the EIA reported 1,418,000 more barrels ​of oil production ​per day in May than was actually produced...

the EIA reported 1,418,000 more barrels ​of oil production ​per day in May than was actually produced; natural gas prices rose by most in any week since 2009; distillates supplies at ​a third straight 38 year high; oil rig count now lowest in 15 years

oil prices finished higher this week on falling US oil inventories, after​ first​ jumping when a fertilizer explosion wiped out the Lebanese port of Beruit...after falling 2.5% to $40.27 a barrel last week after the GDP report showed that the US economy had shrunk at a 32.9% rate in the second quarter, the contract price of US light sweet crude for September delivery fell early on Monday on oversupply concerns as OPEC and its allies rolled back their production cuts ​to begin August and a rise in worldwide COVID-19 cases pointed to a slower pick-up in fuel demand, but turned higher after reports indicated a pickup of manufacturing in the US and Europe in July and finished the session with a gain of 74 cents at $41.01 a barrel after an explosion at the port of Beirut stoked fears of instability in the region...oil prices rose another 69 cents to $41.70 a barrel on Tuesday on hopes that Congress would pass ​a ​new economic stimulus package and on signs that the US is making progress on curbing the coronavirus spread, as a tumbling US dollar swept commodity prices higher across the board...oil prices then rose to their highest since early March on Wednesday after U.S. crude inventories fell sharply and the dollar weakened further, with US crude pushing to as high as $43.52 a barrel before backing off and closing just 49 cents higher at $42.19 a barrel, as mounting coronavirus infections kept traders worried about the demand outlook...oil prices then turned lower on Thursday on concerns that fuel demand remained depressed by the economic slowdown due to the coronavirus pandemic and finished down 24 cents at $41.95 a barrel as "everyone was waiting for the coronavirus relief package to come through to give a bounce to the economy,"...oil prices then fell another 73 cents to $41.22 on Friday despite a stronger than expected US jobs report as US-China tenstions mounted after Trump imposed a sweeping ban on the popular Chinese consumer apps Tik Tok and WeChat and concerns persisted about the impact of the coronavirus on demand, but still finished the week 2.4% higher as traders remained upbeat in the face of a reduction in output cuts by major producers that took effect on August 1st.

meanwhile, natural gas prices rose by the most in any week since 2009 this week as the weather forecast turned hotter and prices in Europe rose, increasing demand for US exports...after falling 5.0% to $1.799 per mmBTU last week on forecasts for cooler weather and the end of a tropical storm threat, the contract price of natural gas for August delivery jumped 30.2 cents or nearly 17% to a near three-month high of $2.101 per mmBTU on Monday​,​ as demand for exports of liquefied natural gas (LNG) rose​,​ and ​as ​weather forecasters called for a return to hot weather and increased cooling demand next week....prices continued higher on Tuesday, rising 9.2 cents to $2.193 per mmBTU, the highest ​front month ​price since January, on forecasts for hot weather through late August after Hurricane​ ​​Isaias passed, keeping East Coast demand for air conditioning high...the rally stalled on Wednesday as natural gas prices slipped two-tenths of a cent, and prices then fell another 2.4 cents on Thursday after a​ larger-than-expected storage injection sapped the price momentum and reminded traders that US gas is still solidly oversupplied....but the rally in gas resumed Friday, as prices rose 7.3 cents, or 3.4%, to settle at $2.238 per mmBTU, as LNG exports increased again and forecasts continued calling for hot weather through late August, with prices thus finishing the week 24% higher at their highest close since Dec. 26th..

the natural gas storage report from the EIA for the week ending July 31st indicated that the quantity of natural gas held in underground storage in the US rose by 33 billion cubic feet to 3,274 billion cubic feet by the end of the week, which left our gas supplies 601 billion cubic feet, or 22.5% greater than the 2,673 billion cubic feet that were in storage on July 31st of last year, and 429 billion cubic feet, or 15.1% above the five-year average of 2,845 billion cubic feet of natural gas that have been in storage as of the 31st of July in recent years....the 33 billion cubic feet that were added to US natural gas storage this week was more than the average 27 billion cubic feet increase that was forecast by analysts polled by S&P Global Platts, but it was much less than the 58 billion cubic feet addition of natural gas to storage during the corresponding week of 2019, while it matched the average of 33 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 July 31st showed that even with a jump in our oil imports and a modest decrease in our oil exports, we still needed to withdraw oil from our stored supplies for the 4th time in the past nine weeks...our imports of crude oil rose by an average of 864,000 barrels per day to an average of 6.010,000 barrels per day, after falling by an average of 794,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 392,000 barrels per day to an average of 2,819,000 barrels per day during the week, which mean​t that our effective trade in oil worked out to a net import average of 3.191,000 barrels of per day during the week ending July 31st, 1,256,000 more 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 lower at 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production totaled an average of 14,191,000 barrels per day during this reporting week..

meanwhile, US oil refineries reported they were processing 14,637,000 barrels of crude per day during the week ending July 31st, 42,000 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 1,054,000 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 609,000 barrels per day more 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 (-609,000) 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....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....   

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,666,000 barrels per day last week, which was 18.1% less than the 6,918,000 barrel per day average that we were importing over the same four-week period last year....the 1,054,000 barrel per day net withdrawal from our total crude inventories came as 1,053,000 barrels per day were being pulled out of our commercially available stocks of crude oil and 1,000 barrels per day were being withdrawn from the oil supplies in our Strategic Petroleum Reserve....this week's crude oil production was reported to be 100,000 barrels per day lower at 11,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states fell by 100,000 barrels per day to 10,600,000 barrels per day, while a 16,000 barrel per day decrease in Alaska's oil production to 432,000 barrels per day was not enough to impact the rounded national total....last year's US crude oil production for the week ending August 2nd was rounded to 12,300,000 barrels per day, so this reporting week's rounded oil production figure was about 10.6% below that of a year ago, yet still 30.5% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

we have often cautioned that the weekly oil production figures we report on are preliminary, and that the final revised oil production figures for the current week will not be released until more than two months later...Friday of last week saw the release of just such a final figure for May's oil output, and it indicates that's the EIA had massively overestimated US oil production ​in their weekly reports ​during that month....to show you how bad the EIA's estimates were, we'll start by showing you a section of the weekly spreadsheet for US oil production, which is not corrected when the revised figures come out, and hence continues to show oil production as originally reported:

the above table excerpt was copied from the EIA's html spreadsheet for the Weekly U.S. Field Production of Crude Oil, which shows their weekly estimates of US crude oil output in thousands of barrels per day going back to 1983....to facilitate pointing out the figures we're talking about, we have highlighted the weekly May figures in a red box, although we'd also note that output for the last two days of May is included in the first figure on the June line...the figures we report weekly are taken from this table, and show that the EIA had reported oil output at 11,900,000 barrels per day during the week ending May 1st, 11,600,000 barrels per day during the week ending May 8th, 11,500,000 barrels per day during the week ending May 15th, 11,400,000 barrels per day during the week ending May 22nd and 11,200,000 barrels per day during the week ending May 29th...including production at 11,100,000 barrels per day for May 30th and 31st, that means that the EIA had reported average production of 11,419,000 barrels per day during the month of May...

now we'll include a section of the table showing confirmed monthly oil production, which was just updated with the May figures last Friday...

this table was copied from the EIA's html spreadsheet for U.S. Field Production of Crude Oil, and it shows the confirmed production figures for US crude oil in thousands of barrels per day going back to 1920...circled in red​, ​we have the final confirmed oil production figure for May, showing that US oil production in May was actually 10,001,000 barrels per day during the month...that means the EIA's weekly reports for oil production in May averaged 1,418,000 barrels per day above what was actually produced...it's now obvious that US oil producers throttled back oil production after pricing for May oil briefly slipped below $0, but that the EIAs weekly estimates failed to capture that...it's also obvious that this accounts for those large "unaccounted for crude oil" figures we had been noting on line 13 of the weekly U.S. Petroleum Balance Sheet​ during this period​, errors the EIA dismissed at the time ​by saying their averages were only off by around 1%...

​returning to this week's report, US oil refineries were operating at 79.6% of their capacity while using 14,637,000 barrels of crude per day during the week ending July 31st, up from 79.5% of capacity during the prior week, but excluding the 2005, 2008, and 2017 hurricane-related refinery interruptions, still one of the lowest refinery utilization rates of the last thirty years...hence, the 14,637,000 barrels per day of oil that were refined this week were still 17.7% fewer barrels than the 17,777,000 barrels of crude that were being processed daily during the week ending August 2nd, 2019, when US refineries were operating at 95.1% of capacity....

with the increase in the amount of oil being refined, gasoline output from our refineries was also higher, increasing by 142,000 barrels per day to 9,300,000 barrels per day during the week ending July 31st, after our refineries' gasoline output had increased by 79,000 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 10.8% less than the 10,421,000 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 126,000 barrels per day to 4,909,000 barrels per day, after our distillates output had decreased by 20,000 barrels per day over the prior week... after this week's increase in distillates output, our distillates' production was 7.1% less than the 5,286,000 barrels of distillates per day that were being produced during the week ending August 2nd, 2019....

with the increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the 2nd time in 5 weeks and for the 9th time in 27 weeks, rising by 419,000 barrels to 247,806,000 barrels during the week ending July 31st, after our gasoline supplies had increased by 654,000 barrels over the prior week...our gasoline supplies increased this week because the amount of gasoline supplied to US markets decreased by 192,000 barrels per day to 8,617,000 barrels per day, even as our imports of gasoline fell by 267,000 barrels per day to 657,000 barrels per day and as our exports of gasoline rose by 329,000 barrels per day to 770,000 barrels per day....after this week's inventory increase, our gasoline supplies were 5.4% higher than last August 2nd's gasoline inventories of 235,172,000 barrels, and roughly 8% above the five year average of our gasoline supplies for this time of the year...  

similarly, with the increase in our distillates production, our supplies of distillate fuels increased for the fifteenth time in 29 weeks and for the 20th time in 44 weeks, rising by 1,591,000 barrels to another 38 year high of 179,977,000 barrels during the week ending July 31st, after our distillates supplies had increased by 503,000 barrels over the prior week....our distillates supplies rose again this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 65,000 barrels per day to 3,700,000 barrels per day, because our exports of distillates fell by 111,000 barrels per day to 1,113,000 barrels per day while our imports of distillates fell by 17,000 barrels per day to 131,000 barrels per day...after this week's inventory increase, our distillate supplies at the end of the week were 30.9% above the 137,451,000 barrels of distillates that we had in storage on August 2nd, 2019, and about 27% above the five year average of distillates stocks for this time of the year...

finally, with the ​jump in our oil imports and the ​decrease in ​our ​oil ​exports, our commercial supplies of crude oil in storage fell for the 7th time in twenty-nine weeks and for the 15th time in the past year, decreasing by 7,373,000 barrels, from 525,969,000 barrels on July 24th to 518,596,000 barrels on July 31st...but even after that decrease, our our commercial crude oil inventories were still around 16% above the five-year average of crude oil supplies for this time of year, and around 54% above the prior 5 year (2010 - 2014) average of our crude oil stocks for the fourth weekend of July, 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 last summer, after generally falling until then through most of the prior year and a half, our crude oil supplies as of July 31st were 18.2% above the 438,930,000 barrels of oil we had in commercial storage on August 2nd of 2019, 27.3% more than the 407,389,000 barrels of oil that we had in storage on August 3rd of 2018, and 9.1% above the 475,437,000 barrels of oil we had in commercial storage on August 4th of 2017...   

This Week's Rig Count

after being unchanged during the week ending July 31st, the US rig count was down for the 21st time in 22 weeks during the week ending August 7th, and is now down by 68.9% over that twenty-two week period....Baker Hughes reported that the total count of rotary rigs running in the US fell by 4 rigs to 247 rigs this past week, which was the fewest active rigs in Baker Hughes records going back to 1940 and 157 fewer rigs than the all time low prior to this year...it was also down by 687 rigs from the 934 rigs that were in use as of the August 9th report of 2019, and 1,682 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 ​4 rig​s​ to 176 oil rigs this week, after decreasing by 1 oil rig the prior week, leading to the lowest oil rig count since July 15th, 2005... that was also 588 fewer oil rigs than were running a year ago, and less than a ninth of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations was unchanged at 69 natural gas rigs, which was still down by 100 natural gas rigs from the 169 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 was just one such "miscellaneous" rig deployed...

the Gulf of Mexico rig count was unchanged at 12 rigs this week, with 9 of those rigs drilling for oil in Louisiana's offshore waters and three drilling for oil offshore from Texas...that was 11 fewer rigs than the 23 rigs drilling in the Gulf a year ago, when all 23 Gulf rigs were drilling offshore from Louisiana...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 13 from the national offshore rig count of 25 a year ago

the count of active horizontal drilling rigs was down by 5 to 211 horizontal rigs this week, which was the least horizontal rigs deployed since November 18, 2005, and also 606 fewer horizontal rigs than the 817 horizontal rigs that were in use in the US on August 9th 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 vertical rig count was down by one to 12 vertical rigs this week, and those were also down by 40 from the 52 vertical rigs that were operating during the same week of last year....on the other hand, the directional rig count was up by 2 to 24 directional rigs this week, but those were still down by 41 from the 65 directional rigs that were in use on August 9th 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 7th, the second column shows the change in the number of working rigs between last week's count (July 31st) and this week's (August 7th) count, the third column shows last week's July 31st active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 9th of August, 2019...    

as you can see, there were only a few changes in drilling activity this week, with just a handful of rig removals and just a couple rig additions, which suggests that prices are currently high enough that drillers are no longer ​hurrying 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 one rig was shut down in Texas Oil District 7C, which corresponds to the southern Permian Midland, while rigs were added in both Texas Oil District 8, which is the core Permain Delaware, and Texas Oil District 8A, or the northern Permian Midland....since the Texas Permian count has thus increased by 1 while the national Permian basin rig count was down by 2 rigs, that strongly suggests that all 3 rigs that were removed from New Mexico would have been drilling in the western Permian Delaware ​up ​ until this week, to account for the national decrease...elsewhere in Texas, there was also an oil rig removed from Texas Oil District 1, which would correspond to the one rig decrease in the Eagle Ford shale that we see above...that still appears to leave us with one oil rig removal unaccounted for, but what we had overlooked is that of the 2 rig start-ups in the Texas Permian, one was drilling for natural gas - the first Permain basin ​natural ​gas rig ​deployment ​this year...that Permian gas rig startup thus masked the ​simultaneous ​shut down of an additional Permian basin oil rig, resulting in our 4 rig decrease nationally...meanwhile, the national natural gas rig count ​still ​remained unchanged because a natural gas rig was shut down in a Mississippi basin not tracked separately by Baker Hughes, which thus doesn't appear here...that shut down left no rigs remaining in Mississippi, which ​was down from the six rigs that were deployed in the state a year ago...

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Resident wants to inform others of fracking issues - The Columbus Dispatch -- Residents of Southeastern Ohio need to be aware of a recent announcement made by Pennsylvania Attorney General Josh Shapiro on the hazards of the oil and gas industry. He reported that a two-year investigation by the Grand Jury uncovered the failure to protect Pennsylvanians from the inherent risks of the fracking industry. Testimonies were given to the jury from residents living near oil and gas drilling sites. They shared their concerns over poor air quality leading to negative health impacts. Reports were given of water contamination which resulted in breathing problems when showering. Parents spoke about their children having nose bleeds and other ailments. Livestock had become sick, infertile and died, according to testimony given by farmers living near fracking operations.Pennsylvania has more stringent regulations of the oil and gas industry than Ohio. In fact, 1,500 fracking wells had been drilled in Ohio before a single regulation had even been written. Ohio is still lacking in the necessary oversight of the fracking industry, with critical legislation yet to be written. As an informed and concerned resident of Belmont County, I am pleading with fellow Ohioans to stand with me and demand that Ohio Attorney General David Yost and Governor Mike DeWine halt any further permitting for the oil and gas industry until a public health and environmental impact study is conducted in Ohio on the risks of fracking. Just as in Pennsylvania, the State of Ohio is already failing to protect communities from air and water pollution from fracking, and now the Ohio EPA has granted permits for, and is promoting cracking to make plastic, which will pose additional threats to our health due to air and water pollution.  Belmont County is the most heavily fracked county in the state, with over 675 wells permitted and 500 producing. Alarmingly, 78 of those wells are located within a five-mile radius of my home. There are four well sites, one within a mile and the remaining three within a mile and a half, that have been in significant violation since 2016. Investigations revealed that no enforcement action had been taken by the Ohio Environmental Protection Agency (OEPA), or remediation of any kind been made by Gulfport, the fracking company in violation. There are a total of 16 Gulfport well pads in our area that have been in violation since 2016. My family and my neighbors have experienced negative health impacts from fracking wells and other infrastructure sites located nearby including, pipelines, compressor and transfer stations.

BARGING Oil and Gas WASTE on the OHIO RIVER is Too Much RISK - A new threat recently emerged for communities along the Ohio River.Three barge docks are proposed to be built along the riverto transport oil and gas waste from horizontal and vertical fracking operations. The projects, if approved, could result in the first barges carrying briny fracking wastes on the Ohio River.The terminals would be developed by 4K Industrial Frac Water Supply and Recycling Technologies in Martins Ferry, DeepRock Disposal Solutions about 61 miles downstream at Marietta, and by Fountain Quail Energy Services about 38 miles downstream from Marietta in Meigs County, Ohio.According to Dr. Randi Pokladnik, a retired research chemist and volunteer with the Ohio Valley Environmental Coalition (OVEC), these operations pose a substantial risk for the Ohio River — the primarily tap water source for approximately five million people.“Citizens have every right to be concerned about yet another threat to their drinking water,” says Dr. Pokladnik. “A quick glance of the Environmental Working Group’s (EWG) data collected from public drinking water suppliers along the Ohio River reveals that all public drinking water sources along the river have pollutants that in many cases exceed the EWG health standards and in some cases exceed federal standards.”Based on current regulations, it is unclear what agencies would be tasked with responding to potential spills as a result of these new barging operations, and whether or not those agencies would be able to work together successfully to address the environmental and public health hazards associated with these pollutants.Even worse, many public water treatment facilities are not equipped to filter out the contaminants if this conventional and unconventional oil and gas waste is spilled in the Ohio River. For example, some contaminants, such as radioactive chemicals in water, can only be removed using very specific techniques that are not currently utilized by most public water treatment facilities in our region.In response to requests and comments from concerned citizens, the U.S. Army Corps of Engineers has scheduled a virtual public hearing on Friday, August 7, for the DeepRock barge dock near Marietta, Ohio.

Utica Shale well activity as of Aug. 1 - Six horizontal permits were issued during the week that ended Aug. 1, and 6 rigs were operating in the Utica Shale.

• DRILLED: 157 (151 as of July 18)
• DRILLING: 99 (100)
• PERMITTED: 507 (498)
• PRODUCING: 2,523 (2,523)
• TOTAL: 3,286 (3,272)

TOP  COUNTIES BY NUMBER OF PERMITS:

• 1. BELMONT: 697 (691 as of July 18)
• 3. HARRISON: 532 (524)
• 2. CARROLL: 530 (530)
• 4. MONROE: 438 (438)

Gulfport updates Utica Shale plans - Gulfport Energy continues to drill Utica Shale wells as the company positions its natural gas production to peak during the colder months. The Oklahoma City-based company previously announced it would curtail production until later this year and early 2021, with the hope that natural gas prices, which are at 25-year lows, would eventually rise. Gulfport plans to complete seven more Utica wells during the second half of this year, and the company said it would run one drilling rig in the Utica through the third quarter. The company has drilled more than 400 wells in Ohio’s Utica Shale, the most of any publicly traded company. “While there is little low-hanging fruit remaining, the team continues to gain efficiencies through the drill bit and deliver on expectations quarter after quarter,” Gulfport President and CEO David Wood said during a presentation Wednesday. The company said it still expects annual production to fall between 1 billion and 1.075 billion cubic feet equivalent per day.During the second quarter, Gulfport’s production averaged 1.03 billion cubic feet equivalent per day, comprising 91 percent natural gas, 6 percent natural gas liquids and 3 percent oil.Three-quarters of the production was in the Utica Shale, where Gulfport drilled five wells and made 10 wells ready for production during the quarter. Gulfport lost $561.1 million, or $3.51 per diluted share, during the second quarter.

Gulfport Keeping Utica Natural Gas Curtailed to Await Better Prices - Gulfport Energy Corp. is still curtailing Appalachian natural gas production in anticipation of better prices later this year and into 2021. Given an uncertain economic outlook, weak energy demand and a slight rebound in associated gas volumes, Gulfport remains “cautious near-term on natural gas pricing,” said CEO David Wood during a call to discuss second quarter results. The company made the decision during the second quarter to shut-in some Utica Shale gas production along with vertical oil wells in the South Central Oklahoma Oil Province (SCOOP) because of low liquids prices. Nearly all of the SCOOP wells have returned to production. “Based on current natural gas pricing, we plan to continue executing on our curtailment strategy, shaping our production profile to peak in the colder months of the year,” Wood said of the Utica curtailments. “This is in line with our updated guidance provided in June.” The independent also plans to complete another seven gross Utica wells in the second half of the year, up from a plan announced in June to complete three. Through the first six months of the year, 13 net operated wells had been completed in the Utica with 3.8 net operated wells in the SCOOP. “This additional activity provides incremental production late this year and into early 2021 in the anticipation of higher prices during the winter months,” management said. The company reaffirmed its 2020 full-year net production at 1.0-1.075 Bcfe/d. Management also said drilling and completion efficiencies would likely help spending come in at the low end of its previously announced $285-310 million capital expenditure budget. Gulfport reported a decline in average realized prices during the second quarter, including transportation costs and cash-settled derivatives, of $2.46/MMcfe, compared with $2.52 in the year-ago period. Revenue also fell year/year to $132.4 million from $459 million. 

Ohio State students, faculty testify for, against on-campus natural gas plant - OSU - The Lantern  -Several members of the Ohio State community testified at a virtual public hearing Tuesday night to discuss the university’s proposed $278 million plan to construct a combined heat and power plant on campus, made possible by the university’s partnership with energy companies.The forum — the second public hearing hosted this summer by the Ohio Power Siting Board — included testimonies from nearly 50 individuals, the majority of whom cited the detrimental health and climate risks of the proposal. Others advocated for the adoption of the proposal, referencing potential job growth and a reported decline in carbon emissions if the plant is constructed.According to Ohio State’s proposal application, the combined heat and power plant will produce thermal energy powered by natural gas, requiring the use of fracking, a process of drilling into the earth to extract natural gas, raising many environmental concerns from members of the Ohio State community.Ohio State first submitted an initial application for the construction of the plant to the Ohio Power Siting Board November 2019, and the Sierra Club, an environmental advocacy organization, submitted a petition to intervene in the case in March 2020. The proposed facility would include a main building standing 60 feet tall, cooling towers extending 27 feet off the roof and two 125-foot steel stacks, according to the Ohio Power Siting Board website. The plant would be located on a 1.18 acre parcel of university-owned land on West Campus and serve as the main source of electricity and heating for the Columbus campus. 

Pennsylvania Regulators Won't Say Where 66% of Landfill Leachate w/ Radioactive Material From Fracking is Going..."It's Private" - Janice Blanock talks to Public Herald about losing her son Luke Blanock to Ewing Sarcoma in 2016. PA DEP’s TENORM data could play a critical role in helping the Blanock’s discover whether oil and gas had anything to do with what happened to Luke. © Nina Berman for Public Herald (podcast & story) In Pennsylvania, the final destination of 66 percent of liquid waste from 30 municipal landfills accepting fracking’s oil and gas waste remains unknown. Oil and gas waste from fracking contains high concentrations of Technically Enhanced Naturally Occurring Radioactive Materials (TENORM), and wherever this radioactive TENORM waste is stored, rain carries water-soluble radionuclides such as Radium-226 through the landfill to create what’s known as leachate – the landfill’s liquid waste. This TENORM-laden leachate is commonly sent to Waste Water Treatment Plants (WWTPs) that are not equipped to remove it before it’s dumped into rivers.If you’re talking about fracking, you’re talking about TENORM, which is present throughout the process in waste streams like pipe scale, sludge, drill cuttings, wastewater, and contaminated equipment. What starts as Naturally Occurring Radioactive Material (NORM) contained deep beneath the Earth’s surface is brought to the surface by fracking and concentrated into TENORM.Public Herald has made several attempts with the Pennsylvania Department of Environmental Protection (DEP) to verify the destination of landfill leachate containing TENORM, but DEP stopped responding to our inquiries after we published the August 2019 statewide report on how fracking’s radioactive waste enters public waters. Our team has since been forced to rely on delayed Right-to-Know Law requests and DEP’s limited online data.From the limited data DEP provided to Public Herald in 2019, and from what our team in 2020 has discovered, we now know and mapped the whereabouts of 34 percent of leachate from a limited number of landfills accepting fracking’s oil and gas waste in Pennsylvania.

Shell completes Appalachia shale gas exit - Royal Dutch Shell has completed the sale of its U.S. Appalachia assets to National Fuel, exiting its shale gas position in the Marcellus and Utica plays. The $541 million cash transaction was completed on July 31 and has an effective date of January 1, 2020. The assets were sold to Seneca Resources Company and NFG Midstream Covington – both subsidiaries of National Gas Fuel Gas Company (NFG). The Appalachian assets, located mostly in northern and western Pennsylvania, include 350 active wells in the Marcellus and Utica shale plays. Together, they produce roughly 250 million cubic feet per day of dry gas, Kallanish Energy notes. Shell’s Upstream director Wael Sawan had previously said the divestment in Appalachia was consistent with the company’s “desire to focus our Shales portfolio.” Shell said it continues to have “attractive opportunities” in its unconventional portfolio inside and outside the U.S., focusing on driving down costs while increasing efficiency. The deal also included the transfer of Shell owned and operated midstream infrastructure, but doesn’t impact Shell’s commitment to Pennsylvania and its planned petchem complex.

Cost Of Shale Gas Drilling Permit In Pennsylvania Jumps 150% - Pennsylvania more than doubled as of August 1 the fee for all unconventional well permit applications, while shale companies call on state officials to find other mechanisms to fund the oil and gas program of the Pennsylvania Department of Environmental Protection.The fee for all unconventional well permit applications is now $12,500—up from US$5,000 for nonvertical unconventional wells and US$4,200 for vertical unconventional wells. The increase is designed “to sustain the Program at current staff levels and operating costs,” according to the new rule. However, the rule and the decision to hike the fees by 150 percent were made on the basis of well permit analyses in the period 2014 through 2017, and were outdated even before the current crisis in the oil and gas industry, Laura Legere of Pittsburg Post-Gazette writes.The state reviews the fees every three years, but Neil Shader, spokesman of the Department of Environmental Protection, told the Pittsburg Post-Gazette that “we will revisit the fee schedule accordingly.”The Department of Environmental Protection of Pennsylvania – the state home to parts of the Marcellus and Utica shale gas basins – funds a large part of its oil and gas program with the fees for well permit applications.The Marcellus Shale Coalition says that the fees for well permit applications in Pennsylvania are now the highest in the United States and called for the Department of Environmental Protection and the administration to “continue to strongly urge DEP and the administration to pursue a more sustainable and equitable funding mechanism for its oil and gas program,” as carried by Pittsburg Post-Gazette. The department has issued just 523 permits to companies in the first half this year, the lowest number of permits since 1993, as the low natural gas prices and the pandemic-driven demand crash discouraged firms from rushing to secure well permits.Gas production in the Appalachia shale basin is expected to drop by 210 million cubic feet/day between July and August, to 32.713 billion cubic feet/day this month, according to EIA’s latest Drilling Productivity Report.

US FERC releases favorable environmental review for PennEast Pipeline | S&P Global Platts — In a step forward for the stalled PennEast Pipeline project, staff of the Federal Energy Regulatory Commission has found the developers' new plan to divide the project into two phases would not constitute a major federal action significantly affecting the environment. The roughly 118-mile, 1.1 Bcf/d natural gas pipeline project, originally intended to link Marcellus Shale dry gas production with markets in Pennsylvania, New Jersey and New York, has faced regulatory hurdles in New Jersey, and an appeals court ruling thwarting its ability to condemn lands in which the state held an interest. To help the project advance in spite of those obstacles, PennEast proposed to amend the authorization and begin with a first phase, a 68-mile segment in Pennsylvania with the capacity to carry 695,000 Dt/d. A second phase segment, mostly in New Jersey, would enable the full capacity. The commission's plans to conduct an environmental assessment by July 10 focused on the limited new facilities required to build the project in two phases. It drew pushback from those calling for a more extensive review or more explanation of the need for each phase. After the July 10 target date for the EA passed, PennEast recently argued that prompt release was critical for the project to meet shippers' needs for firm natural gas transportation service on the Phase I facilities by the winter 2012-22 hearing season. Commission staff acted Aug. 3, releasing a favorable report for the project, mostly focused on the impacts of building a new above-ground facility within a 2.1-acre site — the Church Road interconnects in Bethlehem Township, Pennsylvania. The EA also considered effects of phasing in the pipeline on three areas, air quality, socioeconomics and cumulative impacts. Tony Cox, chair of the PennEast Pipeline board of managers, welcomed the action as "another boost" for the project, which he described as "necessary to meet the vital and growing demand in the region for clean, low-cost, reliable natural gas to serve homes and businesses." The staff environmental report, however, drew quick criticism from some that have opposed the project and FERC's regulation of it. "This is a new low in the commission's consideration, or lack thereof, of this project," said Jennifer Danis, senior fellow of the Sabine Center for Climate Change Law. "FERC asserts that 'the project' won't impact waters of the US because it is only about building the Church Street interconnect — while paradoxically defining project purpose as building both Phase 1 and Phase 2." Her group and others challenging PennEast contend that FERC lacks jurisdiction to consider the proposal as a certificate amendment since the original certificate is already on appeal and jurisdiction already has shifted to the appeals court.

Cuomo signs hazardous waste bill, closing loophole allowing import of gas drilling waste from Pennsylvania - FingerLakes1.com  -Gov. Andrew Cuomo signed a bill Monday that makes New York the first state in the nation to apply hazardous waste laws to potentially toxic oil and gas byproducts.The action, coming just months after the state codified into law its 2014 policy ban on fracking for shale, solidifies the governor’s legacy of applying public health standards to a powerful and often weakly regulated industry.The bill’s legislative sponsors and leading environmental groups praised the governor for closing a “dangerous loophole” in the way oil and gas wastes are regulated.However, throughout Cuomo’s near-decade in office, oil and gas drilling wastes from hundreds of fracked Pennsylvania wells have been dumped in upstate New York landfills and spread on the state’s roadways.Dr. David Carpenter, director of the Institute for Health and the Environment at the University of Albany, said in anaffidavit: “The net effect of New York accepting drill cuttings and de-watered mud from Pennsylvania fracking sites will be that New Yorkers will have an increased risk of cancer, especially lung and gastrointestinal cancers, and increase of birth defects coming from DNA damage and an increased risk of shortened life span.”Anthony Ingraffea, a retired professor of rock mechanics at Cornell University, said in a recent interview: “Perhaps we’ll never know what the environmental and health impacts of all that (fracking waste) currently in New York will be. They’ve made our bed, and now we have to lie in it.”Since January 2011, New York landfills have imported more than 638 thousand tons of waste from Marcellus shale gas wells in Pennsylvania, according to records that state maintains. (New York doesn’t maintain its own statistics). Those landfills and unrelated transfer stations have imported more than four thousand barrels of liquid shale drilling wastes. (A graphic below by Melissa Troutman of Earthworks uses Pennsylvania data to show NY imports of Pennsylvania’s shale waste from 2011 to 2019.)

Cuomo bans hydrofracking waste from coming to New York - In what environmentalists are hailing as the closing of a loophole and a blow to the hydrofracking industry in neighboring Pennsylvania, Gov. Andrew Cuomo on Monday signed a bill banning the importation of hazardous fracking waste into New York.The loophole, they say, had long existed because of the prior definition of hazardous waste that excluded substances like drilling fluids and other material used in exploration and extraction of oil or natural gas.Some of those materials, including rock that environmentalists say contains low-levels of radiation, has been taken to a handful of western New York landfills over the years. Additionally, at least one western New York school used fracking fluid, as a brine, or salty water to help melt ice on its walkways and parking lots. The worry there is that the fluid would run off into the water supply. “New York has led the nation in banning fracking, and we are grateful to Governor Andrew Cuomo for ensuring that fracking waste will no longer contaminate New York’s land and water,” Maureen Cunningham, senior director for clean water at Environmental Advocates NY said of the signing. “Having banned fracking in New York, Cuomo has taken another important step towards making New York frack-free,” added Eric Weltman, of Food and Water Watch. While it has led to an energy boom in places like Pennsylvania, Ohio and Texas, hydrofracking is controversial due to worries about water pollution. Those concerned about climate change also view it as enabling ongoing use of carbon-laden fossil fuels instead of moving toward renewable energy. The environmental group Earthworks in 2019 produced a report showing how waste generated during the fracking exploration process had been placed in landfills in Chemung, Steuben and Allegany counties which are near the Pennsylvania border.

Liberty Utilities Drops Plans For Major Gas Pipeline In N.H. | New Hampshire Public Radio --  Liberty Utilities says it will not build the proposed Granite Bridge natural gas pipeline in Southern New Hampshire, after finding a cheaper way to serve new customers by using existing infrastructure. The company told the state of the change in plans in a Public Utilities Commission filing Friday afternoon. The $340-million pipeline plan dated to late 2017 and drew fierce opposition from climate change activists, who oppose any expansion of fossil fuel infrastructure in the region. Natural gas emits less greenhouse gas than coal or oil, but is still a major driver of climate change. Further dependence on gas, through the pipeline plan and still through Liberty's new alternative, has emerged as a sticking point in the Democratic primary race for governor. Granite Bridge had bipartisan support in the state legislature, including from Senate Democrats who saw a net benefit in extending gas service to residents and businesses who currently rely on expensive, less climate-friendly heating oil. Liberty's New Hampshire president Sue Fleck called that "critical" in a statement Friday -- "not only for New Hampshire’s economy and for families’ pocketbooks, but also to enable the deepest, fastest, and most achievable pathway for decarbonizing our economy and taking action on climate change." Serving new customers was Liberty's original goal in building Granite Bridge, which would have run about 27 miles along Route 101 between Stratham and Manchester -- branching off the Concord Lateral, an existing, mainline gas artery owned by Texas-based Kinder Morgan. Liberty initially said it would be too expensive to upgrade that larger pipeline to suit their needs. But last fall, PUC staff recommended they revisit that option before Granite Bridge could be approved. "Natural gas, sold responsibly as a rate-regulated commodity, is compatible with bold climate action," wrote state utility consumer advocate Don Kreis in his column Friday for InDepthNH. "But Granite Bridge was simply too expensive, and too reliant on dreamy estimates of future customer growth, projected too many years into the future."

Mountain Valley, DEQ reach agreement on environmental fines - The latest problems with muddy runoff streaming from construction sites along the Mountain Valley Pipeline’s route through Southwest Virginia have been resolved, with the company paying $58,000 in fines. The agreement, reached after several months of negotiations with the Department of Environmental Quality, marks the troubled pipeline’s latest penalty for violating erosion and sediment control regulations. Mountain Valley had balked at DEQ’s initial demand for $86,000, which was made after the joint venture of five energy companies building the natural gas pipeline had paid $2.15 million to settle a lawsuit brought by state environmental regulators. The lawsuit filed in 2018 covered violations during the first year and a half of construction; the latest fines were for problems that persisted even after Mountain Valley was ordered to stop work last fall. DEQ initially had cited Mountain Valley for 29 violations from September through March 10, but agreed to drop seven as part of the negotiation process, according to Ann Regn, a spokeswoman for the agency. Negotiations were allowed by a consent decree that settled the 2018 lawsuit, which claimed more than 300 infractions on Mountain Valley’s path through the counties of Giles, Craig, Montgomery, Roanoke, Franklin and Pittsylvania. Also included in the settlement were more intensive, court-ordered environmental inspections, and tougher penalties for additional violations. The fines imposed so far are a paltry sum when compared to the project’s $5.7 billion budget, pipeline opponents have said in calling for tougher enforcement by state and federal officials. “How does MVP continue to rack up DEQ violations when they are supposedly doing repair work under court monitoring and supervision under a court order from a Henrico County judge?” Bonnie Law of Preserve Franklin County said in a statement released by opponents. Critics say erosion from work sites has contaminated nearby streams, which have carried harmful sedimentation as far as the Roanoke River, the source of drinking water for thousands.

Equitrans confirms early 2021 startup for Mountain Valley natural gas pipeline( Reuters) - U.S. pipeline company Equitrans Midstream Corp said on Tuesday it still expects to complete the $5.4 billion Mountain Valley natural gas pipeline from West Virginia to Virginia in early 2021. Mountain Valley is one of several U.S. oil and gas pipelines delayed by regulatory and legal fights with environmental and local groups that found problems with federal permits issued by the Trump administration. Other projects similarly held up include TC Energy Corp's $8 billion Keystone XL crude pipeline and Energy Transfer LP's Dakota Access crude pipeline, which are still involved in court battles. Equitrans said in its second-quarter earnings statement that the project's costs could rise by 5% to around $5.7 billion if it needs "to adapt the construction plan for potential complex judicial decisions and regulatory changes." When Equitrans started construction in February 2018, it estimated Mountain Valley would cost about $3.5 billion and be completed by the end of 2018. But successful legal challenges to federal permits resulted in lengthy delays and higher costs for Mountain Valley. Equitrans said it expects to receive new approvals soon from the U.S. Fish and Wildlife Service, the U.S. Federal Energy Regulatory Commission and the U.S. Army Corps of Engineers that will enable it to finish building the last 8% of the project. The 303-mile (488-km) pipeline is designed to deliver 2 billion cubic feet per day from the Marcellus and Utica shale in Pennsylvania, Ohio and West Virginia to consumers in the Mid Atlantic and Southeast. Mountain Valley is owned by units of Equitrans, NextEra Energy Inc , Consolidated Edison Inc , AltaGas Ltd and RGC Resources Inc .

22 Virginia legislators urge Gov. Northam and health officials to suspend construction on Mountain Valley Pipeline— Twenty-two Virginia legislators jointly signed a letter urging Gov. Ralph Northam (D-Va) and health officials to halt construction on the Mountain Valley Pipeline during the coronavirus pandemic.This comes after Mountain Valley Pipeline announced it intends to bring more than 4,000 workers to a 30 mile stretch of Southwest Virginia and across the border in West Virginia to work on the pipeline.“An influx of thousands of workers for a project whose completion will not benefit Virginians will needlessly risk accelerating the pandemic in an area of the Commonwealth with already limited health care resources,” said Delegate Chris Hurst, whose district includes the route of the proposed pipeline.Virginia Clinicians for Climate Action observed the counties where the MVP intends to resume work have limited access to Intensive Care Unit beds and a population vulnerable to COVID-19 due to higher concentrations of senior citizens, people in poverty, and people with COPD and cardiovascular disease.This is not the first time MVP has had to put a hold on construction. The full letter can be read below:

Virginia senators again push for pipeline review reforms - Virginia’s Democratic Sens. Mark Warner and Tim Kaine are again proposing reforms to the federal pipeline review process in response to public complaints surrounding the now-cancelled Atlantic Coast Pipeline and the still active Mountain Valley Pipeline through Virginia. Legislation put forward by the senators intends “to strengthen the public’s ability to evaluate the impacts of natural gas pipelines being considered by the Federal Energy Regulatory Commission” and “make it easier for the public to offer input and clarify the circumstances under which eminent domain should and should not be used,” a joint statement from Warner and Kaine said. Several of the suggestions — such as requiring an overall environmental impact evaluation to be done if two pipelines are proposed to be built within a year and 100 miles of each other and mandating that public comment meetings be held in every locality through which a pipeline crosses — also appeared in an earlier version of the legislation that was put forward in 2017 by Warner and Kaine in the Senate and Rep. Morgan Griffith, R-Salem, in the House. That legislation was never voted on. Griffith subsequently introduced another version of the law in January 2019.  The legislation put forward Thursday may have a smoother road even in the GOP-controlled Senate, however, given changing attitudes toward natural gas pipelines. A Kaine spokesperson told the Mercury the senators believe “the added provisions in response to recent developments over pipeline litigation will make the bill even more attractive to other members.”Among the new provisions are those preventing pipelines from exercising eminent domain until the project has received all needed permits and FERC has issued rulings on landowner challenges. The latter follows a request in July by Republican FERC Commissioner Neil Chatterjee, who was mulling a run for Virginia governor this spring, and Democratic Commissioner Richard Glick for Congress to pass legislation on FERC rehearing procedures.“We believe that any such legislation should make clear that, while rehearing requests are pending, the commission should be prohibited from issuing a notice to proceed with construction and no entity should be able to begin eminent domain proceedings involving the projects,” the commissioners wrote.

Dominion CEO to Step Down as Utility Marks Massive Loss From Pipeline Cancellation  - Dominion Energy is replacing its CEO as part of an executive shakeup accompanying both the Virginia utility’s major shift away from natural gas and toward a renewable energy future, and the hefty financial penalty it incurred for its cancellation of the Atlantic Coast Pipeline project. Dominion announced Friday that CEO Tom Farrell would step down in October and be replaced by Robert Blue, now executive vice president and co-chief operating officer. Farrell will continue to serve as executive chair and chairman of the board of directors, while current co-COO Diane Leopold will serve as the sole COO. The executive shifts were announced on the same day that Dominion reported a second-quarter 2020 GAAP unaudited net loss of $1.2 billion, or $1.41 per share, compared to a gain of $54 million or 5 cents per share for the same quarter in 2019. The loss was largely driven by a $2.8 billion charge related to its cancellation of the Atlantic Coast Pipeline project earlier this month. On a non-GAAP basis excluding those one-time charges, Dominion reported second-quarter operating earnings of $706 million, or 82 cents per share, compared to operating earnings of $619 million, or 77 cents per share, for the same quarter last year. Farrell, who turned 65 in December, said in Friday’s earnings call that Dominion’s new executive shifts are part of a long-running plan to accommodate his retirement. “As executive chair, I will continue to represent the company...[and] will continue to be focused on developing our strategic plan and Dominion’s leadership in the new clean energy economy.” Dominion and partner Duke Energy canceled the Atlantic Coast Pipeline earlier this month, citing costs that have increased from an initial estimate of $5 billion to as much as $8 billion, as well as legal challenges from landowners and environmental groups. On the same day, Dominion announced it was selling its multistate natural-gas pipeline and storage business to Warren Buffett’s Berkshire Hathaway for about $9.7 billion.

Dominion South rally unlikely to fuel Appalachian production growth in 2020 — Rallying forward gas prices at Dominion South are making for a bullish market outlook in Appalachia this winter – a scenario that's often fueled regional production growth in the past. Following pivotal changes to the industry this year, though, most producers are likely to keep output flat heading into 2021. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up On Aug. 6, Dominion forward strip prices for first-quarter 2021 settled at an average $2.61/MMBtu, or their highest in three months, S&P Global Platts' most recently published M2MS data shows. In early May, as US production was nearing its pandemic-fueled bottom near 85 Bcf/d, forwards traders became increasingly bullish on the value of supply from dry basins like the Marcellus and the Utica, lifting winter gas prices at Dominion South in the mid-$2.60s/MMBtu. As the recovery in US gas production stumbles this month, a similar market narrative is gripping the industry. In associated basins like the Permian and the Bakken, the restoration of previously curtailed wells appears to have peaked, leaving US output lurching around 87 Bcf/d. With Appalachia's wellhead gas prices now headed north of $2, an average unhedged producer in the Marcellus or Utica Shale could be operating above breakeven level by autumn, data compiled by S&P Global Platts Analytics shows. For some producers, it could be enough to tempt fate and resume output growth. According to the chief executive of at least one mid-sized Appalachian producer, though, that outcome is unlikely to play out in 2020, following recent, transformational industry developments this year. After years of overspending and debt leveraging, many Appalachian producers are now finding their back against the wall with the investment community, says Rusty Hutson, CEO of Diversified Gas & Oil. "The equity markets have said enough is enough," Hutson said. "In the debt markets, it's extremely hard to refinance – that's why we're seeing so much distress and bankruptcy," Hutson said in a recent telephone interview. On recent second-quarter earnings calls, two of Appalachia's largest producers, EQT and CNX, said they're keeping production flat over the near term as they confront a low-commodity-price environment that many analysts expect to endure longer term. Many producers are following suit, but some of the most highly leveraged companies are finding it harder to make the shift to maintenance mode, Hutson says.

U.S. natgas soars nearly 17% as LNG exports rise, heat returns - (Reuters) - U.S. natural gas futures jumped nearly 17% to a near three-month high on Monday as demand rose for exports of liquefied natural gas (LNG), and weather forecasters boosted expectations for hot weather and cooling demand next week. Front-month gas futures rose 30.2 cents, or 16.8%, to settle at $2.101 per million British thermal units, their highest close since May 5. That was their biggest one-day rise since November 2018. "A combination of stagnant production ... and a hot change in August’s weather forecasts is creating a bullish set-up that has short sellers running for the exits," said Daniel Myers, market analyst at Gelber & Associates in Houston, noting this was the front-month’s first close above $2/mmBtu in three months and only the second since late January. Last week, speculators boosted long positions on the New York Mercantile Exchange for a seventh straight week to their highest since November 2018 on expectations energy demand will rise as the economy rebounds from coronavirus lockdowns. Data provider Refinitiv said average U.S. production fell to a two-month low of 87.8 billion cubic feet per day (bcfd) so far in August from 88.0 bcfd in July and an all-time monthly high of 95.4 bcfd in November. With hot weather expected to return, Refinitiv projected U.S. demand, including exports, will rise from an average of 88.8 bcfd this week to 92.5 bcfd next week. U.S. LNG exports in August are on track to rise for the first time in six months as the amount of pipeline gas flowing to the plants rose to 4.0 bcfd so far this month from a 21-month low of 3.3 bcfd in July when buyers canceled dozens of cargoes. That is still well below the record high of 8.7 bcfd in February.

U.S. natgas jumps to highest since Jan on rising LNG exports, hot weather - (Reuters) - U.S. natural gas futures on Tuesday jumped to their highest since January as liquefied natural gas exports rose and on forecasts for hot weather through late August after Hurricane Isaias blows through, keeping air conditioners humming. Front-month gas futures rose 9.2 cents, or 4.4%, to settle at $2.193 per million British thermal units, their highest close since Jan. 10. That put the contract into overbought territory with a Relative Strength Index (RSI) over 70 for a second day in a row for the first time since November 2019. On Monday, volume in the front-month, which soared almost 17%, topped 381,000 contracts, its highest since hitting a record 495,196 in November 2018 during the market's most volatile period, when it rose 18% one day and fell 17% the next. Hurricane Isaias, which hit North Carolina overnight, broke the heat wave that has blanketed much of the country since late June. The storm left more than 1.4 million homes and businesses from New York to North Carolina without power on Tuesday and was expected to cause more damage as it scrapes north up the East Coast. But with hot weather expected to return after Isaias blows away, data provider Refinitiv projected U.S. demand, including exports, will rise from an average of 88.6 bcfd this week to 91.8 bcfd next week. That, however, is a little lower than Refinitiv's outlook on Monday as higher prices cause power generators to burn more coal instead of gas. U.S. LNG exports are on track to rise for the first time in six months as the amount of pipeline gas flowing to the plants rose to 4.0 bcfd in August from a 21-month low of 3.3 bcfd in July when buyers canceled dozens of cargoes.

US working natural gas volumes in underground storage rise by 33 Bcf: EIA | S&P Global Platts — Natural gas volumes in US underground storage facilities increased in line with the five-year average while the Henry Hub prompt month contract continues to push above prices not seen since early January as the final three months of injection season commence. US underground natural gas storage inventories increased by 33 Bcf to 3.274 Tcf in the week that ended July 31, according to US Energy Information Administration data released Aug. 6. The injection was larger than the consensus expectations of analysts surveyed by S&P Global Platts, which called for a 27 Bcf build. Responses to the survey ranged from an injection of 20 Bcf to one of 33 Bcf. The injection measured less than the 58 Bcf build reported during the same week last year, but matched the five-year average build of 33 Bcf, according to EIA data. Storage volumes now stand 601 Bcf, or 22.5%, above the year-ago level of 2.673 Tcf and 429 Bcf, or 15%, higher than the five-year average of 2.845 Tcf. The NYMEX Henry Hub September contract added 3 cents to $2.22/MMBtu in trading following the release of the weekly storage report at 10:30 am ET. NYMEX Henry Hub prices over the last week have staged an impressive rally as the balance-of-summer strip, now comprising just September and October, has increased by more than 25 cents on diminishing expectations that storage will breach the 4 Tcf mark by the end of season. The winter strip, likewise, has moved higher as well, settling at $2.95 in at Aug. 5 close and gaining another 2 cents in the session Aug. 6. LNG feedgas has broken above 4 Bcf/d in August, according to S&P Global Platts Analytics. It marks the first time LNG feedgas demand climbed above 4 Bcf/d since June 30, an increase of over 800 MMcf/d from the prior week's average. Although total US liquefaction utilization remains under 40%, there are expectations for stronger feedgas demand in September and October, when US Gulf Coast netbacks are in positive territory. US production has averaged 87 Bcf/d to start August, 300 MMcf/d lower than July. Roughly half of the production losses are maintenance driven, and expected to return by Aug. 7, but the overall risks to the remainder of the summer skew bullish due to strong power burn demand and the recovery in LNG feedgas demand. Despite lower week-over-week production and higher LNG demand, models point to a larger injection for the week in progress. For example, Platts Analytics' supply and demand model currently forecasts a 52 Bcf injection for the week ending Aug. 7. This would increase the surplus to the five-year average by 8 Bcf. Recent changes to supply and demand fundamentals have lowered Platts Analytics' forecast for end-of-season inventories from 4 Tcf down to 3.858 Tcf, which would only register about 50 Bcf more than the five-year average before withdrawal season begins in early November.

Natural Gas Futures Slip as EIA Storage Data Reflects 'Woefully Oversupplied' Market - Natural gas futures buckled under pressure Thursday after a slightly larger-than-expected storage injection sapped the momentum prices had earlier in the week. The September Nymex futures contract settled at $2.165, down 2.6 cents day/day. October also slipped 2.6 cents to $2.305. Spot gas prices softened across the board as well, dragging down NGI’s Spot Gas National Avg. 8.0 cents to $1.830.After a stunning rally to start the week, Nymex futures had been expected to retreat a bit, especially with cooler weather in the forecast. While Wednesday’s price action failed to move the needle, bears got the upper hand on Thursday after the latest government data pointed to a market that remains “woefully oversupplied,” according to NatGasWeather.The Energy Information Administration (EIA) reported that inventories for the week ending July 31 rose by 33 Bcf, which came in far below last year’s 58 Bcf injection but was exactly on par with the five-year average. This is important to consider, NatGasWeather said, because “cooling degree days were solidly hotter/greater than normal, which is indicative of a market still solidly oversupplied.”Broken down by region, the Midwest led with a 15 Bcf injection into stocks, while the East came in with the second-highest build of 12 Bcf, according to EIA. Mountain inventories rose by 6 Bcf, and the Pacific withdrew 2 Bcf. The South Central reported a net injection of 3 Bcf, but salt facilities fell by 3 Bcf while nonsalts added 6 Bcf. Total working gas in storage as of July 31 stood at 3,274 Bcf, 601 Bcf higher than last year and 429 Bcf above the five-year average, EIA said. Price action following the EIA report was swift. In the minutes leading up to the report, the September Nymex contract was trading at $2.245, up 5.4 cents from Wednesday’s close. Earlier, it had soared as high as $2.284. As the print crossed trading desks, the prompt month slipped to $2.225, but then it bounced around as traders attempted to digest the data. Looking ahead to next week’s EIA report, analysts expect a heftier build of about 50 Bcf as temperatures have cooled and East Coast power demand has been crushed by former Hurricane Isaias. This would put the end-of-season figure at or above the top of the seasonally adjusted range, Schork noted. “That is not a bullish thing.”

U.S. natgas soars to December high in best week since 2009 -  (Reuters) - U.S. natural gas futures on Friday jumped to their highest since December after rising by the most in a week since 2009, as liquefied natural gas (LNG) exports increased and forecasts called for hot weather through late August. "The LNG market’s worst days appear to be behind it, with fewer cancellations in September expected to bring utilization back toward 60% before an even stronger recovery in October," said Daniel Myers, market analyst at Gelber & Associates in Houston. Front-month gas futures rose 7.3 cents, or 3.4%, to settle at $2.238 per million British thermal units, their highest close since Dec. 26. For the week, the contract was up 24%, its biggest weekly gain since September 2009. Although U.S. and European gas contracts mostly trade on their own fundamentals, gas at the European Title Transfer Facility benchmark in the Netherlands also soared this week, jumping 50%. That made it profitable for more U.S. LNG cargoes to go to Europe again for the first time in months. U.S. LNG exports in August were on track to rise for the first time in six months as the amount of pipeline gas flowing to the plants climbed to 4.0 billion cubic feet per day in August from a 21-month low of 3.3 bcfd in July, when buyers canceled dozens of cargoes - the most in a month. With hot weather expected to return after Hurricane Isaias cooled the East Coast, data provider Refinitiv projected U.S. demand, including exports, will rise from an average of 88.5 bcfd this week to 90.6 bcfd next week and 91.9 bcfd in two weeks. That is a little lower than Refinitiv's outlook on Thursday as higher gas prices cause power generators to burn more coal instead of gas. 

IEEFA report: China unlikely to come to rescue of overbuilt U.S. LNG industry  — A rebound of the ailing U.S. liquefied natural gas (LNG) industry isn’t likely to come from Chinese demand, according to a new study by the Institute for Energy Economics and Financial Analysis (IEEFA).  Global LNG markets have been hammered by collapsing prices, falling consumption, and an enormous supply glut in Europe and Asia, even as the U.S. LNG industry continues with expansion plans.   “The U.S. liquefied natural gas industry is suffering through a worse-than-worst case scenario: An international market collapse on a scale that seemed inconceivable when the country’s first export facility was put into service just over four years ago,” said Clark Williams-Derry, an energy finance analyst and co-author of No Upside: The U.S. LNG Buildout Faces Price Resistance from China. Accentuating the industry’s troubles, Cheniere Energy, the largest U.S. LNG company, is likely to collect most of its revenues this summer from shipment cancellation fees, rather than actual LNG sales.  Although LNG has become the worst-performing global energy commodity during the coronavirus pandemic—worse even than coal or oil—its problems predate the economic downturn. More than 20 U.S. projects in various stages of development, as well as 20 existing commercial-scale plants, are competing with new LNG plants in Russia, Australia, Malaysia and Cameroon. The ensuing glut has convinced many international buyers to obtain LNG from spot markets rather than signing new long-term contracts. Prior to 2019, China had been the world’s fastest-growing LNG consumer, leading to hopes that it could rescue the planned U.S. LNG buildout. The IEEFA analysis, however, finds that PetroChina, China’s largest natural gas company, has lost money on gas imports every year since 2015, throwing doubt on the Chinese gas market’s ability to absorb new imports.If China is to expand its LNG imports, it will likely have to secure long-term supplies at prices well under $7/MMBtu, Williams-Derry said. Even with U.S. costs close to historically low levels, the margin for reaching those prices is slim: Shipping LNG from the Gulf of Mexico to East Asia costs about $2/MMBtu for feedstocks, $3/MMBtu for liquefaction, and $1/MMBtu for transportation. Regasification and transportation to Chinese cities would add another $1/MMBtu to the total cost. The IEEFA study examined gas pricing in seven major Chinese cities with access both to LNG terminals and pipeline gas. Wholesale prices in April 2019 ranged from $7.73/MMBtu to $8.57/MMBtu; at the time, it cost roughly $8/MMBtu to deliver gas from the Gulf of Mexico to China, meaning that U.S. LNG offered little or no economic benefits to Chinese consumers. '

China only fulfils 5% of Sino-U.S. energy trade deal in first half of 2020 -  (Reuters) - China bought only 5% of the targeted $25.3 billion in energy products from the United States in the first half of 2020, falling well short of its trade deal commitments at a time when relations between the two top economies are already sour. China’s imports of crude oil, liquefied natural gas (LNG), metallurgical coal and other energy products totalled around $1.29 billion this year through June, according to Reuters calculations based on China customs data. While Chinese purchases of U.S. products accelerated recently, analysts say weak energy prices and worsening relations means Beijing may undershoot its full-year goal in the Phase 1 deal agreed in January. (GRAPHIC - China only achieved 5% of the $25.3 bln energy target in the first half of 2020: here) (GRAPHIC - China's energy imports from U.S.: here)  “China is unlikely to fulfil its Phase 1 commitments as they were overly ambitious to begin with,” said Michal Meidan, a director at the Oxford Institute for Energy Studies, adding she expected Beijing to step up purchases to show goodwill. Failure to meet the target could further strain U.S.-China relations, which have nosedived since the outbreak of the coronavirus.  (GRAPHIC - Apparent consumption of refined oil products in China: here) (GRAPHIC - Apparent consumption of natural gas in China: here)  U.S. crude oil had been expected to feature prominently in China’s Phase 1 purchases. But a surge in freight rates coupled with a collapse in fuel demand, as the coronavirus spread, made U.S. imports relatively costly for refiners in China. China imported only 45,603 barrels per day (bpd) of U.S. oil in the first half of 2020 compared with 85,453 bpd in the same period in 2019.Sushant Gupta, research director at consultancy firm Wood Mackenzie, said that to meet the trade deal target, China would need to import 1.5 million bpd of U.S. crude in 2020 and 2021, revising that estimate up from nearly 1 million bpd previously as low oil prices reduced the value of crude purchases.(GRAPHIC - China's crude oil imports: here)China’s refiners boosted U.S. purchases after flagship oil grades slumped into negative territory in April. (GRAPHIC - Crude oil and LNG prices: here)

Northern Natural pitches Northern Lights 2021 to serve winter peak-day needs | S&P Global Platts — Berkshire Hathaway Energy's Northern Natural Gas has proposed a scaled-down version of its Northern Lights 2021 natural gas pipeline expansion, meant to keep up with needs of several existing customers and providing 45,693 Dt/d of incremental winter peak-day service.The proposal is a continuation of the pipeline company's broader Northern Lights project, which it describes as a multi-year commitment to expand its market-area capacity in response to customers' growth requirements through 2026.In the application posted on the Federal Energy Regulatory Commission's website Aug. 1, Northern Natural said contract extensions and growth commitments under the Northern Light expansions were critical in preventing a major bypass of Northern's system by some customers. In the absence of the extension agreements with customers CenterPoint Energy Resources, Xcel, and Flint Hills Resources, a bypass would have translated to a loss of about 1 Bcf/d of their existing winter maximum daily quantity, Northern Natural told FERC.The proposed Northern Lights 2021 Expansion (CP20-503) entails an 11,153 hp greenfield compressor station in Pine County, Minnesota, additional compression at the Pierz compressor station in Morrison County, modifications to the Pierz interconnect, and a pipeline loop and extension totaling 1.43 miles as well as replacement of 0.08 of an 8-inch-diameter pipeline with 12-inch-diameter pipeline and changes, all in Minnesota.The proposal is scaled back from the November 2019 plan put forward during a prefiling review at FERC that pitched more than eight miles of 30-inch-diameter and 36-inch-diameter mainline loops and extensions, and over 13 miles of branch line loops and extensions.

Range to Sell Louisiana Acreage, Cut 100 Jobs -- Range Resources Corp. is selling its Louisiana shale fields for about one-10th of what it paid for them just four years ago as depressed natural gas prices hammered the heavily indebted driller. Range agreed to sell the assets acquired in its 2016 takeover of Memorial Resource Development Corp. to Castleton Resources LLC for $245 million, according to statements by both companies Monday. Range stands to reap an additional $90 million in the future, contingent on higher commodity prices. The $335 million potential total value compares to the approximately $3.3 billion Range originally paid in an all-stock deal for the fields. The biggest-ever deal for Range turned into a bust when the company’s geologists and engineers soured on the quality of the rocks in early 2018. Range is also cutting 100 jobs, or about 17% of its workforce, mostly as a result of the sale, Chief Financial Officer Mark Scucchi said during a conference call with analysts on Tuesday. The sale is expected to close this month and the effective date will be backdated to Feb. 1, according to the statement. Castleton Resources is owned by Castleton Commodities International LLC and Tokyo Gas Co.

Permian Execs Signal Milestone-- America’s most prolific shale drillers are accepting a fate once anathema to an industry obsessed with growth: drilling just to ward off production drops. The pandemic and subsequent plunge in crude prices has forced U.S. crude explorers to scrap plans to expand supplies amid investor skepticism toward the shale business model. For some of the biggest names in the Permian, that’s meant vowing restraint as long as oil lingers at levels too poor to justify a new boom. “Certainly we’re not seeing any signals that growth is needed,” Travis Stice, chief executive officer Diamondback Energy Inc., said during a conference call on Tuesday. “Growth in today’s world is pretty much off the table.” Management teams chastened by crude’s precipitous fall below zero earlier this year are beginning to outline 2021 spending plans. Diamondback said it’ll maintain oil output at this year’s level, which is expected to be dramatically lower than 2019. Concho Resources Inc. expressed similar intent last week. Centennial Resource Development Inc. declined on Tuesday to provide 2021 production guidance. In the fourth quarter, the explorer plans to employ just a single rig, a signal of little growth going into next year. Drillers are focusing shrunken capital budgets on minimizing the steep output declines unique to shale wells, which start out as gushers before quickly declining to trickles. In a handful of cases, spending has been cut so dramatically that executives expect to generate positive cash flow despite enduring the most tumultuous year since the start of the U.S. shale boom. “For most of my career, we would reinvest all our cash flow and then show our success by how much we could grow our production,” Concho CEO Tim Leach said last week. “Well, that’s not how it’s going to work in the future.” A moderation in growth had been anticipated as years of heavy borrowing took a toll on balance sheets and investors blanched at weak or non-existent returns. Supermajors Exxon Mobil Corp. and Chevron Corp. were expected to pick up the slack via ambitious growth plans to pump 1 million Permian barrels a day each by the middle of the decade. But the pandemic threw all prognostications into disarray. Chevron is forecasting a 7% decline in its Permian production next year. Although Exxon didn’t provide a production outlook when it disclosed quarter results last week, the company indicated that its daily Permian output wouldn’t increase much beyond the current 345,000 barrels.

Oil companies are backing Trump’s re-election after giving heavily to Clinton in 2016 --American industries tend to play both sides by donating to candidates from both major political parties. That’s particularly true when it comes to the presidency, which oversees a vast federal bureaucracy influencing trillions of dollars in spending. Even the oil and gas industry, which strongly favors Republicans, split its ticket when it came to the White House race in 2016. The industry gave $1.2 million to Donald Trump, whose campaign won over swing states such as Pennsylvania by chanting “drill, baby, drill.” But it also bequeathed $1 million to Democrat Hillary Clinton, who had promised to put “coal companies out of business” (while helping displaced workers find new jobs).Not this year. Trump is reaping the rewards of being the most pro-fossil fuel president in modern history. The industry has donated $936,000 to his 2020 reelection campaign, according to the Center for Responsive Politics. That’s roughly triple the haul of his presumptive Democratic challenger Joe Biden, who has collected only $265,000 in industry donations as of August. The biggest donors to all political candidates among oil and gas companies were a mix of traditional activists such as Koch Industries ($9.8 million), oil majors such as Chevron ($4.7 million), and shale oil firms like Midland Energy ($2 million). The vast majority of the $6.7 million given by top donors has gone to Republicans in Congress this election cycle. Only two Democrats—Senator Bernie Sanders (Vermont) and Rep. Lizzie Fletcher (Texas)—were even among the top 20 recipients. The reason seems clear. Biden has embraced the climate movement and his party’s enthusiasm for a clean energy transition. Under Biden’s $2 trillion climate plan announced this July, the US will achieve zero net-emissions by 2050, eliminate electric grid emissions by 2035, promote renewable wind and solar energy development, and recommit to the Paris climate accords. Biden also agreed (along with every major Democratic presidential nominee) to end the extraction of fossil fuels on public lands. That’s significantly more ambitious than Clinton’s proposal in 2016.

Trump: Radical Left Wants To Leave Every City At Their Mercy, Incite Riots – President Donald Trump lashed out at radical Democrats, calling them "sick" and accusing them of not loving the country in a speech he delivered Wednesday on restoring American energy dominance and the U.S. economy. "The radical left wants to tear down everything in its way," Trump said. "And in its place, they want power for themselves. They want power. Hard to believe — power. They want to uproot and demolish every American value. They want to wipe away every trace of religion from national life. They want to indoctrinate our children, defund our police, abolish the suburbs, incite riots, and leave every city at the mercy of the radical left. That’s not going to happen. That’s not going to happen."  “Their platform calls for mandating zero-carbon emissions from power plants by 2035. In other words, no drilling, no fracking, no coal, no shale, no gas, no oil; otherwise, they’ve been very good to the industry, I think.You got to be careful. You know, people don’t take it seriously. If they got in, you will have no more energy coming out of the great state of Texas, out of New Mexico, out of anywhere — Oklahoma, North Dakota. Name them. Pennsylvania. Pennsylvania does a lot. People don’t realize that. A lot. It would throw Pennsylvania, Ohio — so many other places. You don’t realize how big it is. They want to have no fracking, no nothing. The policies required to implement this extreme agenda would mean the death of American prosperity and the end of the American middle class. It would mean, I think, even worse than that. It would destroy our country. I used to say, “Would become another Venezuela.” Same ideology. You would become another Venezuela. Venezuela used to be one of the richest in the world, per capita, and period, one of the richest in the world — among the largest oil reserves. Now they don’t have water, they don’t have medicine, they don’t have food. You got a lot of oil; it doesn’t matter. Doesn’t seem to matter. They don’t have anything. And that can happen to us.”

EMISSIONS: Methane plume menaces Navajo as EPA weakens safeguards -- Thursday, August 6, 2020 -- EPA is preparing to finalize a rule later this month that would significantly lighten requirements for fossil fuel producers and remove the regulations entirely for natural gas transmission and storage facilities. The agency's proposed replacement would permit the industry to conduct fewer searches for methane leaks and reduce remediation for a broad swath of the oil and gas sector. It would also rule out the possibility that older oil and gas wellheads would become subject to regulation in the future. But Native American advocates on a June 30 teleconference stressed that those changes would put their communities at risk by undermining air quality and public health on and near Navajo Nation tribal lands in New Mexico. The region, which has been the site of oil, gas, coal and uranium production for a century, has the highest concentration of methane emissions in the U.S. Julia Bernal of Pueblo Action Alliance said she told officials with EPA and the White House Office of Management and Budget that the federal government had neglected to look at the damage that scrapping the methane rules would do to people in the Four Corners region. The area, which straddles the borders of Utah, New Mexico, Colorado and Arizona, is home to hundreds of thousands of Native Americans. "There's already a huge methane cloud that sits over the Four Corners area in the Southwest," Bernal said in an interview. "Indigenous people have raised those concerns. How come that hasn't been addressed?" EPA's removal of federal methane curbs for new oil and gas wells might have an outsize impact on the San Juan Basin of northwestern New Mexico. That's because the Trump administration's rollback is designed to head off future regulations for existing oil and gas infrastructure.The basin is an older oil field that saw declining production even before the coronavirus pandemic caused a massive contraction in the sector this spring. Many of the wells there might not have been covered under EPA's methane rule, known as a new source performance standard, because they're too old.But they would have been regulated under a rule tailored to cover existing infrastructure. If EPA gets its way, that rule may never be written (Climatewire, Aug. 15, 2019). Navajo Nation President Jonathan Nez submitted comments to EPA last year opposing the methane rule rollback. He argued that it would leave transmission and storage infrastructure on Navajo lands unregulated for harmful pollutants. He also said the Navajo stand to see adverse impacts from climate change.Data from the Environmental Defense Fund shows that San Juan County, where more than half the Native American population lives within a half-mile of a production site, is second in New Mexico only to the Permian Basin for its methane levels. The American Lung Association's 2020 State of the Air report, which ranks counties' ozone and airborne particulate pollution levels, or smog, gave San Juan County an F for ozone. It lacked data to assess its particle pollution.

Interior proposes easing royalty calculations for public lands drilling - The Interior Department on Friday proposed a new rule that would allow oil and gas companies to pay less money to the government in exchange for producing energy on public lands by changing how these royalties are calculated.    The proposal would allow oil and gas companies to deduct more for transportation and processing costs from the fees they pay. It would also use an average weekly benchmark price for the commodities rather than the highest weekly benchmark prices to assess royalty payments for certain sales. Proponents say this will ease burdens on regulated industries and promote energy independence. “This proposal provides regulatory certainty and clarity to States, Tribes and stakeholders, removing unnecessary and burdensome regulations for domestic energy production,” Interior Secretary David Bernhardt said in a statement. Opponents argue that the changes unfairly let companies pay less money to the taxpayers. “David Bernhardt all along has had one job to do and that is to give as many handouts as possible to his former clients in the oil and gas industry,” said Aaron Weiss, the deputy director of the Center for Western Priorities. The proposed rule would lessen royalties paid by some oil companies by allowing them to ask the government for transportation cost allowances that exceed the current cap of 50 percent of the oil’s royalty value. It would also let some gas companies pay fewer fees by allowing them to ask the government for processing cost allowances that exceed the current cap of 66 2/3 percent. The department estimated that these changes would result in the oil industry paying the government $11,000 less and the gas industry paying $135,000 less per year. This part of the proposal mirrors changes requested by oil lobbying group the American Petroleum Institute (API) last year.

US senators aim to ease pipeline permitting after latest Keystone XL setback - — US Senate Republicans from energy-producing states are pushing for infrastructure permitting reforms after a fast-track program came under court challenge this year and became the latest roadblock for the Keystone XL heavy crude pipeline. Senator John Cornyn of Texas introduced Aug. 4 a bill to amend the Federal Water Pollution Control Act "to clarify certain activities that would have been authorized under Nationwide Permit 12 and other Nationwide Permits," according to the preliminary text of the bill. Co-sponsors include senators from Alaska, Oklahoma, Montana, North Carolina, North Dakota, West Virginia, and Wyoming. Katie Bays, managing director of FiscalNote Markets, said the co-sponsors signal that the measure is likely aimed at the Northern Plains Resource Council lawsuit against the US Army Corps of Engineers. In that case, a Montana judge in April vacated the Corps of Engineers' NWP12 program and prevented the Corps from using it to authorize construction across waterways. The US Supreme Court later allowed the permits to resume during the appeals process, except in the case of TC Energy's long-delayed Keystone XL pipeline project from Alberta to Nebraska. TC Energy said July 30 that it intends to pursue "other permitting means" to authorize waterway crossings and get the project back on track. Bays said the bill's sponsors likely want to ensure that pipelines have access to NWP12 permitting even if a future administration makes a decision that pipelines should be permitted using the more onerous process of individual permitting. The American Petroleum Institute said the bill would bring "an efficient, short-term solution to restore regulatory certainty and allow continued development of critical infrastructure projects affected by recent federal court decisions" by ensuring the Corps and project owners could continue to rely on NWP12. Bays predicted the Cornyn bill may move through the Environment and Public Works Committee, but does not have a realistic chance of passage by the full Senate. "It looks like political messaging to me, and certainly we've seen the White House use the pipeline industry and energy broadly as a political signal in recent weeks," she said.

Two Keystone XL Construction Workers Test Positive For Coronavirus  - The developer of the Keystone XL oil pipeline confirmed Aug. 5 that two of its workers in northern Montana tested positive for the novel coronavirus last week. In a statement, pipeline developer TC Energy says the first pipe yard worker tested positive at a local clinic last July 28 and the company took protective measures when it learned about the results. That included shutting down activity at the site in Phillips County. The company says it then used contact tracing and identified six close contacts. One tested positive. The company says all are in quarantine at home. They will not return to the worksite as construction is expected to wrap up at that location in the coming days. A spokesperson from the Phillips County Health Department says there’s still a lot of unknowns, but that the two workers are not connected to five county residents who Phillips County announced Tuesday tested positive. Phillips County is now subject to Gov. Steve Bullock’s mandate that requires face coverings be worn in indoor spaces open to the public. TC Energy started construction on the highly disputed 1,200 (twelve-hundred) mile crude oil pipeline in April. At the time, it met with backlash from nearby Native American tribes, who worried workers could bring coronavirus into the area. Bozeman-based Barnard Construction contracted with workers from various locations. In a statement, TC Energy said that the workers were quarantined before beginning work.

Appeals Court Halts Dakota Access Shutdown Order -The controversial Dakota Access Pipeline won a reprieve Wednesday when an appeals court canceled a lower court order mandating the pipeline be shut down and emptied of oil while a full environmental impact statement is completed.  The shutdown order, which would have gone into effect Wednesday, marked the first time a major oil pipeline was court ordered to cease operations for environmental reasons. But while its reversal is disappointing for pipeline opponents, Wednesday's decision was not wholly favorable for the pipeline, either. The court refused to halt the initial order for a new environmental review of the pipeline's crossing under the Missouri River, where the Standing Rock Sioux Tribe fears it will pollute its drinking water and sacred lands if it leaks. "We've been in this legal battle for four years, and we aren't giving up this fight," Standing Rock Sioux Tribe Chairman Mike Faith said in an Earthjustice press release. "As the environmental review process gets underway in the months ahead, we look forward to showing why the Dakota Access Pipeline is too dangerous to operate."  In its ruling, the U.S. Court of Appeals for the District of Columbia Circuit put the question of whether the pipeline could continue to operate without a permit back to the Trump administration, Bloomberg News reported. It said it expected the Army Corps of Engineers to clarify the issue.  "It's interesting what the court did here," Earthjustice lawyer Jan Hasselman, who represents the Standing Rock Sioux Tribe, told Bloomberg. "While the focus has been on this judicially imposed shutdown order, the bigger picture is the environmental impact statement and whether a permit will be reissued under the next administration."  Hasselman argued that the pipeline is now operating illegally, and, if the Army Corps of Engineers decides to let it keep running while a review is completed, the issue will return to court. "[W]e are confident that it will be shut down eventually," he said in the press release.

PIPELINES: Army Corps moves to split utilities from streamlined permits -- Tuesday, August 4, 2020 --The Army Corps of Engineers is proposing to separate oil and gas pipelines from its streamlined permits for utilities — a move that follows a court battle over the program.

Santa Barbara County releases environmental impact report for ExxonMobil trucking project - Santa Barbara County recently released an environmental analysis reviewing ExxonMobil’s proposal to transport oil on local roadways using tanker trucks so that it can resume the operation of three offshore oil rigs and a processing facility. The final supplemental environmental impact report the county made public on July 29 assesses ExxonMobil’s plans to move about 11,200 barrels of oil per day on 70 trucks through most of Santa Barbara County on highways 101 and 166. This proposal would allow ExxonMobil to resume operations at its Santa Ynez Unit, a processing facility that has remained offline since the Plains All American Pipeline was shut off after a spill in 2015. Shortly after releasing the report, a coalition of environmental groups released a statement pushing back on the findings. “The county’s final environmental impact report fails to disclose the devastating impacts that will result if ExxonMobil is allowed to resume oil drilling in the Santa Barbara Channel and truck oil along our scenic highways,” Environmental Defense Center Chief Counsel Linda Krop said in a statement. “ExxonMobil’s proposal will result in more oil spills, air pollution, and increased climate change at a time when we need to pursue clean energy alternatives.” During the 2015 oil spill, which occurred near Refugio State Beach, nearly 3,000 barrels of crude oil poured into the ocean, killing birds, fish, and other marine life. Earlier this year, Plains All American Pipeline reached a civil settlement with the federal government that required it to pay more than $60 million in penalties and damages, according to a March statement from the U.S. Environmental Protection Agency. ExxonMobil is pitching this trucking proposal as a temporary solution to resume operations at its Santa Ynez Unit until the pipeline is replaced. According to the report, Plains All American Pipeline is in the process of applying for a permit to replace the pipeline, and if it’s successful, ExxonMobil would resume transporting oil via the pipeline and the trucking would stop.

California greenlights 'Orwellian' solar-powered fracking scheme -- Steve Horn - California-based multinational oil company Chevron landed two rounds of drilling permits from Gov. Gavin Newsom this summer—evidence, climate advocates say, that Newsom is not committed to tackling the climate crisis. The permits bolster Chevron’s position in the Lost Hills Oil Field, the sixth most prolific field in industry-heavy Kern County, and will shift drilling in the field largely towards using power from solar panels. One critic called the way the permits use climate crisis rhetoric “Orwellian,” incorporating solar power into drilling operations to expand the use of fracking and oil production. The variety of oil extracted in California is among the most greenhouse gas intensive in the world. The town of Lost Hills has a population of 2,500. The community is 97% Latino, and over 27% of people living there have  incomes below the poverty threshold. Environmental justice advocates say the new permits, awarded during a pandemic disproportionately impacting the state’s Latino community in a predominantly farmworker town, further call into question Newsom’s commitment to environmental justice. A representative from Greenpeace USA did not mince words, calling the new fracking permits an example of “environmental racism.”   “These new permits, like the others, will further exacerbate air pollution and poison Black and Brown communities, worsening the dual public health crises they face,” said Greenpeace spokesperson Katie Nelson in a press release. “It’s long past time to end the practice of treating California’s Black, Brown, and Indigenous communities as ‘sacrifice zones.’”  According to a 2015 report by the groups Earthworks and the Clear Water Fund, the town of Lost Hills has high levels of airborne toxic chemicals, including methane, acetone, dichlorodifluoromethane and acetaldehydes. Those chemicals come from drilling and other oil industry infrastructure like that in the nearby oil field. Recent studies by bothHarvard University and Stanford University have found higher COVID-19 case numbers in communities situated near areas with high industrial pollution levels.

Alaska Tribes Petition to Preserve Tongass National Forest Roadless Protections - Last week, nine native Alaska tribes filed a petition calling on the U.S. Department of Agriculture to halt the removal of protections for the Tongass National Forest, the country's largest reserve of public woodlands, which the tribes say is vital to their livelihoods. Currently, more than half of the forest's 16.7 million acres are protected under the Roadless Rule, which, since 2001, has prohibited road building and commercial logging in 58 million acres of U.S. forests. But the Trump Administration is seeking to open the old-growth forest for logging and has requested that the U.S. Forest Service, part of the USDA, lift the rule from the Tongass, a process that is in its final stages. A decision is expected later this summer.   The forest is critical to indigenous economies in southeastern Alaska. Tribal members hunt for deer and moose, fish for salmon, gather mushrooms, berries and medicinal plants, and use the massive trees to carve canoes and totem poles. The forest is "priceless," said Joel Jackson, president of the Organized Village of Kake, one of the tribes that signed the petition. "It's basically our grocery store."Conventional grocery shopping is not feasible in the highly isolated region, Jackson said, with prices for food running two or three times more than they would in the city. Logging and road building in the Tongass could deplete and disrupt plant and animal populations in the ecosystem that the tribes rely on, the petition says. "Not only is it devastating for the land, but for our people and for the survival of our culture," said Marina Anderson, tribal administrator for the Organized Village of Kasaan, which also joined the petition. "It's really essential that we keep these old growth timber stands intact."  A spokesperson for the USDA said agency officials are refraining from comment until after they have reviewed the July 21 petition.  President Trump instructed Secretary of Agriculture Sonny Perdue to remove the Tongass from the Roadless Rule in August—a move that Alaska leaders favor. "With the Trump administration's help, the devastating Clinton-era roadless rule may soon be history, and the Tongass restored to a managed multi-use forest as it was always intended," Alaska Gov. Mike Dunleavy (R) said in his State of the State address in January.  In a September 2019 op-ed for The Washington Post, Sen. Lisa Murkowski (R-Alaska) claimed that the Tongass is sufficiently protected without the Roadless Rule.

BP reports second-quarter loss after major write downs, halves dividend -- Energy giant BP reported a significant loss for the second quarter on Tuesday, after downgrading the value of some of its assets on expectations of lower commodity prices. Second-quarter underlying replacement cost profit, used as a proxy for net profit, came in at a loss of $6.7 billion, meeting expectations of analysts polled by Refinitiv. That compared with a net profit of $800 million in the first quarter of the year. BP also announced that it had halved its dividend to 5.25 cents per share for the quarter, compared to 10.5 cents per share for the first three months of the year. The reported loss for the quarter was $16.8 billion, which includes a post-tax charge of $10.9 billion for non-operating items. It compares to a loss of $4.4 billion over the first three months of 2020. The breakdown of this figure included $9.2 billion in impairments across the group, largely due to BP's revised forecast for oil and gas prices over the next 30 years, and $1.7 billion of exploration write-offs. The U.K.-based oil and gas company said last month that it could incur non-cash impairment charges and write-offs in the second quarter, estimating an aggregate range of $13 billion to $17.5 billion after tax. At the time, BP said the "enduring" impact of the coronavirus pandemic had prompted the firm to lower its oil and price forecasts through to 2050. "These headline results have been driven by another very challenging quarter, but also by the deliberate steps we have taken as we continue to reimagine energy and reinvent bp," Bernard Looney, CEO of BP, said in a statement on Tuesday. "In particular, our reset of long-term price assumptions and the related impairment and exploration write-off charges had a major impact. Beneath these, however, our performance remained resilient, with good cash flow and – most importantly – safe and reliable operations," he added. International benchmark Brent crude futures traded at $44.02 a barrel on Tuesday morning, down more than 0.3%, while West Texas Intermediate (WTI) crude futures stood at $40.89, around 0.3% lower. Analysts had anticipated that "Big Oil" companies, referring to the world's largest energy majors, were likely to report "horrendous" second-quarter results as coronavirus lockdown measures coincided with an unparalleled demand shock and significantly weaker oil and gas prices. However, some companies have been able to limit the damage as their trading divisions have capitalized on heightened market volatility.

BP Pledges to Cut Oil and Gas Production 40 Percent by 2030, but Some Questions Remain -  Energy giant BP says it will cut its fossil fuel production significantly over the next decade, marking the first commitment from a major global oil company to such short-term production declines, which are critical to reining in global greenhouse gas emissions.  The company said Tuesday that its oil and gas production will fall by about 40 percent by 2030, while its refining output will decline about 30 percent, driving down BP's direct emissions as well as those that come from its products.The announcement is the most detailed and significant of the pledges made by the world's leading oil and gas companies, which over the last year have been announcing increasingly ambitious plans to address climate change, yet have largely failed to explain how or when they will pivot away from fossil fuels in coming years. In fact, many of the plans allow the companies' oil and gas output to continue growing for years."BP has radically changed the game," said Andrew Grant, head of oil, gas and mining at the Carbon Tracker Initiative, a think tank that has closely tracked the industry's climate change plans. He added: "In the arms race of emissions announcements, most oil and gas peers have conveniently ignored the global need to produce and use less oil and gas" and BP's production cut makes it "unquestionably the industry leader." The 40 percent production cut does not include BP's 20 percent stake in Rosneft, a Russian energy company that is one of the world's largest oil and gas producers, according to David Nicholas, a BP spokesman. BP chief executive Bernard Looney said in February that the company would reach net-zero emissions by 2050, but he declined to spell out what steps he would take in the near-term. Now, the company says it will boost its investments into low carbon energy ten-fold, to $5 billion a year by 2030, as it draws down its exploration and production of oil and gas. Within 10 years, BP said, it will have developed 50 gigawatts of renewable energy, up from 2.5 gigawatts today, and will have 70,000 electric vehicle stations, up from 7,500. BP will also increase investment in biofuels, hydrogen and carbon capture and storage—a technology that pulls carbon dioxide from smokestacks or directly from the air. Together with its scaled down oil and gas output, the company says its direct emissions will fall by about one-third by 2030, while the carbon-intensity of the products it sells will decline by more than 15 percent.

IEEFA update: Australia sponsors a failing gas industry - The controversial Narrabri gas project for New South Wales, Australia enters the final stages of approval with over 400 people presenting to the Independent Planning Commission who will determine its fate.The project is the most hotly contested resource project in the history of the state with over 23,000 submissions, 98% of which objected to the project.While queueing up to be heard, there was another queue forming.Liquefied Natural Gas (LNG) tankers in the Pacific and Atlantic oceans are motoring in circles while they wait to find a market for their unwanted product. Gas is currently being almost given away on international markets.The very last thing the world needs is more gas.Far from seeing the “gas powered recovery” our politicians desire, we are seeing a gas fired depression around the globe. In the U.S., the number of operating drill rigs has fallen 73% in the last 12 months. And US LNG exports have more than halved so far in 2020. Deloitte estimates that almost a third of U.S. shale producers are technically insolvent at current oil prices.Domestically, the industry is faring little better. On Tuesday, Santos, the proponent of the Narrabri gas project, wrote off a further $950m from its failed Coal Seam Gas to Liquefied Natural investments in Australia. Their total write-downs since 2014 are close to $8bn!Globally, renewables continue to overwhelm new fossil fuel and nuclear power station builds.Since 2010 renewables have grown by approximately 148% whilst nuclear plus fossil fuels have declined by 38%.This year alone, 200 gigawatts of renewable power plants have already been built, compared to only 100 gigawatts of fossil fuel energies and nuclear.Less gas power plants have been built in 2020 than in 2001. Investors are fleeing the gas industry and investment is flooding into renewables.The NSW government recently announced its tender for 3 gigawatts of power projects for its Central Renewable Energy Zone near Dubbo. The response was overwhelming with the tender being nine times over-subscribed. In Australia, gas usage in gas-fired power plants has declined by 59% since 2014 whilst renewables have increased to produce 25% of the energy in the National Electricity Market. The AEMO, the only agency to model a future electricity grid in its Integrated Systems Plan, has shown that in a renewables rich grid, the role of gas is smaller than it is today by 2040. Gas peaking plants only contributed 1.8% of the National Electricity Market’s generation in the year to April 2020 whilst they account for 13.4% of capacity. Put simply, we need capacity in gas peaking plants but they are never run for long. We don’t need much gas to power them.

Venezuela begins cleanup after oil slick hits coast - Venezuelan authorities have begun a cleanup effort after an oil slick washed up over the weekend on the coast of western Falcon state, known for pristine beaches and nature preserves, the environment ministry said in a statement late on Tuesday.Officials had not previously commented on the event, and the ministry said it was still investigating the cause of the spill. An opposition lawmaker and a source at state-run oil company Petroleos de Venezuela had previously said the slick likely resulted from a spill of the contents of a vessel's fuel tank."We have acted immediately in the face of this contingency, because to protect nature is to defend the fatherland," the ministry, known formally as the Ecosocialism Ministry, wrote in a statement posted on its Instagram account. The ministry added that it had set up barriers to contain the oil but did not provide an estimate of how much oil had spilled. It said the oil ministry, PDVSA, the local Falcon state government, national park officials, and the Sebin intelligence service were participating in the cleanup and investigation.

Bulk carrier sitting on reef off Mauritius starts to leak bunker fuel - The 203,000 dwt Wakashio bulk carrier, which ran aground on a reef just off the southeast coastline of Mauritius on July 26, has started spilling bunker fuel into the famous azure seas of the French speaking republic. Local authorities have ordered the public, including boat operators and fishermen, not to venture to the beach and in the lagoons of Blue Bay, Pointe d’Esny and Mahebourg. “All highly sensitive areas including the Ramsar site of Pointe d’Esny and the Blue Bay Marine Park have been protected with booms,” a government spokesperson said. The ship, owned by Japan’s Nagashiki Shipping, was en route from China to Brazil when it ran aground with 3,800 tonnes of bunker fuel onboard. “Due to the bad weather and constant pounding over the past few days, the starboard side bunker tanker has been breached and an amount of fuel oil has escaped into the sea. Oil prevention measures are in place and an oil boom has been deployed around the vessel,” a spokesperson for the Japanese shipping company said today.

Mauritius faces up to its worst environmental crisis as oil slick snakes around the south of the island - An environmental crisis is playing out in the Indian Ocean where a grounded Panamanian-flagged newcastlemax is spewing bunker fuel onto the pristine shores of southeastern Mauritius.The 203,000 dwt Wakashio bulk carrier, which ran aground on a reef July 26, has a gash on its starboard hull through which significant tracts of heavy fuel oil are poisoning the local environment.The ship, owned by Japan’s Nagashiki Shipping, was en route from China to Brazil when it ran aground with 3,800 tonnes of bunker fuel onboard.“We are in an environmental crisis situation,” admitted the environment minister, Kavy Ramano last night, while the fishing minister, Sudheer Maudhoo, said: “This is the first time that we are faced with a catastrophe of this kind and we are insufficiently equipped to handle this problem.”This is the first time that we are faced with a catastrophe of this kind and we are insufficiently equipped to handle this problemNearby nature reserve Blue Bay Marine Park has been badly damaged with coral and rare turtles smothered in oil while schools in the vicinity are closed because of the noxious smell from the bunker fuel.Efforts are being made to try and pump out the remaining fuel from the ship while local politicians have called for international help to contain the damage. The French island of Reunion, which lies 200 km west from Mauritius, has been put on alert as the slick meanders through the ocean.

Oil spill threatens ecological disaster as Mauritius declares emergency (Reuters) - Fuel spilling from a Japanese bulk carrier that ran aground on a reef in Mauritius two weeks ago is creating an ecological disaster, endangering corals, fish and other marine life around the Indian Ocean island, officials and environmentalists say. The MV Wakashio, owned by the Nagashiki Shipping Company, struck the reef on Mauritius' southeast coast on July 25. On Thursday, the government said fuel was leaking from a crack in the vessel's hull and Prime Minister Pravind Kumar Jugnauth declared a state of environmental emergency, pleading for international help. "The sinking of the #Wakashio represents a danger for Mauritius," Jugnauth said. Environmental group Greenpeace said the spill was to likely to be one of the most terrible ecological crises that Mauritius has ever seen. "Thousands of species around the pristine lagoons of Blue Bay, Pointe d'Esny and Mahebourg are at risk of drowning in a sea of pollution, with dire consequences for Mauritius’ economy, food security and health," Greenpeace said in a statement. Satellite images released on Friday showed a slick spreading out into the turquoise waters surrounding the stricken vessel. Some fuel has washed ashore. France was sending specialist teams and equipment to help Mauritius deal with the spill, French President Emmanuel Macron said. A French military aircraft from the neighbouring island of Reunion, a French overseas territory, carrying pollution-control equipment would make two flights over the spill site on Saturday. A naval vessel carrying booms and absorbents would also set sail, authorities on Reunion said. "When biodiversity is in danger, there is an urgent need to act," Macron said. "You can count on our support." Nagashiki Shipping Company said it had tried to free the the tanker but the effort was hampered by persistent bad weather. "We will do our utmost working with the Mauritius authorities and relevant Japanese organizations to offload the oil still in the ship, clean up the spill and safely remove the vessel," Nagashiki said in a statement.

Is Turkey Drilling For Oil & Gas In The Wrong Sea?  -Whilst most of European media have narrowed down the deterioration in EU-Turkey relations to the issues of the “refurbished” Hagia Sophia and the protracted Libyan proxy war, their energy ties were just as crippled by Turkey’s intensive drilling campaign in Cyprus’ offshore, generating bad blood between the Old Continent and Ankara. Driven by its purported objective to drill 26 wells in the Eastern Mediterranean, every one of Turkey’s wildcats in Cypriot waters has gauged Europe’s unity and shed light on its ill-preparedness to confront Turkish actions. Now Turkey has started to drill its initial objective along its northern coast, the Black Sea – the one offshore area that is undeniably Turkish. The reticence of Turkish authorities to drill their Black Sea first might explain a lot as to why drilling in the Mediterranean might be more beneficial. The Turkish Fatih drillship has started prospecting works within Turkey’s Black Sea shelf this July and is assumed to have spud the Tuna-1 wildcat on July 20. Tuna-1 will be drilled in water depth of more than 2km, having been pinpointed as a potential drilling site following 3D seismic surveying in the area in April-May 2019 (by means of the Polar Empress vessel). The location of the Tuna-1 well is peculiar as TPAO has decided to go at it right next to the quadrangle of the Romanian-Bulgarian-Ukrainian-Turkish maritime border, within the deepwater Block 26. It seems that the wildcat’s location not far away from Ukraine’s Skifsky block and (perhaps more importantly) from the largest-so-far offshore discovery of the Black Sea deepwater, the OMV-operated Neptun field in Romania, is a deliberate attempt to maximize the success potential of the well by drilling as close as possible to proven commercial discoveries.

After twin oil spills off its beaches, Sharjah warns vessels -- Authorities in Sharjah have warned of strict action against vessels violating environment regulations and causing oil spills. Two recent oil spills off Khor Fakkan and Kalba beaches have impacted the marine ecosystem and affected the livelihood of fishermen. They have also led to swimming ban on Kalba beach, which was covered with black sludge. Hana Saif Al Suwaidi, chairperson of the Environment And Protected Areas Authority (EPAA), said: "The EPAA, in collaboration with the police, municipal bodies, the coast guard and Bee'ah, has managed to contain the oil spill on the two beaches in Sharjah successfully. These spills could have spelt more disaster on the environment and marine life." In most of the oil spill cases, the pollution is caused by vessels discharging residue from their tanks before going into the port. Al Suwaidi added that the ships causing the environmental violations have been strictly dealt with. "Awareness of ship crews is being raised. Immediate measures are being taken and the public has been asked not to venture into the sea. We are making huge efforts to restore the ecosystem of the area and prevent the pollution from spreading," she added. An official at the Ministry of Climate Change and Environment said that preventing oil spills are crucial since these incidents are occurring at an alarming frequency. "This year alone, three oil spills have happened in the country and caused far-reaching impact. We need a strong mechanism to implement the law," he pointed out. Members of the Sharjah Consultative Council (SCC) and representatives of the Federal National Council (FNC) have also raised their concerns over the spurt in oil spills. They have called on upgrading smart technology that can monitor marine life and carry out surveillance of ships loaded with tanks. The fishing community expressed its concerns over the pollution caused by the ships. "The oil spill mostly spreads to more than five kilometers of coastline and causes shoals of fish to wash ashore." The fishermen in Khor Fakkan, Kalba and Al Qurm areas said that the closure of the beaches have hit their business as their work has come to a halt for several days causing a hike in the price of fishes due to their scarcity.

OPEC+ is facing a 'very delicate, fragile balancing act' in the oil market, strategist says - OPEC and its allies need to find a balance between supporting oil prices and keeping U.S. crude production at bay, a strategist told CNBC this week as the oil-producing group starts to roll back supply cuts. The alliance's historic production cuts of 9.7 million barrels per day expired on July 31 this year. From August, the cuts will be tapered to 7.7 million bpd. Oil prices fell on Monday due to oversupply concerns, Reuters reported, noting that oil output already increased by 1 million bpd in July when Gulf countries ended their voluntary extra supply curbs. "I think we're witnessing kind of a high-wire ... balancing act that OPEC+ is trying to execute here," said John Driscoll, chief strategist at JTD Energy Services. OPEC+ in April made a deal to reduce supply to the market in a bid to support prices, which went into a "free fall" earlier this year amid demand destruction due to the coronavirus and a price war between Russia and Saudi Arabia. We're kind of flying blind, but trying to find this magical mean to use to keep U.S. production at bay and to also support prices. "Now they've restored the balance, prices have recovered, but they have to be very careful because they don't want to be the victim of their own success," he told CNBC's "Capital Connection" on Monday. "If prices were to zoom past $45 a barrel, $50 a barrel on the back of these cuts, that may be waving the red cape in front of the U.S. independents, the producers," he added. U.S. West Texas Intermediate crude futures were down 1.22% at $39.78 a barrel during Asia's afternoon trade, while Brent crude was down 0.94% at $43.11 a barrel. "The way I see it, this is a very delicate, fragile balancing act and there's this cloud of uncertainty overhanging all of it, on the pace of the recovery," Driscoll said. He noted that it is difficult to predict how quickly the economy can recover. "We're kind of flying blind, but trying to find this magical mean to use to keep U.S. production at bay and to also support prices."

OPEC July oil output surges as Gulf voluntary cuts end - OPEC oil output has risen by over 1 million barrels per day (bpd) in July as Saudi Arabia and other Gulf members ended their voluntary extra supply curbs on top of an OPEC-led deal, and other members made limited progress on compliance. The 13-member Organization of the Petroleum Exporting Countries pumped 23.32 million bpd on average in June, the survey found, up 970,000 bpd from June's revised figure, which was the lowest since 1991. OPEC and allies agreed in April to a record output cut as the coronavirus crisis hammered demand. An easing of lockdowns and lower supply have helped oil climb above $40 from April's 21-year low of below $16 a barrel, although concerns of a second wave are keeping a lid on gains. ."Upside potential will continue to be in short supply so long as the COVID hangover lingers," said Stephen Brennock of oil broker PVM. OPEC, Russia and other producers, a group known as OPEC+, agreed to cuts of 9.7 million bpd, or 10% of global output, from May 1. OPEC's share, to be made by 10 members from October 2018 levels in the case of most countries, is 6.084 million bpd. In July, they delivered 5.743 million bpd of the pledged reduction, equal to 94% compliance, the survey found. Compliance in June was revised up to 111%. July's increase is the biggest since April, when OPEC briefly pumped at will before the latest supply cut was agreed. To further support the market, Saudi Arabia, Kuwait and the United Arab Emirates had pledged to cut by an extra 1.18 million bpd in June only. This helped curb output last month to OPEC's lowest since 1991, excluding membership changes, based on Reuters surveys and OPEC figures. The biggest rise in supply in July came from Saudi Arabia, which pumped 8.4 million bpd, up 850,000 bpd from June and close to its quota, the survey found. The United Arab Emirates and Kuwait also boosted output close to their targets. Iraq and Nigeria, which boosted compliance in June and were laggards in previous OPEC+ deals, did not make any further cuts in July, the survey found, with Iraq boosting exports. Both have pledged to make additional reductions in later months.

Oil falls on supply glut fears as OPEC+ set to boost output - Oil prices fell on Monday on oversupply concerns as OPEC and its allies wind back production cuts in August and a rise in worldwide COVID-19 cases points to a slower pick-up in fuel demand. Brent crude futures slid 26 cents, or 0.6%, to $43.26 a barrel by 0253 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 29 cents, or 0.7%, at $39.98 a barrel. Brent posted a fourth month of gains in July and U.S. crude posted a third as both rose from depths hit in April, when much of the world was in lockdown due to the coronavirus pandemic. "Investors are worried about oversupply as the OPEC+ is due to start reducing production cuts this month and a recovery in oil prices from record lows is likely to encourage U.S. shale producers to ramp up output," said Hiroyuki Kikukawa, general manager of research at Nissan Securities. "Also, fears over a resurgence in the coronavirus cases are weighing on oil markets," he said. Oil output by the Organization of the Petroleum Exporting Countries rose by over 1 million barrels a day in July as Saudi Arabia and other Gulf members ended their voluntary extra supply curbs on top of an OPEC-led deal. Russia's oil output in July was unchanged from June levels, the nation's Energy Ministry said on Sunday. OPEC+, a grouping of OPEC and allies including Russia, is set to step up output in August, adding about 1.5 million bpd to global supply. U.S. energy firms kept the number of oil and natural gas rigs unchanged at a record low as the rig count fell for a fifth straight month, although July marked the smallest monthly decline. Oil prices are set for a slow crawl upwards this year as the gradual easing of coronavirus-led restrictions buoys demand, although a second COVID-19 wave could slow the pace of recovery, a Reuters poll showed on Friday. The Australian state of Victoria declared a state of disaster and authorities in the Philippines said they would impose fresh restrictions in Manila this week, reflecting worries around the world about getting the pandemic under control. "Adding to matters is that the U.S. consumer market is entering the last few weeks of peak driving season and with mobility tracking data flatlining," Stephen Innes, chief global market strategist at AxiCorp, said in a report. "Unless there is a significant drop in the COVID-19 case count curve that is sufficient enough to reduce consumer fear of the virus and shift mobility data higher, demand might not get much better from here on in," he said.

Oil Prices Climb After Lebanon Blast-- Oil climbed to the highest level in nearly two weeks after an explosion at Lebanon’s main port rocked the capital Beirut, stoking fears over instability in the region. U.S. benchmark crude futures climbed 1.7% on Monday. Footage showed what appeared to be a fire, followed by crackling lights and then a larger explosion as an enormous cloud of smoke engulfed the area around the Port of Beirut. Authorities say it was caused by highly explosive materials at the port, but didn’t immediately say whether it was an accident or an attack. Meanwhile, analysts’ expectation of a decline in U.S. crude inventory levels in this week’s government report released on Wednesday is also helping to buoy crude prices. “Tensions are high and that just kind of puts a fine point on it,” said John Kilduff, a partner at Again Capital LLC. “Looks like there’s gonna be a draw in crude oil again, so we got that support as well.” Lebanon is reeling under its worst financial and economic crisis, with a sharp plunge in its local currency eroding purchasing power and throwing many into poverty and unemployment. Analysts in a Bloomberg survey are expecting a 3.35 million-barrel decline in oil supplies in the Energy Information Administration report. The industry-funded American Petroleum Institute will report its inventory tally later Tuesday. Still, a persistent supply overhang coupled with a souring demand outlook due to the coronavirus pandemic has kept U.S. crude futures locked in a tight trading range near $40 a barrel since late June. OPEC and its allies plan to ease historic output curbs this month, even with global virus cases above 18 million.

Oil prices end higher after upbeat readings on manufacturing activity –  Crude oil prices ended higher on Monday with West Texas Intermediate crude for September delivery adding 74 cents or 1.8%. WTI settled at $41.01 a barrel in trading on the New York Mercantile Exchange as analysts credited the increase on upbeat readings on manufacturing activities. Some also see a limited field of improvement for oil prices because of the continuing rise of the number of COVID-19 cases reported MarketWatch. October Brent crude, the global benchmark rose 63 cents or 1.5% and finished the day at $44.15 a barrel on ICE Futures Europe. The increased prices came after the Institute for Supply Management said its manufacturing index rose to 54.2 in July from 52.6 in June, the highest level in 15 months. A reading higher than 50 indicates an expansion in activity. However—there’s always a ‘however.’ OPEC’s decision to relax production curbs takes effect this month and the output is targeted to rise by nearly 1.5 million barrels a day. “Investors are worried that the production increase will reverse the recent price recovery in oil, especially as coronavirus cases continue to rise world-wide and energy demand remains subdued,” said Mihir Kapadia, chief executive of Sun Global Investments, in a note.

Oil Rises for Third Day as Dollar Sweeps Commodities Higher- Crude prices rose for a third straight session on Tuesday, leveraging on the dollar’s tumble that swept commodity prices higher and expectations that U.S. stockpiles fell again last week despite the continuous spread of the coronavirus raising doubts about fuel demand. New York-traded West Texas Intermediate, the benchmark for U.S. crude futures, settled August with its strongest performance in more than a week, settling up 69 cents, or 1.7%, at $41.70 per barrel. London-traded Brent, the bellwether for global crude prices, closed the New York session up 28 cents, or 1.3%, at $44.43. The Dollar Index, which pits the greenback against a basket of six competing currencies, resumed its slide on Tuesday after a respite since the end of last week, sending most commodities higher, including gold to record highs. On the stockpiles front, traders expect the U.S. Energy Information Administration to report on Wednesday a 3-million-barrel decline in domestic crude stockpiles last week. But analysts warned that there might be an unexpected swing in the data, in keeping with recent trends. The EIA reported two 7-million-barrel draws and one 10 million barrel slump in July versus two builds of nearly 5 million. Both the declines and increases were way beyond levels forecast by analysts. With the previous week’s data showing an outsize draw, this Wednesday’s EIA release for the July 27-31 week could come up with a huge build, they say. Despite the three-day rally in oil, traders said crude remains under pressure due to concerns a fresh wave of Covid-19 infections elsewhere in the world will hamper demand recovery just as major producers ramp up output. 

Oil edges up to highest since March on hopes for U.S. stimulus -  Brent oil futures on Tuesday closed at their highest since early March on hopes the United States is making progress on a new economic stimulus package, as well as curbing the coronavirus spread. Brent rose 28 cents, or 0.6%, to settle at $44.43 a barrel, its highest close since March 6. U.S. West Texas Intermediate (WTI) crude rose 69 cents, or 1.7%, to $41.70, its highest finish since July 21. Earlier in the day, both Brent and WTI were trading at their highest since early March. Those price moves came ahead of the release of an industry report later Tuesday from the American Petroleum Institute that is expected to show a decrease in U.S. crude stockpiles last week. [EIA/S] “Crude prices turned positive on stimulus hopes and after another positive round of economic data showed manufacturing recovery continued in June,” Edward Moya, senior market analyst at OANDA in New York, said, pointing to better than expected manufacturing data in Asia, Europe and the United States. Negotiations between congressional Democrats and the White House on a new round of coronavirus relief have begun to move in the right direction, though the two sides remain far apart, the U.S. Senate’s top Democrat said on Tuesday. New U.S. coronavirus cases fell below 50,000 over the weekend for the first time since early July, according to the U.S. Centers for Disease Control. Despite Tuesday’s price rise, traders said crude remained under pressure due to concerns a fresh wave of COVID-19 infections elsewhere in the world will hamper demand recovery just as major producers ramp up output. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, were boosting output this month by about 1.5 million barrels per day. U.S. producers also plan to restart shut-in production. In Europe and Asia, meanwhile, concerns are growing that coronavirus may be spreading in a global second wave, said Paola Rodriguez Masiu of Rystad Energy.

Oil jumps more than 1% to five-month high on larger-than-expected inventory drop - Oil prices rose to their highest since early March on Wednesday after a large decline in U.S. crude inventories and the dollar weakened, but mounting coronavirus infections had investors worried about the demand outlook. Brent crude was up 70 cents, or 1.6%, at $45.13 a barrel. West Texas Intermediate oil settled 49 cents, or 1.18%, higher at $42.19 per barrel. Both contracts gained over 4% earlier in the session. U.S. crude inventories fell by 7.4 million barrels last week, the Energy Information Administration said. That exceeded the draw of 3 million barrels analysts predicted in a Reuters poll. A weaker dollar, which makes oil cheaper for holders of foreign currencies, also supported prices. "There's no escaping the benefits of a weaker dollar in the commodity space and oil is certainly basking in its decline," senior OANDA analyst Craig Erlam said. Oil also drew support from signs that talks between the White House and Democrats in Congress on a new coronavirus relief package are making progress, although the sides remain far apart. U.S. factory data this week also showed an improvement in orders, which some analysts took as a hint of economic recovery. Euro zone business activity returned to modest growth in July as some curbs imposed to stop the spread of the coronavirus eased, the Composite Purchasing Managers' Index from IHS Markit showed. Rising prices come against the backdrop of a surge in coronavirus cases which could threaten a recovery in fuel demand. Global coronavirus deaths surpassed 700,000 on Wednesday, according to a Reuters tally, with the United States, Brazil, India and Mexico leading the rise in fatalities. "We see gasoline demand coming in close to 7% year-on-year lower through Q3, with gasoil/diesel registering a decline of some 4%, implying a continued slowdown of the recovery, with a global return to 2019 levels this year increasingly in doubt," JBC Energy said, referring to global consumption, which has collapsed due to lockdowns to help contain the pandemic. The consultancy sees jet fuel demand down 50% year on year through the third quarter. In the United States, the world's top oil consumer, distillate inventories rose last week to their highest in 38 years for the third week in a row, while Gulf Coast distillates were at record high levels, the EIA said. Gasoline stocks rose for a second straight week.

Oil settles below 5-month highs amid fuel demand worries - (Reuters) – Oil prices hovered below five-month highs on Thursday, falling after a session in which bearish sentiment about fuel demand counteracted optimism about Iraq’s supply cuts, pushing the benchmarks in and out of positive territory. Concerns remain that demand is depressed by the economic slowdown due to the coronavirus pandemic, said Phil Flynn, senior analyst at Price Futures Group in Chicago. “Everyone is waiting for the coronavirus relief package to come through to give a bounce to the economy,” he said. Brent crude settled down 8 cents at $45.09 a barrel, while U.S. crude fell 24 cents to $41.95 after a four-day streak of gains. Earlier in the session, planned output cuts from Iraq boosted the contracts. Iraq said it would make an additional cut in its oil production of about 400,000 barrels per day in August to compensate for its overproduction over the past period under the OPEC supply reduction pact. The two benchmarks rose to their highest since March 6 in the previous session after the U.S. government reported a much bigger-than-expected drop in crude stockpiles. [EIA/S] A weaker U.S. dollar was also supportive of oil prices as it makes dollar-priced oil cheaper for holders of other currencies. The dollar index, which measures the greenback against a basket of six major currencies <.DXY>, logged its biggest monthly percentage fall in a decade in July, and a Reuters poll found analysts expected it to continue falling into next year.

Oil Slips Below 45 Bbl On Demand Concerns But Posts Weekly Rise - Oil prices fell nearly 2% on Friday, limiting their weekly gain due to concerns the global recovery could falter from a resurgence of coronavirus cases. The rise in infections remains the dominant issue for the fuel demand outlook. Cases in the United States are still rising in a number of states, while India recently reported a record daily jump in infections. More than 700,000 people have died in the worldwide pandemic. Brent crude fell 69 cents, or 1.5%, to settle at $44.40 a barrel. U.S. West Texas Intermediate (WTI) crude fell 73 cents, or 1.7%, to end at $41.22 a barrel. Brent rose 2.5% for the week, while WTI gained 2.4%. Talks between U.S. lawmakers over another round of stimulus have stalled, meanwhile. U.S. President Donald Trump has threatened to pull White House representatives out of talks and instead issue executive orders to address economic needs. "The U.S. Congress can't seem to come up with a plan for the next round of stimulus and it's creating doubt for U.S. economic recovery," said Gary Cunningham, director of market research at Tradition Energy. OPEC member Iraq pledged to cut output further in August, which helped support prices. The nation has been a laggard in fully meeting its pledge as part of an April deal to reduce supply. Crude has recovered from lows reached in April, when Brent slipped below $16, a 21-year low.

Oil lower as U.S.-China tensions mount, but logs weekly gain - Oil futures ended lower Friday, trimming weekly gains, with pressure tied to rising tensions between the U.S. and China after President Donald Trump imposed a sweeping but unspecified ban on dealings with the Chinese owners of consumer apps TikTok and WeChat.  West Texas Intermediate crude for September delivery was down 73 cents, or 1.7%, to close at $41.22 a barrel on the New York Mercantile Exchange, while October Brent crude fell 69 cents, or 1.5%, to finish at $44.40 a barrel on ICE Futures Europe. WTI saw a 2.4% weekly rise, while Brent gained 2%.  The pair of executive orders banning transactions with Chinese social-media companies signed by Trump late Thursday take effect in 45 days. Oil shifted lower in Asian trade after the announcement, showing “that when it comes to geopolitical risk, Asia oil traders (and most for that fact) have an unfortunate predisposition to heightened U.S.-China tensions,” said Stephen Innes, chief global market strategist at AxiCorp., in a note. Meanwhile, investors have remained fairly upbeat in the face of a reduction in production curbs by major producers that took effect on Aug. 1.Saudi Arabia on Thursday lowered its official selling price, or OSP, for crude into Asia and Europe by 30 cents. Analysts said the move came as a relief to traders who had feared a steeper cut in a bid to take market share from rivals. But the cut still suggests the global market isn’t absorbing physical crudes as cleanly as a month ago, said Michael Tran, analyst at RBC Capital Markets, in a note.“The cut to OSPs is a sign that the market is struggling to absorb the easing of the OPEC production cuts as additional barrels [return to the] market,” he wrote, referring to an easing of curbs by the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, beginning this month.Tran noted that China has played an oversize role in soaking up supplies, which means any slowing of Chinese imports will show up in softer physical pricing. Meanwhile, refinery margins remain soft across most regions, while the U.S. and Europe have seen stagnating traffic patterns in recent weeks.“We continue to have a cautious outlook,” he said, particularly coming into the end of the summer driving season, “as abysmal refining margins could result in economic run cuts, or demand destruction for crude.” A further decline in the number of U.S. oil rigs did little to move prices in early afternoon trade. Oil-field services firm Baker Hughes said the number of rigs fell by four this week to 176. A lack of progress in talks between congressional Democrats and the White House over additional coronavirus aid was also a potential weight on crude prices, as it could represent a threat to consumer demand, analysts said. Talks were set to resume Friday despite a wide gulf on key issues. Meanwhile, the U.S. currency was on the rise, with the ICE U.S. Dollar Index, a measure of the greenback against a basket of six major rivals, surging 0.8%.

Yemenis fear decaying oil tanker could cause major disaster - Following Tuesday’s huge explosions in Beirut, Yemenis have been voicing their concern that the decaying Safer floating storage and offloading terminal could lead to a devastating disaster in Yemen if it is not repaired soon. Having seen footage of the destruction wrought by the explosions in Lebanon, Yemeni fishermen, politicians, government officials, military officers and activists have urged the international community to pressure the Houthis to give experts from the United Nations access to the damaged ship so that it can be fixed. The Safer has been stranded off the western city of Hodeida since early 2015. It reportedly carries around 1.1 million barrels of crude oil and has recently shown signs of rusting, with water entering the engine room. That leak prompted UN officials to warn of a major impending environmental disaster in the Red Sea, as well as the potential risk of a massive explosion caused by the build up of gases in the storage tanks, or by weaponry fired deliberately or accidentally. Under pressure from local and international bodies, the Iran-backed Houthis, who control Hodeida, initially agreed to allow a UN team to board the ship to assess the damage and unload the oil. However, they later reversed that decision, citing a conspiracy between the UN, the US, and the Saudi-led Arab coalition. Khaled Al-Rami, a Yemeni fisherman from Hodeida’s Khokha district on the shores of the Red Sea, told Arab News that his “first thought” on seeing the images from Beirut on Tuesday was that an equally devastating disaster could occur if the Safer spills oil into the water. Last month, the Yemen-based environmental group Holm Akhdar (Green Dream) warned that an oil spill would have devastating consequences for fishermen, marine diversity, and the country’s fish stock. “At least 115 of Yemen’s islands in the Red Sea would lose their biodiversity and their natural habitats. About 126,000 Yemeni fishermen — including 67,800 in Hodeida — would lose their only source of income because of the disaster,” the group said in its report. “If the ship is not repaired, then after Lebanon, it will be Yemen,” Al-Rami said. “On WhatsApp, my friends and other fishermen shared their concerns about a predicted disaster from the ship. We are all worried about the impact of any oil spills on our lives. This is our major concern at the moment. It causes us great horror and panic. I appeal to the international community, the Arab Coalition and the UN committee (in Hodeida) to save us from a possible disaster.”

US Confirms American Company Has Signed Deal With 'Rebels' To Take Syria's Oil | Zero Hedge --For anyone who still actually thinks America's role in Syria was ever somehow about "protecting human rights" or "promoting democracy" — here's the latest out of Syria, which the Trump administration has since confirmed:Syria’s foreign ministry said on Sunday that an American oil company had signed an agreement with Kurdish-led rebels who control northeastern oilfields in what it described as an illegal deal aimed at “stealing” Syria’s crude. That's right, the some 700 to perhaps 1000+ US troops still occupying Syrian territory in the country's oil and gas rich northeast are overseeing a deal for an American company to come in and take the oil.This is after Trump has said for much of the past year that he's keeping American forces there to "secure the oil" — though it's long been left open whether this means "secure" it from ISIS, or the Russians, or Damascus. Now in practice we see it's all about taking these vital resources away from the government and ultimately the already impoverished Syrian people.Syria's foreign ministry as well as state media SANA said it “condemns in the strongest terms the agreement signed between al-Qasd militia (SDF) and an American oil company to steal Syria’s oil under the sponsorship and support of the American administration.”Damascus also said “This agreement is null and void and has no legal basis,” and is likely to lodge an official complaint with the UN. It's as yet unknown precisely what US company or companies are involved. When early reports surfaced last week, it was Syrian state sources making the allegation. But US Secretary of State Mike Pompeo since confirmed it, according to Reuters: Senator Lindsey Graham said during the committee hearing that SDF General Commander Mazloum Abdi informed him that a deal had been signed with an American company to “modernize the oil fields in northeastern Syria”, and asked Pompeo whether the administration was supportive of it. “We are,” Pompeo responded during the hearing streamed live by PBS. “The deal took a little longer... than we had hoped, and now we’re in implementation.”

Erdogan: Turkey resumes energy exploration in east Mediterranean - President Tayyip Erdogan said on Friday that Turkey had resumed energy exploration work in the eastern Mediterranean as Greece had not kept its promises regarding such activities in the region. NATO members Turkey and Greece have long been at loggerheads over overlapping claims for hydrocarbon resources and tensions flared up last month, prompting German Chancellor Angela Merkel to hold talks with the country’s leaders to ease tensions. “We have started drilling work again,” Erdogan told reporters after participating in Friday prayers at the Hagia Sophia mosque. “We don’t feel obliged to talk with those who do not have rights in maritime jurisdiction zones.” He said Turkey’s Barbaros Hayreddin Pasa, a seismic survey vessel, had been sent to the region to carry out its duties. The ship moved into waters off Cyprus in late July and remains in that region. Erdogan made the comments when asked about an accord signed by Egypt and Greece on Thursday designating an exclusive economic zone between the two nations in the east Mediterranean. Diplomats in Greece said their agreement nullified an accord reached last year between Turkey and the internationally recognized government of Libya. However, Erdogan said the Egypt-Greece accord was of no value and that Turkey would sustain its agreement with Libya “decisively.” The Turkish Foreign Ministry has said the Egypt-Greece zone falls in the area of Turkey’s continental shelf. Turkey and Greece are also at odds over a range of issues from flights over each other’s territory in the Aegean Sea to ethnically divided Cyprus.

US Navy Seizes Iran-Bound Ship Carrying Pharmaceutical Supplies Off China- Fars - Iranian state media has announced that a US Navy warship has seized a transport ship near the Chinese port of Qingdao on Wednesday morning.The ship was reportedly en route to Iran loaded with medical manufacturing components, specifically zeolite, which Fars News Agency says is needed for manufacturing oxygen concentrators for coronavirus-infected patients.“Only one imported part is used for production of oxygen concentrators, which is zeolite, and we are forced to purchase it from France and import it to the country through several intermediators,” Peyman Bakhshandeh-Nejad, an Iran-based pharmaceutical company CEO told state media. Amid the raging coronavirus crisis in the Islamic Republic, which for over half a year has been among the hardest-hit countries in the world (and recall that last month President Rouhani shocked in a speech by saying the truer estimate of numbers of Iranian infected stands at some 25 million, not the official 300,000+), Tehran has been desperate to import vital hospital equipment and medicines.However, US-led sanctions related to Iran's alleged nuclear aspirations has made this extremely difficult. While Washington has denied it is targeting vital medicines and staples like food and hospital gear, Iran has said it's precisely these things which are being blocked.  Specifically in the case of the seized ship off China, zeolite is said to be crucial in oxygen concentrator systems for coronavirus patients who can rely on the vital devices at home without having to visit a hospital.

300 ISIS Terrorists At Large- Mass Prison Break In Afghanistan After Hours-Long Firefight - What could be the largest ISIS jailbreak in the terror group's history didn't take place in Iraq or Syria, but just happened inside Afghanistan, where ISIS is attempting to make a come-back at a moment the US-Taliban truce deal is taking shaky effect.It happened Monday after the Islamic State attacked a large prison complex in the eastern city of Jalalabad in which nearly 40 people were killed, among these 10 ISIS members, but some 300 escaped jihadists still remain a large.Some international reports listed that as many as 400 terrorists may have escaped. It reportedly began by a car bomb attack, after which ISIS gunmen surged into the prison area and ultimately overran the guards. ISIS held the prison throughout much of the day Monday as national defense forces laid siege, leading to a huge firefight.  According to Reuters, hundreds escaped amid the chaos:More than 300 prisoners were still at large, Attaullah Khugyani, spokesman for the governor of Nangarhar province, said, said. Of the 1,793 prisoners, more than 1,025 had tried to escape and been recaptured and 430 had remained inside. “The rest are missing,” he said.Jalalabad is an area known for heavy ISIS and other jihadist activity. The terror group got a foothold in central Asia years ago at the height of the Islamic State's short-lived territorial caliphate over w estern Iraq and eastern Syria.