Sunday, August 30, 2020

oil & natural gas prices rose as storms shut down offshore Gulf production (in an otherwise slow news week)

oil prices rose for a 4th consecutive week as most US offshore production was shut down by two hurricanes in the Gulf of Mexico...after rising 3 cents or less than 0.1% to $42.34 a barrel last week as bullish news of rising demand and falling supplies was mostly offset by fears of pandemic impacts, the contract price of US light sweet crude for October delivery opened higher on Monday as half of US offshore oil production was shut down as two storms approaching the Gulf Coast, but then traded in a narrow range and settled 28 cents higher at $42.62 a barrel as the threat of back-to-back storms hitting the Gulf Coast was offset by a coronavirus resurgence in parts of Asia and Europe...the virus worries persisted early Tuesday, but as producers closed down more production when Laura's forecast was upgraded to a category 3 storm, prices began rising and ended 73 cents higher at a five month high of $43.35 a barrel as reports estimated that 84.3% of Gulf oil production, or about 1.6 million barrels of oil a day, had been shut in, along with nearly 61% of natural gas production...but oil prices held fast on Wednesday even as Laura strengthened and the EIA reported a large withdrawal of crude from storage and settled just 4 cents higher at $43.39 a barrel, pressured by concerns of the coronavirus's impact on demand...prices then slid early Thursday as Laura slammed into the rural Louisiana coast, with the worst of the storm missing the major refinery complexes of nearby Texas, and ended down 35 cents at $43.04 a barrel as refinery shutdowns reduced the demand for crude oil, just about offsetting the loss of Gulf of Mexico production...with refineries having missed the worst of the storm's impact, oil prices continued lower on Friday and ended down 7 cents at $42.97 a barrel, failing to react to a weaker dollar, which usually boosts commodity prices...but for the week, oil prices still managed to post a 1.5% increase, representing their fourth weekly rise in a row...

natural gas prices also finished higher for a fourth consecutive week as Gulf production of natural gas was also shut in ahead of the storms....after rising 3.9% to $2.448 per mmBTU last week on hot weather ahead of the storms, the contract price of natural gas for September delivery jumped as much as 10 cents to start the week, supported by a steep drop in Gulf gas production ahead of two tropical systems moving through the Gulf at the time and finished Monday 6.5 cents higher at $2.513 per mmBTU... but natural gas prices backed off 2.4 cents on Tuesday as LNG tankers steered clear of the U.S.export terminals as Hurricane Laura bore down on them and then fell another 2.8 cents to $2.461 per mmBTU on Wednesday as US Gulf LNG exports collapsed to an 18 month low ahead of the storm...but on Thursday, the last day of trading for September natural gas, the price of that contract jumped to 9-month high of $2.579 per mmBTU because Laura also shut down Louisiana's natural gas production, while the contract price of natural gas for October delivery, the new front month gas contract, finished 13.6 cents higher at $2.710 per mmBTU as the EIA reported the weekly injection of gas into storage was a hair short of some expectations...however, prices for October natural gas fell 5.3 cents $2.657 per mmBTU on Friday, even as Reuters reported it as a new 9 month high on the contract roll, as US natual gas exports began to rebound slowly from their pre-storm lows...while natural gas quotes thus finished 20.9 cents or 8.5% higher on the week, the October contract price only managed an 8.4 cent or 3.3% gain, as the sustained heat was enough to lift prices across the board for the week...

the natural gas storage report from the EIA for the week ending August 21st indicated that the quantity of natural gas held in underground storage in the US rose by 45 billion cubic feet to 3,420 billion cubic feet by the end of the week, which left our gas supplies 580 billion cubic feet, or 20.4% greater than the 2,840 billion cubic feet that were in storage on August 21st of last year, and 438 billion cubic feet, or 14.7% above the five-year average of 2,982 billion cubic feet of natural gas that have been in storage as of the 21st of August in recent years....the 45 billion cubic feet that were added to US natural gas storage this week matched an S&P Global Platts' survey of analysts who forecast a 45 billion cubic foot increase, while it was less than the 60 billion cubic feet addition of natural gas to storage during the corresponding week of 2019, and also less than the average of 49 billion cubic feet of natural gas that has been added to natural gas storage during the same week over the past 5 years..  

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending August 21st showed that because of a big jump in our oil exports, we needed to withdraw oil from our stored supplies for the fifth week in a row and for the 7th time in the past twelve weeks...our imports of crude oil rose by an average of 185,000 barrels per day to an average of 5,916,000 barrels per day, after rising by an average of 109,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 1,226,000 barrels per day to an average of 3,363,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,553,000 barrels of per day during the week ending August 21st, 1,041,000 fewer barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly 100,000 barrels per day higher at 10,800,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production totaled an average of 13,353,000 barrels per day during this reporting week..

meanwhile, US oil refineries reported they were processing 14,712,000 barrels of crude per day during the week ending August 21st, 225,000 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 922,000 barrels of oil per day were being pulled out of 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, from storage, and from oilfield production was 438,000 barrels per day less than what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+438,000) 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 data for 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....with last week's fudge factor at -421,000, that means our week over week comparisons on oil supply & demand changes are off by almost twice as much, even as we continue to report them as an indicator of what most oil traders and analysts believe happened, since that's what affects their behavior... (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 rose to an average of 5,819,000 barrels per day last week, which was still 16.9% less than the 7,002,000 barrel per day average that we were importing over the same four-week period last year....the 922,000 barrel per day net withdrawal from our total crude inventories came as 670,000 barrels per day were being pulled out of our commercially available stocks of crude oil and 252,000 barrels per day were being withdrawn from the oil supplies in our Strategic Petroleum Reserve, space in which is also being leased for commercial use....this week's crude oil production was reported to be 100,000 barrels per day higher at 10,800,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states rose by 100,000 barrels per day to 10,300,000 barrels per day, while Alaska's oil production rose by 3,000 barrrels per day to 442,000 barrels per day but had no impact on the rounded national total....last year's US crude oil production for the week ending August 23rd was rounded to 12,500,000 barrels per day, so this reporting week's rounded oil production figure was 13.6% below that of a year ago, yet still 28.1% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 82.0% of their capacity while using 14,712,000 barrels of crude per day during the week ending August 21st, up from 80.9% of capacity during the prior week, but excluding great recession slowdown and the 2005, 2008, and 2017 hurricane-related refinery interruptions, still among the lowest refinery utilization rates of the last twenty-eight years...hence, the 14,712,000 barrels per day of oil that were refined this week were still 15.5% fewer barrels than the 17,408,000 barrels of crude that were being processed daily during the week ending August 23rd of last year, when US refineries were operating at 95.2% of capacity....

with the increase in the amount of oil being refined, gasoline output from our refineries was also higher, increasing by 118,000 barrels per day to 9,518,000 barrels per day during the week ending August 21st, after our refineries' gasoline output had decreased by 200,000 barrels per day over the prior week...​but ​with our gasoline production still recovering from a multi-year low, this week's gasoline output was​ still​ 10.7% less than the 10,660,000 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 380,000 barrels per day to 5,122,000 barrels per day, after our distillates output had decreased by 47,000 barrels per day over the prior week... but even after this week's big increase in distillates output, our distillates' production was still 1,4% less than the 5,193,000 barrels of distillates per day that were being produced during the week ending August 23rd, 2019....

even with the increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the 6th time in 8 weeks and for the 21st time in 30 weeks, falling by 4,583,000 barrels to 239,179,000 barrels during the week ending August 21st, after our gasoline supplies had decreased by 3,322,000 barrels over the prior week...our gasoline supplies decreased by more this week because the amount of gasoline supplied to US markets increased by 531,000 barrels per day to 9,161,000 barrels per day​,​ while our imports of gasoline fell by 18,000 barrels per day to 539,000 barrels per day and while our exports of gasoline fell by 189,000 barrels per day to 620,000 barrels per day....but even after this week's inventory decrease, our gasoline supplies were still 3.1% higher than last August 23rd's gasoline inventories of 231,982,000 barrels, and roughly 5% above the five year average of our gasoline supplies for this time of the year...  

meanwhile, with the big increase in our distillates production, our supplies of distillate fuels increased for the seventeenth time in 32 weeks and for the 22nd time in 47 weeks, rising by 1,388,000 barrels to 177,195,000 barrels during the week ending August 21st, after our distillates supplies had increased by 152,000 barrels during the prior week....our distillates supplies rose this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 705,000 barrels per day to 3,958,000 barrels per day, because our exports of distillates fell by 421,000 barrels per day to 1,094,000 barrels per day, while while our imports of distillates rose by 81,000 barrels per day to 129,000 barrels per day...after this week's inventory increase, our distillate supplies at the end of the week were 31.7% above the 136,060,000 barrels of distillates that we had in storage on August 23rd, 2019, and about 24% above the five year average of distillates stocks for this time of the year...

finally, because ​of ​the big jump in our oil exports, our commercial supplies of crude oil in storage fell for the 10th time in thirty-two weeks and for the 16th time in the past year, decreasing by 4,689,000 barrels, from 512,452,000 barrels on August 14th to 507,763,000 barrels on August 21st....but even after that decrease, our commercial crude oil inventories were still around 15% above the five-year average of crude oil supplies for this time of year, and 54% above the prior 5 year (2010 - 2014) average of our crude oil stocks for the ​third weekend of August, 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 of 2018, except for during the summers, after generally falling until then through most of the prior year and a half, our crude oil supplies as of August 21st were 18.7% above the 427,751,000 barrels of oil we had in commercial storage on August 23rd of 2019, 25.1% more than the 405,792,000 barrels of oil that we had in storage on August 24th of 2018, and 10.9% above the 457,773,000 barrels of oil we had in commercial storage on August 25th of 2017...    

This Week's Rig Count​ ​

the US rig count was unchanged during the week ending August 28th, after rising for the first time in 24 weeks the prior week, but it is still down by 68.1% over that twenty-five week period....Baker Hughes reported that the total count of rotary rigs running in the US remained at 254 rigs this past week, which was still 150 fewer rigs than the all time low prior to this year...that was also down by 662 rigs from the 916 rigs that were in use as of the August 30th report of 2019, and 1,675 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 3 rigs to 180 oil rigs this week, after increasing by 11 oil rigs the prior week, leaving us with 562 fewer oil rigs than were running a year ago, and less than a 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 increased by 3 rigs to 72 natural gas rigs, which was still down by 90 natural gas rigs from the 162 natural gas rigs that were drilling a year ago, and was also less than a twentieth of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those rigs drilling for oil & gas, two rigs classified as 'miscellaneous' continued to drill this week; one on the big island of Hawaii, and one in Sonoma County, California... a year ago, there were no such "miscellaneous" rigs deployed...

The Gulf of Mexico rig count was unchanged at 13 rigs this week, with 10 of those rigs drilling for oil in Louisiana's offshore waters and three drilling for oil offshore from Texas...that was 13 fewer Gulf rigs than the 26 rigs drilling in the Gulf a year ago, when 25 Gulf rigs were drilling offshore from Louisiana and one was deployed in Texas waters...while there are no rigs operating off other US shores at this time, a year ago there were also two rigs deployed offshore from Alaska, so this week's national offshore count is down by 15 from the national offshore rig count of 28 a year ago...also note that in addition to those rigs offshore, a rig continues to drill through an inland body of water in southern Louisiana this week, while a year ago there were no rigs drilling in inland waters..

The count of active horizontal drilling rigs was unchanged at 221 horizontal rigs this week, which was still 563 fewer horizontal rigs than the 784 horizontal rigs that were in use in the US on August 30th of last year, and less than a sixth of the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, the directional rig count was was also unchanged at 20 directional rigs this week, and those were also down by 50 from the 70​ directional rigs that were operating during the same week of last year....in addition, the vertical rig count was also unchanged at 13 vertical rigs this week, and those were still down by 37 from the 50 vertical rigs that were in use on August 30th 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 August 28th, the second column shows the change in the number of working rigs between last week's count (August 21st) and this week's (August 28th) count, the third column shows last week's August 21st active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running during the count 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 30th of August, 2019...    

August 28 2020 rig count summary

as has been the case most of the summer, there were only a few changes in drilling activity again this week, with only three rig removals and just three rig additions, suggesting that prices are currently high enough that drillers are no longer trying 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 that just one rig was shut down Texas Oil District 8, which is the core Permian Delaware, while rigs in other Texas Permian basin​ ​districts were unchanged....since the national Permian basin rig count was down by 2 rigs, that means that the rig that was shut down in New Mexico had been drilling in the far western Permian Delaware, to fully account for the national Permian decrease...elsewhere in Texas, a rig was removed from Texas Oil District 4, which doesn't correspond to a major basin, while one rig was added in Texas Oil District 6, which corresponds to one of the Haynesville shale natural gas rig additions....the other two Haynesville shale natural gas rig additions were across the state line in Lousiana, thus accounting for all the rig changes seen this week, which was​ ​probably the least changes ​in ​one week​ ​we've seen in years...  

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Environmental groups challenge Ohio gas storage permits (AP) — Environmental groups have asked an Ohio appeals court to revoke drilling permits granted by a state agency for construction of massive underground salt caverns to store natural gas liquids along the Ohio River, according to a lawsuit. The complaint filed Thursday with the 10th District Court of Appeals in Columbus accuses the Ohio Department of Natural Resources of not following its own rules by failing to require public notice of company drilling applications, create draft copies of the permits or allow for a public comment period before granting permits July 20. The lawsuit asks the appeals court to order ODNR to restart the application process and follow its rules. ODNR spokesperson Stephanie O’Grady said the department does not comment on pending litigation. The caverns will be created by injecting millions of gallons of fresh water underground into an underground salt formation in Ohio’s Monroe County. After construction, Powhatan Salt Company will turn the project over to Denver-based based company Mountaineer NGL Storage to store ethane, propane and butane, which are byproducts of natural gas drilling. Salt solution created during construction would be transported by a pipeline beneath the Ohio River to an alkaline plant in West Virginia. Mountaineer NGL Storage is finalizing a deal with a U.S. subsidiary of a Thailand-based company, PTT Global Chemical America, to provide ethane storage for a proposed multi-billion dollar petrochemical plant that would produce plastic pellets in nearby Belmont County. Whether the petrochemical plant will be built is uncertain. PTT Global’s partner, a U.S. subsidiary of South Korea’s Daelim Industrial Co., quit the project in mid-July. A long-delayed decision on whether PTT will move forward with a new partner is expected sometime next year. The Ohio lawsuit was filed on behalf of individuals by Concerned Ohio River Residents, FreshWater Accountability Project, Buckeye Environmental Network, Ohio Valley Environmental Coalition and Sierra Club. The complaint says construction and operation of the caverns could lead to spills that would harm private and public water supplies, become a hazard for “potential explosiveness” after natural gas liquids are stored, and would create an eyesore along the Ohio River.

Marietta residents plan virtual hearing on fracking - Disposal Solutions in Marietta applied for a permit for a docking facility, where locals believe fracking wastewater will be offloaded. The wastewater will be disposed of at DeepRock. Devola resident George Banziger said he was unhappy with a virtual public meeting with the Huntington District, U.S. Corps of Engineers on Aug. 7. “People were required to register for the meeting, which was on a Friday and not convenient for most people,” he explained. “The meeting time was changed at the last minute.” He said after an introduction that lasted half an hour, the 13 people who were able to connect each had two minutes to speak. “Then the meeting ended early,” Banziger said. “It was not on Zoom, but was on a platform that several people had trouble getting on.” He said he was also frustrated no representation from DeepRock was in the meeting to answer questions. As a response, a virtual Peoples Hearing will be held from 6 to 8 p.m. Thursday through Zoom. It will be live streamed on YouTube and Facebook live and a hard copy transcript will be sent via certified mail to the Corps of Engineers. Beverly Reed, community organizer for Concerned Ohio River Residents, said the Peoples Hearing is something the citizen advocacy groups have put together. She said those who spoke at the Aug. 7 hearing, as well as those who didn’t get a chance to attend are invited to register for the meeting at bit.ly/DeepRockPeoplesHearing. “We’re going to record the Zoom call and send it to the Army Corps so we can feel heard and know they’ve heard our concerns,” she explained. She added an official complaint was sent in by the group’s attorneys, Fair Shake Environmental Legal Service, as many people were shut out of the meeting.

Pennsylvania Sees More Natural Gas Production Declines Amid Price-Related Curtailments Pennsylvania’s unconventional natural gas producers continued to curtail volumes in the second quarter as the state reported only the second sequential production decline in more than three years. Unconventional natural gas production was 1.717 Tcf in 2Q2020, down from 1.766 Tcf in 1Q2020, when the state also reported a quarter/quarter production decline, according to data released by the Pennsylvania Independent Fiscal Office (IFO). Second quarter volumes grew by only 2.8% year/year, the lowest growth rate in more than three years. Producers have made price-related curtailments since the beginning of the year as they’ve grappled with low natural gas demand in the United States and across the world. The IFO said from 1Q2019 to 2Q2020, the average price of natural gas in Pennsylvania declined by 49.7%. Average prices in the state were $1.36/MMbtu in the second quarter, down 36.6% from the year-ago period. There were 113 new horizontal wells spud in 2Q2020, a decline of 51 wells from the same time last year and the fifth consecutive quarter in which there was a year/year decline in new wells spud. There were also 9,584 horizontal producing wells in the second quarter, which account for over 99% of unconventional production. That’s up 7.7% from 2Q2019. It was the smallest year-over-year increase in quarterly horizontal producing wells on record, the IFO said.

Sunoco asks Environmental Hearing Board to block new DEP shutdown of troubled Chester County drilling site - Sunoco filed a legal challenge against Pennsylvania’s Department of Environmental Protection on Monday, calling on the Environmental Hearing Board to overturn the DEP’s recent shutdown of a construction site for the controversial Mariner East pipeline project. The company argued that the DEP was “improper” and “arbitrary” in issuing an Aug. 20 order that shut down operations of a drilling site in Chester County’s West Whiteland Township, an area where fragile limestone geology has caused repeated technical problems for the pipeline. Sunoco said it would be irreparably harmed if it is forced to continue the shutdown, which DEP said was prompted by a “turbid groundwater discharge” at a horizontal directional drilling site at Shoen Road and Route 100 that officials have shut down twice before over the last three years because of the project’s impact on residential water wells. DEP issued a notice of violation after the discharge at the site, known as HDD 360, on Aug. 8. The department said the discharge was related to construction activities, and was designated as an “inadvertent return” so drilling could not restart without DEP’s permission. Even for a pipeline project that has been plagued with delays since it started in February 2017, construction in West Whiteland has been exceptionally problematic. In July 2017, about a dozen families experienced cloudy water or loss of supply from their private wells after Sunoco’s drilling near Shoen Road punctured an aquifer. In 2018, a series of sinkholes opened up on a pipeline construction site at nearby Lisa Drive, a suburban development, forcing state officials to order a shutdown at that location. In the latest incident, Sunoco argued that a prolonged shutdown would harm the public interest because groundwater flowback will occur, the borehole will be lost, and future drilling will have to retrace ground already covered. The company also accused DEP of contradicting its own letters of June 29 and July 2, which approved a restart of HDD 360 after an earlier shutdown. “It is of utmost importance to complete construction promptly at the HDD 360 work location, important not only for SPLP’s interests, but also for the interests of the public at large to complete construction at a location which has been in-progress now for over three years,” the company said in a seven-page petition. It urged the Board, a quasi-judicial body that hears complaints against the DEP, to issue an order of “supersedeas” that would block the latest order. The DEP said it does not comment on matters in litigation. Last Thursday, the department fined Sunoco $355,000 for spills of drilling mud in eight counties in 2018 and 2019. Those incidents were among more than 100 for which the DEP has issued notices of violation since the project began in early 2017.

PENNSYLVANIA: Judge overturns shutdown of $3B pipeline project -- Wednesday, August 26, 2020 --A judge has overruled Pennsylvania environmental regulators and allowed Energy Transfer LP to resume underground drilling for the Mariner East 2 pipeline in the location of a reported spill.

W.Va. ends plans for long-awaited power plant in Brooke County | WTOV  — A power plant in the works for Brooke County that would provide almost a billion dollars in revenue for the area is no longer going to be built. But local leaders aren’t giving up on the fight for the project. Last week, the state of West Virginia backed out of a $5 million loan guarantee to support the project. And now leaders fear they will lose the project to a neighboring state. "If it doesn't, it’s going to move across one of the state borders to another state, and we are going to lose out on it. So it’s very important to West Virginia," Delegate Randy Swartzmiller said. The plant no longer coming to the area means 1,000 fewer jobs for construction -- and more. "A million dollars up front to the county commission for services that the county provides, ambulance services, sheriff’s deputies. Over 100,000 to the board of education every year for students, a $3.5 million investment to the Brooke County Service District," Sen. Ryan Weld said. There’s more. "It would also allow natural gas producers that are here in Brooke County to put their gas out on the Rover Pipeline and sell it across state lines instead of having to transport it by truck like you see now," Brooke County Commissioner AJ Thomas said. And the reason for the state leaving the project? "I think the state had some concerns regarding whether or not the majority of the construction workers were going to be West Virginia residents," Weld said. But commissioners have been writing letters to the state and are urging them to support the project. The county is united in wanting the power plant, and it is willing to continue fighting for it.

Justice questions need for new Brooke County power plant — Gov. Jim Justice said Wednesday that the Brooke County ESC natural gas power plant project is not dead, but the coal magnate questioned the need for the plant, the loan guarantee request, where the gas would come from and how many jobs the plant would create. Speaking Wednesday during a virtual press briefing from the Capitol, Justice said the Department of Commerce still needed questions answered regarding the Energy Solutions Consortium Brooke County Power project, a proposed 830-megawatt natural gas power plant. “The media has run with this and really just perpetuated something that they felt like was a dead issue, and it’s not dead,” Justice said. “It’s not dead at all, but you expect me as your governor and our staff to be able to have things run to ground and questions answered. Now, it’s going to take some time. It’s not going to happen the day after tomorrow or the next day.” The plant would sell electrical power on PJM Interconnection’s wholesale energy market, which serves 13 states. According to the company, the construction of the plant would create 1,164 direct and indirect jobs, provide a $440 million economic impact to Brooke County and the surrounding area, spur additional natural gas production and provide electricity to as many as 700,000 homes. The Brooke County Commission is rallying support for the power plant from lawmakers, the business community and building trades groups after learning that the state Economic Development Authority has not agreed to assume the debt for a $5.6 million private loan in case the developers are not able to pay the loan back.

Natural gas important to regional growth but opponents want renewable energy instead - — It’s the fastest-growing region of West Virginia. And some think it is growing too fast. There are growing pains in the eastern panhandle. So just what role does natural gas play in the region’s future? With a green light for a compressor station in Berkeley County, opponents of more natural gas infrastructure in the eastern panhandle are raising objections. They claim the new Rockwool industrial project in Jefferson County is behind it. The building insulation manufacturer, set to employ 150 perhaps by year’s end, maintains the compressor station will benefit the entire region — not just Rockwool — when there is peak demand.  But opponents of Rockwool, and of natural gas altogether, for that matter, want no more pipelines and no more gas transported by truck.   “It’s an evacuation or an explosion risk for residents in this community,” says Tracy Cannon, who chairs Eastern Panhandle Protectors. But champions of economic development in the eastern panhandle insist that natural gas is key to attracting new employers who create jobs. And a recent federal court decision putting the brakes on the TransCanada pipeline in the region is already giving some prospective ventures for Berkeley and Jefferson counties pause. But natural gas opponents insist there are other fuel sources for business here. “We shouldn’t be putting in more pipelines,” says Dr. Christine Wimer, president of the Jefferson County Foundation, “because we’re moving to more renewable energy.”Meanwhile, Mountaineer Gas is reportedly scouting as many as three sites for a compressed natural gas facility in the Berkeley-Jefferson county region. And Rockwool, opponents say, will consume 1.6 million cubic feet of gas per day.

OIL AND GAS: Mountain Valley pipeline asks FERC for 2-year delay -- Wednesday, August 26, 2020 -- www.eenews.net E&E News -- Start a free trial - Developers of the Mountain Valley pipeline asked the Federal Energy Regulatory Commission yesterday for an additional two years to complete construction of the project and place it into service.

Mountain Valley asks FERC for more time to complete pipeline -Held up for nearly a year by lawsuits, suspended permits and a stop-work order, the Mountain Valley Pipeline is bidding for more time.The company building the interstate pipeline asked the Federal Energy Regulatory Commission late Tuesday to extend by two years a key approval that will otherwise expire in six weeks.When FERC determined on Oct. 13, 2017, that there was a public need for the natural gas that will flow through the transmission line, it granted Mountain Valley a three-year certificate for a project the company said would only take a year to build.But multiple legal challenges by opponents — who say burrowing a massive pipeline through Southwest Virginia will scar the landscape, pollute the water and kill endangered fish and bats — led courts to set aside three key sets of federal permits. Mountain Valley has said it hopes to have the permits restored in time to complete the 303-mile pipeline by early next year.But “due to the uncertainty regarding the timing of these permits and the outcome of any subsequent legal challenge, Mountain Valley asserts that a two-year extension is necessary and proper,” Matthew Eggerding, assistant general counsel for the company, wrote in the Aug. 25 letter to FERC. Mountain Valley spokeswoman Natalie Cox said Wednesday that the company still expects to complete work on schedule but requested the extension “out of an abundance of caution.”

Despite company claims, only a fraction of the Mountain Valley Pipeline is complete in Virginia -Mountain Valley Pipeline is a $6.2 billion corporate boondoggle that a Pittsburgh-based fracked gas company, EQT Corporation, is trying to ram down the throat of West Virginia and Virginia.  Boondoggle is exactly the right word for this climate-busting project, which was first conceived in 2014 and has yet to be completed.   As originally proposed, MVP carried an estimated price tag of roughly $3.5 billion.  When the price shot up to $4.6 billion, it was assessed to be the most expensive proposed pipeline in the United States on a cost per mile basis. MVP more recently has used an estimate of $5.7 billion, but that was before it announced that it was going to spend up to an additional $500 million to increase the pressure in the pipes to further condense the explosive methane gas and thus increase production.  So that brings the estimated cost to $6.2 billion – for now.Here’s another number that could haunt MVP  $104 million. That is what one of its contractors says it is owed in a pair of lawsuits that were just filed in Pennsylvania and in West Virginia. The contractor is demanding that the pipeline be sold at auction to pay off the debt. So yeah, MVP apparently is not very good with numbers.  It turns out that MVP is no better at telling the truth than it is at math.  Consider the following:

Va. bill seeks to curtail influx of MVP workers - A Virginia legislator has introduced a bill that could make it more difficult for the now-stalled Mountain Valley Pipeline (MVP) to complete construction, Kallanish Energy reports. The bill, introduced by Delegate Chris Hurst, D-Montgomery, would require that any project requiring 50 or more temporary workers during the coronavirus pandemic get additional state approval before proceeding. Such hiring would require approval from the state commissioner of labor and industry. House Bill 5102 would also require an employer to participate in state programs to boost worker safety and health. That could complicate efforts to complete the $5.7 billion natural gas pipeline in Virginia and West Virginia. MVP has said it intends to hire 4,000 workers to complete the pipeline, and the Hurst bill was introduced to block that influx of pipeline workers. Spokeswoman Natalie Cox said the bill could have impacts on major construction projects in Virginia and could undermine current health efforts to combat Covid-19, the Virginia Mercury reported. The company is complying with federal, state and local health guidelines, Cox said. Work on the pipeline has been stalled since October 2019 after a federal appeals court invalidated a key permit known as a biological opinion from the U.S. Fish and Wildlife Service. A new biological opinion is being prepared by the federal agency. The 303-mile pipeline is expected to begin full service in early 2021. It is designed to move Marcellus and Utica shale natural gas to markets in Virginia and the Carolinas. The company says the project is 92% complete, although critics dispute that. The pipeline company has said it hopes to have all the needed permits in place for the pipeline by the end of 2020.

More Gas Pipelines Scrapped Than Put In Service In H1 2020 - Some 5 billion cubic feet per day (Bcf/d) of new pipeline capacity was placed into service in the United States in the first half this year, but an estimated 8.7 Bcf/d of pipeline projects have been canceled so far in 2020, the U.S. Energy Information Administration (EIA) said on Monday. The major cancellations included the 1.5 Bcf/d Atlantic Coast Pipeline project, which was designed to transport natural gas from the Marcellus and Utica shale gas plays to electric power consumers in the Southeast. Despite a major win on a right-of-way issue at the U.S. Supreme Court in June, the developers of the Atlantic Coast natural gas pipeline said in early July that they were definitely scrapping the project given the ongoing delays and significant cost overruns. Dominion Energy and Duke Energy said they were canceling the Atlantic Coast Pipeline “due to ongoing delays and increasing cost uncertainty which threaten the economic viability of the project.” In February, Williams and its partners Duke, Cabot and AltaGas said they had halted investment in the proposed 0.65 Bcf/d Constitution Pipeline project, which would have transported northeastern natural gas production into New England. “While Constitution did receive positive outcomes in recent court proceedings and permit applications, the underlying risk adjusted return for this greenfield pipeline project has diminished in such a way that further development is no longer supported,” Williams said. The South Central region in the U.S. saw the most potential added capacity canceled between January and early July—at 3.5 Bcf/d, with the cancellations of the Permian to Katy Pipeline and the Creole Trail Expansion Project 2, the EIA said. The pipelines that entered into service include the Cheyenne Connector Pipeline and Cheyenne Hub Enhancement Project in Colorado, the Cheniere MIDSHIP Pipeline from SCOOP-STACK Basin in western Oklahoma to the Bennington hub at the Oklahoma-Texas border, and three projects to the Waha hub in West Texas. Most of those projects could increase deliverability to growing natural gas demand markets in North America, the EIA said.

North Carolina sues federal government over approval of seismic tests for oil and gas - North Carolina is suing the federal government over its decision to try to locate oil and gas off the state’s coast despite objections from the state. In June, the National Oceanic and Atmospheric Administration (NOAA) allowed a company to move ahead with seismic testing, which uses blasts from air guns to try to detect oil and gas deposits in the ocean. This decision overrode an objection from the state, which opposed the testing. The seismic testing is a step that comes ahead of offshore drilling, and NOAA's decision falls in line with the administration's goals of expanding oil and gas production. In a lawsuit filed Wednesday, North Carolina’s government argued that NOAA did not adequately show that testing would significantly advance the national interest and also didn’t adequately show that the adverse impacts would be minor. The filing also said that the blasts could affect commercial and recreational fishing, tourism, research and endangered species in the area, including the North Atlantic right whale whose population has dwindled to about 400. “Protecting our state’s beautiful natural resources — and the critical economic benefits they bring to our state — is one of the most important mandates of my job,” North Carolina Attorney General Josh Stein (D) said in a statement. “North Carolinians have made their views crystal clear: We do not want drilling off our coast.” Spokespeople for NOAA and the Commerce Department didn’t immediately respond to The Hill’s requests for comment.

AG fights Trump rule allowing ‘bomb trains’ of explosive liquefied gas ⋆  Attorney General Dana Nessel announced Friday that she has joined a coalition of 14 other AGs in urging a federal court to review a new rule that would allow highly explosive materials to be transported by rail across the country. The petition, filed in the U.S. Court of Appeals for the District of Columbia Circuit, challenges the President Donald Trump administration’s controversial new federal rule that would let trains carry rail tanks full of liquefied natural gas (LNG). The practice has never been allowed before in the United States due to safety risks. “The lack of safety measures proposed by this administration and the risks posed to our communities are serious red flags I cannot overlook,” Nessel said in a statement Friday. “I’ve joined my colleagues in asking the court to intervene and review this rule to keep our communities safe. Studies on how to safely transport liquefied natural gas by rail are still ongoing, and this administration has rushed to implement a rule that will needlessly endanger people’s lives and threaten our environment.” LNG must be stored below -260 degrees, and upon escaping confinement, it expands rapidly to become a highly flammable and explosive cloud of gas. If ignited, the gas would create an inextinguishable pool of fire which could lead to a dangerous explosion. Nessel was among 15 other attorneys general who sent a letter opposing the proposed “LNG by Rail Rule” in January, urging the Trump administration to withdraw the proposal until its public safety and climate implications could be fully examined. The AGs argue that transporting LNG by rail throughout each state, including Michigan, would present a significant risk of catastrophic accidents and harm the environment by emitting climate change-exacerbating greenhouse gases. This is the latest environmental challenge to the Trump administration that Nessel has joined. She also has fought against rollbacks to the Clean Water Act, Endangered Species Act, environmental review of infrastructure projects and more. The California-based environmental law organization Earthjustice also filed a legal challenge to the federal rule on Tuesday.

U.S. natgas futures ease as Hurricane Laura slows LNG exports -  (Reuters) - U.S. natural gas futures eased on Tuesday on forecasts for less demand over the next two weeks than previously expected as liquefied natural gas (LNG) vessels steered clear of U.S. Gulf of Mexico LNG export terminals ahead of Hurricane Laura. The price move came despite an expected drop in daily output to its lowest since May as Laura caused Gulf Coast producers to shut offshore wells. The shutdowns helped boost gas prices to a nine-month high on Monday. Hurricane Laura is expected to strengthen into a major Category 3 hurricane with top sustained winds of 115 miles per hour (185 km per hour) before hitting the Gulf Coast near the Texas-Louisiana border. Front-month gas futures fell 2.4 cents, or 1.0%, to settle at $2.489 per million British thermal units. On Monday, the contract closed at its highest since Nov. 25. Although U.S., European and Asian gas contracts mostly trade on their own fundamentals, a 40% jump in prices at the Netherlands Title Transfer Facility (TTF) in Europe and a 53% increase at the Japan-Korea Marker (JKM) in Asia so far in August have made U.S. LNG more attractive in global markets, which helped push U.S. gas futures up about 40% this month. On a daily basis, U.S. LNG exports were on track to fall to a two-week low of 4.1 billion cubic feet per day (bcfd) as LNG exporters shut or reduced the output of the Gulf Coast LNG terminals. Cheniere Energy Inc said it temporarily suspended operations at Sabine Pass in Louisiana, the biggest U.S. LNG export plant. On a daily basis, U.S. output was on track to fall to a three-month low of 84.9 bcfd, according to preliminary data from Refinitiv that is subject to change later in the day.

U.S. natgas futures slip as LNG exports collapse ahead of Hurricane Laura -  (Reuters) - U.S. natural gas futures slipped on Wednesday as liquefied natural gas (LNG) exports dropped to an 18-month low as vessels steered clear of Hurricane Laura. The price move came despite a drop in output to its lowest since 2018 as producers shut offshore wells ahead of the storm. Hurricane Laura strengthened into a major Category 4 storm with sustained winds of 145 miles per hour (233 kph) before slamming into the Gulf Coast near the Texas-Louisiana border tonight. On its second to last day as the front-month, gas futures for September delivery fell 2.8 cents, or 1.1%, to settle at $2.461 per million British thermal units (mmBtu). The October contract, which will soon be the front-month, was down 2.5% to $2.57 per mmBtu, which would still be the highest close for the front-month since Nov. 22. On a daily basis, U.S. LNG exports were on track to fall to 2.8 billion cubic feet per day (bcfd), their lowest since February 2019, as exporters shut or reduced output at their Gulf Coast terminals ahead of Laura. The amount of gas flowing to Cheniere Energy Inc's Sabine Pass plant in Louisiana fell to zero for the first time since it started operating in 2016. U.S. output, meanwhile, was on track to drop to 84.2 bcfd, its lowest since September 2018, according to preliminary data from Refinitiv.

US working natural gas volumes in underground storage rise 45 Bcf: EIA - — US natural gas stocks increased by 45 Bcf last week, which matched analysts' expectations, as storm-related production declines in the Gulf of Mexico shrink the build for the week in progress, prompting gains across the board for Henry Hub futures. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up US natural gas inventories increased to 3.420 Tcf for the week ended Aug. 21, US Energy Information Administration data showed the morning of Aug. 27. The injection matched an S&P Global Platts' survey of analysts calling for a 45 Bcf build. Responses to the survey ranged from an injection of 37 Bcf to 58 Bcf. The injection measured less than the 60 Bcf build reported during the same week in 2019, as well as the five-year average gain of 49 Bcf, according to EIA data. Storage volumes stood at 580 Bcf, or 20.4%, more than the year-ago level of 2.840 Tcf; and 438 Bcf, or 15%, more than the five-year average of 2.982 Tcf . The injection matched an S&P Global Platts' survey of analysts calling for a 45 Bcf build. Responses to the survey ranged from an injection of 37 Bcf to 58 Bcf. The injection measured less than the 60 Bcf build reported during the same week last year as well as the five-year average gain of 49, according to EIA data. Supply and demand balances were largely similar to the week before, when a 43 Bcf addition was estimated, as both sides fell by roughly the same amount. Total supplies were down 900 MMcf/d for an average 91.8 Bcf/d, led by a 700 MMcf/d drop in onshore production. According to A&P Global Platts Analytics. Downstream, total demand was also lower, falling 700 MMcf/d from the week before, led by a drop in power generation demand, which fell 1.4 Bcf/d on the week. The NYMEX Henry Hub September contract jumped 12 cents to $2.57/MMBtu in trading following the release of the weekly storage report. It represents the highest the prompt-month contract has reached since November 2019. The winter strip, November through March, priced about 8 cents higher at $3.16/MMBtu, extending this month's price gains to nearly $1/MMBtu across the nearby contract strips. Platts Analytics' supply and demand model forecast a 30 Bcf injection for the week ending Aug. 28. This would lower the surplus to the five-year average by 36 Bcf as storms in the Gulf of Mexico restrict offshore production. A 1.6 Bcf/d drop in offshore Gulf of Mexico production coupled with a 900 MMcf/d drop in LNG feedgas demand, both of which are linked to storm activity. The storms may further disrupt demand, leading to looser balances on the week.

U.S. natgas futures jump to 9-month high as Hurricane Laura cuts output - (Reuters) - U.S. natural gas futures jumped almost 5% to a nine-month high on Thursday as output fell to its lowest since May due to shutdowns of offshore wells before Hurricane Laura crashed into the Gulf Coast near the Texas-Louisiana border, and expectations for a third straight day of record pipeline exports to Mexico. Prices jumped despite a drop in liquefied natural gas (LNG) exports to their lowest since February 2019 as Gulf Coast LNG export plants shut and vessels steered clear of the storm, and traders noted that price gains held after a report showed a storage build in line with estimates. Hurricane Laura smashed into the Gulf Coast overnight as a major Category 4 storm with sustained winds of 150 miles per hour (241 kph), causing over 650,000 power outages in Texas and Louisiana. The U.S. Energy Information Administration (EIA) said U.S. utilities injected 45 billion cubic feet (bcf) of gas into storage in the week ended Aug. 21 -- close to the 47-bcf build analysts forecast in a Reuters poll and less than an increase of 60 bcf during the same week last year and a five-year (2015-19) average build of 49 bcf. On its last day as the front-month, gas futures for September delivery rose 11.8 cents, or 4.8%, to settle at $2.579 per million British thermal units (mmBtu), their highest close since Nov. 22. The October contract, which will soon be the front-month, was up about 14 cents to $2.71 per mmBtu, which would be the front-month's highest close since Nov. 8. On a daily basis, U.S. LNG exports were on track to fall to 2.1 billion cubic feet per day (bcfd), their lowest since February 2019 after Cheniere Energy Inc and Cameron LNG shut their export plants in Louisiana. U.S. output, meanwhile, was on track to drop to a three-month low of 85.4 bcfd, according to preliminary data from Refinitiv. 

U.S. natgas futures jump to fresh 9-month high following contract roll - (Reuters) - U.S. natural gas futures jumped on Friday to a nine-month high as the front-month rolled to a new more expensive contract and lots of production remained shut along the Gulf Coast from Hurricane Laura. Traders noted prices were supported by pipeline exports to Mexico rising to a record high for a fourth day in a row and liquefied natural gas (LNG) exports starting to edge up after dropping to an 18-month low earlier in the week after two LNG plants in Louisiana shut ahead of Laura. On its first day as the front-month, gas futures for the most active October contract fell 5.3 cents, or 2.0%, to settle at $2.657 per million British thermal units. Since October futures are trading much higher than where the September contract closed on Thursday, the front-month was still up about 3%, putting it at its highest settle since Nov. 22 for a second day in a row. Gas futures have soared 92% since falling to a near 25-year low of $1.432 per mmBtu on June 26. "Natural gas prices have mounted a monumental comeback within this two-month period," said Daniel Myers, market analyst at Gelber & Associates in Houston, noting the recovery was comparable to the 87% rally between March-July of 2016. "Unlike 2016, this rally has taken place over 63 days, just over half the time." The amount of gas flowing to U.S. LNG export terminals was on track to rise on Friday for a second day in a row to 2.8 billion cubic feet per day (bcfd). On Wednesday, pipeline flows to the LNG plants fell to 2.3 bcfd, their lowest since February 2019, after Cheniere Energy Inc and Cameron LNG shut their Louisiana plants. U.S. output, meanwhile, was on track to drop to a three-month low of 85.3 bcfd on Friday as many wells in the Gulf remain shut for Laura, according to preliminary data from Refinitiv

Natural Gas Hits a 9-Month High: What's Driving the Rally? - The onset of hotter weather has helped lift natural gas prices by nearly 75% since late June, when they hit their lowest level since 1995. With the commodity being the primary U.S. power plant fuel, firms in natural gas business have gained from the bump in cooling demand. Already on the back of a scorching June and July, and continued heat wave in August, natural gas has experienced a ramp up in air conditioning use. Riding on this positive momentum, prices ended the day at a nine-month high of $2.579 per MMBtu. With the updated weather data revealing an ongoing bullish pattern extending into September — particularly in west and southwest — cooling loads should experience a consistent upward spike. The extension of summer heat has translated into the burning of more gas to feed higher electricity consumption for air conditioning. According to the EIA's latest Short-Term Energy Outlook, natural gas’ share of electricity generation would rise to 40% this year from 37% in 2019. Therefore, as Americans crank up their air conditioning to combat hotter-than-normal weather, companies in the natural gas industry stand to make more money. This should also significantly reduce the current inventory surplus that remains bloated due to a combination of weak consumption from a warmer-than-expected 2019-2020 winter, coronavirus-induced drop off in usage and a dip in volumes flowing to LNG export plants. As of Aug 21, natural gas stockpiles held in underground storage in the lower 48 states stands at 3.420 trillion cubic feet (Tcf) — 580 Bcf (20.4%) above the 2019 levels at this time and 438 Bcf (14.7%) higher than the five-year average. While certain regions are likely to witness lower-than-normal temperatures on account of the Hurricane Laura-accompanied storm and rainfall, most of the country will see a continuation of this warming trend over the next few weeks. Consequently, the storage surplus is expected to shrink and push prices even higher. This bodes well for companies that develop and sell natural gas. The novel coronavirus outbreak remains a big catalyst for balancing the natural gas market. Analysts believe that the brake in skyrocketing shale oil production growth — tied to the crude price collapse — will also limit associated gas output, thereby cutting the massive supply glut. As a proof of the impending supply drop, the EIA expects that the United States to churn out 88.7 billion cubic feet a day (Bcf/d) of dry natural gas this year, down from the 2019 average of 92.2 Bcf/d. The U.S. natural gas rig count, an indicator of future production, also points to the same. According to Baker Hughes BKR, the gas rig count continues to decline, recently falling to a record low of 68 from more than 160 a year ago.

The United States set record for daily natural gas power burn in late July --In the United States, natural gas consumed by electric power plants (power burn) set a daily record high of 47.2 billion cubic feet (Bcf) on Monday, July 27, according to S&P Global Platts estimates. Consequently, on the same day, natural gas-fired generation in the Lower 48 states also reached an all-time high of 316 gigawatts (GW) in the late afternoon, according to the U.S. Energy Information Administration’s (EIA) Hourly Electric Grid Monitor.Before July 27, 2020, the record for U.S. natural gas power burn to generate electricity stood at 45.4 Bcf, and it was set on August 6, 2019. Natural gas power burn exceeded 45.4 Bcf per day on seven days in July 2020 and one day in August. Electricity demand in response to high summer temperatures throughout much of the country, relatively low natural gas prices, the start of new natural gas-fired capacity, and greater use of existing natural gas-fired capacity have contributed to increased natural gas consumption in the electric power sector.Natural gas priced at the benchmark Henry Hub in Louisiana averaged $1.73 per million British thermal units (MMBtu) for natural gas delivered on July 27, according to Natural Gas Intelligence. From June 1 to July 30, Henry Hub prices averaged $1.64/MMBtu, 30% lower than the prices during the same period in 2019. Adjusted for inflation, this average price is the lowest average price for this period since at least 1993, the earliest data in Natural Gas Intelligence’s daily price series.Of the electricity generated on July 27 in the Lower 48 states, natural gas held the largest share at 45%, followed by coal with a 24% share. Remaining shares included nuclear at 17%, renewable energy at 12%, and other sources at 3%.  Natural gas is a key power generation resource because it has the flexibility to supply electricity at any time, including at times of peak demand. In contrast, some renewable energy technologies and nuclear power plants may be nondispatchable and not able to adjust their generation to meet load. For example, nuclear power plants may already be running at or near maximum capacity and may be unable to respond to shifts in load.

Business, environmental groups clash on Line 5 oil pipeline in Straits - The Michigan Public Service Commission got an earful Monday — three hours of public comments on Canadian oil transport giant Enbridge's more than half-billion-dollar proposal to build a new oil and gas pipeline in a tunnel under the Straits of Mackinac lake bottom. Emerging from Monday's public hearing were two groups that couldn't be much farther apart on the tunnel concept: business and industry organizations, labor unions and some local politicians who want the project to proceed as quickly as possible, and environmental groups and some local residents who want a full review of potential impacts and alternatives. At issue is a proposed replacement of the 67-year-old, twin pipelines Enbridge currently operates along the Straits of Mackinac lake bottom — aging pipelines that have suffered multiple, damaging anchor strikes and lost support structures in recent years. Many consider the lines — moving 23 million gallons of oil and natural gas liquids per day east through the Upper Peninsula, into the Lower Peninsula and on to a hub in Sarnia, Ontario — a major threat to the Great Lakes and the economies built around them, should a spill like the one that occurred on Enbridge's oil transmission line in Marshall near the Kalamazoo River in 2010 occur there. That spill fouled more than 35 miles of the river, and took four years and more than $1 billion to clean up. Enbridge's tunnel proposal — approved by state officials in the lame-duck final days of Gov. Rick Snyder's term — is opposed by Gov. Gretchen Whitmer and Attorney General Dana Nessel. Environmentalists and others question whether the state should commit to a further 99 years of fossil fuel use at a time of growing concern about climate change, and say there are too many unknowns about the environmental impacts of the tunnel. About 10 members of United Steelworkers made comments in support of a new Line 5 tunnel during the MPSC's online public hearing Monday, including Justin Donley, president of Local 912, representing just under 400 employees at the PBF Toledo Refining Complex in Oregon, Ohio, which gets most of its raw products for refining from Line 5. "Without Line 5, these family-sustaining jobs will be gone, and all of the employment we support will be at risk," he said. "Our refinery provides the majority of jet fuel to Detroit Metro Airport, and there are no feasible and prudent alternatives of supply that would sustain operations at PBF Toledo Refinery." The amount of oil and gas products moved through the refinery would equate to thousands of semi trucks per day, Donley said. "The street system where the refinery is located is not capable of handling the traffic increase it would take to move our product. And even if it were, the refinery doesn't have the infrastructure to move that amount of material by truck."

Pipeline tunnel supporters, foes clash before Michigan panel –   (AP) — Keeping a 64-year-old oil pipeline in operation by running one portion through a proposed Great Lakes tunnel would safeguard the economy and energy supplies, supporters said Monday, while opponents described the project as an unnecessary risk that would contribute to global warming. The two sides clashed during a public hearing before the Michigan Public Service Commission, one of several agencies that will determine the fate of Enbridge’s plan. The Canadian company operates Line 5, which carries crude oil and liquids used for propane between Superior, Wisconsin, and Sarnia, Ontario. A 6.4-mile segment divides into two pipes that extend across the Straits of Mackinac, which connects Lake Huron and Lake Michigan. While denying critics’ claims that they are vulnerable to a catastrophic leak, Enbridge has offered to replace them with a new pipe encased in a concrete tunnel that would be drilled beneath the straits. The public service commission has jurisdiction over the location of pipelines in Michigan. The panel in June rejected Enbridge’s contention that it already had state permission to install the new line because of an easement granted in 1953 when the twin pipes were laid. Instead, the commission is considering a separate application. It will take testimony for and against the $500 million project and make a decision after final arguments in July 2021. During the hearing Monday, the plan drew support from representatives of industry and labor groups including steelworkers, convenience stores and petroleum marketers. “Families and workers are depending on construction of the Great Lakes Tunnel to preserve our natural resources, protect Michigan jobs, and keep energy prices affordable,” Kike Alaimo of the Michigan Chamber of Commerce said in a written statement. Shutting down Line 5 would choke off fuel supplies to refineries in Michigan and Ohio, cause jet fuel shortages at Detroit Metropolitan Airport and force more shipments of oil by truck and rail, project supporters said. Beth Wallace of the National Wildlife Federation dismissed the warnings as false “fear mongering,” saying Enbridge’s other pipelines have enough capacity to handle Line 5’s oil. A recent slowdown of Line 5’s flow because of damage to one of the twin pipes’ support anchors caused none of the dire consequences predicted by Enbridge and its allies,

Blackstone to Gain $5B from Cheniere LNG Sale - Blackstone Group Inc. will see a $5 billion gain from selling a stake in the largest liquefied natural gas export terminal in the U.S. The firm’s private equity business is unloading its stake of just over 40% of Cheniere Energy Partners LP to Brookfield Asset Management Inc. and its own affiliated infrastructure group, according to a filing Monday. Brookfield negotiated the terms of the transaction, including a $34.25 per unit sale price that values the deal at $7 billion, according to people familiar with the matter. Blackstone’s infrastructure unit matched those terms after performing its own due diligence, said the people, who asked not to be named because the details aren’t public. Representatives for Blackstone and Brookfield declined to comment. The infrastructure funds are betting on Cheniere to continue to thrive amid short-term challenges to U.S. LNG exports. The Houston-based terminal operator is generating $4.3 billion annually from Sabine Pass and a smaller terminal in Texas through its fixed-fee contract structure, protecting it from the collapse in prices after the Covid-19 pandemic and a mild winter hammered consumption. While global demand is returning seasonally, the long-term outlook for the fuel is also positive with more nations switching to gas from coal amid concerns about climate change. Bloomberg News first reported discussions around Brookfield’s infrastructure group acquiring a minority position in Cheniere Energy Partners earlier this month. The firm reported an initial investment in 2016 and as of June had accumulated a 0.34% holding. Blackstone Energy Partners made a $1.5 billion investment in 2012 in Cheniere Energy Partners, which was created by Cheniere Energy Inc. to develop the $25 billion Sabine Pass LNG terminal in Louisiana. That project, which is underpinned by 20-year contracts with major global traders and utilities, shipped its first cargo in February 2016. More than 85% of the production volume at Sabine Pass is contracted and is expected to earn about $3.3 billion in fixed fees annually by the time the sixth liquefaction unit starts up in less than three years. Brookfield’s investment in Cheniere also comes after the asset manager purchased a 25% equity interest in Dominion Energy Inc.’s much-smaller Cove Point LNG terminal in Maryland for about $2.1 billion. This summer, Warren Buffett’s Berkshire Hathaway also bought a 25% stake and took over operations at Cove Point as part of a $4 billion deal for Dominion gas assets. For Blackstone’s public shareholders, the sale is expected to generate distributable earnings of $0.16 per share, including $0.13 a share upon closing expected in the third quarter, the people said.

1MM+ US GOM Barrels Shut In Due to Storms - More than one million barrels of oil per day have been shut in on the U.S. Gulf of Mexico, as of August 23, as Hurricane Marco and Tropical Storm Laura make their way to the region, the Bureau of Safety and Environmental Enforcement (BSEE) has revealed. According to the latest information from the BSEE, 114 of the 643 manned platforms in the area have been evacuated, as have five of the non-dynamically positioned rigs in the region. Eight dynamically positions rigs are said to have moved off the location of the storms’ projected paths. A total of 1,065,614 barrels of oil per day have been shut in, which equates to 57.6 percent of the region’s production, the BSEE highlighted. “BSEE has activated its Hurricane Response Team as Hurricane Marco and Tropical Storm Laura make their way into the Gulf of Mexico,” the BSEE said in a statement posted on its website on Sunday. “The Hurricane Response Team is monitoring offshore oil and gas operators in the Gulf as they evacuate platforms and rigs in response to the storms,” BSEE added. “The team works with offshore operators and other state and federal agencies until operations return to normal and the storms are no longer a threat to Gulf of Mexico oil and gas activities,” the organization continued. The BSEE went on to say that after the storms have passed, facilities will be inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back online immediately, according to BSEE, which added that facilities sustaining damage may take longer to bring back online.

Rare Gulf Storm Duo Could Prolong Outages-- The threat of a rare double storm blow looms for the U.S. Gulf Coast despite a weaker Tropical Storm Marco, with more than half of offshore oil production already shut and forecasts showing the potential for Laura to become a major hurricane before landfall Thursday. Marco lost power as it approached Louisiana Monday, but is forecast to skirt the coastline before dying out later this week in Texas, said Don Keeney, a meteorologist with commercial forecaster Maxar. The worst of Marco will likely be confined to just along the shoreline and a little inland, while Laura could arrive Thursday as the Atlantic’s first major hurricane of 2020. The last time two storms plied the Gulf together was 1959. “Laura is a different story,” Keeney said. “At this point it is expected to develop into a hurricane. Right now it is expected to be a strong Category 2 or weak Category 3.” The double threat has already prompted evacuations of offshore energy platforms, and almost 58% of oil output and 45% of natural gas production in the Gulf of Mexico has been shut, according to the Interior Department’s Bureau of Safety and Environmental Enforcement. Gulf Coast refineries and petrochemical plants are often located in low-lying areas vulnerable to flooding. In 2017, an Arkema SA chemical plant about 25 miles (40 kilometers) east of Houston had a fire and explosion after it was flooded by Hurricane Harvey. In September, Exxon shut its Beaumont refinery in Texas because of flooding from Tropical Storm Imelda. Laura almost certainly won’t be as damaging as Harvey, however. Harvey hit Texas as a Category 4 storm and then got pinned in place by larger weather patterns, causing it to send record rains across the eastern half of the state for days. Laura may pack a severe punch at landfall, but it will quickly exit the area, reducing the potential for lingering effects. The last hurricane to hit Texas was Hanna, just under a month ago. Energy platforms in the Gulf of Mexico that account for as much as 17% of America’s oil production and about 3% of gas output are designed to withstand storms of this magnitude; they regularly shut and restart as systems pass through. But two hurricanes roiling the region in quick succession threaten to keep operations shut in for longer and cut into energy supplies more than usual. Marco’s energy impact will be mainly confined to offshore installations, but Laura could cause problems for refineries and fuel-distribution hubs from Houston to Louisiana

Oil and gas companies jump into action ahead of Hurricane Laura -Oil and gas companies are bracing for what could be a major hurricane as the storm entered the Gulf of Mexico late Monday, threatening the nation’s largest concentration of refineries, petrochemical plants and offshore platforms. Tropical Storm Laura is barreling toward Louisiana and Texas after dropping heavy rain and causing flash floods in Haiti, Cuba and the Dominican Republic. The storm is expected to strengthen in the open, warm waters of the Gulf, likely becoming a Category 2 or 3 hurricane by the time it comes ashore near Lake Charles, La., this week. If Laura becomes a Category 3, it would be the first major Atlantic hurricane of 2020. “(Hurricanes are) always a significant concern every season,” said Suzanne Lemieux, the manager of emergency response policy with the trade group American Petroleum Institute. “We see increased risk this year.” Indeed, Laura is the second storm to chart a path for Louisiana this week. A weaker Tropical Storm Marco landed along the mouth of the Mississippi River on Monday afternoon.Laura is forcing companies to temporarily halt about 82 percent of the oil production and 57 percent of the natural gas production in the Gulf, according to an Interior Department bureau that oversees offshore oil and gas production. 0 Workers have been evacuated from 281 production platforms, nearly half of the 643 Gulf of Mexico platforms. Of the 26 drilling rigs in the gulf, 17 have been evacuated or moved from the storm’s track, the department said Monday. Tens of thousands of offshore workers are employed in the Gulf. BP began evacuating all personnel from its platforms Friday and moved four mobile drilling rigs out of the storm’s track. The British oil supermajor also evacuated its operations learning center southwest of New Orleans. Chevron has evacuated all personnel from platforms and has halted production. The California-based oil supermajor also secured two Mississippi River delta terminals and closed nearby pipeline systems. ExxonMobil evacuated personnel from its Hoover platform in the Gulf of Mexico. The Irving-based oil supermajor is operating its refinery units normally. Shell has halted production at all but one of its nine operating platforms in the Gulf and has evacuated non-essential personnel. Shell said it is monitoring Laura’s track to determine if it needs to temporarily shut down its ninth production platform, Perdido.

Experts say oil and gas disruption will depend on Hurricane Laura's speed --Even as Hurricane Laura barrels toward the state’s coastline after being upgraded to a Category 4 storm Wednesday afternoon, economists and regulatory experts say the effects on the state’s oil and gas industry will depend on how long Laura lingers over the Texas-Louisiana border. “If it’s a fast mover like we’re kind of expecting, I don’t expect it to drop the torrential amounts of rain like we dropped in 2017, so that will certainly help and reduce the major flood risk,” said Timothy Snyder, the president of Matador Economics. “We still may have a flood risk and probably some wind damage, but we can sustain some of that. I do not believe, unless that storm gets right on the Gulf Coast and stops, that we’ll have a major event.” David Blackmon, an energy consultant and associate editor for Shale Magazine based in Mansfield, didn’t downplay the seriousness of Hurricane Laura’s impact. But he said that in its aftermath, Texas shouldn’t experience fuel shortages or price spikes witnessed after Hurricane Harvey. “After Harvey, we lost 25% of the refining capacity for a month. But every statement I have seen from the refiners indicates they expect to be back online by the weekend,” Blackmon said. “This storm is really serious, and everyone needs to get out of its way if they can. But as far as the oil and gas industry is concerned, the main thing is that as long as it gets out of that coastal area quickly as it’s predicted to do, the damage and other disruptions to the oil and gas supply chains should be pretty minimal.” There could be a slight uptick in the price of fuel for a few days, but it will be less than what late-summer motorists have paid in the past. That’s because the COVID-19 pandemic has led to a drop in the demand for fuel. “We’re about 35 to 40 cents a gallon lower than we were in February,” Blackmon said. “We saw gas go up by 30 to 40 cents a gallon [after Harvey].” Ray Perryman, a state economist with the Waco-based Perryman Group, agreed that the energy industry is well prepared for natural disasters. But he said other industries could be hit hard. “Hurricane Laura threatens about a third of U.S. refining capacity and a major portion of production of certain types of chemicals.

US Energy Dept Ready to Respond to Laura - The U.S. Department of Energy (DOE) announced Wednesday that it was working with its interagency and private sector partners to prepare for the landfall of Hurricane Laura and support the energy sector response efforts. The organization revealed that its office of Cybersecurity, Energy Security and Emergency Response (CESER) had activated Emergency Support Function #12 responders to support the U.S. Gulf Coast and said DOE responders had been deployed to FEMA’s National Response Coordination Center in Washington, D.C. and had completed deployments for Hurricane Laura response in Puerto Rico and the U.S. Virgin Islands. DOE’s Southwestern Power Administration (SWPA) personnel have also coordinated with the Army Corps of Engineers and SWPA counterparts to prepare for the storm and respond to recovery assistance requests in the assessment of damage and support of restoration efforts when called upon, the organization revealed. “President Trump is taking strong and decisive action to ensure the safety of the American people through this natural disaster,” energy secretary Dan Brouillette said in a government statement. Deputy energy secretary Mark W. Menezes said, “secretary Brouillette and I stand ready to assist in response and recovery efforts, including the potential to authorize the use of the Strategic Petroleum Reserve (SPR), if directed by President Trump”. As of August 26, personnel had been evacuated from 299 production platforms in the U.S. Gulf of Mexico, according to the Bureau of Safety and Environmental Enforcement (BSEE). Personnel from 11 non-dynamically positioned rigs had been evacuated and 16 dynamically positioned rigs had been moved. According to the BSEE, 84.3 percent of oil production had been shut in, equating to 1.5 million barrels per day.

Texas Refineries Avoid Brunt of Laura-- Oil declined as Hurricane Laura barreled into Louisiana, avoiding widespread disruption to key energy infrastructure along the Texas Gulf Coast. Laura made landfall early Thursday near Cameron, Louisiana, as a Category 4 storm and has started weakening. While it knocked out power to hundreds of thousands of people and impacted plants that produce chemicals and liquefied natural gas, southeast Texas ports and refineries -- including the largest U.S. refinery -- likely avoided the worst of it. Crude futures in New York fell as much as 2.4% on Thursday, while gasoline futures dropped as much as nearly 7%. A stronger dollar also reduced the appeal for commodities priced in the greenback. “The damage is not as bad as anticipated, which is creating more sell pressure along the energy complex,” said Phil Flynn, senior market analyst at Price Futures Group. “The lower price of gasoline means worse refining margins potentially, meaning that there’s not going to be a lot of incentive to use a lot of crude quickly.” As the storm passes, traders are assessing the potential impact on both fuel production and consumption. Exxon Mobil Corp.’s Beaumont refinery on the Texas Gulf Coast will begin restarting Friday if an assessment shows no damage from Hurricane Laura, while its Baytown refinery on the Houston Ship Channel has already begun the restart process.

As Laura exits, U.S. energy firms tally damage, plan restarts - (Reuters) - U.S. energy companies on Thursday were organizing crews to evaluate offshore Gulf of Mexico platforms and assess damage to coastal operations as Hurricane Laura took its fierce winds inland. The storm hit Louisiana early Thursday with 150 mile-per-hour (240 kph) winds, damaging buildings, knocking down trees and cutting power to more than 650,000 people in Louisiana and Texas. However, Laura’s storm surge was much less than predicted, sparing refineries from feared massive flooding. Offshore operators were scheduling reconnaissance flights over the more than 300 offshore platforms and drilling rigs whose crews evacuated last week. Laura tore through the Gulf of Mexico’s prime oil fields, with first assessments due Thursday for pipelines and platforms. About 84%, or 1.56 million barrels per day, of U.S. Gulf of Mexico crude output and 60% of natural gas offshore production remained shut on Thursday, the U.S. Department of Interior reported. Chevron Corp has begun to redeploy workers and restore production at its offshore fields. Equinor plans a weekend flyover of its Titan platform and BP is preparing to return workers, spokespeople said. “As far as we know, there have not been offshore impacts,” said Suzanne Lemieux, a emergency response official with trade group American Petroleum Institute.The ports of Beaumont, Port Arthur, Orange, and Sabine in Texas and Lake Charles and Cameron in Louisiana remained closed on Thursday, the U.S. Coast Guard said. Lake Charles avoided significant flooding but was closed by power outages, said Ed Manint, manager of security and safety. Storm-related liquefied natural gas (LNG) plant closures put U.S. LNG exports on track to fall to 2.1 billion cubic feet per day on Thursday, the lowest level since February 2019, according to data from Refinitiv.

Here's how the Louisiana petrochemical industry held up after Hurricane Laura, offshore -Major operators of oil, gas and chemical plants and pipelines in the path of Hurricane Laura appeared to have just limited damage Thursday, with the exception of a leak and chemical fire reported at a chlorine production plant just west of Lake Charles.While hundreds of thousands of residential, business and industrial customers were without power due to downed lines caused by wind speeds that peaked around 150 miles per hour, the area averted the worst-case flooding predictions when storm surge came it at about half the up to 20 feet estimated."There is some damage to some of the facilities, but it appears to be somewhat light," U.S. Secretary of Energy Daniel Brouillette said in a briefing Thursday afternoon. "It is not significant in nature, meaning that the operations of these facilities will probably continue in very short order," he said.Brouillette said his department, other agencies and BioLab Inc. were still trying to determine the cause of the leak and chemical fire at a plant owned by the company, which is a unit in the household products division of KIK Custom Products, based in Toronto, Canada, which makes a range of chlorine-based products, including Clorox-branded pool cleaners.The immediate concern more broadly is the widespread power outages in the area, said Brouillette, a Louisiana native.

Pollution From Oil Wells and Industrial Sites Hit by Hurricane Laura Remains Unknown -The full extent of the damage wrought by the storm formerly known as Hurricane Laura will only continue to grow as the weakened storm continues inland and pollution from petrochemical plants and other industrial sites is discovered.More than 1,400 active oil wells sit in the path Hurricane Laura carved through Louisiana's coastline, some of which are decades old and especially vulnerable due to the state's receding coastline."I have a lump in my throat thinking about them," Bob Bea, a specialist in catastrophic risk management and former well manager for Shell, told the New Orleans Advocate.The environmental damage caused by leaking wells, as well as from pollution spread from other damaged industrial sites, may not be discovered for days as officials focus on search and rescue tasks in the wake of the storm.The storm's rapid intensification, fueled by exceptionally warm sea-surface temperatures, likely made matters worse but overconfidence from regulators and oil companies is also to blame, according to Bea."When it comes to how we manage our platforms, pipelines, and wells, we here in the U.S. are not world leaders in risk management," he said."We're not Canada or Norway. We're not even a Third World country."For a deeper dive: New Orleans Advocate; Potential industrial pollution: AP, New York Times, Wall Street Journal, Buzzfeed

More than 1,400 oil wells were in Laura's path, but spills and other damage may not be known for days - Hurricane Laura plowed through a corner of Louisiana loaded with oil and gas wells, pipelines, storage tanks and other infrastructure that could potentially cause thousands of small and large environmental disasters – the extent of which may not be known for days or weeks.About 1,400 active oil wells are crowded in the path Laura took to Louisiana's coastline. If hit hard enough, the wells, many of which are decades old and may no longer be protected by the state’s receding shoreline, could trigger oil spills in coastal waters and marshes.“I have a lump in my throat thinking about them,” said Bob Bea, a specialist in catastrophic risk management and former well manager for Shell. “I’m not at all confident these systems will, when hit with a severe hurricane, function adequately.”Also in harm’s way are dozens of offshore oil platforms, pipelines, large liquefied natural gas complexes in Cameron Parish and a host of petrochemical plants and refineries in the Lake Charles area. Several heavily contaminated sites managed by the federal Superfund cleanup program could be damaged or flooded, as many were in Texas during Hurricane Harvey in 2017. Federal and state emergency responders say spill inspections and cleanup will likely be delayed as all resources are focused on search-and-rescue operations and other critical post-hurricane needs.

Bodies found of remaining 2 missing in Texas port explosion (AP) — The bodies of the remaining two crew members of a dredging boat who were missing after an explosion last week in the Port of Corpus Christi in Texas were found Monday, the U.S. Coast Guard said. Four people died following the explosion that happened Friday morning when the vessel struck a submerged propane pipeline. The bodies of two crew members were recovered Saturday. The Coast Guard said that all missing crew members of the Waymon L Boyd are now accounted for. The Port of Corpus Christi had previously said the pipeline was carrying natural gas, but said Monday it was carrying propane. An official with the Texas General Land Office said over the weekend that the vessel carried a maximum of 6,000 gallons of diesel fuel. The Coast Guard said the cause of the incident is under investigation. The fire onboard the vessel was first extinguished Friday afternoon, but sparked again and was finally put out at approximately 10 p.m. Friday, shortly before the vessel broke apart and sunk, the Coast Guard said.

GOP candidate for state oil and gas regulatory agency faces fraud accusations - The Republican candidate running to join the Texas oil and gas regulatory agency has run afoul of state environmental rules and is embroiled in a series of lawsuits accusing him of fraud in the oil patch. Jim Wright, owner of an oilfield waste services company, says he has done nothing wrong and that he’s the victim of a Democratic Party smear job. If nothing else, South Texas court filings and public records showing more than $180,000 in state fines levied against Wright point to the fractiousness of the oilfield. At the center of the disputes is DeWitt Recyclable Products, a company Wright started nearly a decade ago near Cuero to take oily muds and other drilling site byproducts and recycle them into crude oil, diesel fuel and cleaned-up dirt. Wright sold the company in 2014 to out-of-state investors for more than $1 million, but he remained listed as president, according to court filings. The Railroad Commission sent the facility a cease-and-desist letter and canceled permits in January 2017 after an inspector found waste stockpiled directly on the ground, waste material storage tanks leaking material into the soil and unpermitted stormwater ponds collecting around the machinery and the facility. In November 2017, Wright agreed to pay for the cleanup of the site and pay the Railroad Commission $181,519 for the violations — even though his attorney had claimed that he did not have ownership or operational control of DeWitt after the sale and that, despite requests, his name was never taken off agency records for the facility. Wright then sued two of the vendors of the storage tanks, alleging that they were responsible for the cleanup of the material in the tanks. The companies later filed countersuits. At stake, among other things, is $800,000 that DeWitt had paid to the Railroad Commission in 2016 to ensure a proper cleanup if the facility were to close. Wright has recouped that money, but the storage tank vendors — some of whom have won court judgments recognizing them as rightful creditors — say that Wright was not entitled to the money.

Major pipelines hit legal snags. But it’s business as usual in Texas. - On a Sunday afternoon in March, Teri Albright tossed tea bags into a pitcher at home. Expecting the tint of iced tea, she was surprised to see the water turn a darker brown. Something was wrong: every tap in the house produced the same sludgy liquid, which looked like chocolate milk. It took several days to find the source of the problem. Kinder Morgan, a titan of oil and gas infrastructure in the United States, had set up a construction site for the Permian Highway Pipeline, a 42-inch natural gas line, about a mile away from their property. That Saturday night, workers accidentally released 36,000 gallons of drilling fluid into the ground. Early on, Kinder Morgan faced opposition from individuals, local governments and conservation groups. EHN visited Hill Country——a unique landscape known for its rolling terrain in central Texas—and found that environmentalists and some who are pro-development had gained a common enemy. A barrage of lawsuits in Hill Country challenged the company, as well as the Railroad Commission of Texas and the Army Corps of Engineers, which are both responsible for permitting and oversight. But the project broke ground last year, with the company completing more than half of the first 100-mile stretch by December. Kinder Morgan is so far unyielding. But nationwide pipelines are facing setbacks. Multiple high-profile pipelines—including Keystone XL and the Atlantic Coast Pipeline—have been stalled or cancelled, after waves of litigation and scrutiny over environmental effects. In early 2020, a new parallel timeline began. On February 13, the U.S. Centers for Disease Control and Prevention confirmed the first case of COVID-19 in Texas. Governor Greg Abbott declared a statewide emergency exactly one month later, then ordered stricter provisions a week later. Restaurants and schools shuttered; the state banned gatherings of 10 or more people. While the onus to implement stricter shelter-in-place rules fell to local officials—creating a patchwork of rules and guidelines depending on the county—the number of coronavirus cases soared. The state has now had more than 600,000 confirmed cases and more than 11,760 deaths due to the virus. But as other economic activities ground to a halt, Kinder Morgan pushes forward. The same is true elsewhere—other pipeline companies are seizing the opportunity to build, presumably with less scrutiny during a pandemic. While the future of pipeline development is uncertain, their immediate impact on the environment and clean water is not. Two years after resisting the Permian Highway Pipeline project, the worst fears for many residents have been confirmed.

US oil, gas rig count drops by seven to 282, mostly from small plays— The US oil and gas rig count dropped by seven on the week to 282 with small plays along the Texas Gulf Coast and Kansas accounting for most of the decrease, rig data provider Enverus said Aug. 27. The Gulf Coast rig removals, accounting for three rigs of the weekly decrease for the period ended Aug. 26, came about the same time as Hurricane Laura, which made landfall around southwest Louisiana's refining center early Aug. 27 as a powerful Category 4 storm. But any relationship of the onshore rig count to the offshore storm may be better known next week if the rigs are restored. Another three-rig decrease in recent days came from Salina, a small niche play in Kansas, which in July and early August only had one to four rigs running. But in mid-August, the play's rigs jumped to six from two, held at six for two weeks, and in recent days plunged to three, Matt Andre, an analyst with S&P Global Platts Analytics said. "It was more of a surprise that it increased to six rigs [earlier this month] rather than falling back to three," Andre said, since drilling there is carried out by vertical-only rigs, which suggests it is not an unconventional play. Otherwise, within the unconventional plays there was little movement the past week. Losing one rig each were the Permian Basin of West Texas, the DJ Basin of Colorado and the natural gas-oriented Haynesville Shale of East Texas/Northwest Louisiana. That brought their totals to 127, six and 36 respectively, Enverus data showed. The Permian's 127 rigs represents the fourth consecutive week of rig losses for that basin. In the last week in July, the Permian, the largest domestic oil play, was running 138 rigs. The Eagle Ford Shale of South Texas gained a rig, for a total of 10. All other basins, such as the Bakken Shale of North Dakota/Montana and two gas-prone basins, Marcellus Shale largely in Pennsylvania and Utica Shale mostly in Ohio, were unchanged. That left the Bakken with 10 rigs, the Marcellus Shale with 25, and the Utica Shale with six. Platts Analytics expects the US rig count to climb in the second half of the year, closing out the year at around 309. "That will be mostly driven by gas-focused drilling in areas such as the Haynesville, which should gain about 20 rigs, and to a lesser degree the Marcellus, up by seven, and the Utica, up by three from August to December," he said. "We are also expecting the Permian Delaware on the Texas side to rise by about 14 rigs, and the Bakken Shale by 10 rigs in the fourth quarter," he added.

Baker Hughes Reports Drop in Oil Rigs  - Baker Hughes Reports Drop in Oil Rigs - Baker Hughes Co. on Friday reported the total number of rotary drilling rigs operating in the United States held flat at 254 this week. The most recent U.S. rig count reflects a three-unit decline in oil rigs (to 180), a three-unit increase in gas rigs (to 72) and no change in the number of miscellaneous rigs (two), Baker Hughes stated. Compared to the corresponding period in 2019, the U.S. rig count is down 650 rigs, the service company continued. It noted that 562 more oil rigs and 90 more gas rigs were operating a year ago. The two-unit miscellaneous rig count is unchanged year-on-year, it added. The U.S. offshore rig count this past week was 13, down 13 from last year, Baker Hughes stated. Baker Hughes also noted that Canada’s overall rig count fell by two this week to 54. The latest total for Canada comprises 19 oil rigs (down one), 35 gas rigs (down one) and zero miscellaneous rigs, the firm pointed out. Against figures for last year, 86 fewer oil rigs and 10 fewer gas rigs are operating in Canada.

Bismarck company develops a new way to clean up oil spills using magnetic wood chips - A Bismarck-based company has reworked an old product -- wood chips -- to better clean up oil spills. Carbontec Energy Corp. has magnetized its chips, which attract and hold oil when placed atop a spill. Their magnetic nature enables them to more easily be removed to collect oil from land or water. Chairman John Simmons believes the chips could help with spills both large and small. Tribes and communities along the Missouri River concerned about major oil spills on the water could have them at the ready, he said. “If there’s a big spill on Lake Sakakawea for instance, you’d have skimmers with a magnetic head,” Simmons said, referring to a machine often used to clean up oil that spills into bodies of water. The wood chips would pull out more than 90% of the oil in the water, Simmons said. Magnetic booms placed in the water also could be used along with the chips to capture the oil and prevent it from flowing farther away from the site of the spill. Such a setup could be useful if the Dakota Access Pipeline were ever to leak at its Missouri River crossing upstream of the Standing Rock Sioux Reservation, Simmons said. Tribal members are concerned that a leak would devastate their water supply. The chips and other equipment could be staged near the Fort Yates water intake in case a leak ever happens, Simmons suggested.

U.S. Army Corps asks appeals court to reverse Dakota Access pipeline ruling -(Reuters) - The U.S. Army Corps of Engineers on Wednesday asked an appeals court to reverse a ruling which scrapped an environmental permit that allows the Dakota Access crude oil pipeline to operate on U.S. land. Earlier this month, a federal judge ordered the U.S. Army Corps of Engineers (ACE) to detail options by the end of the month for resolving the loss of the permit. On Wednesday, ACE and Dakota Access, controlled by Energy Transfer LP (ET.N), argued that the district court abused its discretion in vacating the permit and ordering a thorough environmental study to be conducted. They also argued the court’s ruling sets impossible standards that would discourage major infrastructure investment, waste government resources and pose economic and environmental harm. “The district court’s decision will create a new, heightened standard of judicial review that will be impossible for agencies to meet as they consider vital infrastructure projects,” ACE said in the brief. The loss of the permit could force the 570,000 barrel-per-day pipeline, the biggest out of North Dakota’s Bakken shale region, to be shut and drained.

Dakota Access Case Could Sour Future Pipeline Plans - The U.S. Army Corps of Engineers has asked an appeals court to reverse a lower court’s ruling vacating the permit of the Dakota Access oil pipeline to operate, arguing that such ruling creates “impossible” standards that could scupper future major infrastructure projects.  A federal judge ruled on July 6 that the Dakota Access Pipeline, in operation since 2017, must be emptied and shut down by August 5, until a new comprehensive environmental review is complete. The United States District Court for the District of Columbia said that the Army Corps of Engineers had violated the National Environmental Policy Act (NEPA) when it gave a permit to the pipeline to build beneath Lake Oahe.Earlier this month, a U.S. appeals court ruled that the Dakota Access can stay open and should not be emptied of crude, but it did order an expedited schedule for the parties to submit briefs over whether a new environmental impact statement would be needed for the pipeline.In its brief to the U.S. Court of Appeals for the District of Columbia Circuit, lawyers for the Army Corps of Engineers said that “If not corrected, the district court’s decision will create a new, heightened standard of judicial review that will be impossible for agencies to meet as they consider vital infrastructure projects that excite opposition from some sector of society,” as carried by Bloomberg Law.  According to the Army Corps, those impossible standards would not only discourage investment in major infrastructure, but they would also waste government resources.    The Army Corps argues that the district court – which ordered Dakota Access shut down and the Army Corps to carry out a new, more comprehensive, environmental assessment review – applied the “wrong legal standard” in the precedent it used to vacate the permit for the 570,000-bpd oil pipeline that carries oil from the Bakken/Three Forks area in North Dakota to Patoka, Illinois.

North Dakota Approves Two In-State Pipelines -- August 27, 2020 -Link here. --The North Dakota Public Service Commission approved two pipeline projects Wednesday: one for a new natural gas processing plant in Williams County and another for the Dickinson refinery. The Williams County project involves two new pipelines that will extend from OE2 North's Bill Sanderson Gas Processing Plant, which is located west of Williston. Both will connect to larger pipelines. One of the proposed lines, with a length of 1.3 miles and a capacity of 80,000 barrels per day, is to carry natural gas liquids. The other is for residue gas, with a capacity of 250 million cubic feet per day and a length of 4.7 miles. The project is projected to cost $6 million, and the lines are expected to begin operating by the end of the year.  Construction on the processing plant began this spring and has continued over the course of the summer.

‘People Are Still Putting Their Bodies on the Line to Stop this Pipeline’ - -  Michael Markus, known as Rat­tler, had mixed emo­tions when he heard the news. A fed­er­al judge had ruled that the Dako­ta Access Pipeline was built unlaw­ful­ly and ordered the pipeline to stop pump­ing oil pend­ing an in-depth envi­ron­men­tal review. “We have, and are, going through a lot, but this would heal,” Markus wrote to Rur­al Amer­i­ca In These Times. At the same time, he wrote, “it’s hard not to be heart­bro­ken.” Markus sent the mes­sage from Sand­stone fed­er­al prison in Min­neso­ta, where he is serv­ing a three-year sen­tence for try­ing to stop the pipeline from being built in the first place. Markus, who is Oglal­la Lako­ta, grew up on the Pine Ridge Reser­va­tion. He served in the U.S. Marine Corps and saw com­bat. In 2016, when the NoDAPL move­ment gained momen­tum and resis­tance camps formed near the Stand­ing Rock Reser­va­tion, he made sup­ply runs to the camps. When pipeline secu­ri­ty guards unleashed attack dogs against water pro­tec­tors in ear­ly Sep­tem­ber of that year, Markus moved into the camps to stay. “Well I have been around a few years… lol, and I have been on a search to where I belong and what I need to be doing,” Markus wrote. “When I first went to camp I knew that I have found where I need to be and what I need to be doing.” He took on the tra­di­tion­al Lako­ta role of akici­ta, which in camp meant keep­ing the peace between water pro­tec­tors and on the front lines meant watch­ing “for infil­tra­tors and insti­ga­tors to pro­tect peo­ple from get­ting hurt.” In Feb­ru­ary 2017, as the pipeline neared com­ple­tion and police pre­pared to clear the main Oceti Sakowin camp, Markus was one of a hand­ful of peo­ple, all Native, hit with fed­er­al felony charges for crimes alleged­ly com­mit­ted more than three months ear­li­er. Markus was charged with Civ­il Dis­or­der and Use of Fire to Com­mit a Fed­er­al Felony Offense, a charge that car­ries a manda­to­ry min­i­mum 10-year prison sen­tence. In 2018, he accept­ed a non-coop­er­at­ing plea agree­ment in part because, as he wrote in to RAITT, “we were told we would not get a fair tri­al right from the get go.” In exchange for a guilty plea to the Civ­il Dis­or­der charge, the pros­e­cu­tion agreed to drop the Use of Fire charge and rec­om­mend a 36-month sentence. This expe­ri­ence left Markus skep­ti­cal the court sys­tem can deliv­er jus­tice. “I don’t think it will be stopped [imme­di­ate­ly],” he wrote in his mid-July mes­sage of the pipeline and the court order to shut it down. “Because these peo­ple have so much mon­ey that they can pay the pock­et change fines and keep mak­ing millions.” His words turned out to be pre­scient: Ener­gy Trans­fer LP, the com­pa­ny behind the pipeline, chal­lenged the rul­ing and on Aug. 5 a fed­er­al appeals court paused the shut­down order. The pipeline will con­tin­ue to oper­ate while the envi­ron­men­tal review is con­duct­ed, pump­ing half a mil­lion bar­rels of oil per day out of North Dakota’s Bakken for­ma­tion and under Lake Oahe on the Mis­souri Riv­er, just upstream from the Stand­ing Rock Lako­ta (Sioux) reservation. Razor wire 4 Mean­while, Markus remains in prison — an increas­ing­ly dan­ger­ous place to be as the pan­dem­ic rages on. Covid-19 out­breaks have already swept through many pris­ons and deten­tion cen­ters and a recent report revealed that U.S. Mar­shalls are ship­ping Covid-pos­i­tive inmates all over the fed­er­al Bureau of Pris­ons (BOP) sys­tem. As of this writ­ing, Sand­stone prison had three con­firmed cases.

PIPELINES: Biden win could spell the end for Dakota Access -- Friday, August 28, 2020 -- A President Joe Biden could shut down the Dakota Access pipeline. And if he's elected, environmental groups and tribes will be pressuring him to do just that.

Bakken production pushes Canadian exports on Northern Border to 15-year low | S&P Global Platts — Resurging production in North Dakota's Bakken Shale following a wave of spring shut-ins has pushed Canadian exports to the US Midwest on Northern Border Pipeline down to its lowest flow volumes in more than 15 years, increasing the AECO hub's discount to Chicago pricing. However, Index of Customer data shows a year-over-year increase in Canadian Exports on Great Lakes Gas Transmission line this winter. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up Returning Bakken production and falling capacity have helped push West Canada flows to additional lows on Northern Border, while strengthening prices limit rerouting gas to the US Upper Midwest. West Canada flows have averaged just 524 MMcf/d in August on Northern Border, the lowest in at least 15 years, and hitting as low as 400 MMcf/d for three straight days early this month, according to data by S&P Global Platts Analytics. In contrast, month-to-date flows averaged 994 MMcf/d in 2019. Returning Bakken production is the primary reason behind reduced flows, as Platts Analytics production sample has averaged 2 Bcf/d this month, just 176 MMcf/d below samples seen from January through March. Coupled with this has been falling capacity along Northern Border. It has dropped 142 MMcf/d from the first three months to 2.5 Bcf/d this month at Glen Ullin. Bakken production has climbed back to 1.97 Bcf/d, according to the latest data from the North Dakota Industrial Commission. However, it still remains well below the 3.1 Bcf/d the state averaged in March when the crude oil price collapse struck, prompting a wave of shut-ins, limiting associated gas production.  The lower volumes flowing from Western Canada to the US Midwest have lowered Chicago's premium to AECO this month to 18 cents/MMbtu, which was down slightly from 21 cents/MMbtu in July. As Platts Analytics expects further production in the Bakken the next two months, this should further limit West Canada flows and increase AECO's discount to Chicago. However, as Canadian exports dip on Norther Border, the Index of Customer data indicates Great Lakes pipeline is likely to see higher exports this coming winter than last. According to 3Q 2020 IOC data, there is 1.327 Bcf/d contracted to be exported into the US Midwest on Great Lakes at Emerson this winter. Q4 2019 data indicates there was 1.1 Bcf/d contracted at Emerson last winter, and the pipe actually exported 900 MMcf/d. Q2 2020 IOC data indicates there is 1.3 Bcf/d contracted for exports at Emerson this summer, and summer to date, and the pipe has flowed within about 150 MMcf/d of this contracted amount. If this relationship holds, then Western Canada as a whole would export about 1.1 to 1.2 Bcf/d this coming winter.

Oil and brine spills in McKenzie County after lightning sets tank on fire — An estimated 33,600 gallons of produced water and 1,700 gallons of oil spilled in McKenzie County, N.D., according to a news release from the state Department of Environmental Quality. The spilled materials were completely recovered.Produced water, or brine, is a mixture of saltwater, oil and sometimes, drilling fluids, that is created during oil and gas production.The spill occurred Wednesday, Aug. 26, at a saltwater disposal well about nine miles from Watford City after lightning set a storage tank on fire, according to the press release. E-Source Energy SWD reported the spill. Department officials will continue inspecting the site and monitoring remediation efforts.

Los Angeles natural gas plant has been leaking methane for years - (Reuters) - A Los Angeles-area natural gas plant has leaked planet-warming methane gas for years but work to fix the problem tracked by NASA has been delayed until November, a city power official said.Faulty natural gas compressors at the 690-megawatt Valley Generating Station have been leaking more than 10,000 cubic feet of methane per hour “for the last couple years,” Norm Cahill, the Los Angeles Department of Water and Power’s (LADWP) director of power supply operations, told the utility’s board of commissioners on Tuesday.Video of the meeting was posted online on Wednesday. A leak of that magnitude, over the course of a year, is roughly equivalent to the emissions of 30,000 cars, according to environmental group Sierra Club.In a statement, LADWP said the level was low in comparison to other emissions sources and dwarfed by the 2015 leak at the Aliso Canyon natural gas storage facility that lasted four months and forced evacuations of a suburban neighborhood.

Halliburton looks beyond US shale, charting a “fundamentally different course” – --Halliburton Co. is looking away from its traditional North American heartland for sales growth as the fracking behemoth works its way through an historic oil bust.Shares for one of the world’s biggest oilfield service providers surged more than 8% on Monday after it posted $456 million in second-quarter free cash flow -- more than double expectations. Halliburton also told investors it’s charting a “fundamentally different course” after slashing jobs and the dividend in recent months.“As oil demand recovers, I expect the international business will continue to be a more meaningful contributor to our revenue going forward,” Chief Executive Officer Jeff Miller told analysts and investors during a conference call. “North America production is likely to remain structurally lower in the foreseeable future and has slower growth going forward.”Miller has let go of workers and clipped Halliburton’s dividend after tumbling oil prices brought on by a global pandemic wrecked fracking far more than expected. Rival Schlumberger Ltd. predicted in April that as much as 60% of pressure pumping demand would fall off by July 1. As much as 85% of frack crews have lost work this year, according to Primary Vision Inc.Halliburton “inked simply outstanding results vs. expectations,” analysts at Tudor Pickering Holt & Co. wrote in a note to investors. “Structural cost cuts are clearly bearing fruit.”With 75% of its planned cost cuts complete, Miller said the rest should be done by the end of September, largely focusing on international markets and real-estate holdings.

150+ North American Producers in Chapter 11 Risk - Unless prices strengthen further, about 150 more North American exploration and production (E&P) companies will need to seek Chapter 11 protection through 2022. That’s according to Rystad Energy, which estimated that, if WTI prices remained at $40 per barrel, 29 North American E&P Chapter 11 filings would take place this year, 68 in 2021 and 57 in 2022. Rystad Energy highlighted that if its Chapter 11 forecasts materialize, this would bring the total number of North American E&P filings for 2020-2022 to nearly 190, compared to 207 during the five-year period of 2015-2019. The company noted that this would also bring total Chapter 11 North American E&P debt for 2020-2022 to about $168 billion, which it stated is 36 percent higher than the $122 billion recorded in 2015-2019. The Covid-19 pandemic has added “severe financial strain” on a North American upstream industry that was already “reeling” under billions of dollars of debt, Rystad Energy outlined. “While an improvement in oil prices towards $40 per barrel WTI saved a significant number of E&Ps and prevented early Chapter 11 filings in June-July, the current price environment is in no way sufficient for a large number of E&Ps in the medium-term,” Rystad Energy’s head of shale research Artem Abramov said in a company statement sent to Rigzone. “As hedging programs set at WTI $50+ per barrel expire in the second half of this year, we anticipate greater financial pressure on the industry unless WTI prices recover further,” he added in the statement. Rystad Energy says its E&P Chapter 11 model is based on a cash flow analysis covering about 10,000 active North American oil and gas E&Ps. The model is designed to present a macro-level outlook rather than look at individual company insights, according to Rystad Energy. As of August 23, 12:48pm CEST, there have been 23 million confirmed cases of Covid-19, with 800,906 deaths, according to the latest data from the World Health Organization (WHO). The region most affected by the virus in terms of confirmed cases and deaths, as of August 23, has been the Americas, WHO data shows.

The End of Oil Is Near - The oil industry has turned the oceans into aquatic parking lots—floating storage facilities holding, at their highest levels in early May, some 390 million barrels of crude oil and refined products like gasoline. Between March and May, the amount of oil “stored” at sea nearly tripled, and it has yet to abate in many parts of the world. This tanker invasion is only one piece of a dangerous buildup in oil supply that is the result of an unprecedented global glut. The coronavirus pandemic has gutted demand, resulting in the current surplus, but it merely exacerbated a psychopathy that’s been plaguing the oil industry for years: the incessant overproduction of a product that the world is desperately trying to wean itself from, with growing success.Today, the global oil industry is in a tailspin. Demand has cratered, prices have collapsed, and profits are shrinking. The oil majors (giant global corporations including BP, Chevron, and Shell) are taking billions of dollars in losses while cutting tens of thousands of jobs. Smaller companies are declaring bankruptcy, and investors are looking elsewhere for returns. Significant changes to when, where, and how much oil will be produced, and by whom, are already underway. It is clear that the oil industry will not recover from COVID-19 and return to its former self. What form it ultimately takes, or whether it will even survive, is now very much an open question.Under President Donald Trump, the United States has joined other petroleum superpowers in efforts to maintain oil’s dominance. While government bailout programs and subsidies could provide the lifeline the industry needs to stay afloat, such policies will likely throw good money after bad. As Sarah Bloom Raskin, a former Federal Reserve governor and former deputy secretary of the Treasury, has written, “Even in the short term, fossil fuels are a terrible investment. . . . It also forestalls the inevitable decline of an industry that can no longer sustain itself.” In contrast to an agenda that doubles down on dirty fuels, a wealth of green recovery programs aim to keep fossil fuels in the ground as part of a just transition to a sustainable and equitable economy. If these policies prevail, the industry will rapidly shrink to a fraction of its former stature. Thus, as at no other time since the industry’s inception, the actions taken now by the public and by policymakers will determine oil’s fate. The Greenpeace activists are right. Whether the pandemic marks the end of oil “is up to you.”

Trump Greenlights Drilling in the Arctic National Wildlife Refuge, but Will Oil Companies Show Up? -- The Trump administration has announced that it is opening up the Arctic National Wildlife Refuge to oil and gas development – the latest twist in a decades-long battle over the fate of this remote area. Its timing is truly terrible. Low oil prices, a pandemic-driven recession and looming elections add up to highly unfavorable conditions for launching expensive drilling operations. In the longer term, the climate crisis and an ongoing shift to a lower-carbon economy raise big questions about future oil demand. The motive for drilling in ANWR, I believe, is to score a major, precedent-setting victory over government policies that prioritize conservation over energy production and environmental advocacy groups that have fought for years to protect ANWR as "one of the finest examples of wilderness left on Earth." Capturing ANWR and transforming it into a locus of fossil fuel extraction would be a massive physical and symbolic triumph for politicians who believe that resource extraction is the highest use of public lands.President Trump seems to understand this, based on his recent comment that "ANWR is a big deal that Ronald Reagan couldn't get done and nobody could get done." But global, national and oil industry circumstances are overwhelmingly arrayed against Trump getting it done. ANWR is inarguably an ecological treasure. With 45 species of mammals and over 200 species of birds from six continents, the refuge is more biodiverse than almost any area in the Arctic.Today the oil industry is facing its greatest set of challenges in modern history. They include:

  • A collapse in oil demand and prices due to the global pandemic, with a sluggish and uncertain recovery
  • Companies canceling and reducing activity worldwide, with bankruptcies in the U.S. shale industry and drilling rig counts falling back to 1940 levels
  • New uncertainty about future global oil demand as climate concerns push public interest and government policy toward electric vehicles, and automakers respond with new EV designs
  • The growing possibility of Democratic victories in the November 2020 elections, which would likely lead to policies reducing fossil fuel use
  • Increasing investor pressure on banks and investment firms to reduce or eliminate support for fossil fuel projects.

All of these factors compound the challenges of leasing and drilling in ANWR. Well costs there would be among the highest anywhere onshore in the U.S. Only one well has ever been drilled in the area, so new drilling would be purely exploratory and have a lower chance of success than in better-studied areas. Under these conditions, it would make more sense for companies that are active on Alaska's North Slope to pursue sites they currently have under lease, which pose much lower risk.

EPA Has Granted More Than 3,000 Pollution Monitoring Exemptions to Oil and Gas Industry Environmental regulators across the country granted more than 3,000 requests from polluting oil and gas operations, government facilities, chemical plants, and other facilities to stop pollution monitoring and other procedures intended to protect human health and the environment, an expansive two-month AP investigation revealed. The Trump administration, under pressure from the oil and gas industry, allowed for the exemptions in late March because of the coronavirus pandemic. "It's like saying, 'We're going to remove the radar guns and remove speedometers, but you still have to comply with the speed limit,'" said Eric Schaeffer, now head of the Environmental Integrity Project advocacy group. "That doesn't make sense." While EPA claims the monitoring waivers do not constitute a license to pollute at will, without effective monitoring there is no way to know. As a whole, the skipped leak inspections could be endangering oil and gas workers and allowing thousands of tons of greenhouse pollution to be emitted into the atmosphere, a former oil and gas engineer told the AP. The investigation's findings run counter to statements made by the EPA in June that the coronavirus was not impacting compliance and monitoring, and that the industry was not seeking relief. In fact, the industry actors aggressively sought and were granted exemptions, as early as March, to skip inspections of smokestacks, tank seals, flare stacks, and emissions monitoring systems, which could raise the risk of explosions. "As surely as night follows day there are going to be an increased number of deaths from those causes," Philip J. Landrigan, director of the Program for Global Public Health and the Common Good at Boston College, told the AP.

Faulty heat exchangers spill Venezuelan oil  -An estimated 25,000 bl of oil spilled along western Venezuela's coastline in recent weeks came from faulty heat exchangers at state-owned PdV's El Palito refinery, three officials at the plant told Argus.Heat exchanger systems that use seawater as coolant for crude processing units were contaminated with oil when PdV operators attempted to increase fuel production, according to a refinery manager and two repair crew supervisors."The seawater discharged back into the Triste gulf by the heat exchanger systems are the source of the spills," the manager said. "We're doing everything possible to correct the problem."PdV, which has not commented officially on the spills, has been trying for months to replenish the country's depleted gasoline supplies by repairing its 140,000 b/d El Palito and 305,000 b/d Cardon refineries. Despite some technical support from Iran and China, fuel production has been limited and intermittent at best.At least three oil spills since early July have coincided with PdV attempts to boost gasoline and diesel production at El Palito. Higher pressures associated with increasing crude runs through the distillation tower and following through the 61,500 b/d fluid catalytic cracker (FCC) and other units are raising the volume of oil filtering into the heat exchangers through cracks in the systems. PdV crews are trying to patch up the cracks as they are detected, the supervisors said.Operators managed to raise gasoline output to about 16,000 b/d in July but every attempt to raise output further has opened more leaks that in turn force PdV to suspend operations pending more repairs.Currently El Palito is not producing any gasoline or diesel as the heat exchangers are repaired and cleaned, the manager said.Nearly all of PdV's 1.3mn b/d refining system in Venezuela is out of service, and the company has been mostly locked out of the international market because of credit constraints and US sanctions.The acute fuel shortage, briefly alleviated by Iranian shipments in late May and early June, has worsened again, bringing informal market prices to as much as $4/l. Diesel is easier to find thanks to a sanctions exception on humanitarian grounds, but the US is working to cut off that supply as well by the end of October.

Mauritius calls for aid in race to contain catastrophic oil spill - The island nation of Mauritius has declared a “state of environmental emergency” in what appears to be the worst oil spill and ecological crisis in the country’s history.The freighter ship that ran aground on a coral reef late last month off the coast of Mauritius has leaked over 1,000 tonnes of oil into the Indian Ocean, with government leaders urging for help as the island nation prepares to brace for the “worst case scenario,” says Prime Minister Pravind Jugnauth.Now, the Japanese-owned MV Wakashio has split into two, spilling tonnes of additional oil from the ships’ remaining fuel tanks. Experts had previously predicted that with time and bad weather, the vessel would eventually fall apart and add to the current damage being done to the Mauritian coastline. Even though the size of the spill remains relatively low compared to big oil spills of the past, the location of this particular incident is of greater concern. The site of the vessel happens to lie at a famous coral reef in Pointe d’Esny, an internationally acclaimed sanctuary and conservation site known for its rare wildlife. Nature reserves and once-pristine lagoons near the area have reported an influx of oil leaking into their waters, posing life-threatening risks to thousands of precious marine species. “We are starting to see dead fish. We are starting to see animals like crabs covered in oil, we are starting to see seabirds covered in oil, including some which could not be rescued,” says Dr. Vikash Tatayah, conservation director at the Mauritian Wildlife Foundation. Despite warnings from local officials to stay away, thousands of residents have converged in a last-ditch effort to contain the spread of the spill. Images posted online showed volunteers making home made oil booms out of straw, sugarcane leaves and even human hair donated by residents of the island.

Japans Nagashiki says has scuttled part of Mauritius oil-spill ship (Reuters) - Japan’s Nagashiki Shipping, which owns the bulk carrier that ran aground on a reef in Mauritius and caused a large oil spill, said on Tuesday it has completed scuttling of the front part of the vessel on Monday as instructed by local authorities.The shipping company will continue planning with local authorities and specialists on the removal of the remaining part of the carrier from the reef, it said in a statement. Mauritius said last week it would scuttle the ship’s remains at sea in a way that would avoid further pollution or interfere with maritime routes, after taking in recommendations from various groups on how and where to sink the ship to conform with advice of French experts present on the island. Nagashiki said it has submerged the carrier in water designated by the local authorities. The MV Wakashio had about 3,800 tonnes of heavy oil and about 200 tonnes of light oil as fuel as of July 25 when it ran aground. Except for about 1,000 tons of oil that had spilled overboard almost all of the remaining oil on the ship was retrieved by August 12, and almost all lubricant and residues, which remained onboard, collected by August 23, the firm said. The company will continue to collect oil deposits on board and suspended matter while local authorities, people and an oil spill cleaning company are continuing to collect oil that has drifted to the coast, it said.

Japanese experts warn oil damage could kill mangroves in Mauritius(Kyodo) -- A Japanese disaster relief team said Tuesday the oil spilled from a grounded Japanese freighter off Mauritius in the Indian Ocean could kill mangroves if it is not cleaned up soon. The team composed of seven members, including five environment experts, has been conducting an on-site probe of the damage to the environment, especially the mangrove forests and coral reefs, since Friday, while providing on-site environment assistance to the Mauritius government. "In the heavily polluted areas, oil adhesion to pneumatophores (or aerial roots) can suffocate mangroves to death. Also, if the oil stays for long, its toxic substances can kill mangroves," Noriaki Sakaguchi, vice team leader and an ecosystem conservation expert at Japan International Cooperation Agency, said in an online briefing. While no dead or dying mangroves have been found so far, the team said oil coating on the pneumatophores of mangroves has been confirmed in all seven surveyed locations, with a wide area of damage found in two sites. Clearing oil from mangrove forests in a muddy environment, instead of a rocky one, is particularly difficult as the removal work may allow deeper penetration of the oil beneath the forests, according to the team. The group will start assessing the impact of oil spill on the Ramsar wetlands near the accident site on Thursday. Environment Minister Shinjiro Koizumi told a press conference Tuesday that the ministry is considering sending additional environment experts to the island nation. The second team has inspected 12 locations near the shipwreck, finding no apparent coral deaths caused by the oil spill and no evidence of oil on the seabed. However, ropes containing the spill and the wreck of the ship have destroyed corals, according to a team official, and the water near the accident site is murky as a result. The front section of the ship was towed to open water and sunk as instructed by local authorities after the wreckage was broken into two.

Oil spill in Mauritius calls for more efforts to safeguard coral reef ecosystems - On July 25, 2020, a Japanese cargo ship struck a reef on the southeast coast of Mauritius, leaking tons of oil into coral reefs, pristine turquoise water lagoons and unique ecosystems of the island nation. The grounded ship split up, releasing more oil in the sea that is home to some of the finest coral reefs and marine protected areas in the world. The oil spill has the potential of causing devastating and widespread impacts on the country that depends on her seas for food, livelihoods and tourism that accounts for 36% of Mauritius GDP and generates US$4.3 billion annually. Oil spill threatens the fishing industry as boats and fishing gear may be damaged. In the case of a massive spill, human health may be affected through direct contact, inhalation of the oil or consumption of contaminated seafood. While the country has declared a state of environmental emergency and disaster response is underway, the situation highlights the vulnerability of marine ecosystems and habitats such as mangroves, seagrasses and corals. Oil, a complex mixture of many chemicals, can kill corals, depending on species and exposure. Chronic oil toxicity impedes coral reproduction, growth, behavior, and development. The time of year when a spill happens is critical since coral reproduction and early life stages are particularly sensitive to oil. Efforts are already underway to better protect the underwater world. Just two months before the Mauritius oil spill; the International Coral Reef Initiative (ICRI), a long-standing partner of the United Nations Environment Programme (UNEP), adopted a Recommendation to safeguard the future of coral reefs. It recognizes the vulnerability of coral reefs to climate change, ocean acidification, land-based pollution such as nutrients and sediments from agriculture, sea-based pollution, overfishing, among other activities. Corals support a quarter of all marine life, provide at least half a billion people with food security and livelihoods; protect coastlines from damage by buffering shorelines against waves, storms and floods. Estimates indicate coral reefs account for $2.7 trillion per year in ecosystem service value. The Recommendation, adopted in May 2020, after more than 18 months of work and stakeholder consultations, aims to get coral reefs and related ecosystems prioritized and monitored with rigorous indicators within the Convention on Biological Diversity Post-2020 Global Biodiversity Framework being decided in May of 2021. It calls on countries to safeguard coral reef ecosystems, identifying a set of six coral related indicators for adoption and a further five indicators for priority development, to provide improved information on ecosystem integrity, function, intactness, and resilience 

17 dead dolphins wash up on Mauritius beach near oil spill site (Reuters) - Seventeen dead dolphins washed up on Mauritius’s shore on Wednesday, a government official told Reuters, a month after an oil spill from a Japanese ship that ran aground caused a major ecological disaster in the area. “The dead dolphins had several wounds and blood around their jaws, no trace of oil however. The ones that survived, around ten, seemed very fatigued and could barely swim,” said Jasvin Sok Appadu from the fisheries ministry. The dead dolphins have been taken to the Albion Fisheries Research Centre for an autopsy, Appadu said. Results are expected on Wednesday night. A spokeswoman for local Mauritian environmental group Eco-Sud called for the autopsy results to be released publicly and said the group wanted to be present during the autopsy “to better understand why the dolphins died,” but was still waiting for a response from authorities. The spill came from the Japanese-owned MV Wakashio, which ran aground on July 25 and began to spill oil about a week later. The ship was scuttled Monday. The full impact of the spill is still unfolding, scientists say, and the damage could impact Mauritius and its tourism-dependent economy for decades. The wildlife at risk include the critically endangered Pink Pigeon, endemic to the island, the seagrasses, clownfish and mangrove forests, whose roots serve as nurseries for fish. The Mauritius Marine Conservation Society said 15 kilometers of coastline have been affected by the spill and it is moving towards the Blue Bay Marine park, home to 38 types of coral and 78 species of fish.

At least 40 dolphins die near oil spill in Mauritius - At least 40 dolphins have mysteriously died in an area of Mauritius affected by an oil spill from a Japanese boat, officials and witnesses said yesterday, as witnesses described the deaths of one mother dolphin and her baby. Environmentalists have demanded an investigation into whether the dolphins were killed as a result of the spill from a Japanese ship, which was scuttled on Monday after running aground in July and leaking oil. The death toll may rise: fisherman Yasfeen Heenaye said he saw between 25 and 30 apparently dead dolphins floating in the lagoon yesterday morning, among scores of the animals that fishermen were trying to herd away from the pollution. “There was a mother and her baby,” he said. “He was very tired, he didn’t swim well. “But the mum stayed alongside him, she didn’t leave her baby to go with the group. “All the way she stayed with him. She was trying to protect him.” He filmed as the calf wallowed on its side and died in front of them, floating on the waves. Heenaye, his boat running low on fuel, motioned to Reuben Pillay, who tracked the mother dolphin. She initially looked normal, he said. “But in a few minutes she went on her side, one fin in the water, and one out of the water and then she started flapping her tail really, really rapidly,” said Pillay, a professional drone operator and environmentalist who is providing video to Reuters. “She swam in circles in front of the boat, she moved her tail very violently and after about five minutes she just stopped moving, and she sunk. “We heard cries, I thought it was a woman on the boat – but they told me, no – it was the dolphin.” The mother dolphin stopped moving and eventually slowly sank, tail first, beneath the waves. The dead baby floated on the surface.

Thousands protest in Mauritius over dead dolphins, demand resignations - (Reuters) - Thousands of protesters demonstrated in the Mauritius capital Port Louis on Saturday to demand an investigation into an oil spill from a Japanese ship and the mysterious death of at least 40 dolphins that have been found near the site of the spill. Environmentalists have called for an investigation into whether the dolphins died as a result of the spill caused when the bulk carrier, the MV Wakashio, struck a coral reef last month. One protestor held a banner with a dolphin covered in oil reading “our lives matter” and another held one calling for the government to resign. Mauritian flags were waved across the packed square of St Louis Cathedral. “We do not trust the government and the diluted information they’ve been feeding us regarding the management and responses to the oil spill,” Fabiola Monty, 33 a Mauritian environmental scientist, told Reuters from the square. The government has said it will carry out autopsies on all the dead dolphins and has set up a commission to look into the oil spill. Two investigations are being carried out: one by the police on the crew’s responsibilities and one by a senior Shipping Ministry official on what happened to the ship. So far veterinarians have examined only two of the mammals’ carcasses, which bore signs of injury but no trace of oil in their bodies, according to preliminary autopsy results.

Bintulu MP calls for immediate clean up of ship’s oil spill on Igan River - Bintulu MP Dato Sri Tiong King Sing has called on the federal and state environmental protection authorities to take immediate steps to clean up an oil spill from a ship on Igan River on Aug 23. The Progressive Democratic Party president said the authorities not only need to rectify the issue seriously but also investigate its causes. “The oil spill incident had already been widely circulated on social media for several days And there should be no reason for the relevant departments to plead ignorance. Why allow the oil spill to spread uncontrollably to an extent of nine kilometres along the river,” he said in a statement last night. He took to task a sawmill, which is said to own the ship, for not acting alerting the authorities about the oil spill after it happened. “We need to question why the sawmill involved failed to immediately notify the relevant authorities when the incident occurred. They should have also taken the initiative to assist the authorities to quickly mitigate any further spread of the spilled oil.” Tiong, who is also Prime Minister’s Special Envoy to People’s Republic of China, said he received complaints from local residents that the Igan River had been severely polluted by the oil spill. “Not least, it has caused great hazard and inconvenience to the residents who rely on pumping the river for drinking water. The relevant departments must take this incident much more seriously.

Montara oil spill victims seek aid 11 years on - Friday marked the 11th anniversary of the Montara oil spill, in which hundreds and thousands of barrels of oil spilled into the Timor Sea following an explosion at an offshore rig. Despite more than a decade of suffering the impacts, the affected residents of Timor Island in Indonesia’s southernmost province East Nusa Tenggara (NTT) are still fighting for justice and demanding compensation from rig operator PTT Exploration and Production (PTTEP) Australasia and the Australian government. PTTEP Australasia is a wholly-owned subsidiary of Thai State-controlled PTTEP Pcl. Montara victim advocacy team head Ferdi Tanoni said on Friday in Kupang: “NTT residents, especially the ones living in West Timor, are demanding that the Australian government immediately compensate more than 200,000 residents that have suffered [from the oil spill]. Some have even passed away.” He added that his team demanded that President Joko “Jokowi” Widodo to write a letter to Australian Prime Minister Scott Morrison regarding the issue. The oil spill occurred on August 21, 2009, following an explosion at the Montara oil rig. For 74 days, gas and oil from the rig gushed in the Timor Sea, approximately 690km west of Darwin and 250km southeast of Rote Island, East Nusa Tenggara. Ferdi alleged that then-Australian minister for natural resources and energy, Martin Ferguson, had downplayed the environmental impacts of the oil spill. But, he said the Australian government’s Montara Commission of Inquiry “quoted a baseless statement from the rig operator that between 300 and 400 barrels of oil were spilled every day. “It is estimated that the total area affected by the spill was around 90,000sq km.”

Oil spill off UAEs east coast forces closure of Kalba beach - Black sludge has washed up across three kilometres of pristine Kalba coastline ‎after a suspected oil spill at sea. The slick caused the suspension of fishing activities and the partial closure of Kalba beach. Tuesday’s spill is the fourth along the east coast of the UAE this year and the second in the Sharjah enclave of Kalba. The slick even threatened the protected Al Qurm Nature Reserve – a haven for sea turtles and rare birds – but barriers prevented any damage. “Our inspectors and investigation team were immediately dispatched to the location,” Shamsa Al Ketbi, director of the support services at the Sharjah Environment and Protected Areas Authority, told The National. “The team had to close parts of Kalba Corniche until the clean up process is finalised.” The cause of the spill has not been established and the clean-up is expected to take up to three days. Fishing remains suspended. It is believed most oil spills are caused by rogue tankers cleaning their hulls in international waters. The sludge then washes ashore. The authority is working on establishing a monitoring system to spot spills before they reach the coastline. Fishermen said they noticed the oil sludge at Kalba fishing port early on Tuesday. “The smell was terrible and the water colour was brown to black,” said Saeed Sultan, 35. “I called my father and told him not to go fishing as oil sludges can stick to the fishing net and ruin it completely.” Mr Sultan said he visited Kalba beach on Wednesday and found a dead turtle washed up on the shore.

Turkey’s Black Sea find shapes its potential role as an energy producer - Turkey says its natural gas find in the Black Sea will likely be followed by further discoveries, altering the geopolitics of energy trade in its region. “It’s just the beginning,” President Recep Tayyip Erdogan’s spokesman Ibrahim Kalin said of Friday’s announcement that Turkey struck gas deep under its territorial waters. “The work will continue for exploration as well as drilling at the same time. We’re very hopeful that it will lead to other fields in the same area.” Ankara’s state-oil arm TPAO will continue offshore exploration near the 320 billion cubic meter Sakarya field where officials see “much greater potential” for hydrocarbons, Kalin said in an interview at the presidential office in Istanbul on Saturday. The discovery announced by Erdogan is already the largest of its kind in the Black Sea and proved the existence of sizable deposits deep under the seabed. Kalin said it also gave fresh impetus to Turkey’s search for more energy resources to be able to function as more than just a massive consumer and a conduit for cross-border gas trade. “Turkey will be an energy producing country. That’s a new dimension, a very significant one,” Kalin said. “It puts Turkey at a different level in terms of its strategic location, relations, regional and global affairs.” “Turkey is a premium gas market, which has never been significant on a global scale. The discovery really reinforces the country’s potential role as an energy producer in the region,” said Ashley Sherman, principal analyst on Caspian and Europe upstream at Wood Mackenzie. Another prospective area nearby is the eastern Mediterranean Sea, where Turkey is conducting exploratory work with a seismic research ship. Kalin said the Oruc Reis vessel will continue its survey in waters disputed by Greece and Cyprus, a conflict that’s fueling the tensions with Athens. “Whatever we find in the eastern Mediterranean, we’d like it to be shared by all. We’d like it to benefit all neighboring countries which have a shore,” Kalin said. “We do not want to see this as a zero-sum game.” Turkey is mired in territorial disputes with Greece and Cyprus in the Mediterranean Sea as it searches for oil and gas. France has temporarily increased its military presence to ward off Turkish steps, and German Chancellor Angela Merkel on Wednesday said the European Union was concerned over the increased tensions.

Oil Steady as Virus Offsets Hurricane Threat -- Oil was steady after a third straight weekly gain as the threat of back-to-back storms hitting the U.S. Gulf Coast and disrupting production was offset by signs of a coronavirus resurgence in parts of Asia and Europe. October futures traded near $42 a barrel in New York after falling 1.1% on Friday. Almost 60% of crude output in the U.S. Gulf of Mexico production was closed as of midday Sunday as the region prepared for two approaching hurricanes. The systems -- Marco and Laura -- are coming from different directions and have the potential to cause billions of dollars in damage. Governments around the world, meanwhile, continue to tread a fine line between trying to halt the spread of Covid-19 and efforts to re-open their economies. While the pandemic is showing signs of stabilization in the U.S., it appears to be staging a comeback in Europe and Asia. U.S. benchmark crude futures have been rising -- albeit very gradually -- this month amid a steady decline in domestic crude and gasoline supplies, and tentative signs that demand is returning. That’s starting to encourage the return of production, however, with drillers in the Permian Basin of West Texas and New Mexico putting an additional 10 rigs to work last week for the biggest jump in activity this year. ”What’s going to keep the brakes on the price is what U.S. oil supply is going to do,” said Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia. While the hurricanes are positive for prices, they’re very temporary, but the rising U.S. oil rig count reaffirms that spare capacity can come back and is enough to meet any price increase, he said West Texas Intermediate for October settlement added 0.1% to $42.37 a barrel on the New York Mercantile Exchange at 7:24 a.m. in London. Brent for the same month was climbed 0.2% to $44.42 on the ICE Futures Europe exchange after declining 1.2% on Friday. The global benchmark crude’s premium over WTI was $2.04, the same as Friday, which was the least at the close since July 27. Brent’s prompt timespread suggests concerns about over-supply are increasing. It was 57 cents a barrel in contango -- a market structure where prompt contracts are cheaper than later-dated ones -- compared with a contango of 22 cents at the end of July. Libya’s National Oil Corp. said Friday that it welcomed the country’s new cease-fire agreement and the nation should be able to resume exports when all of its facilities are freed from military occupation, potentially unleashing even more new supply at a time when the OPEC+ alliance is easing output curbs.

Oil prices climb as two hurricanes shutter U.S. offshore production (8/24) --Oil edged higher as production was disrupted by two storms approaching the U.S. Gulf Coast.Futures rose 0.8% in New York. Almost 58% of crude output, or more than 1 million barrels a day, in the Gulf of Mexico was closed as of midday Sunday. The storms Marco and Laura -- the latter of which is forecast to become a hurricane -- are coming from different directions and have the potential to cause billions of dollars in damage. The weather systems could force refineries to shut and also hit demand when they near land.Crude, and other risk assets including equities, received a boost on Monday amid a thaw in U.S.-China relations. President Donald Trump’s team was said to be privately seeking to reassure American companies that they can still do business with the WeChat messaging app in China.U.S. benchmark crude futures have been rising -- albeit very gradually -- this month amid a steady decline in domestic crude and gasoline inventories, and tentative signs that demand is returning. That’s starting to encourage the return of production, however, with drillers in the Permian Basin putting an additional 10 rigs to work last week for the biggest jump in activity this year.“The situation on the oil market over the next three days is likely to be determined partly by news from the Gulf of Mexico,”  “The psychological effect should not be underestimated,” Weinberg said of the impact of the two storms on refining activity and oil production in the U.S. West Texas Intermediate for October added 32 cents to $42.66 a barrel at 10:24 a.m. in London.  Brent for the same month rose 34 cents, or 0.8%, to $44.69. The global benchmark’s premium over WTI closed at its narrowest since July 27 on Friday. he shape of the oil futures curve has suggested concerns about oversupply have grown in recent week. On Friday, Brent futures for October traded at their biggest discount to the November contract since May, a structure known as contango. Speculators have also turned less bullish on WTI, last week trimming their bets to the smallest since May

Muted oil reaction to dual storm threat is 'remarkable,' Kilduff says  - Two storms are barreling toward the Gulf Coast forcing a shutdown in oil operations, but the muted reaction in oil prices demonstrates just how closely the market is tied to a global recovery from Covid-19. "Due to the moribund demand for gasoline and diesel fuels these days, due to the pandemic, it is hard to get a rally going off this remarkable dual-storm threat, which itself is remarkable," Again Capital's John Kilduff told CNBC. Marco, which is expected to make landfall first, has weakened as it approaches the coast and was downgraded to a tropical storm on Sunday night. The other storm Laura, however, is strengthening and "could be more menacing," according to Kilduff. "Given that both storms appear modest based on current forecasts we see lower potential for a sustainable impact on crude ... We expect the elevated storm activity to offer modest but short lived support for both oil prices and refining margins," added Bank of America's Doug Leggate. West Texas Intermediate crude, the U.S. oil benchmark, gained 28 cents, or 0.66%, to settle at $42.62 per barrel. International benchmark Brent crude advanced 78 cents, or 1.76%, to $45.13. As of Sunday, about 57.6% of offshore oil production in the Gulf of Mexico had been shut-in, or roughly 1.07 million barrels per day, according to the U.S. government. The primary driving force for oil prices continues to be the unprecedented fall-off in demand caused by the coronavirus pandemic, as well as worldwide producers' response to the plunge in prices. "Today is more of an opportunity to see that even such a sudden event is weak to really put aside the concerns that Covid-19 has brought upon market participants," said Bjornar Tonhaugen, Rystad Energy's head of oil markets. "Yes, a dip in oil production provides a breath to traders, who have been seeing global output rising over the last weeks, amid a demand recovery lag. But what will really make a difference is news from the recovery front,"

Oil hits five-month highs as U.S. producers cut output ahead of hurricane -  (Reuters) - Crude oil prices rose to a five-month high on Tuesday as U.S. producers shut most offshore output in the Gulf of Mexico ahead of Hurricane Laura even as rising coronavirus cases in Asia and Europe capped gains. Brent futures LCOc1 rose 73 cents, or 1.6%, to settle at $45.86 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 rose 73 cents, or 1.7%, to settle at $43.35. That was the highest closes for both benchmarks since March 5, the day before Saudi Arabia and Russia failed to agree on a new plan to cut output and about a week before the World Health Organization declared COVID-19 a pandemic. U.S. producers cut crude output ahead of Hurricane Laura at a rate approaching the level of 2005’s Hurricane Katrina and also halted most oil refining along the Texas/Louisiana coast. Laura is expected to strengthen into a major hurricane with 115 mile per hour (185 kph) winds before it strikes the coast near the Texas-Louisiana border early Thursday, according to the U.S. National Hurricane Center. On Tuesday, producers had evacuated 310 offshore facilities and shut 1.56 million barrels per day (bpd) of crude output, 84% of Gulf of Mexico’s offshore production, near the 90% outage that Katrina brought 15 years ago. “Today’s strength was again almost entirely attributable to storm concerns,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, noting the storm factor would likely overshadow the weekly storage report from the U.S. Energy Information Administration (EIA). Analysts forecast U.S. crude stockpiles fell for a fifth week in a row last week, according to a Reuters poll conducted ahead of reports from the American Petroleum Institute (API) at 4:30 p.m. (2030 GMT) on Tuesday and the government on Wednesday. “Overall, hurricanes may be limiting supply this week ... but the market will soon again focus on the biggest hurricane of them all, COVID-19,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy. Europe is seeing a rise in coronavirus cases, including re-infection. Two re-infections were reported in Europe and one in Hong Kong. Elsewhere, U.S. and Chinese trade officials reaffirmed their commitment to a Phase 1 trade deal.

U.S. oil and gasoline futures tally highest finish since March as storms force output cuts in U.S. Gulf Coast - Oil and gasoline futures settled Tuesday at their highest since early March, as storms forced the shutdown of more than 80% of offshore crude-oil production in the Gulf of Mexico and prompted refinery cuts. Tropical Storm Marco made landfall Monday and was downgraded to a post-tropical cyclone Tuesday morning. Attention is focused on Laura, which was upgraded to a hurricane Tuesday morning and is expected to make landfall on the U.S. Gulf Coast later this week. “Markets know that the hurricane shut-ins are usually transient, and it’s a bit too early to know whether the current ones will have a prolonged bearish effect on prices or not,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy, in a daily note. “Refineries might need to shut-in more runs due to flooding than upstream operators shut in crude supply,” so weaker demand for crude at the refineries may help to offset price-bullish supply constraints. West Texas Intermediate crude for October delivery CL.1, -0.09% CL00, -0.09% rose 73 cents, or 1.7%, to settle at $43.35 a barrel on the New York Mercantile Exchange. October Brent crude BRNV20, +0.06%, the global benchmark, also gained 73 cents, or 1.6%, to $45.86 a barrel on ICE Futures Europe. Front-month prices for both benchmarks settled at their highest since March 5, according to Dow Jones Market Data. The Interior Department’s Bureau of Safety and Environmental Enforcement, citing operator reports, estimated Tuesday that 84.3% of offshore oil production in the Gulf of Mexico, or about 1.6 million barrels of oil a day, had been shut in, along with nearly 61% of natural-gas production. A number of refineries on the Gulf Coast, where almost half of the U.S. oil processing industry is located, have also suspended production ahead of Laura’s expected landfall, noted Eugen Weinberg, analyst at Commerzbank. While the refineries were reinforced following Hurricane Katrina in 2005, there is still the risk of flooding, which could prompt extended closures. Storms can also affect the transportation of crude oil and exports. It’s no surprise then that gasoline futures jumped 6.5% Monday in response to the storms, Weinberg said. A widening premium for October gasoline relative to November indicates market participants fear the potential of shortages, analysts said. On Tuesday, front-month September gasoline added 2.1% to $1.3959 a gallon—the highest finish since March 5. The most-active October contract gained 0.7% to $1.2685 a gallon. September heating oil , meanwhile, rose 1% to $1.2601 a gallon.

WTI Holds Near 6-Month Highs Amid Gulf Shut-Ins, Inventory Draws - Oil prices were higher today, driven in large part by significant shut-ins across the Gulf of Mexico. WTI traded back above $43.As Bloomberg's Kriti Gupta details, the Gulf of Mexico is responsible for 17% of U.S. offshore oil production, 82% of which has been shut in preparation for the storm (up from 58% yesterday). So the simple explanation for rising crude is less production means less supply and higher prices.It gets even thornier when you consider that 45% of total U.S. petroleum refining capacity also is located along the Gulf Coast.This is unlikely to be reflected in any inventory/production data released this week. API

  • Crude -4.524mm (-4.3mm exp)
  • Cushing -646k
  • Gasoline -6.392mm (-2.7mm exp) - biggest draw since April 2019
  • Distillates +2.259mm (-700k exp)

Analysts expected a fifth weekly crude draw in a row and a continuing trend of draws in Gasoline stocks also... API reported bigger than expected draws for Crude and Gasoline (with the latter's biggest drop in stocks since April 2019)... WTI closed at its highest for the front-month contract since early March...Graphics: BloombergOil was trading around $43.35 ahead of the print, and was little changed after the data."Markets know that the hurricane shut-ins are usually transient, and it's a bit too early to know whether the current ones will have a prolonged bearish effect on prices or not," said Bjornar Tonhaugen, head of oil markets at Rystad Energy, in a daily note. "Refineries might need to shut-in more runs due to flooding than upstream operators shut in crude supply," so weaker demand for crude at the refineries may help to offset price-bullish supply constraints.

Oil steadies; virus concerns weigh as hurricane heads to U.S. -  (Reuters) - Oil prices steadied on Wednesday, pressured by worries about the demand outlook during the coronavirus pandemic but buoyed as U.S. producers shut output in the Gulf of Mexico ahead of Hurricane Laura. Renewed worries over the pandemic, which has squeezed demand and sent prices to record lows in April, dampened market sentiment after reports this week of patients being re-infected, raising concerns about future immunity. Brent crude LCOc1 fell 22 cents to settle at $45.64 a barrel, while U.S. West Texas Intermediate crude CLc1 rose 4 cents to $43.39 a barrel. Both benchmarks settled at a five-month high on Tuesday. The U.S. energy industry was preparing for Hurricane Laura, forecast to become a Category 4 hurricane with heavy rains and catastrophic, 130 mile-per-hour (209 kph) winds that will drive ocean waters up to 30 miles (48 km) inland, forecasters said. Nine oil-processing plants that convert nearly 2.9 million barrels per day of oil into fuel, and account for about 15% of U.S. processing, were shutting down. Oil producers on Tuesday had evacuated 310 offshore oil facilities and shut 1.56 million barrels per day (bpd) of crude output, 84% of Gulf of Mexico’s offshore production. “Oil traders will be preoccupied with the hurricane today,” said Tamas Varga of broker PVM. “Once the danger passes, demand considerations will come into focus again.”

Oil Near 5-Month High as Laura Menaces Refineries-- Oil held at a five-month high as the market braced for disruptions to production and refining from Hurricane Laura and after a further drop in U.S. crude stockpiles added to optimism that demand is recovering. Futures in New York were steady near $43 a barrel after closing at the highest since March 5 on Wednesday. Laura made landfall early Thursday at Cameron, Louisiana, near the border with Texas, as a Category 4 storm. While the hurricane’s path shifted away from refineries and ports in the Houston area, the stretch of coastline that will feel its full impact accounts for about a quarter of U.S. refining capacity. American crude inventories fell by 4.7 million barrels last week, according to an Energy Information Administration report, the fifth straight weekly decline. A drop in gasoline stockpiles to the lowest since December and an increase in refinery run rates provided more evidence that the energy demand recovery in the world’s largest economy is gathering pace. More than 80% of oil output in the Gulf of Mexico and almost 3 million barrels of a day of refining capacity has been shut ahead of Laura’s landfall, causing a spike in U.S. gasoline prices. It’s also disrupting energy flows, with trans-Atlantic shipping rates rising and more than 60 oil and refined product tankers in the western U.S. Gulf waiting for Laura to pass, according to ship-tracking data compiled by Bloomberg. The hurricane has helped oil break out of its narrow range, although “I would have anticipated a stronger move on prices,” said Edward Moya, senior market analyst at Oanda Corp. “That’s because of concern over the coronavirus and continued demand destruction.” Prices West Texas Intermediate for October delivery declined 0.2% to $43.30 a barrel on the New York Mercantile Exchange at 7:38 a.m. in London. The contract climbed 0.1% Wednesday following a 1.7% jump in the previous session. Brent for the same month added 0.1% to $45.64 a barrel on the ICE Futures Europe exchange after falling 0.5% on Wednesday. Still, Laura is likely to have only a temporary market impact, with Covid-19 continuing to cloud the prospects for a more sustainable recovery in oil prices. The market may have recovered from the shock that saw WTI plunge below zero in April, but the oil industry continues to consolidate with prices stuck in the low $40s a barrel. Norway’s Equinor ASA announced it would trim its workforce in the U.S., Canada and the U.K. by 20% on top of previously announced cuts.

Oil Prices Decline After Laura Moves Inland -- Oil declined after Laura barreled into Louisiana, largely sparing the Texas Gulf Coast from widespread disruption to key energy infrastructure. Laura made landfall early Thursday near Cameron, Louisiana, as a Category 4 hurricane and has now weakened to a tropical storm. While the storm knocked out power to hundreds of thousands of people and impacted plants that produce chemicals and liquefied natural gas, southeast Texas ports and refineries -- including the largest U.S. refinery -- likely avoided the worst of it. Crude futures in New York fell less than 1% on Thursday, while gasoline futures dropped more than 5%. A stronger dollar also reduced the appeal for commodities priced in the greenback. “The damage is not as bad as anticipated, which is creating more sell pressure along the energy complex,” said Phil Flynn, senior market analyst at Price Futures Group. “The lower price of gasoline means worse refining margins potentially, meaning that there’s not going to be a lot of incentive to use a lot of crude quickly.” As the storm passes, traders are assessing the potential impact on both fuel production and consumption. Exxon Mobil Corp.’s Beaumont refinery in Texas will begin restarting Friday if an assessment shows no damage from Hurricane Laura, while its Baytown refinery on the Houston Ship Channel has already begun the restart process. Meanwhile, Magellan Midstream Partners LP’s East Houston terminal restored full operations at its refined products truck loading rack and the U.S. Coast Guard reopened the Port of Houston on Thursday. More than 80% of oil output in the Gulf of Mexico and almost 3 million barrels a day of refining capacity had been shut ahead of the storm, causing a spike in gasoline futures prices earlier this week. Since then, prices have retreated. Aside from the storm impact, a persistent inventory overhang as the coronavirus depresses demand continues to cloud the outlook for a sustained rebound in prices.

Oil prices slip as Hurricane Laura's blow unlikely to have sustained impact - Oil prices eased on Thursday as the market expected a quick recovery for production platforms shuttered ahead of a hurricane that churned through the Gulf of Mexico and slammed Louisiana. Brent crude futures for October, which expire on Friday, fell US55 cents, or 1.2%, to settle at $45.09 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 35 cents or 0.8% to $43.04 a barrel. The storm hit Louisiana early Thursday with 150 mile-per-hour (240 kph) winds, damaging buildings, knocking down trees and cutting power to more than 400,000 people in Louisiana and Texas. Its storm surge was less than predicted, sparing inland plants from feared flooding. Oil producers on Tuesday had shut 1.56 million barrels per day (bpd) of crude output, or 84% of the Gulf of Mexico's production, evacuating 310 offshore facilities. BP said Thursday it was already preparing to return to its company-operated facilities in the deepwater Gulf of Mexico to inspect for any potential damage from the storm. At the same time, refiners that convert nearly 2.33 million bpd of crude oil into fuel, and account for about 12% of U.S. processing, halted operations. "On the one hand refinery shutdowns reduced the demand for crude oil, but at the same time Gulf of Mexico production was shut in, nearly offsetting each other,"

Oil Gives Up Some Gains as Refiners Spared  -- Oil was steady -- but still headed for a fourth weekly gain -- after Hurricane Laura swept through Louisiana and Texas without appearing to inflict major damage on the region’s energy infrastructure. Futures in New York traded near $43 a barrel after closing down 0.8% on Thursday. Laura came ashore as one of the most powerful hurricanes to ever hit Louisiana but has since weakened to a tropical storm. While it knocked out power to hundreds of thousands of people and impacted plants that produce chemicals and liquefied natural gas, southeast Texas ports and crude facilities -- including the largest U.S. refinery -- likely avoided the worst of it. More than 80% of oil output in the U.S. Gulf of Mexico and almost 3 million barrels a day of refining capacity had been shut ahead of the storm, causing a spike in gasoline and oil prices earlier in the week. Crude was also buoyed by data showing a fifth straight weekly decline in American stockpiles. “With little oil infrastructure damage reported so far, and with shut-in production likely to return in the coming days, it looks as though oil will remain trading in this fairly narrow range that we’ve become accustomed to,” said Warren Patterson, head of commodities strategy at ING Bank NV. “Demand from refiners should recover fairly quickly.” With the passing of Laura, investor attention now turns back to the coronavirus and the pace of global energy demand recovery. About half of India’s trucking fleet is still idled, leading to a bleak outlook for diesel consumption there, while gasoline and diesel sales in the U.K. are still about 11% below pre-lockdown levels. In China, there’s only expected to be a small boost in energy demand from infrastructure projects and post-flood recovery efforts. West Texas Intermediate for October delivery was unchanged at $43.04 a barrel on the New York Mercantile Exchange at 7:27 a.m. in London. The contract has risen 1.7% so far this week. Brent for the same month added 0.1% to $45.14 a barrel on the ICE Futures Europe exchange after falling 1.2% on Thursday. The more active November contract climbed 0.1% to $45.66. Crude futures on the Shanghai International Energy Exchange fell 0.4% to 293.6 yuan a barrel, paring its advance this week to 2.6%. Brent’s three-month timespread was $1.28 a barrel in contango -- where prompt contracts are cheaper than later-dated ones -- from $1.41 in contango at the end of last week. The change in the market structure of the global crude benchmark suggests concerns about over-supply have eased slightly. 

Oil prices dip as producers, refiners avoid worst of hurricane - Brent crude futures for October fell 4 cents to settle at $45.05 a barrel, before expiring on Friday. U.S. West Texas Intermediate (WTI) crude CLc1 fell 7 cents to $42.97 a barrel. Both benchmarks notched weekly gains of about 1.5%, with WTI rising for a fourth straight week. The benchmarks hit five-month highs during the week as U.S. producers cut crude output ahead of Laura at a rate close to the level of 2005’s Hurricane Katrina. “The oil trade has been featured by strong advances at the start of the week as a sizable amount of storm premium was pumped into the market ahead of Hurricane Laura, followed by a major erasure of hurricane premium following the storm’s arrival as limited impact on offshore crude production or refinery activity was indicated,” said Jim Ritterbusch, president of Ritterbusch and Associates. The oil market has had an unusually long spell of low volatility, analyst Eugen Weinberg at Commerzbank said, in contrast with stock markets. “It didn’t even react to a weaker dollar. There’s no impulse in either direction. It has seldom had so little volatility for such a long period, especially given the dynamic situation on the demand and supply sides,” Weinberg said. Laura, since downgraded to a tropical depression, hit Louisiana early on Thursday with winds of 150 miles per hour (240 km per hour). The storm killed at least six people, damaged buildings and felled trees. Power was cut to hundreds of thousands in Louisiana and Texas, but refineries were spared from massive flooding.

Oil prices edge lower, but tally a weekly gain after Hurricane Laura spares refineries – Oil futures ended modestly lower Friday, but tallied a weekly gain a day after Hurricane Laura made landfall on the Gulf Coast as a Category 4 storm but refineries were spared from extensive damage. Now the industry waits to see how traders respond on Monday. West Texas Intermediate crude for October delivery fell 7 cents, or 0.2%, to settle at $42.97 a barrel on the New York Mercantile Exchange. Based on the front-month contracts, prices saw a weekly climb of 1.5%, which represents their fourth weekly rise in a row according to Dow Jones Market Data reported MarketWatch. October Brent crude, the global benchmark, lost 4 cents, or 0.09%, at $45.05 a barrel on ICE Futures Europe, ahead of the contract’s expiration at Monday’s settlement. For the week, front-month contract prices climbed by 1.6%. “No reports of major damage to refineries or massive flooding should allow the industry to bounce back quickly,” said Phil Flynn, senior market analyst at The Price Futures Group, in a Friday note. “While refineries may stay shut for weeks, they will use this opportunity to do maintenance, and after some seasonal weakness in prices, petroleum should resume its longer-term upward trend.” Hurricane Laura was responsible for at least six deaths and caused extensive damage as it came ashore and moved inland Thursday. However, production from oil rigs in the Gulf of Mexico and activity at refiners in the Gulf Coast, the heart of the U.S. oil-processing industry, was expected to rebound quickly.

Oil Demand Recovering At Record Price -- Rigzone -- August 27, 2020 - World oil demand has grown at a record pace – by 13 million barrels per day (bpd) – in the past four months since the nadir of the COVID-induced collapse in April, IHS Markit reported Tuesday. Presently at 89 percent of pre-COVID levels, global oil demand has risen from 78 percent in April, the consultancy noted in a written statement emailed to Rigzone. The firm attributes the increase to relaxation of some COVID-19 restrictions. It predicts demand should continue to go up until leveling off at 92 to 95 million bpd through the first quarter of 2021. It pointed out the projection equates to roughly 92 to 95 percent of prior year levels. The anticipated plateau in demand will stem primarily from subdued air travel and commutes, IHS stated. “The meteoric rise of world oil demand from the lowest lows of the COVID crash is going to come up just short of a full comeback, at least for now,” remarked Jim Burkhard, IHS Markit’s vice president and head of oil markets. “For demand to fully return, travel – especially air travel and commuting to work – needs to get back to normal. And that won’t happen until there is containment of the virus and effective vaccines.” IHS Markit also stated the number of air flights globally is approximately 30 percent lower than February levels – a marked improvement from the 78-percent shortfall in April. However, it observed that actual jet fuel consumption remains 50 percent lower than prior-year levels because the number of long-haul flights has not recovered to the extent of short-haul flights. Burkhard also pointed out the expected plateau in oil demand growth does not mean a return of the supply overhang that caused prices to plunge in April. He explained that production restraint by the OPEC+ alliance as well as lower projected U.S. output should allow markets to continue rebalancing.

Aramco Shakes Up Top Management -- Saudi Aramco reshuffled its senior management and created a division focused on “portfolio optimization,” as the world’s biggest oil producer adapts to low crude prices and seeks new ways to raise cash. The Saudi state energy company appointed senior vice president Abdulaziz Al Gudaimi to lead a new Corporate Development team that will “assess existing assets” and boost access to “growth markets,” it said in a statement on Sunday. He will report to Chief Executive Officer Amin Nasser and start on Sept. 13. “The organization will support rapid and effective decision-making on the company’s portfolio,” Aramco said. Aramco also named Nasir Al Naimi as acting head of the upstream business -- the exploration and production arm -- while Mohammed Al Qahtani will take over the downstream unit, according to people familiar with the situation, who asked not to be identified because they’re not authorized to speak to media. The downstream business involves refining, chemicals, pipelines and fuel retailing, and was previously led by Al Gudaimi. Aramo is adjusting to weaker energy prices as the coronavirus pandemic hammers the global economy, with Brent crude having fallen 32% this year to around $45 a barrel. The company is slashing investment so it can fulfill its pledge to pay a $75 billion dividend in 2020, even as its debt surges. Most of the dividend goes to the Saudi state, which needs the funds as it faces a major revenue squeeze. Earlier this year, Aramco hired advisers for a potential multi-billion dollar sale of a stake in its pipeline business. And Chairman Yasir Al-Rumayyan said in February there were non-core assets that could be monetized. In another potential sign of Aramco’s changing priorities, Bloomberg reported it suspended plans for a $10-billion refinery in China. The project was unveiled with great fanfare last year. Aramco said in a statement on Monday it was still working with its Chinese partners and committed to the Chinese market.

Pompeo in Middle East to cement Israel-Gulf alliance against Iran - US Secretary of State Mike Pompeo began a five-day visit to the Middle East in Israel before travelling on to Sudan, Bahrain and the United Arab Emirates (UAE). Pompeo met with Prime Minister Benjamin Netanyahu in Jerusalem on Monday, where, according to the US State Department, the two discussed “regional security issues related to Iran’s malicious influence, establishing and deepening Israel’s relationships in the region, as well as cooperation in protecting the US and Israeli economies from malign investors,” meaning China. In a brief press briefing after their meeting, Netanyahu praised Washington for its unilateral sanctions regime against Iran, which he wildly accused of “targeting countries with rockets, with terrorism, with pillage and plunder and murder— Murder—all over the Middle East.” He also boasted that the US would continue to “ensure Israel’s qualitative edge” in terms of military might in the Middle East, even as it steps up arms sales to the Persian Gulf oil sheikdoms. While Israel likes to promote itself as Washington’s key ally in the region, Pompeo made it very clear who was the master in this relationship and that China’s increasing trade and investment ties with Israel were unacceptable. The Secretary of State allowed that the two discussed “the challenge that the Chinese Communist Party presents to the entire world.”

Israel launches air attacks at Hezbollah posts on Lebanon border Israel said it carried out air attacks on Hezbollah observation posts in Lebanon on Wednesday after shots were fired from across the border towards its troops the previous evening. The country's military had said earlier that a "security incident" was unfolding in the vicinity of Manara near the UN-demarcated Blue Line border between the two nations. "During operational activity in northern Israel last night, shots were fired from Lebanon toward IDF troops," the Israeli army wrote on Twitter. "We responded with fire, & our aircraft struck Hezbollah observation posts near the border. This is a severe event & we remain ready to combat any threat to our borders." No Israeli soldiers were wounded in the firing, the military added. Soldiers deployed illumination flares, smoke shells and live fire after the shots from the Lebanese side of the frontier, it said. In a televised statement later on Wednesday, Hezbollah leader Hassan Nasrallah described the border flare-up as an "important and sensitive" matter but refused "for now" to further comment on it. Israel and Lebanon are still technically at war, and United Nations force UNIFIL is tasked with monitoring the ceasefire. Hours earlier, Lebanon had rejected an Israeli call to reform a UN peacekeeping force patrolling the border ahead of a UN Security Council vote to renew its mandate. The incident also comes after Hezbollah announced on Saturday that it had brought down an Israeli drone flying over the Blue Line. Last September, Hezbollah vowed to shoot down Israeli drones flying over Lebanon, following an incident a month earlier when two drones packed with explosives targeted the group's stronghold in south Beirut.

US stages military buildup to enforce deal to steal Syria’s oil - The US military over the past week has been sending convoys across the border from Iraq into Syria in what appears to be a significant escalation of the US military intervention in the war-ravaged country. According to sources in Syria, the convoys have come across at the al-Tanf crossing, where the US military maintains a garrison near the triple frontier between Iraq, Syria and Jordan. They have then traveled to US bases in the northeastern Syrian governorates of Deir ez-Zor and Al-Hasakah. Witnesses said that the convoys included tanks, armored vehicles, oil tankers and trucks bearing weapons and logistical equipment. The buildup of the US forces east of the Euphrates River follows the revelation that Washington has concocted a deal with a newly minted American oil company, Delta Crescent Energy LLC, which has been signed by the so-called Syrian Democratic Forces, the proxy ground troops employed by Washington in Syria, which consist mainly of the Syrian Kurdish YPG militia. Among the equipment being trucked in by the US military are believed to be components for two modular refineries to assist the company in exploiting and marketing Syrian oil. This agreement constitutes a war crime under the Geneva Conventions, which bar the exploitation of the natural resources of an occupied country for the benefit of the occupier. In the case of the US occupation of Syria, this constitutes an even more blatant act of international piracy, as the US military presence in the country has been authorized neither by the Syrian government nor the United Nations.

Libya calls for cease-fire following a failed rebel assault on Tripoli- Libya’s Turkish-backed government announced a cease-fire, months after inflicting a heavy defeat on Russian-supported military commander Khalifa Haftar, raising hopes for an end to a spiraling proxy war. The announcement on Friday and a reciprocal call for a truce from the head of the eastern-based legislature Aguileh Saleh come on the heels of United Nations-mediated talks in Geneva this week, and a phone call between the Russian and Turkish foreign ministers. Their countries have emerged as key power brokers in the North African nation that has the continent’s biggest oil reserves. Haftar, aided by Russian mercenaries, the United Arab Emirates and Egypt, had led a failed offensive to capture the capital, Tripoli, from the internationally recognized government. A Turkish military intervention helped rout his self-styled Libyan National Army earlier this year, and Haftar’s forces fell back to Sirte, the gateway to key oil assets. The truce announcement may bolster efforts to restart oil fields and terminals that have been closed under orders from Haftar since January, costing the country almost $8 billion in lost revenues. The National Oil Corp. welcomed calls from both sides to resume crude output, but said in a statement armed groups needed to leave oil installations before it could lift force majeure. The powerful interior minister in the Tripoli-based government, Fathi Bashagha, said in an interview that the cease-fire wouldn’t have happened without support from the U.S., Turkey, Egypt and Qatar. “It must be followed by a serious political dialogue that leads to a settlement,” he said. “Those steps must be taken quickly.” In some of the first international reaction, Egyptian President Abdel-Fattah El-Sisi welcomed the announcement as did the U.S. German Foreign Ministry spokeswoman Maria Adebahr said that from first reports it “could be an important step.” The UN, which also helped mediate the cease-fire, acclaimed the move. In his statement, Saleh, who has an uneasy alliance with Haftar, backed a proposal to resume oil production and freeze revenues in a foreign account held by the central bank while an arrangement is made to fairly distribute the money. But only Haftar can make that decision and he’s yet to comment on Friday’s developments. Earlier this week, a Haftar-aligned force said it would permit the export of stored fuel to make space for badly needed gas amid power shortages.

France & Italy Join Greece In Major Naval War Games 'Show Of Force' Against Turkey - President Recep Tayyip Erdogan has vowed to make "no concessions" with Greece amid the rapidly escalating eastern Mediterranian gas exploration dispute, declaring Turkey will "do whatever is necessary" to secure its territorial rights in Wednesday remarks commemorating an ancient battle which saw Seljuk Turks victorious during an engagement with the Byzantine empire in the 11th century. "We don't have our eye on someone else's territory, sovereignty and interests, but we will make no concessions on that which is ours," Erdogan said, while urging that Greece must "avoid wrongs that will be the path to ruin". He underscored "We will not compromise what is ours... We are determined to do whatever is necessary."This even as Macron's France has jumped fully onboard to defend Greece and Cyprus' cause in preventing breach of their maritime territory and Exclusive Economic Zones (EEZ).France has since confirmed deployment of its ‘Lafayette’ frigate and three Rafale fighter jets to Cyprus, also as what's being described as a "massive maritime exercise" is underway in the eastern Mediterranean on Wednesday involving Greece, Cyprus, France and Italy.Called the “Eunomia” military exercise, it's a clear and firm signal to Turkey meant to - as Greece's defense minister said, reinforce “the rule of law as part of the policy of de-escalating tensions.”Defense Minister Nikos Panagiotopoulos spelled out specifically that“the initiative… aims to demonstrate the commitment of the four European Mediterranean countries to the rule of law as part of the policy of de-escalating tensions.”The drills are set to run from Wednesday through Friday of this week.