oil prices at 13 month high; US oil supplies at a 42 week low*; global oil supply and demand balanced

(*erroneously stated as a 45 week low last week)

oil prices finished higher for a second straight week on progress towards a US economic stimulus package and on a big drop in US crude inventories....after rising 9% to $56.85 a barrel last week on ongoing OPEC production cuts and on the economic stimulus package making its way through Congress, the contract price of US light sweet crude for March delivery opened higher on Monday on supply cuts among key producers and hopes for further U.S. economic stimulus and never looked back, settling $1.12 higher at $57.97 a barrel while the global benchmark Brent crude settled above $60 a barrel for the first time since January of last year...US oil prices edged up early on Tuesday, reaching their highest in 13 months, as supply cuts by major producers and optimism over a recovery in fuel demand supported energy markets, with US crude rising 39 cents to $58.36 a barrel, led by gains in Brent, which rose for an eighth straight day and topped $61 a barrel...oil prices opened higher again on Wednesday on the American Petroleum Institute's report of a larger than expected drop in crude inventories and held those gains as the EIA reported an even larger drop in oil supplies and finished trading 32 cents higher at $58.68 a barrel, with global prices posting the longest streak of price gains in over two years, supported by producer supply cuts and hopes that vaccine rollouts would drive a recovery in fuel demand....but the rally in oil prices snapped on Thursday after both OPEC and the International Energy Agency (IEA) said renewed lockdowns and the emergence of new coronavirus variants reduced the prospect of a swift demand recovery. and US crude settled 44 cents lower at $58.24 a barrel as technical analysis showed both benchmarks remained in overbought territory...nonetheless, the oil price rally resumed on Friday as progress towards a new stimulus boosted hopes for increased fuel demand, and then jumped to settle $1.23, or more than 2% higher at $59.47 a barrel, after the Houthis' air force hit an airport and air base in Saudi Arabia with a drones attack...hence the March oil contract finished the week 4.6% higher, with US oil prices ending at their highest since early January of last year..

natural gas prices also finished the week modestly higher, as forecasts for bitter cold over most of the Lower 48 threatened to turn the natural gas storage surplus into a deficit....after jumping 11.7% to $2.863 per mmBTU last week on forecasts for continuing below normal temperatures through the end of February, the contract price of natural gas for March delivery opened higher and pushed towards $3 early Monday, but pulled back from the highs on weather model volatility to settle just 1.9 cents higher at $2.882 per mmBTU...Monday's reversal continued on Tuesday, with March gas prices shedding 4.7 cents with the brutal cold circulating through the Lower 48 seen fading before month’s end and a more seasonal pattern to follow thereafter...but natural gas prices rebounded on Wednesday to finish 7.6 cents higher at $2.911 per mmBTU as the frigid air penetrating the north/central United States stalled, leaving large population centers to bear sub-zero temperatures....gas prices then slipped 4.3 cents on Thursday as the cold air outbreak was seen weakening later this month and the weekly storage report disappointed traders, but rebounded again on Friday to close 4.4 cents higher at $2.912 per mmBTU, as bitter cold temperatures blanketed the Lower 48, and threatened to freeze off output throughout most of the country’s production basins, and thus finished the week 1.7% higher than the prior Friday's close...

the natural gas storage report from the EIA for the week ending February 5th indicated that the amount of natural gas held in underground storage in the US fell by 171 billion cubic feet to 2,518 billion cubic feet by the end of the week, which left our gas supplies 9 billion cubic feet, or 0.4% below the 2,527 billion cubic feet that were in storage on February 5th of last year, and 152 billion cubic feet, or 6.4% above the five-year average of 2,366 billion cubic feet of natural gas that have been in storage as of the 5th of February in recent years....the 171 billion cubic feet that were drawn out of US natural gas storage this week was a bit less than the average forecast of a 175 billion cubic foot withdrawal from an S&P Global Platts survey of analysts, but way more than the 121 billion cubic foot withdrawal from natural gas storage seen during the corresponding week of a year earlier, and also more than the average withdrawal of 125 billion cubic feet of natural gas that have typically been pulled out of 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 February 5th indicated that despite a drop in our oil exports, we still had to withdraw oil from our stored commercial crude supplies for the tenth time in the past twelve weeks and for the 23rd time in the past thirty-five weeks.... our imports of crude oil fell by an average of 650,000 barrels per day to an average of 5,857,000 barrels per day, after rising by an average of 1,443,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 866,000 barrels per day to 2,617,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,240,000 barrels of per day during the week ending February 5th, 216,000 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 increased​ by​ 100,000 barrels per day to 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 14,240,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 14,793,000 barrels of crude per day during the week ending February 5th, 152,000 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 973,000 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 420,000 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 (-420,000) 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 balance sheet fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting that there must have been an error or errors of that magnitude in the oil supply & demand figures that we have just transcribed....furthermore, since last week's fudge factor was at +575,000 barrels per day, there was a 995,000 barrel per day balance sheet difference in ​the ​unaccounted for crude oil figure from a week ago, which renders the week over week supply and demand changes we have just transcribed unreliable....however, since most everyone treats these weekly EIA figures as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as published, just as they're watched & believed to be accurate by most everyone in the industry.....(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 5,868,000 barrels per day last week, which was 12.0% less than the 6,671,000 barrel per day average that we were importing over the same four-week period last year.....the 973,000 barrel per day net withdrawal from our crude inventories was due to a 949,000 barrels per day withdrawal from our commercially available stocks of crude oil, and a 24,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which is being leased for commercial purposes....this week's crude oil production was reported to be 100,000 barrels per day higher at 11,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 10,500,000 barrels per day, while a 1,000 barrel per day decrease to 507,000 barrels per day in Alaska's oil production had no impact on the rounded national total....last year's US crude oil production for the week ending February 7th was rounded to 13,000,000 barrels per day, so this reporting week's rounded oil production figure was 15.4% below that of a year ago, yet still 30.5% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 83.0% of their capacity while using those 14,793,000 barrels of crude per day during the week ending February 5th, up from 82.3% of capacity during the prior week...however, since US refinery utilization had averaged the lowest on record through 2020 and has barely recovered, the 14,793,000 barrels per day of oil that were refined this week were still 7.7% fewer barrels than the 16,020,000 barrels of crude that were being processed daily during the week ending February 7th of last year, when US refineries were operating at an also low 88.0% of capacity...

with the increase in the amount of oil being refined, the gasoline output from our refineries was higher for the 4th time in 12 weeks, increasing by 236,000 barrels per day to 8,656,000 barrels per day during the week ending February 5th, after our gasoline output had decreased by 253,000 barrels per day over the prior week...but since our gasoline production is still recovering from a multi-year low in the wake of this Spring's covid-related lockdowns, this week's gasoline output was still 6.3% lower than the 9,241,000 barrels of gasoline that were being produced daily over the same week of last year....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 38,000 barrels per day to 4,660,000 barrels per day, after our distillates output had increased by 104,000 barrels per day over the prior week....but since our distillates' production is also ​recovering from a three year low, that output was 3.7% less than the 4,837,000 barrels of distillates that were being produced daily during the week ending February 7th, 2020...

with the increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the 10th time in thirteen weeks, and for 14th time in 31 weeks, rising by 4,259,000 barrels to 252,153,000 barrels during the week ending February 5th, after our gasoline inventories had increased by 4,467,000 barrels over the prior week...our gasoline supplies increased this week even as the amount of gasoline supplied to US users increased by 87,000 barrels per day to 7,857,000 barrels per day, as our exports of gasoline fell by 43,000 barrels per day to 737,000 barrels per day, while our imports of gasoline rose by 99,000 barrels per day to 657,000 barrels per day....but even after this week's inventory increase, our gasoline supplies were still 1.8% lower than last February 7th's gasoline inventories of 261,049,000 barrels, and near the five year average of our gasoline supplies for this time of the year... 

meanwhile, even with the increase in our distillates production, our supplies of distillate fuels decreased for the 16th time in 24 weeks and for the 29th time in the past year, falling by 1,732,000 barrels to 161,106,000 barrels during the week ending February 5th, after our distillates supplies had decreased by 9,000 barrels during the prior week....our distillates supplies fell by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 110,000 barrels per day to 4,308,000 barrels per day, and because our imports of distillates fell by 162,000 barrels per day to 356,000 barrels per day and because our exports of distillates rose by 13,000 barrels per day to 956,000 barrels per day...but even after this week's inventory decrease, our distillate supplies at the end of the week were still 14.1% above the 141,222,000 barrels of distillates that we had in storage on February 7th, 2020, and about 7% above the five year average of distillates stocks for this time of the year...

finally, even with the ​big ​drop in our oil exports, our commercial supplies of crude oil in storage (not including the commercial oil being stored in the SPR) fell for the 21st time in the past twenty-nine weeks, and for the 24th time in the past year, decreasing by 6,645,000 barrels, from 475,659,000 barrels on January 29th to 469,014,000 barrels on February 5th, the lowest oil inventory level since March 20th...but even after that decrease, our commercial crude oil inventories were about 2% above the five-year average of crude oil supplies for this time of year, and 38.4% above the prior 5 year (2011 - 2015) average of our crude oil stocks as of the first week of February, 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 had jumped​ during the lockdowns​ this spring after generally rising over the past two years, except for during the past 8 weeks and during the past two summers, after generally falling over the year and a half prior to September of 2018, our commercial crude oil supplies as of February 5th were still 6.0% more than the 442,468,000 barrels of oil we had in commercial storage on February 7th of 2020, 4.9% above the 447,207,000 barrels of oil that we had in storage on February 8th of 2019, and also 11.6% more than the 420,254,000 barrels of oil we had in commercial storage on February 2nd of 2018... 

OPEC's Monthly Oil Market Report

Thursday of this past week saw the release of OPEC's February Oil Market Report, which covers OPEC & global oil data for January, and hence it gives us a picture of the global oil supply & demand situation after OPEC, the Russians, and other oil producers agreed to increase their oil production by 500,000 barrels per day during January from their prior commitment to cut production by 7.7 million barrels a day from an October 2018 peak, which had been earlier reduced from the 9.7 million barrels a day cuts they had imposed on themselves during May, June and July....again, before we look at what this month's report shows us, we should again caution that estimating oil demand while the course of the Covid-19 pandemic remains uncertain is pretty speculative, and hence the demand estimates we'll be reporting this month should again be considered as having a much larger margin of error than we'd expect from this report during stable and hence more predictable periods.. 

the first table from this monthly report that we'll check is from the page numbered 47 of this month's report (pdf page 57), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate...for all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures...

as we can see from the above table of their oil production data, OPEC's oil output increased by 181,000 barrels per day to 25,496,000 barrels per day during January, up from their revised December production total of 25,315,000 barrels per day...however, that December output figure was originally reported as 25,362,000 barrels per day, which therefore means that OPEC's December production was revised 47,000 barrels per day lower with this report, and hence January's production was, in effect, a rounded 134,000 barrel per day increase from the previously reported OPEC production figure (for your reference, here is the table of the official December OPEC output figures as reported a month ago, before this month's revisions)...

from the above table, we can see that a 89,000 barrels per day increase in the Saudi's production, an increase of 72,000 barrels per day in Venezuela's output, and a production increase of 62,000 barrels per day from Iran were the major factors in OPEC's January output increase, while several OPEC members failed to take advantage of the new agreement to increase production...recall that last year's original oil producer's agreement was to cut production by 9.7 million barrels per day from an October 2018 baseline for just two months early in the pandemic, during May and June, but that agreement had been extended to include July at a meeting between OPEC and other producers on June 6th....then, in a subsequent meeting in July, OPEC and the other oil producers agreed to ease their deep supply cuts by 2 million barrels per day to 7.7 million barrels per day for August and subsequent months, which was thus the agreement that covered OPEC's output for the rest of 2020...the agreement for January's production, which has now been extended to include February's output, was to further ease their supply cuts by 500,000 barrels per day to 7.2 million barrels per day from that original baseline...however, war torn Libya and US sanctioned OPEC members Iran and Venezuela had been exempt from the production cuts imposed by these agreements, and as we can see above, Iran and Venezuela both saw major increases this month...

since there had never seemed to be a published table or listing available of how much each OPEC member was expected to produce under the eased production cuts of August through December, or the new ones for January, we had been including the table that shows the ​original​ October 2018 reference production for each of the OPEC members (as well as other producers party to the mid-April agreement), as well as the production level each of those producers was expected to cut their output to during May, June, and July...we'll include that table once again now, though with two modifications to that agreement since, it becomes more difficult to compute the production quotas that each of the OPEC members was expected to hold to in January:

the first column in the above table shows the oil production baseline, in thousands of barrel per day from which each of the oil producers was to cut from, a figure which is based on each of the producer's October 2018 oil output, ie., a date before last year's and the prior year's output cuts took effect, and coincidently the highest monthly production of the era for most of the producers who are party to these cuts; the second column shows how much each participant had originally committed to cut during May and June in thousands of barrel per day, which was 23% of the October 2018 baseline for all participants except for Mexico, while the last column shows the production level each participant had agreed to after that cut...the producer's agreement for August through December of last year amended the above such that each member would be allowed to reduce their production cut shown above (ie, the "voluntary adjustment" shown above) by 20%...for example, Algeria's "cut" was expected to be 241,000 barrels per day from May thru July, which would reduce their oil production to 816,000 barrels per day over that period...under the agreement for August through December, Algeria would reduce their "cut" by 20%, or to 193,000 barrels per day, thus allowing them to produce 864,000 barrels per day during those months...with the agreement for January, Algeria would be able to reduce their production cut by another 5% from the "voluntary adjustment" figure shown above, or to 181,000 barrels per day, thus allowing them to produce 876,000 barrels per day during January....offhand, by comparing the above table's voluntary allocation less 25% from the initial OPEC production cut, it appears that Equitorial Guinea, Gabon and Kuwait had all exceeded their revised allocation during January, but that the group as a whole still remained below the quota they would have been allowed to produce for the month...

the next graphic from this month's report that we'll highlight shows us both OPEC and world oil production monthly on the same graph, over the period from February 2019 to January 2021, and it comes from page 48 (pdf page 58) of the February OPEC Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale.... 

after the reported 181,000 barrel per day increase in OPEC's production from what they produced a month earlier, OPEC's preliminary estimate indicates that total global liquids production increased by a rounded 430,000 barrels per day to average 93.12 million barrels per day in January, a reported increase which apparently came after December's total global output figure was revised down by 240,000 barrels per day from the 92.93 million barrels per day of global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 250,000 barrels per day in January after that revision, with oil production increases of 290,000 barrels per day from the OECD countries alone accounting for more than the total non-OPEC production increase in January... 

after that increase in January's global output, the 92.93 million barrels of oil per day that were produced globally in January were 7.33 million barrels per day, or 7.3% less than the revised 100.26 million barrels of oil per day that were being produced globally in January a year ago, which was the first month of additional production cuts of 500,000 barrels per day in an attempt to support prices (see the February 2020 OPEC report (online pdf) for the originally reported January 2020 details)...with this month's increase in OPEC's output, their January oil production of 25,496,000 barrels per day was at 27.4% of what was produced globally during the month, an increase from their revised 27.3% share of the global total in December....OPEC's January 2020 production, which included 537,000 barrels per day from former OPEC member Ecuador, was reported at 28,858,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year produced 2,825,000, or 10.0% fewer barrels per day of oil in January 2021 than what they produced a year earlier, when they accounted for 28.8% of global output...  

However, even after the increase in OPEC's and global oil output that we've seen in this report, there was still a small shortfall in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us...   

the above table came from page 26 of the February Oil Market Report (pdf page 36), and it shows regional and total oil demand estimates in millions of barrels per day for 2020 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2021 over the rest of the table...on the "Total world" line in the second column, we've circled in blue the figure that's relevant for January, which is their estimate of global oil demand during the first quarter of 2020... OPEC is estimating that during the 1st quarter of this year, all oil consuming regions of the globe will be using an average of 93.22 million barrels of oil per day, which is a 950,000 barrels per day downward revision from the 94.17 million barrels of oil per day ​of demand ​they were estimating for the first quarter a month ago (note that we have encircled this month's revisions in green), still reflecting quite a bit of coronavirus related demand destruction compared to 2019, when global demand averaged 99.98 million barrels per day....but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were producing 93.12 million barrels million barrels per day during January, which would imply that there was a modest shortage of around ​100,000 barrels per day in global oil production in January when compared to the demand estimated for the month..

In addition to the revision the first quarter's global oil demand, you can see encircled in green that OPEC has also revised global demand for 2020 upwards by 250,000 barrels per day, which thus means that the supply shortfalls or surpluses that we previously reported for last year would need to be revised....a month ago we estimated a global shortage of around 370,000 barrels per day in global oil production during December, based on the figures that were published at that time...however, as we saw earlier, December's global output figure was was revised down by 240,000 barrels per day from those figures, while global demand for the 4th quarter of 2020 was revised 330,000 barrels per day higher, so with those revised figures, we now find that global oil production in December was running roughly ​940,000 barrels per day short of demand... 

in addition to figuring December's revised global oil supply shortfall that's evident in this report, the upward revision of 330,000 barrels per day to November's global oil output means that the 1,210,000 barrels per day global oil output shortage we had previously figured for November would now be revised to a shortage of 1,540,000 barrels per day..,similarly, the 2,510,000 barrels per day global oil output shortage we had previously figured for October would now be revised to a shortage of 2,840,000 barrels per day once we account for the 330,000 barrels per day upward revision to fourth quarter demand...

As part that upward revision of 250,000 barrels per day in 2020 global demand, OPEC revised 3rd quarter 2020 demand higher by 220,000 barrels per day, revised 2nd quarter 2020 demand higher by 270,000 barrels per day, and revised first quarter 2020 demand higher by 170,000 barrels per day...those revisions mean that theglobal oil supply shortfall we had previously reported for the third quarter months would have to be revised higher by 220,000 barrels per day, that the large global oil surpluses we had previously reported for the second quarter months would have to be revised lower by 270,000 barrels per day, and that the record global oil surplus we had previously reported for March and the surpluses for the other first quarter months would have to be revised lower by 170,000 barrels per day...

This Week's Rig Count

The US rig count rose for the 21st time in the past twenty-two weeks during the week ending February 12th, but for just the 23rd time in the past 48 weeks, and hence it is still down by virtually half over that forty-seven week period....Baker Hughes reported that the total count of rotary rigs running in the US rose by 5 to 397 rigs this past week, which was still down by 393 rigs from the 790 rigs that were in use as of the February 14th report of 2020, and was also still 7 fewer rigs than the all time low rig count prior to 2020, and 1,532 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 increased by 7 rigs to 299 oil rigs this week, after rising by 4 oil rigs the prior week, still leaving us with 372 fewer oil rigs than were running a year ago, and still less than a fifth 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 fell by 2 rigs to 90 natural gas rigs, which was also down by 20 natural gas rigs from the 110 natural gas rigs that were drilling a year ago, and just 5.6% 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 or gas, one rig classified as 'miscellaneous' continued to drill in Lake County, California this week, while a year ago there were two such "miscellaneous" rigs deployed...

The Gulf of Mexico rig count increased by 1 to 17 rigs this week, with 15 of those rigs now drilling for oil in Louisiana's offshore waters and 2 drilling for oil in Alaminos Canyon offshore from Texas...that was 6 fewer Gulf of Mexico rigs than the 23 rigs drilling in the Gulf a year ago, when 20 Gulf rigs were drilling for oil offshore from Louisiana, one rig was drilling for natural gas in the Mississippi Canyon offshore from Louisiana, another rig was drilling for natural gas in the West Delta field offshore from Louisiana, and one rig was drilling for oil offshore from Texas...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig figures are equal to the Gulf rig counts....however, in addition to those rigs drilling in the Gulf, one rig continues to drill through an inland body of water in Lafourche Parish, south of New Orleans, while a year ago there were no rigs drilling on US inland waters..

The count of active horizontal drilling rigs was up by 2 to 344 horizontal rigs this week, which was still less than a half of the 713 horizontal rigs that were in use in the US on February 14th of last year, and less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, the vertical rig count was up by 3 to 23 vertical rigs this week, but those were still down by 7 from the 30 vertical rigs that were operating during the same week a year ago....meanwhile, the directional rig count was unchanged at 18 directional rigs this week, and those were also down by 29 from the 47 directional rigs that were in use on February 14th of 2020....

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 February 12th, the second column shows the change in the number of working rigs between last week's count (February 5th) and this week's (February 12th) count, the third column shows last week's February 5th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday 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 14th of February, 2020..    

it appears that most of this week's rig changes took place in Texas...checking first for the details on the Permian in Texas from the Rigs by State file at Baker Hughes, we find that there were 3 new rigs added in Texas Oil District 8, which corresponds to the core Permian Delaware, that one rig was added in Texas Oil District 8A, which encompasses the northern counties of the Permian Midland basin, and that​ ​another rig was added in Texas Oil District 7B, which includes the easternmost counties of the Permian in Texas, thus accounting for the 5 rig increase in the Permian nationally...elsewhere in Texas, there there was an oil rig added in Texas Oil District 1, there was another oil rig added in Texas Oil District 2, and there was a natural gas rig pulled out of Texas Oil District 4, which together account for the one rig addition in the Eagle Ford shale, which stretches in a narrow band through the southeast counties of the state...there was also a natural gas rig pulled out of the Haynesville shale in Texas Oil District 6, hence accounting for the two rig decrease in natural gas drilling...other changes nationally include the rig addition offshore from Louisiana, a rig addition in North Dakota's Williston basin, and a rig pulled out of an Oklahoma basin that Baker Hughes does not identify...

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Will drilling deal find new life? - The proposal to frack around LaDue Reservoir is off the table, but for how long? After a groundswell of objections, Akron Mayor Dan Horrigan last week removed the proposed legislation from the City Council agenda. The mayor said his action was prompted by concerns of people from both inside and outside of Akron. He was, however, “troubled” by the “misinformation used to stir up community concern when our primary objective is to safeguard the health, economic mobility and safety of our residents.” Misinformation? Perhaps the lack of information – timely information – resulted in the public outcry. Akron Public Service Director Chris Ludle told council members in January, when the proposal first hit the agenda, that the city had been working on the deal with DP Energy Auburn, LLC for about a year. Yet some council members said that was news to them. The proposal called for Akron to lease mineral rights to DP Energy, allowing the company to use hydraulic fracturing to pressurize wells to break up underground rocks at LaDue and release gas and oil deposits. The proposal involved 475 acres around LaDue in Geauga County, with the company paying Akron a one-time fee of $237,500, or $500 per acre, and 15 percent of the royalties on natural gas and oil extracted from the well. Drilling would not have been conducted on the city’s land, but mineral rights would have allowed the company to extract the underground resources. Though in Geauga County, LaDue is owned by Akron as part of its drinking water supply. The mayor, clearly unhappy about the public reaction and the need to nix the deal, emphasized the financial aspect, saying the city lost an opportunity to increase revenue and help keep utility bills in check for Akron residents. He also cited a need to finance a federally mandated $1.2 billion sewer project. That project price tag is a far cry from the one-time, quarter-million payment Akron would have received from DP Energy. The mayor denied the proposed deal had anything to do with campaign or political influence. But some critics pointed out that paperwork to create DP Auburn Energy was filed this year by former Akron councilman Patrick D’Andrea, a longtime friend of the mayor. It is clear this proposal was not vetted properly by the administration and council. With so many concerns, the proposal had to be stopped. There are too many unanswered questions. Geauga residents and officials need to keep a watchful eye out to ensure a drilling deal around LaDue remains off the table.

Unused Gas Well Spews What's Suspected to Be Frack Waste, Killing Fish -  Ohio regulators are working at a gas well that started spewing what’s believed to be brine water from fracking into the environment more than a week ago. The Ohio Department of Natural Resources, which regulates the oil and gas industry, said in an email that it was notified on Sunday, January 24 that fluid, what the agency called “produced brine,” was spraying out of an oil and gas well in the Crooked Tree area near Dexter City in Noble County.  Brine is a salty byproduct of gas and oil production and can contain toxic metals and radioactive substances, according to US EPA. This video posted to Facebook by Amber Deem shows what she says is liquid spraying out of the well and pooling on the ground. Deem told The Allegheny Front in a phone call that the Parkersburg, West Virginia company where said she works owns this well, and that it hadn’t produced gas in years. Deem has now said she is awaiting advice from her attorney before commenting further. Chasity Schmelzenbach, director of Noble County Emergency Management, was informed by Ohio DNR about the incident at the well, which is owned by Genesis Resources LLC of Parkersburg.  On Wednesday, January 27, the state was able to contain the spray in a collection system on-site, Schmelzenbach said, but not before the suspected brine killed fish in Taylor Fork, a small tributary. She said state regulators had wildlife experts at the scene.  “The chloride counts are really high, that’s why the fish kill happened, they believe,” Schmelzenbach said. “Typically brine doesn’t kill fish, so the concentrations had to be pretty high in that small area.”   Ohio DNR said brine continues to flow at the wellhead. So far it has collected, and disposed of more than 30,000 barrels of fluid from the site. The agency has not determined where the liquid originated, or why it suddenly started spewing from the old gas well.  There have been no injuries or evacuations and the extent of impact to the environment is not yet known. Noble County is home to around ten frack wastewater injection wells, according to Schmelzenbach and state mapping, some a few miles from the incident. In late 2019,brine from an injection well in Washington County, Ohio migrated to several producing gas wells, some more than five miles away.  Since 2017, there have been seven spills of frack waste in Noble County, including this one, according to Ohio EPA records.

Ohio Regulators Investigating Source of Brine Shooting from Well -- Ohio environmental regulators investigating the source of brine that began shooting from a gas well in Noble County and continued to flow for almost two weeks before contractors were able to stop it. The Ohio Department of Natural Resources (ODNR) said preliminary testing indicates that the fluid was brine, which is a highly salty water that is produced during the hydraulic fracturing process and can contain chemicals, metals and radioactive substances. Brine can also be produced naturally from oil and gas operations that do not involve fracking, and the source of the spill is not yet known, according to a statement from Sarah Wickham, ODNR chief of communications. Contractors brought in by ODNR have so far collected about 40,000 barrels of fluid during their mitigation efforts. The ODNR was notified of the spill on Jan 24 and contractors were called in to build an emergency containment system, and begin mitigation efforts to prevent fluid from flowing into a nearby stream. However, about 500 fish and other aquatic species were killed. Within 48 hours, ODNR instructed the contractors to build a “more substantial system of containment structures, pipes and storage tanks to prevent the fluid from entering the environment,” until the flow was finally stopped on Feb. 4. The vertical well, Ohio Power/Gant 17-69, is owned by Genesis Resources of Parkersburg, W.Va. The well is located only a few miles from three underground injection wells, where fracking wastewater that can no longer be reused is injected into deep geological formations. Ohio is home to more than 200 injection wells, and much of Pennsylvania’s fracking waste is sent there. There are just 10 injection wells in Pennsylvania. In 2019, brine from an injection well in Washington County, Ohio, migrated to three producing wells at least five miles away. Washington County sits just to the south of Noble County in eastern Ohio. Efforts to add more injection wells in Pennsylvania have been met with opposition from environmental groups. Plans to put an injection well in Indiana County stalled after a legal fight with the township and an environmental group, while the state Department of Environmental Protection in 2020 approved plans for well in Plum Borough, Allegheny County, after a six-year battle. These types of wells are often controversial, as there is research indicating that they may negatively affect groundwater quality and cause unintended seismic activity in the area near the well, and Ohio’s experience may prove valuable in determining their future use in Pennsylvania.

Lorain County pipeline Nexus continues attempts to reduce tax bill  - Lorain County is in the midst of a dispute with Nexus over attempts by the company to devalue pipeline infrastructure which has troubled local officials. Lorain County Commissioner Matt Lundy said Feb. 3 a move by Nexus in challenging the value of its natural gas pipeline could have a devastating impact on local school districts with reduced tax revenue. Attempts by the company to reduce the valuation from an original assessment of $127 million down to around $50 million is a problem, Lundy said. The Ohio Department of Taxation already has reduced the company's assessment to $111 million, he said. “But the big part of their presentation was tax dollars that were going to come into Lorain County because of the value of that pipe in that system," Lundy said. "And I'm disappointed to see that once again, Nexus is back at the table in the state with the Ohio Department of Taxation seeking Reduced values and lower values.” Under the proposed plan, Lorain County alone could lose $955,000 in annual tax revenue with local school districts taking big revenue hits. Firelands Local School District would lose $606,200; Keystone Local Schools; $915,000; Midview Local Schools would drop $882,000; and Oberlin City Schools is set to lose over $1 million annually. This an economic impact that Lundy says will hurt schools and communities. “The sad part is that these kinds of fights can go on for years, and while the fight goes on for years, the company can make the assertion that they're only going to pay what they think the value is," he said. "So, this is going to have a very negative impact on our schools and on our communities." Lundy encourages residents to write to their legislators and tell them the concern and the impact it will have. The Nexus Gas Transmission is a 256-mile natural gas transmission pipeline that crosses through parts of Michigan and Ohio, including Lorain and Medina counties. Lundy previously called the actions by the company a “bait and switch” stating it has not held up its end of the bargain in the commitments made to Lorain County. The pipeline has been operational since 2018 following fierce opposition from the city of Oberlin. In a previous statement to The Morning Journal on the pipeline assessment in December 2019, Nexus spokesperson Adam Parker said the company was committed to paying a "fair and justified tax." “Consistent with how individuals, homes and businesses are taxed, our property tax assessment should reflect the true market value of the pipeline,” Parker said. “After reviewing the preliminary assessment, we have elected to file a petition for reassessment through the formal process established by the Ohio Department of Tax. “Nexus is committed to paying a fair and justified property tax based on the true market value of the pipeline, and looks forward to developing future economic and taxing opportunities in Ohio."

Panel discusses economic future of oil and gas - Martins Ferry Times Leader — An organization affiliated with environmentalist groups says it soon will produce studies suggesting that the oil and gas industry is on an economic decline and that a proposed ethane cracker plant should not become a reality in Eastern Ohio.Panelists from the Ohio River Valley Institute, a think tank focused on “lasting job growth, clean energy, and more inclusive civic structures for northern Appalachia,” held a discussion Wednesday. Speakers at the economic forum included: Kathryn Hipple, professor of finance at Bard College and former financial analyst with the Institute for Energy Economics and Financial Analysis; John Hanger, energy consultant and former Pennsylvania Secretary of Environmental Protection; and Anne Keller, former Wood-Mackenzie petrochemical analyst and current industry consultant.Sean O’Leary, senior researcher at the institute, said their topic was whether the “Shale Crescent”region of Ohio, West Virginia and Pennsylvania will realize the promise of economic renewal or if it’s on the verge of failing.“We are a very new organization. We are a think-tank, and we are devoted to developing policy in the areas of economic development, energy, and also the democratization of election processes as well as policymaking and regulatory processes. In pursuit of that, we’re going to be hosting forums like this one.” O’Leary said the group will be publishing three reports in the coming weeks. On Feb. 10 it will release an economic analysis of the effects of the fracking boom on 22 counties in Ohio, Pennsylvania and West Virginia that produce the majority of natural gas.

The Utica Shale: Ohio's Under-Appreciated Economic Machine - The Utica Shale has never really gotten the level of attention and respect it probably deserves as a major U.S. resource of natural gas and natural gas liquids (NGLs). “We sometimes feel like the Utica is kind of the ‘red-headed stepchild’ of the shale industry,” Mike Chadsey told me when we talked last week, reminding me that, himself being a red-head, it’s ok for him to use that comparison. Mike is the Director of Public Relations for the Ohio Oil and Gas Association, the major trade association for the industry in the Buckeye State.The Utica’s proximity to and co-existence with the immense Marcellus Shalenatural gas formation has a great deal to do with its not getting so much attention for being such a major resource play. But for Ohio, the Utica has been the main driver of a renaissance of an industry that started there decades before the famousSpindletop discovery kicked off the oil business in Texas in 1901. Long before then, Cleveland had become a major commerce center for the early U.S. oil industry, with the state home to one the largest refining centers on earth. Ohio has been an oil and gas state for a long, long time. The past decade has seen another boom in the state, this time centered around not oil, but natural gas and the various liquids elements contained in the rich production from the Utica Shale formation. Instead of new refineries, Ohio has seen an array of new natural gas processing and fractionating plants constructed, along with billions in new investments by a booming chemicals and plastics sector that uses natural gas and NGLs as feedstock. Centered in the Southeastern quarter of Ohio, the boom in the Utica that kicked off in earnest in 2011 had resulted in over $86 billion in new capital investments and created over 200,000 new jobs for Ohio citizens by the end of 2019. Unemployment rates that had stood as high as 15.5% in 2009 had dropped into the 5% to 6% rangeten years later. But then, of course, the bust of 2020 hit, and the Utica region was hit hard like every other shale region in the United States. The collapse of global crude demand that began a year ago resulted in a corresponding collapse in new industry capital investment as companies rushed to cut costs wherever they could. Those cuts impacted company head counts, causing some of those employment gains of the prior decade to be lost.

Report: Ohio fracking counties saw declines in jobs, population and income -  A decade earlier, the oil and gas industry was touted as being the savior for the Ohio River valley region, which had weathered the crumbling of the steel industry and watched helplessly as the coal industry declines.The millions of dollars invested in the Marcellus and Utica region were supposed to translate into local wealth in the form of more jobs, higher incomes and more people moving into the region.However, a new report released Wednesday by an independent think tank based in Johnstown, Pennsylvania, the Ohio River Valley Institute, showed that 22 counties in Ohio, Pennsylvania, and West Virginia responsible for 90% of Appalachia's oil and gas production saw their share of the nation's jobs, personal income and population all decline."In many respects, it's the region that should have theoretically benefited the most from development," said Sean O'Leary, a native of Wheeling, West Virginia, and senior researcher of the institute's 27-page report.In fact, Ohio fared the worst of the three states examined for economic success. Seven eastern Ohio counties — Belmont, Carroll, Guernsey, Harrison, Jefferson, Monroe and Noble — were the hardest hit amongst those analyzed, experiencing a net job loss of more than 8% and a population loss of more than 3%. Mike Chadsey, director of public relations for the Ohio Oil and Gas Association, disagreed with the report's conclusions, saying the industry has worked to revive Appalachia."There are certainly people who take this as gospel. But all you have to do is look at the unemployment numbers from the state, from when oil and gas started in the shale development and unemployment went down," he said. "We know that people found jobs. We know that people are getting $5,000 to $7,000 an acre to lease their property. What they did with that was create all these family foundations and community foundations so they can reinvest their money."Unemployment data doesn't tell the full story, O'Leary said. "The reason the region's unemployment rate dropped during the period wasn't because they were adding jobs. It's because people were moving away and the number looking for jobs was declining," he said.

Report: Shale gas boom counties saw little growth in local jobs, income | Pittsburgh Post-Gazette -In the last decade, Pennsylvania, West Virginia and Ohio produced a tsunami of natural gas that exceeded even the most optimistic projections. That wealth of gas was supposed to translate into newly thriving local economies.According to a report released Wednesday by the Ohio River Valley Institute, the local renaissance never happened.Instead, counties that pumped out nearly all of the Appalachian region’s natural gas lagged on traditional measures of local prosperity: They had less personal income and job growth than the states as a whole and the nation over that time period, and their populations declined.“It is a case of economic growth without prosperity, the defining characteristic of the resource curse,” the institute said. The new think tank advocates for the region to shift away from fossil fuel extraction to clean energy. It is a project of the Johnstown-based Community Foundation for the Alleghenies and has received funding from the Heinz Endowments.Using data from the U.S. Bureau of Economic Analysis, the report looked at 22 counties in the three states between 2008 and 2019, a period when natural gas drilling in the Marcellus and Utica shales began, surged and subsided. In those years, the region went from being a marginal natural gas producer to one of the world’s largest. The 22 counties produced 90% of the states’ total gas output during the study period. Their gross domestic product — the value of the goods and services produced within their borders — grew by 60% over the decade — more than triple the national growth rate.But the communities were not rewarded with proportionate growth in jobs, income or people, according to the report. Over the study period, jobs in the 22 counties at the heart of the shale boom grew by just 1.7%, compared to 10% nationally and nearly 4% in the three states. Personal income in the major shale counties increased by 14.3% — roughly on par with the states, but seven percentage points less than the nation as a whole. Meanwhile, population in the shale counties dropped by 2.4%. “This extreme disconnect between economic output and local prosperity raises the question of whether the Appalachian natural gas industry is capable of generating or even contributing to broadly shared wellbeing,” the report said. Sean O’Leary, the main author of the Ohio River Valley Institute report, said one of the remarkable things about the Bureau of Economic Analysis data is how clear it is. “There is almost no math going on here,” he said. “All that I did was pull the numbers for the years 2008 and 2019 and look at the change over that time.” “It is just blindingly obvious.” Still, John Hanger, a former policy director for Gov. Tom Wolf who led the Pennsylvania Department of Environmental Protection during the first years of shale development, said when he saw the report he found it “shocking.”  It “explodes in a fireball of numbers the claims that the gas industry would bring prosperity to Pennsylvania, Ohio or West Virginia,” he said. Mr. O’Leary said the economic disconnect may have been obscured by the fact that “the money was real.”“The money did get invested to drill all the wells and pump all the gas,” he said. But, “it didn’t land in these local economies.”

CNX Resources (CNX) 2020-End Proved Reserves Up 13% to 9.55 Tcfe  - CNX Resources Corporation announced that it has increased total proved reserves by 13% year over year to 9.55 trillion cubic feet equivalent (Tcfe). The company added 2,247 billion cubic feet equivalent (Bcfe) of proved reserves through extensions and discoveries, which helped it in replacing more than 440% of 2020 net production of 511 Bcfe. CNX Resources’ proved reserve has a reserve life ratio of 18.69 years, based on 2020 production. CNX Resources’ strong performance is based on stable production from Marcellus and Utica shale assets. Production from these shales enables the company to meet its production goal. Replenishment of production through the addition of new proved reserves will allow the company to sustain momentum over the long term.CNX Resources’ 94.6% of the proved reserve is natural gas. Moreover, the company has a very low-cost structure. Drilling and completion costs incurred in 2020 for extensions and discoveries were $480 million. Finding and development cost of the added proved reserves stands at 21 cents per thousand cubic feet (Mcfe), which will give the company a competitive advantage. CNX Resources — through its efficient technology — has been able to explore and expand proved reserves annually for the last five years. At 2016-end, proved reserves of the company were 6.25 Tcfe. At 2020-end, the metric totaled 9.55 Tcfe, reflecting an increase of 52.8% in the last five years. Over the last five years, it was able to lower average cost per Mcfe to $1.64 at 2020-end from $2.32 at 2016-end.

Range Resources assessed $294K penalty for well-status error - Pittsburgh Business Times - The Pennsylvania Department of Environmental Protection fined Range Resources Corp. $294,000 over what the DEP said was incorrectly classifying a Fayette County well as inactive. The civil penalty came in a consent agreement between DEP and Range Resources, one of the largest natural gas producers in southwestern Pennsylvania. The agreement covers one conventional natural gas well, Shirocky No. 1 in Fayette County, that Range had asked for inactive status but provided information that it both expected to have it become active at a later date and an internal memo that said it wouldn’t. DEP said that the well, if there was no plan to use it in the future, should have been plugged. Range said a former employee’s error was responsible for the miscommunication. A DEP subpoena to Range found 42 conventional wells — ones that aren’t drilled into the Marcellus or Utica Shale using current drilling methods — were designated inactive between 2013 and 2017 but production never was resumed. DEP said they should be considered not inactive but instead plugged. “It’s the law: inactive wells need to be viable for future use,” said DEP Secretary Patrick McDonnell in a statement. “If wells are not viable for future use, then they should be classified as abandoned wells and are required to be plugged."

Northern Oil Enters Appalachia as India's Reliance Exits - India’s Reliance Industries Ltd. has agreed to divest its entire stake in 64,000 net acres in the Appalachian Basin, continuing its exodus from unconventional oil and natural gas assets in the United States.  Northern Oil and Gas Inc. (NOG) agreed to acquire the nonoperated stake from Reliance Marcellus LLC in exchange for $175 million and 3.25 million warrants to purchase its common stock at a price of $14.00/share.EQT Corp., which acquired the properties in a broader deal last year when it bought Chevron Corp.’s Appalachian portfolio in Pennsylvania and West Virginia, would operate the assets. The assets are expected to produce 100-110 MMcfe/d this year, and consist of 102.2 net producing wells, another 22.6 wells in process and 231 net undrilled locations in the core of the Marcellus and Utica shale plays, NOG said. The deal gives NOG entry to the Appalachian Basin and complements its stakes in 183,000 acres in the Williston and Permian basins. The company primarily invests in nonoperated minority working and mineral interests. “Our cash purchase price for these assets only ascribes value for producing wells and the large inventory of wells-in-process, with significant upside value on the undeveloped properties,” said NOG COO Adam Dirlam. “The joint venture (JV) structure allows Northern significant input and clarity on the development plans for these assets on a multiyear basis.” NOG plans to finance the transaction with a combination of equity and debt. The deal is expected to close in April.

Public input blocked on shale gas wastewater permitting - Cathy Lodge has some questions and concerns about new state wastewater storage and reuse permits issued to three shale gas developments near her home in Robinson Township, Washington County, but didn’t get an opportunity to voice them. People living near 46 other shale gas operations granted permits in December and January were similarly silenced when the Pennsylvania Department of Environmental Protection decided to not follow its newly adopted notification and public participation protocols for the 10-year general permits known as “ WMGR123.” The wastewater storage and reuse authorizations, approved on Dec. 23 and Jan. 4, allowed shale gas wastewater operations to expand, without pre-permitting public notification and review, at existing shale gas facilities in 15 counties, including Washington, Greene, Fayette, Westmoreland and Butler in southwestern Pennsylvania. “If DEP is going to allow WMGR123 permits and waste processing and storage at wellpads, I definitely want every opportunity possible to voice my concerns prior to them issuing approvals,” Ms. Lodge said. “Getting the opportunity to comment on the permits was something I was looking forward to.” In a Feb. 4 letter to the DEP, Ms. Lodge joined five environmental groups in asking the DEP to immediately suspend the permit approvals, publish public notices of its permit decisions and initiate a 60-day public comment period. Groups signing the letter include the Environmental Integrity Project, PennFuture, Mountain Watershed Association, Earthworks and Center for Coalfield Justice.They requested a formal response from the DEP by Feb. 11. “CCJ believes that public notice and the opportunity to comment ensures that communities have a voice in the environmental decisions that affect them,” Veronica Coptis, executive director of Center for Coalfield Justice, said in an email response to questions. “The DEP’s failure to notify and include impacted communities in the decision making process for these WMGR123 authorizations that will last 10 years is unacceptable.” According to the letter, the DEP’s approval of the 49 permits deprived the organizations’ members and shale gas field residents of the opportunity to review site-specific permit applications and voice concerns before the permits were granted about the potential impacts of oil and gas facilities on their health, environment and public safety.

A Decade Into the Fracking Boom, Pennsylvania, Ohio and West Virginia Haven’t Gained Much, a Study Says - After fracking companies invested billions chasing the natural gas boom across West Virginia, Ohio and Pennsylvania, what do people living in the middle of the most prolific gas fields have to show for it, more than a decade later?That’s the question the Ohio River Valley Institute, an independent think tank based in Johnstown, Pennsylvania, working to advance a more prosperous, sustainable and equitable Appalachia, asked in a report published on Wednesday.Its answer: In short, not much. To be sure, the report found that new horizontal drilling techniques involving hydraulic fracturing in the Marcellus and Utica shale formations, which helped reshape the nation’s oil and gas fortunes, produced a lot of economic growth. But it largely failed to bring the things that help people and local communities the most: jobs, personal income gains and population growth.The natural gas industry hasn’t been an engine for economic prosperity, said Sean O’Leary, the institute’s senior researcher and principal author of the report, and “there is no basis on which we can see that it even can be, going into the future.”It was unable to deliver on local prosperity even though gas production itself exceeded the most optimistic projections, he said. The optimistic projections included a 2010 American Petroleum Institute report projecting robust job growth that was seized on by officials in Pennsylvania, Ohio and West Virginia to usher in the industry. But the institute found that jobs in the 22 counties that account for 90 percent of the production in the three states increased by only 1.7 percent, according to data from the U.S. Bureau of Economic Analysis, while nationally the number of jobs grew by 10 percent.O’Leary does not dispute that the oil and gas industry employs people in each state, but questions where they are located and how many of the jobs are new.He said the institute’s report seeks to reveal true measures of economic prosperity in the counties most affected by the gas boom. In order to do that, the institute focused on counties that produce the most gas and where natural gas production is a more significant part of the local economy.Those counties were Doddridge, Harrison, Marshall, Ohio, Ritchie, Tyler and Wetzel in West Virginia; Belmont, Carroll, Jefferson, Guernsey, Harrison, Monroe and Noble in Ohio; and Bradford, Greene, Lycoming, Sullivan, Susquehanna, Tioga, Washington and Wyoming in Pennsylvania.In general, the report found an increase in economic growth as measured by their share of gross domestic product, but job growth and personal income lagged behind, as did population growth.

Fracking Counties Economic Impact Report – Ohio River Valley Institute – A new Ohio River Valley Institute report titled, “Appalachia’s Natural Gas Counties: Contributing more to the U.S. economy and getting less in return” quantifies the decade-long failure of natural gas boom in the Marcellus and Utica fields to deliver growth in jobs, income, and population to the 22 Ohio, Pennsylvania, and West Virginia counties that produce more than 90% of the region’s natural gas.Contrary to the predictions of the oil and natural gas industry, which a decade ago published economic impact studies saying the expected boom in natural gas production would give rise to over 450,000 new jobs in Ohio, Pennsylvania, and West Virginia, data from the U.S. Bureau of Economic Analysis show that jobs in the 22 counties crept up by a paltry 1.7% while nationally the number of jobs grew by 10%.It should not have been this way. Natural gas production in the region substantially exceeded the projections contained in the industry studies. And economic output in the 22 counties grew by 60%, more than three times the rate of output growth nationally. But little of the income generated by that growth entered local economies. Between 2008 and 2019, as the counties’ contribution to the nation’s economy grew from $2.46 per thousand dollars of output to $3.31, their piece of the national economic pie got smaller.

• Their share of the nation’s personal income fell by 6.3%, from $2.62 for every $1,000 to $2.46.
• Their share jobs fell by 7.5%, from 2.8 in every 1,000 to 2.6.
• Their share of the nation’s population fell by 9.6%, from 3.2 for every 1,000 Americans to 2.9 for every thousand.

Ohio’s seven eastern counties – Belmont, Carroll Guernsey, Harrison, Jefferson, Monroe, and Noble – were the hardest hit seeing a net job loss of over 8% and a population loss of over 3%. Pennsylvania’s eight primary gas counties – Bradford, Greene, Lycoming, Sullivan, Susquehanna, Tioga, Washington, and Wyoming – did better with a net 4.5% gain in jobs. Although that was slightly less than the statewide average gain of 4.6%. And it did not prevent a population decline of 1.4%.Only in West Virginia did the natural gas counties – Doddridge, Harrison, Marshall, Ohio, Ritchie, Tyler, and Wetzel — outperform the state for personal income and jobs. But even then, the rate of growth was less than half the national average and the population loss was greater than the population loss in the state as a whole.John Hanger, former Pennsylvania secretary of Environmental Protection and policy director to Governor Tom Wolf, called the report’s findings “shocking”. “This report documents that many Marcellus and Utica region fracking gas counties typically have lost both population and jobs from 2008 to 2019. This report explodes in a fireball of numbers the claims that the gas industry would bring prosperity to Pennsylvania, Ohio or West Virginia. These are stubborn facts that indicate gas drilling has done the opposite in most of the top drilling counties,” said Hanger.Kathy Hipple, Bard College professor of finance and former analyst at the Institute for Energy Economics and Financial Analysis, said, “This detailed report is another indictment of fracking. The business case for fracking has never been proven. The Appalachian shale gas producers have been spectacularly unsuccessful financially, despite impressive production gains. Many have filed for bankruptcy. Others have taken massive write-offs. This financial failure of the natural gas sector extends to local communities.” Hipple concluded, “Simply put, the natural gas industry has not delivered the promised benefits for producers, investors — or local communities.”

Somerset County Opposes Tennessee Gas Compressor Station - Last night Somerset County passed a resolution (see attached) that opposes the West Milford and Wantage Compressor Station that Tennessee Gas Pipeline Company plans to build. Tennessee Gas Pipeline Company’s proposal includes modification and expansion of the Wantage Compressor Station in Sussex County, New Jersey, including installation of one Solar Titan 130 turbine with an ISO rating of 20,500 hp and auxiliary facilities. This is part of TGP’s East 300 Upgrade that also includes a new compressor station in the Highlands Region of West Milford. “Somerset County has stood up for our health and environment by opposing TGP’s fossil fuel compressor stations. They are the first county and government entity that has passed a resolution to oppose these fossil fuel projects. The compressor stations increase GHG’s, climate impacts, and will have damaging impacts to our air and water. In their resolution, Somerset County raised the fact that the TGP Compressor stations go directly against Governor Murphy’s EO 100 to reduce GHG’s and move to 100% clean energy by 2050. One site for the compressor is in the middle of the Highlands Preserve right next to a C1 stream and above the Wanaque and Monksville reservoir. A leak or accident will be detrimental to the critical drinking water and to nearby communities,” saidJeff Tittel, Director of the New Jersey Sierra Club. “We thank Somerset County for protecting the Highlands and the drinking water for almost 3 million people.On June 20th, Tennessee Gas Pipeline Company L.L.C filed with the Federal Energy Regulatory Commission seeking the issuance of a certificate of public convenience and necessity to construct, install, modify, operate, and maintain certain compression facilities located in New Jersey and Pennsylvania. “These compressor facilities release harmful air pollutants such as NOx, PM2.5, Sox, VOCs, HAPs such as formaldehyde, benzene, and GHG’s.  Benzene can cause headaches, asthma attacks, and worsen symptoms for people with respiratory problems. Chromium, benzene and hydrocarbons can get into industrial stormwater runoff that will increase pollution and flooding.” The New Jersey Sierra Club, Skylands Sierra Club, Sustainable West Milford, North Jersey Pipeline Walkers, Food & Water Watch, held a town hall against the 2 compressor stations with close to 200 people, including government officials from West Milford.

Environmental Groups Sue Federal Regulators Over Western Mass. Pipeline Plan - Environmental groups are challenging a federal agency's decision to allow natural gas expansion in central Massachusetts, arguing legal precedent — and a change in regulatory leadership -- is on their side.On Friday, the Washington, D.C. Court of Appeals will hear oral arguments from two groups opposed to the proposed expansion of a compressor station in Agawam, which the Federal Energy Regulatory Commission (FERC) approved in 2019.The project in question is a proposal from the Tennessee Gas Pipeline Company, LLC — a subsidiary of energy giant Kinder Morgan — to build 2.1 miles of new natural gas pipeline and replace two small compressors with a larger unit at its Agawam site. The company says these upgrades will allow it to deliver more natural gas for distribution in the greater Springfield area, and as such, “alleviate capacity-constrained New England gas markets.”Opponents of the project, meanwhile, want the panel of appellate judges to nullify the permit issued by FERC, saying the project will contribute to climate change,  prolong our dependence of fossil fuels, and harm local residents by increasing pollution in an area already known for poor air quality and pose public safety risks. They also argue that FERC violated federal law and disregarded legal precedent by allowing the project to move forward.“The National Environmental Policy Act requires FERC to meaningfully evaluate greenhouse gas emissions from fossil fuel production and transportation projects,” wrote petitioners, Berkshire Environmental Action Team and Food & Water Watch, in court documents.A spokesperson for FERC declined to comment.

As new information arises, RCC Big Shoal case may enter criminal court -- Criminal charges may become a factor as the Pike County Fiscal Court continues to seek full repayment of a $400,000 loan a previous administration made to the principals of a company whose promised natural gas to liquid fuel plant never materialized. On Feb. 5, Pike Commonwealth’s Attorney Bill Slone confirmed to the News-Express that his office, along with Kentucky State Police, have launched an investigation into the circumstances involved in RCC Big Shoal’s failure to repay the loan from the county. Slone said he has been aware of the case for some time, but as information has arisen recently, he began to feel as though an investigation is warranted. Slone said his office has begun an investigation along with the KSP Special Investigations Branch, which has assigned a detective to assist.While the criminal charges could ultimately result in jail time if those charged are found guilty, Slone said his goal is the same as that of Pike County Judge-Executive Ray Jones and the current Pike County Fiscal Court. “My goal is to get the county’s money back,” he said. RCC Big Shoal principals David Farmer and Bill Johnson were able to obtain a $400,000 loan from the administration of former Pike County Judge-Executive Wayne T. Rutherford with promises of building a natural gas-to-fuel plant in the Big Shoal area of Pike County. The project never materialized and the majority of the loan remains unpaid.

Chesapeake Energy emerges from bankruptcy and shifts back to natural gas (Reuters) - U.S. shale producer Chesapeake Energy Corp on Tuesday exited Chapter 11 bankruptcy with business plan that nods to its founders’ emphasis on natural gas after a recent push into crude oil. Once the second-largest U.S. natural gas producer, Chesapeake was felled by a long slide in gas prices and heavy debts from overspending on deals. Two years ago it paid $4 billion in a bet on shale oil firm WildHorse Resource Development. But oil prices fell after the deal closed. The company plans to focus 85% of this year’s spending on gas fields in the U.S. Northeast and Louisiana, and will let its oil output decline, Chief Executive Doug Lawler said in an interview. It aims to spend between $700 million and $750 million per year on new projects that could generate $400 million in annual free cash flow, he said. Chesapeake filed for court protection last June and won approval last month for a plan that shed about $7.7 billion in debt. It was unable to invest enough in operations to turn a profit while simultaneously paying down $9 billion in debt. That “led us to make decisions that weren’t always the best,” said Lawler, who took over the firm in 2013.

Appalachian Fracking Boom Was a Jobs Bust, Finds New Report – DeSmog - The decade-long fracking boom in Appalachia has not led to significant job growth, and despite the region’s extraordinary levels of natural gas production, the industry’s promise of prosperity has “turned into almost nothing,” according to a new report. The fracking boom has received broad support from politicians across the aisle in Appalachia due to dreams of enormous job creation, but a report released on February 10 from Pennsylvania-based economic and sustainability think tank, the Ohio River Valley Institute (ORVI), sheds new light on the reality of this hype.The report looked at how 22 counties across West Virginia, Pennsylvania, and Ohio — accounting for 90 percent of the region’s natural gas production — fared during the fracking boom. It found that counties that saw the most drilling ended up with weaker job growth and declining populations compared to other parts of Appalachia and the nation as a whole.Shale gas production from Appalachia exploded from minimal levels a little over a decade ago, to more than 32 billion cubic feet per day (Bcf/d) in 2019, or roughly 40 percent of the nation’s total output. During this time, between 2008 and 2019, GDP across these 22 counties grew three times faster than that of the nation as a whole. However, based on a variety of metrics for actual economic prosperity — such as job growth, population growth, and the region’s share of national income — the region fell further behind than the rest of the country. Between 2008 and 2019, the number of jobs across the U.S. expanded by 10 percent, according to the ORVI report, but in Ohio, Pennsylvania, and West Virginia, job growth only grew by 4 percent. More glaringly, the 22 gas-producing counties in those three states — ground-zero for the drilling boom — only experienced 1.7 percent job growth.“What’s really disturbing is that these disappointing results came about at a time when the region’s natural gas industry was operating at full capacity. So it’s hard to imagine a scenario in which the results would be better,” said Sean O’Leary, the report’s author. The report cited Belmont County, Ohio, as a particularly shocking case. Belmont County has received more than a third of all natural gas investment in the state, and accounts for more than a third of the state’s gas production. The industry also accounts for about 60 percent of the county’s economy. Because of the boom, the county’s GDP grew five times faster than the national rate. And yet, the county saw a 7 percent decline in jobs and a 2 percent decline in population over the past decade.

Near Complete Mountain Valley Pipeline Needed, D.C. Circuit Told --Natural gas users, landowners, and the environment would benefit from finishing construction on the Mountain Valley Pipeline and putting the infrastructure into service, the company and other intervenors in a lawsuit to stop the pipeline told the D.C. Circuit.  Green groups, including the Sierra Club and Appalachian Voices, argue falling demand for natural gas and surplus pipeline capacity undermines the company’s claim that the project will serve the public interest. They seek an emergency motion blocking the Federal Energy Regulatory Commission’s orders allowing construction to continue. But the arguments against the project are based on “cherry-picked snippets from an earnings report’...

With construction slowed, MVP continues erosion control from the air - For the third winter in a row, helicopters are dropping grass seeds and mulch along the route of the Mountain Valley Pipeline in an effort to curb erosion on the unfinished project. Heavy traffic of the company’s helicopters has been reported by residents of Franklin County in recent days. Mountain Valley says the erosion control efforts are needed as construction of the natural gas pipeline continues to be delayed by legal challenges of its permits from environmental groups. “Due to ongoing project delays, previous temporary stabilization measures must be periodically refreshed to maintain and protect the ROW [right of way],” company spokeswoman Natalie Cox wrote in an email this week. Helicopters are being used to distribute a liquid mixture of seeds and mulch, a measure that has been approved by state and federal regulators as the best way to preserve construction areas, she said. Although Mountain Valley says it hopes to complete work on the $6 billion project by the end of this year, legal hurdles remain as opponents say the 303-mile long pipeline will scar the scenic landscape of Southwest Virginia, pollute its waters and endanger protected species of bats and fish. The company has agreed to stop all work — with the exception of stabilization and erosion control effects — until Feb. 22, the date by which an appellate court is being asked to rule on approvals from Federal Energy Regulatory Commission. In 2017, FERC approved the pipeline to run through the Virginia counties of Giles, Craig, Montgomery, Roanoke, Franklin and Pittsylvania. At the time, the pipeline was slated for completion by late 2018.

Appalachia's top natural gas-producing counties falling further behind economically, report says - A new study of Appalachian natural gas production suggests that the region’s natural gas boom hasn’t kept the top gas-producing counties in the Ohio Valley from lagging behind the rest of the nation economically. The Ohio River Valley Institute, a nonprofit think tank, released an analysis Wednesday finding that, while those counties’ rates of gross-domestic-product growth more than tripled that of the country between 2008 and 2019, their collective shares of the nation’s personal income, jobs and population all declined.“What we’re seeing is almost the definition of the resource curse, and that is great economic growth with very little, if any, impact on local measures of prosperity,” Sean O’Leary, senior researcher at the institute, said of the report during a webinar last week that focused on the so-far unrealized dream of a petrochemical boom in Appalachia.The report attributes much of the increase in gross domestic product — the total value of goods and services — in 22 counties in West Virginia, Ohio and Pennsylvania to an Appalachian natural gas production boom powered by the advent of hydraulic fracturing, or “fracking,” that exceeded high industry expectations but did not come close to bringing the number of jobs to the region expected to coincide with the boom.Combined job growth in those 22 counties — including Doddridge, Harrison, Ohio, Ritchie, Tyler and Wetzel in West Virginia — was only 1.7% between 2008 and 2019, the report notes, questioning the economic value of the Appalachian natural gas industry to the region.Only in Doddridge County, population 8,448, per 2019 U.S. Census Bureau data, did gains in shares of income, jobs, and population come close to matching the region’s contributions to economic production, the report found. It offered hypotheses that exporting labor and materials, lower natural gas prices than expected and lack of anticipated progress toward petrochemical and plastics manufacturing in the region are contributing to the economic stagnation in “Frackalachia.”“This extreme disconnect between economic output and local prosperity raises the question of whether the Appalachian natural gas industry is capable of generating or even contributing to broadly shared wellbeing,” the report reads. “And, if it is not, should it continue to be the focus of local and regional economic development efforts?”

West Virginia Sen. Manchin to President Biden: Avoid major curbs to natural gas fracking, horizontal drilling — The chairman of the Senate Energy and Natural Resources Committee, seen by many as the likely key vote in the Senate for the Biden administration on contested issues, has asked the president to steer clear of major natural gas fracking and horizontal drilling reforms. “Technologies like hydraulic fracturing and horizontal drilling have allowed our country to more efficiently tap into our rich, domestic energy resources that reside in the vast shale plays across the country, including in my home state of West Virginia,” wrote Joe Manchin, D-W.Va. who, as a moderate, is a critical vote in the 50-50 makeup of the Senate. “These technologies catalyzed a ‘shale revolution’ in the U.S. that has propelled a surge in domestic oil and gas production, culminating in the U.S. becoming a net total energy exporter in 2019 for the first time in 67 years. This energy security affords your administration with expanded geopolitical tools and strengthens our national security,” Manchin wrote. The senator also pointed to a U.S. Geological Survey estimate of 214 trillion cubic feet of natural gas in the Marcellus and Utica shale formations that hasn’t been discovered yet and could be recovered. “Responsible production of our abundant resources is critical. That includes using existing technologies and continuing to innovate new ways to reduce methane flaring and leaks from oil and gas systems and expanding our energy infrastructure and gathering lines to instead get that product to market,” Manchin wrote. “I also strongly support advancing carbon capture, utilization and sequestration technologies, including for natural gas applications, to further reduce emissions,” he wrote. “I encourage you to bear in mind these many benefits of responsible domestic natural gas production as you consider any future executive or administrative action, and I look forward to working with you to achieve our shared goals of energy security, economic growth and global emissions reductions,” Manchin wrote.

Natural gas company announces plan to expand to Knox, Waldo counties -Summit Natural Gas of Maine plans to invest $90 million to extend its service into the Midcoast. “The Midcoast is one of the last commercial centers in Maine without natural gas service, which is why Summit is committed to bringing this energy option to communities along Route 1,” Summit CEO Kurt Adams said in a news release Friday. “We are very excited to help Belfast, Camden, Rockland, and other towns in the region strengthen their economies while providing them with a lower emission fuel alternative.” The company said it hopes to break ground on the pipeline in the fall and that roughly 100 jobs will be created in the Midcoast during construction of the pipeline. Service is expected to start for residential and commercial customers in late 2022 following the completion of the project’s initial phase. Summit hopes to have made service available to more than 6,500 customers and extended its footprint into the towns of Lincolnville and Northport by 2026. Town officials in Rockport and Belfast welcomed the project. “Just as businesses require a variety of fuel sources to meet their unique energy needs, folks in the Midcoast will now have an additional option for heating their homes as they see fit,” Town Manager William Post said in the release.

Westchester County Unanimously Opposes Danskammer Plant Expansion - -- Last night, the Westchester County Board of Legislators unanimously voted in favor of a resolution opposing the massive expansion of the Danskammer fracked gas power plant in Newburgh.With the passage of last night’s resolution, Westchester County has become the first county in New York to unanimously come out in opposition to the dirty Danskammer plant’s expansion aims. In doing so, the county has joined the chorus of municipalities across the state calling for Governor Cuomo to deny the plan its desired expansion permits.Legislator Catherine Parker (D - Harrison, Larchmont, Mamaroneck, New Rochelle, Rye), chief sponsor of the resolution and chair of the Board's Planning, Economic Development and Energy Committee said, "New York State's recently passed the Climate Leadership and Community Protection Act establishing programs, obligations and targets to meet zero emissions by 2050. Expanding the Danskammer plant to a full time, fossil fuel facility is exactly the wrong thing to do if we're serious about a clean, sustainable future, and about meeting those goals."Legislator Ruth Walter (D - Bronxville, Yonkers), chair of the Board's Environment and Health Committee, said, "Although this plant will not be in Westchester, pollution and climate change do not observe County lines. The plant's expansion would add 2 million tons of greenhouse gas emissions annually to our atmosphere, drastically harming air quality in the region and exacerbating climate change and with gallons of diesel fuel and aqueous ammonia are proposed to be stored on-site, there's a significant threat to the water quality for all of us downstream on the Hudson."

U.S. LNG Exports Eclipse Pipeline Takeaway for Only Second Time Since 1998, EIA Says -U.S. exports of liquefied natural gas (LNG) outstripped natural gas exports by pipeline in November, marking only the second time that has happened in more than 20 years, the U.S. Energy Information Administration’s (EIA) said in a new report.LNG exports exceeded gas delivered via pipeline by nearly 1.2 Bcf/d in November, as demand from Asia for the super-chilled fuel mounted ahead of winter.Based on shipping data, preliminary estimates for December and January “suggest a continuation of this trend,” EIA said in its Natural Gas Monthlyreport.LNG feed gas volumes increased in both December and January, NGI data show, as Asian demand further intensified amid the onset of a particularly harsh stretch of cold temperatures.Last November and December, Lower 48 LNG exports set two consecutive monthly records at 9.4 Bcf/d and 9.8 Bcf/d, respectively, EIA said. Average LNG exports over the course of January held at 9.8 Bcf/d and surpassed 11 Bcf on several days.When LNG exports last topped those by pipeline, which was last April, they did so by only 0.01 Bcf/d, EIA said. Prior to that, LNG had not eclipsed pipeline exports since 1998. In its January Short-Term Energy Outlook, EIA forecast that U.S. LNG exports would exceed gas delivered by pipeline in the first and fourth quarters of this year – spanning the typical months of peak demand — and on an annual basis in 2022. The agency said from November through January, monthly U.S. LNG volumes nearly tripled the average levels in the summer months of 2020.EIA forecast that U.S. LNG exports would average 9.8 Bcf/d this month, on par with January’s record level, before tapering to seasonal lows amid milder temperatures in the spring. The agency’s outlook calls for LNG exports to average 8.5 Bcf/d over 2021 and climb to 9.2 Bcf/d in 2022 amid continued strong demand from Asia as well as Europe. The relative ascension of LNG is particularly notable because pipeline exports are strong as well. Total U.S. gross exports by pipeline averaged 7.9 Bcf/d in the first 11 months of 2020, EIA noted, 3% higher than during the same period of 2019.

Cheniere Seeks OK to Ramp Third Corpus Christi LNG Train - Cheniere Energy Inc. has requested FERC approval to place the third train in service next month at its Corpus Christi liquefied natural gas (LNG) export terminal in South Texas, which would ramp up capacity by 4.5 million metric tons/year (mmty). The company requested permission in a letter filed with the Federal Energy Regulatory Commission on Wednesday to bring the train online by March 12. The third train would bring total output at the facility to 15 mmty. Cheniere in December loaded the first commissioning cargo from the third train. Cheniere sanctioned the third train in 2018, the same year the Corpus terminal produced its first LNG. In November 2019, the company moved up its timeline to complete the third train to the first half of 2021, several months ahead of schedule. A sixth train also is under construction at its Sabine Pass LNG terminal in Louisiana, which was 71% complete at the end of September. The sixth train would boost production capacity at that facility to 30 mmty. Global LNG supply grew by 100 million tons (Mt) between 2016 and 2020, driven largely by Australia, Qatar and the United States, according to data intelligence firm Kpler. Despite the pandemic, LNG supply last year grew by 4 Mt, driven mainly by U.S. growth. U.S. capacity is expected to increase to 71 mmty this year, driven by the Corpus expansion and more operating efficiencies at existing terminals, according to Kpler. Winter demand for LNG is strong, and feed gas deliveries to U.S. terminals have been at or near capacity most of the season. Domestic exports reached 6.14 Mt in January during a cold snap in the northern hemisphere that drove up demand, rebounding from a low of 1.97 Mt in July when prices were down amid a supply surplus. Higher demand has left natural gas storage stocks in Asia and Europe lower, while the global economy continues to recover from low points brought on by Covid-19 last year. LNG buying this year is expected to remain above 2020 levels, supporting U.S. exports. Recent NGI data showed U.S. LNG in the money both in Asia and Europe through the remainder of the year.

U.S. energy regulator to create environmental justice position: chairman (Reuters) - The chairman of the U.S. Federal Energy Regulatory Commission said on Thursday the panel will create a senior position on environmental justice, to make sure new energy projects, such as pipelines and liquefied natural gas facilities, do not unfairly harm minority communities. “I believe that the Commission should more aggressively fulfill its responsibilities to ensure our decisions don’t unfairly impact historically marginalized communities,” Richard Glick, a Democrat recently appointed to head the panel by President Joe Biden, told reporters during a teleconference. While the panel is required to consider green justice issues under the National Environmental Policy Act, Glick said in recent years, it has not always emphasized its responsibility. “I thought we really haven’t taken the issue too seriously especially with regards to a couple of LNG projects,” Glick said. He did not name the projects as they are pending. Glick said the FERC would be spending more time considering whether fossil fuel projects would expose nearby residents to a lot of particulate pollutants such as nitrogen oxide, or NOX. FERC should consider whether pollution impacts on communities could be mitigated by moving the projects or installing more pollution controls, Glick said.

Natural Gas Traders Unswayed by Record-Breaking Cold Penetrating Lower 48 - Weather model volatility left natural gas traders flummoxed on Monday, with double-digit increases early in the session nearly erased by the close. With the frigid cold descending from Canada into the Lower 48 seen possibly continuing into March, though, the March Nymex gas futures contract settled 1.9 cents higher than Friday at $2.882. April edged up 2.1 cents to $2.862. Spot gas prices also retreated across most of the country, though trading in the Northeast was notably volatile. New England cash traded as high as $14.000, but NGI’s Spot Gas National Avg. dropped 2.5 cents to $3.985. Even with big swings in the weather data, there’s little argument that the next couple of weeks are poised to be the coldest the country has experienced in years. The issue in the near term is that the European model initially pushed back the arrival of the next bout of extreme cold, shedding demand from the outlook for this week and for later in the month. However, by the afternoon, the model added it all back and then some, with February remaining on track to be in the top 5 coldest on record, according to Bespoke Weather Services. “…the other key is that we do not yet see warming to even normal yet at the end of the runs,” the forecaster said. “If cold continues beyond day 15 and into March, we should see a steady climb in prices, at least when smoothed out.” NatGasWeather expressed frustration in Monday’s price action. The firm pointed out that the Global Forecast System added 25 heating degree days (HDD) since before Sunday’s open and the latest European ensemble data is now 133 HDDs colder compared with the 30-year average for the coming 15 days, which is “by far the coldest it’s been the past several years. “So, clearly, other factors are driving today’s selling since very cold/bullish weather patterns and a tight balance are finally working in concert, and it still isn’t good enough for a sustained rally.” Supporting that theory is the quickened pace that storage inventories have fallen in the final weeks of the traditional withdrawal season, which wraps at the end of March. Even with some deviations in the 15-day forecast, market observers expect a hefty withdrawal in the next three government storage reports. Analysts at The Schork Group indicated the “early whisper number” for the next Energy Information Administration (EIA) report is in the mid-180s Bcf, while the following two reports could fetch draws well into the 200s Bcf. This would bring total working gas in storage to 2,000 Bcf by Feb. 19. “This is significant,” The Schork Group said. “As a result, the odds of finishing this winter above the five-year avarage have collapsed.”

Natural Gas Futures Take Back Seat to Cash as ‘Punishing’ Cold Drives Largest Increases ‘In Years’ - Intraday natural gas price volatility was on full display midweek as traders assessed the impacts of a substantial, though likely temporary, decline in export demand and the potential for a more moderate end-of-February following some of the coldest weather in years. After tumbling to a $2.741/MMBtu intraday low, the March Nymex gas futures contract bounced and eventually settled 7.6 cents higher at $2.911. April tacked on 5.6 cents to reach $2.879. Spot gas prices mounted some of the largest gains in years as the frigid air penetrating the north/central United States stalled, leaving large population centers to bear sub-zero temperatures. NGI’s Spot Gas National Avg. climbed $1.040 cents to $4.835. Weather model fluctuations are nothing new, but when it’s the dead of winter and a polar vortex has plunged into the Lower 48, gas traders take notice. So it’s no surprise that March futures trading has been erratic in recent days. On Wednesday, the prompt month fell early as overnight weather models erased some demand from the 15-day outlook. Prices then bounced when some of that demand was added back to the midday forecast and went on to climb even further once the European model’s afternoon run not only recovered the demand it lost overnight but added significantly more to the outlook. The March contract closed at the session high after dropping to $2.74. “So, now that prices are back to $2.90, is a return run to $3.00 possible?” asked NatGasWeather. A move back to $3.000 may be more plausible if it weren’t for lower export demand. Ahead of the Arctic being pushed farther south into Texas, heavy fog has clouded the Gulf Coast much of this week. This has prompted many key ports and waterways to impose shipping restrictions because of visibility levels, according to Wood Mackenzie. Liquefied natural gas (LNG) demand has steadily fallen since the start of the week, reaching 10.3 Bcf by Wednesday, off from 11.3 Bcf on Monday. Wood Mackenzie attributed most of the decline to Sabine Pass liquefaction facilities partially shutting down operations at the second production unit. There remains a moderate-to-high fog and visibility threat through Thursday; however, “current LNG inventory levels may help limit any further declines,” the firm said.

"Supply Is Frozen" - Polar Vortex Sparks Massive Spike In NatGas/Electricity Costs - As a 'deep chill' from a polar vortex split spills into much of the central US, spot natural gas and electricity prices are spiking quicker than Robinhood pajama traders pumping penny stocks, low-float biotechs, and, of course, GameStop and other meme stocks in recent weeks.   The week's biggest story is the plunge in temperatures across the Great Plains from Canada to Texas, resulting in skyrocketing demand for natgas and electric markets as tens of millions of Americans crank up their thermostats to stay warm."One of the main stories is the very cold temperatures and the expanse of the cold," Marc Chenard, a senior branch forecaster at the US Weather Prediction Center, told Bloomberg."Most of the country will be at or below average except Florida."BAMWX explains a series of winter storms are possible" from Denver to Dallas to Chicago to Cleveland to Mid-Atlantic and Northeast states through next week."An overwhelming signal seems to be developing for a major winter storm from the Deep South to the Ohio Valley into the NE early next week. Here are our 3-7 day hazards map and a blend of models 75th percentile data. Worth note deterministic data showing major snow numbers. #Snow," BAMWX's official Twitter account tweeted.  The reason the extreme weather is so critical to note is that the colder temperatures have prompted wellhead freeze-offs, cutting production receipts just when they're most needed by customers' demand for heating. Frigid temperatures caused equipment failures, temporarily shutdowns and flaring at four natural gas processing plants in the West Texas shale play, filings with the Texas Commission on Environmental Quality show.

US working natural gas volumes in underground storage decline 171 Bcf: EIA | S&P Global Platts — Last week's draw from US working natural gas in storage proved strong enough to reduce the year-on-year surplus to a deficit while the possibility for the largest weekly draw ever is on the horizon. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up Storage inventories declined 171 Bcf to 2.518 Tcf for the week-ended Feb. 5, the US Energy Information Administration reported Feb. 11. The withdrawal was a bit below the 175 Bcf draw expected by an S&P Global Platts' survey of analysts, but above the five-year average withdrawal of 125 Bcf, according to EIA data. Storage volumes now stand 9 Bcf, or 0.4%, below the year-ago level of 2.527 Tcf and 152 Bcf, or 6.4%, above the five-year average of 2.366 Tcf. The pull was less than the 192 Bcf dip reported the week prior as demand was down 2.2 Bcf/d, with residential and commercial declines accounting for the bulk of the declines, according to S&P Global Platts Analytics. Gas-fired generation dropped 800 MMcf/d as a rally in spot prices led to gas losing market share to coal generation. The NYMEX Henry Hub March contract dipped 5 cents to $2.85/MMBtu in trading following the release of the weekly storage report. The upcoming summer strip, April through October, fell 5 cents to average $2.92/MMBtu, up about 3 cents from the week prior. Still, gas prices rose across the board this week. Strong cash market gains from robust demand and production freeze-offs have helped to elevate market forwards. Henry Hub cash prices spiked to more than $5 in Feb. 11 trading while regional markers in the Midcontinent, Rockies, and Texas sailed past $10. The upcoming two storage reports should erase the surplus to the five-year average for the first time since 2019 — placing end-of-March inventories on course to potentially come in below 1.5 Tcf. Platts Analytics' supply and demand model currently forecasts a 265 Bcf withdrawal for the week ending Feb. 12, which would prove more than 100 Bcf above the five-year average draw. Colder-than-normal weather has increased week-on-week demand by 12.6 Bcf/d relative to the prior week. The residential-commercial sector paced the demand growth — averaging 9.8 Bcf/d above the prior week while gas-fired generation rose 1.6 Bcf/d as wind generation fell and loads increased. In addition, widespread freeze-offs from severe cold and wind have taken 1.5 to 2 Bcf/d of production offline currently in the Midwest and Texas. With the worst of the cold weather slated to hit the Midwest and Texas this weekend and early next week, further price spikes are likely, which could force demand-side curtailments to balance on the likelihood of additional production freeze-offs. A very early forecast for the week ending Feb. 19 points to a 365 Bcf withdrawal. The largest weekly storage drop on record stands at 359 Bcf during the week ended Jan. 5, 2018. During that week, a "bomb cyclone" blasted its way across the US, prompting freeze-offs and pipeline-related outages in Appalachia, Permian, Anadarko, and the Bakken, resulting in a 3 Bcf/d drop in production. 

Natural Gas Forwards Brush Off Ice, Snow Draping Lower 48; Higher Prices Still to Come - Bitterly cold temperatures blanketed the Lower 48, and the deep freeze threatened to curb output throughout most of the country’s production basins. Long-held storage surpluses have quickly eroded and export demand continues to fire on all cylinders. It was, by all considerations, the perfect storm to send natural gas futures rocketing sharply higher. And yet, in anti-climatic fashion, natural gas futures failed to sustain a $3 handle during the Feb. 4-12 period, slipping a couple of cents on the week to settle Friday at $2.912/MMBtu. The rest of the curve also barely budged, with modest losses at the front of the curve and meager gains further out. U.S. markets moved similarly, with very small changes across the majority of forward curves. Instead, all the wild swings happened in the cash markets this week, with prices screaming higher as sub-zero temperatures draped across a large swath of the country’s midsection. With a train of winter blasts tracking through the Lower 48 and heading east, there were the usual price gains in the Northeast, but market hubs in the normally quiet Midcontinent market also got in on the action. By Friday, spot gas at Oneok Gas Transmission, or OGT, had surged as high as $600 as the mercury in Oklahoma was set to fall to near zero overnight. Up to 10 inches of snow also was possible. It’s not that futures traders haven’t expressed at least some enthusiasm for the winter blast. March Nymex futures have made brief appearances above $3.000/MMBtu on a couple of occasions. It’s just that prices quickly reversed course any time that level was reached. The prompt month settled Wednesday at $2.911 and then continued to languish through Friday. Forward Look - Learn More “The coldest pattern of the past two years keeps getting sold after each bounce to $3. The back end of the forecast being warm weighted for Feb. 22-27 does stand out,” said NatGasWeather. “However, there’s still three much larger-than-normal draws lined up that will flip surpluses of 152 Bcf to deficits over 200 Bcf, which isn’t bearish.”

Drilling will stop on controversial oil well 150 miles from South Florida after company finds the well too dry — A company will stop drilling a controversial oil well it started in December about 150 miles from the South Florida coast, after saying it did not find a valuable oil source. Bahamas Petroleum Company began drilling the exploratory well off the west coast of Andros Island on Dec. 20, despite wide criticism from Bahamian conservation groups as well as a group of U.S. Representatives led by Alcee Hastings. After six weeks of drilling, the company said it found oil, but a not a commercial quantity of it. BPC plans to plug and abandon the well in the next few days and move its drillship, Stena IceMax, away from the site. The Port of Palm Beach was used as a hub for a supply ship assisting the Stena IceMax during its drilling. The project drew concern in Florida over the possibility that a spill could cause major problems for tourism, fishing, diving, coral reefs, wildlife and the environment, particularly in South Florida and the Florida Keys. The drilling shutdown is good news for the project's opposition. “Offshore drilling in the Bahamas is dangerous for both the country’s tourism-driven economy and its pristine waters,” said Diane Hoskins, offshore drilling campaign director for Oceana, an international organization that advocates for ocean conservation. “We hope the Bahamian government takes this as a sign to stop this senseless journey. The United States and the Bahamas have a shared interest in preventing the associated devastation to our climate, coastal communities and economy.” Despite the victory for conservationists, the battle isn’t over. BPC said it hasn’t yet decided whether or not to drill in the area again in the future, saying its focus now is to shut down the well it was working on.

Shelby Co. Commissioners delay vote on controversial Byhalia Pipeline — Plans for the controversial Byhalia Pipeline remain up in the air, despite another night of fiery debate. Shelby County Commissioners were set to vote on whether to sell two parcels of property for the Byhalia Pipeline project Monday but delayed a vote which would allow the Byhalia Connection Company to purchase land in area code 38109. Opponents argue the pipeline could pollute the water in the neighborhood, while the company argues it could boost the economy. “An oil spill would be devastating to this community and there is nothing, no safety measures to prevent a spill from occurring,” said Justin Pearson. Content Continues Below Pearson is the co-founder of Memphis Communities Against Pipeline. The organization protested outside of the Shelby County Commissioner meeting urging leaders to keep a moratorium in place that would block interested buyers like the Byhalia Connection Company from purchasing two parcels of land in area code 38109. The company plans on building a 49-mile crude oil pipeline that would run from Memphis to Marshall County, Mississippi. “We’ve been inside the community and we have yet to find a single resident who says ‘oh I do want a crude oil pipeline going through my water, oh I want a crude oil pipeline going through our neighborhood and disrupting our future,’” said Pearson.

Byhalia Pipeline Project Gets Final Permit, Can Begin Construction --The Byhalia Connection Pipeline now has all permits needed to begin construction, company officials said Tuesday. The 49-mile pipeline is proposed to run from the Valero refinery near Presidents Island to Marshall County, Mississippi. It's a joint venture between Valero and Plains All American Pipeline. It would connect several other pipelines and, eventually, carry crude oil to the Gulf of Mexico. The project needed approval from the Tennessee Department of Environment and Conservation, which officials said it received. The pipeline also needed approvals from U.S. Army Corps of Engineers offices in Tennessee and Mississippi. The project received those permits "as of last week," said Katie Martin, communications manager with Plains All American Pipeline. The company notified elected officials about the permits Monday but could not release the information publicly until today, following the release of the company's earnings. “Following more than 10,000 hours of environmental field study and analysis, the Byhalia Connection Pipeline project has obtained the U.S. Army Corps of Engineers Nationwide Permit 12, a federal permit only available for projects that will have minimal impacts on the environment," Martin said. "Obtaining the Nationwide Permit 12 is a key step in the project; we look forward to safely and responsibly building and operating a pipeline that will be a long-term benefit to the community.” With permits in hand, Martin said the company can begin construction. Though, it hasn't decided when construction would begin, she said. Once it begins, the company has projected construction would take nine months. However, some properties have not yet been secured by the company. A court hearing on a lawsuit from a group of landowners was slated to begin this week.

Oil company files plan to build tanks, pipeline over historic slave cemeteries - Thick woods overtook the old St. Rosalie Plantation house more than 70 years ago.But to the people of Ironton, a community of modest homes just south of those woods, St. Rosalie remains a powerful symbol of Black heritage in the heart of what used to be a bastion of White supremacy -- Plaquemines Parish.And now, plans to build a new oil export facility on St. Rosalie are raising concerns about whether a key part of that heritage could be erased.Nearly 200 years ago, a free Black man named Andrew Durnford owned and operated a sugar plantation at St. Rosalie, along the west bank of the Mississippi River. Durnford died a few years before the Civil War and left the plantation to his widow and children. Records show the Durnfords enslaved Black workers, but also paid them wages during the Civil War. Once emancipated, those workers founded the town of Ironton just south of the plantation.Durnford and his family were laid to rest in above-ground tombs in one spot on the St. Rosalie property, close to where La. 23 now passes by. About a quarter-mile closer to the river, enslaved people were buried in an area of unmarked graves.The existence of the historic graves was no secret. Documents stored in the Tulane University Archives include lists of workers’ names and references to the enslaved people who died at St. Rosalie. Official maps in the 1920s and 1940s clearly marked two cemetery locations, and Ironton residents who hunted in the woods there knew exactly where the burial grounds were. “We would see the graves,” said Wilkie DeClouet, a retired Jefferson Parish sheriff’s deputy who lives in Ironton. “We knew the graves was there, but we know to go around and you respect that kind of stuff.”

The Sunniest City in Texas is Expanding … Natural Gas Production --The \Newman Power Station, a natural gas plant just across the Texas border in El Paso, is responsible for nitrogen oxide and volatile organic compound emissions, which can form ozone, or smog. Last August, El Paso had one of itsworst days of air pollution in nearly 20 years, as ozone and particulate matter levels spiked sharply. Although it’s likely that the summer’s record-breakingWest Coast wildfire season contributed to the pollution peak, El Paso’s air quality has been worsening over the past few years, driven mainly by local sources like cars, refineries, and industrial plants. In 2020, data from the Environmental Protection Agency (EPA) shows that compared to its five-year average, the El Paso region experienced 20 fewer “good” air quality days per year and four more “bad” air quality days, which can be dangerous for vulnerable populations.  “The power plant has been here as long as I can remember,” says Lara, who grew up in Chaparral and now lives in nearby Las Cruces. “It affects me, and my family and friends, the people I care about in this community.” She worries that in the future, her son might develop asthma, as she has from breathing in excess pollution. Her father, who has lived near the plant for three decades, developed a chronic lung condition that leaves him winded. Last year, El Paso Electric, the company that owns and operates Newman Power Station, proposed upgrading the plant with more efficient generators and decommissioning older, more polluting equipment that is, in some cases, more than 60 years old. While the company says that the new generators will lead to a 25 percent reduction in greenhouse gas emissions, the plant will still create ozone-causing emissions.  In December, the New Mexico Public Regulations Commission, which oversees utilities, rejected El Paso Electric’s proposal, saying that the plant would be obsolete within a few years under the state’s clean energy mandates. By 2045, El Paso Electric will not be able to sell any natural gas-generated electricity to its New Mexico customers—and the state agency won’t make residents pay for a project they can’t use.  But nothing is stopping the company from selling all of its natural gas power to Texas, and making Texans pay the full price. The Texas Public Utility Commission has already approved the plan to upgrade the power plant. A representative from El Paso Electric told the Observer that the company is moving ahead on the upgrade as it waits for a final air permit from the Texas Commission on Environmental Quality (TCEQ).

US Oil, Natural Gas Permitting Drops 10% in January, but Majors in Permian Record Six-Month High Lower 48 onshore oil and gas permit approvals fell by 10% in January versus December to 1,688, with declines seen across all of the major basins, according to the latest monthly statistics compiled by Evercore ISI. The Permian Basin and Eagle Ford Shale combined to account for 52% of the total permit count, said the Evercore team of researchers led by James West. Among the oil-heavy plays, filings in the Permian fell by 99 or 12% month/month (m/m), while the Eagle Ford saw a drop of 73 or 35%. Permits in the Denver-Julesburg (DJ)/Niobrara formation fell by 73 or 35% m/m, and the Bakken Shale saw a reduction of 29 or 43% from the prior month. The Rockies region also included a 45% decline in the Powder River Basin (PRB) to 53 permits. The Permian decline was driven by independent exploration and production (E&P) companies, as permits granted to majors in the basin actually rose by seven to a six-month high of 47. ExxonMobil, Chevron Corp. and Royal Dutch Shell plc accounted for 25, nine and 11 Permian permits, respectively. Denver-based independent Ovintiv Inc. also saw an increase in Permian permits, up 15 or 49% m/m. As for the larger independents working in the basin, Occidental Petroleum Corp. (Oxy), Devon Energy Corp. and Pioneer Natural Resources Co. saw their permit counts fall by 47, 40 and 25, or 59%, 56% and 63%, respectively. The Eagle Ford decline was driven in large measure by Marathon Oil Corp. and ConocoPhillips, whose permit totals plummeted by 32 and 21, respectively, or 72% and 73%. The Bakken permit total of 38 was the lowest count since 2009, with the dropoff driven mainly by Marathon, ConocoPhillips and Devon. The report follows the sale by Equinor ASA of its Bakken portfolio in a deal valued at around $900 million, suggesting that sentiment around the Williston Basin may be cooling. The DJ/Niobrara decline was led by publicly traded companies, with only filed one permit for the basin, Evercore researchers said. The PRB downtrend, meanwhile, was led by Oxy, EOG Resources Inc. and privately held Anschutz Exploration Corp., whose permit counts fell by 85%, 47% and 90%, respectively.

US oil, gas rig count rises by 1 rig to 457, with improved oil prices a boost to E&Ps— The US oil and gas rig count moved up one to 457 in the week ending Feb. 10, rig data provider Enverus said, as growth slowed from double-digit rig increases in the previous two weeks, even with WTI oil prices improving toward $60/b.  The week's single net rig add came on the oil side, as rigs chasing that commodity moved up three to 338, while those chasing natural gas were down two to 119. The rig count had seen double-digits gains in four of the past nine weeks, growing by 26 over the previous two weeks, as operators added rigs to maintain production. Nationwide rig totals have risen 64% since the early July low of 279, according to Enverus. Among the eight largest plays for the week ended Feb. 10, the Permian showed the most change, with three rigs added for a total 208, marking the highest count for the basin since early May 2020. Three plays added one rig: the Eagle Ford Shale (35 rigs) in South Texas, the DJ Basin (10) in Colorado and the Utica Shale (10), mostly in Ohio. The Marcellus Shale (32) mostly in Pennsylvania, and the Bakken Shale (13), mostly in North Dakota, each shed two rigs. Rig totals in both the Haynesville Shale (50) of East Texas/Northwest Louisiana, and the SCOOP/STACK (16) of Oklahoma were unchanged on the week. WTI oil, which plunged into the $20s/b as the pandemic took hold last March and was in the $40s/b for most of H2 2020, is now trading in the $58/b range, providing some comfort for E&P operators after a worrisome year. For the week ended Feb. 10, WTI averaged $57.62/b, up $3.91 week on week; while WTI Midland averaged $58.54/b, up $3.96; and the Bakken Composite price averaged $56/b, up $5, according to S&P Global Platts. Natural gas prices also fared well. Prices at Henry Hub averaged $3.29/MMBtu, up 43 cents; while prices at Dominion South averaged $3.04/MMBtu, up 45 cents. Although commentary on fourth-quarter earnings calls seemed "restrained," in the words of one analyst, upstream executives showed a clearly optimistic attitude for the industry near term.

U.S. Oilfield Workforce Climbs in January for Fifth Consecutive Month - Employment in the U.S. oilfield services (OFS) and equipment sector climbed for the fifth consecutive month in January, according to preliminary data from the Bureau of Labor Statistics (BLS) and analysis by the Energy Workforce and Technology Council. “After shedding nearly 102,000 jobs from March to August due to pandemic-related demand destruction, the upstream oil and gas industry has added back approximately 21,000 positions over the past five months,” the Council noted. An estimated 8,421 jobs were added in January. The sector gained an estimated 5,717 jobs in October, 3,651 in November, and 933 in December, the BLS data showed. “OFS sector employment rose 1.4% in January as companies reopened some production to prepare for expected demand increases as more people are vaccinated,” researchers noted. “Uncertainty remains because of the high number of Covid-19 cases, which continue to suppress demand.” The monthly Oilfield Services and Equipment Employment Report, compiled and published by the Council, which represents 600 OFS members, estimated job losses from demand destruction because of Covid-19 now total 81,061. Since January 2020, about 80,014 jobs have been lost across the domestic OFS sector. Estimated OFS sector jobs in the United States declined from 706,528 in February 2020 to 625,467 last month, down 11.5%. “Losses were heaviest in April, when the sector shed 57,294 jobs — the largest one-month total since at least 2013,” the Council noted. “The jobs lost in 2020 represent annual wages of approximately $15.4 billion.” Job losses were heaviest among companies that provide support services for oil and gas extraction. This portion of the OFS sector has cut 72,580 jobs since the pandemic’s onset — 89.5% of the sector’s total job losses. OFS job losses last year were estimated to be heaviest in Texas, down 56,200, and in Louisiana, which lost 10,800 jobs. The states are the two leaders for oil and gas production, the Council noted. According to the BLS data, oil and gas jobs cut last year also were in order Oklahoma, 9,800; Colorado, 5,200; New Mexico, 4,800; California, 4,700; Pennsylvania, 4,600; North Dakota, 4,000; Wyoming, 2,900; Ohio, 2,100; Alaska, 2,000; and West Virginia, 1,900.

Lower 48 DUC Count Falling to 'Normal' by Year's End, Says Raymond James - The Lower 48’s ample supply of drilled but uncompleted wells, aka DUCs, is coming down at a quick pace and is expected to reach “normal” levels by year’s end, tightening the oil supply according to Raymond James & Associates Inc. In a note to clients, Raymond James analyst John Freeman made the case that the U.S. Energy Information Administration (EIA) may be overstating the number of actual DUCS not yet completed. The EIA in the most recent Drilling Productivity Report for December said the total DUC inventory across seven main Lower 48 regions stood at 7,298, down from 7,443 in November. However, the EIA’s DUC count is 22% “too high and contains many older wells that are likely to never be completed,” according to Freeman. The federal data contains a “plethora of DUCs drilled back as far as 2014 that are ‘dead in the water.’” Even if the older DUCs were to be finished, they “would not produce at near the rate as wells drilled with cutting-edge technology and lateral lengths.” In addition, the escalation in mergers and acquisitions last year across the exploration and production (E&P) sector consolidated a lot of onshore acreage. That has led E&Ps to build larger, more efficient pads with more wells. The additional wells have created a more “normal” DUC inventory than years past. What Freeman sees in Raymond James data is the DUC inventory reaching “normal levels by the end of this year” at the current pace that E&Ps are finishing them. That would require “more spending to hold completions levels flat in 2022 and constraining supply growth.” The pandemic created a historic cut to energy demand, which led to a tremendous work-in-progress inventory of DUCs, he noted. Finishing those wells began in earnest in the second half of 2020, as E&Ps eschewed more development capital spending to concentrate on what they had in inventory.

Experts say Joe Biden's energy moves could benefit Texas | The Texas Tribune — Surrounded by refineries and chemical plants that make up the Houston Ship Channel, the Republican leader of the U.S. House stood last week along what he called “one of America’s success stories.” A cadre of Texans in Congress flanked U.S. Rep. Kevin McCarthy of California to continue a campaign of criticisms they’ve lobbed at President Joe Biden’s climate-focused agenda. Biden’s swift moves to combat global warming have brought equally quick criticisms from state officials that Texas oil and gas jobs are in danger. But their comments often ignore that there is a global push in the free market — not just from the White House — to limit reliance on fossil fuels. And their rhetoric belies the benefits Texas’ oil and gas sector could see from Biden’s early moves. “Unfortunately, our economic bedrock of oil and gas is under attack by an administration that is bent on eliminating millions of jobs,” said U.S. Rep. Brian Babin, R-Woodville, one of seven Texas lawmakers who joined McCarthy last week in front of one of the busiest cargo ports in the world. Even before Biden took office last month, Texas lawmakers had forecasted doom and gloom for the state’s energy industry, projecting the sector’s demise at the hands of the new president.  Even Texas Democrats have swiftly pushed back against Biden’s early moves aimed at protecting the environment. However, the percentage of jobs in the oil and gas industry had begun steadily declining, both in Texas and nationwide, long before Biden took office.  At the beginning of 2020 — before the coronavirus pandemic and a global drop in the demand for oil — the share of jobs in the Texas oil and gas field had fallen to about 1.8%. Over the last decade, the percentage of jobs that are in the oil and gas industry has steadily declined, both in Texas and nationwide. The industry in Texas was especially affected after Saudi Arabia in 2014 ramped up oil production, leading American oil producers to cut jobs while still producing lots of oil. A majority of Americans have said they are interested in a clean and safe environment. Their spending habits increasingly demonstrate that, which experts say poses a much larger threat to the Texas oil and gas industry than Biden does. And, in the short term, Biden’s moves may help Texas, some say. “Basically every executive action Biden’s taken is good for Texas oil and gas,” said Michael Webber, energy professor at the University of Texas at Austin.

Democratic state lawmakers want to tax flared, vented natural gas. Texas oil industry says no. -Environmental groups are pushing state lawmakers to impose a new tax: a 25% levy on gas that is vented or flared as part of the oil extraction process. Currently, this byproduct of oil production is exempt from state taxes normally levied on natural gas production, as it is burned off and released into the atmosphere instead of being captured and brought to market.Groups such as the Environmental Defense Fund and Earthworks are hoping to curb this release of greenhouse gases by making it more expensive for energy producers to flare or vent gas than it would be to invest in the necessary infrastructure to capture and transport it.“Texas is one of the top oil and gas producing states, and as a byproduct of pulling oil out of the ground, this gas comes out — the same gas we use in our homes to cook our food,” said state Rep. Vikki Goodwin, an Austin Democrat who wrote a bill to tax flared or vented gas. “But for oil producers, they see it as a waste product. Rather than figuring out how to sell it or how to use it on-site, they’re basically just throwing it away.” In addition to leading the nation in oil and gas production, Texas is a leader in the amount of natural gas that is vented and flared, according to the U.S. Department of Energy. In 2019, Bloomberg reported that oil producers in the Permian Basin were burning off enough gas to power every residence in the state.The industry and its regulators have since taken steps to tamp down the practice. Several oil and gas companies and trade associations formed a coalition aimed at limiting flaring and methane emissions, and the Texas Railroad Commission, which regulates the oil and gas industry, adopted rules requiring more detailed disclosures from companies seeking flaring permits.In light of those steps, Todd Staples, president of the Texas Oil and Gas Association, said a tax on flared or vented gas could create unnecessary burdens for companies that are already moving toward eliminating the practice. But environmental groups, concerned by the volume of pollutants being released into the atmosphere, say the energy industry in Texas is not moving quickly enough to make changes in the face of the growing threat of climate change. “This is a common sense bill that needs to be passed,” said Sharon Wilson, a senior field advocate at Earthworks. “It is unnecessary to be wasting this product, and it is an intense pollutant that is having an impact not just locally, but globally.”

Texas Group Sets Goal to End Routine Flaring - A group of organizations linked to the Texas oil and gas industry on Wednesday reported that they aim to end routine natural gas flaring in the state by 2030.The announcement from the Texas Methane and Flaring Coalition follows a decision Tuesday by the state’s energy regulator to defer flaring requests from various operating companies. A Bloomberg article posted to Rigzone deems the stance taken by the Railroad Commission of Texas (RRC) “uncharacteristically critical” of the industry practice.Calling flaring “‘a necessary last resort during an upset,’” one commissioner quoted in the Bloomberg article pointed out the RRC should be more vigilant about not approving flaring requests outside such situations. Another commissioner expressed similar sentiments.In a written statement emailed to Rigzone, the Coalition noted that it “considers routine flaring to be flaring of natural gas from new and existing wells/facilities during normal production operations when gas gathering, processing, or infrastructure are insufficient or unavailable.” Additionally, the group stated that it “supports industry’s continued progress to end routine flaring and shares a goal of ending this practice by 2030.” To be sure, it noted that certain situations warrant flaring for safety and environmental protection reasons. Members of the Coalition include more than 40 Texas operators as well as the following seven trade associations: Panhandle Producers and Royalty Owners Association (PPROA), the Permian Basin Petroleum Association (PBPA), the South Texas Energy and Economic Roundtable (STEER), the Texas Alliance of Energy Producers, the Texas Independent Producers and Royalty Owners Association (TIPRO), the Texas Oil and Gas Association (TXOGA), and the Texas Pipeline Association (TPA).

4.2-magnitude earthquake in Oklahoma, officials say  -- A 4.2 magnitude earthquake in Oklahoma was the largest in a swarm of temblors to rattle the state Friday, officials say. The large quake rumbled shortly before noon near Garfield and Noble counties, about 80 miles north of Oklahoma City, according to the U.S. Geological Survey. It was among about a dozen earthquakes in the area from late morning to early afternoon, geologists say. Hundreds reported feeling the quakes. A resident in Covington, which is near the epicenter, said the shaking knocked items off the walls of her home while others felt the earthquake as far as 30 miles away in Enid, the Enid News & Eagle reported. Earthquakes aren’t unusual for Oklahoma. Last year, about three dozen above a 3.0 magnitude were reported in the state, the newspaper reported. Oklahoma has experienced a “surge in seismicity” since 2009, even topping California for more 3.0-magnitude quakes from 2014-2017, according to the U.S. Geological Survey. “While these earthquakes have been induced by oil and gas related process, few of these earthquakes were induced by fracking,” U.S. Geological Survey officials say. Most temblors in the state are caused by wastewater disposal from oil and gas production in which fluid is injected deep below drinking water aquifers, officials say. About 90% of wastewater that’s injected is a byproduct of oil extraction process, not waste frack fluid, officials say.

Big Oil Gets to Teach Climate Science in American Classrooms - - If you were an elementary school student in Oklahoma, you might meet Petro Pete, a cartoon child outfitted in the overalls and hard hat of an oil rig worker. Through Pete, you might learn things like “having no petroleum is like a nightmare!” Meanwhile Pete’s trusty blue dog, Repete, assures the animal kingdom that “the humans learned their lesson and now they don’t leave behind a mess when they drill for oil.” Who would you have to thank for these important academic messages? Oklahoma Oil & Natural Gas, a fossil fuel industry trade group. In Ohio, children may complete a word search sponsored by the state’s oil and gas industry, with answers such as “lubricants” and “carbon black,” while in New Jersey students in grades three through six may receive a workbook titled “Natural Gas: Your Invisible Friend.” The National Energy Education Development Project, backed by 100 oil and gas industry players, promotes lessons on fracking using Jell-O and other fun foods as teaching aids. The stakes for how children and young adults learn about climate change—the science, the politics, the implications—are extremely high. Environmentalists know this. So, clearly, do fossil fuel companies. “Industry groups recognized the value of classrooms for marketing and propaganda decades ago,” says Carroll Muffett, president and chief executive of the Center for International Environmental Law. “It’s where you shape someone's understanding of your product and of your company and of your issues. In a school context, you're shaping their understanding of the world.”  One of the many ironies of K-12 education on climate change is that among the parents, at least, there’s little discord. More than 80% of parents said that they want schools to teach their children about climate change, according to a 2019 NPR/Ipsos poll. That survey also found that  whether people have children or not, nine out of 10 Democrats and two-thirds of Republicans agree that the subject needs to be taught in schools. Yet the forces trying to suppress accurate science teachings remain relentless, says Elizabeth Allan, president of the National Science Teaching Association. Allan teaches climate change to many students in Oklahoma whose parents work in the oil industry, and they come to class with preconceived ideas about what climate change is and isn’t. “When I’m talking to them, it doesn’t lessen the science,” she says, “or the need for them to understand or examine fossil fuels and human contributions to it.”

Biden administration delays Trump rule allowing companies to pay less money for drilling on federal lands - The Biden administration is delaying a Trump administration rule that was expected to result in the oil and gas industry paying less money for drilling on public lands and waters. The administration announced on Thursday that the rule, which was slated to go into effect next Tuesday, will now not become effective until April 16. Interior will also start a 30-day comment period to allow for “additional engagement” on the rule. “The Trump administration sought to allow corporations to pay less money for the oil and gas resources they extract from public lands, which deprives American taxpayers from a fair return and would result in lost tax revenue for state and local governments,” a department spokesperson said in a statement. “As part of the ongoing review directed by President Biden, the Department of the Interior is reviewing this rule to ensure that corporations aren’t unfairly pocketing money that is owed to the American public,” the spokesperson added. The rule, which was finalized in January, changed the way that royalties companies pay to the government for drilling on federal property is calculated and was expected to decrease how much the government collects by $28.9 million each year. This amounts to less than 0.5 percent of the total federal oil and gas royalties it collected in 2018, the rule notes. When he proposed the rule in August, then-Interior Secretary David Bernhardt said in a statement that it would provide “regulatory certainty and clarity to States, Tribes and stakeholders, removing unnecessary and burdensome regulations for domestic energy production.” The rule’s promulgation followed a request from a leading industry lobbying group, the American Petroleum Institute, for changes to how royalties are calculated.

Out of spotlight, two-member panel spent $475K on consulting contracts last year for Line 5 project ⋆ A two-member panel with full, independent authority to oversee the intensive project to replace Enbridge’s controversial Line 5 pipeline and keep oil flowing under the Straits of Mackinac has been quiet and out of the news for the past year, as Line 5-related court cases heat up and focus has largely been on the regulatory agencies permitting the project. The Mackinac Straits Corridor Authority (MSCA) did not meet publicly for 11 months until Wednesday. In the meantime, the panel spent hundreds of thousands of dollars held in trust by the MSCA to secure significant consulting contracts meant to guide Enbridge’s tunnel project forward, according to documents obtained by the Michigan Advance. The statute creating the MSCA was rushed through the 2018 Lame Duck session by the GOP-controlled Legislature, then swiftly signed into law by former Gov. Rick Snyder, who had negotiated the deal with Enbridge shortly before leaving office. While three state regulatory bodies are in charge of granting Enbridge the construction permits necessary for the tunnel — the Michigan Department of Environment, Great Lakes and Energy (EGLE), Michigan Public Service Commission (MPSC) and the U.S. Army Corps of Engineers — the MSCA was entrusted specifically to oversee all aspects of the tunnel project and ensure it comes to fruition. The MSCA approved two contracts worth a total of $475,689 — with the Chicago-based McMillen Jacobs Michigan, Inc. for “advisory tunnel engineering services,” and the Lansing-based CDM Smith Michigan, Inc. for “structural design support services.” Both were already signed in October, according to Michigan Department of Transportation (MDOT) documents attained by a Freedom of Information Act (FOIA) request, but both members of the MSCA met virtually Wednesday to publicly “approve” the contracts. Both contracts were secured by MSCA Chair Mike Nystrom, a registered lobbyist for the construction industry and executive vice president/secretary of the Michigan Infrastructure and Transportation Association (MITA). He didn’t respond to an inquiry for the story. MSCA Member Tony England, a professor of electrical and computer engineering at the University of Michigan, did not appear to be included in the decisions. England’s name is not on the documents, and at Wednesday’s meeting he asked when they were signed. But he approved the contracts during the meeting anyway. The two 2020 contracts make four total consulting contracts entered into by the independent panel. On Dec. 28, 2018, the MSCA signed three-year agreements with the Colorado-based Michael Mooney Consulting, LLC for up to $452,805.33 and with the Grand Rapids-based HT Engineering, Inc. for up to $309,452.70.

Should future plans for Line 5 consider climate change? --The plan to dig a nearly four-mile tunnel underneath the Straits of Mackinac and replace the Line 5 oil and gas pipelines continues to move forward.Last week, Michigan’s Department of Environment, Great Lakes, and Energy said the plan complies with environmental laws on wetland protection, cultural resources, and wastewater discharge.But other state and federal agencies still need to weigh in on the project. And one big sticking point is climate change and whether carbon emissions from burning the oil and gas that flow through Line 5 should be a factor in deciding if the tunnel project gets greenlit.That question is before a Michigan judge right now, and could ultimately determine the tunnel’s fate.  For most energy projects that are proposed on public lands, like drilling for oil and gas or installing a solar farm, the government has to review the resulting environmental impacts, including greenhouse gas emissions.That’s true for pipelines too, explains Pete Erickson, who studies climate policy at the Stockholm Environment Institute.“There is a clear causal link between a pipeline being built or not built and both the production and consumption of that oil, and therefore carbon dioxide emissions, and therefore climate change,” he says.And a project’s impact on climate can be the deciding factor in whether or not it goes forward. A high-profile example is the Keystone XL Pipeline, which would have carried oil and gas from Alberta to Nebraska. The main reason the federal government didn’t grant a permit for the project was because of climate change, according to the Obama administration. And there have been other examples, like recently in Washington, where state agencies have rejected fossil fuel projects because of their projected carbon emissions. For the Line 5 tunnel project, Enbridge, the company behind the proposal, requested that government agencies make an exception in this case.That’s because the company argued this is not a new pipeline — it would justreplace the old one and make it safer. And Judge Mack agreed with Enbridge. Back in October, he said public agenciesshould not consider greenhouse gas emissions with this tunnel project at all.

Line 5 pipeline shutdown adds urgency to Michigan’s propane heating debate  - Shutting down the pipeline would cut off the Upper Peninsula from its supply of cheap propane, but clean energy advocates say there are better alternatives for heating. The impending shutdown of the Line 5 pipeline is bringing new urgency to the debate over transitioning Michigan’s Upper Peninsula from fossil fuel heating. Since 1996, Line 5 has supplied propane to about 15,000 homes in the U.P., a sparsely populated region separated from the rest of the state by Lake Michigan and Lake Huron. Gov. Gretchen Whitmer issued an executive order in December to shut down the pipeline this spring where it crosses the Straits of Mackinac between the two lakes. Enbridge is challenging the order and pursuing permits for a tunnel to carry a rebuilt line under the straits, but either of those efforts fails it could force propane companies to import the fuel by rail or truck, increasing household prices by up to $500 per year in a place with a high number of low-income residents who already struggle to pay heating bills without assistance. “It’s interesting with the whole propane question — immediately people are like, ‘How do we get more propane?’” said Jim Lively, an organizer behind the Upper Peninsula Clean Energy Conference, a monthly series of virtual events spotlighting heat pumps, geothermal and wood alternatives. “All these ideas are better alternatives to being tethered to a pipeline that’s controversial at best.” Conference sessions scheduled for Friday focus on propane delivery options and financing for clean energy in buildings. The events have been organized by a coalition of about 15 groups with representation from environmental, trade, tribal, academic and industry groups. Separately, Gov. Whitmer’s U.P. Energy Task Force is expected to present its own report on propane alternatives next month, while the National Resources Defense Council and consulting firm 5LakesEnergy have also produced a report. Among the proposals are increasing the use of heat pumps, which run on electricity and require dramatically less energy consumption than propane heating systems. Heat pump technology has improved in recent years to the point that geothermal and other systems can heat a home during the winter’s coldest days, said Douglas Jester, a partner at 5LakesEnergy who helped create the NRDC report and sits on the U.P. Energy Task Force. Propane heating systems have around a 15-year life, and the region could gradually transition to heat pumps as residents’ old systems need to be replaced, Jester said. He noted that several utility cooperatives already provide incentives for homeowners to switch, but state regulators would likely have to restructure electric rates before a switch would make economic sense for its customers. “It’s doable, but there’s still work that needs to be done,” Jester said.

Motion Seeks To Dismiss Lawsuit Against Pipeline Company - A motion has been filed to dismiss a lawsuit brought by an environmental activist against the company that installed a controversial natural gas pipeline through Livingston County.  The suit was filed last October in U.S. District Court in Detroit by Michigan resident Matthew Borke against Texas-based Energy Transfer Partners, the company behind the ET Rover pipeline, and its Chairman Kelcy Warren. The company’s security contractor, Leighton Security, was also named in the suit, along with that company's CEO Kevin Mayberry and Operations Manager Gary Washburn.Energt Transfer constructed the 42-inch diameter pipeline which carries 3.25 billion cubic feet of natural gas per day up from the Marcellus and Utica Shale through West Virginia, Pennsylvania and Ohio, crossing into Michigan in Lenawee County, then proceeding north through Washtenaw and Livingston counties before joining the Vector Pipeline in Fowlerville, where it crosses the state into Ontario, Canada. The suit alleges the companies engaged in a conspiracy to deprive Borke of his civil rights. Borke says he began attending meetings of Michigan Residents Against the ET Rover Pipeline in March of 2017, around the same time the Livingston County Sheriff’s Office began providing security at the ET Rover pipeline sites for $60 an hour, utilizing deputies in uniform and departmental vehicles. Borke claims that over the next several months, he and other members of the group were subjected to harassment and intimidation by employees of Leighton Security, which the lawsuit alleges was supported in its activities by the Sheriff’s Office through its contract. On Monday, attorneys for Energy Transfer filed a motion to dismiss the lawsuit, claiming it had failed to establish jurisdiction over the defendants nor that a conspiracy existed. Borke tells WHMI he isn’t surprised the firms are seeking to dismiss his lawsuit on jurisdictional grounds. “Large companies routinely use sub-contractors to do the work, which creates a wall of liability that protects the actual company. The reverse of that however is that anyone working for the company represents that company’s interest and therefore represents them.” He adds that the motion is “attempting to separate the employees from the company it does actually work for.”

Federal court declines to halt construction on northern Minnesota oil pipeline --- A federal court on Sunday denied a request to halt construction on Enbridge’s Line 3 oil pipeline across northern Minnesota and upheld a key water quality permit granted to the project by the U.S. Army Corps of Engineers last year. The decision stems from a Dec. 24 lawsuit filed in U.S. District Court in Washington, D.C., by the White Earth and Red Lake nations and environmental groups Sierra Club and Honor the Earth that sought to stop construction as the groups argued the Army Corps had failed to consider environmental impacts like climate change and a potential oil spill. In an opinion filed Sunday, Judge Colleen Kollar-Kotelly wrote the groups and bands did not meet the burden of proof necessary for the injunction and said the harm of stopping construction, which began Dec. 1, outweighs the environmental risks of the new Line 3. She noted “most of the environmental effects stemming from the construction of Line 3 will not be ‘permanent or irreversible, as the preliminary injunction standard requires.'” “Overall, the court finds the balance of harms and public interest considerations to be a close call,” Kollar-Kotelly wrote. “Plaintiffs offer numerous examples of potential environmental harms stemming from the project’s construction. But the Corps presents persuasive evidence that delaying construction — and in doing so, continuing to rely on existing Line 3 which Enbridge is required to decommission pursuant to its consent decree — also causes ongoing environmental harm and safety risks. Top Articles Tim Walz weighing next round of COVID-19 dial turns, offers few detailsCold weather drags on for Twin Cities, with frigid temperatures to last into the weekend READ MORE New Vikings receivers coach Keenan McCardell was part of a dynamic duo. Now he’ll coach another one.Senate agrees to hear Trump case, rejecting GOP argumentsVikings’ new offensive coordinator Klint Kubiak stepping out of his father’s shadowMisdemeanor assault allegation against Inver Grove Heights city administrator now in prosecutor’s hands Cold weather drags on for Twin Cities, with frigid temperatures to last into the weekend SKIP AD “The court cannot ignore the potential financial losses and harmful economic effects on the local community if construction on the project were to be delayed. Taking into account all these considerations, the court finds that plaintiffs have not definitely tipped the scale in their favor,” Kollar-Kotelly wrote.

Another court blocks attempt to stop Line 3 construction | MPR News --A federal judge says Enbridge Energy can proceed with construction on its contentious Line 3 oil pipeline, less than a week after a state appellate court panel also denied a request from Minnesota tribes and environmental groups to temporarily block work on the project.The Red Lake Band of Chippewa, White Earth Band of Ojibwe, the Sierra Club, and the Native American-led environmental group Honor the Earth filed suit in federal court in December, seeking to overturn a key permit issued by the U.S. Army Corps of Engineers.At the same time, the groups asked the court for an injunction to suspend construction on the pipeline until their lawsuit could be heard, citing “irreparable harm” if work on the project was allowed to proceed.U.S. District Court Judge Colleen Kollar-Kotelly denied the request yesterday, writing the plaintiffs failed “to demonstrate a likelihood of success on the merits and that they will suffer irreparable harm.” The judge agreed that the construction of the 340-mile Line 3 across northern Minnesota will destroy wetlands and could result in other environmental harms.But she said delaying construction also causes safety risks, because that would result in the continued operation of the existing Line 3, which is corroding and requires extensive maintenance. Enbridge Energy is seeking to replace the old line with a new, larger one along a different route across the state. “Overall, the Court finds the balance of harms and public interest considerations to be a close call,” Kollar-Kotelly wrote.“Plaintiffs offer numerous examples of potential environmental harms stemming from the project’s construction. But the Corps presents persuasive evidence that delaying construction …also causes ongoing environmental harm and safety risks.” The judge cited an estimate from Enbridge that delaying construction for six months would result in a $322 million economic hit. The company says more than 5,000 people are currently working on the project.

New Campaign Targets Wall Street Funding to Stop Line 3 Tar Sands Pipeline -A coalition of climate groups ramped up their fight to stop Enbrige's Line 3 pipeline Monday with a new campaign to put a "deluge" of pressure on the financial institutions funding the tar sands project."Funding Line 3 is an unconscionable act at any time, but especially during a time when there is but a small window for us to move toward a zero-carbon economy in a way that ensures a future for the next generation simply because some JP Morgan or Bank of America executive prioritize profits over people is sickening," said Alec Connon, co-coordinator at Stop the Money Pipeline, in a statement."We won't let them take our future—not without a fight," Connon said.Canadian company Enbridge's plan to replace a corroding pipeline with a larger one totransport an estimated 760,000 barrels of tar sands oil per day from Alberta, Canada to Wisconsin, via North Dakota and Minnesota, has been met with strong opposition. Recent direct actions included water protectors locking themselves to an excavator at a work site in Minnesota earlier this month.The new campaign focuses on major U.S.banks including JP Morgan Chase, Citigroup, and Bank of America, as well as international  banks such as HSBC, Credit Suisse, and Deutsche Bank, all of whom the Stop the Money Pipeline says (pdf) are underwriting  the project. The climate activists have got their eyes on an upcoming deadline when the institutions must decide whether or not to renew Enbridge's loan for the pipeline replacement. Rainforest Action Network, a member of the Stop the Money Pipeline coalition, said the crucial role of the banks is clear. "Without any project finance associated with the pipeline construction, the banks providing Enbridge's general corporate financing are the supporters of this destructive project," RAN said in a December briefing."Less than two months from now, on March 31st, 18 banks have a $2.2 billion loan to Enbridge due for renewal," Stop the Money Pipeline co-coordinator Amy Gray said Monday. "Between now and then, we are going to do everything in our power to make it loud and clear to bank executives: They must walk away from Line 3―or there will be consequences."

Tribes, faith leaders petition Biden to end Enbridge Line 3 pipeline - Native tribes and faith leaders are together calling on President Joe Biden to intervene in the ongoing construction of the long-contested Line 3 pipeline in northern Minnesota. Nearly 3,800 people have signed a petition organized by Interfaith Power & Light. The petition, along with a separate letter signed by 345 faith leaders and organizations, asks that the president use executive actions to stop the $2.6 billion Enbridge Energy project — a 1,097-mile replacement pipeline that, once complete, would transport daily 915,000 barrels of Canadian tar sands oil, which produces larger quantities of greenhouse gas emissions than typical crude oil. Opponents of the Line 3 pipeline say it will exacerbate climate change — estimating its emissions will be the equivalent of pollution from 50 coal-fired power plants — and is unnecessary at a time when infrastructure investments should shift toward clean energy. Indigenous tribes, led by the White Earth Band of Ojibwe and the Red Lake Band of Chippewa Indians, add that Line 3, which would span 337 miles in Minnesota, violates their land rights under treaties and endangers wetlands where wild rice grows, and other places they consider sacred. Appealing to Biden's Catholic faith, the petition quotes Pope Francis' 2015 encyclical "Laudato Si', on Care for Our Common Home," where he wrote that the Earth "now cries out to us because of the harm we have inflicted" through irresponsible use of the planet's resources. "In your inaugural address, you said 'a cry for survival comes from the planet itself.' We hear that cry," the interfaith petition reads, "it is being sung by our Indigenous siblings standing in the cold Minnesota winter against this destruction of the sacred. Join their prayer and stand against Line 3." The petition and letter are part of an ongoing campaign that has united the faith community with Indigenous tribes and environmentalists against the oil pipeline. In the six years since the fight against Line 3 began, faith groups and clergy have been present at prayer circles, public hearings and demonstrations where some have been arrested.

Minnesota Police Want a Pipeline Company to Pay for Weapons Claimed as PPE -A MINNESOTA SHERIFF’S OFFICE has requested that the tar sands pipeline company Enbridge reimburse the department for nearly $72,000 worth of riot gear and more than $10,000 in “less than lethal” weapons and ammunition, including tear gas, pepper spray, bean bag and sponge rounds, flash-bang devices, and batons. The sheriff’s office of Beltrami County, which sits at the center of an Indigenous-led fight to stop the construction of Enbridge’s Line 3 pipeline replacement project, labeled the weapons as “personal protective equipment.” The invoices, some of which were first described by the blog Healing Minnesota Stories, await review by the Minnesota Public Utilities Commission. The agency maintains an escrow account set up so that Enbridge can reimburse public safety agencies for expenses associated with Line 3 construction, especially costs for policing protests. In its construction permit, the utilities commission clarified that the fund “may not be used to reimburse expenses for equipment, except for personal protective gear for public safety personnel.” The commissioners did not define the term “personal protective gear.”“I don’t think by any stretch of the imagination batons could be considered PPE — or grenades,” said Tara Houska, an organizer with the anti-Line 3 Giniw Collective. “Those are obviously militarized equipment to be used to subdue and oppress the Indigenous people and allies that are resisting this project from going through our territory.”

Environmental Activists, Unions Conflict Over Oil Pipelines - Environmental activists and labor unions have worked together in the past, but are now on opposite sides of a heated dispute. The disagreement partly involves the building of an oil pipeline between Canada and the United States. The U.S. is currently the world’s largest producer of oil and gas. However, the administration of President Joe Biden aims to bring the country’s release of carbon gasses to net-zero by 2050. One of Biden’s first acts was to cancel the permit for the Keystone XL oil pipeline. The administration also said it is reducing the amount of oil and gas production permitted on federal land. The reactions to the administration’s moves show the difficulties of forming policy that affects many different groups. Climate activists celebrated the cancellation of the Keytone XL pipeline. But labor unions want to keep projects from being stopped. Mike Knisely is secretary and treasurer of the Ohio State Building and Construction Trades Council. He said he has been asking state officials to talk to the president about the effects of his climate policy on union members. “I tell them they need to get back with Biden and ask if this all really has to happen on Day Two of the new administration,” Knisely said. He said he is unhappy that “there’s almost no common ground (on pipelines) with the environmental community.”Climate groups have had successes in recent years. They have persuaded large investors to reduce financial holdings in the fossil fuel industry. They also have sought to get banks to avoid financing oil drilling in Arctic areas of the United States. But a number of important labor unions have members who work on pipelines, in oil refineries and in industries tied to the energy industry. That includes the International Teamsters and North America’s Building Trades Unions. Those unions opposed the move to cancel the Keystone XL pipeline. They also are moving against threats to other pipelines. Environmental groups want to block oil imports from Canada’s oil sands. They also are intensifying efforts to close three other pipelines. Two pipelines, known as Line 3 and Line 5, are operated by the Canadian company Enbridge. The company Energy Transfer’s Dakota Access Pipeline, or DAPL, is the other. Unlike the Keystone XL, the three other pipelines are currently operating. The Enbridge lines bring oil and fuel from Canada. The DAPL sends oil from North Dakota to the Midwestern states and Gulf Coast. Legal cases and government rules threaten all three pipelines. A White House spokesman said the Biden administration is considering a recent court decision that called for an environmental study of the DAPL.

Senator Manchin urges Biden to reverse opposition to Keystone XL pipeline  (Reuters) - The head of the U.S. Senate energy committee, Joe Manchin, on Tuesday urged President Joe Biden to reverse his opposition to the Keystone XL pipeline, saying the project provides union jobs and is safer than transporting the oil via trucks and trains. Biden revoked a permit for the pipeline which would transport 830,000 barrels a day of carbon-intensive heavy crude from Canada’s Alberta to Nebraska. It was part of a flurry of Biden’s executive orders aimed at curbing climate change. In a letter to fellow Democrat Biden, the West Virginia senator said that even without the pipeline, the oil would still find its way to the United States by rail and truck, and pointed to U.S. data showing those methods result in more spills than pipelines. “Pipelines continue to be the safest mode to transport our oil and natural gas resources and they support thousands of high-paying, American union jobs,” Manchin said. Opponents of TC Energy Corp’s pipeline project say building such infrastructure would lock in decades of dependence on oil, making it harder to transition to clean energy. Manchin said he supports “responsible” energy infrastructure development including the Mountain Valley pipeline, which would take natural gas from Manchin’s state to Virginia. Manchin’s support for big pipelines underscores the difficulty that Biden could have moving wide-ranging climate legislation through Congress given Democrats have only the slimmest possible majority in the Senate.

Alberta oil's U.S. allies try long-shot measures to get Keystone XL built | CBC News - Pipeline proponents write letters, try procedural tactics in U.S. Congress. Do they have any hope of success? Some American politicians are still making long-shot efforts to revive the Keystone XL pipeline project, cancelled last month by U.S. President Joe Biden. On Tuesday, Biden received letters from several parties urging him to reconsider, including state-level Republicans and the powerful Democrat who leads the Senate energy committee.In addition, a pipeline measure, sponsored by Republican Steve Daines of Montana a few days ago looked like it would pass in the U.S. Senate but ultimately failed.In a marathon all-night voting session last week, the Senate approved a budget amendment that called for the creation of a fund to improve relations with Canada, related to Keystone XL.The cancelled 1,897-kilometre pipeline was to have carried 830,000 barrels of crude a day from the storage terminal in Hardisty, Alta., to Nebraska, where it would connect to the original Keystone pipeline to U.S. Gulf Coast refineries.The budget amendment was an attempt to stick pipeline construction into the massive COVID-19 stimulus bill. Democrats are preparing a pandemic recovery plan via a fast-track process known as budget reconciliation, which requires just a 51-vote majority to pass instead of the 60 votes required for most bills in the U.S. Senate.The catch with reconciliation: it's only allowed for budget bills. So the reference to a Canada-U.S. budget fund was a procedural gambit to get it tacked onto the spending bill. In any case, it didn't last long: the Democratic majority removed Daines's measure in a subsequent vote. Now, Republicans are talking about other legal options. Fourteen attorneys general from Republican-led states sent Biden a letter on Tuesday saying they were reviewing legal options in the pipeline battle. Written by Montana Attorney General Austin Knudsen, the letter accused Biden of cancelling the project without explaining why his move was in the national interest or offering evidence that it will lower carbon emissions or create green-energy jobs.

Local businesses and people impacted by the loss of Keystone XL Pipeline voice their concerns  (KELO) — South Dakota Congressman, Dusty Johnson, and two of North Dakota’s State Representatives gathered Monday with local businesses affected by the cancellation of the Keystone XL Pipeline.TransCanada Energy first proposed the $8 billion Keystone XL Pipeline in 2008. Phillip is one of many communities along the 1,200-mile project’s proposed path. Last month, President Joe Biden signed an executive order halting the construction of the pipeline which would have delivered crude oil from Western Canada to Midwest refineries.Today more than a dozen people from the Black Hills area came to share their concerns with State Representatives. “I don’t want it to end here. I’ve been fighting for this and making phone calls, I won’t give up, it’s what we need,” Jeff Birkeland, West Central Electric, said.Owner Tricia Burns says the Ignite Wellness Studio has potentially lost 165 memberships which is about $10,700 in revenue.“There’s no certainty at all with anything it seems anymore. So what does the future hold? If we continue to lose jobs and people continue to leave, will we have enough locals to support our business? It’s some difficult conversations,” Burns said.  Even more than the lost revenue, Burns believes the town has lost some great community members.“It’s not just the money but it’s the lives too,” Burns said.  Not everyone opposes the President’s executive order, in fact some celebrated it. Environmentalists and many tribal leaders don’t want the project to move forward because there could be oil spills and it could make climate change worse. The Cheyenne River Sioux Tribe is so opposed to the project, in 2019 the tribe issued a resolution saying all Keystone XL trucks must immediately turn around and leave the reservation.

Did Biden's Order To Halt Keystone XL Pipeline 'Destroy' 11,000 Jobs? -  Snopes.com -  Claim: U.S. President Joe Biden's Jan. 20, 2021, executive order to halt construction of the Keystone XL pipeline "destroyed" 11,000 jobs. In October 2020, TC Energy, the firm behind the pipeline, projected that it would hire 11,000 people to work on the pipeline in the coming year. Additionally, two union leaders said 1,000 members would immediately lose their jobs and another 10,000 future positions will no longer exist, totaling 11,000, as a result of Biden's order. However, there was no evidence to definitely prove if, or to what extent, 11,000 positions would have been filled without Biden's order, considering multiple hurdles for pipeline proponents. The exact number of jobs eliminated, or employment opportunities that were planned for but won't be created because of Biden's decision, remained unknown.

Cold as Ice - Frigid Weather Blasting into Propane Country. Markets Brace for Supply Disruptions - A blast of Arctic air plunges the Midwest and Northeast into deep freeze. Already-low propane inventories result in supply shortages in local markets. Propane transport trucks move product hundreds of miles from storage hubs to replenish regional terminals as markets scramble to meet surging propane demand. Are we talking about the nightmarish polar vortex winter of 2013-14, when regional propane inventories were sucked down dangerously low and Conway, KS, propane prices skyrocketed to almost $5.00/gal? No. We are talking about now. This is a description of what is happening today in U.S. propane country –– that belt of northern states that depend heavily on propane for heating. But this is not 2013-14. Things have changed.  So in today’s blog we’ll explore how the latest polar vortex could be quite different than that weather-driven crisis seven years ago. We’ve been particularly interested in the propane market this winter, starting with Now You See It, where we warned of the possibility of a coming propane price squeeze. The big issue was exports, which were running at all-time highs and had the potential to deplete inventories at record rates. We worried that average days-supply, when calculated using both domestic demand and exports, had dropped to a five-year low, and that the market could get very tight. By January, as we detailed in Big Panama With A Purple Hat Band, that was just how things were playing out, with markets further complicated by long delays at the Panama Canal and, as a consequence, skyrocketing shipping rates. Then, a couple of weeks ago in It's All Over Now, we looked at how frigid weather in Asia had pulled even more U.S. propane into export markets, and how that resulted in a Mont Belvieu price spike up to 95 cents/gallon (c/gal), and over a dollar per gallon at the Conway hub in Kansas. We wrapped up that blog by stating the blindingly obvious: “The short term is all in the hands of Mother Nature.”

Mineral owners seek lawmakers' help in addressing oil, gas royalty concerns -- Some North Dakota mineral owners report they have seen as much as two-thirds of the oil and gas royalties they expect to receive in a given month disappear as Bakken producers take deductions to move the products down the processing chain, and they’re asking for lawmakers to help stop the practice. The oil industry is pushing back, saying that such change might cause oil development to dry up and would discourage companies from investing in pipelines and other infrastructure needed to accommodate gas produced alongside oil in the Bakken. The issue is complex and garnered numerous questions Monday from legislators on the Senate Finance and Taxation Committee when they heard from supporters and opponents of Senate Bill 2217, whose lead sponsor is Rep. Brad Bekkedahl, R-Williston. The Williston Basin Royalty Owners Association, led by former Rep. Bob Skarphol, R-Tioga, is backing a bill to address the deductions, which are sometimes taken from royalties to help pay for post-production costs. The expenses have to do with transporting oil or gathering gas from wells, compressing it and moving it to a processing plant where its various components are separated out into more marketable products. Skarphol said royalty owners familiar with deductions “will express their disdain” whenever the topic comes up. “Disdain is a polite way to say it,” he said. “Many royalty owners find the royalties statement so complex they do not even make the effort to decipher what is happening. They simply deposit the check and stick the statement in a drawer. Some royalty owners are afraid if they complain, their wells could be shut down and their royalties would end.” Deductions for post-production costs are not applied consistently across the Bakken -- some oil and gas companies take them at a variety of rates, and others don’t. Whether a mineral owner sees deductions also depends on the specific language of the lease he or she signed with the company developing the minerals. The bill would prohibit the deductions unless a lease explicitly allows for the practice. It also would give mineral owners the right to audit the records of the oil and gas company paying them royalties and require the business to comply. Violators could be punished with a Class B misdemeanor and a $10,000 penalty.

Equinor Sells Bakken Position as Production Fades -  Equinor has agreed to sell its Bakken Shale operation for $900 million, ending a decade long struggle to make money in the US shale oil business. The Norwegian oil company is exiting assets in North Dakota and Montana after a decade of development. A Houston-based private equity producer will take over the shale fields. The buyer, Grayson Mill Energy, is acquiring wells producing around 48,000 BOE/D and 242,000 operated and non-operated acres in North Dakota and Montana. The Norwegian oil company’s remaining shale holdings are in the gas producing Marcellus and Utica Shale formations in the eastern US, which it has been paring in recent years. “We are taking action to improve the profitability of Equinor’s international oil and gas business,” said Al Cook, executive vice president of development and production international at Equinor. He added that Grayson Mill agreed to hire Equinor’s Bakken field team and a “significant number of the support teams.” “By divesting our Bakken position, we are realizing proceeds that can be deployed towards more competitive assets in our portfolio, enabling us to deliver increased value creation for our shareholders,” said Anders Opedal, president and chief executive officer of Equinor. Equinor is selling for a fraction of the $4.4 billion price it paid to enter the Bakken in 2011, when it bought Brigham Exploration at a premium during the early shale boom. The Bakken sale completes is retreat from which began with the sale of its Eagle Ford Shale operation in 2019 for $325 to Repsol.

More than 20,000 gallons of oil spill near Williston — An estimated 21,000 gallons of crude oil spilled Tuesday, Feb. 2, at an oil well in Williams County, N.D., according to a news release from the state Department of Environmental Quality.Norwegian firm Equinor Energy reported the spill about two miles east of Williston occurred due to a valve failure. By the time the spill was reported, all but 420 gallons of oil had been recovered on-site. The department reports no impact to nearby farmland. Department officials will continue inspecting the site and monitoring remediation efforts, according to the release.

More than 10,000 gallons of oil spill from pipeline in Dunn County, North Dakota — An estimated 10,500 gallons of crude oil spilled Tuesday, Feb. 2, from a pipeline in Dunn County, N.D., according to a news release from the state Department of Environmental Quality. Wyoming-based Bridger Pipeline reported the spill due to a pipeline fracture about 11 miles northwest of Killdeer, N.D. About 420 gallons of oil flowed onto nearby rangeland, which can render the land temporarily unusable for agriculture. Department officials will continue inspecting the site and monitoring remediation efforts, according to the release.

Equinor sells U.S. Bakken shale assets, posts record loss for 2020 (Reuters) - Norway’s Equinor has agreed to sell its assets in the U.S. Bakken shale oil province after a decade of multibillion-dollar losses and criticism for poor investment decisions. Equinor will sell the assets in the states of North Dakota and Montana to Grayson Mill Energy, a company backed by private equity firm EnCap Investments, for around $900 million. The Bakken region was developed during last decade’s U.S. shale boom, and currently produces more than a million barrels of oil a day, roughly half the peak reached in late 2019. The region has a high per-barrel cost of production and investor demands for capital discipline have caused producers to throttle back output since the coronavirus pandemic erupted. “Equinor is optimising its oil and gas portfolio to strengthen profitability and make it more robust for the future,” CEO Anders Opedal said in a statement. “We are realising proceeds that can be deployed towards more competitive assets in our portfolio,” he added. Opedal declined to say whether Equinor planned to sell more foreign assets, but added it was happy with its remaining U.S. operations. “We still have a good position in the Marcellus and also in the U.S. Gulf of Mexico,” he told Reuters. “We will also focus on our operations in Brazil and Britain, and seek to improve our international business as operators or partners.”

Equinor Exits The Bakken Shale As It Books Record Loss -Equinor is selling all its assets in the Bakken shale play as part of a strategy to boost the profitability of its international upstream business, the Norwegian major said on Wednesday, while the oil major records a net loss for 2020.Equinor has agreed to sell its assets in the Bakken, including all operated and non-operated acreage and midstream infrastructure, to Grayson Mill Energy, which is backed by EnCap Investments, for only US$900 million. It paid $4.7 billion for the assets in 2011.“Equinor is optimising its oil and gas portfolio to strengthen profitability and make it more robust for the future. By divesting our Bakken position we are realising proceeds that can be deployed towards more competitive assets in our portfolio, enabling us to deliver increased value creation for our shareholders,” Equinor’s president and CEO Anders Opedal said in a statement.  The Bakken sale is the latest Equinor divestment of onshore U.S. assets following the sale of its assets in the Eagle Ford in Texas in 2019.Equinor commissioned a report on its U.S. business to PwC last year, and that report showed in October that “Equinor has recorded large financial losses in the US. These were mainly driven by an ambitious growth strategy and investments that were based on overly optimistic price assumptions,” Equinor’s board chair Jon Erik Reinhardsen said at the time. Apart from the Bakken sale, Equinor announced on Wednesday its Q4 and full-year 2020 results, reporting a record net loss of US$5.5 billion for 2020, compared to a net income of US$1.85 billion for 2019. The fourth-quarter loss soared to US$2.4 billion from a loss of US$230 million for Q4 2019. For this year, Equinor expects free cash flow before capital distribution at around US$6 billion, assuming $50 oil, chief financial officer Svein Skeie said in a presentation. The company is cutting its capex plans by around 15 percent compared to previous guidance, with annual capex expected at US$9 billion-US$10 billion this year and next.

US Army Corps asks for two-month delay to decide whether to shutter DAPL | S&P Global Platts — The US Army Corps of Engineers requested a two-month delay until April 9 to decide whether to shutter the Dakota Access Pipeline, triggering a further strengthening in Bakken crude differentials as traders considered the possibility of the Bakken Shale's primary crude oil artery closing. Fresh off of canceling the controversial Keystone XL Pipeline, a federal judge agreed to postpone a Feb. 10 court hearing until April 9 in a move that could give the Biden administration an ample timetable to consider how it might take the unprecedented step to close the 4-year-old, 570,000 b/d pipeline, at least temporarily, while a more stringent, court-ordered Environmental Impact Statement, or EIS, review is conducted that could easily extend into 2022. Bakken crude differentials, which had already strengthened ahead of the hearing, continued moving higher Feb. 9. S&P Global Platts assessed Bakken barrels at Williston, North Dakota, that are injected into DAPL, at WTI CMA minus $1.25/b, up 10 cents from the Feb. 8 assessment and the strongest in eight months. Bakken crude at Clearbrook, Minnesota, was assessed at WTI CMA minus 35 cents/b, up 15 cents from Feb. 8 and the strongest in six months. A federal appeals court ruling in January essentially confirmed the Dakota Access Pipeline is operating illegally without the necessary legal permitting, and that it is up to the Biden-led Corps of Engineers to determine whether it will let the Energy Transfer-operated pipeline continue to flow crude oil while the environmental review determines whether the needed easement is deserved. The plaintiffs, led by the Standing Rock Sioux Tribe, supported the requested delay. The DAPL case is closely watched by industry and environmental observers alike because it could potentially set a standard for attempting to close existing pipelines and other fossil fuel infrastructure. Biden has never publicly weighed in on DAPL, but Vice President Kamala Harris and Biden's nominee for Interior secretary, US Rep. Deb Haaland, a Democrat from New Mexico, have both supported shutting the pipeline. Accord to the motion in court requesting the delay, "Department of Justice personnel require time to brief the new administration officials, and those officials will need sufficient time to learn the background of and familiarize themselves with this lengthy and detailed litigation."

Indigenous Youth Embark on Sub-Zero, 93-Mile Run to Protest Dakota Access Pipeline -- Despite sub-zero temperatures, group of Indigenous youth on Tuesday kicked off a 93-mile run to protest the Dakota Access Pipeline and demand that the Biden administration #BuildBackFossilFree. The run began shortly after 8am CST from a drill pad in Timber Lake, South Dakota—where the youth braved a wind chill of -26°F (-32°C)—and will end at the Oceti Sakowin Camp site, the center of heated resistance to the pipeline in 2016. Standing Rock youth are sharing a live stream of the event. "In 2016 a group of us youth from the Standing Rock and Cheyenne River Nations had the courage and were brave enough to stand up to the Dakota Access Pipeline (DAPL) that was going to cross our lands, threatening not only our drinking water supply but the land we have called home for generations. Millions of people from all walks of life stood with Standing Rock," Annalee Rain Yellowhammer, Standing Rock Sioux Youth Council vice president, said in statement last week announcing the run. "Mr. President Joe Biden," she said, "you have the opportunity to be brave and take courage; shut down the Dakota Access Pipeline." The group is encouraging people to show support by taking actions Tuesday including making "some noise on social media" and calling the White House to pressure Biden to shut down the pipeline, which is operating without a federal permit. "They are running because of one simple fact," Dallas Goldtooth of the Indigenous Environmental Network wrote in a Wednesday email to supporters. "DAPL IS AN ILLEGAL PIPELINE." That legality is set to come under further legal scrutiny at a hearing Thursday. Last month, a federal appeals court sided with the Standing Rock Sioux Tribe by upholding a lower court's ruling that the U.S. Army Corps of Engineers (USACE) violated federal law in granting an easement for DAPL to cross a federal reservoir along the Missouri River. According to the Associated Press: U.S. District Judge James Boasberg has set a status hearing for Feb. 10 to discuss the impact of [the] opinion by the D.C. Circuit of the U.S. Court of Appeals that upheld Boasberg's ruling ordering the Corps to conduct a full environmental impact review. Opponents of the pipeline want it shut down immediately. Boasberg said in his one-sentence order that the Corps needs to show how it "expects to proceed" without a federal permit granting easement for the $3.8 billion, 1,172-mile (1,886 kilometer) pipeline to cross beneath Lake Oahe, a reservoir along the Missouri River, which is maintained by the Corps.

Judge delays hearing on permit for Dakota Access pipeline (AP) — A federal judge on Tuesday agreed to push back a hearing about whether the Dakota Access oil pipeline should be allowed to continue operating without a key permit while the U.S. Army Corps of Engineers conducts an environmental review on the project. The Corps filed a motion Monday to postpone the Wednesday hearing in order to allow Biden administration officials more time to familiarize themselves with the case, including the 2016 lawsuit filed by the Standing Rock Sioux Reservation in an attempt to stop construction. The pipeline began operating in 2017 after Donald Trump took office. U.S. District Judge James Boasberg reset the hearing for April 9. Neither the tribes nor Texas-based Energy Transfer, which owns the pipeline, objected to the delay. Boasberg said he wants the Corps to explain how it “expects to proceed” without a federal permit granting easement for the $3.8 billion pipeline to cross beneath Lake Oahe, a reservoir along the Missouri River that is maintained by the Corps. Boasberg in April 2020 ordered further environmental study after determining the Corps had not adequately considered how an oil spill under the Missouri River might affect Standing Rock’s fishing and hunting rights, or whether it might disproportionately affect the tribal community.

North Dakota oil prices surge and output stalls as pipeline's fate awaited (Reuters) - Crude prices in North Dakota’s Bakken shale region have surged to their highest levels in about six months as producers in the region rein in output and amid doubt over the fate of the Dakota Access Pipeline, the main artery running oil out of the region.North Dakota is the second only to Texas in terms of U.S. oil producing states, with about 1.2 million barrels per day (bpd) of output. Harsh weather in the region is restraining production and well completion, which had already been hampered by poor demand in 2020 caused by coronavirus. Concern about how U.S. President Joe Biden’s administration will handle the Dakota Access Pipeline (DAPL), which can transport more than 550,000 bpd out of the Bakken, is also boosting prices. The possibility that the line could be shut down is prompting some producers to ask for higher premiums for their oil, fearing buyers may renege on agreements, dealers said. Crude output in North Dakota is still about 20% lower than the historic high of 1.5 million bpd hit in late 2019. While production from wells more than one year old has recovered, output from newer wells has not, because of a lower rate of completions. Bakken crude in Clearbrook, Minnesota strengthened to trade just 35 cents under benchmark futures on Tuesday, the strongest since early August, dealers said. The state’s rig count has been flat at around 11 since October, according to Baker Hughes data. Output is expected to slide by nearly 20,000 bpd, the biggest decline since May, to about 1.2 million bpd in February, according to the U.S. Energy Information Administration. Prices have risen in part due to the frigid temperatures that have plunged below 0 degrees Fahrenheit in recent days. Cold weather can cause equipment to freeze and cut production further, traders said. Meanwhile, DAPL has been embroiled in legal battles over the past five years, and faces new threats from the Biden administration. The latter has already taken several steps to restrict new oil and gas development, though it has not yet tried to shut a pipeline currently in operation.

Burgum says Corps should argue for keeping pipeline running (AP) — North Dakota Republican Gov. Doug Burgum is asking the U.S. Army Corps of Engineers to argue for keeping the Dakota Access oil pipeline operating while it conducts an environmental review on the project. A federal judge has asked the Corps to explain how “it expects to proceed” now that court rulings have determined that the pipeline is operating without a permit to cross beneath Lake Oahe, a reservoir along the Missouri River that is maintained by the Corps. A hearing on the matter originally scheduled for Wednesday has been postponed to April 9. Burgum’s letter to the Corps said that shutting down the pipeline during the review “would have devastating consequences for the state” and a “chilling effect on infrastructure investment” across the country. U.S. District Judge James Boasberg in April 2020 ordered further environmental study. He said the Corps had not adequately considered how an oil spill under the Missouri River might affect fishing and hunting rights for the Standing Rock Indian Reservation, which straddles the North and South Dakota border, or whether it might disproportionately affect the tribal community. Burgum said to stop the flow of oil after more than three years would be a blow to a country that is in “desperate need of infrastructure upgrades, jobs and economic activity to accelerate recovery from the COVID-19 pandemic.”

West Coast lawmakers try again for drilling ban - U.S. senators from the West Coast, looking to build on the Biden administration’s pause on new offshore oil leases, are again pushing for a ban on drilling off Washington, Oregon and California. At the end of January Sens. Patty Murray and Maria Cantwell, both D-Wash., introduced the “West Coast Ocean Protection Act” to permanently ban offshore drilling in federal waters off the West Coast. Cantwell is a senior member of the Senate Energy and Natural Resources Committee and in a position to push the measure there. Murray and Cantwell say their intent is to make permanent an existing moratorium on drill leasing in those federal waters, to prevent a repeat of the Trump administration’s attempt to reopen them for oil and gas exploration. “The Pacific Ocean provides vital natural resources for Washington state, and offshore drilling puts everything from local jobs and ecosystems at risk,” Murray said in a Jan. 29 joint statement with Cantwell. “We need this permanent ban to safeguard our coastal environment and our state’s economy, including fisheries, outdoor recreation, and so much more.” “Washington’s $30 billion maritime economy supports over 146,000 jobs from fisheries, trade, tourism and recreation—but it could all be devastated in an instant by an oil spill,” said Cantwell. “We must permanently ban offshore drilling on the West Coast to protect our coastal communities, economies, and ecosystems against the risk of an oil spill.” Meanwhile, the federal Bureau of Ocean Energy Management is considering potential offshore wind energy areas that could be mapped out for leasing to developers. Compared the relatively shallow outer continental shelf off the U.S. East Coast – where up to 16 wind energy project are already planned – the deeper Pacific Ocean waters would need floating wind turbine technology to advance before wind power arrays are constructed.

Chevron Refinery Dumps Oil Into San Francisco Bay -A Chevron oil refinery in Richmond, California dumped an estimated 600 gallons of petroleum into San Francisco Bay Tuesday.The leak was not detected until an oil sheen on the water near the refinery was noticed around 3 p.m. Many local residents complained of the fumes from the spill, which eventually washed up on shore."It smelled like somebody spilled gasoline in front of my house. It smelled very very badly for [the] whole day," Margaret Berczynski, told ABC7-KGO. "I'm really devastated. I cannot take my kids to the water... I'm really scared," she added.Officials warned the fumes could cause ear, nose, and throat irritation. Contra Costa County Supervisor John Gioia harshly criticized the refinery. "It is unacceptable to have this happen in our community," he said. "It causes harm to people's health. It causes harm to bird life, wildlife and marine life." The cause of the spill is still unknown.As reported by the San Francisco Chronicle:The investigation into the spill is a multi-agency effort involving Chevron, the U.S. Coast Guard, California Office of Spill Prevention and Response, California Department of Fish and Wildlife, and Contra Costa County, Chevron officials told The Chronicle. Other state and federal agencies "may elect to join the investigation," said Tyler Kruzich, a Chevron spokesperson.Kruzich told The Chronicle that Chevron officials are "developing an estimate of how much hydrocarbon was released, in addition to testing the hydrocarbon to determine its composition."County Supervisor John Gioia — who said on Facebook that there was a 5 gallon-per-minute leak of a petroleum product at the Chevron Richmond Long Wharf — said the leak started around 2:40 p.m. and continued until about 4:30 p.m. For a deeper dive:  ABC-7 KGO News, East Bay Times, KTU, SFGate, KCRA Sacramento, KPIX-CBS5, San Francisco Chronicle

Oil spill at Chevron refinery in Contra Costa County prompts public health warning - Contra Costa County authorities issued a public health advisory Tuesday afternoon after a Chevron refinery in Richmond began spilling a petroleum product into the San Francisco Bay. Tyler Kruzich, a spokesman for Chevron, said refinery employees first noticed a sheen in the water about 3 p.m. The company immediately started working to contain the leak and notified the various state and federal agencies that respond to oil spills, he said. A spill report from the state’s Office of Emergency Services said a refinery pipeline was leaking roughly five gallons per minute of an oil and gasoline mixture into the bay. Footage from the Bay Area ABC7 helicopter showed an iridescent sheen hugging the coastline and extending into the bay. AdvertisementThe leak was stopped about 5 p.m., according to Chevron and Contra Costa County officials. It remained unclear what caused it, the spill report said. The extent of the spill was unclear Tuesday evening. The state report, which was generated at 4 p.m., said about 100 gallons had been spilled. The Bay Area Air Quality Management District, a regulatory agency that dispatched inspectors to the scene, wrote on Twitter that about 600 gallons of a “petroleum and water mixture” had leaked. Eric Laughlin, a spokesman for the California Department of Fish and Wildlife, said it was too early to say how much petroleum had entered the bay. Officials were working Tuesday night to contain the spread of the oil and identify delicate habitats at particular risk, he said. State authorities were weighing whether to issue a fisheries closure for the area.

Oil May Not Be Chevron’s Largest Business In 20 Years  - While oil and gas will certainly be needed for decades to come, the oil and gas division may not be Chevron’s top business in 20 years, although it will still be a very big part of the U.S. supermajor’s operations, chief executive Michael Wirth told CNN Business in an interview published on Monday.Big Oil, especially the European majors, have rushed to announce increased investments in renewable energy, and some even plan to reduce their overall oil and gas production. BP, for example, said last year that it would boost its investment in low-carbon energy ten times to US$5 billion a year and reduce oil and gas production by 40 percent by 2030.  The biggest oil corporations in the Americas, including U.S. supermajors Exxon and Chevron, have not promised to become net-zero emission businesses by 2050, unlike all major oil firms in Europe—BP, Shell, Eni, Equinor, Total, and Repsol, which have raced to announce green strategies over the past year.In the Americas, Occidental Petroleum became the first major U.S. oil firm to announce a net-zero emissions goal at the end of last year.For Chevron, “Oil and gas will still be a very big part. Will it be the biggest part? Time will tell,” Wirth told CNN Business in the interview.Chevron will not be investing in solar and wind power, Wirth told CNN. This is in contrast with European oil majors, who are building solar and wind power portfolios as they look to capture larger shares of the electricity market.Chevron’s bet is on carbon utilization technologies, renewable natural gas, and reducing emissions from its operations. “We increased actions to advance a lower carbon future, abating emissions in our operations, starting up our first renewable natural gas plant and investing in low-carbon technologies like our recent announcement with carbon utilization start-up, Blue Planet,” Wirth said on the Q4 earnings call last month.Oil and gas will still be a large part of the energy system, and “somehow demand will need to be met. And we think it should be met by those that can do it in a way that has the lowest carbon impact,” the executive said on the call.

Shell Hits Its Own Peak Oil, Plans to Reduce Output – WSJ - Royal Dutch Shell said it would start reducing oil production, calling an end to a decades-old strategy centered on pumping more hydrocarbons as it and other energy giants seek to capitalize on a shift to low-carbon power. The move marks a historic shift for the company, which after starting out importing seashells began selling kerosene in the 19th century and had sought to grow its oil business ever since. Until recent years, it pursued expensive, environmentally challenging projects in Canadian oil sands and Alaska, driven by fears the world could run out of oil. Now, it sees demand faltering long before oil runs out. Shell said Thursday its oil production had already peaked and it expects output to decline 1-2% a year, including from asset sales, reducing its exposure to commodity prices over the longer term. The company plans to cut its production of traditional fuels such as diesel and gasoline by 55% in the next decade. At the same time, the company said it would double the amount of electricity it sells and roll out thousands of new electric-vehicle charging points. The strategy follows similar plans from rivals BP PLC and Total SE to reduce their dependence on fossil fuels while expanding in renewable power such as wind and solar, partly in response to growth in regulatory and investor pressure. By contrast, U.S. companies Exxon Mobil Corp. and Chevron Corp. don’t plan to invest substantially in electricity and both say the world will need vast amounts of fossil fuels for decades to come. Exxon does, though, plan to invest in technology to reduce carbon emissions. However, the pivot to low-carbon energy is seen by analysts as challenging because it requires investments in areas where major oil companies don’t necessarily have a competitive advantage and that have lower returns. Renewables projects typically generate returns of around 10%, compared with the traditional 15% targeted on oil-and-gas projects. As such, major oil companies’ green ambitions have so far failed to ignite enthusiasm among investors, at a time when the energy industry is grappling with the fallout from the pandemic, which prompted BP and Shell to cut their dividends. The share prices of Europe’s three largest oil companies have fallen dramatically since Covid-19 sapped demand and sent oil prices lower, with Shell down 35% over the past year, BP 45% lower and Total down 24%. Shell shares traded 2% lower Thursday. Shell sought to allay any concerns about its new strategy Thursday, saying fossil-fuel production would remain a material source of revenue into the 2030s, while reiterating its policy to increase its dividend by 4% each year. “By accessing the enormous opportunities that the future of energy holds we will create the conditions for future share price appreciation,” said Chief Executive Ben van Beurden. “We expect to radically transform Shell over the next 30 years.”

USGS Estimates 1.4 Tcf of Conventional Natural Gas in Alaska's Western North Slope -- The U.S. Geological Survey (USGS) said Friday it estimates 1.4 Tcf of conventional natural gas resources are technically recoverable in formations west of Alaska’s National Petroleum Reserve (NPR-A), the first time such an assessment has been released for the area.  Despite the North Slope’s abundant petroleum resources, the region is not believed to contain any recoverable oil deposits. The North Slope’s Prudhoe Bay field, for example, remains the most prolific in U.S. history, with more than 12 billion bbl produced, according to BP plc. The USGS study suggested that while oil deposits were formed in the NPR-A area, they were transformed when geologic temperatures increased and turned them to natural gas. “This new assessment shows that we still have much to learn about Alaska’s North Slope,” said USGS’s Sarah Ryker, associate director for Energy and Minerals. “There has been speculation for decades that this area west of the NPR-A might be rich in oil. However, the limited geologic data we have indicate the rocks assessed contain modest natural gas, but likely no oil. “That finding helps the Bureau of Land Management, the U.S. Fish and Wildlife Service, the State of Alaska and the Alaska Native Corporations understand the natural resources that they manage.”The latest assessment was one in a series ordered by the Department of the Interior under the Trump administration in 2017. President Biden has sincetemporarily frozen leasing and permitting on federal lands and offshore waters.  The USGS had not previously assessed areas west of the NPR-A for conventional resources. Other formations in the region were included in both a 2017 assessment of conventional resources of the Cretaceous Nanushuk and Torok formations in the NPR-A and adjacent areas, and a 2012 assessment ofunconventional resources of the entire North Slope. The USGS also released an assessment of conventional resources of the Central North Slope in 2020.  The latest assessment only included areas adjacent to the NPR-A, not any formations that lie within it. However modest, the new assessment shows more natural gas resources could be tapped on the North Slope at a time when developers are working to rejuvenate liquefied natural gas (LNG) exports from the state.

Alaska LNG Project Lands Private Partner, Plans to Seek Federal Funding to Launch $5.9B First Phase - Alaska is pursuing federal funding and partnering with a private firm to jumpstart a long-simmering pipeline project to export North Slope natural gas. Tim Fitzpatrick, spokesman for the state-owned Alaska Gasline Development Corp. (AGDC), told NGI that Alaska aims to begin the first phase of the state’s liquefied natural gas (LNG) pipeline and export plant by partnering with an as-yet unnamed private firm and by applying for federal pandemic stimulus and infrastructure funds.AGDC may also seek defense funding because a large military installation in the state would be able to switch from coal to natural gas if the project is completed, Fitzpatrick said. AGDC anticipates that federal funds would cover approximately 75% of costs of the first phase, he said, with the private partner paying the rest and taking the lead on the project once funded.AGDC said it and the private firm would build a $5.9 billion natural gas pipeline from the North Slope to Fairbanks. It would span about 500 miles and could begin delivering gas to the Fairbanks area by 2025, AGDC said.Frank Richards, AGDC president, said that by breaking the project into phases, AGDC hopes to complete the key first portion of the pipeline largely with federal investments. With that work underway, he said, the overall project would gain momentum and likely be viewed as lower risk, opening a door for more private investments to complete the overall project.“We’re calling strategic parties right now,” Richards told NGI. “That’s ongoing.”

Court order delays construction at ConocoPhillips' Alaska project (Reuters) - A weekend court ruling has temporarily blocked winter construction at a huge ConocoPhillips oil project on Alaska’s North Slope. U.S. District Court Judge Sharon Gleason issued an order Saturday barring ConocoPhillips from starting planned gravel mining and gravel-road construction at its Willow project. With an estimated 590 million barrels of oil and the potential to produce 160,000 barrels per day, Willow would be the westernmost operating oil field in Arctic Alaska. First oil is planned as early as 2024, according to ConocoPhillips. Gleason’s injunction came in response to an environmental lawsuit claiming the Trump administration’s Willow approval failed to properly consider wildlife and climate-change impacts. The judge last week rejected environmentalists’ request for a more sweeping injunction. Her new order halts gravel-related work until at least Feb. 20, giving the 9th Circuit Court of Appeals time to weigh in. ConocoPhillips had intended to start blasting gravel on Feb. 12, according to Gleason’s order. The plaintiffs have shown “there is a strong likelihood of irreparable environmental consequences once blasting operations commence,” the order said. Additionally, the plaintiffs’ arguments concerning climate change “could well be likely to succeed on the merits” at the appeals court, Gleason said. Gleason’s order does not stop construction of seasonal ice roads, which melt away in summer. Plaintiff representatives noted that Biden is reviewing Trump administration oil policies, including the approval of Willow. “We’re hopeful this terrible project can be stopped, either by the courts or the Biden administration’s review,” Kristen Monsell, an attorney with the Center for Biological Diversity, said in a statement on Sunday. ConocoPhillips Alaska spokeswoman Rebecca Boys said by email that the company does not comment on pending litigation.

'Invisible killer': fossil fuels caused 8.7m deaths globally in 2018, research finds --Air pollution caused by the burning of fossil fuels such as coal and oil was responsible for 8.7m deaths globally in 2018, a staggering one in five of all people who died that year, new research has found.Countries with the most prodigious consumption of fossil fuels to power factories, homes and vehicles are suffering the highest death tolls, with the study finding more than one in 10 deaths in both the US and Europe were caused by the resulting pollution, along with nearly a third of deaths in eastern Asia, which includes China. Death rates in South America and Africa were significantly lower.The enormous death toll is higher than previous estimates and surprised even the study’s researchers. “We were initially very hesitant when we obtained the results because they are astounding, but we are discovering more and more about the impact of this pollution,” said Eloise Marais, a geographer at University College London and a study co-author. “It’s pervasive. The more we look for impacts, the more we find.”The 8.7m deaths in 2018 represent a “key contributor to the global burden of mortality and disease”, states the study, which is the result of collaboration between scientists at Harvard University, the University of Birmingham, the University of Leicester and University College London. The death toll exceeds the combined total of people who die globally each year from smoking tobaccoplus those who die of malaria.Scientists have established links between pervasive air pollution from burning fossil fuels and cases of heart disease, respiratory ailments and even the loss of eyesight. Without fossil fuel emissions, the average life expectancy of the world’s population would increase by more than a year, while global economic and health costs would fall by about $2.9tn.The new estimate of deaths, published in the journal Environmental Research, is higher than other previous attempts to quantify the mortal cost of fossil fuels. A major report by the Lancet in 2019, for example, found 4.2m annual deaths from air pollution coming from dust and wildfire smoke, as well as fossil fuel combustion. This new research deploys a more detailed analysis of the impact of sooty airborne particles thrown out by power plants, cars, trucks and other sources. This particulate matter is known as PM2.5 as the particles are less than 2.5 micrometers in diameter – or about 30 times smaller than the diameter of the average human hair. These tiny specks of pollution, once inhaled, lodge in the lungs and can cause a variety of health problems.

Feds release report on crude oil leak near Herschel - A Transportation Safety Board investigation has found several factors contributed to an oil spill at an Enbridge pumping station near Herschel, Sask. The TSB released the final report on its investigation into the spill on Wednesday. The equivalent of about 300 barrels of crude oil leaked on April 30, 2020, including about 60 barrels’ worth that seeped off the Enbridge property into a ditch running along a road near the pumping station. The report found that the problem originated with a ruptured hose in a system that injects chemicals meant to ease the flow of oil through several of the company’s pipelines, including Enbridge Line 3, which moves crude to Eastern Canada and the U.S. Midwest. A heat tracing system failed, which is believed to have allowed the hose to freeze overnight. This likely caused a buildup of pressure, leading the hose to fail, the report stated. The leak was too small to be detected by remote monitoring systems in Edmonton, so it wasn’t found until workers arrived at the site in the morning. A piece of hose that failed at an Enbridge pumping station near Herschel, Sask., contributing to an April 2020 spill of about 300 barrels’ worth of crude oil. Annotations on the photo were done by staff from the Transportation Safety Board. TSB investigators noted the spill was a result of overlapping failures in various systems. Enbridge’s own hazard assessment for the pumping station noted the potential for freezing to cause the hose to rupture. However, the TSB investigation found the company only saw the potential for a chemical leak and failed to identify a design flaw allowing crude oil from Line 3 to back up into the hose. Lastly, the investigation found that, despite a network of berms, ditches, control valves and containment ponds meant to handle spills orders of magnitude larger than the one that occurred, a worker failing to close a control valve in the station’s storm water release system at the end of the day on April 29 allowed spilled oil to get off the property. 

Ng Spurns Keystone XL Nafta Challenge  -- Prime Minister Justin Trudeau is rejecting calls for a more combative response to U.S. protectionism, hoping a conciliatory approach will mend relations damaged during Donald Trump’s presidency. Trade Minister Mary Ng said in an interview this week she is focusing her efforts with the new Biden administration on mutual U.S.-Canada interests despite early policy hiccups that risk further fracturing ties between the two nations, whose commercial relationship is worth $725 billion a year. The rocky start began when President Joe Biden canceled permits for the Keystone XL pipeline, a move that prompted the leader of oil-rich Alberta to threaten a challenge under the old North American free-trade pact. Tensions grew when the new administration strengthened “Buy American” provisions for government procurement contracts. “I don’t think that getting into a trade war with the U.S. is in the best interests of Canadian workers or the energy sector,” Ng said Wednesday. “What we’ve got to do is find that common ground where Canadian interests are viewed and seen as American interests as well.” The trade minister’s comments highlight Trudeau’s decision to sidestep flashpoints with Biden and instead channel energy into goals such as fighting climate change and fostering an economic recovery. Trudeau’s officials welcomed Biden’s arrival at the White House after the Trump era, which upended years of relative stability with Canada’s largest trading partner. The two countries exchanged almost $2 billion in goods and services every day in 2019. Their economies are so integrated that the average automobile manufactured in North America crosses the U.S.-Canada border seven times before being sold, Ng said. Biden’s “Buy American” rules are intended to boost the U.S. economy by pushing federal agencies to source goods and services from domestic businesses. The government spends nearly $600 billion annually on such contracts. “Canadian contributions -- our business contributions, our exporter contributions -- into those supply chains and value chains are absolutely important to American workers and American businesses,” Ng said when pressed on how the government will push back against the president’s plan.

Oil Company Caves Under Pressure to Cut ‘Draconian’ Injunction | DeSmog UK -- Campaigners are celebrating after an oil and gas exploration company was forced to scale back a “draconian” injunction against protesters.Activists have posed a series of legal challenges to an interim injunction granted to UK Oil and Gas (UKOG) in 2018, that apply to three of its sites in West Sussex and Surrey.In a dramatic climbdown just days before the next court hearing, the company yesterday announced it planned to remove the ban on “slow-walking” – a tactic used by activists to delay deliveries to oil and gas sites by walking in front of lorries. “This is a massive victory,” said Lorraine Inglis, from Weald Action Group. “We’ve been fighting for three years to cut down this draconian injunction – at every court hearing we’ve made progress.” Campaigners initially challenged the High Court injunction just a fortnight after it was granted. Five women put themselves forward as the named defendants, enabling a challenge to be mounted, and the case was adjourned for a trial in 2022.Initially, the injunction applied to the company’s sites in Broadford Bridge and Markwells Wood in West Sussex, Horse Hill in Surrey and its headquarters in Guildford  The named defendants have successfully reduced the injunction’s power in both size and scope, but the injunction still applies to activity at Horse Hill, where UKOG has secured oil drilling rights. However, activity on the site – known as the “Gatwick Gusher” for its extensive hydrocarbon resources – is yet to start.“This has been an abuse of the injunction process which should only be used to prevent real and immediate threats of unlawful action,” said Ann Stewart, from residents’ campaign group Markwells Wood Watch. “UKOG have basically had an injunction over an empty field for two and a half years.”The initial injunction followed years of protests at UKOG’s different oil and gas drilling sites, which were predominantly peaceful.  In a statement, the company said it would request that the High Court leave the monitoring of the Horse Hill site to local Surrey police.

Oil major Total’s full-year profit falls 66% as Covid pandemic hits fuel demand - France's Total on Tuesday reported a massive drop in full-year profit, following a tumultuous 12 months in which commodity prices collapsed amid the coronavirus pandemic. The energy major said full-year 2020 net profit came in at $4.06 billion, beating expectations of $3.86 billion from analysts polled by Refinitiv. It compared with $11.8 billion for the 2019 fiscal year, reflecting a drop of 66% year-on-year. Total also posted fourth-quarter net profit of $1.3 billion, beating analyst expectations of $1.1 billion. Shares of Total are up around 0.8% year-to-date, having tumbled more than 28% last year. "Total faced two major crises in 2020: the Covid-19 pandemic that severely affected global energy demand, and the oil crisis that drove the Brent price below $20 per barrel in the second quarter," Total CEO Patrick Pouyanne said in a statement. "In this particularly difficult context, the Group implemented an immediate action plan and proved its resilience thanks to the quality of its portfolio," he added. Total said it would propose a fourth-quarter dividend payout of 0.66 euros ($0.8) per share, in line with previous quarters, and set the dividend for 2020 at 2.64 euros per share. The oil and gas industry was sent into a tailspin last year, as the coronavirus pandemic coincided with a historic demand shock, falling commodity prices, evaporating profits, unprecedented write-downs and tens of thousands of job cuts. Last week, U.K.-based oil and gas major BP reported its first full-year net loss for a decade, while U.S. oil giant Exxon Mobil reported its fourth consecutive quarter of losses. The Anglo-Dutch oil giant Royal Dutch Shell also reported a sharp drop in full-year profits.

Merkel Offered Trump $1BN For US To Drop Sanctions Against Russia-Germany Pipeline  - Fresh Nord Stream 2 pipeline controversy has erupted in Germany as Angela Merkel’s government stands accused of attempting to arrange a quid pro quo with top American officials to get them to call off the sanctions regimen that's aimed at thwarting construction and completion of the project. Berlin reportedly offered to spend $1 billion on American gas if Washington would stop piling on sanctions and allow the Russia to Germany pipeline to be finished, which under normal circumstances would be just months away. The US position which hardened under the Trump administration and its sanctions on any companies or their executives working on NS-2 was that it would made Europe more energy-dependent on Russia and thus more susceptible to its geopolitical influence, while at the same time "punishing" Ukraine. However, critics have pointed out the US has economic interests as well, namely the desire to sell its own LNG to Germany.It appears Merkel government tried to tap into this clear economic motive, knowing this might be the most direct 'opening' with then President Trump.The details of the brewing scandal, according to UK's The Telegraph, are as follows:Lobbying group Environmental Action Germany (DUH) this week published a leaked letter from Olaf Scholz, the German finance minister, to Steve Mnuchin, the then US treasury secretary, dated last August. In it, Mr Scholz offered to invest $1bn on new infrastructure to import American liquefied natural gas (LNG) at German ports if the US dropped the planned sanctions.And now thrown into the mix and adding to the scandal is the Alexei Navalny affair. The United States and Ukraine have used Russia's arrest of the Russian opposition activist who was allegedly poisoned by nerve agent last August to put pressure on Merkel over the Nord Stream 2 project. Earlier this month even after Russia expelled diplomats from Germany, Sweden and Poland for allegedly taking part in pro-Navalny rallies, which the embassies for the most part denied, Berlin said it's sticking with cooperation with Russia on Nord Stream 2 "for the time being".

Nornickel must pay €1.62 billion for its huge oil spill - Judges at the Krasnoyarsk Court of Arbitration on the 5th of February announced their verdict in the case against the Norilsko-Taymyrsky Energy Company.The company that is owned and managed by mining and metallurgy giant Nornickel will have to pay 146,18 billion rubles (€1.62 billion) for the grave environmental damage inflicted on nature in the Taymyr region.It was Russia’s environmental protection agency Rosprirodnadzor that sued the company after more than 21,000 tons of diesel fuel in late May 2020 leaked from aruptured oil reservoir near the city of Norilsk. Rosprirodnadzor and its leader Svetlana Radionova originally demanded almost 148 billion rubles. Nornickel and its subsidiary, however, soon disputed the claim and argued that damage was worth only 21,4 billion rubles (€238 million).The court case started in early October. Svetlana Radionova is content with the verdict.“I am confident that this money will be spent on solving environmental problems,” she says in a statement. According to newspaper Kommersant, practically the whole sum (145,5 billion rubles) will included in the federal budget, while the minor sum of 685,000 rubles will be included in the budget of Norilsk.In a statement, Nornickel says it will “carefully study the verdict.” It is not clear if the company will file and appeal.Previously, the company has argued that the fine must be included not in the federal treasury, but rather in the regional budget of Krasnoyarsk. The fine is unprecedented in Russia and must be seen as a strong signal to the country’s powerful producer of nickel, copper, palladium and platinum. It is a strike against the company. But company shareholder and CEO Vladimir Potanin will have no major problems finding the required money.

NDMO responds to oil spill reports - THE Solomon Islands Government through the National Disaster Management Office, NDMO, has deployed a Multi-Sectoral Technical Assessment Team on an oil spill operation in Graciosa Bay in Temotu Province, on Friday 05th February 2021. The deployment of the team followed oil spill reports on MV QUEBEC, a foreign bulk carrier anchored at Graciosa Bay, discharging Heavy Oil Fuel, (HFO) when it arrived on 20th January 2021. The National Emergency Operations Centre (NEOC), received a report from Lata Police Temotu Province that there has been an Oil Spill with potential damage to the environment observed by Solomon Islands Government, SIG, Border Agencies whilst conducting routine vessel clearance on MV Quebec. The NEOC elevated the initial report to the Solomon Islands Maritime Authority (SIMA), Environment and Conservation Division (ECD) of the Ministry of Environment, Climate Change, Disaster Management and Meteorology, the Ministry of Fisheries and Marine Resources, and the Royal Solomon Islands Police Force (RSIPF). Based on the technical assessment and recommendations on maritime, environmental, and disaster risks, the Multi‐Sectoral Technical Assessment Team aimed to provide further information on the oil spills and the impacts to the communities and environment, whilst identifying the drivers to determine appropriate actions for the Government to take. Whilst on the ground, the Team will also assess the oil leakage from the wreckage of MV Tremax, a sunken vessel at the Lata wharf in 2014. NEOC received oil leakage reports on the sunken vessel from some individuals, Temotu Provincial Government, and the Lata Fisheries Centre on 03rd February 2021. Coordinated by NEOC, the team is spearheaded by the Solomon Islands Maritime Authority, SIMA, and comprised of other technical agencies including the Environment, Fisheries, Disaster, Police, and Temotu Provincial Government Officers. Under the National Marine Spill Contingency Plan (NATPLAN), SIMA is the SIG lead agency on marine pollution and oil spill in the country.

Court orders Shell to pay for Nigerian oil spills - Between 2004 and 2007, oil spilled out from pipelines owned by a Shell subsidiary, polluting the fields and fish ponds in three Nigerian villages.1 So four Nigerians teamed up with Milieudefensie/Friends of the Earth Netherlands to sue Shell over the leaks in 2008. Now, nearly 13 years later, a Dutch court has largely ruled in their favor. “Finally, there is some justice for the Nigerian people suffering the consequences of Shell’s oil,” plaintiff Eric Dooh said in a press release. “It is a bittersweet victory, since two of the plaintiffs, including my father, did not live to see the end of this trial. But this verdict brings hope for the future of the people in the Niger Delta.” The case involved three leaks: two from pipelines near the villages of Oruma and Goi and one from a well near the village of Ikot Ada Udo. The Court of Appeal in the Hague issued its decision on the first two spills January 29, ruling that Shell Nigeria must compensate the villagers for the damage done. Further, it ruled that both Shell Nigeria and its parent company, Royal Dutch Shell, must install a warning system in the Oruma pipeline so that leaks can be detected and stopped before they cause significant environmental harm. The compensation will be life-changing for the plaintiffs. Dooh hopes to use it to invest in his home village of Goi and create jobs, Milieudefensie climate justice campaigner Freek Bersch told Treehugger in an email. Another plaintiff, Fidelis Oguru of Oruma, wants to use it for an operation to recover his eyesight. However, it is the second half of the ruling that is especially significant. It marks the first time that a Dutch company has been held responsible for the actions of one of its subsidiaries abroad, Friends of the Earth explained. Campaigners say this could set an important precedent for the Netherlands, Nigeria, and the wider world. “This is also a warning for all Dutch transnational corporations involved in injustice worldwide,” Milieudefensie director Donald Pols said in the press release. “Victims of environmental pollution, land grabbing or exploitation now have a better chance to win a legal battle against the companies involved. People in developing countries are no longer without rights in the face of transnational corporations.” Bersch said that more lawsuits would likely be brought against other oil companies acting in Nigeria. “But,” Bersch added, “we hope that this judgment will also be a stepping stone for court cases for victims in other countries, against other multinationals, in other courts.” The ruling could also help with the growing movement to hold fossil fuel companies liable for the effects of climate change.

Nigerian farmers win hollow legal victory against Shell for oil spillages -In a case that has taken 13 years to reach a conclusion, the Dutch Court of Appeal has ruled that the Nigerian subsidiary of Royal Dutch Shell—the Anglo-Dutch oil giant is headquartered in the Netherlands—is liable for oil spills in the Niger Delta in Nigeria between 2004 and 2007. While Shell had argued that saboteurs were responsible for leaks in underground oil pipes that have polluted the delta, the court ruled that while sabotage was the most likely cause in two of the villages, this had not been established beyond reasonable doubt. By allowing the leaks to occur and failing to clean up the contaminated area, Shell’s Nigerian subsidiary had acted unlawfully and was liable for the damage. The court ordered Shell Nigeria to pay compensation for the massive oil spills that have caused widespread pollution and ruined Nigerian farms, with the amount of compensation to be decided later. It ordered the company to start purifying the contaminated water within weeks and to install a leak detection system to a pipeline that caused one of the spills. Shell may yet appeal to the Dutch Supreme Court. Environmental and human rights activists have hailed the decision as ground-breaking, enabling cases to be brought against transnational corporations in the country where they are headquartered and making it harder for the parent company to “walk away from trouble” caused by overseas subsidiaries. Such optimism is belied both by Shell and other oil corporations’ record in Nigeria and the outcome of previous court rulings that, without any mechanisms to enforce their decisions, have achieved little in practice. Shell, with its deep pockets, have long sought to evade responsibility via lengthy legal proceedings, many of them in UK courts, for their part in regular oil spills on the Niger Delta that have ruined the livelihoods of local people. Even when courts find against Shell, the oil giant manages to manoeuvre its way out of its obligations. In 2015, Shell accepted responsibility for the oil spills of Bodo, Ogoniland, in 2008 and 2009 and agreed to pay the people of Bodo $83.4 million, far less than their original demand of $454.9 million, but the oil spills have yet to be cleaned.

Qatar Sanctions Massive $30B North Field East LNG Project - State-owned Qatar Petroleum (QP) is moving ahead with the largest liquefied natural gas (LNG) export project ever to be sanctioned, staking a claim to the world’s projected future demand. QP announced a positive final investment decision (FID) Monday for the North Field East (NFE) Project, which has been in the works for years and would produce 33 million metric tons/year (mmty). The project would boost Qatar’s overall LNG production capacity to 110 mmty from 77 mmty. The new facilities would receive 6 Bcf/d from the North Field, considered the world’s largest non-associated gas field. Qatar is already the world’s largest LNG exporter. The NFE project is expected to cost $28.75 billion. CEO Saad Sherida Al-Kaabi said QP is in discussions with other energy majors to take a stake in the project as they have in the country’s other LNG trains over the years. The FID comes at a time when sanctioning export projects of any size has been rare given a LNG supply glut that’s plagued the market in recent years and the pandemic’s economic fallout. “This event is of particular importance as it comes at a critical time when the world is still reeling from the effects of a global pandemic and related depressed economies,” he said. “This investment decision is a clear demonstration of the steadfast commitment by the state of Qatar to supply the world with the clean energy it needs.” QP awarded the engineering, procurement and construction (EPC) contract to a joint venture of Chiyoda Corp. and Technip Energies. Chiyoda has built 12 of Qatar’s 14 existing LNG trains. The EPC award covers four mega liquefaction trains each with a capacity of 8 mmty, associated utility facilities and a carbon capture and sequestration (CCS) facility to cut greenhouse gas emissions (GHG) from the export terminal by 25% compared to similar plants, Chiyoda said. Al-Kaabi said the CCS system would be the largest of its kind in the LNG industry. The project would also tap solar power, utilize a boil-off gas recovery system to limit GHG emissions, as well as conserve water and cut nitrogen oxide emissions. The measures come as buyers and the countries they serve are increasingly demanding responsibly produced and delivered LNG. The cost of feed gas would be offset in part by condensate, propane, ethane, sulfur and helium production. “At a long-term breakeven price of just over $4.00/MMBtu, it’s right at the bottom of the global LNG cost curve, alongside Arctic Russian projects,” Qatar has been dominant in the global LNG trade for decades. According to Kpler, about two-thirds of its exports go to Asia, which is projected to drive the market’s growth in the years ahead.

Exxon Exits Kurdistan License  - DNO has announced the acquisition of ExxonMobil’s 32 percent interest in the Baeshiqa license in the Kurdistan region of Iraq. The deal, which is pending government approval, doubles DNO’s operated stake to 64 percent and sees ExxonMobil exit the asset. DNO said it plans to continue an exploration and appraisal program on the license while fast tracking early production from existing wells in 2021. “By increasing our stake in the Baeshiqa license now, we demonstrate our belief in its ultimate potential,” Bijan Mossavar-Rahmani, DNO’s executive chairman, said in a company statement. “Following the stabilization of oil prices and export payments in Kurdistan, DNO is stepping up spending on new opportunities,” he added in the statement. Following the completion of the deal, the remaining partners in the license would comprise TEC, with a 16 percent stake, and the Kurdistan Regional Government, with a 20 percent carried interest. DNO previously bought a 32 percent interest in the Baeshiqa license from ExxonMobil, and assumed operatorship of the asset, back in 2018. The 125 square mile Baeshiqa license is said to contain two large structures, Baeshiqa and Zartik, which have multiple independent stacked target reservoir systems, including in the Cretaceous, Jurassic and Triassic, DNO pointed out. In addition to the Baeshiqa license, DNO operates the Tawke license, containing the Tawke and Peshkabir fields, in Kurdistan. Gross operated production from the Tawke license averaged 110,300 barrels of oil per day in 2020, DNO highlighted.

Analysis: Iran oil output faces race against time as U.S. sanctions linger (Reuters) - Iran’s oil reserves risk becoming stranded assets unless the new U.S. administration eases sanctions that have left the country lagging rivals in output capacity and losing a race against time as the transition to low carbon energy gathers pace. Iran, which sits on the world’s fourth-largest oil reserves, relies heavily on oil revenue, but sanctions have prevented it from pumping at anywhere near capacity since 2018. The penalties were tightened under former U.S. president Donald Trump and although the new President Joe Biden is more conciliatory, top officials in his administration have said Washington would not take a quick decision on any deal with Iran. Iran’s leadership says sanctions have only delayed the moment when it will produce the oil in its vast reserves - and that the world will eventually need it. But the increasing pace of the global energy transition to lower carbon fuels, combined with the impact of the COVID-19 pandemic on energy demand, have brought forward forecasts for when the world will hit peak demand - the point beyond which consumption will permanently fall. Some Iranian officials, including the oil minister Bijan Zanganeh, have said repeatedly Tehran needs to maximise production rapidly - before oil demand disappears and rival producers take what’s left of market share. That idea, however, has been pushed back by factions who see it as a betrayal of future generations. “The dominant narrative is still to keep production optimal long-term - without realising time is running short - and to avoid exporting oil as raw material - without appreciating the refining business may not be a profitable business in the long-term anyway,” said Iman Nasseri, managing director for the Middle East with FGE energy consultancy.

State oil firms risk wasting $400 billion as energy transition speeds up (Reuters) - National oil companies (NOCs) risk squandering $400 billion on expensive oil and gas projects over the next decade that may only break even if the world fails to meet the Paris climate goals, a non-governmental organisation said on Tuesday. In a new report called Risky Bet, the Natural Resource Governance Institute (NRGI) estimated that NOCs could invest $1.9 trillion over the next ten years, meaning one-fifth of those investments would be unviable unless the oil price stayed above $40 a barrel. Major oil companies like BP, Total and Royal Dutch Shell have already progressively lowered their long term price estimates, now in the $50-60 a barrel range, while some analysts see even lower levels depending on the energy transition scenario. The result could worsen inequalities as funds that could have been better spent on healthcare, education or diversifying the economy might instead create an economic crisis. Many of these NOCs are based in countries where 280 million people live below the poverty line. “State oil companies’ expenditures are a highly uncertain gamble,” “They could pay off, or they could pave the way for economic crises across the emerging and developing world and necessitate future bailouts that cost the public dearly.”

Hedge funds bet on oil's 'big comeback' after pandemic hobbles producers (Reuters) - Hedge funds are turning bullish on oil once again, betting the pandemic and investors’ environmental focus has severely damaged companies’ ability to ramp up production. Such limitations on supply would push prices to multi-year highs and keep them there for two years or more, several hedge funds said. The view is a reversal for hedge funds, which shorted the oil sector in the lead-up to global shutdowns, landing energy focused hedge funds gains of 26.8% in 2020, according to data from eVestment. By virtue of their fast-moving strategies, hedge funds are quick to spot new trends. Global oil benchmark Brent has jumped 59% since early November when news of successful vaccines emerged, after COVID-19 travel curbs and lockdowns last year hammered fuel demand and collapsed oil prices. Last week it hit pre-pandemic levels close to $60 a barrel. U.S. crude has climbed 54% to around $57 per barrel during the same period. “By the summer, the vaccine should be widely provided and just in time for summer travel and I think things are going to go gangbusters,” said David D. Tawil, co-founder at New York-based event-driven hedge fund, Maglan Capital, and interim CEO of Centaurus Energy.

Brent approaches $60 per barrel as supply cuts, stimulus hopes lift prices - Oil prices rose on Monday to their highest in just over a year, with Brent nudging past $60 a barrel, boosted by supply cuts among key producers and hopes for further U.S. economic stimulus measures that can boost demand. Brent was up 87 cents, or 1.47%, at $60.21 a barrel, and U.S. West Texas Intermediate rose 90 cents, or 1.58%, to $57.75 a barrel. Both contracts were at their highest levels since January 2020. "Oil prices are back close to pre-pandemic levels," "Support seems robust and the narrative sees the oil market swiftly burning through the remaining crisis-surplus, potentially running into tightness later this year," The oil market continues to tighten‮ ‬with deeper cuts from Saudi Arabia who pledged extra supply cuts in February and March on the back of reductions by other members of the Organization of the Petroleum Exporting Countries and its allies. In a sign that prompt supplies are tightening, the six-month Brent spread hit a high of $2.54 on Monday, its widest since January last year. OCBC's economist Howie Lee said the world's top exporter Saudi Arabia sent a "very bullish signal" last week when it kept monthly crude prices to Asia unchanged despite expectations of small cuts. "I don't think anybody dares to short the market when Saudi is like this," he added. A weaker dollar against most currencies on Monday also supported commodities, with dollar-denominated commodities becoming more affordable to holders of other currencies. Investors are also keeping a close watch on a $1.9 trillion COVID-19 aid package for the United States that is expected to be passed by lawmakers as soon as this month. Hopes that Iranian oil exports would soon return to the market have been dampened, supporting oil prices. Stronger crude prices are, meanwhile, encouraging U.S. producers to increase output. The U.S. oil rig count, an early indicator of future output, rose last week to its highest since May, according to energy services firm Baker Hughes Co.

Oil rises 2% to more than one-year high on supply cuts, stimulus hopes (Reuters) - Oil prices rose 2% on Monday to their highest in over a year, with Brent nudging past $60 a barrel, boosted by supply cuts among key producers and hopes for further U.S. economic stimulus. Brent rose $1.22, or 2.1%, to settle at $60.56 a barrel, while U.S. West Texas Intermediate rose $1.12, or 2%, to settle at $57.97 a barrel. Both benchmarks were at the highest since January 2020. “Managing to breach $60 again feels like the market is finally resurfacing after the long struggle and (taking) a proper breath,” Brent and WTI have risen more than 60% since the start of November due to optimism around coronavirus vaccine distributions as well as production cuts from OPEC+ members. “There is a sense that the glut of oil supply is disappearing more rapidly than anybody thought possible.” Saudi Arabia pledged extra supply cuts in February and March following reductions by other members of the Organization of the Petroleum Exporting Countries and its allies. In a sign that prompt supplies are tightening, the six-month Brent spread hit a high of $2.54 on Monday, its widest since January last year, a signal of demand for current supply. OCBC economist Howie Lee said the world’s top exporter Saudi Arabia sent a “very bullish signal” last week when it kept monthly crude prices to Asia unchanged despite expectations for small cuts. “I don’t think anybody dares to short the market when Saudi is like this,” he added. Investors are keeping watch on a $1.9 trillion COVID-19 aid package for the United States that is expected to be passed as soon as this month. Hopes that Iranian oil exports would soon return to the market have been dampened, supporting oil prices. U.S. President Joe Biden said the United States would not lift sanctions on Iran simply to get it back to the negotiating table, while Iran’s Supreme Leader Ayatollah Ali Khamenei said all sanctions should be lifted first.

Oil climbs to 13-month highs, as supply cuts, demand optimism support - Oil prices edged up on Tuesday to their highest in 13 months as supply cuts by major producers and optimism over fuel demand recovery support energy markets. Brent crude futures for April gained 29 cents, or 0.5%, to $60.85 a barrel by 0246 GMT. U.S. West Texas Intermediate crude (WTI) for March was at $58.25 a barrel, up 28 cents, or 0.5%. Both Brent and WTI are at their highest since January 2020. Front-month prices for both contracts are up for the seventh session on Tuesday, the longest win streak since January 2019. Additional supply reductions by top exporter Saudi Arabia in February and March, on top of cuts by producers in the Organization of the Petroleum Exporting Countries and their allies, are tightening supplies and balancing global markets. Investors are also pinning hopes on oil demand recovery when COVID-19 vaccines take effect. A weak dollar has also helped shored up prices of commodities. "Progress on U.S. stimulus and optimism around the roll-out and effect of vaccines across the remainder of 2021 and a slightly weaker USD help the view (for a recovery) albeit there was mixed news on the impact of the current vaccines formulated on the emerging South African variant," He cautioned, however, that both Brent and WTI are in overbought territory on technical charts. "While I remain a bit cautious at current levels, the medium and longer-term outlook for demand is healthy, and one can understand a willingness to look through some of the near-term uncertainty that remains for oil,"

Oil gains, with Brent prices up an 8th session as traders spot signs of better energy demand - Oil futures moved up on Tuesday, shaking off earlier weakness, as signs of improving energy demand prompted global benchmark prices to tally an eighth consecutive session gain. “With supply dynamics of the global oil market as clear and steady as they have been in years, trader focus has turned to demand in recent sessions, and with the continued vaccine distribution efforts, falling COVID case counts, and another huge stimulus package working its way through Congress, demand expectations are rising,” analysts at Sevens Report Research wrote in a Tuesday newsletter. The U.S. benchmark West Texas Intermediate crude for March delivery rose 39 cents, or 0.7%, to settle at $58.36 a barrel on the New York Mercantile Exchange, with front-month prices scoring a seventh consecutive session of gains. That is the longest streak of gains since the eight-session rise ended Feb. 22, 2019, according to Dow Jones Market Data. April Brent crude tacked on 53 cents or 0.9%, to end at $61.09 a barrel on ICE Futures Europe. Tuesday’s rise marked its eighth in a row, the longest run since February 2020. Both WTI and Brent crude futures logged their highest settlements since January of last year. “After losing momentum through much of January trading, the crude complex has posted a strong rally over the past two weeks,” bringing Brent above the $60 a barrel level, said Robbie Fraser, manager of global research and analytics at Schneider Electric, in a daily note. “That rally has been aided by longer-term optimism and expectations of broader market strength, but current prices are likely to generate some anxiety that the rally is near overextended territory,” he said. Oil rallied Monday as equities continued their surge, helping to lift major U.S. benchmarks to another round of all-time highs. Broad-based market optimism remains tied to expectations for another large round of government aid under President Joe Biden’s $1.9 trillion proposal, as well as progress on vaccine rollouts around the world. Meanwhile, Saudi Arabia’s decision to unilaterally cut output by 1 million barrels a day in February and March is seen helping to keep supplies in check, analysts said.

Oil prices extend rally after surprise fall in U.S. stocks - Oil extended its rally for a ninth day on Wednesday, its longest winning streak in two years, supported by producer supply cuts and hopes that vaccine rollouts will drive a recovery in demand. The American Petroleum Institute said on Tuesday crude inventories fell by 3.5 million barrels, versus expectations for a 985,000-barrel build. Brent crude was up 41 cents, or 0.67%, at $61.51 after touching a 13-month high of $61.61 earlier in the session. U.S. crude was up 33 cents, or 0.57%, to $58.68, having touched $58.76, also a 13-month high. "One can only wonder whether there's further to go in this week's rally," said Stephen Brennock of broker PVM. "However, as things stand, oil has yet to lose its shine." Brent has now risen for nine sessions in a row, its longest sustained period of gains since December 2018 to January 2019. It is the eighth daily rise for U.S. crude. Some analysts say prices have moved too far ahead of the underlying fundamentals. "The current price levels are healthier than the actual market and entirely reliant on supply cuts, as demand still needs to recover," said Bjornar Tonhaugen of Rystad Energy. Crude has jumped since November as governments kicked off vaccination drives for COVID-19 while putting in place large stimulus packages to boost economic activity, and the world's top producers kept a lid on supply. Top exporter Saudi Arabia is unilaterally reducing supply in February and March, supplementing cuts agreed by other members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+. Some analysts forecast supply will undershoot demand in 2021 as more people get vaccinated and start going away on trips and working in offices.

WTI Rebounds, Shrugging Off Another Big Gasoline Stock Build - Oil prices have pumped and dumped overnight, back to unchanged, after API reported a bigger than expected crude draw and much bigger than expected gasoline build that confused the algos. API:

• Crude -3.5mm (-994k exp)
• Cushing -378k
• Gasoline +4.81mm- biggest build since April 2020
• Distillates -487k

DOE

• Crude -6.645mm (-994k exp, -2.5mm whisper)
• Cushing -658k
• Gasoline +4.259mm
• Distillates -1.732mm

Crude stocks fell more than expected (for the 3rd week in a row) but gasoline inventories continued their almost 6-week streak of builds.. Source for graphs: Bloomberg Gasoline Demand weakness lingers... Crude production has been flat to slightly lower as prices and rig counts have risen recently suggesting some capital discipline among drillers. WTI was hovering near the lows of the day around $58.20 ahead of the data drop and spiked on the bigger than expected crude draw...

Oil Is Soaring Amid "Supercycle" Chatter  Just days after one of our favorite macro strategists, Dylan Grice, predicted that the stage is set for "a bull market in oil", and JPM quant Marko Kolanovic said a new oil and commodity supercycle has begun, oil is starting to get the message, and has jumped more than 2% on Friday... ... rising to the highest intraday level in more than a year as output curbs from top producers whittle down global inventories, while JPM predicts that an epic systematic short squeeze is about to be unleashed next month in oil (we discussed this earlier this week, and will touch on this shortly again). Oil was set for a second straight weekly gain, as OPEC+ continued to slash output and the group expects a stronger second half of the year, which to Bloomberg indicates "that global inventories will face sharp declines unless the cartel boosts supply." Indeed, Iraq said OPEC+ is unlikely to change its output policy at a March meeting. Meanwhile, in the U.S., crude stockpiles are at the lowest in nearly a year. “This time of year, there’s usually builds,” said Bill O’Grady, executive vice president at Confluence Investment Management in St. Louis. "The draws we’ve been getting are pretty surprising, setting up a really bullish backdrop.” As a result of the rally, WTI futures' 14-day Relative Strength Index (RSI) rose to the most overbought since 1999 this week and remains above 70 in a sign that the commodity may be due for a pullback, which however has yet to come. “Based on fundamental analysis, the case for further price gains is hard to make, although we are seeing optimism in financial markets in general,” said Hans van Cleef, senior energy economist at ABN Amro. “We think that much higher oil prices are not sustainable and that oil producers will then start to increase production.”Oil in longest rally in two years as vaccines boost demand hopes (Reuters) - Oil prices rose on Wednesday, extending its rally for a ninth day, its longest winning streak in two years, supported by producer supply cuts and hopes vaccine rollouts will drive a recovery in demand. Falling U.S. crude inventories were also supportive. Crude stocks last week fell for a third straight week, dropping 6.6 million barrels to 469 million barrels, their lowest since March, according to the Energy Information Administration. Analysts in a Reuters poll had forecast a 985,000-barrel increase. [EIA/S] “A combination of higher refining activity and lower imports resulted in a third consecutive draw to oil inventories, and a chunky one at that,” said Matt Smith, director of commodity research at ClipperData. He cautioned that a build to gasoline inventories offset the bullish draw. Brent crude settled up 38 cents, or 0.6%, at $61.47 a barrel, after touching a 13-month high of $61.61. U.S. crude closed 32 cents, or 0.6%, higher at $58.68 a barrel, also after touching a 13-month high at $58.76. Brent has now risen for nine sessions in a row, its longest sustained period of gains since December 2018 to January 2019. It is the eighth daily rise for U.S. crude. Some analysts say prices have moved too far ahead of the underlying fundamentals. “The current price levels are healthier than the actual market and entirely reliant on supply cuts, as demand still needs to recover,” said Bjornar Tonhaugen of Rystad Energy. Crude has jumped since November as governments kicked off vaccination drives for COVID-19 while putting in place large stimulus packages to boost economic activity, and the world’s top producers kept a lid on supply. Top exporter Saudi Arabia is unilaterally reducing supply in February and March, supplementing cuts agreed by other members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+. Some analysts forecast supply will undershoot demand in 2021 as more people get vaccinated and start going away on trips and working in offices. “It should be a strong second half of the year and oil prices are a reflection of that,” 

The Most Fragile Oil Price Rally In History - Brent crude could hit $70 or even $80 a barrel by the end of this year, one hedge fund manager says. It could top $100 next year, an energy analyst forecasts. Oil is on a tear, and suddenly, everyone is bullish. But this is probably the most fragile oil price recovery in history. Something as tiny as a virus could kill it.Herd immunity is the big factor for hedge funds, according to a recent Reuters report. According to them and several banks, the United States—the world’s biggest oil consumer—will reach herd immunity by the middle of the year, which will coincide with summer driving season to the benefit of oil producers.“By the summer, the vaccine should be widely provided and just in time for summer travel and I think things are going to go gangbusters,” one hedge fund manager, David D. Tawil of Maglan Capital, told Reuters.Government stimulus will also help. In fact, it could even push prices to $100 and over, accordingto Energy Aspects’ Amrita Sen.“We’ve always called for $80 plus oil in 2022. Maybe that is $100 now given how much liquidity there is in the system. I wouldn’t rule that out,” Sen told Bloomberg this week.Central banks and governments have been more than generous with stimulus to weather the effects of the crisis caused by the pandemic, and while some are skeptical about the long-term benefits of some measures, the overall sentiment towards them is positive. There are some flies in the stimulus ointment, however. In Europe, some analysts are warning that government support for businesses is creating so-called zombie companies that will collapse the moment the stimulus end, which it will eventually have to do. In the United States, some analysts have questioned the need for President’s Biden $1.9-trillion stimulus program saying the economy is already picking up, however slowly, and a stimulus package as huge as this one could lead to excessive inflation, which could have unexpected consequences. And then there are the oil producers, many of which have been struggling to stay afloat since the pandemic hit the global scene. With rising oil prices, the struggle will end, but it will also tempt many to start producing more, especially as demand recovers thanks to mass vaccinations. This is the dominant expectation: that by the summer, there will be enough people vaccinated for life to begin to return to normal, including in oil demand. Analysts and financiers note that oil companies are much warier about production growth this time and will hold off returning to growth mode for longer. This may or may not be the case, but what most analysts and financiers seem to be brushing off is the possibility of a resurgence in Covid-19 infections.

Oil drops after strong rally, demand hopes limit losses - Oil prices fell on Thursday, giving up some of the recent strong gains, although losses were curbed by production cuts and hopes that rollouts of vaccines will drive a recovery in demand. Brent crude fell 39 cents, or 0.6%, to $61.08 a barrel, as of 0231 GMT, after touching its highest since January 2020 on Wednesday. U.S. crude slid 35 cents, or 0.6%, to $58.33 a barrel. "Crude oil futures rallied following a bigger than expected fall in inventories in the U.S.," ANZ said in a note. "However, sentiment was curtailed by a rise in gasoline inventories." Crude stocks last week fell for a third straight week, dropping 6.6 million barrels to 469 million barrels, their lowest since March, according to the Energy Information Administration. Analysts in a Reuters poll had forecast a 985,000-barrel increase. Brent has risen for the previous nine sessions, its longest sustained period of gains since January 2019. On Wednesday, was the eighth daily rise for U.S. crude. However, some analysts say prices have moved too far ahead of the underlying fundamentals. Stocks were flat in early trading in Asia on Thursday as investors kept tapping the brakes on runs in asset prices after taking in tepid U.S. inflation data and comments from the Federal Reserve chief affirming the outlook for a slow recovery. Crude has jumped since November as governments kicked off vaccination drives for COVID-19 while putting in place large stimulus packages to boost economic activity, and the world's top producers kept a lid on supply. Top exporter Saudi Arabia is unilaterally reducing supply in February and March, supplementing cuts agreed by other members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+.

Oil prices snap an eight-day run as IEA cuts demand outlook - Oil capped its longest winning streak in two years following the International Energy Agency’s bleaker outlook for global demand and signs that futures were overbought. Prices in New York slid 0.8% on Thursday, the biggest decline in two weeks, after rising for eight straight sessions. The IEA said the re-balancing of the global oil markets remains “fragile” and slashed its forecasts for world oil consumption in 2021 as the pandemic continues to limit travel and economic activity. Still, the agency said the market’s prospects look stronger in the second half of the year, and swollen oil inventories will drop sharply as fuel use picks up. “Crude has shown some really strong gains,” said Gary Cunningham, director at Stamford, Connecticut-based Tradition Energy. But “there’s some questions as to whether or not these levels can be maintained” amid uncertainty over the demand recovery and the ability for producers to limit supplies. While crude is up more than 11% this month, the recent stretch of price gains had pushed its 14-day Relative Strength Index this week to the most overbought level since 1999, signaling the rally was due for a correction. But the underlying setup for oil remains firm. Citigroup Inc. predicted the global benchmark Brent will likely reach $70 a barrel by the end of the year, while JPMorgan Chase & Co. called a new supercycle for commodities. Oil’s rebound accelerated after Saudi Arabia pledged to deepen output cuts and the premium on the nearest contract firmed in a bullish backwardation structure, helping to unwind global stockpiles built up during the outbreak. There are still concerns that the virus may curb near-term fuel demand, with China’s air traffic falling sharply ahead of the Lunar New Year holiday after a resurgence in some areas. “It’s an ideal time for profit-taking” following the recent streak of price gains, said Edward Moya, senior market analyst at Oanda Corp. Yet, “there’s optimism that a lot of Americans are going to get vaccinated in these next couple months, which means they’re going to be more willing to travel.” West Texas Intermediate for March delivery fell 44 cents to settle at $58.24 a barrel. Brent for April settlement slid 33 cents to end the session at $61.14 a barrel, posting the largest daily loss since Jan. 22. Along with the IEA’s expectation for a brighter second half of the year, OPEC also said demand for its crude will be higher than previously expected, on a weaker outlook for rival supply and stronger global consumption in the second half.

Oil Prices Surge As Inventories Decline  | Rigzone -- Oil in London climbed for a fourth straight week as efforts to clear an oil surplus are seen holding the market over until demand comes back in force. Global benchmark Brent futures on Friday surged the most since early January, while West Texas Intermediate crude flirted with $60 a barrel for the first time in more than a year. Signs of inventories declining in the U.S. and elsewhere point to the success OPEC+ has had in draining a surplus left in the wake of an historic demand slump due to the pandemic. OPEC expects a stronger second half of 2021, indicating this week that global inventories will face sharp declines unless the cartel boosts supply. Iraq said OPEC+ is unlikely to change its output policy at a March meeting. In the U.S., crude stockpiles are at the lowest in nearly a year. “OPEC is showing a lot more nimbleness and practicality in their approach,” said Vikas Dwivedi, a global energy strategist for Macquarie Group in Houston. “It looks like U.S. shale is going to be a lot more measured and not just completely collapse the supply/demand balance.” One of the most dramatic moves in the market this week has been in Brent’s futures curve. So-called backwardation between the first and third futures contract, which indicates tight supplies, soared to its strongest level since January 2020. At the same time, brokers reported a frenzy of bullish trading in the key Dated-Frontline swap, which is tied to physical North Sea markets, flipping to a premium for the first time in a year. There are further signs of supply being constrained in the near term. A frigid Arctic blast spreading across America’s largest shale oil patch has caused crude flowing from wells to slow or halt completely. Traders say several hundred barrels a day of output in the Permian Basin could be impacted by well shutdowns that began Thursday. Crude prices “can still go higher from here,” said Ryan Gorman, market strategist at Blue Line Futures LLC in Chicago. “With Saudi Arabia’s production cut and some progress toward the end of the tunnel here for the virus, there’s still some room for this market to go.” Prices West Texas Intermediate gained $1.23 to settle at $59.47 a barrel, rising the most in nearly two weeks. Brent for April settlement rose $1.29 to end the session at $62.43 a barrel. Both benchmarks are at the highest since January 2020. Still, concerns remain over whether crude’s rally is sustainable. WTI futures’ 14-day Relative Strength Index rose to the most overbought since 1999 this week and remains sharply above 70 in a sign that the commodity is due for a pullback. Meanwhile, the Covid-19 pandemic continues to crimp fuel consumption from China to the U.S., with the International Energy Agency cutting its demand forecast for 2021 and describing the market as fragile.

Oil Futures at Fresh Highs on Saudi Attack (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and the Brent contract on the Intercontinental Exchange reversed higher in late morning trade and rallied to fresh highs Friday afternoon after the Iranian-aligned Houthis militia claimed responsibility for a drone attack on a Saudi Arabian airport and airbase earlier this week, heightening the risk of supply disruption in the world's largest crude oil exporter amid tightening global oil market.Further bolstering the oil complex, the U.S. dollar faded earlier gains to finish below 90.50 level after University of Michigan reported its consumer sentiment index unexpectedly declined in early February, with the souring sentiment concentrated in the expectations index among households making less than $75,000 a year. At 76.2, the consumer sentiment index dropped to a four-month low and missed analyst expectations for an improvement to an 80.9 reading."Households with incomes in the bottom third reported significant setbacks in their current finances, with fewer of these households mentioning recent income gains than any time since 2014," said Richard Curtin, chief economist of the consumer survey. Even more surprising was the finding that despite the expected passage of a massive $1.9 trillion stimulus bill, consumers viewed prospects for the national economy less favorably in early February than last month.On the session, West Texas Intermediate for March delivery futures rallied $1.23 to settle at $59.47 barrel (bbl), while international crude Brent April contract advanced $1.29 to finish at $62.43 bbl. Both benchmarks finished this week at their highest points on the spot continuous charts in 13 months.NYMEX March ULSD futures added 2.68 cents to $1.7714 gallon and March RBOB futures surged 4.23 cents to $1.6925 gallon. Friday's gains came despite Baker Hughes data released early afternoon showing the number of oil-drilling rigs in the United States increased for the twelfth consecutive week through Friday, reaching the highest level since May 2020. At 306, the number of active oil rigs rose seven from the prior week but are down 372 from the comparable week a year ago. During the fourth quarter 2020, the number of rigs increased a total of 84 while gaining 39 so far in the current quarter.

International Criminal Court ruling paves way for legal proceedings against Israel for war crimes - The International Criminal Court (ICC) has ruled that it does have jurisdiction over war crimes and crimes against humanity in the Palestinian territories of the West Bank, Gaza and East Jerusalem. This paves the way for investigations into Israel and Hamas’ conduct during Israel’s murderous assault on Gaza in 2014 and Israel’s response to the weekly protests held under the banner of the Great March of Return that started in March 2018 and lasted for more than a year. According to United Nations figures, Israel’s bombardment of Gaza in 2014 killed 2,251 Palestinians, including 1,462 civilians, and injured 11,231. Of the Palestinians who lost their lives, 521 were children and 283 were women. The civilian death toll was far higher than that of the estimated 400 fighters belonging to Hamas, the Islamist group that controls Gaza and the ostensible target of the war. Just 67 Israeli soldiers, along with six civilians, were killed, and 1,600 soldiers were injured. The UN’s Human Rights Council (UNHRC) concluded that the mass killing and destruction were deliberate, not accidental, resulting from explicit decisions taken at the highest level of the Israeli government. Israeli forces responded to the largely peaceful Great March of Return protests, held in Gaza near its border with Israel, by firing tear gas canisters, some of them dropped from drones, rubber bullets and live ammunition, mostly by snipers. As a result, 214 Palestinians, including 46 children, were killed, and over 36,100, including nearly 8,800 children were injured. One in five of those injured (over 8,000) were hit by live ammunition. In contrast, just one Israeli soldier was killed and seven others injured during the demonstrations. The ICC ruling constitutes a potential legal barrier to Israel’s plans to extend and/or build new settlements and Prime Minister Benjamin Netanyahu’s plans, now on hold, to annex the Jordan Valley in breach of the ban on an occupying power settling civilians in or annexing occupied territory.