Suez Canal shutdown cuts Persian Gulf exports; US gasoline exports at a 41 week low...

oil prices fell for the third week in a row, after rising 80% over the prior 18 weeks, as new Covid infections and lockdowns increased worldwide...after falling 6.4% to $61.42 a barrel last week on rising tension between Biden and Putin, and on a new wave of Covid infections across Europe, the contract price of US light sweet crude for April delivery opened higher on Monday as hopes for a pick-up in demand later this year helped arrest last week's broad sell-off​,​ and hung on to finish with a 13 cent gain as traders continued to weigh the prospects for energy demand after problems with the AstraZeneca vaccine and renewed lockdowns in Europe, as trading in the April US oil contract expired ​with it priced ​at $61.55 a barrel...with oil quotes now referencing the price of US light sweet crude for May delivery, which had risen 12 cents to $61.56 a barrel on Monday, oil prices​ ​tumbled from the opening bell on Tuesday as European coronavirus curbs pointed to another hit to demand, and ended ​the day ​down $3.80​​ or more than 6%​ ​at $57.76 a barrel, as hope for an economic recovery was dampened by setbacks in vaccine rollouts in parts of Europe and Southern Asia, with prices​ then​ falling even lower in post-settlement trade after the American Petroleum Institute reported U.S. crude oil inventories unexpectedly rose over the most recent week...prices thus opened lower on Wednesday, but edged higher as investors looked for bargains following the previous day's plunge, and then jumped nearly 6% to close $3.42 higher at $61.18 a barrel after a ​big ​ship ran aground in the Suez Canal, provoking concern that the incident would tie up crude shipments and drive prices higher...but oil prices opened lower again on Thursday as coronavirus lockdown concerns outweighed the Suez Canal disruptions and slid to a 4% loss, with May crude settling $2.62 lower at $58.56 a barrel, as the U.S. reported the most new Covid cases since Feb. 12 and the U.S. dollar strengthened, reducing the appeal of commodities priced in the currency...however, oil prices bounced back on Friday, on fears that the ship stuck in the Suez Canal might block shipping for weeks, squeezing supply, with oil closing $2.41 higher at $60.97 a barrel after Yemen’s Houthis said they had attacked several of Saudi Aramco’s facilities with drones and ballistic missiles...oil prices thus finished their most volatile week in 11 months with a loss of just 0.7%, while the May oil contract also saw a statically identical decline...

meanwhile, natural gas prices finished slightly higher for the first time in 6 weeks after the closure of the Suez Canal, cutting off LNG exports from the Persian Gulf and Australia....after falling 2.5% to $2.535 per mmBTU last week as weather forecasts suggested little demand for heating thru the remainder of the season, the contract price of natural gas for April delivery opened 1% lower on Monday but quickly reversed ​course ​on continued robust liquefied natural gas output and settled up 4.7 cents on the day​ ​at $2.582 per mmBTU​.​...but continuing forecasts for weak weather related demand overshadowed LNG growth on Tuesday and prices ​reversed to fall 7.4 cents to $2.508 per mmBTU, which was followed by a penny price rebound on Wednesday amid concern about delayed LNG export deliveries after the grounded container ship blocked the Suez Canal...natural gas prices then rallied on Thursday after a bullish government inventory report and on consistently solid demand for U.S. LNG exports​,​ and climbed 5.2 cents to settled at $2.570 per mmBTU...however, despite strong exports and signs of stronger Gulf Coast industrial demand, natural gas futures drifted lower on Friday, finishing down 1.3 cents at $2.557 per mmBTU on the day, but still​ managed to​ log a 0.9% increase on the week...

the natural gas storage report from the EIA for the week ending March 19th indicated that the amount of natural gas held in underground storage in the US fell by 36 billion cubic feet to 1,746  billion cubic feet by the end of the week, which left our gas supplies 263 billion cubic feet, or 13.1% below the 2,009 billion cubic feet that were in storage on March 19th of last year, and 78 billion cubic feet, or 4.3% below the five-year average of 1,824 billion cubic feet of natural gas that have been in storage as of the 19th of March in recent years....the 36 billion cubic feet that were drawn out of US natural gas storage this week was more than the average forecast of a 21 billion cubic foot withdrawal from an S&P Global Platts survey of analysts, and was also more than 26 billion cubic foot withdrawal from natural gas storage seen during the corresponding week of a year earlier, but it was less than the average withdrawal of 51 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 March 19th indicated that even after another big increase in our oil refining, we still had a modest surplus of oil left to add to our stored commercial crude supplies, which increased for the 5th week in a row and for the 13th time in the past thirty-five weeks....our imports of crude oil rose by an average of 299,000 barrels per day to an average of 5,622,000 barrels per day, after falling by an average of 332,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 39,000 barrels per day to 2,481,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,141,000 barrels of per day during the week ending March 19th, 338,000 more barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was 100,000 barrels per day higher at 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 14,141,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 14,389,000 barrels of crude per day during the week ending March 19th, 957,000 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 273,000 barrels of oil per day were being added to the supplies of oil stored in the US....comparing those totals, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports and from oilfield production was 522,000 barrels per day less than what what was added to storage plus what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+522,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting there ​must have been a error or errors of that magnitude in this week's oil supply & demand figures that we have just transcribed....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 they're 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 rose to an average of 5,723,000 barrels per day last week, which was 9.5% less than the 6,326,000 barrel per day average that we were importing over the same four-week period last year.....the 273,000 barrel per day addition to our total crude inventories was all added to our commercially available stocks of crude oil, while the quantity of oil stored in our Strategic Petroleum Reserve remained unchanged....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 5,000 barrel per day decrease to 454,000 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 March 20th 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% above 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 81.6% of their capacity while using those 14,389,000 barrels of crude per day during the week ending March 19th, up from 76.1% of capacity during the prior week, but still a historically low figure, even for this time of year, when refineries are typically undergoing seasonal maintenance...hence, the 14,389,000 barrels per day of oil that were refined this week were still 9.2% fewer barrels than the 15,838,000 barrels of crude that were being processed daily during the week ending March 20th of last year, when US refineries were operating at a seasonal slow 87.9% of capacity...

even with the increase in the amount of oil being refined, the gasoline output from our refineries was lower for the 12th time in 19 weeks, decreasing by 300,000 barrels per day to 8,577,000 barrels per day during the week ending March 19th, after our gasoline output had decreased by 128,000 barrels per day over the prior week...as a result, this week's gasoline production​ ​was 4.3% lower than the 8,958,000 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 373,000 barrels per day to 4,601,000 barrels per day, after our distillates output had increased by 1,330,000 barrels per day from a twenty-six year low of 2,898,000 barrels per day over the prior two weeks...but even after that three week rebound in our distillates' production, this week's distillates​ ​output was still 4.9% lower than the 4,838,000 barrels of distillates that were being produced daily during the week ending March 20th, 2020...

even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the fourteenth time in nineteen weeks, and for 18th time in 36 weeks, rising by a modest 204,000 barrels to 232,279,000 barrels during the week ending March 19th, after our gasoline inventories had increased by 472,000 barrels over the prior week...our gasoline supplies managed to increase this week even though the amount of gasoline supplied to US users increased by 174,000 barrels per day to 8,616,000 barrels per day because our exports of gasoline fell by 247,000 barrels per day to a nine month low of 433,000 barrels per day, and because our imports of gasoline rose by 29,000 barrels per day to 939,000 barrels per day...but even after this week's inventory increase, our gasoline supplies were 2.9% lower than last March 20th's gasoline inventories of 239,282,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year... 

meanwhile, with the recovery in our distillates production, our supplies of distillate fuels increased for the 2nd time in 9 weeks and for the 10th time in thirty weeks, rising by 3,806,000 barrels to 141,553,000 barrels during the week ending March 19th, after our distillates supplies had increased by 255,000 barrels during the prior week....our distillates supplies rose this week as the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 436,000 barrels per day to 3,592,000 barrels per day, while our exports of distillates rose by 441,000 barrels per day to 1,129,000 barrels per day​, and​ while our imports of distillates rose by 140,000 barrels per day to 664,000 barrels per day...after this week's inventory increase, our distillate supplies at the end of the week were 13.8% above the 124,442,000 barrels of distillates that we had in storage on March 20th, 2020, and rose to about 1% above the five year average of distillates stocks for this time of the year...

finally, even with the recovery in our refinery throughput, our commercial supplies of crude oil in storage (not including the commercial oil being stored in the SPR) ended the week higher for the eighth time in the past nineteen weeks and for the 29th time in the past year, increasing by 1,​912,000 barrels, from 500,799,000 barrels on March 12th to 502,711,000 barrels on March 19th...after this week's modest increase, our commercial crude oil inventories remained 6% above the most recent five-year average of crude oil supplies for this time of year, and were still nearly 49% above the 5 year average of our crude oil stocks as of the third week of March at the beginning of the decade, 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 to record highs during the spring lockdowns of last year, after generally rising over the prior two years except for during the 10 weeks prior to the Texas freeze​,​ and except for during the past two summers, after generally falling​ from a record high​ over the year and a half prior to September of 2018, our commercial crude oil supplies as of March 19th were 10.4% more than the 455,360,000 barrels of oil we had in commercial storage on March 20th of 2020, 13.7% more than the 442,283,000 barrels of oil that we had in storage on March 22​nd of 2019, and also 17.4% more than the 428,306,000 barrels of oil we had in commercial storage on March 16th of 2018...      

This Week's Rig Count

The US rig count rose for the 25th time over the past 28 weeks during the week ending March 26th, but it still remains down by 47.3% from the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US was up by 6 to 417 rigs this past week, which was still down by 311 rigs from the 728 rigs that were in use as of the March 27th report of 2020, and was 1,512 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 9 rigs to 318 oil rigs this week, after rising by 9 oil rigs the prior week, leaving us with 300 fewer oil rigs than were running a year ago, and 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 was unchanged at 92 natural gas rigs for the 5th week in row, which was still down by 10 natural gas rigs from the 102 natural gas rigs that were drilling a year ago, and just 5.7% 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 was down by one to twelve rigs this week, with 10 of those rigs drilling for oil in Louisiana's offshore waters and 2 continuing to drill for oil in Alaminos Canyon offshore from Texas...that was 6 fewer Gulf of Mexico rigs than the 18 rigs drilling in the Gulf a year ago, when 17 Gulf rigs were drilling for oil offshore from Louisiana, and one rig was drilling for natural gas in the West Delta field​, also​ offshore from Louisiana...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 totals are equal to the Gulf rig counts....

The count of active horizontal drilling rigs was up by 8 to 380 horizontal rigs this week, which was still down by 273 rigs from the 653 horizontal rigs that were in use in the US on March 27th 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 directional rig count was up by ​1 rig to 15 directional rigs this week, but those were also down by 32 from the 47 directional rigs that were operating during the same week a year ago....on the other hand, the vertical rig count was down by 3 to 22 vertical rigs this week, and those were down by 6 from the 28 vertical rigs that were in use on March 27th 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 March 26th, the second column shows the change in the number of working rigs between last week's count (March 19th) and this week's (March 26th) count, the third column shows last week's March 19th 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 27th of March, 2020..    

once again, it appears that most of this week's new activity was in the Permian basin... so checking first for the details on the Permian basin in Texas from the Rigs by State file at Baker Hughes, we find that there were 6 rigs new rigs set up in Texas Oil District 8, which corresponds to the core Permian Delaware, while one rig was pulled out of Texas Oil District 7C, which includes the southernmost counties of the Permian Midland basin, which together means there was a net increase of 5 rigs in the Texas Permian, thus accounting for this week's Permian basin change.....elsewhere in Texas, there were 2 rigs pulled out of Texas Oil District 1, while there was a rig added in Texas Oil District 4, which all could have been in the Eagle Ford shale, which stretches in a narrow band through the southeast part of the state...at the same time, there was also a rig pulled out of Texas Oil District 10 in the Texas panhandle, which doesn't appear to have been targeting that region's Granite Wash basin....other rig additions were in Colorado, but not in the state's Niobrara chalk, in Oklahoma's Cana Woodford, in North Dakota's Williston basin, and in a Utah basin not named by Baker Hughes​, more than likely the Uinta​...other than those, the only other change evident this week ​was ​the oil rig that was removed from Louisiana's offshore waters ​that we alluded to previously... 

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Injection wells exist to hold fracking wastewater — but the water can move. Here's how --Salty wastewater produced by fracking for oil and gas has to go somewhere. Often, it’s injected into disposal wells deep underground. But sometimes that wastewater can find its way back to the surface and cause environmental problems. Injection wells, oil and gas wells, and older, abandoned wells are often all in one area.“When you have this many wells in the landscape that makes the landscape Swiss cheese,” said geologist Terry Engelder, Penn State professor emeritus. Engelder’s work, indicating how much natural gas might be accessible by fracking, earned him the nickname “Father of the Marcellus Shale.” Injecting wastewater into underground rock layers could create problems if there are a large number of wells in the vicinity.Just last month, an unused gas well in Noble County, Ohio started spewing salty brine water. According to the Ohio Department of Natural Resources (ODNR), more than 1.5 million gallons of the wastewater were collected, but not before enough escaped into a nearby creek to kill fish and salamanders. This screenshot from a video posted to Facebook by Amber Deem shows what she claims is the gas well spewing what’s suspected to be wastewater from fracking operations.Engelder examined state records and thinks that brine spray was wastewater from a nearby injection well.The injection well and the unused well were drilled into the same underground rock formation, a sandstone layer nearly 6,000 feet underground.“It flowed along the Medina [sandstone] 2.54 miles, and then back up,” he said. He also theorized that the wastewater could have come from another injection well in the Medina sandstone nearly four miles away.Drilling an injection well into the same layer as other oil and gas wells makes wastewater migration more likely, Engelder said.He looked at a sample of 35 injection well depths in Ohio and found many were drilled to the Medina sandstone layer, the same layer as many older, abandoned oil and gas  wells.In another migration incident in 2019, in Washington County, Ohio, ODNR concluded that brine from an injection well drilled into shale migrated into an adjacent layer of sandstone, contaminating multiple gas wells five miles away.

State Republicans seek to ban cities from limiting natural gas development  - Ohio lawmakers are considering a pair of bills that would block cities and counties from opting out of pipeline projects or limiting the use of natural gas. Lobbyists representing the coal and natural gas industries appeared before the House Energy and Natural Resources committee Wednesday in support.House Bill 192 would prohibit city or county governments from banning the use of “any fossil fuel” for energy generation or the construction of a natural gas pipeline through the jurisdiction. House Bill 201, similarly, would block local governments from passing any ordinance that “limits” or “prevents” consumer access to natural gas. Supporters of the state legislation, namely the energy industry, say cities banning energy sources will lead to price increases for consumers and an unworkable minefield of regulations and no-fly zones for energy providers.“[HB 201], in turn, will keep Ohio from becoming a hodgepodge of local ordinances where one community has access to fossil fuel energy and another, just a short distance away, does not,” said Ohio Oil and Gas Association President Matthew Hammond.As Jimmy Stewart, president of the Ohio Gas Association noted, some Ohio cities have shifted away from fossil fuels. Cleveland, Cincinnati, Euclid and Lakewood have all passed resolutions establishing a goal of operating on 100-percent clean, renewable energy by 2025. The city resolutions came after the passage of House Bill 6 in 2019, which gutted the state’s efficiency and renewable energy standards.The bill is now at the center of a federal bribery investigation that has yielded the indictment of the former House Speaker Larry Householder, former Ohio GOP chairman turned lobbyist Matt Borges and late lobbyist Neil Clark. Householder’s political strategist, Jeff Longstreth, and lobbyist Juan Cespedes have pleaded guilty to their role in the alleged racketeering scheme.

Ohio, Louisiana want to intervene in Line 5 federal lawsuit -The states of Ohio and Louisiana have asked to intervene in a federal court case over the future of Enbridge's Line 5 pipeline through Michigan's Straits of Mackinac. The states, led by Ohio Attorney General Dave Yost, filed a request Friday seeking amici status in Enbridge's case against the state government's revocation of its 1953 easement through the Straits of Mackinac. As early as July 2019, Ohio Gov. Mike DeWine's office expressed concern about how a Line 5 closure would hurt refinery jobs, fuel costs and disrupt airline schedules that rely on timely deliveries of fuel that stems from the pipeline.Ohio's two refineries near the Michigan border supply fuel to Ohio and southeast Michigan, including Detroit Metro Airport, DeWine said in the 2019 letter. Ohio could lose up to 1,000 refinery employees in Toledo if Line 5 were shut down, the motion said."The threat is not limited to Ohio or its refineries; it extends to workers, consumers and industries throughout Michigan, Ohio, Indiana and the surrounding region and could result in additional layoffs and other economic harm," the motion said.  Line 5 owner Enbridge has argued the state can't shut down the dual pipeline because it falls under the jurisdiction of federal regulators, such as the Pipeline and Hazardous Materials Safety Administration. The Canadian pipeline giant and the state of Michigan are expected to have their first meeting with a mediator in April. Michigan has not supported Ohio and Louisiana's intervention in the case, according to the motion.

Ohio, Louisiana argue against Line 5 shutdown in federal court— Ohio Attorney General David Yost is asking a federal judge in Grand Rapids to block Michigan Gov. Gretchen Whitmer’s effort to shut down the Enbridge Line 5 pipeline, arguing on behalf of Ohio refineries and the state of Louisiana that closing the submerged oil line would have economic impact beyond Michigan. Yost filed an amicus brief on Friday, March 19 in the case Enbridge brought against Whitmer last fall, which is pending before Judge Janet Neff in the Western District of Michigan. The case is scheduled to begin mediation in April. In the brief, Yost argues that closing the pipeline segment under the Straits of Mackinac would cause economic hardship for businesses supplied by the pipeline. In November, Whitmer announced termination of the 1953 easement that allows the pipeline to cross the lakebed where lakes Michigan and Huron connect. She gave Enbridge until May 12 to stop the oil flow, a deadline the company says it won’t comply with absent a court order. “Ohio refineries, their employees, and key industrial stakeholders directly rely on Line 5′s crude oil supply, and its economic effects are strongly felt in the Buckeye State and beyond,” Yost wrote. “Ohio, joined by Louisiana, respectfully urges the court to carefully balance protections for both the environment and the economic health of individuals and businesses on both sides of the border by allowing Line 5 to continue to operate safely.” Case documents indicate Michigan opposes the motion but the state has not yet filed a reply. Enbridge allies have mounted a full-throated defense of the controversial pipeline this year. Canadian government and business officials are lobbying the Biden Administration to intercede in Whitmer’s decision and are threatening to invoke a 1977 treaty governing the operation of cross-border pipelines unless Michigan backpedals the closure order. Seamus O’Regan, Canadian natural resources minister, told a parliament committee earlier this month that the pipeline’s operation is “non-negotiable.” The 68-year-old, 645-mile pipeline runs from Superior, Wisconsin to Sarnia, Ontario by way of Michigan. It is a key part of Enbridge’s Lakehead network that carries light crude and natural gas liquids under the Straits of Mackinac. Its existence has caused escalating concern since another Enbridge pipeline caused a massive oil spill in 2010 on the Kalamazoo River. Because the pipeline crosses both Michigan peninsulas and many waterways, opponents see little benefit but substantial risk for the state from its existence and dismiss economic concerns around its closure as overblown.

Chesapeake fined $1.9 million for wetland, stream violations in PA - Federal and state regulators have proposed a $1.9 million fine against Chesapeake Energy for damaging dozens of wetlands and streams at its gas drilling sites in Pennsylvania. According to a complaint lodged in federal court in Williamsport, Oklahoma-based Chesapeake illegally damaged wetlands and streams at 76 well sites, in Beaver, Bradford, Sullivan, Susquehanna, and Wyoming counties. The regulators say the company filled in, dredged, or otherwise encroached on protected waterways at the sites without obtaining the proper permits. The Pennsylvania Department of Environmental Protection says the company alerted regulators about the possible violations in 2014, after a similar investigation in West Virginia found the company had diverted or impacted over 2 miles of streams. The company conducted an internal audit of its Pennsylvania operations and found it diverted or filled in over 28 acres of wetlands and 2,300 feet of streams. As part of a proposed consent decree with federal and state regulators, the company will restore a total of 55 acres of wetlands and repair over 4,000 feet of streams. “This settlement resolves many violations over several years and leads to a net increase of wetlands and restored streams,” said DEP secretary Patrick McDonnell, in a statement. McDonnell applauded Chesapeake for coming forward to disclose its violations.  The investigation and subsequent agreement in Pennsylvania was held up byChesapeake’s bankruptcy case, which ended in January.

Every Pa. community deserves protection from the harms of fracking - All communities, whether rural or densely populated, deserve protection from harm. Public and private water supplies are critically important to the individuals, families, and communities who rely on them.For far too long, extractive industries have paved the way for our elected officials to turn the Ohio River into a dumping ground. Five million people rely on the river for their drinking water, yet it remains one of the most polluted in the country, despite decades-long cleanup efforts. Communities throughout the region have had enough: local residents are coming together to create a world that puts people’s health and well-being over fossil-fueled corporate profits.For residents of the Ohio River Valley, news of the Delaware River Basin Commission’sdecision to permanently ban hydraulic fracturing in the Delaware River Basin was met with conflicting emotions. While the victory is tremendous because it is (finally) an admission of the harms of fracking, and the precedent established is critically important, it just isn’t enough.Until every community in every region is shielded from the health and economic damage and destruction the petrochemical industry wields, our work is not finished.After more than a decade of research, we’ve learned unequivocally that it’s impossible to make hydraulic fracturing safe; the process is inherently dangerous and laden with risk. We cannot prevent the fine particulate pollution and release of radioactive materials into our environment any more than we can control for a potential methane leak or prevent an earthquake from forming under the ground on which we stand. Fracking puts our communities and the people we love at constant risk, and it weighs heavily on all of our shoulders.The toll of the petrochemical industry’s destructive tactics is devastating. Oil and gas companies roll into our communities, destroy our land, pollute our air, and accelerate the global climate crisis – then leave when profits are low and liabilities high.A growing body of research has linked fracking to negative impacts on pregnancy and infant development, asthma, skin rashes, heart problems, and potentially cancer. Many of us in southwestern Pennsylvania have been paralyzed with fear as rare childhood cancers have spiked in four of our heavily-fracked counties.The People Over Petro Coalition believes that people—our health, welfare, and interests—must be respected and protected over petrochemicals and the life-cycle impacts of its upstream and downstream industries, including plastics. Together, we are working to reverse the expansion of the petrochemical industry in the Appalachian Basin and encourage a clean, renewable, and regenerative economic foundation.

Consumer protection law can’t be used to sue gas and oil firms over land leases, Pa. Supreme Court says - The state attorney general’s office can’t invoke Pennsylvania’s consumer protection law to sue two oil and natural gas firms on behalf of private landowners who claim they got raw deals in leasing their mineral rights, a divided state Supreme Court has ruled. With Justice Kevin Dougherty dissenting, the high court concluded the Pennsylvania Unfair Trade Practices and Consumer Protection Law protects only buyers, not sellers, from being swindled. That law therefore cannot be invoked in the case the AG’s office filed against Chesapeake Energy Corp. and Anadarko Petroleum Corp. because those firms were buying, not selling, leases to secure rights to oil and natural gas reserves beneath land the property owners possesses in Marcellus Shale regions of the state, Justice Sallie Mundy wrote in the Supreme Court’s majority opinion. That decision voids a ruling by Commonwealth Court ruling that upheld the legal ability of the AG’s office to press on with the suit it originally filed in Bradford County Court. The case focused on the actions by Anadarko and Chesapeake in the purchase of natural gas leases in Bradford, Centre, Clinton, Lycoming, Potter, Sullivan, Tioga and Wyoming counties. The AG’s office claimed the firms struck a deal to divide the territories between them, thereby eliminating competition and keeping down the prices the firms had to pay for leases. That constituted an unfair and deceptive business practice, the AG’s office contended. The consumer protection law isn’t the vehicle for addressing that issue, Mundy found, because it “simply does not regulate buyers’ conduct in commercial transactions.” In dissenting, Dougherty argued the AG should be allowed to continue pressing the suit because the consumer protection law governs “trade and commerce,” and that is what Anadarko and Chesapeake were engaging in when they sought leases.

PA Democrats allowed to intervene in Delaware River anti-fracking lawsuit -The first round in the ongoing lawsuit challenging the Delaware River Basin Commission's authority to ban fracking in its jurisdictional waters has gone to the State Democratic Caucus. A knockout blow could be landing as soon as April. "About two weeks ago in New Hope, we announced the filing of our initial motion" to be added to the case as interveners, said State Sen. Steve Santarsiero, D-12 of Lower Makefield, during a news conference Wednesday afternoon. "The court has granted that motion and entered that order last Friday. "We now will not file anything at least until April, and that will be a motion to dismiss." Santarsiero and the democratic caucus filed a motion to intervene in a lawsuit seeking to stem Republican attempts to again open up the Delaware River basin to fracking. Hydraulic fracturing, also referred to as "fracking," is the process of drilling into host formations such as shales and tight sandstones, and injecting fluids and sand under pressures great enough to fracture the rock formations to allow the extraction of oil and gas, according to the Environmental Protection Agency. In a one-page order from U.S. Eastern District of Pennsylvania Judge Paul S. Diamond, the judge allowed the "Senator Intervenors," namely Santarsiero, Carolyn Comitta, Amanda Cappelletti, Maria Collett, Wayne Fontana, Art Haywood, Vince Hughes, John Kane, Tim Kearney, Katie Muth, John Sabatina, Nikil Saval, Judy Schwank, Sharif Street, Tina Tartaglione, and Anthony Williams, to be added as defendants in the Sen. Gene Yaw v. The Delaware River Basin Commission. Yaw and other GOP lawmakers want the ban overturned and filed suit after the commission banned fracking in the watershed last month after years of discussion and debate. "The motion will seek to dismiss the case on the grounds that is not supported by state law; I feel our position is strong and the plaintiffs lack standing, " Santarsiero said. "As I mentioned a few weeks ago when we filed to intervene, the Pennsylvania Constitution is pretty clear."

Opponents of Pennsylvania-New Jersey LNG plan cheer federal ruling -Critics of a plan to transport liquefied natural gas from northeastern Pennsylvania to a port on the Delaware River in New Jersey welcomed a recent federal ruling that they say could put up significant regulatory speed bumps – or possibly derail the project altogether.The ruling, by the Federal Energy Regulatory Commission, involved an LNG facility in Puerto Rico run by New Fortress Energy. The company had sought a ruling that FERC lacked jurisdiction over the facility but the commission ruled on March 19 that it does have oversight.That decision is significant for what bearing it might have on another New Fortress Energy-related project, which would process natural gas at a plant in Wyalusing, Pa., liquefy it through super-low temperatures and then send it via rail and/or highway to a port in Gibbstown, N.J.“With the caveat that this is speculation, but informed speculation, I will say yes, this does have an impact on Wyalusing,” said Jordan Luebkemann, an associate attorney for Earthjustice, which opposed the New Fortress special permit allowing LNG to be transported by rail.New Fortress has sought to have FERC disclaim jurisdiction over the project, which has already gained numerous federal, state and local permits, including one from the Delaware River Basin Commission.A full-fledged FERC review could set off environmental assessments that could consider the ecological, cultural and human impacts of the project.That, in turn, could also mean opportunities for litigation to challenge the quality and thoroughness of those reviews – all of which could amount to added time, scrutiny and chances for the project to be delayed or derailed. New Fortress has two filings pending before FERC seeking declarations that both the Wyalusing and Gibbstown sites are free of its oversight. A FERC spokeswoman, Tamara Young-Allen, said the filings remain pending. Citing regulations against discussing the timing of a proposed action, she would not estimate when the commission might render rulings.

Federal court ruling may clear the way for natural gas pipeline through WNY -The long-delayed Northern Access natural gas pipeline may have received its final approval Tuesday – from three federal judges in New York City. That panel of the U.S. Second Circuit Court of Appeals ruled unanimously against the state Department of Environmental Conservation and the Sierra Club in their efforts to block the project, even though the judges wrote that National Fuel "flimflammed" the DEC in a dispute over legal deadlines. It's the latest – and, unless the DEC and the Sierra Club appeal to the Supreme Court, perhaps the last – courtroom victory for National Fuel and its Empire Pipeline subsidiary. While the DEC said it was "disappointed" by the ruling and was considering its options, National Fuel said it was "very pleased." "Today’s ruling certainly clears the most significant hurdle facing the continued development of the Northern Access project," spokeswoman Karen Merkel said. "We're going to keep fighting this," said Diana Strablow, vice chair of the Sierra' Club's Niagara Group. The company's $500 million pipeline would carry natural gas from the fracking fields of McKean County, Pa., through Allegany, Cattaraugus and Erie counties, to a connection to a Canadian pipeline beneath the Niagara River at Chippawa, Ont. The package also includes some additions to National Fuel's system in Niagara County: about 2 miles of pipelines; a gas dewatering station on Liberty Drive in Wheatfield; and a pair of 22,000-horsepower compressors on Killian Road in Pendleton. But the main project is the 96.5-mile pipeline from Pennsylvania to the Niagara River. It's a 24-inch-wide pipeline, to be laid in a 75-foot-wide right of way. New York's highest court has ruled National Fuel has eminent domain power to seize land from property owners along the route.

Why A Federal Order In The Weymouth Compressor Case Has The Natural Gas World Worried - In the six years since Massachusetts residents began fighting a proposed natural gas compressor station in Weymouth, the controversial and now-operational project has mostly been an issue of local concern. Not anymore. As a challenge to the compressor station’s permit to operate winds its way through the Federal Energy Regulatory Commission (FERC) — the agency in charge of approving interstate energy projects — some on the five-person body have signaled that they’re no longer interested in doing business as usual. In a 3-2 vote last month, the commission began what some FERC experts are calling “a seemingly unprecedented” review process that not only raises questions about the future of the Weymouth Compressor, but has many in the gas industry worried about the fate of their current and future projects. At the simplest level, this case is about whether FERC should hold a hearing to relitigate the Weymouth Compressor’s license to operate, known as a “service authorization order.” This happens all the time when project opponents appeal a FERC decision. But two things make this situation unique: the potential precedent it could set, and the fact that FERC has a new commissioner who has promised to give more weight to climate change and environmental justice concerns.  The Weymouth Compressor was designed to be the linchpin of a large interstate gas pipeline system called the Atlantic Bridge Project. The project connects two pipelines and allows fracked natural gas from western Pennsylvania to flow through New Jersey and New England, and into Maine and eastern Canada for local distribution. Though no public opinion polling about the compressor exists, there is intense opposition to it here in Massachusetts, that tends to focus on four issues:

• Public health and safety: Though rare, compressor stations occasionally catch fire and explode. For this reason, most are built in rural places. The Weymouth Compressor, however, is in a densely populated area that’s prone to flooding and near a busy highway. The site itself is near schools, senior housing and a mental health facility. Safety concerns about the compressor increased after two unplanned shutdowns in September triggered a federal investigation.
• Environmental justice: Weymouth has a long history of air pollution and soil contamination. The compressor site is near two state-designated “environmental justice” communities, not to mention a gas-fired power plant, a chemical plant, a sewage pelletizing plant, a gas metering station and the highly trafficked Fore River Bridge. Residents in the area have statistically higher rates of cancer, pediatric asthma and cardiovascular and respiratory diseases, and according to the Greater Boston Physicians for Social Responsibility, the “compressor station is, even by data provided by the company itself, likely to worsen the health and safety at this already at-risk community.”
• Climate change: Between growing evidence that natural gas pipelines emit a lot of the potent greenhouse gas methane, and the fact that the compressor station will periodically release gas and other volatile organic compounds during “blowdowns,” many environmentalists worry about the project’s climate impacts.
• Whether the project is needed: When the compressor was first proposed, the developer said it had customers lined up to buy the gas. In the years since, that picture has changed. Enbridge, the company that now owns and operates the Weymouth Compressor, says it currently has contracts with six gas distribution companies in Maine and Canada, though it declined to say how much gas each receives. Anti-compressor activists are skeptical about the actual demand, and maintain there are enough questions to warrant another look from federal regulators.

Fracking No Cure-All for Appalachia's Economy -Fracking has rapidly raised the economic output of northern Appalachia, but a new report finds rural residents haven’t gained much from that growth.“In a perfect world, the other indicators — jobs, income and population — would go up more or less proportionately (with output), and that’s what manifestly did not happen,” said Sean O’Leary, the author of the document for the Ohio River Valley Institute.Natural gas organizations said the report cherry-picks data, and they pointed out that it comes from a think tank that supports transitioning away from natural gas.The report looks at the change in several economic metrics for 22 fracking-heavy counties in Pennsylvania, Ohio and West Virginia between 2008 — before the drilling boom — and 2019.The most spectacular increases came in gross domestic product — the value of goods and services produced. The shale counties grew at three times the national average, O’Leary said. They also produced the 10 largest GDP increases among the nearly 300 counties in Ohio, Pennsylvania, West Virginia, New York and Maryland, according to supplementary analysis by Lancaster Farming.A big boost in GDP would usually mean local people see their incomes rise accordingly, but O’Leary found that only about 20% of the economic growth entered the county economies. Many natural gas workers and allied businesses come from out of state, and royalty recipients are not spending or investing all of their windfall locally.“Much of the revenue is landing elsewhere,” O’Leary said. Job growth was one of the biggest selling points for the industry at the advent of the drilling boom. Studies projected fracking would feed the three states over 450,000 jobs — more than the population of Pittsburgh. By O’Leary’s count, the industry has fallen far short of that hype, eking out just 5,600 jobs across the 22 counties.

The Fracking Shill Local Newspapers Love to Publish --   “If we hit our CO2 targets and every one of us are living in abject poverty, is that really how you really want to live?” Greg Kozera is making his pro-fracking case to me. Later in our phone call, he’ll argue that renewable energy depends on child labor in Congolese cobalt mines and observe that his golden retriever lived to the ripe age of 14 years old romping around three fracking wells, proving that the practice poses no health risks. He makes a version of this case every weekend in the opinion pages of newspapers throughout Ohio, West Virginia, and Pennsylvania—the case for natural gas, for industry, and, if you take his word for it, for America.Four years ago, an editor at the Parkersburg News and Sentinel in West Virginia contacted Shale Crescent USA, a nonprofit “messaging” organization in Marietta, Ohio, whose funders include natural gas companies and pipeline construction companies, to ask what the group’s work entailed. Kozera, a former oil and gas salesman who now serves as Shale Crescent’s head of marketing, responded by suggesting the paper run a five-part series, authored by himself, about how to return jobs to the Mid-Ohio Valley by embracing natural gas. The series debuted in August 2017 and was such a hit, to hear Kozera tell it, that the paper offered him a weekly column. Then the column started getting picked up by other regional papers, including the Charleston Gazette-Mail and occasionally the Columbus Dispatch. Today, Kozera’s weekly pro-fracking column often runs in eight to 10 local papers throughout the Ohio River Valley, reaching anywhere from 60,000readers to well over 200,000 if his column is picked up by the region’s major papers like the Gazette-Mail, Dispatch, or Akron Beacon Journal.It reaches even more when recirculated by national publications like the New York Daily News, which has one of the largest readerships in the country. Four years after the News and Sentinel’s initial inquiry, Kozera is now one of the most ubiquitous voices in the fracking conversation in the Marcellus Shale region, which stretches from southern New York down through the three crucial battleground states of West Virginia, Ohio, and Pennsylvania. And for nearly as long as he’s been writing those columns, environmentalists and climate scientists have asked the newspapers publishing his words a simple question: Why have they given this man a megaphone?

Mountain Valley Pipeline's once-favorable gas economics fall amid completion hurdles - As EQM Midstream Partners tries to overcome legal and regulatory hurdles that have so far prevented it from completing its Mountain Valley Pipeline, a further delay or cancellation of the project could impact US Northeast gas flows and prices after Dominion Energy scrapped the Atlantic Coast Pipeline in 2020, S&P Global Platts Analytics data show.Despite demand from downstream customers in the mid-Atlantic and Southeast, new pipelines that would connect those markets with abundant supplies of Appalachian Basin gas have struggled to get built due largely to permitting challenges, pressure from environmental groups and shifting economics.A group of Republican lawmakers is pushing legislation that would speed up permitting and reduce costs of new US energy infrastructure, but the prospects are uncertain under the Biden administration and Democratic-led Congress. Dominion cancelled the $8 billion ACP last July, citing legal hurdles and ballooning costs.While the 303-mile, 2 Bcf/d Mountain Valley Pipeline could feasibly argue that its value proposition has only grown in the wake of the Atlantic Coast Pipeline cancellation, the project's once-favorable economics have been diluted by a combination of rising costs and narrowing spreads. When it was initially filed, Mountain Valley proposed a maximum interruptible rate of about $0.97 per dekatherm -- the equivalent of the all-in cost for firm transportation, including reservation and variable charges.But at that time the project was estimated to cost roughly $3.25 billion. Substantial delays and permitting challenges have caused cost estimates to balloon to as high as $6 billion, indicating that all-in costs to ship on Mountain Valley, when it does come online, could be nearly double the rate assumptions underpinning the early project prospectus.And while the costs to ship on the project have grown, the spreads the pipeline is designed to capture—between Dominion South on the upstream end and Transco Zone 5 downstream—have come under heavy pressure as earlier demand-growth forecasts for the mid-Atlantic region have failed to fully materialize, Platts Analytics data show.In 2014, when Mountain Valley was initially offered at open season, spreads between Dominion and Zone 5 for calendar year 2022 were trading at nearly $1.50/MMBtu, well above the roughly $1 it would cost to ship on Mountain Valley.But now, nearly seven years later, that spread has collapsed to only around $1/MMBtu, while costs have risen. Even if the project's costs remained flat over the last seven years, the spread would still generally be out of the money.

FERC rejects bid to halt Mountain Valley construction -- Thursday, March 25, 2021 -- The Federal Energy Regulatory Commission yesterday denied a bid to stop construction on parts of the embattled Mountain Valley pipeline, despite a stern rebuke from the agency's two Democratic members.

Montgomery County tree-sit ends with removal of second pipeline protester - — Nine-hundred and thirty-one days after the first pipeline protester went up in the trees off Yellow Finch Lane, the last one came down Wednesday. Using a construction crane, law enforcement officers removed a Massachusetts man from a tree stand where he had been blocking work on the controversial Mountain Valley Pipeline. The day before, a protester from Vermont was extracted in the same way. Ever since Sept. 5, 2018, an unknown number of mostly anonymous activists have taken turns living in two tree stands about 50 feet off the ground, near the top of a steep, wooded slope. Their strategic position in the pipeline’s path prevented tree-cutting without the risk of injury or death, and made removing them a challenge. But in the end, police went even higher. A crane stationed on Yellow Finch Lane, downhill from the tree-sits, used its boom to lift an industrial bucket, with two state police officers aboard, higher than the tallest tree, according to Sara Bohn, a member of the Montgomery County Board of Supervisors who was allowed to witness the removal. The officers were then lowered down to a spot where they could reach the protesters and pull them from their perches. Late Tuesday afternoon, Claire Marian Fiocco, 23, of Dorset, Vermont, was removed and charged with interfering with the property rights of Mountain Valley.The next day around noon, the last remaining tree-sitter — Alexander Samuel Parker Lowe, 24, of Worcester, Massachusetts — was extracted and charged with obstructing justice and interfering with property rights. Both Fiocco and Lowe were being held without bond Wednesday. Montgomery County General District Court Judge Gerald Mabe denied Fiocco bond on Thursday, saying that he was concerned that Fiocco is accused of violating a court order to leave pipeline property. Mabe said that normally a trespassing case would have no presumption against bond, but the nature of the tree-sitter case left him with no confidence that Fiocco would obey any restrictions he might impose. “It is with a heavy heart that the court is going to deny your motion for bond,“ Mabe said. The judge added that Fiocco could appeal his decision to the Circuit Court — the same court that ordered tree-sitters to come down last November – if she did not want to remain in jail until May 5, when her trespassing charge is scheduled to be resolved.

Byhalia Pipeline wants the land, but the Shelby County Commission isn’t selling - County-owned land sought by Byhalia Pipeline will stay with the county, the Shelby County Commission decided Monday. The commission’s 9-2 vote to hold onto two vacant properties that developers needed to construct the controversial 49-mile Byhalia Connection Pipeline puts a snag in the company’s plans to build the crude oil pipeline through southwest Memphis. It’s a win for the community organizers who have fought the project for months and more recently with the help of high profile backers such as former Vice President Al Gore and actors Danny Glover and Mark Ruffalo. But developers have already made clear that if one route was blocked, they’d try others. Before the vote, Commissioner Tami Sawyer urged her colleagues to reject the sale and thwart what she and other pipeline opponents consider environmental racism. “I’m just going to ask each of our fellow commissioners to rise to the occasion and listen to the people who are facing eminent domain, who already live in cancer clusters, who have lost a significant amount of family members to health issues due to dumping and pollution of their air and water — just due to the ZIP code that they live in,” Sawyer said. “We declared racism a pandemic six months ago and yet we continue to pass and ignore things that fall into the line of what racism as a systemic institution looks like. This is a case of environmental racism playing out once again in Shelby County.”

Proposed Byhalia Connection Pipeline finds resistance down so-called “path of least resistance” - The smoke stacks from the Valero Refinery poked above the tops of the leafless trees as Romone Anderson was taking bag after bag of trash to his curb. It was a Monday morning and a train had just finished rolling through, slightly visible between the trees behind his house. Following the route of those same tracks – who did not know until a reporter told him – is the path of the proposed Byhalia Connection Pipeline.  “We haven’t even been informed, and it’s running basically right through the back of our house. It’s really going to affect us and I want to learn what’s going on,” he said. Anderson and his family moved into the home two years ago. Being a Chicago native, he is no stranger to declining water quality, but he had no idea that an oil company had planned to build a pipeline a few hundred feet from his house. In an area that has been zoned for industries, spokespeople from Plains All American – the parent company of Byhalia Pipeline LLC – said that the planned route was decided as it was “the path of least resistance.” “That’s some real racist shit to say,” Anderson said, shaking his head while reading. “I don’t think they’re right though. These people have been here for 15 to 20 years, and I don’t think this is going to be as easy as [the company] thinks it’s going to be.” The “gaffe” has become somewhat of a rallying call to grassroots movements in the area, as well as to city, state and national representatives. On March 14, a rally was hosted by Memphis Community Against the Pipeline (MCAP), a Southwest Memphis group that has garnered national attention for their fight against Plains. That rally featured a range of speakers, from local landowners – such as Clyde Robinson and Scottie Fitzgerald, to national political figures – like former Vice President Al Gore and U.S. Congressman Steve Cohen.

Natural Gas Futures Post Back-to-Back Gains; Cash Prices Climb --Natural gas futures on Monday advanced for a second consecutive session, boosted by continued robust liquefied natural gas (LNG) levels. The April Nymex contract settled at $2.582/MMBtu, up 4.7 cents day/day. May gained 5.3 cents to $2.619. NGI’s Spot GasNational Avg. rose 4.0 cents to $2.310, with prices up across the Rocky Mountains region along with a snow storm to start the week.LNG feed gas volumes held well above 11 Bcf to start the week after approaching 12 Bcf during last Friday’s trading. The export activity boosted the prompt month on Friday by 5.4 cents and continued to help drive market momentum on Monday.Asian demand for U.S. exports continues after a particularly cold winter, and European demand for American gas is on the rise afterstorage inventories there dwindled early in 2021. As of mid-March, there was 361 TWh of natural gas in storage in the European Union, representing only a third of the region’s capacity, according to NGI data. That is nearly 270 TWh below the year-earlier level.However, domestic demand is in a precarious state with weather forecasts increasingly calling for warmth and minimized heating needs the rest of this month and into April. Analysts said the weather backdrop has prevented any sustained rallies this month and may challenge the current winning streak this week.Bespoke Weather Services said the picture was as bleak “as it can be at this time of the year.”

Natural Gas Futures Flop As Weather Conditions Overshadow LNG Momentum - Just as a rally started to mount, natural gas futures stumbled on Tuesday and dashed hopes for a three-day winning streak. Strong liquefied natural gas (LNG) levels had propelled the prompt month over the two prior trading sessions, but continued forecasts for weak domestic weather demand curbed the momentum. The April Nymex contract shed 7.4 cents day/day and settled at $2.508/MMBtu Tuesday. May fell 6.5 cents to $2.554. NGI’s Spot Gas National Avg. inched ahead 1.0 cent to $2.320. LNG feed gas volumes hovered close to 12 Bcf/d late last week – around record levels — and have held comfortably above 11 Bcf this week, thanks in part to strengthening European demand for U.S. exports. This strength is linked to “declines in European storage, suggesting that U.S. injection-season LNG exports are likely to be strong — tightening the market later this year,” EBW Analytics Group said. The LNG demand also reflects confidence in coronavirus vaccination programs and that “economic shut-ins are increasingly unlikely,” the EBW team said. Still, “LNG demand may remain subject to temporary reductions due to maintenance or tropical storms.” 

US gas in storage posts larger-than-expected pull in likely last draw of season | S&P Global Platts — US gas storage volumes declined more than the market expected in the week ended March 19, prompting a slight rise to the Henry Hub summer strip despite the likelihood of injection season starting a week ahead of schedule. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up Storage inventories decreased 36 Bcf to 1.746 Tcf for the week ended March 19, the US Energy Information Administration reported the morning of March 25. The withdrawal was more than the 21 Bcf draw expected by an S&P Global Platts survey of analysts. It was also greater than the 26 Bcf draw reported during the same week last year but still under the five-year average withdrawal of 51 Bcf, according to EIA data. Regionally, most of the error came from underestimating the gains in demand as part of the long recovery from February's Arctic blast. While there was a slight uptick in total supplies, led by gains in net Canadian imports and bolstered slightly by higher production levels offshore, the tighter balances were mainly a reflection of stronger demand week on week, according to S&P Global Platts Analytics. The increase of about 400 MMcf/d of supply, which averaged right at 97 Bcf/d during the week, paled in comparison with the 1.7 Bcf/d increase seen on the demand side. Demand was mainly driven by continued gains in LNG feedgas deliveries and home heating demand, possibly the last gasp of winter as markets transition toward the summer injection season. Storage volumes now stand 263 Bcf, or 13%, less than the year-ago level of 2.009 Tcf and 78 Bcf, or 4.3%, less than the five-year average of 1.824 Tcf. The storage report added a modest dose of bullish sentiment into the market after a steady downward march the last six weeks. Prompt-month NYMEX Henry Hub April traded about 5 cents higher the morning of March 25 at $2.57/MMBtu, while the balance-of-summer strip added about 3.5 cents of support from the slightly larger-than-anticipated draw from inventories. With the summer strip now pricing in around $2.69/MMBtu, the outlook sits roughly 10 cents higher than a week ago, but still 10 cents lower than it did two weeks ago, indicating the market is wavering but relatively consistent on the expected price of gas from April onward. Platts Analytics supply and demand model currently forecasts a 14 Bcf net injection for the week ending March 26, which would stand in stark contrast to the five-year average draw of 24 Bcf. Warmer temperatures this week are driving a 7 Bcf/d decline in total US demand and positioning the markets for what will likely be the final reported storage withdrawal of the season before inventories start to replenish over the next seven months.

As Spring Warmth and Expiry Loom, April Natural Gas Futures Slide -Despite robust U.S. export levels and signs of stronger Gulf Coast industrial demand, natural gas futures drifted lower on Friday, finishing in the red for only the second time during the trading week. The April Nymex contract settled at $2.557/MMBtu, down 1.3 cents day/day. May, however, inched up three-tenths of a cent to $2.619. The April contract rolls off the board following Monday’s trade. If prices were to hold up through then, the new prompt month would open comfortably ahead of $2.600. NGI’s Spot Gas National Avg., meanwhile, fell 7.0 cents to $2.215. Demand for U.S. liquefied natural gas (LNG) held strong Friday, as it has for most of this month amid dwindling supplies and increasing need for imports in Europe. LNG feed gas volumes approached 11.6 Bcf on Friday, according to NGI data. Volumes held above the 11 Bcf threshold all week, as they have over a majority of days in March. This has helped to offset modest weather-driven demand domestically, as the Lower 48 segues into the spring season, when heating needs fade and most Americans only begin to run air conditioners amid mild temperatures. Bespoke Weather Services said Friday “below-normal demand is still favored quite easily over the next few weeks.” Bouts of rain and thunderstorms were expected to inject doses of regional heating demand in the week ahead. Overall, however, weather is expected to play a minor role for the next few weeks in terms of driving use of natural gas. That outlook kept futures in check Friday. That noted, recovering industrial demand following the Artic freeze that rattled the Texas energy industry in February could provide near-term boosts to demand. Analysts said such demand increases were evident in Thursday’s bullish inventory report.

State laws halting municipal gas bans unlikely to stem power burn declines in 2021 — As state governments across the US continue to ban local restrictions on natural gas usage, higher prices and growing renewable power supply are still likely to weaken demand for the fuel this year. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up Kansas on March 24 moved one step closer to enacting legislation to require municipalities across the state to ensure the provision of gas and propane as options for consumers. Known as the Kansas Energy Choice Act, Senate Bill 24 was passed by the state's House of Representatives in a 93-29 vote. The measure was previously passed by the Kansas state Senate in February. With the approval of Governor Laura Kelly, a Democrat, Kansas would join Arizona, Tennessee, Oklahoma, Louisiana, Utah, Arkansas and Mississippi to have enacted legislation to preemptively stop municipalities from banning gas usage in local buildings, according to reporting from S&P Global Market Intelligence. The move comes in response to an ordinance passed in March 2020 by the city of Lawrence, home of the University of Kansas, setting a goal for 100% renewable-sourced power usage in the municipality by 2035. With pending legislation in another 15 states, lawmakers stretching from the East Coast to the Desert Southwest are now attempting to enshrine, within state laws, a guaranteed market share for gas. While those efforts will likely ensure continued demand for the fuel in some residential-commercial settings, the laws are unlikely halt price-driven fuel switching or growing wind generation in the power sector – both of which are likely to depress demand for gas this year. Across the Midwest, the Southeast and Texas, where the momentum for bans against local gas restrictions has been strongest, generator demand for the fuel is down this year. Gas-to-coal switching has impacted demand from power generators in all three regions, but year-on-year declines in the Midwest have been among the largest in percentage terms owing to the compounding effect of higher wind generation, which is more concentrated there. In the Upper Midwest, gas-fired power burn has averaged about 2.3 Bcf/d year to date, down about 600 MMcf/d, or nearly 21%, compared with demand over the same period last year. With late-winter cash prices at key regional hubs like Chicago city-gates, Mich Con city-gate and Northern Ventura up about 85 to 90 cents/MMBtu compared with year-ago levels, generator switching away from gas is likely to blame, at least in part, for the lower power burns.

Abandoned boats cause oil spill in Walker County (WBMA) — Boats left at an abandoned marina have leaked gallons of oil into White Oak Creek in Walker County.According to the Alabama Department of Environmental Management (ADEM) crews were working to contain and clean up the spill.ADEM said it was notified on Saturday of the leaking vessels in the creek in Oakman, approximately a half mile upstream of the Warrior River.The leaking vessels had already caused a visible sheen atop the water when responders arrived on site. EPA’s Region 4 emergency rapid response contractors began placing boom and removing fuel from the water.Responders found five vessels at the abandoned marina – one sunk, another upside down and three partially submerged in the water.The area of the sheen at the marina is estimated at 12,000 square feet.ADEM said accessibility to the marina is limited due to poor road conditions in the area and a local bridge with weight capacity limits that may hamper a vacuum truck in getting to the marina. The Department said it will continue efforts to contain and clean up the spill, closely monitor the situation and investigate the incident.

NATURAL GAS: LNG project axed after climate pushback, lawsuits -- Tuesday, March 23, 2021 -- A coalition of energy companies is pulling the plug on a liquefied natural gas export terminal proposed for southern Texas, project developers said yesterday.

Annova LNG scraps plans for pipeline project in Port of Brownsville -(KVEO) —The Annova LNG gas terminal announced the end of their project for the fracking site at the Port of Brownsville after a 6-year-long battle with the surrounding community, including environmentalists and indigenous tribes. “Annova LNG is not going forward because of years and years of community opposition,” said Rebekah Hinojosa, the gulf coast campaign representative of the environmental group, the Sierra Club. LNG stands for liquified natural gas, and Annova LNG was met with backlash with multiple court hearings and protests from the Brownsville community. “The Point Isabel School District even went as far as to stop a tax subsidy for the project,” said Hinojosa. Hinojosa said that fracking is known to cause earthquakes, water contamination, and air pollution, which caused concerns for the neighboring Laguna Atascosa wildlife preserve. “Home to really critical endangered species…Like the endangered Ocelot, the Aplomado falcon,” said Hinojosa. The Port of Brownsville released a statement regretting the loss of Annova LNG: “The Port of Brownsville regrets Monday’s announcement that Annova LNG will not be moving forward with its proposed LNG export facility at the port. The project offered significant job and economic development opportunities for the entire Rio Grande Valley community over many decades. We appreciate our work with the Annova team and their partnership throughout the process.” Annova LNG released a statement saying that the global market caused its cancelation despite the behind-the-scenes protesting from the area.

Activists Welcome Cancellation of Texas LNG Terminal - In what Indigenous and environmental activists hailed as a testament to the power of grassroots organizing, a leading U.S. fossil fuel company on Monday announced the cancellation of a planned fracked natural gas terminal in southern Texas.Reuters reports liquefied natural gas developer Annova LNG said it will immediately discontinue work on the Brownsville export terminal "due to changes in the global LNG market." The company's facility would have been capable of exporting 6.5 million tonnes per annum (MTPA) of liquefied natural gas. The project was one of three proposed fracked natural gas terminals in the Rio Grande Valley."If built, Annova LNG would have destroyed wetlands, blocked a wildlife corridor threatening the survival of endangered wildlife, and put communities needlessly at risk," said the Sierra Club in a statement Monday."Today's victory is the result of six years of tireless efforts of the Rio Grande Valley communities in South Texas who have written comments, attended hearings, protested banks, and more to protect their health, their precious coastline, and the climate from Annova LNG's proposed fracked gas project," said Sierra Club Gulf Coast Campaign representative Bekah Hinojosa."No LNG export terminal has any place in our communities or our energy future, and today's news is a step in the right direction to putting an end to exporting fracked gas across the world," she added. Juan Mancias, chairman of the Carrizo Comecrudo tribe, welcomed the cancellation in a statement."Ayema ahua'p pele maute alpa Esto'k Gna," he said—It is a good day to be a human being.   "Thank you to all who have worked so hard to fight this fracked gas project and protect our sacred lands from pollution," said Mancias. "There's more work to do to ensure other proposed fracked gas export terminals, which would desecrate our burial sites and sacred lands, are never built, but today we celebrate this important victory for our people and our environment. The other two Rio Grande Valley proposed LNG terminals must be stopped." In addition to the cancelled Annova terminal, the Federal Energy Regulatory Commission during the administration of former President Donald Trump also approved Texas LNG Brownsville's proposal for a four million metric tons per year terminal at the Brownsville Ship Canal and Rio Grande LNG's Rio Bravo pipeline terminal at the Port of Brownsville.

Crude Export Terminal Projects Itching To Join Battle For Barrels - The Moda Ingleside Energy Center (MIEC) in Corpus Christi, the Enterprise Hydrocarbons Terminal (EHT) in Houston, and the Louisiana Offshore Oil Port (LOOP) have been loading more crude oil than any of their Gulf Coast competitors over the last year. In fact, they accounted for nearly half of the total oil exported. As many of the crude exporters have learned the hard way, leading the pack today is no guarantee you’ll still be out front six, 12, or 24 months from now. Despite the global pandemic and the market disruptions it has caused, a number of new export terminals and expansions to existing terminals are still under development, and all of them hope to draw barrels from their rivals. Today, we conclude our series with a look at planned capacity additions to Gulf Coast export facilities. As we said in Part 1, U.S. crude oil exports have been rising steadily since the ban on most exports was lifted in December 2015 — even during COVID-impacted 2020, when export volumes for the first time averaged more than 3 MMb/d. However, the volume of oil being exported from the 20-odd crude-handling terminals along the Gulf Coast varies widely, and since the start of last year almost half of those barrels have been loaded at only three facilities: Moda Midstream’s MIEC; Enterprise Products Partners’ EHT; and LOOP, which is co-owned by MPLX, Shell Pipeline, Shell Oil, Marathon Petroleum, and Valero Terminaling & Distribution. Each of these terminals has its unique features, of course, but what they have in common are access to major production areas, ample storage capacity, and the ability to efficiently load the larger vessels favored by shippers — fully loading Suezmaxes and partially loading VLCCs at MIEC (as we discussed in Part 1), fully loading Suezmaxes at EHT, and fully loading VLCCs at LOOP (see Part 2). The shift in volumes of crude oil being exported from Gulf Coast terminals over the last two-plus years suggests that the competition for barrels is remarkably fluid, not just among individual terminals but among the four major export areas (Corpus Christi, Houston, Beaumont, and Louisiana). For example, in 2019, crude exports out of the broader Houston area (including Freeport, Seabrook, and Texas City; green bar segments in Figure 1) averaged just over 1 MMb/d, followed by Corpus Christi (including Ingleside; yellow bar segments) with about 750 Mb/d, Beaumont (blue bar segments) with about 650 Mb/d, and Louisiana (led by LOOP; orange bar segments) with 225 Mb/d. In 2020, the Corpus Christi area rocketed to the top (with about 1.5 MMb/d of exports, on average), due largely to the start-up of three new Permian-to-Corpus pipelines in late 2019 and early 2020 as well as new storage and dock capacity at a number of export terminals in Corpus and Ingleside. Last year, exports out of the Houston area remained close to flat (at just under 800 Mb/d), while those from Louisiana increased (mostly because of gains at LOOP), and exports from Beaumont plummeted. In 2021 to date, the Corpus Christi area remains on top by a wide margin, with export volumes in the first two-and-a-half months of the year averaging nearly 1.6 MMb/d, or more than double the Houston area’s 740 Mb/d, followed by Louisiana’s 350 Mb/d and Beaumont area’s 170 Mb/d, according to RBN’s weekly Crude Voyager report.

Can't Get Enough - Ethylene Shortages From Plants Crippled by Deep Freeze Roil Petchem Markets - It’s been over a month since the Deep Freeze swept across Texas, shutting down the power grid, curtailing natural gas supplies, and generally wreaking havoc on the state’s population and infrastructure. The petrochemical industry was hit particularly hard, with every ethylene-producing steam cracker in the state and many in nearby Louisiana forced into hard shutdowns — that is, production coming to a screeching halt with little or no preparation. The result was unit damage well beyond what typically happens with other weather-related events like hurricanes, where there is usually some ability to manage an orderly shutdown. Consequently, at least half of the industry’s capacity to produce ethylene and its by-products remains offline, a development that is ricocheting through supply chains across the economy. Today, we examine the magnitude of the damage, consider what is happening in ethylene markets — the epicenter of the turmoil — and contemplate the longer-term implications of the outages.   To put the events of the past six weeks into perspective, let’s take a brief tour of ethylene production facilities in the U.S. There are 50 individual ethylene plants, but several petchem complexes include more than one plant at a given location. For example, ExxonMobil has three steam crackers in Baytown, TX, and Dow has two in Plaquemine, LA. As shown in Figure 1, almost 90% of the crackers in the U.S. are located along the Gulf Coast, and 60% of them are in one state: Texas. Only four U.S. ethylene plants are not on the Gulf Coast — one in Longview, TX, and the other three scattered across Illinois, Ohio, and Kentucky. The largest concentration of facilities in Texas are in Houston, Beaumont, and near Freeport. In Louisiana, the plants are clustered in Lake Charles and along the Mississippi River.  In the U.S., most steam crackers use natural gas liquids as their primary feedstocks, with ethane making up just under 80% of the total, propane 12%, and other liquids (butane, naphtha) making up the rest. As a group, the crackers in Texas and Louisiana can produce about 85 billion pounds per year (billion lb/y) of ethylene, not counting by-products. But all ethylene plants are not created equal. Some of them — mostly the ones built over the past few years — can crack only ethane (blue diamonds in Figure 1) or an ethane/propane mix (a blend of both ethane and propane; green diamond); the capacity of these plants adds up to about 28 billion lb/y of the total. Another 18 billion lb/y can be made by crackers that can separately crack both ethane and propane (red diamonds).  Another 39 billion lb/y is produced by crackers that can run various feedstocks (yellow diamonds), usually all the way from the lightest (ethane) to the heaviest (naphtha). That’s important because the heavier the feedstock, the more byproducts the cracker yields. 

East Austin Residents Without Gas for More Than a Month — A gas outage in East Austin’s historically Black neighborhood is exposing more issues with Texas low-income properties. Texas Gas Service crews turned gas line off on February 20 and hasn't turned it back on since after finding a leak.Families at Mount Carmel Apartments have been without hot water, hot food and heat for more than 30 days. Nonprofits and city leaders finally stepped in to help, but many residents are asking, why did it take so long? Austin City Council member Natasha Harper-Madison helping to provide accommodations. Several agencies are involved in the inspection process involving the gas line. Residents must relocate during construction for an uncertain period of time. Taniquewa Brewster’s balcony is normally a place of peace. She sits on her wooden chair on her second floor apartment looking out at the 12-acre property, waving to neighbors and watching the hustle and bustle of her little community. “You catch me here, most the days,” she said, laughing. “It lets me see everything, and be a part of my community.” Now, the mother of five is using her patio as a place to empower her community, as she stands on her balcony and passionately yells out to the crowd of at least 20 neighbors. She held a private meeting with all the tenants at Mount Carmel Apartments so they could work together to deal with their gas problem. “We can’t lean on anybody but each other,” Brewster said. . “Shouldn’t this have triggered something?” she asked. “This is a multi-family property that has children, disabled people, elderly people. I think after multiple days it should trigger something, somewhere.”

Texas’s chief energy regulator fiercely defended fossil fuels after historic blackouts. She also profits from oil and gas. - Washington Post - Late last month, as Texans were digging out from a historic winter storm and days-long power outages, the state’s chief oil and gas regulator had a clear message: Natural gas producers are not responsible for the disaster. “Some media outlets would have you believe that natural gas producers and frozen transmission lines caused the power shortages across the state,” said Christi Craddick, who chairs a three-member commission overseeing the industry, during a Texas House of Representatives hearing Feb. 26. “But … these operators were not the problem. The oil and gas industry was the solution.”  Craddick and her father, a well-known Republican state representative who sits on two Texas House committees overseeing oil and gas, have direct financial ties to that industry, including with some of the same gas-producing companies that have admitted to shutdowns of their own facilities during the storm. The father-daughter pair, who hail from Midland — the heart of the West Texas oil and gas boom of the past decade — own and manage land across the state that generated more than $100,000 from Texas’s largest natural gas producers in 2019, according to forms they submitted to the state Ethics Commission last year. The companies include XTO Energy, a subsidiary of ExxonMobil, and Pioneer Natural Resources, both of which reported equipment failures during the winter storm. Critics say the ownership stakes reflect a conflict of interest for the Craddicks and exemplify a major ethics loophole in Texas, where regulators are allowed to have financial interests in the companies they oversee, unlike in some other oil-rich states. The ties are also newly relevant in light of last month’s blackouts, which left more than 9 million Texans without power and may turn out to be the costliest weather event in the state’s history. Adrian Shelley, director of the advocacy group Public Citizen’s Texas office, said regulatory agencies in the state are “explicitly in service of industry.” He added that in the absence of robust conflict-of-interest laws preventing such situations, many Texans assume energy regulators are controlled by oil interests. “For [Christi] Craddick, in all of her visits to the various state committees, there hasn’t been any earnest self-reflection of the agency’s role. It’s just been a strict defense of the industry,” said Shelley.

Warren Buffett’s Berkshire Hathaway pitching Texas on $8 billion power plan -As the Texas Legislature debated how to respond to last month’s winter storm-driven power crisis, executives at billionaire Warren Buffett’s Berkshire Hathaway Energy were pitching lawmakers an idea: The group would spend over $8 billion to build 10 new natural gas power plants in the state. Lawmakers would agree to create a revenue stream to provide Berkshire a return on its investment through an additional charge on Texans’ power bills.Representatives for Berkshire Hathaway Energy have been in Austin meeting with lawmakers and state leaders for the past week and a half, according to a person working closely on the issue.The proposed company, which would likely be known as the Texas Emergency Power Reserve, would build and maintain plants that sit idle during normal times, according to a slide deck obtained by The Texas Tribune. Whenever demand for power in the state threatened to surpass supply, these new plants would kick in to make up the difference, if ordered to do so by the state’s grid operator.“When you flip that switch and say, look, demand has exceeded supply, it has to come on in 10 minutes,” Chris Brown, CEO of Berkshire Hathaway Energy, said in an interview Thursday with the Tribune. “That’s the Texas Emergency Power Reserve promise — that’s the promise that we’re making to the citizens of Texas.”In the presentation, the representatives estimated the cost of that new charge to consumers as $1.42 per month for residential customers, $9.61 for commercial customers and $58.94 for industrial customers. The pitch to state leaders also included a poll conducted by Republican pollster Mike Baselice suggesting that Texans would be broadly supportive of paying a little more on their power bills to increase reliability. The poll was conducted from March 17-21 among 800 likely voters in Texas, according to top lines of the poll obtained by the Tribune. Over the past week, Berkshire Hathaway Energy, part of Buffett’s multinational conglomerate company Berkshire Hathaway, has hired eight lobbyists in Austin at a cost of more than $300,000, according to records filed with the Texas Ethics Commission. One of those lobbyists is Allen Blakemore, a Houston political consultant who serves as a top strategist to Lt. Gov. Dan Patrick. Blakemore did not respond to a request for comment.

KCI Airport gets $2.4M natural gas bill from Texas-based provider after February winter storm — If your natural gas bill took a giant jump after February’s cold snap, you certainly weren’t the only one. Kansas City International Airport received a $2.4 million bill.Kansas City Mayor Quinton Lucas posted on social media Monday saying the airport’s bill is usually about $80,000, but its latest bill for February skyrocketed.“We weren’t born yesterday, so expect some further talks from here,” the mayor wrote on Twitter.Lucas said KCI’s natural gas provider is Houston-based Symmetry Energy Solutions, which calls itself a “leading energy supplier” on its website and provides natural gas to more than 100,000 customers in over 30 states.During the winter storm last month, much of Texas’ power grid collapsed. Additionally, there were massive failures in coal, oil, and natural gas. Many residents would have to go without electricity or heat for days on end.Still, Lucas said he doesn’t want those energy struggles to affect KCI passengers. “Kansas City certainly understands the energy industry challenges from this winter, primarily originating in the southwest,” Lucas said. “We do not believe, however, those costs should be disproportionately assessed to our MoKan flying public.”

US oil, rig count jumps 11 to 513, as Permian keeps adding: Enverus— The US oil and gas rig count jumped 11 to 513 in the week ending March 24, rig data provider Enverus said, as the prolific Permian Basin of West Texas and southeast New Mexico continued to add rigs amid lower but still robust crude prices. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up Permian rigs were up eight to 232 on the week. So far this year, the basin has added 56 rigs. Oil-directed rigs accounted for the week's jump, with counts up 12 to 387. Gas fields lost one rig, leaving 126. The Permian and nationwide US oil and gas rig counts are the highest they've been since April 2020, when totals began falling fast as crude prices plummeted amid the pandemic's initial spread. But that was a year ago, and since then WTI oil prices, which plummeted from just under $50/b in early March 2020 into the teens, have not only recovered but are now hovering around $60/b and well above breakeven levels of the $30s-$40s/b. "The longer crude prices stay above $55-$60/b, the more confidence operators will have in bringing rigs back," said Parker Fawcett, North American supply analyst for S&P Global Platts Analytics. "But we think rig additions will continue to be slow and steady throughout the year." The past week's rig additions were largely driven by privately held operators which have led the rig count recovery, Fawcett said. "Privates are now only 34% below pre-pandemic levels, publicly traded companies near 50%, and majors still lagging at 79%," he added. Most large US basins gained a rig or remained stable week on week, although the DJ Basin largely in Colorado lost two rigs, leaving 14. Up a rig each were the Bakken Shale (16 rigs), mostly in North Dakota; the SCOOP-STACK (19), of Oklahoma; and Utica Shale (12), largely in Ohio. Unchanged on week were the Haynesville Shale (47), of East Texas/Northwest Louisiana; the Eagle Ford Shale (37), of South Texas; and the Marcellus Shale (23), largely in Pennsylvania. 

14 states sue Biden administration over oil and gas leasing moratorium -  Fourteen states filed suit on Wednesday against President Joe Biden'smoratorium on new oil and natural gas leases on public lands and waters.A coalition of 13 states, led by Louisiana, filed one lawsuit on Wednesday. Wyoming filed a separate lawsuit. The states in Louisiana's suit are Alabama, Alaska, Arkansas, Georgia, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah and West Virginia. All 14 states have Republican attorneys general."This moratorium might make for a nice headline about fighting climate change, but the real consequences of the action are far from certain and far from uniformly environmentally friendly," the Wyoming lawsuit said. Biden's order on Jan. 27 to pause new leasing was part of a series of executive actions to address climate change and transition the economy away from fossil fuel production and toward clean energy.In a statement Wednesday, Louisiana Attorney General Jeff Landry called Biden's order an "aggressive, reckless abuse of Presidential power."Biden also directed the secretary of the Interior Department to begin a thorough review of existing permits for fossil fuel development and ordered the federal government to conserve 30% of public lands and water by 2030.The suits also come as the Biden administration prepares to unveil its proposal for overhauling the nation's infrastructure, which is expected to include an ambitious set of climate-related proposals. The Louisiana lawsuit argued that the president's executive order would hurt communities dependent on oil and gas drilling and drive up energy prices. The lawsuit also requested the Bureau of Land Management be allowed to restart quarterly oil and gas lease sales.The Interior Department declined to comment on the lawsuits.The oil and gas leasing moratorium would not end fossil fuel extraction since the industry still holds undeveloped leases. Drilling on federal lands contributes to roughly a quarter of U.S. greenhouse gas emissions and generates billions of dollars in revenue.

How a Burmese immigrant profited by flipping cheap oil leases from Trump auctions -- (Reuters) - A Myanmar-born U.S. perfume entrepreneur became a curiosity last year when she became the nation’s top buyer of oil-and-gas leases at the Trump administration’s federal auctions, despite having no apparent energy background. Since July, Levi Sap Nei Thang has spent about $3.7 million on nearly 300 government leases covering 133,000 acres in 12 states. She told Reuters at the time that she was keen to produce oil on the parcels. A Reuters examination of her dealings reveals she pursued a different strategy: selling the leases to other Burmese immigrants at inflated prices after billing them as great investments on social media, according to interviews with seven buyers and others familiar with her business, along with sales agreements and leasing documents they provided. Reuters confirmed four cases in which Thang sold one or more drilling leases to Burmese immigrants for prices ranging from one-and-a-half to 13 times what she paid. Thang made nearly $335,000 in the cases reviewed by Reuters, buying the leases for about $215,000 and selling them almost immediately for more than $550,000. Three of Thang’s buyers told Reuters they had met many others who described themselves as buyers of her leases, but Reuters could not determine the full scope of Thang’s lease sales, which are private transactions. In October, Thang invited dozens of buyers to Wyoming to meet her and tour their parcels, according to a buyer who attended. Photos and videos posted on her Facebook page show her with groups of smiling people in windy, cold weather. Thang told the buyers they were more like her “friends, siblings and families,” one video shows. Federal and state records show Thang has not transferred ownership of the drilling rights to the four buyers who told Reuters they purchase leases from her. Thang’s company is still listed as the owner of those parcels in government records. Of the nearly 300 leases Thang won at state and federal auctions, only two have been reassigned, both to the same new owner, according to a Reuters review of state and federal lease registries. In order to transfer ownership of a lease, both buyer and seller must submit a signed form to the state or federal land office.  In the biggest sale confirmed by Reuters, the owner of a sushi business in Texas, Tha Cin, gave Thang $510,000 in multiple payments last year for two leases in New Mexico that Thang had bought that summer for about $200,000, according to Cin and her lawyer, copies of the sale agreements, and lease records. 广告 Despite Cin’s purchase agreements with Thang, dated in early September, federal and state leasing documents still showed Thang’s company as the owner of the parcels as of Friday. That surprised Cin’s lawyer, Jeff Vaughan. Cin said she was moved by Thang’s spiritual references in Facebook videos. “All our money was taken by the person who we believed and trusted, who talked about God all the time,” she said.

White House climate adviser meets with oil and gas companies -National climate adviser Gina McCarthy on Monday met virtually with leadership from oil and gas companies to discuss “shared priorities” according to a readout from the White House. The readout, which did not specify which companies or individuals participated, said that these priorities included climate change, protecting and creating jobs and ensuring that the U.S. is a leader on clean energy. McCarthy “made clear that the Administration is not fighting the oil and gas sector, but fighting to create union jobs, deploy emission reduction technologies, strengthen American manufacturing, and fuel the American economy,” according to the White House. The meeting comes amid tensions between the White House and some in the industry over moves like putting a temporary pause on new leases for oil and gas drilling on public lands. That pause is pending a review from the administration of its oil and gas program, and the Interior Department will hold a forum this week where groups representing industry, tribal and environmental viewpoints will speak. The White House also said that Interior was represented at the meeting, though it did not say by whom, to discuss the pause, as well as outreach during the review of the program. Meanwhile, McCarthy also talked to the company leaders about how the president is committed to “bringing the voices and perspectives of all stakeholders to the table” on climate change and asked participants about their commitments and ideas on the topic.

HOUSE: Democrats introduce package to crack down on fracking -- Tuesday, March 23, 2021 -- A group of House Democrats introduced legislation yesterday that they say would hold big oil and gas companies accountable to national standards for environmental protection.

Fact Check-Though Keystone XL Pipeline had secured most of its funding, it was only 8% constructed - Reuters Fact Check - In the weeks following U.S. President Joe Biden’s decision to scrap the Keystone XL oil pipeline, posts on social media have claimed that the project “was in Phase 4 & just about completed” and that it had been “paid for” by the time Biden “pulled the plug.” While it is true that the project had secured funding, which was largely expected to be paid out in 2021 and 2022, the claim is partly false, as less than 10% of the pipeline had been built by the time Biden formally revoked the permit. Examples of posts making this claim can be found here , here and here . These posts are referring to the Keystone XL Pipeline, a project cancelled by Biden on his first day in office on Jan. 21, 2021, dealing a death blow to a long-gestating project that would have carried 830,000 barrels per day of heavy oil-sands crude from Alberta to Nebraska (here). Environmental activists and indigenous communities hailed the cancellation, and traders and analysts said U.S.-Canada pipelines will have more than enough capacity to handle increasing volumes of crude out of Canada, the primary foreign supplier of oil to the United States (here). A map of the Keystone XL’s route alongside the existing Keystone Pipeline System, operating since 2010, can be seen here . By claiming that the project was in “Phase 4” of construction, the posts seem to conflate the Keystone XL Pipeline with the larger Keystone Pipeline System. Owned by North American company TC Energy, the Keystone XL Pipeline “is the fourth phase of the Keystone Pipeline System,” an existing 2,687-mile pipeline whose Canadian portion “runs from Hardisty, Alberta, east into Manitoba where it turns south and crosses the border into North Dakota,” according to the company’s website (here). In the United States, the existing Keystone Pipeline System runs from the North Dakota border “south through South Dakota to Steele City, Nebraska, where it splits – one arm running east through Missouri for deliveries into Wood River and Patoka, Ill., with the other running south through Oklahoma to Cushing and onward to Port Arthur and Houston, Texas.”   The Keystone XL Pipeline, a planned extension to this larger system that would run 1,210 miles from Hardisty, Alberta to Steele City, Nebraska, is considered “the fourth phase of the Keystone Pipeline System” (www.keystonexl.com/about/).  Reuters spoke via email with James Stevenson, a spokesperson for the Canada Energy Regulator, which oversees the Canadian portion of the Keystone XL Pipeline (here). Stevenson confirmed that as of late 2020, about 152 kilometers, or 93 miles, of pipeline had been laid near the U.S.-Canada border. Therefore, about 8% of the planned 1,210-mile XL extension had been built by the time President Biden revoked the permit.

Oil demand, future of Enbridge Line 3 argued before appeals court In a high-stakes hearing, Minnesota appellate judges had sharp questions Tuesday for the Minnesota Public Utilities Commission (PUC) and Enbridge about the ultimate need for the company's new oil pipeline across northern Minnesota.The Minnesota Department of Commerce, along with several pipeline opponents, have challenged Enbridge's long-term oil demand forecast, which the PUC accepted when it approved the company's controversial new Line 3.While the $3 billion-plus pipeline is half-built, the Minnesota Court of Appeals could freeze work if it rejects Enbridge's oil demand forecast. A key issue before the court: Is the forecast simply a reflection of Canadian oil producers' supply projections? "It seems to take the approach of 'If we build it, they will come,' " Judge Peter M. Reyes Jr. said Tuesday during questioning.A three-judge panel of Reyes, Lucinda Jesson and Michael Kirk also heard arguments Tuesday on other challenges to the PUC's Line 3 approval, including whether the project's environmental review adequately considered effects of an oil spill in the Lake Superior watershed.The court has 90 days to make a decision on the appeals.The Commerce Department and pipeline foes have long argued that oil demand — including from Canada — will fall as the world migrates from fossil fuel, including by adopting electric vehicles. Enbridge's forecast didn't properly account for that transition, they say.Enbridge has long argued that its corridor of pipelines across northern Minnesota is so full that it can't meet oil shippers' demands — a condition that will continue for a long time. The PUC agreed, as it did with Enbridge's contention that new Line 3 is needed for safety.The current Line 3, one of six Enbridge pipelines across northern Minnesota, is corroding and can only run at half-capacity for safety. Calgary-based Enbridge, however, has continued running the old pipeline safely by essentially patching it up.At the heart of a continuing debate is the definition of oil demand under state law and PUC regulations.The Department of Commerce, which does research and other public interest work for the PUC, argues that by state law, demand is rooted in refineries' need for oil — and thus ultimately by consumers' need for products like gasoline. Jesson noted to Hinderlie that Minnesota's two oil refineries both support new Line 3. "We have refineries in Minnesota who say there is demand," she said.

Enbridge Is 'Funding And Incentivizing' Police To Crack Down On Its Opponents -  – Jane Fonda’s trip to Minnesota has not gone exactly as planned. She expected attention from the media. She did not expect attention from the police.The actress and climate activist told HEATED on Tuesday that her much-publicized press conference to oppose the Line 3 tar sands pipeline was delayed because of an extended interaction with the Minnesota State Patrol. On her way to the event, the vehicle leading her caravan was pulled over for failure to signal more than 100 feet before a turn.“We pulled over to wait for them, it took a long time to process their identification, and they ended up not being ticketed,” she said. “Then we drove 12 miles to the press conference and the police car followed us the whole way.” While being followed, they couldn’t tell what the speed limit was (unmarked roads, this is Northern Minnesota). So Fonda’s caravan drove at a glacial place to avoid getting stopped again, further delaying the press conference.Fonda’s experience on its own was benign. Her colleagues were not arrested, hurt, or ticketed. If you watch the video of the stop, the police officer actually seemed super nice. Really, it’s the woman driving who seems kind of mean.But Fonda does not see her experience in isolation. She views it as part of a coordinated effort between Minnesota law enforcement and the Canadian oil company Enbridge to harass, intimidate, and surveil opponents of the Line 3 pipeline. “This is a public police force that’s been privatized by a foreign oil company, and every minute they spend harassing the water protectors—and assaulting the water protectors—they turn in an invoice and they get paid,” she said. “They’re making a fortune off this.”“This was just a little taste of what these the local water protectors are getting every day,” she added. “I was sort of glad that I experienced it.”Ask anyone working to oppose Enbridge’s Line 3 pipeline project in any capacity in Northern Minnesota, and they will tell you they’ve been followed by cops while driving alone. Most will tell you they’ve been intimidated—verbally, physically, or both. Some will tell you they suspect they are being surveilled. Others report violence and brutality. “The police presence has been strong,” said Tara Houska, a tribal attorney and founder of Giniw Collective, a frontline group resisting the pipeline through direct action. “We’ve seen groups of squad cars 20-plus strong from different counties guarding the line. Last week a car followed us for two hours straight.” Women who participate in direct actions against the pipeline aren’t the only ones who report being followed and intimidated by Minnesota police, either. Rita Chamblin, a resident of Bemidji, holds trainings on how to legally monitor the pipeline’s construction for the group Watch the Line MN—but tells everyone to always take someone with them. “I don’t go out and monitor alone, and I’m an old white woman,” she said.

Line 3 Pipeline Protest Arrests Include Fergus Falls Woman - KVRR Local News — A Fergus Falls woman is among the latest group of Line 3 pipeline protesters to be arrested. 30-year-old Brittney Jo Kakac was taken into custody along with 6 other people from across the country near Floodwood, Minnesota. St. Louis County Sheriff’s deputies say four protesters locked themselves to heavy machinery used by pipeline workers. The other two locked themselves to an access gate. All six were cut free and arrested. A seventh person was arrested who refused to leave when ordered. One was also a repeat arrest from last week in a similar incident. The full list of arrests is below:

Line 3 construction brings complication, controversy to Fond du Lac Reservation --About a month ago, Taysha Martineau walked out of the protest camp she built in a small patch of woods near her home on the Fond du Lac Indian Reservation and knelt in the middle of the road.Elders from her community surrounded her, scolding, telling her to leave. "Go!” they shouted. “We want you out of here! Don't do this to us!" For several weeks, Martineau had been welcoming activists to the plot of land she had dubbed Camp Migizi — which means “eagle” in the Ojibwe language — to take part in the yearslong fight against the Line 3 oil pipeline, a 380-mile replacement project that Enbridge Energy began building across northern Minnesota in December.  But for some in the community, the pipeline and the protest that follows its construction have attracted outsiders — and with them, trouble. A day earlier, growing tension over the protesters’ presence on the Fond du Lac Reservation had boiled over. The Carlton County Sheriff's Office said it had received a call alleging that three people connected to the pipeline protests had thrown suspicious packages into a Line 3 worksite, just a half-mile from the camp. An emergency alert was sent out to people in the area. The sheriff called in a bomb squad. No bomb was ever found, and the case remains under investigation. But accusations flew, on both sides. Martineau called it "law enforcement-induced hysteria" on Camp Migizi's Facebook page. Forty households within a half-mile radius had to be evacuated for several hours.It was that threat, in part, that brought the elders — among them, the tribal chairperson — to Martineau’s camp. But that moment at Camp Migizi was one among many, part of a long, complicated relationship between the Fond du Lac Band of Lake Superior Chippewa and Line 3.“I was a conduit for their misplaced anger and their grief, because I've been out here and I've been vocal,” she said. “When they're mad at protesters, they think of me, because I'm from here, and they know me.”For decades, a network of pipelines has crossed the Fond du Lac Reservation, c arrying millions of barrels of Canadian crude oil underneath its land every day. One of those pipelines is the existing Line 3, which has been around since the 1960s. When Enbridge first proposed replacing it with a new line, the Fond du Lac band was among the most vocal opponents, arguing the project wasn't needed and that it threatened tribal resources.But after state regulators first approved the project to replace Line 3 nearly three years ago, the band changed course, andagreed to allow the new line to be built across the reservation.

Fight over natural gas ban roils Nevada -A fight over the future of natural gas is simmering in Nevada, highlighting questions about equity and energy costs that could cloud efforts to decarbonize the buildings sector. Nevada is one of at least seven states this year where lawmakers are considering proposals to phase out or reduce the use of natural gas in homes and businesses, according to a tally by the American Gas Association. A state lawmaker, Assemblywoman Lesley Cohen (D), is set to introduce legislation that would set emissions reduction targets for buildings over the next 30 years, to ultimately achieve a 95% decrease in emissions from buildings by 2050. Under the plan, energy efficiency measures and electrification would be the primary means for decarbonization. While it’s unclear if the bill will pass, Gov. Steve Sisolak (D) backed a climate strategy last year that called for switching from gas-powered to all-electric buildings. The Nevada debate is also showcasing how gas ban proposals nationally can face resistance not just from gas utilities, but from business and union groups in states with Democratic-controlled legislatures. Supporters say the measure provides a framework for the state to plan a gradual, cost-effective transition away from natural gas that protects ratepayers from potential so-called stranded assets — such as new gas infrastructure that could be of little value in the future. They say the proposal is a natural step for Nevada to move toward its commitment to “zero or near-zero” greenhouse gas emissions economywide by 2050, as the state pledged to do under a bill passed in 2019. “Responsible energy planning isn’t just a necessity, it’s an unparalleled opportunity to create good jobs, diversify our economy, and lead the nation in renewable energy innovation,” Cohen said in a statement. “In a legislative session full of economic challenges and tough choices, this one is easy: let’s make sure we’re getting the best returns on our energy investments in the years to come.” But Southwest Gas, the utility that services the majority of homes and businesses in the state, plans to oppose the bill, and real estate and minority business groups are also raising concerns. Echoing arguments made in statehouses and cities around the country that have considered similar gas transition measures, opponents say that limiting the ability of new businesses and homes to connect to the gas system will drive up energy costs and hurt small businesses. Under the plan, gas providers would need to decrease emissions 2.5% by the end of 2022 relative to 2016 levels and continue reducing emissions every two years thereafter.

Settlement with Merit Energy resolves violations of oil pollution prevention regulations in Wyoming - Today, the U.S. Environmental Protection Agency (EPA) announced a proposed settlement with Merit Energy Company (Merit) of Dallas, Texas, resolving alleged violations of the Clean Water Act, and its implementing regulations meant to prevent oil pollution. These violations include failure to comply with Spill Prevention, Control, and Countermeasure (SPCC) requirements at a tank battery facility operated by the company in Hot Springs County, Wyoming. As a result of the proposed agreement, Merit will pay a civil penalty of $115,000 to resolve the alleged violations. Today's proposed settlement resulted from EPA's investigation of an oil spill that occurred on June 19, 2018, when Merit released approximately 455 barrels of crude oil from the Stateland Tank Battery Facility into Grass Creek, a tributary of the Big Horn River. In reviewing the spill, EPA discovered deficiencies in Merit's SPCC plan for the facility. The company has since corrected these deficiencies and submitted an updated plan to EPA, helping ensure the environment and nearby communities are better protected from damaging oil spills. 'Due to the harm oil spills can cause to public health and the environment, every effort must be made to prevent oil spills and to clean them up promptly once they occur,' said the EPA Region 8 Enforcement and Compliance Assurance Division Director Suzanne Bohan. 'We are encouraged by Merit's actions to come into compliance with the laws and regulations that protect the environment from the damages that can occur when oil is discharged into navigable waters or adjoining shorelines.' The Oil Pollution Prevention requirements of the Clean Water Act are intended to prevent and facilitate the response to the discharge of oil from non-transportation-related onshore facilities. All facilities with 1,320 gallons of oil that have the potential for a spill to reach waters of the United States are required to have an SPCC Plan. The $115,000 penalty will be deposited into the Oil Spill Liability Trust Fund, a fund used by federal agencies to respond to discharges of oil and hazardous substances. This proposed Consent Agreement is subject to a 30-day public comment period and final approval by the EPA's Regional Judicial Officer. To access and comment on the Consent Agreement, visit: https://www.epa.gov/publicnotices/notices-search/location/Wyoming

FERC OKs Gas Pipeline Job After First-Ever Climate Change Review - With the help of a Republican commssioner who was its Trump administration chairman, the Federal Energy Regulatory Commission approved 87 miles of natural gas pipeline replacement in South Dakota and Nebraska after reviewing its effect on climate change—the agency's first such action. Neil Chatterjee joined current FERC Chairman Richard Glick and Allison Clements, both Democrats, in the 3-2 decision. Commissionsers James Daily and Mark Christie, both Republicans, dissented in the March 22 decision. “We find that the project’s contribution to climate change would not be significant,” the commission said in its review of Northern Natural Gas Co.’s request to replace a pipeline that was built in the 1940s and 1950s, the A-line that carries gas from South Sioux, Neb. to Sioux Falls, S.D. In a significant change in policy, FERC will continue to consider all appropriate evidence regarding the significance of a project’s reasonably foreseeable greenhouse gas emissions and their contribution to climate change, the agency said in the decision. Glick, who took over as chairman after President Joe Biden’s inauguration, said FERC is committed to treating GHG emissions' contribution to climate change the same as all other environmental impacts. “A proposed pipeline’s contribution to climate change is one of the most consequential environmental impacts and we must consider all evidence in the record to assess the significance of that impact,” he said. The order noted, however, that the evidence the commission relies on to assess significance may evolve. On Feb. 18 FERC issued a Notice of Inquiry seeking new information and additional stakeholder perspectives to help it decide whetherto revise its approach for assessing the significance of GHG emissions. Future changes would not affect its Northern Natural Gas decision, the order said. FERC compared the $173.8 million project’s foreseeable GHG emissions to total GHG emissions of the US. “This project could potentially increase CO2 emissions based on 2018 levels by 0.0003%, in subsequent years, the operations only would be 0.000006%,” the order said. The company wants to replace the existing pipeline because it has mechanical joints and acetylene welds that are more susceptible to leaks and hydrostatic pressure test failures. The existing pipeline will be sold to a salvage company and removed. Danly agreed that the project should be approved, but dissented in part, saying the commission violated the law “by reversing its longstanding determination that it is unable to assess the significance of a project’s GHG emissions or those emissions’ contribution to climate change without sufficient reasoning.” Danly said the order is “regulatory malfeasance at its most arbitrary and capricious,” and the change in policy direction announced is in “an obscure docket that is likely not to be appealed.”

Valve failure prompts oil spill in Divide County –A valve failure has led to an oil spill in Divide County, the North Dakota Department of Environmental Quality reported Thursday. Summit Midstream Partners estimates that 532 barrels or 22,300 gallons of oil spilled at the site 16 miles southwest of Crosby. The spill occurred along piping going into a tank at Summit's Divide Station. The oil was contained to the site by a berm, according to a spill report the company filed with the state. Summit reported the spill to the state last Saturday. About three-quarters of the oil has been recovered, according to Environmental Quality. State inspectors will continue to monitor cleanup, the agency said.

North Dakota bumps budget due to faith in oil outlook (AP) — North Dakota’s Legislature on Monday bumped tax collection expectations for the next two-year spending cycle, with budget writers banking on stable oil prices and production. House and Senate appropriation committees predicted general fund tax collections at $4.04 billion, or $95 million more than the Republican-led Legislature’s budgetary starting point in January. Senate Appropriations Chairman Ray Holmberg called the Legislature’s numbers “very reasonable.” Lawmakers will rely on them to finish their work on the state’s 2021-2023 spending plan. “This is the one we hang our hat on,” Holmberg told the appropriations committee. “It’s the best guess we have at this point.” Lawmakers based their numbers on a pair of competing revenue forecasts presented last week. Lawmakers essentially split the difference between estimates done by state budget analysts and Moody’s Analytics, and their own economic consultancy, IHS Markit. While oil prices are a key contributor to the state’s wealth, oil revenues actually are a relatively small part of the state’s general fund, which finances state government and a variety of programs. The general fund can take in no more than $400 million in oil tax revenues per two-year budget cycle, a setup designed to protect the budget from price swings. Beyond that level the money goes to other state funds. The state’s general fund is financed mostly by taxes on sales, income, corporations, tobacco and gambling. Lawmakers assumed oil prices at $40 a barrel when crafting their budgetary starting point in January, though prices have hovered at around $60 a barrel since then, including on Monday. The Legislature’s appropriations committees on Monday adopted an estimated price of $60 a barrel, and predicted production would decline from about 1.1 million barrels daily to 1 million barrels in the second year of the budget cycle.

Are California Oil Companies Complying With the Law? Even Regulators Often Don’t Know. — ProPublica -- At the ragged edge of rapidly gentrifying downtown Los Angeles, the aging, yellow brick residential Portsmouth Hotel sits among knockoff watch dealers here, while a block away, a giant construction crane hoists materials skyward for new luxury apartments. Below ground is another story. Tucked out of sight, oil wells run thousands of feet deep, tapping thick crude from one of California’s many urban oil fields. And in the fall of 2019, investigators with the state’s oil agency flagged trouble. Nasco Petroleum was injecting huge amounts of water into well bores above the legal pressure limits, aiming to push more crude out of the aging downtown field. Similarly intense pressure led to a major oil spill in 2006, after a nearby well bore operated by Nasco’s predecessor ruptured. Hot crude and oily waste bubbled up from underground, filled an apartment building basement, oozed out of manhole covers and buckled sidewalks. More than 130 low-income tenants were evacuated. The pressure wasn’t the investigators’ only concern. They also noted that a number of “bad” wells had been left unfixed for years, with missing cement seals. The wells, investigators wrote in a report to a manager, posed “immediate” risks to drinking water aquifers. They urged supervisors at the California Geologic Energy Management Division, or CalGEM, to take the strongest possible enforcement actions: order Nasco to cease well operations, suspend approvals of the company’s project or both. No one ever did. While the agency said in a statement that it has taken less stringent measures, like mandating that Nasco lower injection pressure, it declined to provide evidence that the company had complied. Officials acknowledged they remain concerned about potential threats to drinking water, though they said they had no proof of contamination. In January, they said they would address the problems but declined to provide specifics. Today, three of the problematic wells are listed as active on CalGEM’s website. Less than 100 feet from Nasco’s oil operations, low-income residents of the Portsmouth Hotel said they’ve endured decades of problems from the site, including the ground trembling at all hours, fumes that cause headaches and nausea, and equipment catching fire.“People live in here with fear. ... They worry something’s gonna happen, an explosion or something, and we’re not gonna have a chance,” said Gregorio Villegas, the longtime building manager. A Nasco employee said its wells are operating with no problems. The owner did not respond to requests for comment. Emergency phone numbers on the site’s front entrance are disconnected, and no one responded to knocking on gates.

Haaland defends leasing pause during Interior forum  --Top officials at the Interior Department heard a variety of conflicting perspectives about drilling on federal lands and waters on Thursday amid tensions surrounding the Biden administration's pause on new federal oil and gas leasing. Interior Secretary Deb Haaland on Friday defended the pause as it “gives us space to look at the federal fossil fuel programs that haven’t been meaningfully examined or modernized in decades.” During a public forum on Friday, industry groups, environmentalists, Native leaders and labor organizations were among those that spoke with administration officials. The forum comes as the department is expected to produce an interim report on the program this summer. In an executive order, President Biden also put a temporary pause on new leases for federal lands, “pending completion of a comprehensive review and reconsideration of federal oil and gas permitting and leasing practice.” When he was on the campaign trail, Biden said he wanted to ban new oil and gas permitting on federal lands, but since taking office, his administration has not said it plans to do so. At the top of the forum Thursday, Haaland reiterated that “fossil fuels will continue to play a major role in America for years to come.” Republicans and some energy industry groups have criticized the pause, with 14 states recently suing over the move. During the forum, industry groups talked about jobs that come from public lands and waters drilling and argued that “responsible” development of federal land can be part of a climate solution. They also argued that the significant number of leases that are not being used does not constitute a stockpile, saying instead that not every lease can be used. “It takes several years ... for a company to analyze the underlying geology, perform the necessary technology and engineering assessments and arrange the logistics of exploration and development projects before a company can determine if a lease contains commercial quantities of oil and natural gas,” said Frank Macchiarola, the senior vice president of Policy, Economics and Regulatory Affairs at the American Petroleum Institute. Meanwhile, environmental groups warned of pollution and discussed oil spills resulting from these activities. Nathalie Eddy, interim field team manager at Earthworks, argued that the administration “should permanently halt all new oil and gas extraction on public lands.” Speakers from indigenous groups stressed that tribes are concerned by climate and environmental issues, but some also noted the importance of oil and gas for tribal economies. “Too often, well-intentioned but overly broad responses to the climate crisis are not good for all of Indian Country,” said Fawn Sharp, president of the National Congress of American Indians.

White House yanks Interior nominee after Murkowski opposition - The White House has withdrawn its nomination of Elizabeth Klein to become the Interior Department’s deputy secretary, as the Biden administration faced push back from Alaska Sen. Lisa Murkowski, sources familiar with the situation said Monday. Details: Klein is a former Obama administration official and deputy director of the State Energy and Environmental Impact Center at the New York University School of Law who focused on renewable energy and climate change issues. The Biden administration pulled her nomination after hearing of opposition coming from Murkowski, a moderate Republican whose vote is crucial to Biden’s legislative agenda and who has sought to expand the oil and gas industry in her state, one of the sources familiar with the matter said. The White House and a spokesperson for the Department of Interior did not immediately respond to questions. A spokesperson for Murkowski did not reply to a request for comment. A spokesperson for Sen. Joe Manchin, the West Virginia Democrat who chairs the Senate Energy and Natural Resources Committee that would have considered Klein’s nomination, did not immediately answer questions. Tommy Beaudreau, a former Interior official under the Obama administration and Alaskan native, is being vetted for a possible nomination as deputy secretary, said two people familiar with the matter. Murkowski floated Beaudreau’s name as a possible replacement for Klein, the people said. Beaudreau is currently a lawyer at law firm Latham & Watkins' environment, land & resources department, and global co-chair of the firm's project siting & approvals practice.

Canadian oil producers see new route to Gulf Coast refineries coming from CP Rail deal | Financial Post — Canadian Pacific Railway Ltd.’s blockbuster US$25-billion deal for Kansas City Southern offers new hope for expanded access to the Gulf Coast for Canadian oil producers that have struggled to reach heavy oil markets in Texas and Louisiana. Canadian oil and gas companies have for years tried to expand their options to ship heavy oil from Alberta to the southern coast of the United States, but their efforts to reach the world’s largest concentration of heavy oil refineries have been challenged time and time again. Most recently, U.S. President Joe Biden cancelled permits for the Keystone XL pipeline. Currently, only Canadian National Railway Co. offers a direct route for oil producers to ship crude from Alberta to the U.S. Gulf Coast, but the combined CP/KCS railway network could introduce some competition among the railways to move those barrels.The CP and KCS rail networks currently connect in Kansas City, from which point the KCS rail line offers direct connection to heavy oil markets in Louisiana (Shreveport, Baton Rouge and New Orleans) and Texas (Beaumont, Port Arthur, Houston and Corpus Christi).“In combination, the combined railroad can offer one-railroad connectivity between Alberta and U.S. Gulf Coast markets via these existing KCS connections,” The deal could also reduce overall shipping costs by boosting competition between CP and CN,   Currently, crude by rail accounts for about five per cent of revenue at CP and about two per cent at KCS. The two companies believe the deal will boost these revenues. CP spokesperson Jeremy Berry in an emailed statement said the company plans to use a crude-by-rail facility in Alberta that pulls the blending agents out of heavy crude oil to create a “pipeline-competitive way of delivering Alberta energy products to market by rail.”He added: “We can do this as the combination will provide for a more direct and efficient route to refineries on the Gulf Coast.”A combination of energy products, including crude oil and fracking sand, chemicals and plastics, make up roughly 20 per cent of CP Rail’s total freight revenue,

Donald Trump’s Parting Gift to the People of St. Croix: The Reopening of One of America’s Largest Oil Refineries - For years, Sonia Rivera and her husband have lived off the land, growing tomatoes, cucumbers, kale and other vegetables at their idyllic home in St. Croix, part of the U.S. Virgin Islands located just east of Puerto Rico and roughly a thousand miles from the shores of Florida. In early February, their paradise became a nightmare.  A flaring incident at the massive Limetree Bay oil refinery sent a plume of steam into the air and covered more than 130 houses in the Clifton Hill neighborhood, including the Rivera’s home and garden, with specks of oil.   Rivera said she had to dig up and throw out her whole plot, including more than 50 pounds of food. “Literally black spots were all over everybody’s roofs,” Rivera said. “We’ve already spent over $600 trying to replace the dirt that was contaminated.” It’s certainly not the first accident to occur at the 56-year-old facility, once one of the largest oil refineries in the world. The refinery site is home to one of the biggest, and least known, oil spills in U.S. history. Its previous owners faced a multi-million dollar settlement for violating the Clean Air Act. And over the past year, as new ownership rushed to reopen the plant after nearly a decade, Limetree Bay has experienced a series of mishaps and delays, including multiple fires, foul odors strong enough to close schools and several unscheduled flares like the one that doused Rivera’s home and garden. Now the plant stands as a prime example of what environmentalists see as the Trump administration’s unfettered and irresponsible deregulatory agenda and a penchant, late in President Trump’s term, for granting sweetheart deals to well-connected corporate interests. In Limetree’s case, the administration ignored decades of precedent in issuing new permits and expressed a willingness in emails to the refinery’s new owners to do almost anything they needed to restart it. Virgin Islands government officials touted the plant’s restart in February as a lifeline for the territory, still recovering from two Category 5 hurricanes in 2017—Irma and Maria—and crippled by a pandemic that devastated global tourism. Locals, like Rivera, worry what it will mean for them, and their tropical island, to once again live in the shadow of an oil refinery that has fouled St. Croix’s ecosystem throughout its existence.

The Biden EPA Withdraws a Key Permit for an Oil Refinery on St. Croix, Citing ‘Environmental Justice’ Concerns -  The Biden administration handed environmental justice advocates a major victory on Thursday when it announced it was withdrawing a key pollution permit for an oil refinery in the U.S. Virgin Islands that locals say has long fouled their air and water and endangered their health. Citing “environmental justice concerns” and the new administration’s priority to consider “the needs of overburdened communities,” the Environmental Protection Agency announced in a press release that it was withdrawing the federal air pollution permit for the Limetree Bay oil refinery, located on the territory’s southern island of St. Croix. The move, however, won’t require Limetree to cease refining operations. The company had operated the refinery as an oil storage facility for years, but last month reopened the refining portion utilizing that permit, which was issued by the Trump EPA in December 2020. “Withdrawing this permit will allow EPA to reassess what measures are required at the Limetree facility to safeguard the health of local communities in the Virgin Islands, while providing regulatory certainty to the company,” Walter Mugdan, EPA’s acting regional administrator, said in the release. The decision could lead to stricter pollution controls at the facility and marks the Biden administration’s most significant step so far to follow through on its pledges to elevate environmental justice to the top of its regulatory agenda. Nearly 75 percent of the people living in the communities just north of the refinery are Black, about a third identify as Hispanic or Latino and over a quarter fall below the national poverty line, according to a recent EPA analysis. “We are grateful to the Biden/Harris administration and the EPA for this significant first step in commitments to environmental justice and meaningful action on climate change,” Jennifer Valiulis, executive director of the St. Croix Environmental Association, said in a statement Thursday afternoon. “Our island community and environment have suffered for decades due to lax monitoring of emissions, poor enforcement, and inadequate protections.” The permit withdrawal comes just days after Inside Climate News reported that the St. Croix refinery had been the site of one of the largest oil spills in American history and that its previous owners had dodged a multi-million dollar settlement for violating the Clean Air Act.

Facing COVID-19 outbreaks and privatization, oil workers shut down refineries in Brazil - The deadly combination of worsening working conditions and the uncontrolled acceleration of the COVID-19 pandemic in Brazil is provoking strikes and work stoppages at Petrobras refineries since the beginning of March. On Monday, the strike by nearly 900 oil workers at the Landulpho Alves Refinery (RLAM), in Bahia, entered its 18th day. It has been strengthened by the walkout of fellow Petrobras workers at the Gabriel Passos Refinery (Regap), in Minas Gerais. Both refineries have suffered severe COVID-19 outbreaks. At RLAM, two oil workers died this month after being infected with the coronavirus: operations technician Carlos Alberto, 55, and shift coordinator Wagner Plech, 52. In addition to these fatalities, more than 80 other workers have tested positive for COVID-19 at the facility, with eight of them being hospitalized and three admitted to an Intensive Care Unit. Striking workers at the Landulpho Alves refinery (RLAM) in Bahia, Brazil (Twitter) The coronavirus outbreak at RLAM began after management took action to prevent a strike in February, when workers were protesting against the sale of the refinery. “Workers report that cases of contamination by the virus began to multiply about six days after the eve of their [scheduled] strike [on February 17], when RLAM’s General Manager authorized the entry into the facility, without any kind of safety controls, of contract and outsourced workers, placing up to three teams of operators in CCLs [Local Control Houses], who slept on mattresses on the floor and in a closed environment,” the union reported. At Regap, the decision to stop the work was taken after more than 200 workers, including contract and outsourced employees, tested positive for COVID-19 in March alone. Eleven of them had to be hospitalized due to severe cases of COVID-19. The cases at Regap skyrocketed during a “maintenance stop,” a periodic procedure for check-up and renovation of the structure that requires the presence of up to 2,000 extra workers. The procedure was started on February 28 and was supposed to last about 30 days. The coronavirus is also spreading uncontrollably through Petrobras’ terminals and offshore platforms. According to a Reuters report, oil workers at the Campos Basin in Rio de Janeiro have pressed charges at the Labor Prosecutor’s Office demanding that Petrobras provides clarification on the spread of the coronavirus on oil and gas platforms, following a spike in cases in March. Considered by the government as “essential,” oil workers are being pushed into highly infected workplaces to ensure a high production of fuels and oil derivatives and meet Petrobras’ demand for profits. While subjecting its employees to deadly conditions, the company has closed 2020 with a net profit of 7 billion reais (US$ 1.27 billion).

Cheniere and Shell oil tankers change course to avoid Suez Canal as ships divert routes -Companies are scrambling to reroute shipping vessels to avoid the logjam at the Suez Canal, including at least two U.S. ships carrying natural gas for Cheniere and Shell/BG Group, according to data provided by MarineTraffic and ClipperData. At least ten tankers and containerships are changing course as the Ever Given, one of the world's largest containerships, remains stranded across the canal along Egypt, MarineTraffic spokesman Georgios Hatzimanolis told CNBC in an interview. "We expect that number to go up as this closure progresses," Hatzimanolis said. The1,300-foot ship ran aground Tuesday enroute from Malaysia to the Port of Rotterdam in the Netherlands. The stranded ship has caused other vessels to back up in the canal, holding up roughly $400 million an hour in goods, according to Lloyd's List shipping journal. That's slowly increased over the last several days after repeated efforts by Egypt to refloat the 247,000-ton containership have failed. Officials there are using eight large tugboats and excavation equipment on the banks of the canal to dig out sand around the grounded vessel. According to MarineTraffic, there are 97 vessels stuck in the upper portion of the canal, 23 vessels waiting in the middle and 108 vessels in the lower portion. The logjam stretches through the Red Sea, past the Gulf of Aden, all the way to the Border of Yemen and Oman. "From Asia to Europe we are seeing ships divert in the Indian Ocean, just below the southern tip of Sri Lanka," added Hatzimanolis. For Europe-bound ships coming from Asia, going around Africa instead of through the canal can add up to seven days to a ship's journey, he said. The Maran Gas Andros LNG tanker departed from Ingleside, Texas on March 19 loaded with Cheniere fuel and a carrying capacity of 170,000 cubic meters of liquified natural gas. The Pan Americas LNG tanker, which is carrying Shell/BG fuel, left Sabine Pass on March 17 and can carry up to 174,000 cubic meters of liquefied natural gas. Matt Smith, director of commodity research for ClipperData, confirmed which companies were using the ships. Both tankers changed course in the middle of the North Atlantic Ocean before diverting to go around the Cape. ClipperData also shows the Suezmax Marlin Santorini loaded with 700,000 barrels of Midland West Texas Intermediate crude oil diverting away from the canal. Smith said the original route to the Suez was an "unusual diversion." "The vast majority of U.S. crude exports avoid the Suez Canal, heading either to Europe or around the Cape of Good Hope to Asia instead," Smith explained. The Suezmax Marlin was at Magellan's Seabrook terminal in Houston, Texas, on March 10, where it was topped off with 330,000 barrels of West Texas light crude oil before heading to Galveston lightering zone a day later. The vessel then left the U.S. declaring for Port Said in Northeast Egypt but took a turn south Thursday after passing the Azores Islands near Portugal. "The vessel is yet to update its declared destination," said Smith. ClipperData shows the number of fully loaded fuel tankers waiting off Port Said as well as the US Gulf Coast. As of Friday afternoon, another two tankers and a Suezmax, the largest tanker that can navigate the Suez Canal, carrying vacuum gasoil from the U.S. were passing Crete and set to anchor offshore Egypt.

About 4,000 liters of diesel oil pumped out of sunken ship in Mui Ne - A representative of Truong Tam Maritime Company today said that the company and related competent agencies made concerted efforts to pump nearly 4,000 liters of diesel oil mixed with water out of the wrecked ship safely. The operation was a race against time in 15 minutes. As media released, the Bach Dang ship, with a capacity of 2,500 metric tons, with seven sailors aboard capsized and sank on its way to carry the fly ash from Vinh Tan 2 thermal power plant in the province to the Southern Province of Dong Nai. Luckily, all of the sailors were rescued and 4,000 liters of diesel oil remained in the ship’s fuel tank when it capsized. The ship has since been lying upside down on the sea, with neither oil spill nor fly ash spreading. After all 4,000 liters of diesel oil was pumped out of the ship’s fuel tank, the salvage and treatment of fly ash will continue.

PTTEP loses high profile Montara oil spill lawsuit - On August 21, 2009, the Montara-H1 well blew out on the wellhead platform. An explosion and uncontrollable oil spill continued spewing between 400-2,000 barrels of oil per day into the Timor Sea until November 3, 2009 after a relief well was drilled and the leak stopped. It was the biggest oil spill in Australian history. A class action of 15,000 seaweed farmers took PTTEP to court several years ago, seeking roughly $200 million in damages to their seaweed crops, with the case taking more than five years to conclude. On Friday afternoon, the Federal Court of Australia in New South Wales ruled that oil from the Montara H1 production well had reached seaweed crops of Indonesia. PTTEP has officially lost the case a decade after the oil spill. PTTEP had argued that oil from the spill did not reach Indonesian waters. Federal Court justice Yates, however, ruled otherwise. "I am satisfied that oil spilled from the H1 Well blowout reached certain areas of Indonesia," justice Yates said when handing down his verdict this afternoon. PTTEP then argued that even if oil had travelled from the Montara oil spill to Indonesia, that by the time the crude floated there, it would have disintegrated and not caused damage. "I am satisfied that this oil caused or materially contributed to the death and loss of [the plaintiff's] crop," justice Yates ruled. This claim too, was dismissed by the Court. Justice Yates also found that PTTEP had been negligent in its operations of the Montara oil field, a fact PTTEP did not dispute, and awarded damages of about Rp252 million (A$22,500) to the lead plaintiff of the class action. Given there are 15,000 class action members, the cost of damages could reach well over $300 million. A spokesperson for Maurice Blackburn told Energy News they were "happy with the result." Justice Yates said he calculated the damaged as "the difference between the net income earned and the net income but for the respondents negligence." It has been a long wait for both the class action plaintiffs, represented by Maurice Blackburn, and the defendant PTTEP, represented by Allens. The Federal Court sat on the ruling for more than 12 months since the trial ended to reach its determination. PTTEP does have the right to appeal the judgment.

Grounding of cargo ship in Suez Canal could hurt the LNG market if prolonged, analyst says -The disruption caused by the grounding of a large container ship in Egypt's Suez Canal — halting marine traffic through one of the busiest and most important waterways in the world — could have a major impact on the liquefied natural gas (LNG) market if prolonged, according to an analyst at Wood Mackenzie. The ship, called Ever Given, ran aground on Tuesday morning after losing the ability to steer amid high winds and a dust storm, the Suez Canal Authority (SCA) said in a statement. Rescue efforts are currently underway with multiple tugboats sent to the scene to assist in the re-float operation, which can take days. "The impact of this disruption on the LNG market will be limited if the disruption is solved within a day or two. Only a handful of LNG cargoes were in the close vicinity of the Suez Canal when the incident started. At this stage, we don't expect major bottlenecks, unless the situation drags on," said Lucas Schmitt, principal analyst at Wood Mackenzie. The Suez Canal is a key channel for LNG ships – with around 8% of global LNG trade passing through. "So far in March 2021 a handful of cargoes have been transiting each day in both directions (until the disruption)," added Schmitt. The 120-mile long man-made waterway is a key point of global trade, connecting a steady flow of goods from East to West. Everything from consumer products to machinery parts to oil flows through its waters. Nearly 19,000 ships passed through the canal during 2020, for an average of 51.5 per day, according to the Suez Canal Authority. The Ever Given ship, was sailing from China to Rotterdam when it ran aground. The impact on the LNG market would be greater if the disruption is prolonged as the recent delays at the Panama Canal illustrated, according to Schmitt. Those delays lead to a spike in LNG prices and shipping rates, according to Reuters. "However, the timing of this incident means it will have less impact on prices than that of the Panama since we're entering the shoulder season for the LNG market," he noted. "Charter rates are currently low – around 30 k$/d – but could tighten up (reflecting the additional tonne-mile needed to bypass the canal) if the disruption lasts." Schmitt added further delays could "impact both loading and discharge schedules and disrupt some flows, mostly to the European market."

Australia Dangerously Dependent On China's Fuel Exports As 2 Of Its Last 4 Refineries Close --There's growing alarm in Canberra over what's expected to be Australia's inevitable increased dependence on foreign petroleum amid a major influx of cheaper refined oil products from China. It comes as China's crude oil refinery capacity is rapidly expanding and simultaneously Australia is about to see its last four refineries cut down by two, given the recent announced closures of an Exxon Mobil and separately a BP refinery. It's yet another way that Beijing has the upper hand and leverage amid the ongoing trade war which has seen the two sides slap tariffs and even a few import bans on each other. A recent report out this week in the South China Morning Post runs through the numbers which suggests China is poised to dominate crude exports in the Asia-Pacific region, particularly to "vulnerable" Australia - leaving Aussie government leaders concerned over self-sufficiency and if the country can weather the storm of Beijing's "coercive trade warfare". "Chinese exports of refined oil products to Australia rose from a few thousand tonnes before 2011 to nearly 300,000 tonnes at the end of last year, according to figures from China customs," the report begins by noting. Following the announced impending closures of BP’s Kwinana and ExxonMobil’s Altona plants, a third - Ampol’s Lytton plant - is now also said to be mulling a shutdown given its inability to compete with Asian refineries. And the fourth, Viva Energy’s Geelong refinery, has since last year been kept afloat by a federal government rescue package amid spiraling lossesestimated at over $100 million.

Oil rises slightly despite demand fears amid European lockdowns - Oil steadied on Monday as hopes for a pick-up in demand later this year helped arrest last week's broad sell-off, but prices stayed under pressure as new European coronavirus lockdowns made a quick recovery look less likely. Brent crude was up 6 cents or 0.1% to $64.59 a barrel, while U.S. oil for delivery in April gained 13 cents to settle at $61.55 per barrel. The more active U.S. crude futures for delivery in May rose 14 cents or 0.2% to $61.58 a barrel. Both contracts fell more than 6% last week after making steady gains for months on the back of output cuts and an expected demand recovery. "Oil (had) its worst week this year as concerns grow over a flaring up in COVID-19 cases across Europe," "This comes at a time when there are clear signs of weakness in the physical oil market." Physical markets have come under pressure as refiners around the world, including China and the United States, begin maintenance activities. Chinese refinery maintenance season is due to peak in May and begin tapering in June, traders have said, depriving some crude grades such as those in West Africa of their main outlet. Nearly a third of French people entered a month-long lockdown on Saturday, while Germany plans to extend its lockdown into a fifth month, according to a draft proposal. "Vaccination campaigns haven't been as fast as the market had hoped for and consequently this will have an effect on the oil demand recovery, which in turn hurts prices," While a broad economic recovery remains elusive, Saudi Aramco Chief Executive Amin Nasser was optimistic on longer-term prospects for the world's top oil exporter. On Sunday Nasser said global oil demand was on track to reach 99 million barrels per day (bpd) by the end of 2021. "While I think demand is going to improve further as more economies ease travel restrictions in the coming months, the impact of this will be offset to some degree by rising oil supply," "OPEC+ will be easing supply restrictions slowly, while U.S. shale production is likely to ramp up due to the attractive oil prices again. All told, I can't see oil prices rising significantly further."  The Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, have put in place unprecedented production cuts to balance global markets after demand plunged during the COVID-19 pandemic. U.S. drillers meanwhile are starting to take advantage of the recent spike in prices, adding the most rigs since January in the week ending last Friday.

Oil falls as European coronavirus curbs point to demand hit - Oil tumbles 4% on concerns over Europe curbs, rollouts il prices fell more than 4% on Tuesday, hit by concerns over new pandemic curbs and slow vaccine rollouts in Europe as well as a stronger dollar. Brent crude futures were down by $2.69, or 4.2%, to $61.93 a barrel, having hit a low of $61.41. West Texas Intermediate (WTI) U.S. crude futures fell by $2.46, or 4%, to $59.10, after falling to as low as $58.47. Both contracts traded near lows not seen since February 12. The front-month Brent spread flipped into a small contango for the first time since January. Contango is where the front-month contracts are cheaper than future months, and could encourage traders to put oil into storage. "Continental Europe is tightening the coronavirus measures and thereby further restricting mobility," Commerzbank analysts said. "This is likely to have a correspondingly negative impact on oil demand." Extended lockdowns are being driven by the threat of a third wave of infections, with a new variant of the coronavirus on the continent. Germany, Europe's biggest oil consumer, is extending its lockdown until April 18 and asked citizens to stay home to try to stop a third wave of the COVID-19 pandemic. Nearly a third of France entered a month-long lockdown on Saturday following a jump in COVID-19 cases in Paris and parts of northern France. A stronger U.S. dollar also weighed on prices. As oil in priced in U.S. dollars, a stronger greenback makes oil more expensive for holders of other currencies. Physical crude markets are indicating that demand is lower, much more so than the futures market. "Physical prices have been weaker than futures have been suggesting for several weeks now," said Lachlan Shaw, head of commodity research and National Australia Bank.

Oil prices drop 6% to enter correction territory - U.S. and global oil prices fell by roughly 6% on Tuesday to enter correction territory, as renewed lockdowns in Europe to combat the coronavirus pandemic looked likely to crimp energy demand. "Optimism around a swift global economic recovery has recently been dampened by setbacks in vaccine rollouts in parts of Europe and Southern Asia," said Christin Redmond, commodity analyst at Schneider Electric, in a market update. Meanwhile, "U.S. refineries continue to struggle to come back online following the mid-February winter storm, which has resulted in several consecutive weeks of crude inventory builds." West Texas Intermediate crude for May delivery lost $3.80, or 6.2%, to settle at $57.76 a barrel on the New York Mercantile Exchange. Front-month prices have fallen 12.6% from the recent high of $66.09 on March 5 to enter correction territory, according to Dow Jones Market Data. May Brent crude dropped $3.83, or 5.9%, to $60.79 a barrel on ICE Futures Europe. The global benchmark also marked a correction, down 12.7% from the recent high of $69.63 from March 11. Both WTI and Brent crude logged their lowest front-month contract settlements since February. Germany, Europe's largest economy, extended its lockdown measures by another month to April 18 (link), and imposed several new restrictions in an effort to drive down the rate of coronavirus infections. "A surge in virus cases in mainland Europe, where the rollout of vaccines has been painfully slow, has cast doubt on resumption of travel in the region...Among other things, this is hurting demand projections for crude oil and holidays," While Europe is struggling with extended shutdowns, the opposite is happening in the U.S., where a continued easing of social distancing restrictions, vaccine rollouts, and the release of government financial aid checks are expected to boost demand for crude in the world's largest oil-consuming country. The divergent trends were evident in the crack spreads -- the differential between products produced from a barrel of crude and the crude itself -- on either side of the Atlantic. He noted that the gas oil/Brent crack spread in Europe remains very low, below $5 a barrel. By comparison, the comparable U.S. spread is seen around $15 a barrel. Among other factors influencing trading, tensions between Saudi Arabia and Yemen rebels have provided some support for oil prices this month.

WTI Holds Big Losses After Surprise Crude Build -Crude prices crashed today, extending recent losses with WTI back below $58 at six-week lows amid dimming prospects of a steady recovery in demand from Europe to India.  “The weakness in crude prices isn’t likely to go away in the coming weeks, even as U.S. refinery utilization recovers to pre-storm levels,” “There is still the resurgence of Covid-19 in Europe and Asia, and refinery maintenance in China and these are likely to keep international demand weak for U.S. crude.”  Tonight's API-reported inventory data will give us the next trend direction API:

• Crude +2.927mm (-900k exp)
• Cushing -2.282mm
• Gasoline -3.728mm
• Distillates +246k

After four straight weeks of builds, analysts expected crude stocks to draw this week, but once again (if API is right) we saw a crude build. Gasoline stocks drew down once again.  WTI broke below a key technical level today and was hovering around $57.50 ahead of the API print and was unexcited by the data. “The swing lower was triggered by the deteriorating near-term demand outlook in the face of still hampered refineries, surging interest and renewed European lockdowns,” “With prices breaking below the 50-day moving average during the session, technical traders may well take WTI lower still.”Finally, we note that overseas buying isn’t expected to recover any time soon. China, the largest customer for U.S. oil, slowed its intake after purchasing heavily in recent months. Local producers are also competing with traders that have amassed large quantities in storage across the world and are looking to offload their supplies since it doesn’t pay now to store oil and sell in the future.

Oil rises on bargain-hunting but oversupply fears cap gains - Oil prices edged higher on Wednesday as investors looked for bargains following the previous day's plunge, but gains were capped as pandemic lockdowns in Europe and a build in U.S. crude stocks curbed risk appetite and raised oversupply fears. Brent crude futures rose 27 cents, or 0.4%, to $61.06 a barrel by 0108 GMT, after tumbling 5.9% and hitting a low of $60.50 the previous day. West Texas Intermediate (WTI) crude futures climbed 19 cents, or 0.3%, to $57.95 a barrel, having lost 6.2% and touched a low of $57.32 on Tuesday. Both benchmarks touched their lowest levels since early February on Tuesday and have now fallen more than 14% from their recent highs earlier this month. The front-month spread for both Brent and WTI slipped into contango, where front-month contracts are lower than the later months, a sign that demand for prompt crude is declining. "Investors adjusted positions from Tuesday's sharp selloff," "But the market sentiment remained bearish due to growing concerns about demand recovery in the wake of new pandemic curbs in Europe," he said. Germany, Europe's biggest oil consumer, extended its lockdown to April 18, and Chancellor Angela Merkel urged citizens to stay at home for five days over the Easter holiday. Worries over the pace of the recovery from the pandemic were also heightened after a U.S. health agency said the AstraZeneca Plc vaccine developed with Oxford University may have included outdated information in its data. Adding to pressure, U.S. crude oil stocks jumped by 2.9 million barrels in the week to March 19, against analysts' expectations in a Reuters' poll for a decline of about 300,000 barrels, according to trading sources citing data from industry group the American Petroleum Institute. But gasoline stocks fell by 3.7 million barrels, compared with expectations for a build of 1.2 million barrels. Human rights sanctions on China imposed by the United States, Europe and Britain, which prompted retaliatory sanctions from Beijing, also added to market concerns.

WTI Dips After Surprise Crude, Product Inventory Builds - After a brief dip, extending yesterday's losses, on the surprise crude build reported by API overnight, but anxiety over the Suez canal blockage potentially taking days to fix sent prices notably higher overnightTen tankers carrying 13 million barrels of crude could be affected after a container ship that ran aground in the Suez Canal blocked vessels passing through the waterway, oil analytics firm Vortexa said on Wednesday.The approximate rate of backlog is about 50 vessels a day and any delays leading to re-routings will add 15 days to a Middle East to Europe voyage, Vortexa added. DOE

• Crude +1.912mm (-900k exp)
• Cushing -1.935mm
• Gasoline +204k
• Distillates +3.806mm

Official data confirmed API's crude build surprise but it is the build in products that is most notable.

Oil gains more than $3/bbl after Suez Canal ship grounding (Reuters) - Oil prices jumped about 6% on Wednesday after a ship ran aground in the Suez Canal, and worries that the incident could tie up crude shipments gave prices a boost after a slide over the last week. The crude benchmarks, U.S. crude and London-based Brent, added to gains after U.S. inventory figures showed a further rebound in refining activity, suggesting U.S. refiners are mostly recovered from the cold snap that slammed Texas in February. Brent crude settled at $64.41 a barrel, gaining $3.62, or 6%, after tumbling 5.9% the previous day. West Texas Intermediate (WTI) settled at $61.18 a barrel, rising $3.42, or 5.9%, having lost 6.2% on Tuesday. The gains appeared to stabilize the market that had slumped from early this month, when prices hit their highest levels this year on expectations for demand recovery. Those hopes have since been dashed as European nations re-entered lockdowns to halt another wave of the pandemic. Oil has recovered from historic lows reached last year as OPEC and its allies made record output cuts. On Tuesday, both benchmarks touched their lowest since February. Ten tug boats struggled on Wednesday afternoon to free one of the world’s largest container ships after it ran aground and blocked the Suez Canal for more than a day, port agent GAC said. The GAC said the information it had received earlier claiming the vessel was partially refloated, allowing traffic to resume along the fastest shipping route from Europe to Asia, was inaccurate. “It’s one of those wild cards that is unique to the crude oil industry,” said Bob Yawger of Mizuho in New York. “Once you think you have everything nailed down, I can guarantee one thing: You don’t.” Oil prices were also supported by U.S. Energy Information Administration data that showed refinery runs recovering after a winter storm shut Texas refineries last month.

Oil Prices Fail to Get Boost from Blocked Suez  -- Oil dropped as a strengthening dollar and mounting lockdowns in Europe blunted the potential impact of crude cargoes backing up outside the blocked Suez Canal. Futures fell 4.3% in New York on Thursday in the wake of a stronger U.S. dollar, which reduces the appeal of commodities priced in the currency. Work to re-float the massive ship that’s stuck in the canal continued without success. While the Suez blockage is complicating trade, a long-term realignment of global crude flows has seen westbound shipments from Persian Gulf producers fall, limiting the impact on oil prices. The Suez Canal has “diluted importance as a transit hub for energy,” said Bob Yawger, head of the futures division at Mizuho Securities. Prices are facing pressure from the rising dollar, “the incredible inability of the euro zone in particular to take care of the Covid situation” and case numbers in the U.S. “going in the wrong direction.” At the same time, the U.S. reported the most new cases on Wednesday since Feb. 12 and European countries have tightened restrictions recently. Volatility has risen to the highest since November, and traders see the market shedding length with little to stoke immediate optimism ahead of a full-fledged economic reopening from the pandemic. Despite the recent sell-off, oil is still up around 20% this year and there is confidence in the longer-term outlook for demand as coronavirus vaccinations accelerate worldwide and OPEC+ continues to hold back supply. The alliance is scheduled to meet next week to decide production policy for May. “It all got a bit too excited earlier with talk about supercycles and massive stock draws in the first quarter,” said Paul Horsnell, head of commodities research at Standard Chartered. That was “never on the cards, the big stock draws come later.” Still, the prompt timespread for Brent has resumed trading in a bullish backwardation after briefly flipping to a bearish contango on Tuesday for the first time since January. The spread was 14 cents in backwardation on Thursday, compared with 67 cents at the start of the month. West Texas Intermediate for May delivery fell $2.62 to settle at $58.56 a barrel in New York. Brent for May settlement slipped $2.46 to end the session at $61.95 a barrel. Hedge funds had built up net long positions in WTI and Brent last month to the highest in over a year, according to a Bloomberg analysis of Commodities Futures Trade Commission and ICE data for four contracts. Since then, prices jumped to multi-year highs and above technical gauges indicating a correction was due, before last week’s price plunge sent futures in New York back near $60 a barrel.

Oil drops more than 4%, on pace for third straight week of losses - Oil prices fell on Thursday as a new round of coronavirus restrictions in Europe revived worries about demand, even as tug boats struggled to move a stranded container ship blocking crude oil carriers in the Suez Canal. Brent crude slid 3.8% to $61.95 per barrel. U.S. West Texas Intermediate (WTI) crude dropped 4.28% to settle at $58.26 per barrel. Both contracts jumped about 6% on Wednesday after a ship ran aground in the Suez Canal, one of the world's most important oil shipping routes. The Suez Canal Authority said on Thursday it had suspended traffic temporarily while eight tugs work to free the vessel. "We believe that the incident mostly creates noise in the market and should remain without any lasting fundamental impact," said Norbert Rücker, analyst at Julius Baer bank. Wood Mackenzie's vice president, Ann-Louise Hittle, said a few days of delays in crude or product travelling through the Suez Canal to Europe and the United States should not have a prolonged impact on prices in those markets. The impact of the Suez Canal blockade on oil prices is also limited as the destination of most oil tankers is Europe, but European demand is currently weak due to a new round of lockdowns. "If Europe was in a better state in its COVID-19 battle, then the disruption would possibly create a more prolonged issue but this is not the case. That is why traders today quickly corrected some of the previous day's gains," said Rystad Energy's analyst Bjornar Tonhaugen. The technical manager of the ship said another effort to re-float the vessel will be undertaken later in the day after an earlier attempt failed. The salvage company said it might take weeks. Given the persistent demand worries and falling prices, expectations are growing that the Organization of Petroleum Exporting Countries and allies, together called OPEC+, will roll over their current supply curbs into May at a meeting scheduled for April 1, four OPEC+ sources told Reuters. "Oil markets are unlikely to renew their upward momentum aggressively until OPEC+'s next meeting in early April, which should leave production cuts unchanged," said Jeffrey Halley, senior market analyst at OANDA. The global oil market was also under pressure as producers faced difficulties selling to Asia, especially China. Asian buyers instead took cheaper oil from storage while refinery maintenance has reduced demand, industry sources said. A strong dollar also weighed on oil prices. The dollar hit a new four-month high against the euro as the U.S. pandemic response continued to outpace Europe's.

Oil prices rebound on fears Suez Canal blockage may last weeks - Oil prices bounced back on Friday from a plunge a day earlier on concerns that a large container ship that ran aground in the Suez Canal may block the vital shipping lane for weeks, squeezing supply. Prices, however, were still headed for a third consecutive weekly loss. Brent crude advanced $1.16, or 1.9%, to trade at $63.12 per barrel, after dropping 3.8% on Thursday. U.S. West Texas Intermediate (WTI) crude advanced $1.25, or 2.1%, to trade at $59.81 per barrel, having tumbled 4.3% a day earlier. Both benchmarks were on track for a weekly loss of more than 3%, following a more than 6% decline last week. The trapped container ship is blocking traffic in the Suez Canal, one of the world's busiest shipping channels for oil and refined fuels, grain and other trade between Asia and Europe. Officials stopped all ships entering the canal on Thursday, and a salvage company said the vessel may take weeks to free. "Expectations that the blockage of the Suez Canal may last for weeks raised fears of supply tightness in oil markets," said Nissan Securities researcher Yasushi Osada. "But lingering worries that a fresh wave of lockdowns in Europe and elsewhere may slow a recovery of global fuel demand are expected to limit price gains," he said. Countries in Europe are renewing restrictions to curb the spread of COVID-19, which will likely reduce fuel demand from the region. Germany, Europe's largest economy, has seen its biggest increase in coronavirus cases since January. In parts of western India, authorities ordered people indoors as new infections hit the highest level in five months. The oil market was also under pressure as producers had difficulty selling to Asia, especially China. Asian buyers instead took cheaper oil from storage while refinery maintenance has reduced demand, industry sources said.

Oil jumps 4% on fears Suez Canal blockage may last weeks (Reuters) - Oil prices rose more than 4% on Friday on worries global supplies of crude and refined products could be disrupted for weeks as workers try to dislodge a giant container ship blocking the Suez Canal. Slideshow ( 2 images ) It was a rebound from a sharp decline the previous session on concerns that fresh coronavirus lockdowns in Europe would hurt demand. Brent crude rose $2.62, or 4.2%, to settle at $64.57 a barrel, after dropping 3.8% on Thursday. U.S. West Texas Intermediate (WTI) crude gained $2.41, or 4.1%, to settle at $60.97 a barrel, having tumbled 4.3% a day earlier. Brent rose 0.1% over the last week, while WTI dropped 0.7%, its third weekly loss. Oil trade was volatile this week, as traders weighed the potential impact of the Suez Canal blockage which happened on Tuesday against the effect of new coronavirus lockdowns. “Today the market is up again as traders in a change of heart decided that the Suez Canal blockade is actually becoming more significant for oil flows and supply deliveries than they previously concluded,” said Paola Rodriguez Masiu, Rystad Energy’s vice president of oil markets. The Suez Canal stepped up efforts on Friday to free the stuck mega vessel, after an earlier attempt failed. Efforts to free it may take weeks, with possible complications from unstable weather. Of the 39.2 million barrels per day (bpd) of total seaborne crude in 2020, 1.74 million bpd went through the Suez Canal, according to data intelligence firm Kpler. Additionally, 1.54 million bpd of refined oil products flow through the canal, about 9% of global seaborne oil product trade, Kpler said. On Friday, there were 10 vessels waiting at the entry points of the Canal carrying around 10 million barrels of oil, Kpler said. Reeling from the blockage in the Suez Canal, shipping rates for oil product tankers have nearly doubled this week, and several vessels were diverted. The oil markets were also lifted by worries over escalating geopolitical risk in the Middle East. Yemen’s Houthi forces on Friday said they launched attacks on facilities owned by Saudi Aramco. Prices also drew support from expectations that the Organization of the Petroleum Exporting Countries and its allies will maintain lower production. Goldman Sachs said it expects OPEC+ to keep production unchanged for May when the group meets next week, “with a still large ramp-up of 3.4 million barrels per day expected by September.” Acting a week ahead of the OPEC+ meeting, Abu Dhabi National Oil Company (ADNOC) has deepened crude oil supply cuts to Asian customers in June to 10%-15% from 5%-15% in May, several sources said. In the United States, the number of rigs drilling for oil rose by six this week to 324, data from oil services firm Baker Hughes showed. Still, the potential negative effect on demand from the coronavirus pandemic loomed. Germany’s third wave of the coronavirus could turn into the worst one so far and 100,000 new daily infections is not out of the question, the head of the German Robert Koch Institute (RKI) said.

Oil’s Most Volatile Week In Months Closes With a Whimper - -- Oil in New York barely nudged this week despite whipsawing over several days, as renewed lockdowns in some regions blunted near-term demand outlooks and muted the impact of a standstill at the Suez. West Texas Intermediate futures fell less than 1% to close the week at $60.97, while Brent crude just barely eked out a gain, snapping a streak of back-to-back weekly declines. Futures rose almost 6% and fell nearly 5% in sessions this week as traders recalibrated their positions from day-to-day. Market volatility reached the highest since November. While optimism remains over the long-term outlook for a global demand rebound, the downbeat developments surrounding European lockdowns and rising case counts exacerbated an abrupt unwinding of long positions in a market that was signaling it may have rallied too far, too fast. Still, Goldman Sachs Group Inc. said crude’s decline in recent weeks had overshot market fundamentals, and demand should still increase sharply through the northern hemisphere’s summer season. The stage is set for crude’s rally “but the whole recovery trade got a little bit ahead of itself and oil got a little bit ahead of itself,” said Jay Hatfield, CEO at InfraCap in New York. “Once we get the real demand coming back, we can start to see prices heading to $70, $80 or even a superspike.” Meanwhile, the Suez Canal remained blocked, with efforts to dislodge a massive container vessel expected to take until at least Wednesday. The impact on headline prices was muted. The grounding of the Ever Given ship on Tuesday set off a chain of events that’s wreaking havoc on global seaborne trade -- shipping rates have increased, hundreds of vessels remain backed up in the channel and ships are rerouting to avoid the logjam. Yet the impact on the oil market is likely smaller than it would have been in the past, with flows from the Middle East to Europe declining due to a long-term realignment of trade. And while plenty of oil is shipped from the North Sea to Asia, it’s usually carried on tankers that are too large to pass through the canal. Nevertheless, “the last days feel like oil investors are on a rollercoaster,” said Giovanni Staunovo, a commodity analyst at UBS Group AG. “Drops are followed by a rise the day after, with fundamental news not being able to explain those shifts.” Prices WTI for May rose $2.41 to settle at $60.97 a barrel. Brent for the same month gained $2.62 to end the session at $64.57 a barrel. Oil prices have come under renewed pressure recently amid softening physical demand, a strengthening dollar and the unwinding of long positions. The increased volatility over the past two weeks has been felt across oil markets. Combined open interest in WTI and Brent has fallen nearly 7% to the lowest since January, refined product prices have slipped from the highs they hit after last month’s deep freeze and crude’s underlying market structure weakened.  Still, prices are up roughly 25% this year and there’s confidence in the longer-term outlook as vaccination rates climb and OPEC+ keeps supply in check. The group meets next week to decide on its production policy for May. 

Saudi Aramco profit slumps 44% after Covid-battered year, but maintains dividend –- Oil giant Saudi Aramco reported a 44% slump in full-year 2020 results, but maintained its $75 billion dollar dividend payout, with CEO Amin Nasser describing the last twelve months as one of the most "challenging years" in recent history. Saudi Aramco, Saudi Arabia's behemoth state oil firm, reported net income of $49 billion in 2020, down from $88.19 billion in 2019. The result was slightly below analysts expectations of $48.1 billion but still represents one of the highest of any public company globally. "In one of the most challenging years in recent history, Aramco demonstrated its unique value proposition through its considerable financial and operational agility," Saudi Aramco Chief Executive Amin Nasser said in company statement Sunday. Aramco said revenues were impacted by lower crude oil prices and volumes sold, and weakened refining and chemicals margins. The firm also said it expects to cut capital expenditure in the year ahead, and lowered its guidance for spending to around $35 billion from a range of $40 billion to $45 billion previously. Free cash flow slumped almost 40% to $49 billion, well below the level of its hotly anticipated dividend. Aramco also declared a payout of $75 billion for 2020, despite concern that it would take on additional debt to maintain it. "Looking ahead, our long-term strategy to optimize our oil and gas portfolio is on track and, as the macro environment improves, we are seeing a pick-up in demand in Asia and also positive signs elsewhere," he added. Shares in the top western oil and gas companies including Royal Dutch Shell and BP dropped to multi-year lows in 2020, as the coronavirus pandemic wrecked havoc across the global economy and sparked a historic collapse in the price of oil. Exxon Mobil, the largest U.S. energy company, posted its first annual loss. Escalating attacks on oil facilities Aramco's facilities have been the target of several attacks by Yemen's Houthi rebels — attacks that have escalated this year, with Saudi Arabia and Iran, the latter of whom backs the rebels, on opposing sides of Yemen's bloody civil war. Houthi missile volleys in parts of Saudi Arabia that struck Aramco facilities earlier in March briefly sent the price of oil above $70 a barrel to its highest level in more than a year. Most recently, the rebels claimed responsibility for drone strikes on an Aramco facility in the capital Riyadh on Friday, causing a fire that the Saudi energy ministry said was quickly brought under control with no casualties. Asked how the company aimed to reassure investors and the global community that its infrastructure was well-protected and prepared to prevent serious disruption to its operations, CEO Amin Nasser stressed that there was "no impact on business" from the attacks. "I think the most important thing is the readiness of our people," Nasser told CNBC during a press conference following the earnings release. "There is always something you learn with each attack, and you go and you enhance your emergency response … and you make sure you have all what is needed to restore these facilities if they are attacked."

Saudi Forces Strike Yemen In Response To Attack On Aramco - Saudi-led coalition forces conducted airstrikes against Houthi military bases in Yemen’s capital Sanaa, Bloomberg reported, citing local residents and a Houthi-controlled TV channel. The attacks, according to the report, targeted military camps and Houthi facilities near the Sanaa airport and the suburbs of the city. They came in response to a Houthi drone attack on Saudi oil facilities that took place on Friday. According to Saudi media, the attack did not cause any damage.This is just the latest in a series of airstrikes by the Saudi-led coalition against the Houthis, after the Yemeni rebel group, which is affiliated with Iran, struck a Saudi oil target earlier this month.  “The missile forces managed today to strike [a facility] of the Saudi Aramco company in Jeddah with a Quds 2 cruise missile. The strike was precise,” a spokesman for the Houthis said in early March. The Saudi side later confirmed the attack but said it had inflicted no significant damage.At the time, the Houthis warned there will be more attacks against Saudi targets and advised foreign companies and Saudi Arabia residents to be cautious.The Saudi response came soon enough in a series of airstrikes, with 32 carried out on March 9 alone, Zerohedge reported at the time.Saudi Arabia and the Houthis have been locked in a conflict since 2015. Many see it as a proxy war between the Saudis and the Iranian backers of the Yemeni rebel group, which overthrew the Saudi-affiliated Yemeni government and tried to assume power over the country.Oil facilities in Saudi Arabia are a favorite target for the Houthis because of the Kingdom’s reliance on oil revenues. The most notable attack that the Yemeni rebel group claimed responsibility for was the September 2019 attacks on Saudi Aramco’s oil facilities that cut off 5 percent of daily global supply for weeks, sending oil prices soaring. Saudi Arabia and the United States have said that it was Iran—and not the Houthis—who was responsible for the attack.

Saudi official made death threat against UN's Khashoggi investigator: report - A Saudi official reportedly issued what was perceived as a death threat against a United Nations investigator following her investigation into the murder of journalist Jamal Khashoggi. Speaking to The Guardian, Agnès Callamard, the organization's special rapporteur for extrajudicial killings, said she was alerted to the threat by a UN colleague in January 2020. Two threats were allegedly made toward Callamard by a Saudi official during a meeting of senior UN officials in Geneva, in which the official reportedly threatened to have her "taken care of" if she was not reined in by the UN. “A death threat. That was how it was understood," Callamard said when asked how her colleagues saw the statement. After UN officials voiced alarm at the threat, other Saudi officials tried to reassure them that the threat should not be taken seriously, the Guardian reports. But after the officials left, the Saudi official remained and repeated their alleged threat to the UN officials. “It was reported to me at the time and it was one occasion where the United Nations was actually very strong on that issue. People that were present, and also subsequently, made it clear to the Saudi delegation that this was absolutely inappropriate and that there was an expectation that this should not go further," Callamard told the Guardian. During the "high-level" meeting between Saudi diplomats in Geneva, visiting Saudi officials and senior UN officials, Callamard's investigation into the Khashoggi killing was angrily criticized by the Saudis, Callamard said. The Saudi officials also reportedly baselessly claimed that Callamard had been paid by the Qatari government. As the Guardian reports, Callamard's 100-page report published in 2019 concluded there was "credible evidence” that Saudi crown prince Mohammed bin Salman was behind Khashoggi's death, along with other Saudi officials. The Saudi government has repeatedly denied that the crown prince ordered Khashoggi's death.

Oil nations tipped for political instability if the world moves away from fossil fuels— Algeria, Chad, Iraq and Nigeria will be among the first countries to experience political instability as oil producers feel the effects of a transition to low carbon energy production, according to a new report from risk consultancy Verisk Maplecroft. In its 2021 Political Risk Outlook, published Thursday, the firm cautioned that countries that had failed to diversify their economies away from fossil fuel exports faced a "slow-motion wave of political instability." With the move away from fossil fuels set to accelerate over the next three to 20 years, and the Covid-19 pandemic eating into short-term gains gains in oil export revenues made in recent years, Maplecroft warned that oil-dependent countries failing to adapt risk sharp changes in credit risk, policy and regulation. Though some countries are increasing fossil fuel investment in the short term, consensus estimates indicate that "peak oil" will be reached in 2030, after which the transition toward a low carbon economy will gather steam and force oil-producing countries to adapt their revenue streams. Analysts suggested the worst-hit countries could enter "doom loops of shrinking hydrocarbon revenues, political turmoil, and failed attempts to revive flatlining non-oil sectors." Since the oil price crash of 2014, most exporters have either stagnated or reversed efforts to diversify their economies, Maplecroft data highlighted, with many doubling down on production in the ensuing years in a bid to plug revenue holes. "Despite this, the majority took a hit on their foreign exchange reserves anyway, including Saudi Arabia, which has burnt through almost half of its 2014 dollar stockpile," the report added. Break-even costs, the capacity to diversify and political resilience were identified as the three key factors determining the severity of the impact on stability when the expected energy transition begins to bite. "Currently, if countries' external break-evens – the oil prices they need to pay for their imports – remain above what markets can offer, they have limited choices: draw down foreign exchange reserves like Saudi Arabia since 2014, or devalue their currency like Nigeria or Iraq in 2020, effectively rebalancing their imports and exports at the expense of living standards," the report explained. Nigeria, Africa's largest economy, relies on crude sales for around 90% of its foreign exchange earnings and has devalued its naira currency twice since March last year. The IMF last month urged the country's central bank to devalue once again, but met with resistance. "Many, if not a majority, of net oil producers are going to struggle with diversification largely because they lack the economic and legal institutions, infrastructure and human capital needed,"   The most vulnerable countries are higher-cost producers that are heavily dependent on oil for revenues, have lower capacity to diversify and are less politically stable, the report said, identifying Nigeria, Algeria, Chad and Iraq as the first to be hit "if the storm breaks" due to their fixed or crawling exchange rates.