israel has repeatedly told Turkey that Hamas is using its territory to plan attacks, but last weekend Mr Erdogan met Ismail Haniyeh, the head of Hamas, and Turkish intelligence agents maintain close contact with the group’s operatives in Istanbul,” the Telegraph report said. Hamas has been hosted in mostly Arab countries since its rise to power in the Gaza Strip. Among these Arab nations that hosted Hamas are Syria and Qatar, the latter being the most recent. Turkey is Qatar’s closest ally in the Middle East and the two countries are often on the same page when it comes to regional politics (e.g. Syrian conflict). The issue has fueled hostility between the two states, even though they maintain diplomatic relations. "Israel is extremely concerned that Turkey is allowing Hamas terrorists to operate from its territory, in planning and engaging in terrorist attacks against Israeli civilians," its foreign ministry said. ...Turkey has proved such a welcoming environment for Hamas that the group’s deputy leader, who has a $5 million US government bounty on his head, travels freely to the country without fear of arrest. A dozen Hamas operatives have moved to Istanbul from the Hamas-controlled Gaza Strip in the past year, according to Israeli and Egyptian intelligence records. — The Telegraph Also taking part in this alliance is Iran, who provides training and weapons to both Hamas and the Palestinian Islamic Jihad (PIJ).
Lebanon crisis: Dozens hurt as police and protesters clash in Beirut - Clashes between riot police and anti-government protesters in the Lebanese capital, Beirut, have left dozens of people wounded, witnesses say. The violence began as demonstrators, who had been attacked during a sit-in by masked counter-protesters, tried to move into a square near parliament. Police fired tear gas and rubber bullets, while protesters threw stones. At least 20 officers were also wounded. Protests over economic mismanagement by the ruling elite began in October. Saturday's events are some of the worst violence since the largely peaceful protests started. They triggered the resignation of the Prime Minister, Saad al-Hariri, but talks to form a new government are deadlocked. "It was a very peaceful protest. Everyone was singing chants that we're one people, that we're all peaceful and then some of the young guys pushed one of the fences that separated us," Mona Fawaz, who was at the protest, told the BBC. "We saw an enormous amount of police come out and really disperse us, push us and then they started [firing] tear gas on us. There was really no reason for all this demonstration of force." Riot police and security forces had been deployed in large numbers in Beirut, chasing demonstrators, beating and detaining some of them, Reuters news agency reports. Some protesters tried to push through steel barriers blocking the way to the parliament and government buildings. Clashes continued late into Saturday night.
Algeria stands at a historic crossroads - Algeria is teetering on the edge of a serious crisis. It is at a crossroads and it is hard to say which way the country will go. On the one hand, disregarding tensions such as the country has not seen since its independence in the early 1960s, the authorities are insisting on ploughing ahead with presidential elections. On the other, huge demonstrations, which for the past ten months have protested against the ruling establishment and the idea of elections under its aegis, are still taking place every week. At the same time, the country is witnessing unprecedented legal trials of the most prominent faces of the ruling regime – including two prime ministers, ministers and business leaders – on serious charges, ranging from corruption and squandering of public funds to the abuse of power. Leading figures who until recently ruled Algeria, including the brother of ousted President Abdelaziz Bouteflika and two senior intelligence and military officers from that time, remain in prison after being convicted on serious charges of violating the authority of the army and conspiring against the government. Against this background, which would have been unimaginable in Algeria only a few months ago, more and more people are taking to the street, rebelling against and suspicious of everything, even of the legal proceedings against these former regime henchmen. After all, the establishment, or what is left of the old regime, is still in place, even if it has offered up its most prominent figures. The political impasse has been going on for weeks. Attempts to calm the public mood by sacrificing some of the Bouteflika faithful has only served to fuel demonstrators' demands that all such remnants of the old guard be rooted out.
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