natural gas prices hit 25 year low; crude supplies and oil + oil product supplies again at new all-time highs

oil prices fell for the 2nd week in the past three this week, on a resurgence of covid-19 cases in the US and globally, which threatened the chance for an economic recovery...after rising nearly 10% to $39.75 a barrel last week on signs of rising demand and on the apparent success of the OPEC+ output cuts, the contract price of US light sweet crude for July delivery opened 1.5% lower on Monday on White House trade adviser Peter Navarro's comments that the trade deal with China was "over", but moved back up after Trump tweeted that the trade agreement was "fully intact" and finished 71 cents higher at $40.46 a barrel on tighter supplies from major producers and an improvement in the long-term demand outlook as trading in the July oil contract expired...now quoting the price of US light sweet crude for August delivery, which had ended last week at $39.83 a barrel and risen 90 cents to $40.73 a barrel on Monday, oil prices moved lower on Tuesday, as a rising number of Covid-19 cases sparked demand fears, and as traders braced for reports expected to show swelling U.S. crude inventories and ended down 36 cents at $40.37 a barrel...oil prices then opened below $40 Wednesday morning following a surprisingly large crude build reported by API overnight and then went on to fall $2.36 or nearly 6% to $38.01 a barrel after the EIA confimed that U.S. crude supplies had hit another record and as mounting coronavirus cases in the US, China, Latin America and India unnerved speculators and pressured oil prices...but oil prices found support on Thursday as data showed that fewer Americans had filed for unemployment benefits last week and that orders for key capital goods had rebounded in May and ended 71 cents higher at $38.72 a barrel, as data provided to Reuters showed road traffic in some of the world's major cities had returned to 2019 levels in June...oil prices then pulled back on Friday as a record rise in U.S. coronavirus cases and growing infections in parts of the world pointed to long-term challenges for a recovery in crude-oil demand and ended down 23 cents at $38.49 a barrel, thus posting a weekly drop of 3.6%, after record U.S. crude inventory data had dragged prices lower midweek...

meanwhile, natural gas prices tumbled to their lowest level since 1995 after a big storage injection was reported Thursday and barely rebounded from there, thus ending lower for a 4th straight week....after falling 3.6% to $1.669 per mmBTU on falling LNG exports last week, the contract price of natural gas for July delivery slipped another half cent on Monday as rising natural gas output offset forecasts for warmer-than-normal weather and higher air conditioning demand over the next two weeks...natural gas prices fell another 2.7 cents on Tuesday, as a weakened heat outlook further weighed on July contract prices, and then fell another 4 cents to a two-month low of $1.597 on Wednesday on forecasts of a big weekly storage build...natural gas prices collapsed over 14 cents to a 25-year low of $1.440 per mmBTU on Thursday after the EIA reported that big build, prompting fears that underground storage caverns would be full by the end of the summer, before ending the session off 11.5 cents at $1.482 per mmBTU....prices then edged up 1.3 cents to finish the week still down more than 10% at $1.495 per mmBTU on Friday despite ongoing demand destruction from expanding coronavirus cases, on a continued slowing of gas output, a small rise in pipeline and LNG exports, and an increase in cooling demand..

Since we haven't looked at natural gas prices lately, we'll ​first ​include a graph of their recent trajectory below..

the above graph is a screenshot of the interactive daily price chart for the July natural gas futures contract at Barchart.com, and it shows the range of prices, in dollars per mmBTU, for​ ​​the​ July natural gas futures contract as a vertical bar for each day over the past year...one can barely see it in this view, but each bar has two small horizontal appendages: the one on the left is the opening price for the day the bar indicates, while the appendage on the right is the day's closing price...

​next, we'll include a graph of ​natural gas prices going back 30 years, to 1990:

​this graph also came from ​​the same the interactive daily price chart for the July natural gas futures contract at Barchart.com​, but we have reset the interactive feature to show the maximum price history, which displays the range of natural gas prices over each month in that history as a vertical bar​...since the July 2020 contract was not trading over that history, this had the effect of changing the focus of the graph to the prices for the nearest monthly natural gas contract that was trading at any given time, which is the same as what is being quoted as 'the price of natural gas' daily...​however, since trading in the July natural gas contract expired​ on​ Friday, ​this and other longer term graphs now reflect natural gas prices for ​the ​August​ gas contract​, which averaged about 5 cents higher than the July contract prices we've discussed today...​nonetheless, it's stil clear that natural gas prices have fallen to their lowest level since 1995..​

the natural gas storage report from the EIA for the week ending June 19th indicated that the quantity of natural gas held in underground storage in the US rose by 120 billion cubic feet to 3,012 billion cubic feet by the end of the week, which left our gas supplies 739 billion cubic feet, or 32.5% higher than the 2,273 billion cubic feet that were in storage on June 19th of last year, and 466 billion cubic feet, or 16.9% above the five-year average of 2,546 billion cubic feet of natural gas that has been in storage as of the 19th of June in recent years....the 120 billion cubic feet that were added to US natural gas storage this week was well above the consensus forecast from S&P Global Platts' survey of analysts calling for a 107 billion cubic feet increase, and was way more than the average of 73 billion cubic feet of natural gas that have been added to natural gas storage during the same week over the past 5 years, and it was also above the 103 billion cubic feet addition of natural gas to storage during the corresponding week of 2019... it was also the most natural gas added to storage during any June week in the modern record, and also the 3rd largest natural gas storage increase in the past decade...

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending June 19th indicated that a sizable increase in our oil production was almost enough to cover a large increase our oil exports, again leaving us with surplus oil to add to our stored commercial supplies of crude oil for the 3rd week in a row, and for the 30th time in the past forty-one weeks....our imports of crude oil fell by an average of 102,000 barrels per day to an average of 6,540,000 barrels per day, after falling by an average of 222,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 695,000 barrels per day to an average of 3,157,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,383,000 barrels of per day during the week ending June 19th, 797,000 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 rose by 500,000 barrels per day to 11,000,000 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 14,383,000 barrels per day during this reporting week..

meanwhile, US oil refineries reported they were processing 13,840,000 barrels of crude per day during the week ending June 19th, 239,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 490,000 barrels of oil per day were being added to the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports and from oilfield production was 53,000 barrels per day more than what was added to storage plus what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just ​inserted a (-53,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the average daily supply of oil and the average daily 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 have just transcribed....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....   

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,556,000 barrels per day last week, which was 11.6% less than the 7,415,000 barrel per day average that we were importing over the same four-week period last year....the 490,000 barrel per day net addition to our total crude inventories included 284,000 barrels per day that were added to our Strategic Petroleum Reserve, and 206,000 barrels per day that were being added to our commercially available stocks of crude oil ....this week's crude oil production was reported to be up by 500,000 barrels per day to 11,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was up by 500,000 barrels per day to 10,600,000 barrels per day, while a 1,000 barrel per day increase in Alaska's oil production to 362,000 barrels per day had no impact on the rounded national total....last year's US crude oil production for the week ending June 21st was rounded to 12,100,000 barrels per day, so this reporting week's rounded oil production figure was about 9.1% below that of a year ago, yet still 30.5% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 74.6% of their capacity while using 13,840,000 barrels of crude per day during the week ending June 19th, up from 73.8% of capacity during the prior week, but excluding the 2005 & 2008 hurricane​-related refinery ​interruptions, still one of the lowest refinery utilization rates of the last thirty years...hence, the 13,840,000 barrels per day of oil that were refined this week were still 20.2% fewer barrels than the 17,337,000 barrels of crude that were being processed daily during the week ending June 21st, 2019, when US refineries were operating at 94.2% of capacity....

with the increase in the amount of oil being refined, gasoline output from our refineries was also higher, increasing by 438,000 barrels per day to 8,794,000 barrels per day during the week ending June 19th, after our refineries' gasoline output had increased by 217,000 barrels per day over the prior week... however, since our gasoline production is still recovering from a multi-year low, this week's gasoline output was still 16.3% lower than the 10,512,000 barrels of gasoline that were being produced daily over the same week of last year....at the same time, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 63,000 barrels per day to 4,561,000 barrels per day, after our distillates output had decreased by 264,000 barrels per day over the prior week...but even after this week's increase in distillates output, our distillates' production was 14.0% less than the 5,305,000 barrels of distillates per day that were being produced during the week ending June 21st, 2019....

even with the big increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the 6th time in 9 weeks and for the 14th time in 21 weeks, falling by 1,673,000 barrels to 255,322,000 barrels during the week ending June 19th, after our gasoline supplies had decreased by 1,666,000 barrels over the prior week...our gasoline supplies decreased this week because the amount of gasoline supplied to US markets increased by 738,000 barrels per day to 8,608,000 barrels per day, while our imports of gasoline rose by 174,000 barrels per day to 704,000 barrels per day, and while our exports of gasoline fell by 209,000 barrels per day to 286,000 barrels per day....even after this week's inventory decrease, our gasoline supplies were still 9.9% higher than last June 21st's gasoline inventories of 232,225,000 barrels, and roughly 9% above the five year average of our gasoline supplies for this time of the year...  

with the increase in our distillates production, our supplies of distillate fuels increased for the eleventh time in 23 weeks and for the 16th time in 38 weeks, rising by 249,000 barrels to 174,720,000 barrels during the week ending June 19th, after our distillates supplies had decreased by 1,358,000 barrels over the prior week....our distillates supplies rose this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 89,000 barrels per day to 3,466,000 barrels per day, and because our exports of distillates fell by 173,000 barrels per day to 1,128,000 barrels per day, while our imports of distillates fell by 94,000 barrels per day to 69,000 barrels per day....after this week's inventory increase, our distillate supplies at the end of the week were 39.4% above the 125,380,000 barrels of distillates that we had stored on June 21st, 2019, and about 28% above the five year average of distillates stocks for this time of the year...

finally, even with the drop in our crude oil output and the decrease in our oil imports, our commercial supplies of crude oil in storage rose for the 19th time in twenty-two weeks and for the 34th time in the past 52 weeks, increasing by 1,442,000 barrels, from a record high of 539,280,000 barrels on June 12th to another all time high of 540,722,000 barrels on June 19th...that meant our our commercial crude oil inventories were around 16% above the five-year average of crude oil supplies for this time of year, and around 54% above the prior 5 year (2010 - 2014) average of our crude oil stocks for the third week of June, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories have generally been rising since September 2018, except for during last summer, after generally falling until then through most of the prior year and a half, our crude oil supplies as of June 19th were 15.2% above the 469,576,000 barrels of oil we had in commercial storage on June 21st of 2019, 29.8% above the 416,636,000 barrels of oil that we had in storage on June 22nd of 2018, and 6.2% above the 509,213,000 barrels of oil we had in commercial storage on June 16th of 2017...  

furthermore, once again checking the total of our commercial oil supplies and the stockpiles of all the refined product made from oil, we find those supplies have increased by 3,932,000 barrels this week to ​yet ​another record high of 1,450,655,000 barrels, 11.6% more than the 1,299,928,000 barrel total of the same week a year ago...   

This Week's Rig Count

the US rig count fell for the 16th week in a row during the week ending June 26th, but just by the minimum, leaving the rig count down by 66.6% over that fifteen week period....Baker Hughes reported that the total count of rotary rigs running in the US decreased by 1 rig to 265 rigs this past week, which was the fewest active rigs in Baker Hughes records going back to 1940 and 139 fewer rigs than the all time low prior to this year, and was also down by 702 rigs from the 967 rigs that were in use as of the June 28th report of 2019, and 1,664 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 to flood the global oil market in their first attempt to put US shale out of business....

the number of rigs drilling for oil decreased by 1 rig to 188 oil rigs this week, after falling by 10 oil rigs the prior week, leaving oil rig activity at its lowest since June 12, 2009, which was also 605 fewer oil rigs than were running a year ago, and less than an eighth of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations was unchanged at 75 natural gas rigs, matching the lowest number of natural gas rigs running in at least 80 years, down by 98 natural gas rigs from the 173 natural gas rigs that were drilling a year ago, and less than a twentieth of 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, two rigs classified as 'miscellaneous' continued to drill this week; one on the big island of Hawaii, and one in Lake County, California... a year ago, there was just one such "miscellaneous" rig deployed, drilling a test well in Sandusky county Ohio..

the Gulf of Mexico rig count was unchanged at 11 rigs this week, with all of those rigs drilling for oil in Louisiana's offshore waters...that matches the fewest number of rigs working in the Gulf or offshore nationally in Baker Hughes offshore records dating back to 1968, and was 15 fewer rigs than the 26 rigs drilling in the Gulf a year ago, when 24 rigs were drilling offshore from Louisiana and two rigs were operating in Texas waters...there are no rigs operating off other US shores at this time, nor were there a year ago, so the Gulf of Mexico rig count is equal to the national rig count, just as it has been since the onset of last winter...

the count of active horizontal drilling rigs decreased by 4 rigs to 234 horizontal rigs this week, which was the fewest horizontal rigs active since December 30th, 2005, and hence is a new 14 year low for horizontal drilling...it was also 610 fewer horizontal rigs than the 840 horizontal rigs that were in use in the US on June 28th of last year, and less than a fifth of the record of 1372 horizontal rigs that were deployed on November 21st of 2014...on the other hand, the directional rig count increased by 2 to 20 directional rigs this week, but those were still down by 48 from the 68 directional rigs that were operating during the same week of last year...at the same time, the vertical rig count rose by 1 rig to 15 vertical rigs this week, but those were also still down by 44 from the 59 vertical rigs that were in use on June 28th of 2019....

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 June 19th, the second column shows the change in the number of working rigs between last week's count (June 12th) and this week's (June 19th) count, the third column shows last week's June 12th 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 June, 2019...    

as you can see, there was very little change in drilling activity ​anywhere this week, suggesting that prices have risen high enough that drillers are no longer anxious to shut down money-losing operations, but not high enough to encourage ​the ​addition of new rigs to the field...checking the rig counts in the Texas part of Permian basin, we find no changes in either Texas Oil District 8, which is the core Permian Delaware, or in Texas Oil District 7C and Texas Oil District 8A, the southern and northern reaches of the Permian Midland respectively...with the rig count in the Texas Permian thus unchanged, that means that the rig that was shut down in New Mexico would have been drilling in the western Permian Delaware to account for the 1 rig decrease in the Permian basin rig count nationally...​.​the lone rig that was added in Texas this week was Texas Oil District 3, which we usually attribute to the Eagle Ford shale, but rigs in that basin were unchanged this week, so the ​District 3 rig was ​apparently ​targeting some other unnamed formation...elsewhere, the rig pulled out of Colorado had been drilling in the Denver-Julesburg Niobrara chalk, and the rig pulled out of Wyoming had been drilling in another basin not tracked by Baker Hughes, while the rig added in Oklahoma was drilling in the Cana Woodford, where the rig count rose to 6 but was still down from 49 rigs a year ago...we should also note that there were no changes in natural gas rigs anywhere in the country this week...

++++++++++++++++++++++++++++++++++++++

Utica Shale well activity as of June 20 -  Seven horizontal permits were issued during the week that ended June 20, and 8 rigs were operating in the Utica Shale.

• DRILLED: 170 (165 as of May 2)
• DRILLING: 107 (100)
• PERMITTED: 506 (506)
• PRODUCING: 2,487 (2,483)
• TOTAL: 3,270 (3,254)

TOP COUNTIES BY NUMBER OF PERMITS

• 1. BELMONT: 691 (688 as of May 2)
• 2. CARROLL: 530 (530)
• 3. HARRISON: 522 (515)
• 4. MONROE: 438 (438)
• 5. JEFFERSON: 283 (277)
• 6. GUERNSEY: 280 (280)

TOP COMPANIES BY NUMBER OF PERMITS

• 1. EAP OHIO: 870 (864 as of May 2)
• 2. ASCENT RESOURCES UTICA: 644 (637)
• 3. GULFPORT APPALACHIA: 416 (413)
• 4. ANTERO: 258 (258)
• 5. ECLIPSE: 218 (218)

Shale well gas production drops - Natural gas production from Ohio’s shale wells dropped during the first three months of the year, according to the Ohio Department of Natural Resources. Utica and Marcellus shale wells produced almost 582 billion cubic feet of natural gas through March. That was almost 5% less natural gas than was produced during the first quarter of 2019. Horizontal shale wells produced nearly 5.9 million barrels of oil, a 16% increase over the previous year. Most of the wells drilled in Ohio have targeted areas that primarily produce natural gas. The wells also produced 7.3 million barrels of salty wastewater or brine.  ODNR recorded production from 2,509 horizontal shale wells, with each well averaging:

• ‒ 2,346 barrels of oil.
• ‒ 232 million cubic feet of natural gas.
• ‒ 86 days of production.

Belmont County produced the most natural gas — 206 billion cubic feet — and Guernsey County produced the most oil — 2.6 million barrels — during the quarter. Ascent Resources Utica was the top producer of both natural gas — 190 billion cubic feet — and oil — 2.3 million barrels. Some drillers have deferred production with the hope that commodity prices will rebound later this year and next year.

Chevron resumes local natural gas asset divestiture -  Chevron in February had picked Barclays to help it sell the assets, which includes natural gas wells in West Virginia, Ohio and Pennsylvania, 400,000 net acres in the Marcellus Shale and 450,000 acres in the Utica Shale.

Dow, Shell announce joint plans to develop electric cracking technology - Dow, Inc. and Shell announced this week a joint development agreement to accelerate and develop technology to electrify ethylene steam crackers. Currently, steam crackers rely on fossil fuel combustion to heat their furnaces, which makes them CO2 intensive. Dow and Shell said that using renewable electricity to heat steam cracker furnaces could become one of the routes to decarbonize the chemicals industry. The companies have innovation project teams in Amsterdam and Terneuzen, the Netherlands and Texas focused on designing and commercially scaling “e-cracker” technologies. “Continuously improving the sustainability of our operations is an inherent part of how we operate at Dow,” said Keith Cleason, vice president of Dow Olefins, Aromatics and Alternatives business. “Significant technological breakthroughs are needed to reduce our industry’s energy use and greenhouse gas emissions, which will require companies to step out of their comfort zones and work together to achieve bold and ambitious new goals. Our partnership with Shell is an important step in making this vision a reality.” Shell brought its petrochemicals experience to Pennsylvania when Shell Chemical Appalachia LLC invested in the building of a major plant consisting of an ethylene cracker with a polyethylene derivatives unit near Pittsburgh. The plant will use low-cost ethane from shale gas producers in the Marcellus and Utica basins to produce 1.6 million tonnes of polyethylene each year. Completion of the site’s early works program was realized in November 2017 with the main construction phase beginning shortly after. Commercial production is expected to begin in the next couple of years. “Steam cracking makes base chemicals, which are transformed into a range of finished products that help society live, work and respond to climate change,” said Thomas Casparie, executive vice president of Shell’s global chemicals business. “This new work with Dow has the potential to contribute to the reduction of carbon emissions from the manufacture of chemicals and to Shell’s ambition of becoming a net-zero emissions energy business by 2050 or sooner.

Former technician admits to falsifying weld records on Mariner East pipeline in Westmoreland County -  A former pipeline technician admitted Monday that he falsified documents indicating welds on the Mariner East pipeline in Westmoreland County had been properly X-rayed when they had not been.Joshua Springer of Scottdale, Westmoreland County, had worked on Energy Transfer’s Mariner East 2 pipeline between May 2017 and June 2018, mostly responsible for a 20-mile segment between Houston, Pa., and Delmont.His job was to take X-rays of welds and interpret the data to make sure the welds were good, then record the findings in reports sent to Energy Transfer, a Texas-based energy company. Energy Transfer had previously said that the company’s outside auditors discovered the falsified records in 2018, before the pipeline was put into service. The company said it immediately reported the fraud to regulatory authorities and Mr. Springer was fired by his employer.Energy Transfer said it had reinspected all welds in the section where Mr. Springer had worked and found all in compliance.The three Mariner East pipelines carry natural gas between the Marcellus and Utica shales in Ohio, West Virginia and Western Pennsylvania to processing plants near Philadelphia.The U.S. attorney’s office did not identify Mr. Springer’s employer but said he was a radiograph technician for a company that performed “nondestructive testing” on the pipeline.He was responsible for testing welds and interpreting the results of the tests, developing film, signing reader sheets and certifying the quality and integrity of the welds.The testing typically involved taking three X-rays of each weld, said Assistant U.S. Attorney Lee Karl. The results — including whether the X-ray of the weld was acceptable or rejected, the number of the weld and other technical data — are all recorded on a reader sheet maintained by Energy Transfer as required by the Pipeline and Hazardous Material Safety Administration. Mr. Springer falsified various reader sheets, according to his plea, by creating and signing sheets indicating that certain welds had been X-rayed and were acceptable “knowing in truth and fact that he signed and certified reader sheets for welds where he intentionally substituted X-ray exposures from different welds,” said Mr. Karl. “He did this because one of the original X-ray exposures was unacceptable and contained a defect on the film. Rather than re-shoot the weld and correctly interpret the radiograph, [he] purposefully substituted an exposure from a different weld that he knew would be acceptable.” After his conduct was discovered, Mr. Karl said, an outside audit determined that Mr. Springer did this 77 times.

Natural gas drilling impact fees generate nearly $2B in revenue since 2012 - The Pennsylvania Public Utilities Commission (PUC) released data this week showing that the Commonwealth’s natural gas impact tax has generated nearly $2 billion in new revenues since 2012, with more than $200 million reported in 2019.“Generating nearly $2 billion in less than a decade, Pennsylvania’s tax on natural gas development is a winning policy that makes community investments and key statewide environmental protection and conservation programs possible,” Marcellus Shale Coalition President David Spigelmyer said. “Impact tax revenues directly benefit all 67 Pennsylvania counties, regardless of drilling activity, funding new roads, parks, bridges, first responders, flood control and farmland preservation, among others.”Spigelmyer stated that policymakers should closely recognize that the impact tax structure ensures all Pennsylvania residents share in the benefits of responsible shale development.This year’s impact fee distribution is approximately $42.6 million lower than last year, driven primarily by the average price of natural gas in 2019 ($2.63 per 1 million British thermal units) versus the average price in 2018 ($3.09 per MMBtu) which caused a lower impact fee payment for each well in 2019, according to the PUC.

New Lawrence County gas-fired power plant starts generating electricity for up to 1 million homes  - -- Western Pennsylvania has a new 1,000-megawatt power plant fueled by natural gas, and it's located in Lawrence County. Kallanish Energy made an official announcement Wednesday that it has started generating electricity at its commercial operations at the Hickory Run Energy Center near New Castle. The plant went online in mid-May, producing enough electricity to power one million homes. The facility is located on a former manufacturing site near North Beaver Township. It uses natural gas from the Marcellus and Utica shales and employs 23 workers. It cost $863 million and broke ground in 2017, employing up to 500 workers during the construction process. Kallanish Energy reports the plant uses two gas-powered turbine generators along with a steam turbine generator as well as two heat recovery steam generators. The power plant is owned and operated by a subsidiary of Japan's ITOCHU Corp., by Kansas-based Tyr Energy. Kallanish cited state agencies expect natural gas will produce up to 45-percent of Pennsylvania's electricity by the end of 2022.

Support amplifies for proposed state methane rule - All of the 32 speakers at Tuesday evening’s virtual public hearing voiced degrees of support for the state Department of Environmental Protection’s proposal to limit emissions of methane and volatile organic compounds at shale gas operations. But all of them also emphasized that the rule isn’t strong enough to protect public health and the environment, and said big loopholes excluding low-producing wells and those with no history of leaks from regular inspections must be closed. The testimony of Elaine Labalme, a consultant with the Environmental Defense Fund, was typical. “The annual climate impact of methane emissions are twice that of all the cars in the state. We’ve got a million-ton methane problem, and that calls for serious action,” she said. “Pennsylvania must lead in the face of federal regulatory rollbacks.” As proposed, the rule would reduce VOC emissions by 4,404 tons a year and — as a co-benefit — methane by 75,603 tons per year from the approximately 11,500 existing shale gas well sites and connecting infrastructure, including compressor stations. But the proposal also would exempt low-producing conventional wells — those that produce less than 15 barrels of oil a day — from regular inspections. That means that of the more than 71,000 conventional wells, just 303 would be inspected. Inspections of all conventional or unconventional horizontal shale gas wells with histories of low leakage would also see their inspections reduced. “The rule as proposed has loopholes and is not adequate,” testified Shannon Smith of FracTracker Alliance, which compiles statistics on the oil and gas industry. “Research doesn’t show that the absence of leaks predicts future leaks.”

Pa. grand jury report on fracking: DEP failed to protect public health - A Pennsylvania grand jury report two years in the making slammed the Department of Environmental Protection for failing to protect the public from the health effects of fracking. Pennsylvania Attorney General Josh Shapiro, who sent investigators across the state to investigate the industry, announced the findings at a press conference Thursday in Harrisburg. The grand jury said the risk of fracking should fall on the industry and on regulators but DEP “did not take sufficient action in response to the fracking boom.” “It’s the government’s job to set and enforce the ground rules that protect the public interest,” Shapiro said. “Through multiple administrations, they failed.” At one point, Shapiro held up a jar of brown well water that he said came from a resident whose water had been contaminated. He told stories of testimony from residents who complained of dead livestock, nausea, headaches and nosebleeds. “The grand jurors heard repeated testimony of small children waking up with severe nosebleeds. One parent testified that her 4-year-old daughter was waking up crying with blood pouring out of her nose,” Shapiro said. In one case, a resident saw how a nearby drilling operation polluted a waterway, watching the water “change colors.” He filmed the incident and contacted DEP. But Shapiro says rather than investigate and hold the company accountable, the resident was threatened with “filing a false report.” Susan Phillips / StateImpactPA Three-year-old Skylar Sowatsky protests drilling at a rally in Butler County in 2012. Skylar’s mother Kim McEvoy said once gas drilling began, her water turned gray and cloudy. And in the spring of 2012, her well was running dry. The grand jury concluded the DEP’s responses to such problems amounted to sending the message: “Leave fracking alone.” “Sadly, too many DEP employees listened,” Shapiro said. And the agency’s leadership, he said, is “too cozy” with the industry. A spokesman for DEP put the blame on the administration of former Gov. Tom Corbett, a Republican who followed Democratic Gov. Ed Rendell, and who presided over the beginning of the state’s fracking boom. Rendell ushered in the Marcellus Shale development with enthusiasm. But the real gas rush began under Corbett, who served as governor for one term between 2011-2015. His handling of shale gas drilling was controversial, and used by current Gov. Tom Wolf as part of his campaign to oust Corbett. “The Wolf Administration inherited a flawed ideological approach to regulation of unconventional oil and gas development that was forced on the departments of Environmental Protection and Health by the Corbett Administration, which promoted the rapid expansion of natural gas development and profit above these other priorities,” the DEP spokesman said in statement. Wolf promised greater reforms and oversight of the fracking industry, including a severance tax, but for many environmentalists, he fell short.

‘Government failed': Pa. attorney general’s report highlights shortfalls in Marcellus Shale oversight. -  Attorney General Josh Shapiro flexed his muscles on the natural gas industry and its state regulators Thursday, making a forceful argument that the regulators - and the elected officials who give them their cues - have consistently placed the industry over the people through most of the first generation of development of the Marcellus Shale play in Pennsylvania. Shapiro’s 102-page grand jury report called for several changes that he said are badly needed to level the playing field for property owners who have seen their private water wells contaminated by hydraulic fracturing, or “fracking,” or have battled physical ailments that came on with the arrival of Big Gas in their communities. “It’s David and Goliath,” Shapiro said. “It’s a rural family living next to a huge industry backed by billions of dollars and out-of-state investors, by bought science, by lobbyists and former officials who have amassed so much power that they act as though they are unaccountable.” The document released Thursday did not assign criminal culpability to anyone. Shapiro’s investigators have brought environmental charges against two gas drilling companies out of the same two-year investigation, and the attorney general hinted when the latter set of those charges were filed on June 15 that the grand jury’s ongoing probe will result in more criminal charges down the road. Shapiro said Thursday’s report - littered with anecdotal stories from the direct testimony of more than 70 individuals in the heart of the Marcellus play - points more broadly to a state government that has failed, and he delivered some strong punches to his friend and Democratic political ally Gov. Tom Wolf’s Department of Environmental Protection in the process. “It’s the government’s job to set and enforce the ground rules that protect the public interest, and through multiple administrations, they failed to do that,” Shapiro said. In the report, Shapiro’s investigators chastised DEP over the history of the shale boom for failing to conduct water quality tests in response to citizen complaints, often failing to enforce a “presumption” that oil and gas activity within a certain distance of a home when contamination was proven, and showing a long-term bias against issuing violations.

Shale industry will be rocked by $300 billion in losses and a wave of bankruptcies, Deloitte says - The U.S. shale industry is about to enter a period of "great compression" as low oil prices hammer the sector, according to a Deloitte study released Monday.The firm believes that exploration and production companies could  write down the value of their assets by as much as $300 billion as they struggle to breakeven in a lower-for-longer oil price environment. Significant impairments are expected in the second quarter. Based on this, the firm envisions a wave of bankruptcies followed by mass consolidation.  "The oil industry is currently experiencing a 'great compression' in which companies' room to maneuver is restricted by low commodity prices, reduced demand, capital constraints, debt loads, and health impacts of COVID-19," the report said. "Unlike in previous downturns, these effects are now simultaneous — creating a higher level risk of technical insolvencies and building intense pressure on the industry." The coronavirus pandemic sent oil prices tumbling in March and April as billions of people around the world stayed home in an effort to slow the spread of the virus. By some estimates, global fuel demand dropped by a third as businesses shut their doors, cars remained parked and airplanes stayed grounded.  According to Deloitte, 30% of shale operators are technically insolvent with oil prices at $35 and 20% have "stressed financials."While some of the $300 billion in write-downs and impairment charges that the firm envisions is due to accounting practices, it's also indicative of the fact that these companies are becoming riskier for equity holders. The charges signify a reduction in future earnings power, and with debt levels staying the same, a company's leverage ratio immediately increases."As COVID-19 impacts amplify pressures on shale companies through 2020, a wave of impairments may prompt the deepest consolidation the industry has ever seen over the next six to 12 months," said Duane Dickson, vice chairman at Deloitte.Whiting Petroleum, once a big player in the Bakken shale region, was the first casualty of the coronavirus-induced drop in oil prices when the company filed for bankruptcy protection on April 1. And others are reportedly on the way.The impacts will be felt across the oil and gas sector, as well as throughout the financial markets more broadly, Deloitte said. "The reverberations of the pandemic will extend beyond the US shale industry. Although US shale is less than 10 percent of global oil and gas production, it accounts for 40 percent of the global drilling activity and explains nearly 100 percent of the growth in US midstream and export-oriented refining and petrochemical sectors over the past 10 years. Thus, any major developments in US shales will likely have a domino effect on the global oil and gas industry," the report concluded.

Who Pays for Stranded Assets? Taxpayers Are Footing The Bill For 100-Year Old Oil Wells - Plugging old oil and gas wells may cost as much as ten times what the industry routinely estimates, according to a new report from Carbon Tracker. As oil and gas companies walk away from their “stranded liabilities,” the public may be left to pick up the tab. When oil and gas companies are finished with old wells, they are supposed to close them and pay for the cleanup. However, often the wells are abandoned, or “orphaned,” left idled but not plugged up for good. In many cases, these wells are dumped onto local and state governments, leaving taxpayers to pay for the cleanup.  The problem is not new, however. “Bonding” for oil and gas wells have been around for many years, but the actual requirements are lax almost everywhere. Companies are not required to pay the full cleanup costs upfront, the logic often being that they will earn money as they go, better equipping them to pay for cleanup later on. But when it comes time to pay, many years later, some companies do not have the money to meet their obligations. In fact, more than 200 North American oil and gas companies have filed for bankruptcy since 2015, a rate of failure that is only accelerating with the recent oil market meltdown. “Low bonding levels were an acceptable risk, as long as the vast majority of oil companies remained good credit risks,” Carbon Tracker said in its report. However, “[s]tates have inadvertently created a moral hazard: it’s always in the operator’s financial interest to delay permanent abandonment of wells as long as possible, often by selling late-life and marginal assets to weaker companies,” Carbon Tracker wrote. “As a predictable result, inventories of largely self-bonded idle wells, some that have been nonoperational for more than 100 years, have ballooned.” With more and more drillers in financial distress, many more wells will wind up unplugged, leaving the public to deal with the mess. State and local governments may decide to foot the bill and pay for permanent closure, which translates into a significant subsidy for the oil and gas industry. “If instead, they are not plugged, the price will be paid by landowners, citizens, and the environment,” Carbon Tracker warned. . A special report from Reuters found that 3.2 million abandoned oil and gas wells together emitted 281 kilotons of methane in 2018, equivalent to the emissions of 16 million barrels of oil, although that is likely a low estimate. More important to individual landowners living nearby, the wells can contaminate groundwater and soil, and emit toxic air emissions. There are also risks of explosions.

Support grows for taxpayer-funded oil well cleanup as an economic stimulus  Democrats leading the push say their plan has no real downside, while critics say it gives the industry a pass. When the U.S. was fighting to emerge from the Great Depression in the 1930s, President Franklin D. Roosevelt launched ambitious public works projects to put people back on the job. Now, with the country in the midst of another crushing economic slowdown, can cleaning up oil and gas wells fill in as a similar stimulus? That’s the question on Capitol Hill, as negotiations are underway to appropriate tax dollars to plug orphan oil and gas wells. Democrats leading the push say the plan has no real downside, as it would create temporary employment in the oilfields while cleaning up wells that emit greenhouse gases, leak air and water pollution, and pose an explosion hazard. “It’s a win for the environment, it’s a win for states, it’s a win for workers,” chair of the Subcommittee on Energy and Mineral Resources Rep. Alan Lowenthal, D-Calif., said during a June 1 forum on the proposal. “And it simply accelerates the cleanup that American taxpayers are on the hook for sooner or later anyway.” Moderates on both sides of the aisle and a coalition of green groups are hailing the political momentum to address orphan wells as a much-needed win for jobs and environmental cleanup. But other environmentalists panned the negotiations as sidelining reform in favor of addressing symptoms of a larger issue. On Monday, the House unveiled a more than 2,000-page bill called the Moving Forward Act that proposed an infrastructure-focused stimulus package and included the first public salvo in the funding negotiations. The bill would give the Department of the Interior and the Department of Agriculture 90 days to create a federal well-plugging program, which would receive $2 billion over five years. The bill also included language that, if passed, would close some loopholes in the currently inadequate system meant to guarantee money is available for well cleanup.

Hilco gets price cut for purchase of Philadelphia Energy Solutions refinery A Chicago development company will get almost all of the last-minute price cut it sought to buy the bankrupt Philadelphia Energy Solutions, setting the stage for the sale of the 1,300-acre refinery complex to close Friday. Hilco Redevelopment Partners, which agreed in February to pay $252 million for the property, will get a $26.5 million price cut under a settlement announced Thursday, a nominal reduction from the $27.5 million discount it had sought. Hilco’s effort to cut the price at the eleventh hour irked two PES creditors, which stand to receive less under the deal. But in the end, the objecting creditors seem to accept that a reduced sales price is better than no deal at all. “I think this is the right solution at this juncture,” said Paul N. Silverstein, a lawyer representing the two lenders, Marble Ridge Capital LP and Serengeti Asset Management LP, which together are owed more than $80 million from PES. Under the settlement, the creditors dropped their call for the court to reject the price cut and order Hilco to live up to the original purchase agreement. The sale to Hilco, originally scheduled to close by May 31, was delayed because agreements were not yet in place to outline plans to clean up the property, heavily polluted after more than 150 years of oil processing. Hilco requested the price cut on June 6, saying it needed the discount because of economic uncertainty due to the coronavirus pandemic, increased environmental remediation costs, and the collapse of a waterfront bulkhead that occurred since it won the right to buy the property.

Tennessee Gas Pipeline plans to build at West Milford NJ Tilcon site — The Tennessee Gas Pipeline Co. has plans to build a compressor station in a former quarry near Monksville Reservoir, whose owner bailed on a controversial plan to expand an organic recycling operation on the site.Township records show the Kinder Morgan Energy Partners subsidiary is under contract to purchase the 47-acre site off Burnt Meadow Road. Owned by Tilcon prior to April 2014, the property is used for storage and sale of mulch and other landscaping supplies.A plan introduced in 2018 to expand that operation drew outrage from residents who objected to references to food waste recycling in the application.Representatives for the applicant vowed not to bring food waste to the site as a condition of approval. Still, residents remained skeptical and members of the local Planning Board were critical of errors in the application during public hearings. The application was voluntarily withdrawn in December 2019. It was never resubmitted. Tennessee Gas Pipeline Co. records show the compressor station would be part of the East 300 Upgrade Project designed to increase Consolidated Edison capacity so the power company can lift its moratorium on new gas hookups in Westchester County, New York, records show. Katherine Hill, a Kinder Morgan spokesperson, said the project consists of modifications to two existing compressor stations, and the construction of one new electric-driven compressor station along the 300 Line. Established with the construction of a 24-inch pipeline in 1955, the transmission line cuts through Sussex, Passaic and Bergen counties.

Drilling work halted on natural gas pipeline after mishap damages N.J. couple’s house -  Drilling work has been halted on a controversial New Jersey Natural Gas pipeline project, after a mishap Friday leaked sludge into a nearby stream and damaged a house in Monmouth County that had to be evacuated, the gas company and an environmental group opposed to the project said. The incident occurred Friday morning in Upper Freehold Township, where a crew was doing horizontal drilling for New Jersey Natural Gas’ Southern Reliability Link, an underground pipeline that would run for 30 miles through Monmouth, Ocean and Burlington counties, intended to provide an alternate delivery route for gas used by NJNG customers. The $180 million project has been opposed by environmentalists, homeowners and some local governments, but has been approved by multiple agencies, including the Pinelands Commission, the New Jersey Department of Environmental Protection and the state Board of Public Utilities. A lawsuit to overturn the approvals by the PBU and Pinelands Commission is now pending in the Appellate Division of State Superior Court after being filed jointly by the New Jersey Sierra Club, the Pinelands Preservation Alliance and the Burlington County townships of Bordentown and Chesterfield. Jeff Tittel, the Sierra Club’s executive director, said Friday’s incident was indicative of the environmental and safety hazards posed by the pipeline project, which he called “a nightmare.” Tittel faulted the DEP and Gov. Phil Murphy for having allowed the project to move forward. “What we have been warning against has now happened,” Tittel said. “They destroyed somebody’s house and polluted wetlands and a stream.” A New Jersey Natural Gas spokesman said on Saturday that the drilling mud that leaked on Friday was a non-toxic mix of water and naturally occurring clay. The drilling was halted immediately, the DEP was notified and responded to the scene, and the incident was under investigation, he said.

Homeowner had 2 minutes to grab her belongings after N.J. pipeline project wrecked her home. - Imagine being given two minutes to grab your worldly possessions before a building inspector slaps a sign on your home of 32 years saying it is uninhabitable.Barbara Fox-Cooper doesn’t have to imagine. It happened to her Friday morning after a gas pipeline drilling mishap appears to have fractured the foundation of her home in a rural, bucolic stretch of Upper Freehold, Monmouth County.“They gave me two minutes to grab my belongings while they stood in the doorway to make sure my home didn’t collapse,” Fox-Cooper said Sunday. “My heart is literally crushed.”She said she heard a cracking sound Friday morning and spotted water gushing up from the floor of her concrete basement.“It sounded like a cracker being crushed,” she said.A neighbor helped her figure out the foundation was crumbling and it appeared to have been caused by a hydraulic drilling operation for a gas pipeline about 100 feet from her property.The incident occurred Friday at her home in Upper Freehold Township, where a crew was doing horizontal drilling for New Jersey Natural Gas’ Southern Reliability Link, an underground pipeline that would run for 30 miles through Monmouth, Ocean and Burlington counties, intended to provide an alternate delivery route for gas used by NJNG customers.Friday’s mishap involved what is known as an inadvertent return, or the unintended discharge of drilling mud to the surface through a natural crack or fissure in the bedrock being drilled, a company official said.A New Jersey Natural Gas spokesman said Saturday that the drilling mud that leaked on Friday was a non-toxic mix of water and naturally occurring clay. The drilling was halted immediately, the Department of Environmental Protection was notified and responded to the scene, and the incident was under investigation, said Kevin Roberts, a NJNG spokesman.

With Air Permit Vacated, Senators Call For Construction To Stop On Weymouth Compressor - On Thursday, Sens. Elizabeth Warren and Edward Markey wrote to federal regulators asking to halt construction of a controversial natural gas compressor station in Weymouth. The letter comes after a federal court vacated the compressor's air permit earlier this month.  "Given the invalidation of the facility's air quality permit, construction must stop immediately," the senators wrote in a letter to the Federal Energy Regulatory Commission, which oversees interstate gas transmission. The state Department of Environmental Protection (MassDEP) granted the air quality permit after contentious hearings last May, during which MassDEP admitted that the project's provisional air permit was based on incomplete data. On June 3, the First Circuit Court of Appeals found that MassDEP did not follow its own established procedures, and vacated the permit.  The court's decision revolves around whether MassDEP properly assessed the best type of turbine to run the compressor. Local advocates argued that an electric motor would produce far less air pollution than the proposed natural gas-fueled motor. Station owners argued that an electric motor would require additional infrastructure and be too expensive, and MassDEP agreed.  In the June 3 decision, the court said that MassDEP did not have enough evidence to make this decision, and asked the department to redo its analysis.   The court decision rejected other claims that opponents of the compressor station made about cumulative air pollution, environmental justice and noise.   A spokesperson for Enbridge, the energy company building the compressor station,  said in an email that the company is "working to address the air permitting matter as efficiently as possible."  Enbridge began construction on the compressor station last December and expected to have it running later this year. Alice Arena, executive director of the Fore River Residents Against the Compressor Station (FRRACS) said that her group is hoping  the court decision will at least delay the station's startup. "This is going to push back those timelines," said Arena. "Enbridge cannot operate that station without a permit."

LNG shipments by rail approved in US amid pipeline battles (AP) — The Trump administration has taken the final step to allow rail shipments of liquefied natural gas, a new front in the movement of energy products that had been opposed by environmental groups and 15 states. The U.S. Pipeline and Hazardous Material Safety Administration published the rule late last week for shipments of the flammable and odorless liquid known as LNG. “The department’s new rule carefully lays out key operational safeguards to provide for the safe transportation of LNG by rail to more parts of the country where this energy source is needed,” Transportation Secretary Elaine Chao said in a statement. The rule comes amid foundering prices for natural gas in the U.S., as court and regulatory battles over pipeline projects have slowed movement of the nation’s world-leading gas production to markets. The rule requires enhancements — including a thicker outer tank made of steel with a greater puncture resistance — to the approved tank car design that, for decades, has been approved for shipments of other flammable cryogenic materials, such as liquid ethylene and liquid ethane. The rule takes effect in 30 days after it was published. Previously, federal hazardous materials regulations allow shipments of LNG by truck, but not by rail, except for with a special permit. The Sierra Club accused the Trump administration of “selling the country out to the fossil fuel industry” for dangerous shipments that will travel past homes, schools, businesses and environmentally sensitive areas. “This new rule has major impacts on rail safety because the dangers of a possible derailment, spill, or explosion would be catastrophic,” Jeff Tittel, director of the New Jersey Sierra Club, said in a statement. “This is an accident waiting to happen.” .

Report cites slow progress fixing gas leaks  — The state's aging natural gas pipelines are still riddled with thousands of potentially dangerous and damaging leaks, according to a new report. The report, compiled by environmental groups using data from publicly regulated utilities, found at least 15,728 gas leaks statewide at the end of 2019, some of them dating back several years. A majority are "grade 3" leaks, considered the least dangerous, but the report's authors note that any leaking combustible gas is a hazard. "Gas leaks are potentially explosive, kill trees, harm human health and release destructive greenhouse gas," said Audrey Schulman, president of the Home Energy Efficiency Team, a Cambridge nonprofit that mapped the data. To be sure, the report shows utilities made progress fixing gas leaks last year, with at least 11,401 repairs. A 2014 law requires the utilities to track and grade all gas leaks on a scale of 1 to 3, with 1 being most serious, and immediately repair the most hazardous. The law also requires utilities to share the information with the public. Rep. Lori Ehrlich, D-Marblehead, called the latest data in the report "disappointing" and said utilities aren't moving quickly enough to fix the leaks. "Though the number of leaks is slightly lower, it's nothing to celebrate," she said. "After more than a decade of new laws and deadly explosions that traumatized a whole region of our state, the gas companies have not come close to providing our state a closed system for their explosive gas."

Despite another setback, corporate customers stick with Mountain Valley Pipeline - Once again, developers of the Mountain Valley Pipeline say it will take longer and cost more to finish a natural gas pipeline that has long invoked acrimony along its path through Southwest Virginia.But all five energy companies in the joint venture seem determined to ride it out, despite contracts signed years ago that allow them to withdraw if the project was not completed by June 1.“Roanoke Gas needs the MVP supply,” said Paul Nester, president and CEO of a utility that will tap gas from the transmission line. When completed, Mountain Valley will span 303 miles from northern West Virginia to Pittsylvania County, where it will connect with another pipeline.Fierce opposition since the project was announced in 2014 has led to repeated cost overruns and delays.When construction began in the winter of 2018, Mountain Valley said it would be done by the end of the year at a cost of $3.7 billion. Two weeks ago, the company said work will continue until early 2021, with a price tag that could balloon to $5.7 billion.Most work is currently stalled by legal challenges from environmental groups.But in announcing the latest delay on June 11, Mountain Valley said the buried pipeline is 92% completed. Having invested so much already, the partners seem unwilling to give up at this point.Under so-called precedent agreements, shippers — or customers — of the pipeline must give notice by the end of the month to take the escape clause. Doing so would require them to pay their share of costs incurred so far, plus an additional 15% of that sum.In most cases, the shippers are subsidiaries of companies that are financing the project through other subsidiaries. Roanoke Gas, for example, is a subsidiary of RGC Resources. A second subsidiary, RGC Midstream, is paying for its share of the project and will have a 1% ownership interest. Were the company to bail out now, Roanoke Gas would owe the amount cited in the precedent agreement in addition to the $52 million that RGC Midstream has invested in the pipeline so far. Nester said the company has no intention of pulling out. Other partners in the joint venture are EQM Midstream Partners, which will own close to half of the pipeline and operate it once it’s completed; NextEra Energy Capital Holdings; Con Edison Transmission; and WGL Midstream. A spokesman for WGL declined to comment last week. Other companies could not be reached. According to a filing with the U.S. Securities and Exchange Commission last November, Consolidated Edison will cap its investment in the project at about $530 million, reducing its ownership interest from 12.5% to 10%. EQM will cover the shortfall created by the New York-based utility, it reported in its own filing. Mountain Valley said it could not talk about the details of the shipper agreements.

Dominion requests 2-year extension for ACP; feds approve MVP - Construction on the 600-mile Atlantic Coast Pipeline won’t be complete until 2022, Dominion Energy told federal regulators last week in its request for a two-year extension. Dominion and Duke Energy, co-owners of the ACP, originally projected construction would be finished in 2019. Multiple legal challenges and permitting issueshave added to the delays, as well as the price tag: $8 billion, up 60% from the initial estimate of $5 billion. Most of that cost will be passed on to ratepayers.The Federal Energy Regulatory Commission could legally grant the time extension if it determines the delays are the result of “good cause.”  Based on its previous decisions, FERC will likely approve the request. Trees have already been cut in Northampton and Cumberland counties, part of the ACP’s 160-mile route through eastern North Carolina. Many areas along the North Carolina route are communities of color or low-income neighborhoods. Although the US Supreme Court ruled last week that the pipeline could route beneath a portion of the Appalachian Trail in Virginia, the utilities still have to secure eight environmental permits to finish the project. FERC also granted a Certificate of Public Convenience and Necessity for the Mountain Valley Pipeline Southgate project. This pipeline would run from Pittsylvania County, Va., enter North Carolina near Eden in Rockingham County and travel 46 miles southeast, ending in Haw River, in Alamance County. It is the southern extension of the main MVP, which routes through West Virginia and Virginia. The project has amassed roughly 300 environmental violations in Virginia, where state regulators there have placed a temporary stop-work order on the project.

With Supreme Court case over, courts again weigh whether Atlantic Coast Pipeline is needed - Last week, the Supreme Court handed a victory to the Atlantic Coast Pipeline when it ruled that the U.S. Forest Service had the authority to allow the project to cross beneath the Appalachian Trail. But the end of that battle has seen the revival of another, more fundamental conflict: whether the pipeline really is needed. The project’s main developers — Dominion Energy and Duke Energy — have since its introduction adamantly insisted the pipeline is the best way to supply what they say is the growing demand for natural gas in the region. “The Atlantic Coast Pipeline is needed now more than ever for our region’s economy and our path to clean energy,” wrote Dominion spokesperson Ann Nallo in an email to the Mercury Friday. “Communities across Hampton Roads, Virginia and eastern North Carolina are experiencing chronic shortages of natural gas. They urgently need new infrastructure to support military bases, manufacturing and home heating.”Not everyone agrees. Since 2017, when the Federal Energy Regulatory Commission granted the pipeline a certificate of public convenience and necessity, the project has been dogged by legal challenges. Many have been successful, particularly in the Richmond-based 4th Circuit Court of Appeals, which has overturned key permits from agencies including the U.S. Forest Service, U.S. Fish and Wildlife Service and Virginia Air Pollution Control Board.Nor has the project’s central permit — the 2017 FERC approval — gone unchallenged. In 2018, eight cases from environmental groups and landowners were consolidated in the D.C. Circuit Court of Appeals to dispute the necessity of building the 600-mile-long pipeline from West Virginia through Virginia and into North Carolina.That case was paused after the Supreme Court agreed to take up theCowpasture case over the pipeline’s Appalachian Trail crossing. But with the high court’s June 15 ruling, the D.C. Circuit will now again have the chance to grapple with the issue.  The revival of the FERC approval challenge also comes as Dominion ispetitioning FERC to extend the pipeline certification another two years, citing “unforeseen delays in permitting.”

Foot on the gas: Anti-pipeline activists fight on, undeterred by Supreme Court -  Last week, the Supreme Court ruled 7-2 that the Atlantic Coast Pipeline would be allowed to cross underneath the Appalachian Trail. Dominion Energy, the pipeline’s main backer, has characterized the Supreme Court’s decisions as a significant step forward for the controversial project. If completed, the pipeline would carry natural gas 600 miles from West Virginia to North Carolina. The project’s initial price tag was $5 billion, but more recent estimates say it will cost as much as $8 billion. Gas was supposed to be flowing by 2019, but the Southern Environmental Law Center says that less than 6 percent of the pipe has been installed so far. The project has been slowed in part due to years of dedicated work from grassroots activists, who have fought tooth and nail to stop the pipeline from slicing through the Appalachian wilderness. They say the project will have devastating effects on water quality and wildlife in the area, and that it’s not economically necessary. “They’ll parade the decision to shareholders, and probably make some additional press releases to make [the pipeline] seem like an inevitable project,” says Daniel Shaffer, a geospatial consultant for the anti-pipeline coalition Allegheny-Blue Ridge Alliance. “But it really doesn’t change their situation.” Lew Freeman, the executive director of ABRA, says the group is “disappointed, but not entirely surprised” that the Supreme Court ruled the way it did. “We’re quick to point out that this is only one of several issues on which the Forest Service permit was struck down,” Freeman says. “Those other reasons for vacating the permit were not challenged by Dominion in this case.” In other words, the Supreme Court case doesn’t ensure that the Forest Service permit will be reinstated—it just removes one of many hurdles that Dominion will have to clear when it requests another Forest Service permit. The Southern Environmental Law Center, which is dedicated to protecting the environment, has led the legal opposition to the pipeline. After the decision last week, the SELC noted that eight other permits for the pipeline are still in question. “Their certificate of public necessity and convenience is under review,” says Shaffer. “They can’t cross any water anywhere. Can’t take any endangered species. Can’t cross under the Blue Ridge Parkway. We don’t know what will happen with the Forest Service permit.” And in January, a permit to build an invasive compressor station in Buckingham County’s historically black Union Hill neighborhood was thrown out.

Editorial: Be wary of the Atlantic Coast Pipeline --  Why should South Carolinians care whether the Atlantic Coast Pipeline is allowed to cross the Appalachian Trail in Virginia? The simple answer is that S.C. Dominion Energy customers could be footing the bill for an extension into the Palmetto State a few years down the line. The 600-mile pipeline, a Dominion-Duke Energy project for moving shale-fracked natural gas from West Virginia to markets south and east, is planned to end in Robeson County, N.C., which borders South Carolina. But Dominion CEO Thomas Farrell told S.C. lawmakers in 2018 that, “We would like to bring the pipeline to South Carolina if the demand is there.”Well, Dominion has a lot of ratepayers here — about 700,000 electricity customers and 350,000 natural gas customers — since acquiring South Carolina Electric & Gas Co. And all Dominion and Duke have to do is demonstrate to regulators there is a demand for electricity or gas, then ratepayers would have to pay for extending the pipeline and buy natural gas from themselves. Just like the disastrous Base Load Review Act enabled SGE&G to charge ratepayers for costs sunk into the V.C. Summer nuclear station expansion, Dominion could be allowed to charge South Carolina ratepayers for the cost of bringing the pipeline into the state. That’s what the director of the Southern Environmental Law Center’s Asheville office, D.J. Gerken, calls a “stacked monopoly.” The good news, he says, is that the energy companies might still have to find another route through the mountains and park lands under a federal court ruling separate from the recent U.S. Supreme Court decision that would allow the pipeline to cross the Georgia-to-Maine hiking trail. The latter ruling, however, could make it easier for other applicants, like the Mountain Valley Pipeline, to cross the Appalachian Trail and other sensitive land in Virginia. In some cases, utilities can use the power of eminent domain to force the sale of private land for pipeline construction. South Carolina already gets plenty of gas through the Transcontinental pipeline, which runs through the state’s northwest. Other pipelines from the Gulf Coast also deliver natural gas. But, according to Mr. Gerken, also an attorney who has argued several cases on the topic, Dominion and Duke would rather buy gas from themselves. He also suspects the energy companies would like to run the pipeline to a port where the gas could be liquefied for export.

U.S. natgas little changed as rising output offset higher demand - Reuters(Reuters) - U.S. natural gas futures were little changed on Monday as rising daily output offset forecasts for warmer-than-normal weather and higher air conditioning demand over the next two weeks. Front-month gas futures fell 0.5 cents, or 0.3%, to settle at $1.664 per million British thermal units. Refinitiv said production in the Lower 48 U.S. states averaged just 87.7 billion cubic feet per day (bcfd) in June, down from a 16-month low of 88.2 bcfd in May and an all-time monthly high of 95.4 bcfd in November. On a daily basis, however, output hit a five-week high of 88.4 bcfd over the weekend, up from a 19-month low of 85.7 bcfd in late May. With warmer weather coming, Refinitiv forecast U.S. demand, including exports, would rise from 84.8 bcfd this week to 86.6 bcfd next week. That confirms Refinitiv's warmer-than-usual projection but was slightly lower than its outlook on Friday. The amount of pipeline gas flowing to U.S. liquefied natural gas export plants averaged just 4.0 bcfd (41% utilization) in June, down from an eight-month low of 6.4 bcfd in May and a record high of 8.7 bcfd in February. Utilization was about 90% in calendar 2019. On a daily basis, however, LNG exports were on track to rise to 4.1 bcfd on Monday from a 14-month low of 3.6 bcfd last week. U.S. pipeline exports, meanwhile, are rising as North American consumers crank up their air conditioners. Refinitiv said pipeline exports to Canada averaged 2.3 bcfd in June, up from a seven-month low of 2.2 bcfd in May but still well below the all-time monthly high of 3.5 bcfd in December. Pipeline exports to Mexico averaged 5.3 bcfd this month, up from 4.8 bcfd in May but shy of the record 5.6 bcfd in March.

U.S. natgas falls to 2-month low on forecast big storage build - (Reuters) - U.S. natural gas futures on Wednesday fell over 2% to their lowest level since April on expectations for a big weekly storage build. The decline came despite forecasts for a continued slowdown in output and an increase in air conditioning demand and exports. U.S. utilities likely injected a higher-than-normal 106 billion cubic feet (bcf) of gas into storage last week as the weather turned cooler and the coronavirus pandemic continued to dent demand, according to a Reuters poll. Front-month gas futures fell 4.0 cents, or 2.4%, to settle at $1.597 per million British thermal units. That was the lowest close since April 2 and puts the contract within a dime of a near 25-year low. Refinitiv said production in the Lower 48 U.S. states has averaged 87.7 billion cubic feet per day (bcfd) in June, down from a 16-month low of 88.2 bcfd in May and an all-time monthly high of 95.4 bcfd in November. But as the weather turns warmer, Refinitiv forecast U.S. demand, including exports, would rise from 84.5 bcfd this week to 86.0 bcfd next week. That was slightly higher than its demand outlook on Tuesday. The amount of pipeline gas flowing to U.S. liquefied natural gas export plants has averaged 4.0 bcfd (41% utilization) in June, down from an eight-month low of 6.4 bcfd in May and a record high of 8.7 bcfd in February. Utilization was about 90% in calendar 2019. On a daily basis, however, LNG exports were on track to rise to a two-week high of 4.6 bcfd on Wednesday as flows to the Cameron LNG plant in Louisiana hit a record high. That is up from a 14-month low of 3.6 bcfd last week. U.S. pipeline exports were also rising as North American consumers crank up their air conditioners. 

US working natural gas volumes in underground storage rise by 120 Bcf: EIA | S&P Global Platts - Last week's addition to natural gas in storage proved much larger than the market expected, prompting the remaining Henry Hub summer strip to fall more than 10 cents. The amount of natural gas in US storage facilities increased 120 Bcf to 3.012 Tcf in the week that ended June 19, according to US Energy Information Administration data released June 25. The injection was significantly above the consensus expectations of an S&P Global Platts' survey of analysts, which called for a 107 Bcf build. Responses to the survey ranged from an injection of 88 Bcf to one of 120 Bcf. The injection was also larger than the 103 Bcf reported during the same week last year and the five-year average build of 73 Bcf, according to EIA data. In addition, the injection was larger than the 85-Bcf build the week prior as LNG feedgas deliveries fell for the sixth straight week. Storage volumes now stand 739 Bcf, or 32.5%, above the year-ago level of 2.273 Tcf and 466 Bcf, or 18.3%, above the five-year average of 2.546 Tcf. The entire NYMEX Henry Hub contract strip has traded down sharply following a significantly bearish increase in storage levels last week, which exceeded most expectations. The biggest losses were on the balance-of-summer contracts extending from July through October, with July falling nearly 9 cents to a weighted average price of $1.54/MMBtu and October selling off 6 cents, down to $1.77/MMBtu. Following another large storage injection that pushed stocks to over 3 Tcf, a level typically not hit until August, the Henry Hub balance-of-summer strip tumbled to $1.60/MMBtu The prompt-month contract is now trading at its lowest levels of at least the last 10 years. Sustained losses in LNG feedgas demand in the Gulf region continue to pose a massive headwind on prices in the near term. The ICE end-of-season storage contract is now trading around the 4 Tcf mark, a nearly 300 Bcf increase since the start of the injection season. Platts Analytics' supply-and-demand model currently expects a 74 Bcf injection for the week that ended June 26, which would be 9 Bcf more than the five-year average. A quick warm-up in weather across the eastern US this week is contributing to a continued whipsaw in power burn demand, which has risen by nearly 6 Bcf/d compared with the reference week, with most of the return of power loads being concentrated in the Northeast and Southeast cell regions. Total US demand is coming in 5.5 Bcf/d higher on average, with gains in power being weighed down by concurrent declines in the residential-commercial and industrial demand sectors.

NYMEX prompt hits 25-year low on rising storage, continued demand weakness | S&P Global Platts— NYMEX prompt-month Henry Hub futures prices plunged to a 25-year low on June 25 as rising gas storage inventories and pandemic-related demand weakness continue to weigh on the market. In early trading, the NYMEX contract dipped 11.5 cents to around $1.48/MMBtu after the US Energy Information Administration reported a massive 120 Bcf injection to gas storage – the largest one-week addition to stocks in nearly 14 months, EIA data shows. At market close, the NYMEX July contract settled at $1.482/MMBtu, according to S&P Global Platts data. In the cash market, prices across the Southeast and Texas Gulf Coasts also came renewed pressure on June 25. In morning trading, spot Henry Hub fell 9 cents to $1.49/MMBtu. In east Texas, Houston Ship Channel hub tumbled nearly 16 cents to trade at $1.41/MMBtu – its lowest in 21 years, S&P Global Platts data shows. Weakening gas prices along the US Gulf Coast come as the region grapples with mounting supply. Since early April, US LNG feedgas demand has declined from record highs at over 9.6 Bcf/d to an average 4.1 Bcf/d in June, led by steep declines at Freeport LNG and at Cheniere Energy's Sabine Pass and Corpus Christi terminals, data compiled by S&P Global Platts Analytics shows. Earlier this week, market sources told S&P Global Platts that another 40 cargoes previously scheduled for August lifting had been cancelled by offtakers – likely extending the weakness in feedgas demand through the remaining summer months. Much of the growing surplus has, and will continue to make its way into storage. On June 25, the EIA reported a 39 Bcf addition to South Central storage, lifting regional stocks to an estimated 1.212 Tcf. Over the past 10 years, South Central storage inventories have reached their highest at 1.37 Tcf – likely an approximate reflection of regional capacity. Assuming underground storage and salt domes across the Gulf Coast states could fill to 1.4 Tcf, the region would still have less than 190 Bcf in remaining capacity before inventories reach tank top.

Time Is (Not) On My Side - Natural Gas Futures Plunge to Record June Lows; Why Now? The CME/NYMEX Henry Hub prompt contract settled at $1.482/MMBtu yesterday, down 11.5 cents (7%) from the previous day and the lowest settle that the market has ever seen during June trading. That’s also a 33-cent (18%) drop from just two weeks ago when prompt futures were around $1.80/MMBtu. The immediate rationale is the larger-than-expected and larger-than-normal storage build reported by the Energy Information Administration yesterday. But current price levels are also indicative of bigger problems looming for the gas market, namely that while gas production is down, total demand, including exports, has been exceptionally weak too. As a result, by mid-July, the storage inventory appears likely to reach record highs for that time of year — record highs that may well persist through the end of injection season in early November unless there is a substantial correction in the gas supply-demand balance. Moreover, it’s looking less and less likely that relief will come from the demand side. Today, we look at the drivers behind the latest gas market meltdown and implications for the balance of injection season. U.S. natural gas futures haven’t been on the same nausea-inducing roller coaster that oil prices have thus far in 2020, but it’s fair to say that the gas market is feeling its collective stomach drop right about now. As we explained a few days ago in That’s Schadenfreude!, gas prices already were weak, averaging about $1.80/MMBtu in 2020 to date, lower than the annual average has been in the past 25 years. As shown in Figure 1 (left graph), prompt futures started the year above $2/MMBtu but quickly tumbled to multi-decade lows by mid-January as wintry weather failed to materialize and it became clear that the year-on-year surplus in storage that had carried over from 2019 wasn’t going anywhere anytime soon (see Oops, Winter’s Out of Time and Flirtin’ with Disaster). Then came COVID-19 and market worries that business closures and social distancing measures would clip domestic consumption, sending front-month futures still lower through March. In reality, the impact to domestic gas consumption was offset by colder-than-normal weather through April, which ended up boosting residential/commercial use enough to whittle down the storage surplus somewhat and buoy prices again.

U.S. natgas edges up from 25-year low as output slows, exports rise - (Reuters) - U.S. natural gas futures edged up on Friday from a near 25-year low due to a continued slowdown in output, a small rise in pipeline and liquefied natural gas (LNG) exports over the past week and an increase in cooling demand with the coming of hot summer weather. That price increase came despite ongoing demand destruction from the coronavirus, swelling stockpiles and a collapse in LNG exports earlier in the month. "If you were looking for a dead cat bounce, we got more of a dead cat splat," said Phil Flynn, Price Futures Group senior market analyst. "Everyone was hoping we'd get a bottom, but the (storage) injection number is too overwhelming to ignore." On its last day as the front-month, gas futures for July delivery rose 1.3 cents, or 0.9%, to settle at $1.495 per million British thermal units (mmBtu). On Thursday, the contract settled at its lowest since August 1995 following a bigger-than-expected weekly storage build. August futures, which will soon be the front-month, were flat at $1.54 per mmBtu. Futures spreads, meanwhile, surged to records as investors bet demand will rebound later this year as the pandemic wanes. With ongoing government lockdowns keeping many businesses shut and U.S. LNG exports down by half since the start of the year, stockpiles are filling fast and are expected to reach a record 4.1 trillion cubic feet by the end of October. Refinitiv said production in the Lower 48 U.S. states averaged 87.7 billion cubic feet per day (bcfd) in June, down from a 16-month low of 88.2 bcfd in May and an all-time monthly high of 95.4 bcfd in November. As the weather heats up, Refinitiv forecasts U.S. demand, including exports, would rise from 84.8 bcfd this week to 86.2 bcfd next week and 89.4 bcfd in two weeks. Pipeline gas flowing to U.S. LNG export plants averaged 4.1 bcfd (42% utilization) in June, down from an eight-month low of 6.4 bcfd in May and a record high of 8.7 bcfd in February. Utilization was 90% in 2019. On a daily basis, however, LNG exports rose to a three-week high of 4.9 bcfd on Thursday as flows to Cameron in Louisiana hit a record high. That is up from a 14-month low of 3.6 bcfd last week. 

Trump administration overrules NC, approves offshore seismic testing for oil and gas deposits | NC Policy Watch -Buffeted by breaking waves and a brisk ocean breeze, the town of Rodanthe balances on a precarious shard of landalong the Outer Banks. From here, the eastern-most point in North Carolina, it is less than 45 miles to an expanse of the sea where energy corporations plan to puncture the ocean bed in search of oil and gas.But first, seismic testing companies must do their reconnaissance. To do so, they deploy a boat towing an array of 24 airguns firing every 10 to 15 seconds for 24 hours each day, as many as 208 days a year. At low frequencies, the sound ping-pongs among the ridges and valleys of the ocean bed, and the returning echo patterns can reveal the locations of the energy deposits.The sounds also reveal the vulnerability of sea life to human-made intrusions. Scientific studies have shown the sound can injure, kill and deafen marine life, including fish, whales and dolphins — forcing them to flee their habitats and blunting their desire to eat and breed.Last week, the federal government overruled North Carolina’s objection to seismic testing off the coast, saying the activity proposed by the company WesternGeco is in the national interest. The decision allows the Bureau of Ocean and Energy Management to issue permits for seismic testing on the Atlantic Outer Continental Shelf, roughly from Maryland to Florida. Four more companies have requested permits.Environmental coastal advocates condemned the decision.“The decision to overrule the state shows the unwillingness of the federal government to listen to the wishes of the people,” said Larry Baldwin, Crystal Coast waterkeeper. “That arrogance goes even further when a decision by the state of North Carolina, which has been very outspoken against seismic and drilling, is completely ignored.”

Mississippi Sets Penalties for Protests Near Oil, Gas Pipelines - Mississippi has designated properties with oil and gas equipment as “critical infrastructure,” making trespassing on those sites a misdemeanor punishable by up to a year in prison, under a new law signed Thursday by Gov. Tate Reeves (R). About a dozen other states have passed similar laws to limit protests near oil or gas pipelines and other infrastructure, including laws enacted earlier this year in Kentucky, South Dakota, and West Virginia, according to the International Center for Not-for-Profit Law. Knowingly trespassing on any property with oil, gas, or chemical pipelines or tanks violates the Mississippi law, which takes effect...  To read the full article log in.

Two Louisiana Activists Charged with Terrorizing a Lobbyist for the Oil and Gas Industry -- Two Louisiana environmental activists face up to 15 years in prison after they were arrested Thursday for terrorizing an oil and gas lobbyist by leaving a box of plastic "nurdles" on his front porch. Anne Rolfes and Kate McIntosh with the Louisiana Bucket Brigade turned themselves in at 8:30 a.m. and were held for nearly nine hours by Baton Rouge police, their attorney, Pam Spees, said Thursday evening. She said she would be asking local prosecutors "to look carefully at these arrests and reject the charges against these two dedicated advocates as soon as possible."Rolfes and McIntosh are part of a broad coalition fighting to stop the Taiwanese Formosa Petrochemical Corp. and its subsidiary, FG LA LLC, from constructing a massive, $9.6 billion plastics and petrochemical complex, proposed on 2,400 acres in a predominantly Black portion of St. James Parish.   The plant is part of a planned plastics expansion in the United States that's facing fierce opposition from grassroots activists, environmentalists and members of Congress. An analysis by ProPublica found the complex could more than triple the level of cancer-causing chemicals that residents of St. James are exposed to. It also found that the area around the site is already more saturated with those toxins than more than 99 percent of industrialized areas in the country. As activists have fought development across the state in recent years, Louisiana lawmakers have twice moved to stiffen criminal penalties for trespassing on oil and gas infrastructure.  In 2018, the state enacted a law that made trespassing on pipelines or industry sites a felony, punishable with up to five years in prison. This year, Gov. John Bel Edwards vetoed a bill that would have imposed a mandatory minimum three-year sentence if the trespassing occurred when the state is under a state of emergency. The incident that prompted the arrests happened on Dec. 11, after a report of a "suspicious package" left on the porch of a residence, said Don Coppola, a spokesman for the Baton Rouge Police Department. A lobbyist for the oil and gas industry lived in the home, The Times-Picayune and The New Orleans Advocate reported.  There was a note on the package "indicating not to open the container as the contents could be hazardous," Coppola said. It contained plastic nurdles—the raw material from which plastic products are made—that had been manufactured at another Formosa plant.

EPA fines Enbridge $6.7M over failure to fix pipeline safety issues - Enbridge said Thursday that the Alberta, Canada-based company has settled with the U.S. Environmental Protection Agency and agreed to pay the fines, levied in May. Regulators alleged that Enbridge violated a 2017 consent decree. Among other things, the EPA said Enbridge neglected to properly evaluate thousands of “shallow dents” on its Lakehead Pipeline System, which runs through both of Michigan's peninsulas and includes an underwater stretch of twin pipelines through the Straits of Mackinac. According to an EPA letter, just over $3 million of the fines involved Enbridge’s failure to repair or mitigate small dents that showed “indications” of “metal loss” and “cracking.” Mike Koby, Enbridge’s vice president U.S. liquids operations, told the Minneapolis Star Tribune the company and the EPA disagreed over the nature of the small dents. However, Koby said Enbridge did further pipeline integrity assessments to address the agency’s concerns. Enbridge signed a consent decree in 2017 with the U.S. Justice Department to resolve claims from a massive oil spill in Michigan and another pipeline leak in Illinois, both in 2010. The company paid $177 million and pledged to improve pipeline safety under that agreement. More than 1.1 million gallons of oil spilled from a rupture in Enbridge's 30-inch transmission pipeline near Marshall beginning July 25, 2010. The spill devastated Talmadge Creek and surrounding wetlands and fouled about 38 miles of the Kalamazoo River. Thinners in the thick, sludgy, diluted bitumen evaporated, causing significant amounts of the oil to sink to the river bottom, clump with sediments and other materials, and complicate the cleanup. Enbridge officials did not discover or address the ongoing oil spill for 17 hours. It was discovered only after being reported by a third party who came upon the spreading environmental disaster along Talmadge Creek. A National Transportation Safety Board report on the Marshall spill blasted Enbridge's pipeline integrity management, its spill response preparedness and its staffing and training.The report was also critical of the "weak regulation" of pipeline integrity management programs, control center procedures and public awareness by the federal Pipeline and Hazardous Materials Safety Administration, or PHMSA. Enbridge said it reports compliance issues to the EPA, and that most of the recent fines relate to self-reporting and were “administrative in nature.” Enbridge's Line 5 moves 23 million gallons of oil and natural gas liquids per day east through the Upper Peninsula, splitting into twin underwater pipelines through the Straits, before returning to a single transmission pipeline through the Lower Peninsula that runs south to Sarnia, Ontario. Many have expressed concern about the aging pipes over several years, noting that a pipeline disaster in the Straits such as the one that occurred in Marshall would devastate the Great Lakes, shoreline and island communities, and the state economy. Enbridge officials have steadfastly maintained the pipes are safe.

Enbridge Line 5 shut down after anchor support incurs ‘significant damage’ - Enbridge Energy has shut down the Line 5 petroleum pipeline in the Straits of Mackinac following “significant damage” to an anchor support on the lakebottom pipeline, Gov. Gretchen Whitmer announced Friday evening.In a letter Friday to the Canadian company’s CEO, Al Monaco, Whitmer expressed dismay about the damage, which Enbridge reported to state officials late Thursday. She asked Monaco to turn over “all information available” about the incident, including reports, photos and video, and directed Enbirdge to provide “affirmative evidence” of the dual pipelines’ integrity. It’s not clear what caused the damage, Whitmer wrote, “although it appears the anchor support was subject to considerable force.” A spokesman for Enbridge said the incident did not result in a spill.  In an email to Bridge Friday, spokesman Ryan Duffy said company officials discovered Thursday during seasonal maintenance work that the support had "shifted from its original position." "We immediately shut down the line as a precaution," Duffy wrote, and notified state and federal officials. Duffy said Enbridge will provide the information Whitmer requested.Line 5 opponents have long expressed concerns that the 67-year-old pipeline, which transports oil and natural gas liquids between Wisconsin and Ontario, could pose a catastrophic hazard to the Great Lakes and inland waterways if it sustains damage resulting in a spill. Friday’s news prompted renewed calls to shut down the pipeline. “We don’t even know what Enbridge knew and when in relation to the new damage,” said Sean McBrearty, coordinator of the group Oil & Water Don’t Mix, in a statement. “Enough is enough.”Mike Shriberg, Great Lakes regional executive director for the National Wildlife Federation, called for a third-party determination of the pipeline’s safety, and said the company “cannot be trusted with Michigan’s most valuable natural, economic and cultural resource.”The damaged support is about 150 feet from a section of the pipeline where coating covering the pipe was reported damaged on May 26. Enbridge has shut down the pipeline and is using divers and a remotely-operated vehicle to gather more information, according to Whitmer’s letter to Monaco.

Enbridge resumes partial operation of Line 5, Gov. calls for another shutdown, review - Enbridge has resumed partial operation of Line 5 under the Straits of Mackinac, a company spokesman said Saturday, despite the request of Gov. Gretchen Whitmer to keep the pipeline shut down. Line 5 was shut down by the company on Thursday after "significant damage" was discovered in an anchor support during routine maintenance. Whitmer on Saturday sent a second letter to Al Monaco, CEO of Enbridge, asking the company to immediately shut down the dual pipeline running through the Straits of Mackinac until the damage is investigated, assessed and preventative measures are put in place, according to a release from the governor's office. “Given the gravity of this matter, I was taken aback to learn the company has unilaterally resumed operation of the west leg without even an opportunity for discussion,” said Governor Whitmer. “At this moment, Enbridge is pumping crude through the Great Lakes on state-owned bottomlands without any explanation for the cause of this damage to the pipeline structure and no assurance that Enbridge has taken sufficient steps to mitigate future harm. "This disregard for the safety and well-being of our Great Lakes, and Enbridge’s due care obligations under the 1953 Easement, is unacceptable.” In addition to Whitmer's request, she also asked Enbridge to provide a full report as to the cause of the damage and measures Enbridge will put in place to prevent it from happening again, according to the release. Once the state, or a third-party selected by the state, has reviewed the information, the state and Enbridge can discuss when normal operations can resume, the release said. When operating, Line 5 transports up to 540,000 barrels per day of light crude oil, light synthetic crude, and natural gas liquids, according to Enbridge. Operation of the west leg of the pipeline was restarted at about 2 p.m. Saturday, after inspections by a remote-operated vehicle determined there was no damage to that part of Line 5, according to Enbridge spokesman Ryan Duffy.

Enbridge rebuffs Gov. Gretchen Whitmer, won’t close Line 5 after damage to anchor support | Bridge Magazine - Gov. Gretchen Whitmer is asking Enbridge to shut down the second leg of Line 5 after the company reported the pipeline suffered “significant damage” to an anchor support.Enbridge shut down both legs of the oil and natural gas pipeline that runs through the Straits of Mackinac after maintenance workers discovered the damage Thursday. But the company resumed operation of the west leg Saturday afternoon after determining it was not damaged. “Given the gravity of this matter, I was taken aback to learn the company has unilaterally resumed operation of the west leg without even opportunity for discussion,” Whitmer wrote Saturday.  “At this moment, Enbridge is pumping crude through the Great Lakes on state-owned bottomlands without any explanation for the cause of this damage to the pipeline structure and no assurance that Enbridge has taken sufficient steps to mitigate future harm.”The company indicated in a statement, also released Saturday, it did not plan to shut down the second leg as the damaged leg is reviewed. “Our federal regulator, (the Pipeline and Hazardous Materials Safety Administration), has no objections to this plan,” wrote spokesperson Ryan Duffy. Duffy told Bridge Friday that the company discovered an anchor support on the east leg of the pipeline had “shifted from its original position” during seasonal maintenance work. In a letter to Whitmer sent Saturday, Enbridge CEO Al Monaco said the company is assessing damage to the pipelines by deploying divers and using a remote-operated vehicle. Whitmer asked that the company provide engineering reports, photographs, video and other evidence of the damage to the state by Monday and said the “incident leaves many unanswered questions as to the cause of this damage.” The company said that when it first became aware of the damage it immediately shut down operation of the 67-year-old pipeline that transports oil and natural gas between Wisconsin and Ontario, but news of the damage has renewed calls to shut it down permanently.

Michigan AG asks judge to suspend operation of Line 5 — Michigan Attorney General Dana Nessel is asking an Ingham County judge to temporarily halt Enbridge's operation of Line 5 after state officials learned last week that an anchor support had sustained damage.The company had shut down the line, which features two pipelines that run parallel to one another in the Straits of Mackinac, after discovering the problem Thursday. But on Saturday, Enbridge spokesman Ryan Duffy said an inspection of the west leg had been completed and "the issue with the screw anchor assembly" was isolated to the east leg.  The company "resumed normal operations" on the west leg at about 2 p.m. Saturday.  But in a Monday statement, Nessel said Enbridge had provided no explanation of what caused the damage and a "woefully insufficient explanation of the current condition and safety of the pipeline as a result of this damage." On Friday, Michigan Gov. Gretchen Whitmer announced that Enbridge had informed her administration that it shut down the line after a support received what the governor described as "significant damage" from an "unknown" cause. The governor requested Enbridge turn over "all relevant information about this most recent damage." In a letter to the company's CEO, Al Monaco, she asked Enbridge to "provide affirmative evidence, including appropriate diagnostic testing, that establishes the integrity of the dual pipelines in the Straits of Mackinac." On Saturday, Duffy said there were no issues or damage to the anchor structures on the west leg. But in court filings, the attorney general's office said Enbridge "unilaterally reactivated" the west leg of the pipelines without consulting the state and "prior to providing any of the information that the governor requested." Whitmer requested that Enbridge leave the dual pipelines shut down until "an investigation into the cause of this incident and the overall risk to the Great Lakes could be completed," Nessel's new court filings said. "The people of the state have an interest in ensuring that privately owned infrastructure that threatens the Great Lakes is operated in a reasonably prudent and legal manner, complete with appropriate government oversight," the court filings added. "By shirking its legal obligations to share information with the state, Enbridge has irreparably harmed the people by denying their ability to oversee Enbridge’s operations on public trust bottomlands and protect the Great Lakes."As part of an ongoing legal fight with Enbridge over Line 5, Nessel is asking Ingham County Circuit Court Judge James Jamo to order Enbridge to provide all of the information in its possession related to the damage to Line 5, according to a press release. She also wants the court to order that operations of the pipeline be suspended until the state has conducted a full review of the information.

Michigan Democratic congressional members seek Enbridge Line 5 shutdown - Democratic members of Michigan’s congressional delegation have joined Michigan Attorney General Dana Nessel in calling for a temporary shutdown of the Line 5 pipeline beneath the Straits of Mackinac until more is known about what damaged an anchor support on one of the line’s two legs.  Congressional members led by Rep. Debbie Dingell, of Dearborn, sent a letter Wednesday to U.S. Transportation Secretary Elaine Chao asking Chao to shut down the pipeline until a full investigation is completed and both legs of the line are deemed safe. The request comes two days after Nessel asked an Ingham County Circuit Court judge to order a temporary shutdown.Enbridge Energy, the Canadian petroleum company that owns Line 5, notified state officials last Thursday that an anchor support on the line’s east leg had sustained “significant damage” from an unknown source. The company stopped transporting petroleum products on both legs of the dual-span pipeline while workers investigated. But by Saturday afternoon, Enbridge had resumed operations of the west leg. The east leg remains closed, a company spokesman said Wednesday.The partial reopening prompted an outcry from Michigan Gov. Gretchen Whitmer,who criticized Enbridge for a lack of transparency in describing the circumstances of the damage and acting “unilaterally” to reopen over her objections.Enbridge responded that it had consulted with federal regulators at the Pipeline and Hazardous Materials Safety Administration, or PHMSA, which regulates pipelines. Those regulators had “no objections” to the pipeline’s partial reopening, the company said in a statement.

Judge: Enbridge must temporarily shut down Line 5 — Enbridge must temporarily cease Line 5's operation in the Straits of Mackinac after damage to an anchor support was revealed last week, Ingham County Circuit Court Judge James Jamo ruled Thursday. The company had failed to comply with the terms of a 1953 Line 5 easement and a 2018 agreement "by depriving" the state of "certain oversight and documentation due to it by the contractual language," Jamo said. On Monday, Michigan Attorney General Dana Nessel asked Jamo to temporarily halt Enbridge's operation of Line 5 after the company informed Gov. Gretchen Whitmer of the anchor support damage from an "unknown" cause on June 18. Nessel said she was "grateful" for Jamo's order Thursday. Whitmer applauded it, said Tiffany Brown, the governor's spokeswoman. "Enbridge’s decision to continue pumping crude oil through the Straits of Mackinac with so many unanswered questions was reckless and unacceptable," Brown said. "Enbridge owes a duty to the people of Michigan and must answer to the state for how it treats our Great Lakes." Enbridge is disappointed in the court’s ruling because it believes Line 5 is safe, said Vern Yu, an executive vice president at the company. "An extended shutdown of Line 5 would threaten fuel supplies in Michigan and Ohio resulting in critical gasoline supply shortages and gasoline price increases for consumers in Michigan and the surrounding region," a statement from the company added. Enbridge shut down the entire line, which features two pipelines that run parallel to one another in the Straits of Mackinac, after discovering the problem. But on Saturday, Enbridge spokesman Ryan Duffy said an inspection of the west leg had been completed and "the issue with the screw anchor assembly" was isolated to the east leg." The company "resumed normal operations" on the west leg about 2 p.m. Saturday But Whitmer requested that Enbridge leave the dual pipelines shut down until "an investigation into the cause of this incident and the overall risk to the Great Lakes could be completed," Nessel's court filings said. "The people of the state have an interest in ensuring that privately owned infrastructure that threatens the Great Lakes is operated in a reasonably prudent and legal manner, complete with appropriate government oversight," the court filings added.   Nessel asked Jamo to order Enbridge to provide all of the information in its possession related to the damage to Line 5 and to order that operations of the pipeline be suspended until the state has conducted a full review. Jamo agreed Thursday."The west line operations must cease as immediately as possible upon receipt of this order, but within no more than 24 hours," Jamo's order said. "The west line may not be restarted by defendants until a determination is made on the Motion for a preliminary injunction."

Judge shuts down pipeline — A judge shut down an energy pipeline in Michigan’s Great Lakes on Thursday, granting a request from the state after the owner reported problems with a support piece far below the surface.Enbridge Inc. has not provided enough information to Michigan officials to show that continued operation of the west leg of the Line 5 twin pipeline is safe, Ingham County Judge James Jamo said. Without the temporary order, “the risk of harm to the Great Lakes and various communities and businesses that rely on the Great Lakes would be not only substantial but also in some respects irreparable,” the judge said.  Enbridge, a Canadian company based in Calgary, Alberta, said it was disappointed with the decision but quickly complied by closing the west leg.  Enbridge’s Line 5 carries oil and natural gas liquids from Superior, Wisconsin, to Sarnia, Ontario. A four-mile (6.4-kilometer) segment divides into two pipes that lie on the bottom of the Straits of Mackinac, which connect Lake Huron and Lake Michigan.Enbridge last week said an anchor support on the east leg of the pipeline had shifted. The company said Line 5 itself was not ruptured and that no oil spilled into the water, but it still hasn’t explained how the incident occurred.The east leg was shut down. But Enbridge said it resumed the flow through the west line Saturday after consulting with federal regulators at the U.S. Pipeline and Hazardous Materials Safety Administration.The judge said he’ll hold a hearing Tuesday on the state’s request for a preliminary injunction that, if granted, could keep Line 5 closed indefinitely.“With the continued operation of this pipeline, the risk of severe and lasting environmental damage to Michigan’s most important natural resource continues to grow every day,” Attorney General Dana Nessel said. Line 5 transports up to 540,000 barrels per day of light crude oil, light synthetic crude and natural gas liquids, which are refined into propane, according to Enbridge. The pipeline has been operating since 1953. Gov. Gretchen Whitmer criticized the restart of the west leg of Line 5, calling it a “brazen disregard for the people of Michigan” and the safety of the Great Lakes.

Ahead of meeting on Line 3, northern Minnesota mayors urge Walz not to file appeal — A coalition of mayors near the route of Enbridge's proposed Line 3 oil pipeline have asked Minnesota Gov. Tim Walz to prevent the Department of Commerce from filing an appeal over whether the project is actually needed.The Public Utilities Commission on Thursday, June 25, is set to consider requests for reconsideration filed last month by the department, environmental groups and Minnesota tribes. If the PUC denies the requests, which it quickly and unanimously did in November 2018, the parties can then petition the Minnesota Court of Appeals to review the case.The department has long argued the PUC improperly approved the pipeline's certificate of need by failing to consider a long-range demand forecast, because Enbridge instead submitted a pipeline utilization forecast that assumed demand would continue at 2016 refinery capacity.The 42 mayors urged Walz to support the Line 3 project, which would replace the existing, aging Line 3 with a new pipeline that would increase existing capacity and follow a new route through much of the state. It is expected to carry 760,000 barrels of oil (31.92 million gallons) per day from Alberta, Canada to the Enbridge terminal in Superior, Wisconsin. "We need you to say YES to Line 3 and NO to the Minnesota Department of Commerce filing any more appeals," the mayors wrote. "We need you to start appropriating funding outside the Twin Cities area and hold your agencies accountable for approving projects in a timely and fair process."

State utility regulators reaffirm support for Line 3  - Minnesota utility regulators have once again thrown their support behind Enbridge Energy’s Line 3 oil pipeline replacement project. On Thursday, the state Public Utilities Commission voted 4-1 to deny petitions for reconsideration filed by several Ojibwe bands, environmental groups and the state Department of Commerce. The PUC — a five-member panel of state regulators that oversees pipelines and monopoly utilities — rejected arguments from project opponents that they should weigh new evidence that has emerged since they first approved the pipeline two years ago, including a significant drop in oil demand caused by the COVID-19 pandemic. Instead, after about a half-hour of discussion, the PUC voted to uphold the project’s certificate of need and route permit, reasoning that the benefits of replacing an old, corroding pipeline with a new, modern one, outweighed the project’s implications for climate change and its potential impacts on the lakes, rivers and wild rice beds in the northern third of the state. “A new pipeline with thicker and safer materials, constructed with up-to-date safety standards by skilled laborers operating under prevailing wage laws, is a better outcome than leaving an old pipeline,” said commission chair Katie Sieben.  It’s been more than five years since Enbridge Energy first proposed replacing Line 3, part of a network of five pipelines that together deliver nearly 3 million barrels of crude oil a day from the oil sands region of Alberta, across northern Minnesota, to Enbridge’s terminal in Superior, Wis. The pipeline is corroding and has a history of spills, and requires substantial maintenance. Enbridge has already completed the new pipeline in Canada and Wisconsin. But the Minnesota portion of the project, which is now projected to cost nearly $3 billion, has been held up by regulatory and legal delays.  Environmental groups and tribes have aggressively fought the project on several fronts, arguing that Minnesota doesn’t need the oil the pipeline would carry, that it would exacerbate the effects of climate change and that creating a new pipeline corridor across northern Minnesota threatens the lakes, rivers and forests where tribal members retain rights to hunt, fish and harvest wild rice.

PIPELINES: 18 states to Supreme Court: Release Army Corps permits -- Wednesday, June 24, 2020 -- Eighteen states say it is "critical" for the Supreme Court to intervene in a circuit court case and allow the use of a key Army Corps of Engineers water crossing permit for new oil and gas pipelines pending an appeal.

A Giant Plastics Company Tried to Halt a Juneteenth Ceremony for Buried Slaves -Death Alley activists gathered near the hamlet of Welcome on Friday to celebrate Juneteenth, which observes the date when news of the end of slavery reached enslaved Black people in Texas. About 40 people danced, prayed and sang gospel songs at a cemetery of unmarked graves on the grounds of a former plantation where nearby residents firmly believe their Black ancestors were buried after working the land as slaves. The celebration paid homage to those who founded their rural community along the Mississippi River and lived through one of the nation’s darkest periods.But had Formosa Plastics gotten its way, the ceremony would never have happened. Formosa is a Taiwanese mega-corporation building a $9.4 billion petrochemical complex known as the Sunshine Project at the site, a swath of former plantation fields a couple miles from a church and elementary school on the outskirts of Welcome. The company’s attorneys were in court Thursday attempting to prevent residents from accessing the cemetery on land it now owns. A local judge rejected the company’s arguments and upheld a temporary restraining order allowing residents observe Juneteenth on the hallowed grounds. In a statement, the company cited concerns over “health and safety.”  The ruling comes as communities across the U.S. contend with the brutal reality of state violence against Black people, with waves of protest against ongoing police killings continuing in cities across the country. The Sunshine Project would significantly increase the concentration of cancer-causing chemicals and other harmful air pollutants in majority-Black neighborhoods located along the riverside, which are already surrounded by petrochemical facilities. Friends and neighbors have died of cancer, and activists have renamed the industrial corridor “Death Alley.”  Death Alley has become an internationally recognized landmark of environmental racism, and research shows that cancer rates are higher in lower-income, majority-Black neighborhoods than in higher-income, whiter areas of the region. In Death Alley and across the U.S., polluting industries are known to locate near to communities of color like Welcome. Nationally, Black people are three times more likely to die from air pollution than the overall population.

ANR Pipeline asks US FERC to review expansion between Canada, Gulf Coast | S&P Global Platts— ANR Pipeline asked the US Federal Energy Regulatory Commission to authorize a 165,000-Dt/d expansion that would help deliver natural gas from as far away as Manitoba to markets in the Gulf Coast region and other points on its interstate pipeline system. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up "Demand has grown not only in the Gulf Coast, driven in part by the construction of LNG export terminals, but also at areas served by ... various receipt and delivery points on the ANR system," the pipeline company told FERC. "The project will match this growing demand at several points on the ANR system with low-cost natural gas supply from multiple supply basins, including imports" from Western Canada. ANR, a subsidiary of TC Energy, submitted a June 22 abbreviated application for a Natural Gas Act certificate and related authorizations for the Alberta XPress project. The company asked FERC to authorize the project by May 20, 2021, to allow the project to enter service by November 2022. ANR has executed binding precedent agreements with two shippers to provide firm transportation service that would cover the full gas transportation capacity of the project. The project shippers were designated "foundation shipper" and "anchor shipper," but not otherwise named in the application. ANR told FERC the project would not hurt its existing customers and would have minimal impacts on landowners, communities and the environment. The project, estimated to cost $81.1 million, would put in place a 15,900-hp greenfield compressor station in Evangeline Parish, Louisiana, which would boost incremental capacity on ANR's Southeast Mainline 501 and 501 Loop pipelines between Ohio and Louisiana. The project would also involve a lease between ANR and affiliate Great Lakes Gas Transmission, under which ANR would lease capacity on the Great Lakes pipeline system between Manitoba and an ANR system connection in Wisconsin (CP20-484). At a June 18 FERC meeting, the regulator granted ANR authorization to build and operate the Grand Chenier XPress project in Louisiana to serve Venture Global Calcasieu Pass and the Calcasieu Pass LNG export terminal.

Several Louisiana oil and gas companies file for bankruptcy amid coronavirus, low crude oil prices -  Several oil and gas service businesses in Louisiana have filed for bankruptcy protection in recent weeks amid an economic downturn spurred by the coronavirus pandemic and low crude oil prices. Two businesses near Lafayette, one in Houma and another in Kenner filed for bankruptcy, all of which appear to be oil and gas services companies. Dozens more Louisiana businesses are owed money by the companies filing for bankruptcy, records show. In recent weeks, the Louisiana Oil and Gas Association has said about half its 460 member companies have told the organization that bankruptcy was on the table as an option to survive the economic downturn. Hundreds of wells in Louisiana have been shut-in since the coronavirus pandemic began. Wells are shut in for various reasons, one of which could be lack of production. Operators aren't required by the state to disclose why the decision was made. Crude oil futures briefly fell below $0 several weeks ago as demand for fuels plummeted amid stay-at-home orders across the globe to control the spread of the coronavirus. Storage became an issue for a glut of oil on the market. With some countries agreeing since then to limit oil production and world economies gradually reopening, the price of U.S. benchmark oil has rebounded about 20% in the past 30 days to about $40 per barrel. However, experts say $55 to $65 per barrel is needed by U.S. producers. In early June, there were fewer than 300 oil rigs running across the U.S., the lowest in recent history. During the most dire point of the 2014 to 2016 oil bust, there were still about 400 rigs operating. If there's less oil and gas extraction, there's less demand for related services — the majority of Louisiana companies tied to the oil and gas sector. "We are going to get hit hard," said Gifford Briggs, president of the Louisiana Oil and Gas Association. "If you're not drilling wells, it doesn't matter what kind of debt you have, there's not enough business." Some of the organization's members have concerns about what happens when existing work dries up at the end of the year. "They said, 'We've got some work to finish out 2020, but we have nothing in 2021," Briggs said. "That V-shaped recovery is not going to happen." None of the companies filing in recent weeks had filed for bankruptcy before, despite the significant downturn in the industry in 2016. (list of the companies, assets and liabilities, follows)

PANDEMIC: Report: 1 in 6 oil execs say drilling won't recover -- Thursday, June 25, 2020 -- The nation's oil producers think it will take up to two years for oil output to recover in the wake of the coronavirus pandemic, according to a new survey by the Federal Reserve Bank of Dallas.

Dallas Fed Energy Survey - Dallasfed.org - Activity in the oil and gas sector deteriorated further in second quarter 2020, according to oil and gas executives responding to the Dallas Fed Energy Survey. The business activity index—the survey’s broadest measure of conditions facing Eleventh District energy firms—fell from -50.9 in the first quarter to -66.1 in the second quarter. It was the lowest reading in the survey’s four-year history and indicative of significant contraction in activity. The business activity index for oilfield services firms plunged from -46.3 to -73.5, while the business activity index for exploration and production (E&P) firms fell from -53.3 to -62.6. Production indexes suggest oil and gas production sank relative to the previous quarter. According to E&P executives, the oil production index declined sharply, falling 36 points to -62.6. The natural gas production index also fell significantly, from -21.2 to -47.8. The oil production index is at its lowest point in the survey’s four-year history. The index for capital expenditures for E&P firms declined from -49.0 in the first quarter to -66.1 in the second, indicating a further reduction in capital spending. Additionally, the index for capital expenditures for oilfield services firms declined from -50.0 to -73.5. Most indexes point to worsening conditions among oilfield services firms. The equipment utilization index fell from -47.2 in the first quarter to -69.2 in the second, a survey low. The operating margins index dropped from -50.0 to -68.6. While firms found relief as input costs collapsed—that index fell from -11.3 to -50.0—the index of prices received for services also slid further into negative territory, from -37.7 to -64.7. The aggregate employment index posted a fifth consecutive negative reading, declining from -24.0 to -46.1, which suggests an acceleration in job cuts. Additionally, the aggregate employee hours worked index dropped from -32.1 to -47.0. The index for aggregate wages and benefits fell further into negative territory, from -8.2 to -41.7. The company outlook index reading improved but remained deeply negative at -51.0 in the second quarter, indicating outlooks deteriorated. While uncertainty remained elevated, slightly fewer firms noted rising uncertainty this quarter than last, and the aggregate index fell 28 points to 35.7. On average, respondents expect a West Texas Intermediate (WTI) oil price of $42.11 per barrel by year-end 2020, with responses ranging from $22 to $65 per barrel. Survey participants expect Henry Hub natural gas prices to be $2.15 per million British thermal units (MMBtu) by year-end.

ENERGY POLICY: Lawmakers propose new aid for oil, gas and efficiency -- Thursday, June 25, 2020 -- Republican senators are proposing to ease the tax burden and royalty payments for oil and gas companies weathering the COVID-19 fallout, while new bipartisan legislation in the House and Senate would aid the ailing energy efficiency sector.

Blanco County residents sue company over drilling spill - — Teri Albright held up a glass of opaque water that she’d gotten from her Blanco County well as she explained Monday why she was suing the company that had, months earlier, spilled tens of thousands of gallons of drilling fluid into an underground aquifer. “This is not drinkable,” she said. Albright is one of four Blanco County residents who have filed a federal lawsuit against Kinder Morgan LLC, alleging that the Houston-based pipeline company violated the national Safe Drinking Water Act as it worked to construct the Permian Highway Pipeline. Kinder Morgan pumped 36,000 gallons of drilling fluid into the aquifer on March 28 as the company attempted to drill under the Blanco River. Kinder Morgan did not notify the Texas Railroad Commission — the state agency that regulates pipelines — or the Texas Commission on Environmental Quality until after Albright had posted pictures of the chocolate-colored water on Facebook and the photos were shared by residents and environmental groups concerned about the project. After the mishap, Kinder Morgan suspended drilling activities at the Blanco River. The company on Monday said crews have not yet resumed drilling. The company is evaluating alternative measures for crossing the river. However, other construction activities on the pipeline and compressor stations are continuing as planned. The project is 65% complete, the company said Monday. The Trinity Edwards Springs Projection Association, a nonprofit formed in 2015 by landowners who depend on private wells in the Trinity Aquifer for their water supply, is also suing Kinder Morgan. The nonprofit repeatedly asked Kinder Morgan to route its pipeline away from the aquifer, said Jim Blackburn, an environmental attorney and the nonprofit’s board president. “Kinder Morgan ignored these pleas and then failed to competently construct this project — violating the trust our politicians and state agencies gave them and, in the process, violating common law and federal law,” Blackburn said. “Kinder Morgan earned this lawsuit.”

Brazoria County landowner wins eminent domain fight against pipeline giant - Houston pipeline operator Enterprise Products Partners will have to renegotiate with a Brazoria County landowner after a Texas appeals court ruled it couldn’t use eminent domain to cheaply acquire land for a planned pipeline. The ruling Thursday overturns a 2018 Brazoria County Court decision and throws out Enterprise’s $132,000 purchase of a 30-foot-wide swath of land from Terry Hlavinka, who had sought $3.4 million for the pipeline easement.Soon after Enterprise garnered a permit to build the pipeline in 2016, the company and Hlavinka failed to agree on a price for an easement. An Enterprise subsidiary, HSC Pipeline, took the case to court claiming that the pipeline was a common carrier allowing the company to use eminent domain to obtain the property through condemnation proceedings rather than paying fair market value.The pipeline, however, transported only propylene from a Texas City refinery to the Braskem plant in Freeport. Under Texas law, a pipeline must deliver product to a third party, such as the public, for it to be considered a common carrier. The appeals court ruled that the pipeline was not a common carrier and therefore didn't qualify for the type of eminent domain used to buy Hlavinka’s land.Enterprise declined to comment. Hlavinka’s 16,000-acre property off Chocolate Bayou has more than two dozen pipelines across it. The 30-foot easement Enterprise sought totaled 6.41 acres and ran parallel to existing pipelines.Hlavinka told the appeals court that Connecticut industrial gas company Praxair paid him $3.4 million to build a private, non-common carrier pipeline on his land and that Michigan chemical company Dow paid $2 million to build another.“He used comparable sales to support his opinions regarding the fair market value of the easement based on its value as a separate economic unit,” Justice Russell Lloyd wrote in the court’s opinion.

State denies request to limit oil production The three-member Oklahoma Corporation Commission on Wednesday denied a request to limit the amount of oil that can be produced from Oklahoma wells. Commission Chairman Todd Hiett, Commissioner Dana Murphy and Commissioner Bob Anthony approved a final order that ended the agency’s consideration of the case. The Oklahoma Energy Producers Alliance (OEPA) and affiliated companies requested the relief in early April. The OEPA represents mostly smaller, independent oil and gas producers who primarily operate older, vertical wells with smaller rates of production. It had asked for a mandatory oil waste declaration from commissioners so that the agency could take additional steps to require operators to shut in wells or to take other actions deemed appropriate to cut crude oil production inside the state. The OEPA had sought the relief as the price for a West Texas Intermediate barrel of crude oil approached $20 a barrel, based upon arguments that a curtailment would help remove excess market supplies and improve crude oil’s price. The OEPA’s request, however, was opposed by the Petroleum Alliance of Oklahoma and its member companies. Representatives of both the alliance and many larger oil and gas companies operating in Oklahoma countered that the free market would take care of excess supply issues on its own.

North Dakota state revenues plunge in pandemic but remain ahead of forecast - North Dakota sales and oil taxes amid the coronavirus pandemic have fallen well below forecasts, but state revenues overall remain ahead of the Legislature's projections for the current budget period. State Office of Management and Budget Director Joe Morrissette presented the latest revenue figures on Tuesday to the Legislature's interim Government Finance Committee. May revenues to the state's general fund, which funds general government operations, were down 19.1%, or $36 million, from a 2019 legislative forecast. But overall, state revenues are running 1.9%, or $45.4 million, ahead of the forecast. "That's positive news," Morrissette told the committee. North Dakota state revenues see some 'good news' amid pandemic North Dakota is about halfway through its 2019-21 budget cycle. The 2019 Legislature passed a record $14.7 billion overall budget that includes federal money. That budget has about $4.8 billion in general fund spending. Sales taxes, the general fund's biggest revenue source, were down 35.4%, or $27.4 million, which Morrissette said reflects business restrictions in April due to the pandemic. "That's the worst month that we've seen," he said, telling the committee, "we would expect that to be kind of the bottom."

Gavin Newsom Hands Out Fracking Permits to Connected Driller – Steve Horn -  On June 1, in the midst of the turmoil created by the coronavirus pandemic and the death of George Floyd in Minneapolis, California Gov. Gavin Newsom’s administration quietly issued 12 fracking permits to Aera Energy, a joint venture owned by ExxonMobil and Shell.Oil drilling in California has faced criticism for its disproportionately negative health impactson Latino communities and other people of color. The 12 new permits will be for fracking in the Lost Hills Oil Field. The Kern County town of Lost Hills is more than 97 percent Latino, according to 2010 U.S. Census data. The fracking permits are the latest example of California’s oil industry benefiting from regulatory or deregulatory action during the COVID-19 pandemic and came just months after the Newsom administration said it supported taking actions to “manage the decline of oil production and consumption in the state.” Aera, which also received 24 permits from the California Geologic Energy Management Division (CalGEM) on April 3 during the early days of COVID-19, has well-connected lobbyists in its corner who work for the firm Axiom Advisors.One of them, Jason Kinney, headed up Newsom’s 2018 transition team and formerly served as asenior advisor to Newsom while he was lieutenant governor. He is also a senior advisor to California’s Senate Democrats. The other, Kevin Schmidt, previously served as policy director for Newsom when the latter was lieutenant governor. Aera paid Axiom $110,000 for its lobbying work in 2019 and, so far in 2020, has paid $30,000, lobbying reports reveal. Axiom’s lobbying disclosure records show both Kinney and Schmidt listed as lobbyists and Aera as one of the firm’s clients. Kinney’s wife, Mary Gonsalvez Kinney, was also the stylist for Newsom’s wife–Jennifer Siebel Newsom–dating back to their time spent living in the San Francisco Bay Area. Kinney and Schmidt did not respond to repeated requests for comment for this article. Calling the situation “unseemly,” Jamie Court, president for the Los Angeles-based group Consumer Watchdog, wrote via email that “Aera should not be able to buy the influence it apparently has over state oil and gas policy.” Last November, prior to the 24 permits issued in April, Newsom had declared a statewide fracking permit moratorium in response to a scandal involving a regulator for the California Division of Oil, Gas, and Geothermal Resources (DOGGR). The regulator, who had been tasked with heading oversight issues on issuing permits, was revealed to have stock investments valued up to $100,000 in Aera Energy’s parent company, ExxonMobil. Newsom fired the head of DOGGR at the time, Ken Harris, and eventually renamed the agency CalGEM.

Chevron’s ‘Black Lives Matter’ Tweet Prompts a Debate About Big Oil and Environmental Justice -When Chevron tweeted "black lives matter" on June 5, the multinational U.S. energy corporation evoked a visceral reaction from many climate activists."Your performative solidarity with the Black community is an absolute joke," Communities for a Better Environment, a California-based environmental justice organization, responded. "You should be ashamed of yourself for killing, poisoning and ruining the health and lives of Black people all over the world."Chevron's tweet referred readers to a statement from the company's leadership that was released amidst international protests over the killing of George Floyd on May 25 by a Minneapolis police officer. "As the human energy company, we are just that—humans, and we've felt the impact of what is happening in the United States around ra cial injustice," the statement says. "Our company is rooted in a diverse and inclusive culture, but we also understand it is our time to listen and learn." The statement goes on to quote a number of senior executives, including CEO Mike Wirth: "I share the anger and pain felt by so many Americans at the recent killings of unarmed black men and women. Racism and brutality have no place in America. Yet these incidents still occur. And they impact people well beyond those directly affected by such tragedies. Including people at our company. I absolutely believe we are stronger when we embrace our differences, and now is an important time to do just that." Though Chevron was not the only oil industry heavyweight to issue a statement declaring its commitment to combating racism, the Chevron tweet was shared far more widely than one from BP, which linked to a letter by CEO Bernard Looney that condemned "racial injustice in all its forms." By contrast, Royal Dutch Shell and ExxonMobil have remained silent on the issue.

15,000 gallon oil spill reported near Kobuk River - (KTUU) - An oil tank at Shungnak School in the Native Village of Shungnak has overflowed, causing around 15,000 gallons of heating oil to spill, according to the Alaska Department of Environmental Conservation. The spill was reported by the Native Village on Saturday and officials say it could impact the Kobuk River — which is around 300 feet away from the spill — and local drinking water which is 160 feet away. AEDC said the spill was caused during a fuel transfer from a barge on the Kobuk River that was intended for the Shungnak Native Store but was delivered to the school instead, causing an overflow of the school tank #1. For now, the fuel transfers have been stopped and a crew in Shungnak is working to remove the oil by excavating contaminated soil and pumping it into containers. Currently, no injuries or impacts to wildlife have been reported, AEDC said, but the area is being monitored by the department to prevent the oil from moving to other areas. Both the Environmental Protection Agency and AEDC are working on cleaning the spill, but due to travel restrictions put in place because of the COVID-19 pandemic, neither agency is actually in Shungnak.

15,000 Gallon Oil Spill Threatens River and Drinking Water in Native Alaskan Village --Around 15,000 gallons of fuel oil spilled in a Native Alaskan village Saturday, threatening a nearby river and the local drinking water supply.The spill occurred during a routine fuel delivery to the Northwest Arctic village of Shungnak. The fuel spilled around 12:30 p.m. June 20, but was not discovered by the villagers until 1:06 p.m. They reported it to the Alaska Department of Environmental Conservation (ADEC) immediately thereafter, The Arctic Sounder reported."A response crew from Shungnak responded to the spill immediately, removing the spilled heating oil using sorbent material and also by pumping it into containers," ADEC said in a situation report.There have been no injuries reported and the oil spill has not harmed any wildlife so far. However, there are concerns that it could spread to sensitive areas."The extent of contamination has been reported by the incident commander to be approximately 160 feet from the Kobuk River and approximately 295 feet from the Shungnak drinking water source," ADEC said. The spill occurred when fuel intended for the Shungnak Native Store was delivered to the school instead,KTUU reported. This caused fuel tank #1 to overflow. The fuel was being transferred from a barge on the Kobuk River. All transfers have now been stopped.

Interior opens more of Alaska reserve to oil development - (AP) — More than 18 million acres of a petroleum reserve in Alaska will be opened to oil and gas drilling under a plan released Thursday by federal officials, who touted it as being key to President Donald Trump’s goal of increasing energy production. “Today’s action is one more significant step in the process of delivering on his promise,” Interior Secretary David Bernhardt said in a statement. The Department of Interior released the environmental review for the National Petroleum Reserve-Alaska, which covers an area the size Indiana. The area was set aside by President Warren Harding in 1923 for its potential petroleum value. The 23-million-acre site on the western North Slope contains about 8.7 billion barrels of oil, according to the U.S. Geological Survey. Environmentalists decry opening up the reserve, worried about what drilling could do to wildlife such as polar bears and a large caribou herd. “This plan turns its back on unique and spectacular Arctic wildlife species and sells their key habitat out to the oil industry,” said Nicole Whittington-Evans, Alaska program director for Defenders of Wildlife. “It gives away critical habitat for imperiled polar bears and vital habitat for caribou and migratory birds to oil companies that will only exacerbate the climate crisis by expanding into a fragile frontier area with new drilling,” she said. “It is bad for the Western Arctic and bad for the planet.”

60,000 litres of wastewater diverted after refinery oil spill - The Water Security Agency (WSA) is shedding a bit of light on the size of and the immediate response to a recent oil spill at the Co-op Refinery Complex. On May 22, a spill from a refinery storage pond, attributed by CRC officials to wind, caused a substance containing oil to leak into the City of Regina’s sewage system. The WSA confirmed to Global News on Thursday that Regina wastewater treatment plant operators visually identified oil in incoming wastewater. At that point, about 60,000 litres of incoming wastewater were diverted to a lagoon cell for special treatment. Exactly how much oil was in that wastewater, however, is still being determined. “The refinery normally does send a treated oil product through there. They have a very substantial system that cleans this and brings it through, so something happened there that changed some of those products,” said WSA spokesperson Patrick Boyle. “So that’s part of the investigation. We’re trying to figure out how much, and when.” Boyle said that none of what was spilled has been determined to have escaped the sewage system into the environment. While the plant is owned and operated by the city of Regina, the WSA oversees and regulates the treatment of wastewater in Saskatchewan. Read more: Co-op refinery workers in Regina back to work after two sides agree to new deal Neither the City of Regina or the Co-op Refinery Complex issued a public notice to alert residents or media of the spill.

Cleanup for Arctic oil spill tops $1b – President Vladimir Putin said on Friday the scale of the clear-up operation after a huge fuel spill in the Arctic was unprecedented for Russia, with Greenpeace estimating the environmental damage to waters in the region at $1.4 billion. A vast fuel tank lost pressure on May 29 and unleashed 21,000 metric tons of diesel into rivers and subsoil near the city of Norilsk, an incident that Greenpeace has compared to the devastating 1989 Exxon Valdez oil spill off Alaska. “Russia has not yet had experience of clearing up such vast pollution from bodies of water as far as I understand,” Putin told officials on state television. It will take at least 10 years for biodiversity in the waters to fully return where the accident happened, the state fishing agency said at the meeting. The state environmental watchdog plans to finish its assessment of the damage by July 1, its head told Putin. Vladimir Chuprov, a Greenpeace activist, said the damage to the water totalled 100 billion roubles ($1.44 billion), a figure that was higher than it should be because of what he said was the slow official response, the TASS news agency reported. The city of Norilsk is home to mining giant Norilsk Nickel. The company and emergency specialists are collecting contaminated soil and fuel from local rivers into containers. Nornickel has already spent 5 billion roubles on the clean-up, its co-owner Vladimir Potanin said. The mining giant also plans to spend 13.5 billion roubles on safety checks for its remaining fuel storage tanks in 2020-2021. More than 90% of the fuel from the rivers and about 70% of the contaminated soil have been already collected, Nornickel said earlier this week. Putin previously ordered officials to check all similar fuel storages in Russia, and they plan to complete this process by July 24, they told him.

Mexico's largest refinery restarts after quake that killed worker - (Reuters) - A worker at Mexico’s largest refinery died after a fall during a powerful earthquake on Tuesday, the country’s civil protection agency said, with the tremors also causing a fire that led to the brief shuttering of the installation. The fire, which ignited where power generators and a boiler are located, was quickly extinguished, a company spokesperson said. The facility on the coast of the southern state of Oaxaca near the epicenter of the earthquake reopened after a short period of time, the civil protection agency said. “A small fire broke out and was immediately controlled,” the Pemex spokesperson told Reuters. The worker died in hospital after he fell from one of the plant’s structures during the quake, the protection agency said. The Pemex spokesperson did not respond to requests for additional information on the status of its workers. Two photos posted on the company’s Twitter page showed flames engulfing the corner of the plant and firefighters dousing them with water from several hoses. Pemex said on Twitter that all other company installations were operating normally. The 7.4 magnitude earthquake hit the coast of southern Mexico on Tuesday morning, killing at least one person, buckling roads and sending people fleeing their homes into the streets. Some buildings elsewhere in Oaxaca state were badly damaged, and fallen rocks could be seen blocking some roadways. The Salina Cruz refinery, which has been operating below its operating capacity for an extended period of time, holds a total crude oil processing capacity of 330,000 barrels per day.

The Newest Battlefield In The European Gas War -- Across the planet LNG prices in May-June 2020 have dropped to unprecedentedly low levels – landed seaborne prices still remain below $2 per MMBtu, compelling rivals of LNG to counteract the trend. In the vanguard of those affected is the Russian pipeline gas monopoly Gazprom which expects its exports to drop from the peak of 199-200 BCm per year attained in the last 2 years to some 167 BCm in 2020. Pipeline gas supplies to Europe seems somewhat paralyzed currently with little to no availability of ramping up exports despite producers curbing natural gas production concurrently to oil. With this in mind, Gazprom is looking to beat its competitors on their own field, having no liquefaction facility that could realistically target European customers.  In the first days of June 2020, the Greek industrial holding Mytilineos announced that it had concluded a long-term contract with Gazprom’s commercial arm, Gazprom Export, to import Russian natural gas. The news in and of itself should not be considered as anything surprising – Mytilineos had several short-term contracts with the Russian firm in the past couple of years and imported 0.6 BCm in 2019. Were one to examine the details of the deal though, it gets much more interesting – LNG prices to Greece have started off this year at $3.5 per MMbtu, oscillated around the $2.5 per MMbtu mark in March-April and then took a plunge below $2 per MMbtu in the last days of April, remaining there ever since. Were it not for the increase of US LNG exports to Greece, this might not even trigger a response from Russia – Revithoussa has traditionally relied on a combination of Qatari, Algerian, Nigerian and Norwegian LNG deliveries. As indicated above, the onset of continuous US LNG deliveries to Greece bears a much harsher reputational blow to Russian energy interests than Qatari or Algerian supplies. This year has already seen 13 LNG cargo arrivals to Revithoussa, a manifold increase over the 2019 end result of 3 cargoes in total. Coming from a fairly extended list of LNG hubs (Sabine Pass, Cameron LNG, Cove Point), US LNG calls into question Kremlin’s claim that the American shale gale would not be able to supplant Russian deliveries – it turns out it can, albeit at highly adverse market conditions. Thus, instead of the initial question whether US LNG can reach Southern Europe, the issue to follow through lies with American producers’ ability to withstand such low gas prices for a long-term period.

Bland LNG contracts need a bit of seasoning - Platts Insight - The LNG market has clung tenaciously to traditional contracting structures, but so many of the justifications – the rationale for oil indexation, limited LNG supply, and lack of spot gas trade or benchmark – no longer pass the sniff test in 2020 and beyond. The LNG market needs different options. Sellers still need some long-term commitments to provide financial security to shareholders, and buyers still need some security of supply to assuage regulatory concerns regarding economic vulnerability. That said, the tropes that define each of these concepts for buyers and sellers desperately need to evolve, and now is the perfect time to move on. Shifting the focus from “how much” and “how long” to “when” and “what period of the year” provides a better solution to what currently ails the market for LNG contracts. Taking the LNG contract to the next level involves better defining when – more specifically what time of the year – having an LNG contract is an absolute necessity, and when it is more of an option. Here’s where the introduction of seasonal LNG contracts come into focus. This new type of LNG contract supports the goals of both buyers and sellers, while also simultaneously reducing mutual risks. In a seasonal LNG contract, a long-term deal will be struck, where both sides agree to a specific period of the year when the LNG is most and least valued. For most buyers in the northern hemisphere, this period of time would be during the fourth and first quarters, when weather can increase consumption by two to three times the annual average. Fine tuning the starting and stopping point of the seasonal LNG contract would depend on individual markets, with different criteria used such as heating and cooling degree day profiles or population weighting relative to total gas use. Seasonal differences in contracts are not unprecedented. Some Asian buyers previously negotiated for highly seasonal annualized volume at a 60-40 or 70-30 ratio towards the winter (Korea) or the summer (Taiwan), which also involved swapping arrangements for lifting LNG out of season. However, the contracts still required lifting volumes 12 months per year, whereas what is being suggested here is that the contract will only exist for a fixed period of the year, with no commitment to lift at other times.

Niger Delta Still Waiting for Big Oil to Clean Up Devastating Pollution -  In 2011, a ground-breaking report by the UN Environment Programme (UNEP) on oil pollution in Ogoniland highlighted the devastating impact of the oil industry in the Niger Delta and made concrete recommendations for clean-up measures and immediate support for the region's devastated communities.Now, nearly ten years later, a new report published Thursday by Friends of the Earth Europe, Amnesty International, ERA and Milieudefensie, details Shell's failure to implement the "emergency measures" laid out by UNEP and says only 11 percent of contaminated areas in the Niger Delta have begun the clean-up process.Titled "No Clean-Up, No Justice," the new report explains that for "more than five decades, the people of Ogoniland, in the Niger Delta, have struggled against oil pollution, destruction of the environment and human rights violations."According to estimates, Shell Oil has dumped an estimated nine to 13 million barrels of crude oil into the Niger Delta since 1958."Oil and gas extraction has caused large-scale, continued contamination of the water and soil in Ogoni communities," said Friends of the Earth in a statement. "The continued and systematic failure of oil companies and government to clean up have left hundreds of thousands of Ogoni people facing serious health risks, struggling to access safe drinking water, and unable to earn a living." As Common Dreams reported earlier this year, the local government has also worked with Shell to suppress the right of people in Ogoniland to fight against pollution."The discovery of oil in Ogoniland has brought huge suffering for its people," said Osai Ojigho of Amnesty International Nigeria. "Over many years we have documented how Shell has failed to clean up contamination from spills and it's a scandal that this has not yet happened."The ecological damage, Ojigho added, "is leading to serious human rights impacts — on people's health and ability to access food and clean water. Shell must not get away with this — we will continue to fight until every last trace of oil is removed from Ogoniland."

Nigerians bid to sue Shell in UK over oil spill pollution -  Thousands of Nigerians are asking British judges to give them permission to sue Royal Dutch Shell Plc in London over environmental damage caused by oil spills 3,000 miles away in Africa. Lawyers for residents of the crude-rich Niger Delta believe a landmark UK Supreme Court ruling last year against a London-based miner should set a precedent. Shell, which has blocked the suit twice from entering British courts, says the litigation should be heard in the West African country. Oil companies are hurting from squeezed profits as the coronavirus pandemic has destroyed demand and pushed prices lower. Adding to its worries, Shell might also face legal battles in the UK, as well those already underway in the Netherlands, that could expose the firm to higher damages for causing pollution in the developing world. An April 2019 decision that allowed a group of Zambians to proceed to trial against Vedanta Resources for pollution caused by a copper-mining unit clarifies the law around a company’s duty of care to those affected by operations of a subsidiary, said Robert Meade, an attorney at Bracewell who specialises in oil and gas. Still, “it does not mean that a parent company might be liable for its subsidiaries’ actions or inaction,” he said. Daniel Leader, a partner at Leigh Day representing the Nigerian claimants, said the English courts should hold the oil major to account in English courts “for the devastating damage Shell has caused to their communities over many years.” Nigeria is Africa’s largest oil producer, and depends on crude for about half of government revenue and 90% of export earnings. However, thousands of spills over decades have destroyed the livelihoods of fishing and farming communities in the southeast of the country, including more than 40,000 people from the Bille and Ogale communities who are trying to force Shell to pay compensation and clean up. While the two communities have been hurt by spills, a spokesperson for Nigeria-registered Shell Petroleum Development Co. said that most are caused by oil theft, pipeline sabotage and illegal refining. Despite preventative measures such as cages around wellheads and community engagement, SPDC says it saw a 40% rise in spills over 100 kilograms related to theft and sabotage last year compared to 2018. Amnesty International in 2018 questioned Shell’s claims concerning the cause of spills, finding the company likely understated the number attributable to “operational” faults. SPDC, the operator of a joint venture that includes Nigeria’s state oil company as the majority shareholder, denied the allegations.

Closure notice issued to Assam OIL withdrawn -- The Pollution Control Board of Assam (PCBA) conditionally withdrew on Monday the closure notice issued to Oil India Limited’s (OIL) Baghjan oil field where a blowout last month sparked an inferno that displaced thousands, spewed thousands of litres of oil and gas into the fragile ecosystem and wreaked havoc on the local wildlife. In a letter to OIL’s resident chief executive based in Assam’s Duliajan, PCBA said the closure notice issued on June 19 was withdrawn following an affidavit by the company to the pollution watchdog that said OIL will submit a detailed timebound environmental management plan within 15 days. Monday’s order – seen by HT – also said OIL will have to apply for consent to operate (CTO) under section 25 of the Water (Prevention And Control) Act 1974 and section 21 of the Air (Prevention And Control) Act 1981 separately each for drilling, production and other installations along with an environmental management plan. “They have to submit all the details of hazardous waste generated, disposed and treatment facilities as per the Hazardous and Other Waste (Management and Transboundary Movement) Rules, 2016,” the letter said. The board issued the closure notice on Friday on the grounds that the company has been operating it without prior permissions, including the key “consent to establish” and “consent to operate” clearances. “Baghjan oil field is located just 500 metres to the Maguri Motapung wetland which is part of eco-sensitive zone of Dibru Saikhowa National Park, which is effected severely due to the negligence from your end,” read the closure notice. “You are destroying the aquatic life of Dibru Saikhowa National Park and Maguri Motapung wetland , of endangered species in the name of exploring oil without any mitigation measures,” it added. The blowout that began on May 27 led to the uncontrollable flow of oil from gas well 5 -- causing extensive damage to biodiversity and wildlife the region, according to a preliminary report on the environmental damage caused by the incident. There are 17 oil wells and five gas wells in the Baghjan oil field, which generates 1,200 kilolitres of crude oil and 1.5 to 2 million metric standard cubic metres of gas per day. 

No oil flow from Baghjan gas well site to water bodies - PSU major Oil India Limited on Friday said that no oil is flowing into water bodies from a gas well in Assams Baghjan following a blowout last month, as claimed in a video clip which has gone viral on social media. Floodwaters have entered the gas well fire site in Tinsukia district affecting efforts of the OIL authorities to cap the well and douse the blaze, the company said. "There is a video clip is in circulation in the social media wherein it has been claimed that lot of oil is flowing into nearby water bodies/river from Baghjan blowout well. This is totally false since all hydrocarbon coming out of the well is completely burnt at the well head," OIL said in a tweet. A release by the Press Information Bureau (PIB) also said that the well head area is dry and no oil is flowing into any waterbody. "Before the fire occurred, condensate was falling in nearby area as it was coming out along with gas. But once the well caught fire on 9th June, all condensate and gas is getting burnt," the release said. Well number 5 at Baghjan has been spewing gas uncontrollably since the blowout on May 27 and it caught fire on June 9, killing two of OIL's firefighters at the site. Meanwhile, it has been raining continuously and various parts of Baghjan gas well site and three roads leading to the spot from Tinsukia were inundated making it difficult to move personnel and equipment, OIL said in a statement. The site of helipad earmarked earlier cannot be used now because of the presence of floodwater on the road and efforts are on to identify a new site to set up a helipad. Due to damage of Doomdooma-Baghjan Bridge, all movement on the bridge has been suspended. OIL had contacted the Army for construction of a Bailey bridge but it can be done only after the water level recedes, the company said. Another bridge over Daisajan near Daisajan Tea Estate on Tiphuk Kordaiguri road is deteriorating too due to the flood. However, environmental Impact Assessment by M/s ERM is continuing with collection of samples of air, water, soil from different parts of the area since June 4 as a part of a study. Due to agitation by people, there was production loss of 88 MT of crude oil and 0.14 million metric standard cubic meters (MMSCM) of natural gas as on Thursday, the company said adding that operations were disrupted in 13 oil wells and one gas well.

Australia introduces increased fines for pollution related incidents - Ship owners, charterers, masters, operators need to be aware of increased liabilities for fines being introduced in Australia, in addition to any pollution clean-up costs and damage claims. As reported by law firm HWL Ebsworth, with effect from 1 July 2020, the majority of Australian States (and the Northern Territory) have increased their fines for pollution related incidents. The State and Territory legislation and penalties apply to oil spills that are within, or migrate to within, 3 nautical miles of the coast. Beyond 3 nautical miles the Commonwealth legislation will apply. Members are reminded that the discharge of oil in Commonwealth, State or Territory waters is a strict liability offence for owners and masters and potentially crew members too, plus those involved in the operation and maintenance of the ship. The Commonwealth legislation expressly also includes charterers in the list of those strictly liable. The maximum fine for an oil spill in Commonwealth waters will now increase to AUS$4.44 million for a master and AUS$22.2 million for a corporate owner or charterer. It is worth noting that the fines are not limited to oil or bunker spills and could also apply to other situations, for example where containers have been lost overboard. Both AMSA and the relevant State regulators and port authorities continue to police this policy area strictly. Members are advised to take extra care when trading in Australia. Should a spill or incident occur, owners should take immediate steps to notify the relevant authorities. Steps should also be taken to mitigate the physical damage and manage the resulting liabilities and penalties with care.  

Asian Buyers Turn to U.S. Oil Amid Uncertain Flows From OPEC -  As the OPEC+ alliance sticks to its guns in trying to curb oil output to shore up prices, Asian buyers are increasingly looking to the U.S. for a cheaper source of supply.Refiners in the top crude-importing region have been forced to accept big reductions in their regular contracted volumes from producers includingSaudi Arabia and Iraq in the past couple of months. They’ve also been taken aback by sharp swings in official selling prices.The lower volumes and pricing uncertainty is encouraging Asian processors to take a closer look at American crudes, particularly as freight rates across the Pacific have fallen over the last couple of months. Staff at four Asian processors who buy and sell crude said they were considering purchasing U.S. oil, declining to be named because the information is confidential. Saudi Arabia and other OPEC members have long-standing reputations as reliable suppliers to Asia, but the price war followed quickly by massive output cuts have unsettled buyers in the region. While these traditional suppliers are unlikely to be overtaken by the U.S. anytime soon, the instability has created an opening for American producers.“It’s difficult for refiners to cope with such volatility,” said John Driscoll, chief strategist at JTD Energy Services Pte in Singapore. “On the other hand, U.S. oil is looking more attractive with lower prices and freight rates. The volume of U.S. oil flowing to Asia is already rising. About 49 million barrels are scheduled to arrive next month, compared with 27 million barrels each in May and June, figures from Vortexa Ltd. show. Deeper discounts for American crude relative to other benchmark crudes such as Brent are spurring interest from China, said Serena Huang, a senior analyst at the market analytics firm.As the OPEC+ alliance sticks to its guns in trying to curb oil output to shore up prices, Asian buyers are increasingly looking to the U.S. for a cheaper source of supply.Refiners in the top crude-importing region have been forced to accept big reductions in their regular contracted volumes from producers includingSaudi Arabia and Iraq in the past couple of months. They’ve also been taken aback by sharp swings in official selling prices. The lower volumes and pricing uncertainty is encouraging Asian processors to take a closer look at American crudes, particularly as freight rates across the Pacific have fallen over the last couple of months. Staff at four Asian processors who buy and sell crude said they were considering purchasing U.S. oil, declining to be named because the information is confidential. Saudi Arabia and other OPEC members have long-standing reputations as reliable suppliers to Asia, but the price war followed quickly by massive output cuts have unsettled buyers in the region. While these traditional suppliers are unlikely to be overtaken by the U.S. anytime soon, the instability has created an opening for American producers.

China hits brakes on crude imports after buying frenzy  (Reuters) - China will press the brakes on crude imports in the third quarter, after record purchases in recent months, as higher oil prices hurt demand and refiners worry about a second virus outbreak, analysts and trade sources said. China imported a record 11.3 million barrels per day (bpd) of crude in May, with volumes set to rise in June and July, as cheap crude purchased during an oil price slump in April arrives in the country. But the world's top crude importer is expected to receive around 0.8-1.3 million bpd less crude from abroad in August and September than it did in May, analysts forecast. With Brent LCOc1 prices back above $40 a barrel and a new wave of coronavirus cases raising fears a nascent recovery could be derailed, traders say independent refineries - which account for a fifth of China's crude imports - are already reducing the amount of crude oil they are buying. Chinese oil imports soared as Brent crude prices fell to their lowest since 1999, dipping below $20 a barrel. Refiners cashed in, snapping up cheap crude and selling diesel and gasoline at higher retail prices secured by the government. Shipping data from Refinitiv Eikon showed over 50 tankers queued around the oil refining hub of Shandong province on June 18 - double the 22 vessels recorded a month earlier. But energy consultancies FGE, SIA Energy and Rystad Energy all expect imports to ease off in the third quarter from the second quarter, even as the country has added new refining capacity, underpinning crude demand.

Abandoned freighter off Yemen could dump 1 million barrels - The abandoned freighter FSO Safer has been sitting off the coast of Yemen for five years, with more than 1 million barrels of crude oil in its hull. The United Nations and others monitoring the ship says it's a ticking time bomb that could cause an environmental disaster in the Red Sea and on nearby shorelines worse than the 1989 Exxon Valdez oil spill. Meanwhile, the Safer and its fate have been caught up for years in a civil war and political wrangling that have thrown Yemen into a humanitarian crisis. "The disaster could happen at any second," said an unnamed senior official at the state-owned company in charge of the ship, according to the Associated Press. He issued a plea for international help, but Houthi rebels who control the area have denied access to inspectors who could assess the damage and perhaps repair or move the ship. "Rescue Yemen from a terrible, imminent disaster that will add to Yemen’s burdens for tens of years and deprive thousands from their source of living, and kill marine life in the Red Sea," the official said. (MORE: Lightning Kills at Least 83 in India) Photos taken last year show the tanker partially submerged and listing to one side. Seawater is leaking into the engine compartment, increasing the risk of sinking, and rust has covered parts of the tanker, according to documents obtained by the AP. Protections in place to help contain flammable gases have deteriorated. There are also rumors that explosive devices have been planted in the waters around the ship but no one knows if that's true, according to I.R. Consilium, a consulting firm that's been monitoring the Safer. The damage, lack of access and continued decline have put the ship in danger of rupture or explosion. Joanna Wronecka, Poland's ambassador to the United Nations, said at a U.N. Security Council meeting in November that could lead to an "unprecedented environmental and humanitarian catastrophe in the Red Sea." Among the impacts could be contaminated drinking water for millions of people who rely on coastal desalinization plants, an analysis by I.R. Consilium found. A spill could also disrupt shipping lanes in the Red Sea, a crucial route for oil and other goods, and cause damage to marine life. The tanker was being used as a floating storage facility when the rebels took over in 2015, according to the AP report. It measures 118 feet long and has 34 storage tanks. The state-owned oil company can no longer afford to take care of it, although they recently sent a dive team to seal holes in the ship where seawater was leaking in.

In 2020's biggest energy deal, six firms strike $20 billion agreement with Abu Dhabi state oil giant - A consortium of six global investors has entered into a $20.7 billion agreement with Abu Dhabi National Oil Company (ADNOC), the state-owned oil company said Tuesday. As part of the agreement, the group will invest $10.1 billion to acquire a 49% stake in a newly-formed subsidiary, ADNOC Gas Pipeline Assets, with lease rights to 38 pipelines. ADNOC will hold the majority stake of 51% and will retain ownership of the pipelines. It will also manage operations and remain responsible for capital expenditure. It is the single-largest energy infrastructure investment in the region, and the largest in the world in 2020, according to Abu Dhabi National Oil Company. It is also part of the UAE national oil company's strategy to attract foreign capital and maximize the value of its assets. The six companies involved are Global Infrastructure Partners, Brookfield Asset Management, Singapore's sovereign wealth fund GIC, Ontario Teachers' Pension Plan Board, NH Investment & Securities and Snam. "We are excited to have completed this deal, and once again partner with some of the word's leading infrastructure and institutional investors," said Sultan al-Jaber, chief executive officer of ADNOC Group and UAE's minister of state. "It is in fact a huge achievement, particularly given the current challenging economic climate and business environment, and it is, if anything, a testament to Abu Dhabi and the UAE's position as a trusted, reliable and credible investment destination," he told CNBC's Hadley Gamble. Al-Jaber said the deal would allow ADNOC to reinvest responsibly and finance activities that produce higher returns.

Oil edges up on tighter supply, but demand concerns check gains - Oil prices nudged higher on Monday on tighter supplies from major producers, but concerns that a record rise in global coronavirus cases could curb a recovery in fuel demand checked gains. Brent crude rose 9 cents, or 0.2%, to $42.28 a barrel by 0009 GMT, while U.S. crude was at $39.76 a barrel, up 1 cent. Both contracts rose about 9% last week and Brent crude futures flipped into backwardation, where oil for immediate delivery costs more than supply later, usually an indication of tightening supply. In the United States and Canada, the number of operating oil and natural gas rigs fell to a record low even as higher oil prices prompt some producers to start drilling again. Iraq and Kazakhstan pledged to comply better with oil production cuts during an OPEC+ panel on Thursday. However, the OPEC+ group, consisting of Organization of the Petroleum Exporting Countries and its allies including Russia, has yet to decide whether to extend a record supply cut of 9.7 million barrels per day (bpd) for a fourth month in August. Oil prices have also been supported by a recovery in fuel demand globally following a collapse in April-May during coronavirus shutdowns as countries across the world resume economic activities. Still, the World Health Organization reported a record jump in global coronavirus cases on Sunday, with the biggest increase seen in north and south America. Spikes in coronavirus infections in parts of the world such as Beijing and Australia's second-most populous state Victoria have prompted authorities to reimpose movement restrictions to curb the spread. "The potential economic damage of a new round of COVID-19 countermeasures will likely contain any investor enthusiasm," said Michael McCarthy, chief market strategist at CMC Markets.

Oil prices seesaw after Navarro walks back U.S.-China trade deal comment Oil flat, near highest since March, after Trump assurance on China trade - Oil prices were little changed on Tuesday, hovering near their highest levels since early March after U.S. President Donald Trump soothed jangled nerves over U.S.-China trade. Prices rose a day after Trump wrote in a tweet late Monday that the trade agreement was "fully intact." Markets had been unsettled by surprise comments from White House trade adviser Peter Navarro who said the hard-won deal with China was "over". "Oil prices need a healthy relationship between the U.S. and China," said Edward Moya, senior market analyst at OANDA in New York. He also noted that crude prices pared gains when traders were unimpressed by a U.S. purchasing managers report. Brent futures were up 11 cents, or 0.3%, to $43.19 a barrel. Brent was on track for its second straight daily close at the highest level since prices collapsed on March 6 after the Organization of the Petroleum Exporting Countries (OPEC) and allied producers including Russia, failed to agree on production cuts. West Texas Intermediate crude rose 5 cents, or 0.1%, to $40.78. U.S. crude could close its highest since March 6 for a third straight session. Prices pared early gains after the U.S. Purchasing Managers' Index (PMI) showed the country's rebound from coronavirus depressed levels was not as sharp as in Europe. "Looking at the strength of the physical market and recovering global oil demand, we think that the crude oil price is still on its way higher," Nordic bank SEB said in a note. Bank of America (BofA) Global Research has lifted its oil price forecast for this year. It now expects Brent crude to average $43.70 a barrel in 2020, up from a previous estimate of $37.

WTI Tumbles Below $39 On Crude Build, Rebound In Production  - WTI prices fell back below $40 this morning following a surprisingly large crude build reported by API overnight., as fears of a second-wave of COVID-19 (and perhaps lockdowns) stymie hopes for a rebound in demand amid record inventories.While the “focus lies on the inventory data,” there’s also persistent anxiety around the growth of the pandemic, said Hans van Cleef, senior energy economist at ABN Amro.“Hopes for a rise in demand are counterbalanced by fears regarding new Covid-19 spread.”As Bloomberg notes, anxiety over trade also weighed on the market, with the U.S. mulling new tariffs on $3.1 billion of exports from France, Germany, Spain and the U.K., adding to an arsenal of measures against the European Union that could spiral into a wider transatlantic trade fight later this summer. DOE:

• Crude +1.44mm (+1.5mm exp, Platts -100k exp, BBG WHIS -595k exp)
• Cushing -991k
• Gasoline -1.673mm (-1.9mm exp)
• Distillates +249k (+100k exp)

Official EIA data confirmed API's reported build in crude stocks last week, and the smallest draw at Cushing since May. The build in distillates also pours cold water in any pick up in jet fuel or diesel (trucking) demand.  Graphs Source: Bloomberg. Gasoline demand is also closely-watched as an indicator of the speed of recovery in the economy, and jet-fuel demand remains low... US Crude production tumbled the prior week due to storm Cristobal shut-ins, and that drop was erased last week, back up to 11.0mm b/d...WTI briefly traded back above $40 overnight but was hovering around $39.50 ahead of the DOE print and tumbled to the lows of the day after the data...

Oil drops nearly 6% on record U.S. crude inventories, pandemic resurgence fears -Oil prices fell nearly 6% on Wednesday after U.S. crude storage hit another record and coronavirus cases rebound in countries like Germany and surge in heavily populated areas of the United States. Mounting coronavirus cases in the United States, which had its second-largest rise in new infections since the crisis began, China, Latin America and India have unnerved investors and pressured oil prices. "These are all important oil demand centers. A second wave of infections and lockdowns will derail the global economic recovery and with it, oil demand and prices," said Stephen Brennock of broker PVM. Brent crude was down $2.29, or 5.5%, to $40.29 a barrel, a day after hitting its highest levels since early March, just before the pandemic and Saudi-Russia price war hit the markets. West Texas Intermediate crude settled $2.36, or 5.85%, lower at $38.01 per barrel. U.S. crude oil inventories swelled last week by 1.4 million barrels, exceeding analysts' expectations in a Reuters poll for a 299,000-barrel rise, the Energy Information Administration said, citing rising production. That marked the third straight record for crude in U.S. storage. "The thing I was most concerned about was the rebound in domestic production and it was up - as a standalone it was capable of doing some damage to the market," said Bob Yawger, director of energy futures at Mizuho. The International Monetary Fund said the coronavirus is causing wider and deeper damage to economic activity than first thought, and it slashed its 2020 global output forecasts further. India's oil imports in May hit the lowest since October 2011 as refiners with brimming crude inventories cut purchases. China, the world's top crude importer, is also expected to slow imports in the third quarter, after record purchases in recent months.

Oil Prices Fall Back Below $40 On New COVID Fears - The two-month oil rally has stalled, with WTI falling back to $38 per barrel. The resurgence of Covid-19 across the U.S. has halted the market’s positive momentum. In many ways, the rally was already overdone.  Texas Governor Greg Abbott ordered bars to shut down on Friday as the spread of the coronavirus continues to accelerate. With several states – and the U.S. as a whole – setting new daily records for positive cases, fuel demand faces enormous downside risk in the weeks ahead. For instance, Texas gasoline demand on June 24 was 17.8 percent lower than on June 17. California regulators approved a new rule requiring more than half of all trucks sold to be zero-emissions by 2035, with incremental targets beginning in 2024. The rule is estimated to lower the state’s greenhouse gas emissions by 17 million metric tons, and save truck operators $6 billion on fuel costs. It is also expected to spur manufacturing for electric heavy-duty trucks.  A federal judge ordered Enbridge totemporarily shut down the aging Line 5 pipeline after an anchor support of the pipeline recently shifted. The judge will hold a hearing on Tuesday to weigh the state of Michigan’s request to keep the pipeline closed indefinitely. The pipeline carries 540,000 bpd of light crude and natural gas liquids from Alberta through Wisconsin, Michigan and then back into Canada at the oil hub of Sarnia, Ontario. Washington DC and Minnesota each announced separate lawsuits against the oil industry this week. The DC attorney general sued ExxonMobil, BP, Royal Dutch Shell, and Chevron over its decades-long campaign of climate disinformation. A day earlier, Minnesota’s attorney general filed a similar lawsuit against Exxon, Koch Industries and the American Petroleum Institute. Unlike past cases, which sought damages for the company’s role in fueling climate change, these cases hinge on consumer protection violations.  Occidental Petroleum said it would write down $9 billion, or more than 10 percent of the company’s assets.. Natural gas prices fell below $1.50/MMBtu this week, the lowest level since the 1990s.  Poor refining margins throw up a red flag to the oil rally. With demand still weak enough to squeeze margins, refiners may purchase less crude oil, sapping the momentum for inventory drawdowns.

Oil prices hold ground after sharp retreat on virus fears - Oil prices rose about 2% in a volatile session on Thursday, buoyed by signs of a marginal improvement in the U.S. economy and a tepid rise in fuel demand, but price gains were limited by rising cases of COVID-19 in some U.S. states. Brent crude rose 74 cents, or 1.8%, to $41.05, after trading as low as $39.47. The global benchmark dropped 5.4% on Wednesday. West Texas Intermediate crude settled 71 cents, or 1.87%, higher at $38.72 per barrel. Road traffic in some of the world's major cities in June had returned to 2019 levels, data provided to Reuters by location technology company TomTom showed. Oil prices fell early, then found support as data showed fewer Americans filed for unemployment benefits last week and orders for key capital goods rebounded in May. Still, the decline in jobless claims was less than analysts expected and other data supported expectations that second-quarter GDP could shrink at as much as a 40% annualized rate. To kick-start the world economy devastated by coronavirus, central banks have unleashed trillions of dollars in stimulus. "Part of the rebound here is the idea that all the stimulus measures that central banks and the world's governments are pumping into the economy is going to have a positive impact on economic activity and that it will be supportive to demand," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. "The only roadblock is if the number of COVID-19 cases picks up and we have to reimpose shelter in place measures but I don't think we can conclude that it's in the cards yet."

Oil Prices Climb as U.S. Economic Data Lends Support (Reuters) - Oil prices rose about 2% in a volatile session on Thursday, buoyed by signs of a marginal improvement in the U.S. economy and a tepid rise in fuel demand, but price gains were limited by rising cases of COVID-19 in some U.S. states. Brent crude rose 74 cents, or 1.8%, to settle at $41.05 a barrel. U.S. West Texas Intermediate (WTI) crude ended the session up 71 cents, or 1.9%, at $38.72. Road traffic in some of the world's major cities in June had returned to 2019 levels, data provided to Reuters by location technology company TomTom showed. Oil prices fell early, then found support as data showed fewer Americans filed for unemployment benefits last week and orders for key capital goods rebounded in May. Still, the decline in jobless claims was less than analysts expected and other data supported expectations that second-quarter GDP could shrink at as much as a 40% annualized rate. To kick-start the world economy devastated by coronavirus, central banks have unleashed trillions of dollars in stimulus. "Part of the rebound here is the idea that all the stimulus measures that central banks and the world's governments are pumping into the economy is going to have a positive impact on economic activity and that it will be supportive to demand," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. "The only roadblock is if the number of COVID-19 cases picks up and we have to reimpose shelter in place measures but I don't think we can conclude that it's in the cards yet."

Oil futures decline, with U.S. prices down over 3% for the week as spread of coronavirus looks to hurt demand recovery - Oil futures declined on Friday, as a record rise in U.S. coronavirus cases and growing infections in parts of the world pointed to long-term challenges for a recovery in crude-oil demand, pulling U.S. prices down by more than 3% for the week. “The oil demand recovery story was dealt a blow this week after the U.S. registered the biggest-ever jump in coronavirus cases, suggesting many states may have to visit regional lockdowns soon,” wrote Edward Moya, senior market analyst at Oanda, in a Friday research note.U.S. states, including Arizona, Texas, South Carolina and Florida, saw confirmed cases rise by more than 30% over the past week, according to a Wall Street Journal analysis of data aggregated by Johns Hopkins University.West Texas Intermediate crude for August CLQ20, -0.85% fell 23 cents, or 0.6%, to settle at $38.49 a barrel on the New York Mercantile Exchange, following a 1.9% gain on Thursday.Global benchmark Brent oil for August delivery BRNQ20, -0.85% shed 3 cents, or 0.07%, to end at $41.02 a barrel on ICE Futures Europe, after a 1.8% advance in the previous session. For the week, WTI saw a 3.4% decline, while Brent lost 2.8%, based on the most-active contract settlements last Friday, according to Dow Jones Market Data.

Oil dips on rise in coronavirus cases, posts second negative week in three - Oil prices dipped on Friday, erasing earlier gains, as new coronavirus cases spiked in the United States and China, and on growing concerns about rising U.S. output ticking up while crude stockpiles sat at record highs. Brent crude futures were 14 cents lower at $40.9. West Texas Intermediate crude futures fell 23 cents, or 0.6% to settle at $38.49 per barrel. Brent was on track for a weekly decline of 3.1% and U.S. crude was headed for a weekly drop of 3.6%, after record U.S. crude inventory data dragged prices down on Wednesday. Earlier gains, supported by optimism over rising road traffic boosting fuel demand, were erased in early U.S. trading on fears that spiking COVID-19 infections in large gasoline-consuming U.S. states could stall the demand recovery. Cases have risen sharply in California, Texas and Florida, the three most populous U.S. states. Friday morning, Texas Governor Greg Abbott reversed the state's reopening plan, ordering most bars to close due to the surge in cases. That could undermine the steady increase in refining output, with U.S. refiners now operating at nearly 75% of their capacity, per official government data. "Employers are delaying the return of their employees back to the office and that will impact the return of gasoline demand," said Andrew Lipow, president of Lipow Oil Associates. The global economic outlook has also worsened or at best stayed about the same in the past month, a majority of economists polled by Reuters said, and the recession under way is expected to be deeper than earlier predicted. A survey of executives in the top U.S. oil and gas producing region by the Dallas Federal Reserve Bank found more than half of executives who cut production expect to resume some output by the end of July. U.S. and Canadian energy firms cut the number of oil and natural gas rigs operating to a record low again this week, according to data from Baker Hughes.

Coronavirus: Saudi Arabia bars international pilgrims for Hajj - Saudi Arabia has banned international visitors from making the Islamic pilgrimage, or Hajj, this year in a bid to control coronavirus. Only a very limited number of people currently living in the kingdom may take part, an announcement on state media says. An estimated two million people would otherwise have visited Mecca and Medina this summer for the annual gathering. There had been fears the Hajj might be cancelled altogether. In normal times the pilgrimage is one of the most significant moments in the Muslim religious calendar. But only citizens from countries around the world who are already resident in Saudi Arabia will be allowed to attend this year. The authorities say this is the only way they will be able to make plans for social distancing that will keep people safe. Saudi Arabia has recorded 161,005 cases of infection and 1,307 deaths. It only lifted a nationwide lockdown at the weekend. Making the pilgrimage at least once is one of the Five Pillars of Islam - the five obligations that every Muslim, who is in good health and can afford it, must satisfy in order to live a good and responsible life, according to Islam. Pilgrims gather in Mecca to stand before the structure known as the Kaaba, praising Allah (God) together. They perform other acts of worship too, renewing their sense of purpose in the world.

Treasury sanctions Iranian ship captains after gasoline delivery to Venezuela - — The Treasury Department on Wednesday slapped fresh sanctions on five Iranian ship captains who delivered gasoline to Venezuela, whose once-thriving oil industry has suffered a breakdown. The Iranian shipping sector is a frequent target of the Trump administration for its financial support of Venezuelan President Nicolas Maduro's regime. Earlier this week, five Iranian tankers brought approximately 1.5 million barrels to the gas-starved country, which was once a prominent fuel exporter. The move was likely to anger Washington as the two OPEC nations sidestep U.S. sanctions. "The Treasury Department will target anyone who supports Iranian attempts to evade United States sanctions and who further enables their destabilizing behavior around the world," Treasury Secretary Steven Mnuchin wrote in a statement. "The Iranian regime's support to the authoritarian and corrupt regime in Venezuela is unacceptable, and the administration will continue to use its authorities to disrupt it." The five Iranian captains' designated work for Islamic Republic of Iran Shipping Lines and National Iranian Tanker Co. and, over the past month, have captained vessels identified as blocked property. "Mariners who do business with Iran and Venezuela will face consequences from the United States of America," Mike Pompeo, the nation's top diplomat, said Wednesday at the State Department. "The Maduro regime has mismanaged Venezuela's abundant natural resources to the point that it must import gasoline from Iran, and Maduro's claims of equal and fair gasoline distribution are fooling no one," he added. Gasoline is scarce in Venezuela due to a near-complete breakdown of the OPEC nation's 1.3 million barrel-per-day refining network. Oil, the country's biggest export, has plummeted more than 60% since Maduro succeeded dictator Hugo Chavez as Venezuela's president in 2013.

Sisi's 'Declaration Of War' Puts Egypt & Turkey On War Footing Over Libya --Egypt and Turkey have long been on opposite sides of the raging battle for the fate of Libya, with Turkey providing major military support and backing for the UN-recognized Government of National Accord (GNA) in Tripoli, and with Egypt backing Gen. Khalifa Haftar.The situation escalated over the weekend, amid a pullback of pro-Haftar forces from Tripoli after being defeated in the bid for the capital, when Egypt's President Sisi announced from an airbase near the Libyan border that the Egyptian Army stands ready to intervene in Libya on behalf of Haftar. Sisi declared that if GNA forces attempt to enter Haftar-controlled Sirte, pushing deeper into central Libya, this would be a 'red line' for Egypt, forcing it's intervention.  Crucially both Tripoli and its main ally Turkey on Sunday condemned what they called Sisi's "declaration of war". Turkish state media recorded the GNA statement as follows: "This is a hostile act, direct interference, and amounts to a declaration of war" - in condemnation of Sisi's statements. It added that for the Libyan state, "interference in its internal affairs, attacks on its sovereignty, whether by declarations... like those of the Egyptian president or by support for putschists, militias, and mercenaries, is unacceptable."The heated rhetoric, and with Egypt potentially beefing up forces and military hardware along its border with Libya, has some regional sources saying that Turkey and Egypt are headed for direct war in a rapidly intensifying situation."Now Egypt’s president is signaling possible red lines in Libya," The Jerusalem Post writes. "This line could keep the Turkish-backed GNA from Sirte and a strategic airfield at Jufra. The country would be split down the middle. Egypt has a massive army, but it is also an army mostly untested on foreign battlefields."Tripoli is now calling on the international community, especially the UN, to step in should Egypt's army get involved.

France backs Egypt’s threat to intervene against Turkey in Libyan war - French President Emmanuel Macron’s support for Egypt’s threat to intervene militarily against the Italian-backed Turkish intervention in Libya marks a major escalation of the nine-year imperialist carve-up of Libya launched by the 2011 NATO war. On June 21, Egypt’s bloodstained dictator, General Abdel Fattah al-Sisi, threatened to intervene in Libya to defend warlord Khalifa Haftar’s forces against the Turkish-backed Government of National Accord (GNA). Speaking while inspecting troops at a military base near the Libyan border, he warned that a GNA capture of Sirte, a strategic town and gateway to Libya’s oil industry, would be a “red line.” “Any direct intervention from the Egyptian state has now acquired international legitimacy,” Sisi said. He told Egyptian air force pilots and special forces units: “Be prepared to carry out any mission, here inside our borders—or if necessary, outside our borders.” Echoing the rhetoric he used to justify a 2013 coup against Islamist President Mohamed Mursi and the savage repression of a two-year revolutionary upsurge of the working class in Egypt, Sisi said Egypt would intervene in Libya in self-defense against “direct threats” from “terrorist militias and mercenaries.” He added: “If the Libyan people … asked us to intervene, this would be a signal to the world that Egypt and Libya are one country, one interest.” The target, Egyptian officials made clear, is the Turkish intervention in Libya, launched in January, to support the UN-recognized GNA against Haftar’s forces. “The aim is deterrence: Egypt does not want a single Turk to cross the line into eastern Libya,” Ziad Akl of Egypt’s Al-Ahram Centre for Political and Strategic Studies told London’s Financial Times. The French government, which together with Russia, the UAE and Egypt has backed Haftar in Libya, promptly intervened to declare its support for Cairo in the war. Speaking alongside Tunisian President Kaïs Saïed at the Elysée presidential palace in Paris, Macron accused Turkish President Recep Tayyip Erdoğan’s government of “playing a dangerous game in Libya.” This comes shortly after a dangerous confrontation between French and Turkish warships in the Mediterranean.