fuel supplies drop most on record as US oil refining collapses, leading to largest ever jump in oil supplies

​refinery utilization at an all time low, 10% lower than it's ever been; oil refined is least on record; record jum​p in oil inventories, record drop in gasoline inventories; distillates production at a 26 year low, distillates inventories drop most in 18 years;  largest jump in oil imports in 39 weeks

oil prices jumped this week after OPEC and other producers committed to holding their oil output steady through the end of April...after rising 3.8% to $61.50 a barrel in volatile trading last week as US oil output remained sharply curtailed in the wake of freeze damage to Texas production, the contract price of US light sweet crude for April delivery opened higher on Monday and initially rose more than 2% on progress on a huge U.S. stimulus bill and on hopes for improving oil demand as ​more ​vaccines are rolled out, but later tumbled to a loss of 86 cents at $60.64 a barrel on fears that Chinese crude consumption was slowing and that OPEC might increase global supply at a meeting later this week...oil prices then opened lower on Tuesday and extended those losses on worries over a possible supply increase from OPEC to close down 89 cents, or 1.5%, at $59.75 a barrel, its lowest close since Feb​ruary​ 19th, after OPEC Secretary General Mohammad Barkindo said the outlook for oil demand was looking more positive, particularly in Asia, ostensibly telegraphing an oil production increase...oil prices opened lower again on Wednesday after the API reported a surprise increase in crude inventories, but then reversed and rallied to a $1.53 increase at $61.28 a barrel after the EIA report showed a record drop in domestic fuel inventories in the wake of the deep freeze that ​had ​shuttered refineries in several states last week...oil prices were down more than 1% again early Thursday, but then surged more than 7% to the highest in nearly two years after the OPEC+ alliance surprised traders with its decision to keep their output unchanged, signaling a tighter crude market in the months ahead, before settling with a $2.55 increase at $63.83 a barrel​,​ as Saudi Arabia even said it would extend its voluntary oil output cut of 1 million barrels per day ​in the months ahead ​before gradually phasing it out...oil prices continued to surge on Friday following a stronger-than-expected U.S. jobs report and the decision by OPEC + not to increase oil supplies in April and settled $2.26 higher at $66.09 a barrel, thus finishing the week with an increase of 7.5% at the highest level since April 2019...

natural gas prices, on the other hand, finished lower after gas inventories fell much less than had been expected...after falling every day last week to a 4 week low of $2.771 per mmBTU as frozen production resumed and temperatures moderated, the contract price of natural gas for April delivery opened 1% higher on Monday, but only managed to hold a six-tenth cent gain at $2.777 per mmBTU at the close on forecasts for seasonally milder weather and lower heating demand through March...natural gas prices rallied again early Tuesday, climbing on LNG export momentum and hints of increased heating demand in mid-March. and held on to a 6.2 cent gain at $2.839 per mmBTU, but the brief rally's momentum faded Wednesday and prices fell 2.3 cents to $2.816 per mmBTU...prices then tumbled Thursday despite a recovery in LNG exports after a surprisingly anemic storage withdrawal caught traders off guard and left prices 7.0 cents lower at $2.746 per mmBTU...disappointment in the weak storage withdrawal carried into Friday as traders anticipated the spring 'shoulder season' when gas storage is refilled, and natural gas prices fell another 4.5 cents to $2.701 mmBTU and thus ended the week at a 5 week low, 2.5% lower than the prior week's close...

the natural gas storage report from the EIA for the week ending February 26th indicated that the amount of natural gas held in underground storage in the US fell by 98 billion cubic feet to 1,845 billion cubic feet by the end of the week, which left our gas supplies 277 billion cubic feet, or 13.1% below the 2,122 billion cubic feet that were in storage on February 26th of last year, and 178 billion cubic feet, or 8.8% below the five-year average of 2,032 billion cubic feet of natural gas that have been in storage as of the 26th of February in recent years....the 98 billion cubic feet that were drawn out of US natural gas storage this week was far less than the average forecast of a 137 billion cubic foot withdrawal from an S&P Global Platts survey of analysts, and was also ​much ​less than 145 billion cubic foot withdrawal from natural gas storage seen during the corresponding week of a year earlier, but was more than the average withdrawal of 81 billion cubic feet of natural gas that have been pulled out of natural gas storage during the same week over the past 5 years...   .

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending February 26th indicated that because of a big drop in our oil refining and a big jump in our oil imports, we had the largest surplus of oil on record left to add to our stored commercial crude supplies, which increased for the fourth time in the past fifteen weeks and for the 13th time in the past thirty-seven weeks.... our imports of crude oil jumped by an average of 1,692,000 barrels per day to an average of 3,941,000 barrels per day, the largest jump in 39 weeks, after falling by an average of 1,299,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 37,000 barrels per day to 2,351,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,285,000 barrels of per day during the week ending February 26th, 1,655,000 more barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells increased by 300,000 barrels per day to 10,000,000 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 13,941,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 9,903,000 barrels of crude per day during the week ending February 26th, 2,237,000 fewer barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a record 3,080,000 barrels of oil per day were being added to the supplies of oil stored in the US....so looking at that data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports and from oilfield production was 957,000 barrels per day more 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 (-957,000) 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 an error or errors of that magnitude in the oil supply & demand figures we have just transcribed....​ ​moreover​, since last week's fudge factor was at +429,000 barrels per day, there was a 1,386,000 barrel per day balance sheet difference in the unaccounted for crude oil figure from a week ago, which means the week over week supply and demand changes we have just transcribed are nonsense...however, since most everyone treats these weekly EIA figures as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as published, just as they're watched & believed to be accurate by most everyone in the industry.....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,661,000 barrels per day last week, which was 12.8% less than the 6,459,000 barrel per day average that we were importing over the same four-week period last year.....the ​record ​3​,​080,000 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 300,000 barrels per day higher at 10.000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 300,000 barrels per day higher at 9,500,000 barrels per day, while a 17,000 barrel per day decrease to 464,000 barrels per day in Alaska's oil production had no impact on the rounded national total....last year's US crude oil production for the week ending February 28th was rounded to 13,100,000 barrels per day, so this reporting week's rounded oil production figure was 23.7% below that of a year ago, yet still 18.7% 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 56.0% of their capacity while using those 9,903,000 barrels of crude per day during the week ending February 26th, down from 68.6% of capacity during the prior week, ​and the ​lowest refinery utilization rate on record...hence, the 9,903,000 barrels per day of oil that were refined this week were​ also the least on record, 36.9% fewer barrels than the 15,696,000 barrels of crude that were being processed daily during the week ending February 28th of last year, when US refineries were operating at an also low 86.9% of capacity...

even with the drop in the amount of oil being refined, the gasoline output from our refineries was higher for the 6th time in 15 weeks, increasing by 565,000 barrels per day to 8,301,000 barrels per day during the week ending February 26th, after our gasoline output had decreased by 1,295,000 barrels per day over the prior week...​but ​even with that ​partial ​rebound in gasoline production, this week's gasoline output was 14.9% lower than the 9,757,000 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) decreased by 723,000 barrels per day to an twenty-six year low of 2,898,000 barrels per day, after our distillates output had decreased by a record 953,000 barrels per day to an eleven year low of 3,621,000 barrels per day over the prior week...with distillates' production thus depressed, that output was 37.7% less than the 4,648,000 barrels of distillates that were being produced daily during the week ending February 28th, 2020...

even with the increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the 4th time in sixteen weeks, and for 17th time in 33 weeks, falling by a record 13,624,000 barrels to 243,472,000 barrels during the week ending February 26th, after our gasoline inventories had increased by 12,000 barrels over the prior week...our gasoline supplies decreased this week despite the production jump because the amount of gasoline supplied to US users increased by 941,000 barrels per day to 8,148,000 barrels per day, even as our imports of gasoline rose by 74,000 barrels per day to 605,000 barrels per day, while our exports of gasoline fell by 24,000 barrels per day to 493,000 barrels per day...after this week's big inventory decrease, our gasoline supplies were 3.4% lower than last February 28th's gasoline inventories of 252,048,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year... 

meanwhile, with the second straight big decrease in our distillates production, our supplies of distillate fuels decreased for the 19th time in 27 weeks and for the 29th time in the past year, falling by a 9,719,000 barrels to 142,996,000 barrels during the week ending February 26th, the largest drop in 18 years, after our distillates supplies had decreased by 4,969,000 barrels during the prior week....our distillates supplies fell by even more this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 144,000 barrels per day to 3,788,000 barrels per day, in part because our exports of distillates rose by 119,000 barrels per day to 820,000 barrels per day, while our imports of distillates rose by 18,000 barrels per day to 321,000 barrels per day...but even after this week's​ big​ inventory decrease, our distillate supplies at the end of the week were still 6.3% above the 134,464,000 barrels of distillates that we had in storage on February 28th, 2020, while they fell to about 2% below the five year average of distillates stocks for this time of the year...

finally, with the the big jump in our oil imports and and the record low 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 10th time in the past thirty-two weeks, and for the 29th time in the past year, increasing by a record 21,563,000 barrels, from 463,042,000 barrels on February 19th to 484,605,000 barrels on February 26th...after that record increase, our commercial crude oil inventories rose to 3% above the five-year average of crude oil supplies for this time of year, and about about 40% above the prior 5 year (2011 - 2015) average of our crude oil stocks as of the end of February, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped 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 last two and during the past two summers, after generally falling over the year and a half prior to September of 2018, our commercial crude oil supplies as of February 26th were 9.1% more than the 444,119,000 barrels of oil we had in commercial storage on February 28th of 2020, 7.0% more than the 452,934,000 barrels of oil that we had in storage on March 1st of 2019, and also 13.8%  more than the 425,906,000 barrels of oil we had in commercial storage on March 2nd of 2018...   

This Week's Rig Count

The US rig count rose for the 23rd time over the past 25 weeks during the week ending March 5th, but it still remains down by 49.2% from what it was a year ago....Baker Hughes reported that the total count of rotary rigs running in the US was up by 1 to 403 rigs this past week, which was still down by 390 rigs from the 793 rigs that were in use as of the March 6th report of 2020, and was also still one less rig than the all time low rig count prior to 2020, and 1,526 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 1 rig to 309 oil rigs this week, after rising by 4 oil rigs the prior week, leaving us with 372 fewer oil rigs than were running a year ago, and still less than a fifth of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations  was unchanged at 92 natural gas rigs, which was still down by 17 natural gas rigs from the 109 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 decreased by 3 to 14 rigs this week, with 12 of those rigs now drilling for oil in Louisiana's offshore waters and 2 drilling for oil in Alaminos Canyon offshore from Texas...that was 9 fewer Gulf of Mexico rigs than the 23 rigs drilling in the Gulf a year ago, when 20 Gulf rigs were drilling for oil offshore from Louisiana, one rig was drilling for natural gas in the Mississippi Canyon offshore from Louisiana, another rig was drilling for natural gas in the West Delta field offshore from Louisiana, and one rig was drilling for oil offshore from Texas...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig ​totals are equal to the Gulf rig counts.....

The count of active horizontal drilling rigs was up by 3 to 362 horizontal rigs this week, which was down by 346 rigs from the 708 horizontal rigs that were in use in the US on March 6th of last year, and less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014....on the other hand, the directional rig count was down by 2 rigs to 16 directional rigs this week, and those were also down by 35 from the 51 directional rigs that were operating during the same week a year ago....meanwhile, the vertical rig count was unchanged at 25 vertical rigs this week, and those were also down by 9 from the 34 vertical rigs that were in use on March 6th 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 5th, the second column shows the change in the number of working rigs between last week's count (February 26th) and this week's (March 5th) count, the third column shows last week's February 26th 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 6th of March, 2020..    

although they're not all obvious, we have a few more rig changes this week than in recent weeks....checking first for the details on the Permian in Texas from the Rigs by State file at Baker Hughes, we find that there were 3 new rigs added in Texas Oil District 8, which corresponds to the core Permian Delaware, and one rig added in Texas Oil District 8A, which includes the northern counties of the Permian Midland basin, which means there was a net increase of 4 rigs in the Texas Permian....since the national Permian rig count was only up by 3, that means that the rig that was removed in New Mexico must have been pulled out of the farthest west reaches of the Permian Delaware, to balance the national Permian total....elsewhere in Texas, there was a rig pulled out of Texas Oil District 1, there were 2 rigs added in Texas Oil District 2, and there was a rig pulled out of Texas Oil District 4, some or all of which could have been offsetting changes in the Eagle Ford shale that could net to no ​net ​change and hence wouldn't show up in the table above...there was such an offsetting change that isn't evident in the Barnett Shale in Texas Oil District 7B, where a natural gas rig was pulled out and an oil rig was added while the ​basin's ​rig count remained unchaged....there was also a rig added in the panhandle in Texas Oil District 10, which apparently was not in the Granite Wash, since that basin shows no change...other states showing changes include Louisiana, where 3 rigs were pulled out of the state's Gulf waters while one rig was added in the northern part of the state that ​apparenly ​wasn't in the Haynesville. and North Dakota, where one rig was pulled out of the Bakken shale in the Williston basin...meanwhile, there was a natural gas rig added in an "other' basin that Baker Hughes doesn't track, which more than likely was one of the Texas or Louisiana rigs in a basin that we couldn't easily pin down either..

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Southwestern Drills First Ohio Utica Well after Montage Acquisition - Appalachian pure-play Southwestern Energy Co. plans to keep year/year production and spending flat in 2021 even as it assumes a larger asset base and entry into Ohio with its acquisition of Montage Resources Corp. The exploration and production company laid out its vision for the year last week, joining peers in announcing a plan aimed at prioritizing free cash flow (FCF) generation, “disciplined investment” at maintenance levels and debt reduction. “Our maintenance capital program will hold fourth quarter 2021 production flat with our fourth quarter 2020 level including the Montage assets,” said CEO Bill Way. “Due to our strategy, investments will be focused on the highest return projects at strip prices. And given the strength of our inventory, we expect to have activity in all of our core operating areas.” In addition to its core areas in Northeast Pennsylvania and northern West Virginia, the company gained a foothold in Ohio with the acquisition of Montage, a tie-up that created Appalachia’s third largest oil and gas producer with more than 1 Tcfe of production anticipated this year. Way said the company moved a rig into Ohio and has since drilled its first dry gas Utica Shale well there. Southwestern plans to spend $850-925 million this year and intends to exit 4Q2021 producing about 3.05 Bcfe/d. Management said the company would bring 75-90 wells to sales, including up to 15 in the Ohio Utica’s dry gas window. Capital investment would be split evenly between Southwestern’s dry and liquids-rich acreage across Ohio, Pennsylvania and West Virginia. The company spent $899 million last year. This year’s budget is based on the assumption that Henry Hub prices will average $2.77/Mcf and West Texas Intermediate prices will average $50.00/bbl. The company expects to generate more than $275 million of FCF after having delivered $55 million in FCF in 4Q2020.

Commissioners anticipate oil and gas progress  — The Belmont County Board of Commissioners answered questions about the future of oil and gas activity during their Wednesday meeting. Guests included Bill Lample of the Dillies Bottom area along Ohio 7, near the site of a potential ethane cracker plant, who asked questions about whether the new presidential administration might prove harmful to fracking locally. He referred to executive orders from the office of President Joe Biden, including revoking a permit for a Keystone XL pipeline. The proposed pipeline would be nearly 1,200 miles from Canada to the Gulf Coast.“All these executive orders on the oil, pipelines and drilling, is it going to affect Belmont County?”Lample said.“It’s hard to say an exact yes or no,” Belmont County Commissioner Jerry Echemann said, adding the order is aimed at federal land. “I don’t think it will. Obviously I think we have a president now who is less friendly to oil and gas than the previous president, but I don’t think we’re going to be impacted too much by the executive orders that Biden put into place, because the main ones are on federal land, and none of our fracking is on federal land,” Echemann elaborated after the meeting.“The only federal land we really have nearby is the Wayne National Forest,” he said, naming the forest located in southeastern Ohio among the Appalachian Mountains, the southern edge of Monroe County on Ohio 7.“I don’t think that in and of itself will hurt it. The big challenge now are the low energy prices. They’re wanting to see energy prices come up, so that they can do more drilling and be more aggressive at it,” Echemann said.Lample said, “In Dillies Bottom and around Moundsville, there’s a lot of trailer parks. A lot of trailers.”“These certainly are not the best of times for the oil and gas industry,” Echemann said, adding he hoped for a better turn. “It’s all a function of price, when you look at the activity going on,” Commissioner J.P. Dutton said, adding there had been a slow-down even prior to the COVID-19 pandemic. “I think if we see prices creep up a little bit.”

Work begins on controversial Hamilton County Duke Energy pipeline - Work has begun on a controversial natural gas pipeline that will run through much of Hamilton County. Duke Energy's Central Corridor Pipeline has been in the works for years, and the utility company's local spokeswoman, Sally Thelen, said it will mean better service to its customers. "It's critical that we get this pipeline in," she told WCPO, calling it the "backbone of the system" in Southwest Ohio. "Hamilton County is our most populated county that we serve, so it’s critical that we get this pipeline in so that we can continue to do that." Once completed, the pipeline will span 13 miles from Golf Manor to Sycamore Township's northern annex adjacent to Sharonville. The pipeline will also run through neighborhoods in Cincinnati, Amberley Village, Evendale, Blue Ash, Reading and Sharonville. Work began Monday at the pipeline's northern terminus after years of pushback from neighbors who live along the route, as well as from county leaders. In 2016, then-Hamilton County Commissioner Todd Portune called the pipeline a bad idea. "They're bad for Hamilton County. They're bad for the neighborhoods they run through. They're bad for Duke (Energy)," he said. As recently as 2019, residents were still concerned. "We listened to some of the feedback we’ve gotten from neighbors, customers, local officials . We’ve reduced the size and the pressure of the pipeline. So we are very confident in using the latest building materials and monitoring capabilities that are out there now. This pipeline will be very safe," she said, adding that the energy company has experience installing infrastructure like the Central Corridor Pipeline.

Revolution pipeline back in service as Energy Transfer and regulators reach yet another deal -Natural gas began flowing Monday in the Revolution pipeline, 2½ years after it slid down a rain-soaked Center Township hillside and burst into flames.Since then, Texas-based Energy Transfer Corp. and the Pennsylvania Department of Environmental Protection, its primary regulator, have been battling over whether the pipeline owner had done enough to prevent the explosion in Beaver County and whether it was doing enough now to avoid another.The company was prohibited from repairing the ruptured portion of the pipe while it worked to stabilize the hill behind Ivy Lane, which stubbornly kept slipping, and on other steep slopes along the 40.5-mile project designed to ferry gas from fracked shale wells through Butler, Beaver, Allegheny and Washington counties.The company’s inability to shore up sliding soil along its right of way after the explosion Sept. 10, 2018, and trouble with construction on the much larger Mariner East pipeline corridor prompted the DEP to issue a permit ban that was lifted in January 2020. When Energy Transfer finally got the go-ahead to reroute the broken piece of pipe onto flatter ground and prepared to put Revolution back in service in the fall, the DEP intervened again, in November.Regulators found unstable slopes that hadn’t been properly secured and ordered the company not to fill the pipe with gas and, if it had, to empty it — a sign that regulators weren’t fully sure of the status of Energy Transfer’s plans.Energy Transfer took that order to court.Late last month, the company signed a settlement agreement with the DEP that said the Revolution pipeline could restart March 1 with increased slope monitoring. It also gave the company 60 days to submit a permanent stabilization plan for a steep hill near Penny Hollow Road. The DEP said the company has shown that the pipeline now is overbuilt to the point that it has a high safety factor. While the DEP previously insisted that the entire right of way must be permanently stabilized before gas could flow again, the settlement gives Energy Transfer more time to reach that goal. In the meantime, instruments installed at certain slopes will measure stability, groundwater levels and ground movement.DEP inspectors, who have visited the pipeline 43 times so far this year, have continued to mark outstanding violations but recorded progress in their inspection notes. The settlement deal also includes a $125,000 civil penalty. That follows a record $30.6 million penalty that the DEP fined Energy Transfer in January 2020 as part of another consent order and agreement that also called on the company to repair stream and wetland damage.

Groups Oppose Pittsburgh-Area Frack Waste Injection Well - Environmental groups are asking Gov. Tom Wolf to revoke state permits for a fracking waste injection well in the Pittsburgh suburb of Plum. It’s one of a handful of new injection wells permitted to operate in Pennsylvania by the EPA. The wells receive fluid drilling waste created by fracking and gas production.  The groups are worried that these waters — too toxic to be processed at municipal wastewater plants — will threaten private well water, the nearby Allegheny River, and that the high-pressure injection could induce earthquakes. In a letter to Gov. Tom Wolf, the groups said the well “would present devastating risks to several downstream Allegheny River public drinking water systems, including the Pittsburgh Water and Sewer Authority” which provides drinking water to hundreds of thousands of people. The letter points to a 2016 U.S. Geological Survey study that found oil and gas waste from an underground injection well in West Virginia had contaminated a nearby creek. The groups warn fracking waste could seep into groundwater and tributaries to the Allegheny River through a well casing failure or underground fissures caused by nearby coal mines and gas wells. Representatives from Delmont, Pa.-based Penneco Environmental Solutions, the company developing the well, did not respond to requests for comment. The company’s website states that the process of underground injection is safe and “is crucial to environmental protection and energy production.” In April 2020, the Pennsylvania Department of Environmental Protection gave Penneco a permit to pump 54,000 barrels of waste (42 gallons per barrel) a month into the Murrysville sandstone, an 80-foot thick rock layer 1,900 feet below the ground. A spokeswoman for Wolf said the governor would look into the issue, but said there wasn’t much he could do. “(T)he governor does not have the authority to himself revoke or suspend permits,”

Stopping Radioactive Water: Officials Want to Ban Oil & Gas Injection Wells at Pennsylvania Headwaters to Block EPA Permit - When you zoom in to Clara, dirt roads appear. And between wide, tree-covered hills, houses pop up, where 181 people live in Potter County, 30 minutes from the New York State border.  Clean water in Clara is essential to local cattle, horses, wildlife, world-class fisheries, and residents who, without access to a public water system, all rely on wells or springs. Water from Clara pours out of the Appalachian Mountains as part of the Triple Divide: where rainfall splits from one mountain range to three sides of the country. Only four places on the continent have this kind of hydrological reach.But there’s more than wildlife and farms in Clara. Hundreds of conventional and unconventional (a.k.a. fracking) oil and gas wells are cut into the landscape. And that means there’s oil and gas waste, too.In a rusty, grayish-blue building down a dirt road surrounded by trees and backed by beautiful mountains, sits Roulette Oil & Gas. It’s a 15-minute drive from Clara Township. The company operates 271 conventional and 3 unconventional oil and gas wells in Potter County.Conventional wells are drilled vertically to reach shallow reservoirs of oil and gas. It’s a simpler and older process than unconventional, horizontal, hydraulic fracturing today, commonly known as “fracking.” Regardless of the well type, drilling creates large amounts of wastewater, that industry and regulators often describe with harmless names like “salt water”, “brine”, or “produced water.”In September 2020, Roulette Oil & Gas submitted a permit application to the U.S. Environmental Protection Agency (EPA) which asks to convert one of their conventional wells in northwest Clara Township into a Class II-D injection well to dispose of brine from 110 of Roulette’s conventional wells in the area. That means shooting wastewater thousands of feet underground at high pressure into a cavern that once held fossil fuels.A Public Herald review of EPA’s permit authorization for Roulette Oil & Gas found that it doesn’t exclude injecting waste from the three unconventional wells operated by the company. The permit allows for the injection of 15,500 barrels of wastewater a month, and it can also be modified — leaving it open to accepting waste from more oil and gas operators in the future.

Fractured: Harmful chemicals and unknowns haunt Pennsylvanians surrounded by fracking - part 1 - 13-year-old Gunnar Bjornson r lives with his mom, dad, older brothers and younger sister about 35 miles south of Pittsburgh in the aptly-named community of Scenery Hill, where narrow country roads wind through shady woods that open up onto hilltop vistas of rolling fields. The hills are peppered with farmhouses, fruit orchards, and fields of corn and squash. The roadsides are punctuated by little white churches, farm stands, and dirt driveways marked with hand-painted signs like "The Jones's" and "Hidden Family Farm."  Scenery Hill is in Washington County, the most heavily fracked county in Pennsylvania, with about 1,584 wells in its 861 square miles, so the idyllic country roads are also flanked with signs directing oil and gas well traffic: "No well traffic beyond this point," "Staging area ---->," "Truck traffic: No engine breaks," and ads that read, "We buy mineral rights!"  August 19, 2019, was a typical day for Gunnar—he played drums, took the dog outside, and argued and joked with his siblings. But unbeknownst to him and his family, Gunnar had a number of harmful chemicals coursing through his body.  A urine sample taken from Gunnar that day contained 11 harmful industrial chemicals, including benzene, toluene, naphthalene, and lesser-known chemicals linked to a range of health effects including respiratory and gastrointestinal problems, skin and eye irritation, organ damage, reproductive harm, and increased cancer risk.  These chemicals are found in things like gasoline, pesticides, industrial solvents and glues, varnishes, paints, car exhaust, industrial emissions, and tobacco smoke. They're also commonly detected in air emissions from fracking wells. In Texas, researchers found that babies born near frequent flaring—the burning off of excess natural gas from fracking wells—are 50 percent more likely to be premature. In Colorado, the state Department of Health found that people living near fracking sites face elevated risk of nosebleeds, headaches, breathing trouble, and dizziness. In Pennsylvania, researchers found that people living near fracking face increased rates of infant mortality, depression, and hospitalizations for skin and urinary issues. Studies of fracking communities throughout the country have found that living near fracking wells increases the risk of premature births, high-risk pregnancies, asthma, migraines, fatigue, nasal and sinus symptoms, skin disorders and heart failure; and laboratory studies have linkedchemicals used in fracking fluid to endocrine disruption—which can cause hormone imbalance, reproductive harm, early puberty, brain and behavior problems, improper immune function, and cancer.

Fractured: Buffered from fracking but still battling pollution - part 4  —On a balmy evening in September of 2019, eight women gathered around a conference table in a small office about 25 miles southeast of Pittsburgh. -- The group chattered and laughed through the presentation until Ann LeCuyer pulled up a map of the planned route for the Mariner East 2 Pipeline, sending a brief hush through the room. "It's so close to my house!" someone exclaimed. "Look, I'm in the blast zone and I didn't even know until now." Mariner East 2 is one of three pipelines (along with Mariner East 1 and Mariner East 2X) being constructed to carry highly flammable natural gas liquids—liquid components of natural gas that have been separated out—350 miles from the Utica and Marcellus Shale plays in eastern Ohio, the northern panhandle of West Virginia, and across Pennsylvania to processing facilities at Philadelphia ports. From there, the end products will be carried overseas by ship for use in plastics production. (Ethane, a byproduct of fracking, is used to manufacture plastics.) Executive Director of Protect PT Gillian Graber of Trafford explains a map of community and natural gas infrastructure to Protect PT members during an event at the non-profit's Harrison City, Pennsylvania, headquarters. (Credit: Connor Mulvaney for Environmental Health News) The project is orchestrated by Sunoco's parent company Energy Transfer LP, which also owns the controversial Dakota Access Pipeline. The Mariner East pipeline projects have been rife with accidents, spills, and controversy, in part because Pennsylvania doesn't have a state agency that oversees the placement of such pipelines. The planned route runs across people's yards and within a half mile of 23 public schools and 17 private schools, which worries residents due to the company's safety record: Between 2002 and the end of 2017, Energy Transfer LP pipelines experienced a leak or an accident every 11 days on average. Pipeline construction in Pennsylvania has already resulted in sinkholes, polluted waterways on public land, and an explosion in a town 35 miles west of Pittsburgh that destroyed a house. At least 25 other sites along the proposed pipeline route have been identified as being at risk for similar accidents. The Pennsylvania Utility Commission is fighting in court to keep its calculations on potential damage if such accidents occured secret, even though a recent investigation by Spotlight PA found many communities in the "blast zone"—the areas adjacent to the pipeline that could be engulfed in flames in the event of a pipeline explosion—lack adequate emergency response plans.

Fractured: Distrustful of frackers, abandoned by regulators - part 3 —For nearly a decade, Bryan Latkanich has been telling anyone who'd listen that allowing two fracking wells to be drilled on his farm is the worst mistake he's ever made. He's a single father on disability who leased his land in 2010 at the height of the fracking boom, thrilled to have two wells 400 feet from his home in exchange for what he thought would be millions of dollars in royalties, only to run into problem after problem. The drilling disturbed more land than had been agreed to or permitted, which he alleges damaged the foundation of his home. He caught workers illegally pumping water out of a pit into the woods behind his property. His well water became undrinkable and he and his son Ryan, who was 2 years-old when the wells went in, developed a rash of ongoing, mysterious health issues. The royalties were a pittance compared to what he expected. Chevron, which owned and operated the two wells, denies any responsibility for these problems, and Bryan has gotten few answers from the state agencies he's called upon to investigate. "I was a total cheerleader for this industry at the beginning," Bryan told Environmental Health News (EHN). "Now I just want to make sure no one else makes the same mistake I did. This has ruined my health and my kid's health and destroyed my farm. It has ruined my life."  In fracking towns across the state and country, people like Bryan have struggled to get answers about what's happening on their land, in their communities—even in their bodies. The state agencies tasked with overseeing the industry and responding to citizen complaints about pollution and health issues are often under-budgeted, understaffed, and overwhelmed. In Ohio, for example, a three-year investigation published in September 2020 by environmental advocacy group Earthworks showed that the Ohio Environmental Protection Agency and Ohio Department of Natural Resources failed to act on 39 percent of public complaints filed regarding air pollution from the oil and gas industry. The consequences are exemplified by a 2018 incident: After an explosion at an Exxon fracking well in Belmont County, Ohio, the site leaked methane at a rate of about 132 U.S. tons an hour for 20 days, ultimately emitting more of the powerful greenhouse gas than the entire oil and gas industries of France, Norway or the Netherlands do in an entire year. Methane is 84 times more climate-warming than carbon dioxide over a 20-year period.

Pennsylvania Families Exposed to Unusually High Levels of Oil and Gas Industry Chemicals, Report Finds – DeSmog --A groundbreaking four-part report by Environmental Health News (EHN) offers new scientific evidence that living near oil and gas development can expose people to a wide array of hazardous and carcinogenic chemicals — not just those living near shale drilling and fracking, but also those living near older conventional oil and gas wells.  The two-year EHN investigation sought to fill in a gap in the scientific understanding of fracking and chemical exposures by undertaking some research themselves, under the guidance of scientific advisors and with approval from an Independent Review Board. They collected air, water, and urine samples from five Pennsylvania families and sent the samples off to researchers at the University of Missouri for analysis. Those tested also wore personal air monitors for up to eight hours on most days samples were collected. The testing cost the publication an average of $12,000 per family, reporter Kristina Marusic said. Researchers also collected data about the families' activities and other potential sources of chemical exposure before and during the sampling.  The researchers discovered striking levels of chemicals associated with oil and gas and their “biomarkers,” substances produced when the body processes chemicals — like mandelic acid, which can be evidence of exposure to ethylbenzene or styrene, or hippuric acid, a biomarker for toluene. The compounds they found biomarkers for, which also included benzene, can cause irritation of the skin, nose, and eyes, central nervous system problems, and liver and kidney damage; some are also carcinogens.  “We were pretty shocked at some of these really high levels of these biomarkers in kids,” Marusic told Allegheny Front, adding that she was also surprised to see that some of the highest readings were also found in people who lived further away from shale wells but close to conventional oil wells. That said, the investigative reporting was intended to be a pilot project, she added, not proof that that the chemicals found pose a threat to people's health. “A lot of times the purpose of a pilot study is to say, ‘Hey, I think there might be something here. We should really look into this further,” she said. “This investigation represents the first comprehensive body burden analysis of residents living in areas targeted by fracking,” Dr. Sandra Steingraber of Concerned Health Professionals of New York, which publishes a compendium of research into the “risks and harms” associated with unconventional oil and gas, said in a statement. “As such, it fills an important data gap and strongly suggests that the toxic emissions from fracking operations are entering the bodies of nearby residents at levels known to cause harm.”

Sky-High Levels of Fracking Chemicals Detected in Children's Bodies -While the hazards of fracking to human health are well-documented, first-of-its-kind research from Environmental Health News shows the actual levels of biomarkers for fracking chemicals in the bodies of children living near fracking wells far higher than in the general population.The research fills a gap in the science between the health harms experienced by those living near frackingand the known harms caused by fracking chemicals: whether fracking chemicals were actually in people's bodies. They are. Of the southwestern Pennsylvania families who participated in the study, those who lived closer to fracking wells had higher levels of fracking chemicals or their biomarkers than those who lived far away.One nine-year-old boy had biomarkers for toluene, which can damage the nervous system or kidneys, 91 times higher than the average American. Another had biomarkers for ethylbenzene and styrene, 55 times higher than the average American. Exposure to ethylbenzene and styrene is linked to skin, eye, and respiratory tract irritation, reproductive harm, endocrine disruption, and increased cancer risk. The research is part one of a multi-part series by Environmental Health News exploring the multifaceted "body burden" of fracking.As reported by Environmental Health News: In Texas, researchers found that babies born near frequent flaring—the burning off of excess natural gas from fracking wells—are 50 percent more likely to be premature. In Colorado, the state Department of Health found that people living near fracking sites face elevated risk of nosebleeds, headaches, breathing trouble, and dizziness. In Pennsylvania, researchers found that people living near fracking face increased rates of infant mortality, depression, andhospitalizations for skin and urinary issues. Studies of fracking communities throughout the country have found that living near fracking wells increases the risk of premature births, high-risk pregnancies, asthma, migraines, fatigue, nasal and sinus symptoms, skin disorders and heart failure; and laboratory studies have linked chemicals used in fracking fluid to endocrine disruption—which can cause hormone imbalance, reproductive harm, early puberty, brain and behavior problems, improper immune function, and cancer.

Investigation Into Chemical Exposure From Fracking in Pennsylvania Provokes Call for Rapid Phaseout - "While financial analysts, policymakers, and massive corporations squabble over the finer points of the fracking debate, families living amidst the wells day in and day out live in constant fear about what the industry might cost them—if they had another child, would they need to worry about birth defects? Are these exposures increasing their kids' cancer risk? Would it be safer to move to a place far away from all of this, even if it would also mean being far from their extended families, friends, and communities? And even if they could move, how far would they have to go to feel safe?"Those are just some of the questions facing the western Pennsylvania families featured in a report published Monday by Environmental Health News (EHN), a publication of the nonprofit Environmental Health Sciences. Five families from the region participated in a pilot study on the chemicals commonly found in emissions from fracking sites.  Concerned Health Professionals of New YorkSandra Steingraber of Concerned Health Professionals of New York, a group that has long sounded the alarm about the impact of fracking—which largely affects poor and rural households—responded by calling for an end to the process."Consider[ed] together with the results of previous studies, the findings of this multi-part investigation serve as a powerful moral indictment of the Pennsylvania Department of Public Health, which has long privileged gas industry interests over protecting the health of Pennsylvania residents," Steingraber said. "Pennsylvania's children should not be used as laboratory rats in an uncontrolled human experiment involv[ing] toxic exposures.""In light of today's revelatory investigation, Concerned Health Professionals of New York reiterates our call: The risks and harms of fracking to public health are inherent to its operation," Steingraber added. "The only method of mitigating fracking's grave threats to public health is a rapid, comprehensive phaseout of fracking." Aided by scientific advisers, EHN conducted a two-year investigation intended to "provide a snapshot of environmental exposures in people living near fracking wells and help pave the way for additional research on a larger scale." Over the course of nine weeks in 2019, EHN collected a total of 59 urine samples, 39 air samples, and 13 water samples from five nonsmoking local households, all of which had at least one child. We found chemicals like benzene and butylcyclohexane in drinking water and air samples, and breakdown products for chemicals like ethylbenzene, styrene, and toluene in the bodies of children living near fracking wells at levels up to 91 times as high as the average American and substantially higher than levels seen in the average adult cigarette smoker.The chemicals we found in the air and water—and inside of people's bodies—are linked to a wide range of harmful health impacts, from skin and respiratory irritation to organ damage and increased cancer risk.

When the Kids Started Getting Sick - -On an evening in August, 2008, Cindy Valent learned that her twenty-year-old son, Curt, was in the hospital. Valent, who was fifty-three, with frosted hair and a matter-of-fact manner, lived in Cecil, a small town in southwestern Pennsylvania, which has become a hub of the natural-gas industry. For nearly a year, Curt, a junior at Robert Morris University, had been complaining that his shoulder hurt. That weekend, while with his girlfriend, Erin, he began running a fever and having chest pains. “I thought it was no big deal,” Valent told me recently. In the evening, routine imaging at the hospital revealed a spot near his lung. A few weeks later, Curt was diagnosed with Ewing’s sarcoma, a virulent form of bone cancer, which had spread to his lungs, liver, lymph nodes, and spleen.mWhen Curt began chemotherapy, she cut her hours so that she could stay with him in the hospital during treatment. At one point, she got a medical bill for 1.3 million dollars and wasn’t sure that her insurance would cover it. “We live by the seat of our pants, and without the seat of our pants, we’re screwed,” she said. Kendra Smith, the mother of one of Valent’s preschool students, heard about the situation and offered Valent a more flexible job at a law firm where she and her husband, John, were partners. At the time, the Smiths were beginning to handle cases dealing with environmental issues. When Valent joined, John Smith was representing a local library board in a dispute over the proposed location for a new building. Soil tests had revealed that the planned site was contaminated with benzene, an industrial chemical and known carcinogen, but the county’s development authority wanted to save money by removing only a little of the pollutant before construction. The Smiths helped the library fight for a more extensive cleanup. In December, 2010, while on a snowboarding trip, Curt asked Erin to marry him. On Monday, he finished his college coursework and handed in his last papers. Valent didn’t spend a lot of time thinking about why Curt had gotten sick. It seemed useless to dwell on it. But, in 2011, she learned that Kyle Deliere, a local twenty-five-year-old, had also been diagnosed with Ewing’s sarcoma. The Valents knew Kyle because he had grown up about a half mile from their house, and because he played with the Cecil Township Youth Baseball Association; Curt had played pitcher with the group as a child, and, as he grew older, was an occasional umpire. Valent thought nothing of the coincidence. Then, in December, 2013, she learned that her sixteen-year-old neighbor, Luke Blanock, who also played with the association, had been diagnosed with Ewing’s. As Luke grew sicker, his battle with cancer gained national attention: in early 2016, his wedding to his high-school sweetheart was filmed for an episode of “Inside Edition.” He died that August, and the Pittsburgh Pirates held a moment of silence in his honor during a game.

Pennsylvania Saw Modest Increase in Unconventional Natural Gas Production Last Year, but Activity Down - Pennsylvania unconventional natural gas production surpassed 7 Tcf last year, up 3.9% from 2019, the lowest growth rate on record for a full year of production, according to the state’s Independent Fiscal Office (IFO). Fourth quarter production increased 2.9% year/year to 1.8 Tcf, flat with the annual growth level in the third quarter. Quarterly production growth hit a peak in 2018 of 18.6%, but decelerated for eight consecutive quarters until plateauing at 2.9% in 4Q2020. Activity across the Appalachian Basin has declined as producers have cut budgets and scaled back operations. Demand was hit hard last year by the Covid-19 pandemic and investors have demanded more discipline from the upstream sector. The IFO said 99 horizontal wells were spud in the final three months of 2020, the lowest quarterly spud count since 2Q2016. Preliminary data for 2021 also show that the number of wells spud in January and February decreased by roughly 25% from the same time last year. The number of horizontal producing wells, which account for more than 99% of all unconventional production, increased by 5.9% to 9,868 in the fourth quarter. The IFO also tracks results from vertical wells drilled to unconventional formations, but they account for a marginal share of quarterly volumes. “This growth rate is the smallest year-over-year increase in quarterly horizontal producing wells on record,” the IFO said. “Decelerating growth in producing wells is due to less drilling activity and older wells being shut in or plugged.” The office added that “without a significant uptick in new wells spud, producing well growth will likely continue to decelerate.” While Henry Hub prices declined throughout 2020, they increased in 4Q2020 by 5.6% year/year to average $2.47/MMBtu during the period, driven by winter weather and higher electricity demand. However, IFO noted that regional prices fell steeply throughout the year. In the fourth quarter, average prices in Pennsylvania declined 21.8% year/year to $1.39/MMBtu.

Bankrupt Philadelphia Energy Solutions blames ‘mislabeled’ pipe for big blast that led to refinery’s closure The bankrupt former operator of a South Philadelphia refinery has blamed the supplier of an allegedly mislabeled elbow section of pipe for the 2019 leak and explosion that led to the permanent closure of the plant.Philadelphia Energy Solutions Refining and Marketing LLC, along with the trust that is liquidating the company’s remaining assets, has sued Babcock & Wilcox Co. for allegedly mislabeling the pipe, whose failure authorities say led to the catastrophic accident. The pipe was installed 46 years before the explosion when the refinery was owned by Gulf Oil.“B&W inadequately and defectively marketed the failed elbow joint by mislabeling the failed elbow joint and misleading the purchaser,” according to the complaint, filed Friday in Philadelphia Common Pleas Court. The suit was first reported by Law360.com.The refinery property was sold last year in bankruptcy court for $225.5 million to Hilco Redevelopment Partners, which promised to demolish and clean up the 1,300-acre site and rebuild it as a mixed-use industrial park. PES was the East Coast’s largest refinery until the June 21, 2019 accident damaged the plant and tipped public sentiment against its continued operation.Though the 150-year-old refinery is closed for good, PES continues to sort out the settlement of millions of dollars in liabilities owed to creditors. The lawsuit filed Friday in Philadelphia Common Pleas Court seeks damages from Babcock & Wilcox for allegedly mislabeling the failed pipe joint, and makes claims for negligence, product liability, and breach of warranty.A preliminary 2019 report by the U.S. Chemical Safety and Hazard Investigation Board identified the 8-inch diameter section of pipe in the refinery’s alkylation unit as the source of the leak of flammable liquids and hydrofluoric acid (HF), which formed a vapor cloud that exploded. The alkylation unit produces a chemical that boosts octane level of gasoline.A series of explosions released 5,239 pounds of deadly HF and launched pieces of shrapnel as large as 19 tons across the refinery. Despite the release of hydrofluoric acid, only five refinery workers experienced minor injuries that required first aid treatment.The piping circuit in the alkylation unit that contained the ruptured elbow was installed in about 1973, when a previous owner, Gulf Oil, had installed the unit. CSB said the piping appeared to be original. The CSB report said that a section of pipe that leaked had corroded to about half the thickness of a credit card, or a mere 0.012 inches thick, 7% of the minimum thickness allowed. It said the faulty section of steel pipe contained a high amount of copper and nickel, whose presence in a steel alloy can cause greater corrosion when it comes in contact with HF.

Fracking banned in Delaware River Basin - In a historic ruling, the Delaware River Basin Commission voted Feb. 25 to permanently ban fracking (hydraulic fracturing) for natural gas in the Delaware River Watershed. This ruling formally affirms a drilling moratorium the DRBC imposed in 2010. Representatives of the four states with waterways the Delaware River drains — Pennsylvania, New York, New Jersey and Delaware — voted in favor of the ban. But the federal government representative from the U.S. Army Corps of Engineers abstained, claiming more time was needed to coordinate with the Biden administration.Executive Director Wenonah Hauter of Food & Water Watch, one of several groups who fought for the ban, criticized the federal abstention: “Grassroots activists stopped a plan to frack the Delaware River and never stopped fighting until today’s victory was assured. . . . Fracking is a threat to the Delaware River and everywhere else. Communities living with the harms of fracking have known for years that there is no way to make fracking safe.“The White House chose political expediency today over protecting the drinking water of 15 million people. Biden should listen to communities and science and support a ban on fracking everywhere.” (foodandwaterwatch.org)The DRBC ban prohibits fracking activity in areas of northeastern Pennsylvania and southern New York that sit atop natural gas deposits in the Marcellus Shale formation. Because New York State banned fracking in 2014, the ban only impacts Pennsylvania drilling. The Marcellus Shale does not extend into Delaware or New Jersey.More than 15 million people, a population including New York City; Philadelphia and Trenton, N.J.; and Wilmington, Del., rely on the 13,539-square-mile Delaware River Basin for their drinking water. The protected area includes the Delaware Water Gap and the Upper Delaware Scenic and Recreational River areas — parks that attracted three million visitors and generated $130 million in economic activity in 2019, according to the National Parks Conservation Association.Environmental and community activists have pressured the DRBC for over a decade to ban fracking in the area. Thousands of people signed petitions, wrote letters, demonstrated and spoke out at public hearings. This campaign expanded the broader struggle across the U.S. to ban fracking and to stop building dangerous pipelines to transport petroleum and natural gas extracted through fracking.

US Natural Gas Production Fell 1% in 2020 Amid Pandemic, Lower Prices, EIA Says -- U.S. annual natural gas production in 2020 declined 1% year/year and averaged 111.2 billion Bcf/d, a reflection in part of the pullback in drilling activity following the demand destruction and downward pressure on prices caused by the coronavirus pandemic.In releasing its latest 2020 estimate, measured by gross withdrawals, the U.S. Energy Administration (EIA) also on Tuesday noted that a robust increase in production during 2019 resulted in elevated volumes of gas in storage and additional stress on prices early in 2020.Domestic natural gas production grew by 9.8 Bcf/d, or 10% year/year, in 2019, and averaged 111.5 Bcf/d.The agency said production volumes reached a 2020 low in May of 106.4 Bcf/d, before gradually recovering in the second half the year. By December, EIA said, production had increased to 113.0 Bcf/d, though that marked a monthly high not expected to be sustained on an annual basis this year.In the previously released Annual Energy Outlook 2021, EIA said its base case outlook assumed that domestic gas production would recover to pre-pandemic levels by 2023 before continuing to rise through 2050, driven by Lower 48 shale and tight resources, as well as associated gas from oil plays.Under that assumption, the agency said, “more than half of the growth in shale gas production between 2020 and 2050 comes from shale gas plays in the Appalachian Basin in the East region, and most of the remaining growth comes from plays in the Gulf Coast and Southwest regions.” EIA noted Tuesday that Appalachia remains the largest gas-producing region in the United States and is still expanding. Within the Appalachia region, the agency noted, West Virginia was home to the biggest increase in production last year, up 20% to an annual average 7.1 Bcf/d. Production from the Marcellus and Utica/Point Pleasant shales of Ohio, Pennsylvania and West Virginia continues to expand as well. In total, 2020 production from these three states increased to 33.6 Bcf/d in 2020 from 32.1 Bcf/d in 2019, EIA said. Texas remained the largest gas producing state, though its output decreased from 28.4 Bcf/d in 2019 to 28.1 Bcf/d in 2020. Meanwhile, Oklahoma had the largest gas production decrease, falling 13% to 7.6 Bcf/d, according to EIA.

Pipeline firm outlines eminent domain case at Supreme Court -- Wednesday, March 3, 2021 -- The developer of the PennEast pipeline called for the Supreme Court to overturn a lower court's "deeply flawed" decision blocking the company from seizing state-controlled land in New Jersey to build its 116-mile natural gas pipeline.Both the state of Kentucky and the companies that issued bonds guaranteeing clean-up and reclamation of the dynamite-blasted landscape warned in court proceedings that there might not be enough money to do all the required work. With other U.S. coal-mining companies in similar financial straits and demand for coal plummeting, Blackjewel’s situation is a harbinger of the trouble ahead in coal country. Coal mining companies are required to post bonds to cover the costs of reclamation should they go bankrupt. They are also supposed to reclaim idled mine sites contemporaneously, as they are mining new areas. As the industry rapidly loses market share and continues its lurch toward the financial abyss, part of its legacy could involve scarred, strip-mined landscapes left behind by serial bankruptcies and government programs that may not be able to step in and finance clean-up and reclamation, environmental and citizens groups fear. “There just is not the capital left in the coal industry to satisfy all the remaining outstanding reclamation obligations,” said Peter Morgan, a Sierra Club attorney who closely follows coal-industry bankruptcy cases nationally. “These companies have been allowed to kick the can down the road time and time again, and now they are running out of road.” Morgan said he sees the Blackjewel case as “the tip of the iceberg,” with other major bankruptcies on the horizon. “There will be a lot more Blackjewels,” he said.

Maine natural gas company pulls plug on $90 million midcoast project -- A Maine natural gas company is withdrawing plans for a $90 million project announced earlier this year. In announcing the withdrawal, Summit Natural Gas alluded to political opposition to the gas pipeline that would have expanded natural gas access in Waldo and Knox counties. “Without regional alignment on the best ways to reduce emissions and promote cleaner energy usage, we will no longer pursue plans to bring natural gas to this part of Maine,” CEO Kurt Adams said Tuesday. The pipeline project had attracted early support from leaders in Rockport and Belfast, but opposition was growing against the project, with groups like Sierra Club Maine campaigning against the “fracked gas line.” Summit had pitched the pipeline as a move to limit climate change, coming at a time when Gov. Janet Mills has pledged to make Maine climate neutral by 2045. The company said the project would have reduced Maine’s carbon emissions by 263,000 metric tons over five years, which is equivalent to removing 56,000 cars from the road. Natural gas is a “relatively clean burning” fossil fuel, according to the U.S. Energy Information Administration, and the use of natural gas results in lower rates of carbon dioxide emissions than oil or coal.

Florsheim Announces Sale of NRG Plant, Possible Energy Storage Plan— A gas-fired power plant that drew controversy over plans to build a new turbine was among the fossil fuel plants NRG Energy is selling, Middletown Mayor Ben Florsheim said Monday night.NRG announced Monday that it was selling 4.8 GW of fossil fuel generating assets to Generation Bridge, an affiliate of ArcLight Capital Partners, for $760 million. Florsheim said the company announced in a meeting on Monday morning these assets include the Middletown power plant, as well as plants in New York and California.The announcement comes just over two weeks after NRG failed to secure funding in a regional energy auction it needed to build a new turbine to replace two half-century-old turbines at its plant on the Connecticut River in the south of Middletown.Shortly after that auction, NRG officials held a meeting with the Middletown Common Council and residents opposed to the new turbine. NRG indicated it would be looking into a different proposal for the plant that would include energy storage that the company believed would be more competitive with the regional auction price. “Suffice it to say, this is going to significantly impact the future of this project in ways that we can’t quite anticipate yet,” Florsheim said.

Manchin emphasizes natural gas in second letter to Biden - — For the second time this week, U.S. Sen. Joe Manchin, D-W.Va., has reached out to President Joe Biden on energy policy.Manchin, the chairman of the Senate Energy and Natural Resources Committee, wrote to the president Friday in support of natural gas production, stressing the related impact on the economy and energy security.“Responsible production of natural gas and practices like hydraulic fracturing have improved our nation’s energy security while supporting the nearly 1.5 million hard working Americans the industry employs, including in rural communities across our great nation,” Manchin said. “It is my hope that you will consider these benefits as you evaluate the federal oil and gas leasing program and consider other policies and regulations related to the energy industry.” Friday’s letter follows Manchin’s request for Biden to reconsider his decision to revoke the permit for the Keystone XL oil pipeline. Biden, through executive action, rescinded approval of the project, which would have resulted in the transportation of 800,000 barrels of oil daily from Alberta, Canada to Nebraska.The senator noted Friday the opportunities for natural gas projects in Appalachia with the Marcellus and Point Pleasant-Utica Shale formations, which go from the West Virginia-Virginia border to New York. According to the U.S. Geological Survey, the formations contain an estimated average of 214 trillion cubic feet of natural gas.“Responsible production of our abundant resources is critical,” Manchin said. “That includes using existing technologies and continuing to innovate new ways to reduce methane flaring and leaks from oil and gas systems and expanding our energy infrastructure and gathering lines to instead get that product to market.Manchin said the use of natural gas liquids has increased due to the manufacturing of chemicals, plastics and synthetic materials. He added China’s demand is also expected to continue growing as part of the country’s economic competitiveness strategy.

U.S. natgas hold near 4-week low as weather turns seasonally milder (Reuters) - U.S. natural gas futures held near a four-week low on Monday on forecasts for seasonally milder weather and lower heating demand in March. After falling for seven days in a row, front-month gas futures NGc1 edged up 0.6 cents, or 0.2%, to settle at $2.777 per million British thermal units. On Friday, the contract closed at its lowest since Jan. 29. Refinitiv said output in the Lower 48 U.S. states dropped to an average of 86.5 billion cubic feet per day (bcfd) in February as extreme weather froze gas wells and pipes in Texas and the central United States, the lowest in a month since October 2018. That compares with 91.1 bcfd in January and an all-time monthly high of 95.4 bcfd in November 2019. Refinitiv projected average gas demand, including exports, would drop from 111.3 bcfd this week to 102.9 bcfd next week as the weather turns seasonally milder. That, however, was higher than Refinitiv forecast on Friday. The amount of gas flowing to U.S. LNG export plants fell to an average of 8.5 bcfd in February as extreme cold cut power and gas supplies, the lowest since October 2020. That compares with an average of 10.4 bcfd in January and a monthly record high of 10.7 bcfd in December. Buyers around the world continue to purchase near record amounts of U.S. gas because prices in Europe and Asiaremain high enough over U.S. futures to make it profitable to ship American gas across the oceans. Traders, however, noted U.S. LNG exports cannot rise much more until new units enter service in 2022 since U.S. export capacity is only 10.5 bcfd. LNG plants can pull in a little more gas than they can export since they use some of the fuel to run the facility. 

Hints of Heating Demand Boost April Natural Gas Futures - Natural gas futures rallied on Tuesday, climbing on liquefied natural gas (LNG) export momentum and hints of increased heating demand in mid-March. The April Nymex contract climbed 6.2 cents day/day and settled at $2.839/MMBtu, building upon a modest gain a day earlier. May advanced 5.7 cents to $2.875. NGI’s Spot Gas National Avg., meanwhile, lost 12.5 cents to $2.840, led lower by sharp declines in the volatile Northeast region. Futures opened trading in the green on Tuesday and gained strength through the session. Mild weather is widely anticipated much of next week across the Lower 48, but forecasters noted the potential for cooler conditions the following week that could inject a dose of heating demand before spring settles in for good. Though above normal temperatures are still anticipated, projections for the March 12-16 time frame trended colder for the eastern two thirds of the Lower 48 early Tuesday, Maxar’s Weather Desk said. This change is “echoed among the various models over the past 24 hours,” the forecaster said. Production, meanwhile, hovered around 86 Bcf as trading got underway Tuesday, still well below the roughly 90 Bcf level reached prior to the paralyzing winter freeze that gripped Texas in mid-February. The U.S. Energy Information Administration (EIA) estimated that natural gas production in Texas dropped nearly 45% during the week ended Feb. 13, hitting a low of 11.8 Bcf/d on Feb. 17. It is gradually recovering.

US gas storage volumes fall much less than expected as Henry Hub summer strip dips | S&P Global Platts --Forecasts proved well off the mark as US natural gas in storage fell by only 98 Bcf for the week ended Feb. 26 following the week prior's monster draw of 338 Bcf, prompting a decline for the Henry Hub summer strip. Storage inventories decreased by 98 Bcf to 1.845 Tcf for the week-ended Feb. 26, the US Energy Information Administration reported the morning of March 4. The withdrawal was much weaker than the 137 Bcf draw expected by an S&P Global Platts survey of analysts. It was the largest miss by the storage survey in at least five years. By comparison, the survey has missed the EIA estimate by an average of 8 Bcf year to date. The closest figure of the survey to the EIA estimate was still well above the mark, calling for a 117 Bcf draw. The extent of the disconnect between the EIA and the market is possibly the largest it has ever been in the shale era, likely because of the compounding uncertainties related to the recovery of both production and demand in the wake of the mid-February cold front that brought massive volatility to the US gas market, according to S&P Global Platts Analytics. The draw was closer to the five-year average of 81 Bcf, and, as a result, the deficit to the five-year average increased from 161 Bcf to 178 Bcf. The EIA's South Central region posted a net change of zero for the week as the salt dome facilities added 9 Bcf, while the non-salt storage fields withdrew 9 Bcf. Over the past five years, the region has posted a net draw of 15 Bcf. Platts Analytics models pointed to a 28 Bcf draw for the region. Natural gas prices searched for direction this week, with the April NYMEX oscillating between $2.70/MMBtu and $2.90/MMBtu. The NYMEX Henry Hub April contract slipped 7 cents to $2.75/MMBtu following the release of the weekly storage report. The summer strip, April through October, fell 6 cents to average $2.85/MMBtu. A lack of intimidating cold in the March forecasts has kept market bulls at bay, while a constructive inventory backdrop has kept market bears from accelerating selling pressure. The market is clearly not reading too much into the report, as the large miss could be more a sign of transient issues post freeze-off events or simply data collection errors. Platts Analytics supply and demand model currently forecasts a 67 Bcf withdrawal for the week ending March 5, which would measure 22 Bcf weaker than the five-year average, as the withdrawal season enters its final month. Production for the week in progress was not impacted by the freeze-off event earlier in the month leading to a production gain of 5.4 Bcf/d week over week. Milder temperatures also reduced total demand by nearly 6 Bcf/d.

April Natural Gas Futures Stumble as Bearish Storage Report Overshadows LNG Recovery - A surprisingly anemic storage withdrawal caught markets off guard on Thursday, fueling bearish demand sentiment and driving natural gas futures lower despite robust liquefied natural gas (LNG) levels.The April Nymex contract dropped 7.0 cents on the day and settled at $2.746/MMBtu. May shed 6.8 cents to $2.781.Diminished near-term weather demand also dragged spot gas prices lower. NGI’s Spot Gas National Avg. shed 16.5 cents to $3.005. LNG export volumes exceeded 11 Bcf Thursday, NGI data showed, marking a return to near-record levels on strong demand from Asia and parts of Europe. LNG feed gas levels were temporarily muted amid the disruptions imposed in February by the Artic freeze that gripped Texas and threw Gulf Coast energy operations out of sync. They have since recovered and on Thursday were on par with the peak reached during the height of winter in January. However, production also recovered to the pre-freeze level of 90 Bcf. “Production levels rebounded quickly after most freeze-offs and other cold related impacts resolved just a week after production bottomed out at around 70 Bcf/d on Feb. 17,” Wood Mackenzie analyst Dan Spangler said in a note to clients Thursday.  What’s more, weather outlooks provided little in the way of new momentum for heating demand.

Small Gains for Natural Gas Forwards as LNG Demand Roars Back; More Upside May Wait Until After Spring -- Shoulder season may be setting in across U.S. natural gas forward markets weeks ahead of schedule, with modest price changes seen across the country, according to NGI’s Forward Look. A quick return to business as usual following last month’s historic winter freeze combined with near-perfect temperatures to drive April forward prices up only 6.0 cents from Feb. 26-March 3. A similar increase was seen for May forwards, while the summer (April-October) strip and next winter (November-March) posted smaller gains, Forward Look data showed. Rather than winter weather providing any momentum for forward prices this week, the latest weather data showed only a brief bout of cold over the next couple of weeks, with models favoring chilly air over the West then moving eastward around the middle of the month. However, before and after the projected cold snap, conditions are expected to be fairly mild, and NatGasWeather noted weather models are now at odds on just how cold it may become. The European model has grown chillier in recent runs, while the American model has warmed. “Statistically, the latest European Centre is more than 25 heating degree days colder versus the Global Forecast System for the coming 15 days,” NatGasWeather said. Rather than banking too much on the weather, traders may have relied on technical support to spur the rebound, according to EBW Analytics Group. However, further price gains may prove difficult to come by, barring a more substantial bullish forecast shift. The EBW analysts said the market surprisingly shrugged off the recent 338 Bcf storage withdrawal, which was the second largest on record. The withdrawal finally flipped the storage surplus to the five-year average to a deficit. Then, the Energy Information Administration (EIA) followed up the massive draw with another stunner on Thursday. The EIA reported a shockingly low 98 Bcf withdrawal from storage inventories for the week ending Feb. 26. Participants on The Desk’s online energy chat Enelyst questioned the validity of the data, especially in the South Central region. The EIA reported no net change in stocks for the period, with the 9 Bcf build in salt facilities being negated by the 9 Bcf draw in nonsalts. Some estimates had pointed to a draw in the high 20s Bcf. Some market observers also noted that refineries along the Gulf Coast have experienced a much slower return following the Arctic blast, while others said ethane rejection in the Permian Basin may have boosted production in the region. Elsewhere across the country, the Midwest withdrew 43 Bcf out of storage, and the East took out 41 Bcf, according to EIA. Both the Mountain and Pacific regions pulled out less than 10 Bcf. Total working gas in storage fell to 1,845 Bcf, which is 277 Bcf lower than year-ago levels and 178 Bcf below the five-year average. Ahead of the EIA report, estimates were pointing to a much steeper withdrawal near 135 Bcf, which would have pushed the deficit to the five-year average to around 215 Bcf.

EDITORIAL: Move tankers away from Mayfield homes  --RESIDENTS of Fredericksburg’s Mayfield neighborhood have a good reason to complain about the dozens of tanker cars CSX Transportation has parked near their homes: They can smell the liquefied petroleum gas (LPG) and other hazardous chemicals the cars contain. That prompted the City Council to pass a resolution requesting that the railroad stop storing tanker cars near the residential area. CSX officials responded that although it “may occasionally have rail cars temporarily in the Fredericksburg yard waiting to be moved to customers,” the tankers are “generally empty,” and “moved daily.” Then why are nearby residents still getting unwelcome whiffs of their contents? It would be one thing if this was the first time that CSX used tracks in the city to store tanker cars containing hazardous chemicals. It’s not. Mayfield residents, including Vice Mayor Chuck Frye, Ward 4, still remember a 2016 incident in which a tanker car parked there leaked a small amount of ethanol being transferred from a subsidiary’s now-defunct ethanol plant in Spotsylvania County. At that time, CSX promised to build a 1.5-mile spur line at its rail yard on Railroad Avenue to keep tanker cars out of the city’s residential areas. The spur line was built with CSX contributing $414,000 and the commonwealth dedicating $900,000 of state money to the project. For the week ending Feb. 27, CSX moved 123,488 carloads of freight containing everything from grain and farm products to petroleum products, lumber, steel scrap, coal and shipping containers—a 2.9 percent increase over the same week in 2020. Since capacity is limited to the amount of space on its tracks, which are shared by Amtrak and the Virginia Railway Express, the railroad often has to pull railcars onto spur lines to let more urgent traffic pass.

How a Gas Company Grossly Underestimated One of the Biggest Pipeline Spills in U.S. History | The New Republic (part 1 of 3) Last year, on August 14, two teenagers riding their ATVs through the woods in Huntersville, North Carolina, noticed a strange liquid bubbling from the earth. They stopped to take a look. The pair, who soon informed their local fire department, had no clue of the scale of the disaster they were looking at. And thanks to the craftiness of Colonial Pipeline, the rest of the country wouldn’t, either.The Colonial Pipeline system, described by a former CEO as a “superhighway of energy,” consists of two parallel pipelines that stretch a combined 5,500 miles, running through 12 southeastern states carrying gas from Houston to New Jersey. We now know the spill started sometime in early August 2020, caused by a crack in one of the pipes, and that the flow of gas was cut off shortly after the local fire department called it in. At first, the company said only around 63,000 gallons of gasoline had spilled, according to local news reports from WSOC. Then, as August turned to September, the number grew to 273,000. In November, as the company assured Huntersville residents that it was “deeply committed to keeping them informed throughout the process,” the number increased again, this time stopping in the neighborhood of 360,000 gallons. By then, the North Carolina Department of Environmental Quality, which was overseeing the cleanup process, released a statement that found that Colonial “has significantly underestimated the volume of gasoline” spilled into the natural preserve. Less than a week later, a Colonial spokesperson admitted toWFAE that the company in fact had no clue how much gas had been pouring from its pipe and that it would, “release a number when we believe it’s accurate and verified through multiple models.” In late January, some five months after those two teenagers happened upon the burst pipeline, the spill’s true scope was finally released in aComprehensive Site Assessment Report filed by the company with DEQ:1.2 million gallons. Instantaneously, it became one of the largest nontanker spills in modern American history. And even with the 1,600 pages of documentation, there was still a great deal of missing information. Last week, the DEQ sent Colonial a Notice of Continuing Violation, finding that the company had not adequately measured or reported the levels of vapor, soil, and air pollution from the site, ordering it to update its assessment by the end of April, and continue testing the private resident wells. The question that now hovers over this crisis is how Colonial managed to obscure, for this long, the scope of what happened in the backyard of North Carolina’s most populous city.

Between Oil And Water: The Issue With Enbridge’s Line 5 – The Organization for World Peace -- Two pipelines have been lying at the bottom of the Great Lakes for six decades. Carrying more than half a million barrels of oil and natural gas liquids every day, Enbridge Inc.’s Line 5 runs from Superior, Wisconsin to Sarnia, Ontario. The pipeline passes under the environmentally sensitive Straits of Mackinac—a narrow waterway that connects Lakes Michigan to Lake Huron. The Strait has shallow water, strong currents, and extreme weather conditions (becoming frozen during winter). If a pipe were to rupture, the oil would reach shorelines, accumulate, and jeopardize Great Lakes Michigan and Huron’s ecology. Conscious of environmental concerns, on 13 November 2020, Michigan governor Gretchen Whitmer demanded that Enbridge halt oil flow through the pipeline within 180 days. A 2016 study by the University of Michigan found that more than 700 miles (or roughly 1,100 kilometres) of shoreline in Lakes Michigan and Huron would be compromised by a Line 5 rupture. The Graham Sustainability Institute used computer imaging to model how the oil potentially could spread. According to their findings, the most significant risk areas include the Bois Blanc Islands, places on the north shore of the Straits, and Mackinaw City. Communities at risk include Beaver Island, Cross Village, Harbor Springs, Cheboygan, and other areas of the shoreline. A pipeline rupture would quickly contaminate Lakes Michigan and Huron’s shorelines and would involve an extensive cleanup.Enbridge claims Line 5 is in good condition and has never leaked in the past. However, Enbridge has a checkered past when it comes to oil spills. In 2010 an Enbridge pipeline ruptured in the Kalamazoo River (also located in Michigan) and spilled roughly 1 million gallons of crude oil. The spill went undetected for 18 hours, and the United States Department of Transportation fined Enbridge USD 3.7 million. It is one of the largest land-based oil spills in American history. An investigation found the cause of the pipeline breach to be corrosion fatigue due to ageing pipelines. Alarmingly, the pipeline that runs through the Straits of Mackinac is 15 years older than the pipeline that burst in the Kalamazoo River. Additionally, this is not the only time an Enbridge pipeline has leaked oil. Between 1999 and 2013, there have been 1,068 Enbridge oil spills involving 7.4 million gallons of oil. Despite this history, Enbridge is refusing to comply with the demands of Michigan. On 24 November 2020, Enbridge took legal recourse and brought the case to the U.S. federal court. Enbridge argues that the state has overstepped its jurisdiction. The company also asserts that they not answerable to state overseers, only the U.S. Pipeline and Hazardous Material Safety Administration. Legal analysts point out that the courts are typically hesitant to shutdown operating pipelines and have not often done so in the past. Enbridge is likely to cite precedents in an appeal if the court rules in favour of the state.

Canada calls Michigan’s shutdown of Line 5 a threat to country’s energy security - Natural Resources Minister Seamus O’Regan is calling Michigan’s order to shut down the Enbridge ENB-Tpipeline Line 5, a major petroleum conduit for Central Canada, a threat to this country’s energy security. He said Canada considers the continued operation of Line 5 “non-negotiable” for this country. It is the strongest language the federal government has used to date for a bilateral dispute that is quickly becoming a test of the budding relationship between Prime Minister Justin Trudeau and new U.S. President Joe Biden. The Trudeau government’s minister also vowed Canada would do whatever it takes to stop Michigan from shutting down the pipeline, which passes through the state on its way to Sarnia, Ont. Earlier this week, a senior Global Affairs official said Ottawa would invoke a 1977 Canada-U.S. treaty, which forces binding arbitration on the matter, if necessary. Mr. O’Regan was speaking to MPs on a parliamentary committee Thursday. “We take threats to our energy security very seriously,” he told the special House of Commons Committee on the Economic Relationship between Canada and the United States. “A shutdown of Line 5 would have profound consequences, in Canada and in the United States.” He vowed Canada would intervene precisely when necessary. “The federal government is watching it like a hawk. ... We are watching it on almost a minute-by-minute basis and we will be absolutely prepared to intervene at exactly the precise moment.” Michigan Governor Gretchen Whitmer has ordered the May, 2021, shutdown of the Line 5 pipeline, citing environmental risks. Calgary-based Enbridge Inc. has challenged her decision in court. The Enbridge Line 5 pipeline carries petroleum from Western Canada through Great Lakes states to Ontario, where much of the crude is turned into gasoline and other fuels before the remainder is shipped through the Line 9 pipeline to Quebec refineries.

Enbridge's Line 5 pipeline 'very different' from Keystone XL and Canada will fight hard for it: O'Regan — The federal government won’t let Michigan shut down the Line 5 pipeline, Canada’s natural resources minister said Thursday as he dismissed opposition comparisons to the thwarted Keystone XL project. Seamus O’Regan sounded almost combative as he vowed to defend the 1,000-kilometre line, which bridges an environmentally sensitive part of the Great Lakes to link Wisconsin with refineries in Sarnia, Ont. “We are fighting for Line 5 on every front and we are confident in that fight,” O’Regan told a special House of Commons committee on the relationship between Canada and the United States. The Enbridge Inc. pipeline carries an estimated 540,000 daily barrels worth of oil and natural gas liquids, and is vital to the energy and employment needs of Ontario, Alberta and Quebec, as well as northern U.S. states, he added. “We are fighting on a diplomatic front, and we are preparing to invoke whatever measures we need to in order to make sure that Line 5 remains operational. The operation of Line 5 is non-negotiable.” In November, Michigan Gov. Gretchen Whitmer ordered Line 5 to be shut down by May, accusing Calgary-based Enbridge of violating the terms of the deal that allows the line to traverse the bottom of the Straits of Mackinac. The straits, which link Lake Michigan and Lake Huron, boast powerful, rapidly changing currents that experts have said make the area the worst possible place for an oil spill in the Great Lakes. Pipeline opponents in the U.S. — many of the same voices who helped make TC Energy’s proposed Keystone XL expansion an environmental rallying point over the last decade — have vowed to see it shut down. Kirsten Hillman, Canada’s ambassador to the U.S., said Michigan’s concerns over Line 5 predate Whitmer and have been a topic of frequent discussion for embassy officials since 2017. Diplomats and governments will play a role in finding a solution, but resolving the dispute will likely come down to the state government and Enbridge, she suggested. “Line 5 is a crucial piece of energy infrastructure for Canada, but also for the United States — that is a core and principal message that we’re giving,” Hillman told the committee. She echoed O’Regan’s points about the potential impact not only on Canada, but on Michigan and Ohio as well, noting that the pipeline has been operating safely for more than half a century.

Solving Line 5 pipeline spat will require Biden's intervention, U.S.-Canada expert says U.S. President Joe Biden may be the key to settling the dispute over a Canadian-owned pipeline in Michigan, according to a long-time analyst of Canada-U.S. relations. Calgary-based Enbridge's Line 5 transports oil and natural gas liquids from Western Canada through the United States to refineries in Ontario and Quebec. Enbridge is working to replace a segment of the 68-year-old pipe that runs 7.2 kilometres under the Straits of Mackinac, which connects Lake Huron and Lake Michigan. The 1,038-kilometre project, built in 1953, goes from northwestern Wisconsin, across the upper peninsula of Michigan, under the Strait of Mackinac and down through the lower peninsula before crossing back up into Canada, terminating in Sarnia, Ont. Last November, Michigan Gov. Gretchen Whitmer moved to revoke the 1953 permit that allows the crossing under the straits. She gave notice that Enbridge must shut down the pipeline by May 2021, arguing the project presents an "unreasonable risk" of environmental damage to the Great Lakes. Earlier this week, Michael Grant, assistant deputy minister for the Americas at Global Affairs Canada, said the federal government is prepared to invoke the rules of a decades-old bilateral treaty if necessary to prevent the state government from pulling the permit. "The federal government is working very closely with Enbridge, mostly through mobilizing our diplomatic network in the United States, to engage the state of Michigan, as well as other states that have a vested interest in Line 5. We are also looking at all of our options that are available, including the 1977 treaty," Grant said. "Joe Biden is the key to this. And he's the key to it because this is litigation by the state of Michigan. So the federal government can't necessarily pre-empt the legislation, but they can weigh heavily in," he said. "And that's why I think Canada is talking about invoking this older treaty. They can intervene and say, 'no,no, this is important — we should allow this.'" However, Sands says the Line 5 dispute so far doesn't appear to be on Biden's radar and he has doubts the president will actually get involved. "We may have to re-examine whether Biden and Trudeau really do have this special relationship that we've heard about, because so far it's all talk, no action."

Deepwater Horizon's long-lasting legacy for dolphins The Deepwater Horizon disaster began on April 20, 2010 with an explosion on a BP-operated oil drilling rig in the Gulf of Mexico that killed 11 workers. Almost immediately, oil began spilling into the waters of the gulf, an environmental calamity that took months to bring under control, but not before it became the largest oil spill in the history of the petroleum industry. Nearly 10 years have passed since then, and the oil slick has long since dispersed. Yet, despite early predictions, area wildlife are still feeling the effects of that oil, and research published in Environmental Toxicology and Chemistry has shown that negative health impacts have befallen not only dolphins alive at the time of the spill, but also in their young, born years later. A team of researchers, including UConn Department of Pathobiology Professor and Director of the Connecticut Sea Grant College Program Sylvain De Guise, is part of a network conducting a long-term study on the health of bottlenose dolphins living in Louisiana's Barataria Bay, in the vicinity of the disaster. This population of dolphins includes individuals who lived through the disaster and some born afterwards. "We were on the ready and as soon as we could, and in 2011 we initiated a comprehensive health assessment where 60 to 80 people in the field worked together to find and safely pursue a multi-disciplinary, multi-expertise sample collection and study effort to assess the dolphins' health," says De Guise. De Guise explains that after collection, samples were processed in 60 to 80 different specialized labs, and the researchers then regrouped to put the information together. De Guise's research group specializes in studying the immune system, and from the very first set of samples they started to see consistent and abnormal immune responses in the Barataria Bay dolphins, compared with a similar control group of dolphins from Sarasota Bay who were not exposed to oil. For the Barataria Bay dolphins, the researchers observed immune cells called T-cells that were overly responsive to stimulation. The body uses T-cells to respond to a stimulus, or something recognized as foreign. In particular, there were increased numbers of cells called regulatory T cells, or Tregs, which De Guise describes as the cells that help put the brakes on during an immune response to prevent the body from over-responding and doing more harm than good. Despite the elevated numbers, De Guise says they were surprised to find the Barataria Bay dolphin Tregs appear to be functionally defective.

US LOOP reports 855,000 barrels of sour crude deliveries for February --Over 855,000 barrels of sour crude oil was delivered from the Louisiana Offshore Oil Port in February, an increase of 205,00 barrels on the month, LOOP reported. Monthly LOOP Sour deliveries have increased steadily since October, and February represented the most deliveries reported since August last year when 790,000 barrels were taken out of storage at the facility. Before pandemic lockdowns took hold last year, LOOP deliveries reached 810,000 barrels in February 2020. Deliveries of the grade, which consists of a blend of Poseidon, Mars and Basrah, Kuwaiti and Arab Medium crudes, have increased as market conditions have steadily shifted into backwardation. That often can disincentivize market participants from storing crude and gives more incentive to taking crude out of storage. Refinery usage also has been growing, although winter storms in February took a bite out of consumption as some Gulf Coast refineries were forced to close. Power outages impacted Texas’ refinery capacity, with as much as 4.4 million b/d offline during the week of Feb. 18. Most refineries have begun restarting, but effects may linger until mid-March. The average API gravity for LOOP Sour in February was 29.91 degrees — lighter than January’s average of 29.67 degrees; and sulfur content averaged 2.04%, which was more sour than the month prior’s average of 1.92%. LOOP and Matrix Markets sold 150 of the 9,300 capacity allocations contracts that were offered during its monthly crude storage auction on March 2.

Louisiana AG Landry authorizes settlement between oil company, state  – Louisiana Attorney General Jeff Landry announced Thursday he signed off on a deal to resolve litigation involving an oil-and-gas company and coastal parishes alleging environmental damage. The Louisiana Legislature would have to create the framework to implement the deal between Freeport-McMoRan and the state, with the proceeds going to projects consistent with Louisiana's coastal restoration plan, Landry said. Oil-and-gas leaders, and at least one of their top legislative allies, denounced the deal, calling it secretive and counterproductive for the state’s economy and coastal restoration. “Our actions on these suits are designed to bring finality and resolution and allow everyone a seat at the table,” Landry said. Landry, a Republican, said the settlement releases Freeport from liability for any current claims, triggering its dismissal from the coastal parish lawsuits. In exchange, Freeport would deposit an initial $15 million payment into an escrow account. The company would make additional annual payments, contingent on legislative action, of $4.25 million over 20 years, he said. Payments would not be distributed until the Legislature creates a special fund and oversight board to manage the money. The board would award money toward projects consistent with the state’s Coastal Master Plan, with 60% dedicated to state projects and 40% dedicated to local projects, according to Landry’s office. Landry said the agreement balances environmental protection with a healthy oil-and-gas industry. It does not apply to other similar lawsuits involving dozens of other companies, and Landry said he respects those companies’ right to continue to litigate if they chose to do so. “This litigation has been going on for over eight years now and continues to have a chilling effect [on the industry],” Landry said. “I continue to share, along with the industry, ways to be able to resolve these matters or to take these things off of the table.” Landry said coastal parishes involved in the litigation don’t need to approve the agreement, which he said involve state claims. Gov. John Bel Edwards already has affirmed the settlement. "These long-standing lawsuits by Louisiana’s coastal parishes are focused on coastal restoration and protection," Shauna Sanford, a spokeswoman for Edwards, said by email. "This agreement ensures that settlement funds stay in the impacted coastal communities for restoration projects and the Governor is hopeful that this settlement can act as a framework for how other similar actions might be handled."

Gas utilities face unprecedented test in digesting 'astronomical' storm costs | S&P Global Market Intelligence - As U.S. gas utilities report billions of dollars in natural gas purchase costs during February's deep freeze, analysts and executives say the industry has never faced a cost recovery challenge quite like this. The initial gas cost estimates are "astronomical and unprecedented" enough to complicate the funding and timing of any type of cost recovery, Mizuho Securities USA LLC analyst Gabriel Moreen said in a recent research note. While Mizuho was initially confident the impact on gas distributors would be limited, Moreen said the firm now sees potential for longer-term impacts. The cost recovery mechanism that policymakers ultimately approve will play a major role in determining the magnitude of those impacts, the analyst said. Consensus is emerging among gas utility leaders and equity analysts that securitizing the costs would be the simplest and best solution for companies and ratepayers alike. Under this model, companies would issue bonds to finance storm-related gas purchase costs. Some state commissions have already authorized utilities to record those costs in a regulatory asset. They will later determine whether those recorded costs were reasonably incurred and accurate, before setting a schedule for recovering them. [see embedded table]  One Gas Inc., which reported $2.2 billion in gas costs, is working with state policymakers and regulators to develop legislation allowing gas utilities to securitize the regulatory assets, Senior Vice President and Chief Commercial Officer Curtis Dinan said on a Feb. 26 conference call. He characterized the conversations as "very positive" but cautioned that the situation is unprecedented. "Historically, you've seen [securitization] in different parts of the country primarily related to electric utilities that have dealt with different storm costs," Dinan said. "There hasn't been, that I'm aware of, situations that would apply to a gas utility similar to that until this most recent event."

Six hurt in Saturday afternoon fire at Delek refinery in El Dorado -Delek US said six of its employees are being treated for injuries after a fire broke out Saturday afternoon in the Penex unit of its refinery in El Dorado. The fire was put out by the refinery’s on-site emergency response team with assistance from the El Dorado Fire Department. The fire was reported about 4 p.m. El Dorado resident Rochell Lee Thompson shot Facebook video of the fire. CLICK HERE to see it. Thompson, who lives about two blocks from the refinery, told magnoliareporter.com that his house shook about 4 p.m. He went outside and saw the fire. The refinery was evacuated. Delek US said in a statement issued Saturday night that after the fire broke out, the company began to monitor the air quality within the refinery and the community and have detected no adverse impacts. “We have accounted for all personnel, and we are deeply saddened that six Delek employees are receiving medical treatment this evening. Four of the injured were transferred from the Medical Center of South Arkansas to the burn unit at Arkansas Children's Hospital in Little Rock. Delek US said that the facility was in the process of undergoing turnaround activity, so there are no operational impacts to Delek US or Delek Logistics

Delek: Investigation into fire at El Dorado refinery to be launched— A fire broke out at the Delek: El Dorado Refinery, formerly known as Lion Oil, Saturday afternoon, injuring six people. It will be investigated “as soon as possible,” a statement released by Delek US Holdings late Saturday night said. “Earlier today, a fire occurred at the Penex unit of our refinery in El Dorado, Arkansas. Our on-site emergency response team, with the assistance of the El Dorado Fire Department, extinguished the fire,” the statement says. “We immediately began to monitor the air quality within the refinery and the community and have detected no adverse impacts.” Delek reported that six people were “receiving medical treatment.” Alex Bennett, executive director of business development at Medical Center of South Arkansas, said on Saturday that six patients were brought to the hospital and four were subsequently transferred to the Arkansas Children’s Hospital (ACH) Burn Unit, explaining that almost all burn patients in the state are transferred there. She said Sunday that the remaining two patients had also been transferred to ACH. The statement goes on to say that the refinery was in the process of turnaround activity, so there were no operational impacts to Delek Logistics or Delek US. “All of our facilities have rigorous, well documented safety controls. Safety is one of our Core Values. A full investigation will be launched as soon as possible,” the statement concludes. Along with the company fire brigade on-site at the refinery, the EFD, Union County Sheriff’s Office and Arkansas State Police responded to the fire.

Cold weather led to refinery shutdowns in U.S. Gulf Coast region -- U.S. Energy Information Administration (EIA) The cold snap that affected much of the central part of the country in mid-February disrupted energy systems,particularly in and around Texas. In the U.S. Gulf Coast, where the petroleum infrastructure has rarely operated in sub-zero temperatures, several refineries fully or partially shut down, leading to the largest reduction in Gulf Coast refinery operations in several years.Based on the U.S. Energy Information Administration’s (EIA) Weekly Petroleum Status Report (WPSR), gross inputs of crude oil and other feedstock to U.S. refineries declined 2.7 million barrels per day (b/d) (18%) to 12.6 million b/d for the week ending February 19, 2021. Most of the reduction in gross inputs (also known as refinery runs) was in the Gulf Coast region, which includes Texas.Gulf Coast refinery runs decreased by 2.4 million b/d (28%) to 6.3 million b/d, the largest weekly decline since the impact of Hurricane Harvey in September 2017. The refinery closures will likely continue to affect petroleum markets in the coming weeks, reducing refinery demand for crude oil and production of refined products such as motor gasoline and distillate fuel oil.The Gulf Coast accounts for more than half of total U.S. refinery capacity, and Texas alone accounts for about 32% of total U.S. capacity. By the peak of the weather’s impact on February 17, several refineries had announced either substantial or complete shutdowns as a result of external power outages, constrained natural gas supplies, logistical disruptions, or damage to process units. In total, an estimated 3.7 million b/d, or 20% of total U.S. refining capacity, was shut in as a result of the weather, according to U.S. Department of Energy estimates. Most of the disruptions and shutdowns were among refiners in the Beaumont/Port Arthur, Houston, and Corpus Christi regions of Texas. A more detailed analysis of how the cold weather affected Gulf Coast refineries is available in EIA’s This Week in Petroleum.

European Gasoline Diverted to Texas to Ease Supply Crunch (Bloomberg) -- Five gasoline tankers that were enroute to the U.S. East Coast diverted to the Port of Houston to help ease a supply crunch after last month’s freeze crippled the region’s refineries. Major refineries along Gulf Coast, the nation’s refining hub, shut gasoline units during the February deep freeze and power failures. Operators have gradually begun resuming production since the weather warmed, but some plants could take weeks to get back to normal.  Texas retailers were also forced to truck in gasoline from other states last week for the first time since Hurricane Harvey. U.S. gasoline stockpiles fell by a record 13 million barrels last week, with most of that in Gulf Coast region, according to government data. The five ships are carrying nearly 1.5 million barrels in total. Texas remains “very low” on gasoline, said Paul Hardin, president of the Texas Food & Fuel Association trade group. “If we don’t have a public panic buy, we’ll make it through the next three or four days.” Friday afternoon 12.2% of Texas gasoline stations -- roughly one in every eight -- were unavailable because of lack of fuel, Patrick DeHaan, head of petroleum analysis for GasBuddy, said in an email. The figure was at 14% Monday. The New York area, which is supplied with fuel by pipeline from Houston to augment its local refineries, is not yet facing Texas’ pinch. The region’s inventories increased last week. But the country’s largest fuel artery, the Colonial Pipeline, said earlier this week major lines toward New York were experiencing reduced throughput. Fewer barrels of gasoline will be available in the Northeast. “Gasoline is definitely migrating south. There’s room in the tanks so I would expect to see greater flows” toward Houston in coming weeks,

Record U.S. crude stockbuild as refining plummets after Texas freeze (Reuters) - U.S. crude oil stockpiles surged by a record of more than 21 million barrels last week as refining plunged to an all-time low due to the Texas freeze that knocked out power for millions. With refiners unable to process crude, gasoline and distillate inventories also dropped dramatically, especially in the Gulf Coast region where their declines set records, the U.S. Energy Information Administration said Wednesday. Crude inventories rose by 21.6 million barrels, the largest one-week increase ever, in the week to Feb. 26 to 484.6 million barrels. Analysts had anticipated a 932,000-barrel drop. “This drop is 100% based upon the storm in Texas,” said John Kilduff, partner at Again Capital Markets in New York. “It was very bullish for refineries and very bearish for oil, it was the crack spread siege.” The storm shut U.S. refining capacity along the Gulf Coast, while demand remained in other parts of the country. Refinery crude runs fell by 2.3 million barrels per day in the last week, and the overall refinery utilization rate plunged 12.6 percentage points to an all-time low at 56%, EIA said. U.S. Gulf Coast refining use dropped to just over 40% of its overall capacity, a record low. Several major refiners along the Gulf shut outright during the storm and had to deal with frozen components as they restarted slowly. “I’m not surprised, I’m surprised it took an extra week to all kick in. It was a giant storm and it shut down every refinery in refinery row, basically,” said Bob Yawger, director of energy futures at Mizuho. Oil prices jumped after the data, with U.S. crude futures climbing to $61.38 a barrel, a 2.7% increase as of 11:35 a.m. ET (1635 GMT). Brent rose 2.3% to $64.15 a barrel. The increase in stocks was also driven by a big jump in U.S. crude imports, which rose by a net 1.66 million barrels per day, EIA said. U.S. gasoline stocks fell by 13.6 million barrels in the week, the most ever, to 243.5 million barrels, compared with expectations for a 2.3 million-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 9.7 million barrels in the week to 143 million barrels, versus expectations for a 3 million-barrel drop.

US oil, gas rig count leaps 30 to 491 on week, as oil prices climb further: Enverus  — The US oil and gas rig count leaped 30 in the week ending March 3 to 491, rig data provider Enverus said, reaching the highest total since late-April 2020, as WTI oil prices climbed near the mid-$60s/b amid buoyant outlooks at major energy conferences.Oil-directed rigs accounted for the vast majority of the week's gain, rising 27 to 366, while rigs chasing natural gas grew three to 125.The Permian Basin, sited in West Texas and Southeast New Mexico, was the clear focus area for growth, with a weekly increase of 12 for a total 222. Rig totals in the Permian are now at the most since late-April 2020."While on paper this looks like a massive week-on-week gain, generally speaking, it was a large recovery that was needed after two straight weeks of flat rigs for US shale," S&P Global Platts Analytics analyst Andrew Cooper said.The week's large jump may have been an "accumulation" from slowdowns the past few weeks because of the winter freeze that struck the US in mid-February, with rigs finally mobilized to the field after delays, Platts' Analytics analyst Parker Fawcett said.The freeze hit the Permian and Eagle Ford Shale in South Texas particularly hard. At peak, up to 4 million b/d of the US' total 11 million b/d of oil production was offline, although most of it was quickly restored within a few days. "At the annual CERAWeek by IHS Markit energy conference this week, enthusiasm for the future of upstream oil and gas in the next two decades was evident, despite what many believe will be a steadily growing use of renewable and alternative energy sources by mid-century; a move even oil and gas producers have begun to embrace.For the time being, upstream players have repeatedly renewed their vows not to contribute to supply-demand imbalances. At CERAWeek, they repeated they will stick to austere capital budgets and growth targets of 5% or less per year and return sizeable amounts of cash to shareholders, while continuing to cut costs, improve efficiencies and seek ways to reduce their carbon footprints.Oil prices that have topped $60 WTI in recent weeks served as backdrop for talk at the conference, with chatter that a year of under-activity in 2020 could push prices even higher in the next 18 months or so.LeBlanc said producers will almost certainly continue with austere programs in 2021, but suggested next year, if prices climb further, their appetite might overcome their will power.WTI averaged $61.35/b in the week ending March 3, up 13 cents week on week, according to S&P Global. WTI Midland averaged $62.28/b, down 8 cents, and Bakken Composite averaged $60.40/b, up $1.04.Natural gas settled lower as prices continued to stabilize following the impact of the US freeze. Henry Hub prices averaged $2.74/MMBtu, down $1.43 on week, and Dominion South averaged $2.32/MMBtu, down 58 cents.

Oil production could fall in Permian Basin due to Biden proposal - Dallas Fed report (Reuters) - Possible changes to oil leasing and permitting requirements governing federal lands could lower oil production in the Permian Basin, a report from the U.S. Federal Reserve Bank of Dallas, said on Thursday. In late January, U.S. President Joe Biden signed a raft of executive orders that paused new leasing for drilling on public lands and waters that account for about a quarter of U.S. oil and gas production. "We estimate that by the end of 2025, the Permian will produce between 230,000 and 490,000 barrels per day less than if drilling activity continued at its current pace," report bit.ly/30aL3kn said. Texas produces 41% of U.S. crude oil and 25% of natural gas, according to the Energy Information Administration. New Mexico, is the biggest beneficiary of revenues from drilling on federal lands.

Pioneer CEO sees 'very little growth' in U.S. oil production (Reuters) - U.S. oil production will likely see “very little growth” in the future after remaining largely flat in 2021 at around 11 million barrels a day, Scott Sheffield, Pioneer Natural Resources Co chief executive officer, said at a conference on Tuesday. The coronavirus health crisis slashed global fuel demand and sent oil prices plummeting last year before economic stimulus measures and COVID-19 vaccine rollouts helped the industry regain footing in recent months. Still, U.S. shale oil production is lower than pre-pandemic levels and Sheffield and other industry experts said during CERAWeek by IHS Markit that it was unlikely to recover to its peak more than 13 million barrels per day. “I see U.S. production flattish this year at around 11 million barrels a day with very little growth in the future,” Sheffield said. The decline in oil comes as public policy, investors and energy companies increasingly focus on producing clean energy to fight the effects of climate change. Sheffield said Irving, Texas-based Pioneer was working to electrify its fracking fleet to help reduce emissions in its oil production.

U.S. oil production won't return to pre-pandemic levels, says Occidental CEO - Occidental CEO Vicki Hollub said Thursday that she doesn't envision U.S. oil production returning to pre-pandemic highs. "I do believe that most companies have committed to value growth, rather than production growth," she said during a CNBC Evolve conversation with Brian Sullivan. "And so I do believe that that's going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day." She believes companies will focus on optimizing current operations and facilities, rather than seeking growth at all costs. But she added that oil demand is recovering faster-than-expected, driven primarily by China, India and the United States. "The recovery looks more V-shaped than we had originally thought it would be," she said. The company's initial forecast had demand returning to pre-pandemic levels by the middle of 2022. Now, Hollub believes demand will return by the end of this year or the first few months of 2022. "I do believe we're headed for a much healthier supply and demand environment" she said. Her comments came after West Texas International crude futures, the U.S. oil benchmark, jumped more than 4% on Thursday to trade as high as $64.86 per barrel, a level last seen in January 2020. She expects crude prices will be "a little better than where they are today" if her demand forecast for next year is correct, but she does not expect prices to go up "excessively" other than the short spikes that can occur from time to time. OPEC and its oil-producing allies on Thursday decided to keep production levels largely steady into April, with Saudi Arabia also announcing that it would extend its voluntary one million barrels per day production cut. The group first implemented unprecedented supply cuts in 2020 in an effort to provide a floor as oil prices tumbled to historic lows. The energy sector has rebounded this year and is the top-performing S&P group by a long shot, but stock prices continue to hover well below prior highs as the focus on ESG investing, among other things, weighs. Hollub reiterated Thursday that the company is working toward net zero carbon oil production through its heavy investments into carbon capture. "We need to change the narrative .. it's not fossil fuels that's really the problem, it's the emissions," she said. "What we have to do is we need to get everybody focused on instead of trying to kill fossil fuels, we need to get everybody's attention on how do we use oil and gas reservoirs to our advantage." "How do we use that to lower emissions all around the world, and that's exactly our goal. Our goal is to be the company that provides the solution," she said.

Dying Oil Companies’ Parting Gift: Millions in Clean Up Costs -When Weatherly Oil and Gas filed for bankruptcy in February 2019, the company was walking away from several hundred Texas wells. Many hadn’t produced a drop of oil in years. Companies are legally required to “plug” wells that they’re no longer using to extract oil and gas by pouring concrete into all their openings and cracks; this prevents them from leaking fossil fuels or harmful pollutants into the air and water sources nearby. But many companies that abandon wells say they no longer have the financial means to do so, leaving government regulators on the hook for the cost. The problem is massive: There are approximately 2.1 million unplugged abandoned wellsacross the country. The Texas Railroad Commission, or RRC, which oversees the state’s oil and gas industry, tried to make sure Weatherly would pay up, objecting to the state’s bankruptcy plan because it didn’t include sufficient information about the amount of money that would be set aside for well cleanup and for the company’s various creditors. Ultimately, Weatherly struck a deal with the agency: The company would pay the Commission $3.5 million to cover the plugging costs of the abandoned wells that it couldn’t find buyers for. The agency agreed, and the bankruptcy court approved the deal. When Weatherly handed over 173 abandoned wells to the state, it officially became the company responsible for the most orphan wells in Texas. Unfortunately, the $3.5 million that the RRC was able to squeeze out of Weatherly doesn’t even cover a third of the $13.3 million estimated cleanup cost. Effectively, the state is now responsible for coming up with almost all of the $10 million shortfall.Though Weatherly insisted it couldn’t find the money to fulfill its plugging obligations, the company’s top executives were paid a combined $8.6 million in the year preceding bankruptcy. Weatherly’s former CEO later became a paid bankruptcy expert for FTI Consulting, a public-relations firm with a record of launching duplicitous front groups for oil companies. (The company’s former executives did not immediately respond to requests for comment.) It’s a stark example of the way that environmental liabilities are going unaddressed when companies go belly up, according to a report released Tuesday by the new nonprofit group Commission Shift, which advocates for reform of oil and gas regulation in Texas. The Lone Star State currently has more than 6,000 orphan wells on government rolls, and the RRC estimates they will cost more than $300 million to clean up.

Oil trade group is poised to endorse carbon pricing - —The oil industry’s top lobbying group is preparing to endorse setting a price on carbon emissions in what would be the strongest signal yet that oil and gas producers are ready to accept government efforts to confront climate change. The American Petroleum Institute, one of the most powerful trade associations in Washington, is poised to embrace putting a price on carbon emissions as a policy that would “lead to the most economic paths to achieve the ambitions of the Paris Agreement,” according to a draft statement reviewed by The Wall Street Journal. “API supports economy-wide carbon pricing as the primary government climate policy instrument to reduce CO2 emissions while helping keep energy affordable, instead of mandates or prescriptive regulatory action,” the draft statement says. API’s executive committee was slated to discuss the proposed statement this week. In a statement to the Journal, API’s senior vice president of communications, Megan Bloomgren, said the group’s efforts “are focused on supporting a new U.S. contribution to the global Paris agreement.” Carbon pricing aims to discourage the production of harmful greenhouse gases by setting a price on emissions. The API draft statement would endorse the concept in principle, without backing a specific pricing scheme such as a carbon tax.

American Petroleum Institute move would recognize climate change, but undercut other measures -  The American Petroleum Institute, the oil and gas industry’s top lobbying arm, is edging closer to endorsing a carbon tax, a tool that would make fossil fuels more expensive, boost prospects for renewable and nuclear energy, and curb pollution that is driving climate change. But a paper being weighed by an API policy committee would back a carbon tax as an alternative to federal regulation and policies aimed at slowing climate change. And many analysts and lawmakers doubted the sincerity of any such API move because it is highly unlikely Congress would adopt a carbon tax — allowing the trade group to appear to support climate action while risking little. The draft statement, first reported by The Wall Street Journal, says that “API supports economy-wide carbon pricing as the primary government climate policy instrument to reduce CO2 emissions while helping keep energy affordable, instead of mandates or prescriptive regulatory action.” Coming up with the right language is key for API’s nearly 600 members at a time when President Biden wants urgent action in the fight against climate change. His administration is looking at measures that would slash fuel consumption, clamp down on methane emissions, make buildings more efficient, and limit drilling on federal lands. As Biden pledges monumental action on climate change, the fight with the fossil fuel industry has just begun API’s president Mike Sommers is eager to be part of those discussions, especially to prevent limits on drilling, moderate regulations on methane emissions and influence the terms of the climate plans required by all signatories to the Paris climate accord, which the United States just rejoined. Environment and climate groups doubt that the draft endorsement was significant. Maya Golden-Krasner, deputy director of the Center for Biological Diversity’s Climate Law Institute, said “the API’s move would be little more than a public relations ploy, and the Biden administration shouldn’t be taking policy cues from the standard polluters’ playbook.”

Nebraska commission to intervene on natural gas prices after extreme cold in February --Nebraska regulators said Tuesday that they will intervene — for now — in the February price hikes expected on the bills of customers served by privately operated natural gas companies. Extreme cold in mid-February, from the Canadian border to Texas, caused natural gas prices on the open market to skyrocket, driving up the price that utilities pass on to customers. In portions of Nebraska it was one of the coldest mid-Februarys on record. The Nebraska Public Service Commission has regulatory authority over Black Hill Energy and NorthWestern Energy, but not municipal utilities such as Metropolitan Utilities District. Tom Glanzer, a spokesman for NorthWestern, said that the utility didn’t yet have an estimate on how the February price spikes would affect bills, but that the utility will work with the PSC to ease stress on customers. In South Dakota, for example, the increased cost will be spread over 12 months. A representative of Black Hills couldn’t be reached. MUD has estimated that the average residential customer could see an additional $17.21 on their February bill, a cost that could have been $200 higher if not for cost-saving moves made by the district. Requiring an additional 30-day grace period for paying off delinquent bills. Extending the moratorium on shutting off delinquent low-income households. Opening an investigation into price spikes that occurred as a result of the February Arctic outbreak and then assessing options. Directing the two utilities to withhold from bills, for now, the extraordinary price spikes related to the Arctic outbreak until further findings have been made.

The Fight Over The Future Of Natural Gas : Short Wave : NPR podcast - A growing number of cities are looking at restricting the use of gas in new buildings to reduce climate emissions. But some states are considering laws to block those efforts, with backing from the natural gas industry. Today, NPR science correspondent Dan Charles takes us on a tour of three cities where this is playing out:

• Lawrence, KS - Last year, the city commission adopted a goal of moving to 100 percent renewable energy. Now, the state legislature in Kansas is considering a bill that says no city in Kansas can prevent or discourage people from using natural gas from their local gas utility to heat their homes. That bill is likely to become law.
• Salt Lake City, UT - City officials here are not considering a ban. Instead, they're hoping to provide incentives to consumers that will encourage them to switch from natural gas.
• Flagstaff, AZ - Last year, the city council passed a climate emergency declaration and set in place the goal of reaching carbon neutrality by 2030. As part of this, officials were considering limiting new construction if plans included natural gas. But, Arizona's state legislature signed a bill into law making it illegal for cities in the state to limit these gas hookups.

30 years later, echoes of largest inland oil spill remain in Line 3 fight | MPR News - Thirty years ago Wednesday, on March 3, 1991, the Line 3 oil pipeline ruptured in Grand Rapids, Minn., spilling 1.7 million gallons of crude oil onto the frozen Prairie River.It's still the largest inland oil spill in U.S. history. Because the river was covered with ice, crews were able to keep the oil from reaching the Mississippi, 2 miles away."There would be people on the ice, squeegeeing oil on top of the ice, which was weird, everything was weird, it was like some kind of gross landscape,” Scott Hall, a reporter for Grand Rapids public radio station KAXE, told MPR News in 2018 for an episode of its Rivers of Oil podcast, which dove deep into the impacts of the spill.“And so they had hoses going down, and just sucking as much oil as they could out into these tanker trucks."About 50 people gathered at the Prairie River on the 30th anniversary of the largest inland oil spill in U.S. history. On March 3, 1991, a pipeline owned by the Lakehead Pipeline Co. ruptured, spilling about 1.7 million gallons of crude oil. The Lakehead Pipeline Co. owned Line 3, which was built in the 1960s to carry oil from Canada, at the time of the spill. And the company that succeeded Lakehead, Enbridge Energy, is now replacing that same Line 3 with a new pipeline along a different route across the state.Construction on the new line began in earnest in December. But Native American tribes and environmental groups continue to fight the $4 billion project, on the ground and in court. At least 50 people gathered at the Prairie River near the spill site in Grand Rapids Wednesday. Law enforcement issued citations to dozens of protesters after they blocked traffic on U.S. Highway 2. Protesters say the 1991 spill is an indicator of the risk that oil pipelines pose to Minnesota waters.

Enbridge's Line 3 deal-making divides Ojibwe bands in Minn. -  Last fall, Enbridge offered the Red Lake Band of Chippewa a lucrative deal if the tribe would drop legal efforts to quash the company's new pipeline across northern Minnesota. Red Lake said no. In 2018, Enbridge made an attractive offer to the Fond du Lac Band of Lake Superior Chippewa to run part of the pipeline — a replacement for its current aging and corroding Line 3 — through its reservation. Faced with the alternative of having the new Line 3 next door with no control over it, the tribe took the deal. But it has caused lingering bad feelings with other Ojibwe. The two offers underscore Enbridge's attempts to win over the Ojibwe bands in Minnesota — and the tensions those efforts have caused as construction of the controversial pipeline enters its fourth month. "There has been an attempt [by Enbridge] to divide us, and to an extent it has," said Sam Strong, Red Lake's tribal secretary. "It's very negative, and it is their playbook." Enbridge is spending more than $3 billion on the new Line 3, one of the largest construction projects for Minnesota in recent years. Line 3 is one of six Enbridge pipelines along a similar corridor, carrying thick crude from Alberta, Canada, to Superior, Wis. The corridor crosses the Leech Lake and Fond du Lac reservations. Enbridge platted the new Line 3 partly along a new route, largely to avoid crossing reservations, but still traversing a vast swath of land where the tribes have treaty rights to hunt, gather and fish. The Leech Lake Band of Ojibwe was not only against a new pipeline on its reservation, it wanted the old Line 3 gone. So when Enbridge agreed to remove the old pipe, Leech Lake didn't oppose the new pipeline when it was approved by the Minnesota Public Utilities Commission (PUC).  The other four tribes — Red Lake, Fond du Lac, the White Earth Band of Ojibwe and the Mille Lacs Band of Ojibwe — fought hard against the pipeline. They saw it as a desecrater of lakes, rivers and wild rice fields, a crop the Ojibwe hold sacred. "We really believe in the reciprocity of our people and the nature around us," Strong said. "Financial compensation might benefit us, but if this pipeline burst and there is a catastrophic event, would we be complicit?" White Earth, the state's largest Ojibwe band, and Red Lake continue battling Line 3 in both federal court and the Minnesota Court of Appeals. The Mille Lacs Band also is part of the state appeal, which aims to rescind the PUC's approval of Line 3. Fond du Lac, after its deal with Enbridge, dropped out of the court fight and Leech Lake never joined it.In October, before Enbridge got its final environmental permits for the project, the company offered Red Lake a bundle of economic incentives, according to documents obtained by the Star Tribune. Red Lake rejected the offer, as it has a longstanding resolution opposing Line 3, Strong said. Still, he acknowledged that Enbridge's offer caused some dissent within the tribe.

'Pipe Dream': Enbridge escalates local tensions - Indian Country Today - Berglund Park stood empty recently as families and community members huddled around warming fires in an open field nearby, listening to music and eating Indian tacos as they learned about the Enbridge Line 3 pipeline cutting through their community. A group of pipeline opponents known as water protectors from the nearby Honor the Earth camp organized the small winter carnival to provide information about the impact of dependence on fossil fuels and a future built on renewable energy.  Their routine request to use the pavilion on Feb. 4, however, was rejected by public officials who said they had “concerns” – sparking a backlash that quickly turned the small-town festival into a public fight over freedom of speech and assembly. It is also emblematic of the powerful economic clout the Canadian company holds over the region and the divisions it creates in local communities, said Shanai Matteson, a non-Native woman raised in Palisade who has joined local Indigenous groups in opposing the pipeline.“It seems like there isn’t much common ground anymore,” she told Indian Country Today. “The pipeline is ripping through the community. A lot of people feel that Line 3 is inevitable and that we’re just causing problems by protesting.”Mara Verheyden-Hilliard, director of the Center for Protest Law and Litigation in Washington, D.C., sent a letter to city and county officials challenging the decision on behalf of water protectors, including Matteson and Winona LaDuke, White Earth Band of Ojibwe, a well-known environmental justice activist and executive director of Honor the Earth.“Your offices have attempted to deprive LaDuke, Matteson and others of their lawful rights to assemble on public land,” the letter said. “Basic First Amendment rights are being deprived at the whim and direction of entities and officials, armed with the power of the state, serving essentially as private security of a private corporation whose profit interests lie in suppressing and demonizing opposition to their activities – including suppressing educational events that can impact the public’s understanding of their dangerous pipeline.”Water protectors believe they were barred from Berglund Park because leaders wanted to curb criticism of Line 3 and Enbridge, a company that has brought jobs, donations and an economic boost to Aitkin County.The windfall has created sharp divisions in the community, splitting neighbors, families and friends. Matteson believes many people in the region, including some of her own family members, signed over their lands to Enbridge without fully understanding that they had a choice in the matter.“I think they figured that since their neighbors signed with Enbridge, they had little choice,” she said. “Refusing to sign would essentially be telling your neighbors that they’re wrong.”

Leaders of tribal nations in MN ask Walz to pause Line 3 work during legal appeal -- The Minnesota Indian Affairs Council is asking Gov. Tim Walz to temporarily stop the ongoing construction of the Line 3 oil pipeline across northern Minnesota. In a letter dated Wednesday, the group, which serves as the official liaison between the state and the 11 Native nations within its borders, urged Walz to issue an executive order putting a stay on the pipeline replacement project construction while lawsuits challenging the project’s approval play out in court. “The pipeline project opens up a brand new pipeline corridor through a water-rich environment where wild rice and other plants and animals are plentiful,” the council wrote. The state’s seven Ojibwe bands, the letter continues, retain treaty-protected rights to hunt, fish and gather along the 330-mile stretch of land in the state where the pipeline is being constructed. “Clearly, the pipeline construction and operation will negatively impact the productivity of the resources throughout the pipeline corridor,” it continues. The letter from the council follows requests from the White Earth and Red Lake Nations to place a stay on the project until their appeals, along with challenges from environmental groups and the state Commerce Department, are heard in court. But those requests were denied by the Minnesota Public Utilities Commission and the Minnesota Court of Appeals. Enbridge Energy has quickly ramped up construction of Line 3 since it received final permits at the end of November. Work began in earnest on Dec. 1. More than 4,000 workers are currently building the pipeline, along five different sections spread out across the length of the pipeline corridor, which stretches from far northwestern Minnesota, south past the headwaters of the Mississippi River, and east to Enbridge’s pipeline hub in Superior, Wis. Tribes and groups fighting the project have argued their appeals will be moot without a stay, since it will likely take several months for the court process to play out. Enbridge anticipates completing the pipeline by the end of September. In the letter, tribal leaders also express worry that President Joe Biden's recent decision to cancel the Keystone XL pipeline — which also would have carried Canadian oil into the U.S. — could embolden Enbridge to eventually build more pipelines in the new Line 3 corridor. "President Biden's decision to stop the Keystone XL pipeline has essentially handed Enbridge a monopoly for exporting tar sands out of Canada," the letter reads. "This does not bode well for us."

Republicans used oil industry-backed study to criticize Deb Haaland - Republican senators cited a study commissioned by the biggest oil and gas trade association in the US in their criticisms of Deb Haaland, Joe Biden’s nominee to lead the Department of the Interior, during a confirmation hearing last week. Republicans on the Senate energy and natural resources committee referenced the study, which has been widely criticized by conservationists, as they grilled Haaland, a Democratic US representative from New Mexico, on her past statements about energy issues and the Biden administration’s climate plans. At issue in particular was the administration’s 60-day pause on new federal oil and gas leases, which several senators mischaracterized as a “ban”. All Republicans on the committee have received significant campaign contributions from oil and gas political action committees and employees, and some are personally invested in the industry, as the Guardian and the Center for Media and Democracy recently reported. Haaland, who would be the first Native American cabinet secretary, supports the Green New Deal and opposes fracking on federal land. As secretary of the interior, she would implement Biden’s climate agenda, which, though relatively ambitious, may not go as far as she would prefer. As they criticized Haaland and Biden’s stance on federal leases, two of the senators cited projected job losses from a ban on federal oil and gas extraction that came from a study commissioned by the American Petroleum Institute(API). API is the country’s biggest oil and gas trade association and spent millions of dollars to help elect Republicans to Congress in the 2020 cycle.John Barrasso of Wyoming, the ranking member on the committee and a top Senate recipient of oil and gas contributions, cited the institute’s September 2020 study three times during the hearings, and Cindy Hyde-Smith of Mississippi referenced it once.On 23 February, Barrasso listed the study’s projected job losses for the states that committee members represent, leading with Haaland’s state of New Mexico (62,000 jobs) and his state of Wyoming (33,000). “My question is for you: why not just let these workers keep their jobs?” asked Barrasso. Conservationists have criticized the study. It considers a permanent ban on new and existing leases, not the current 60-day pause on only new leases, and predicts job losses over a two-year period. The energy news website DeSmog noted that for New Mexico, these predicted job losses far exceeded the total number of employees in the oil and gas extraction industry, and described the claim as “staggering”.

DAPL protester fighting grand jury jailed again; Martinez also now being fined -- A Dakota Access Pipeline protester who is refusing to provide testimony to a federal grand jury is once again behind bars, his supporters say.Steve Martinez was held in contempt Wednesday for the second time in a month and jailed as a federal prisoner, according to supporters. He had been free for about a week, after being released Feb. 22 following 19 straight days of incarceration in the Burleigh Morton Detention Center. Grand jury proceedings are secret, and the government does not confirm them, much less talk publicly about them. Martinez's supporters say the grand jury is investigating a violent clash between protesters and law officers more than four years ago that became the emblematic skirmish of the prolonged protest against the pipeline that's now moving Bakken oil east. A New York City woman who suffered a serious arm injury is suing law officers and Morton County, seeking millions of dollars. Martinez is the one who drove Sophia Wilansky to get medical aid. He's refusing to testify about it because he believes authorities are trying to suppress the anti-DAPL movement. Martinez, 46, is originally from Pueblo, Colorado, but he's lived in Bismarck since November 2017. He received his first grand jury subpoena in December 2016, and about 40 of his supporters rallied outside the federal courthouse in Bismarck in January 2017. A federal judge refused to quash the subpoena, but prosecutors later withdrew it without giving a reason. They subpoenaed Martinez again last November, according to his attorneys. He was jailed Feb. 3 for not complying, released on a technicality about three weeks later, but immediately given another subpoena. He could be imprisoned for up to 1 ½ years -- the maximum length of the grand jury proceeding. He also is now being fined $50 per day but "continues to stand in solidarity with his Indigenous relatives," according to his supporters.The pipeline has been operating since June 2017, though American Indian tribes are still fighting in court to try to get it shut down. Tribes and environmental advocates fear an oil leak would contaminate the Missouri River.  The protest over six months in 2016-17 resulted in more than 750 arrests.

How Closing DAPL Would Impact Bakken Crude Oil Producers  --When it finally came online in mid-2017, the Dakota Access Pipeline was a lifesaver for Bakken crude oil producers. For years, they had suffered from takeaway-capacity shortfalls that forced many shippers to rely on higher-cost crude-by-rail, sapping producer profits in the process. Then came DAPL, which provides straight-shot pipeline access to a key Midwest oil hub, and its sister pipe — the Energy Transfer Crude Oil Pipeline (ETCOP) — which takes crude from there to the Gulf Coast. Problem solved, right? Not exactly. Now, there’s at least an outside chance that a shutdown order is issued as soon as early April in connection with the ongoing federal district court process, with the timeline for a physical closure of the pipe still to be determined. A shutdown may last for only a few months but could potentially last much longer. Where does this uncertainty leave Bakken producers, many of whom have been hoping to benefit from the recent run-up in crude oil prices by ramping up their output this spring? Today, we discuss recent upstream and midstream developments in the U.S.’s second-largest shale/tight-oil play. While it was being developed, DAPL was among the most controversial pipeline projects in the U.S., second only perhaps to TC Energy’s Keystone XL, which remains in limbo (and only partially built) after President Biden canceled KXL’s Presidential Permit his first day in office. Opposition to DAPL didn’t stop when it began commercial operation 45 months ago today. On March 25, 2020, U.S. District Court Judge James Boasberg ruled in a lawsuit filed by the Standing Rock Sioux tribe that the U.S. Army Corps of Engineers violated the National Environmental Policy Act (NEPA) when, in February 2017, it issued DAPL’s developers an easement under Lake Oahe — a large reservoir near the tribe’s reservation in central South Dakota (see Figure 1) — without preparing an environmental impact statement (EIS). Three-plus months, later, on July 6, Boasberg ordered that the Corps’s easement be vacated and that DAPL be taken out of service until the Corps completed the EIS, a process expected to take a year or more. The U.S. Court of Appeals on August 5 stayed the District Court judge’s order that the pipeline be shut down during the preparation of the EIS, and the Corps announced on September 10 that it had formally started the process of preparing the environmental report. On January 27, 2021, the Court of Appeals affirmed the parts of Boasberg’s ruling vacating the Corps’s Lake Oahe easement and directing the Corps to finish the EIS but reversed the parts of Boasberg’s ruling requiring the pipeline to be shut down. Separately, Judge Boasberg is considering a second motion filed by the Standing Rock Tribe for an injunction to shut down DAPL. After the Court of Appeals’ late-January ruling, Boasberg scheduled a February 10 status conference to discuss the tribe’s injunction motion and how the Corps expects to proceed now that the appellate court has confirmed that its easement is vacated. A day before the planned meeting, the Corps asked that it be delayed to April 9, and Boasberg agreed. For its part, the Standing Rock Tribe has been arguing that, with the easement for DAPL’s crossing under Lake Oahe vacated, the pipeline should be shut down immediately and shouldn’t be allowed to be restarted unless and until an EIS has been approved. Energy Transfer, which owns the largest share of DAPL and operates the pipeline, said during its quarterly earnings call on February 17 that the pipeline has been operating safely for almost four years now and that it does not see a scenario under which the pipeline will be ordered offline.

California City Bans New Gas Stations, Says No More Pumps -The Petaluma, California, City Council unanimously moved to ban new gas stations, and existing stations will not be allowed to add any new gas pumps. Electrek discusses Petaluma's Ban on New Gas Stations.Existing gas stations aren’t being shut down in Petaluma. It’s just that no new ones will be built, because there are enough – one within a five-minute drive of every residential area in the city, in fact, as the Santa Rosa Press Democrat writes. The plan is to accelerate the adoption of electric vehicles, and Petaluma’s City Council, with a population of around 60,000, feels its 16 existing gas stations is enough. Petaluma is the first seed planted, and many will follow and sprout, first in California, and then in other US states like Washington. For example, the Coalition Opposing New Gas Stations (CONGAS) is working to ban gas stations in Sonoma County, California, and its nine cities.Just as the world is moving away from coal and other fossil fuels and toward green energy, so too will towns and cities follow in Petaluma’s footsteps by deciding they have enough gas stations as EV numbers rise and ICE cars fall. The number of charging stations will multiply, and the number of gas stations will shrink.

Democrat Katie Porter says to target Big Oil in new role as natural resources chair  (Reuters) - U.S. Representative Katie Porter, who has earned a reputation for grilling bank and drug company executives during Congressional hearings, told Reuters she will focus on a new target in her new role as chair of the House Natural Resources Oversight Committee: Big Oil. The position will make the California Democrat a key player in U.S. energy policy as President Joe Biden puts curbs on federal fossil fuel development at the center of a plan to fight climate change. Biden paused new federal oil and gas leases, source of about a quarter of U.S. petroleum production, shortly after taking office in a move widely seen as a first step toward delivering on his campaign promise of a permanent ban. Porter is one of several Democratic lawmakers that introduced a set of bills this week to reform federal oil and gas leasing regulations, including by raising royalty rates for the first time in a century - proposals that could impact existing leases even if new leases are eventually phased out. “How can things not have gone up as I see the cost of my everyday expenses -- healthcare, childcare, college, housing -- all go up?” Porter said. “This is not a coincidence. This takes intense lobbying work by the fossil fuel industry to prevent these changes.” Porter introduced a bill that would boost the amount oil companies must pay on their federal onshore production to 18.75% from 12%, a rate that has not changed since 1920, and also increase minimum bids in lease auctions to $5 per acre from $2. “I confess when I first heard the term ‘oil and gas royalty rates’ I didn’t immediately feel a deep emotional sort of reaction to fighting the issue. But as I began to understand what’s really at stake, which is oil and gas companies taking our public resources at pennies on the dollar, I began to feel outraged,” she said. A second-term Congresswoman from California, Porter has become a social media sensation after her rapid-fire grilling of powerful executives over issues like compensation and drugs pricing. She is perhaps best known for scrawling on what Twitter dubbed her “whiteboard of truth” during committee meetings -a prop she will use in her new oversight role. Porter said that as a professor who taught classes about bankruptcy, she enjoys teaching esoteric policy and making it real for people. “Our public lands are not a speculative investment,” she said. “They are a national treasure.”

Oil Sands Give OPEC a Boost  -- Major oil sands producers in Western Canada will idle almost half a million barrels a day of production next month, helping tighten global supplies as oil prices surge. Canadian Natural Resources Ltd.’s plans to conduct 30 days of maintenance at its Horizon oil sands upgrader in April will curtail roughly 250,000 barrels a day of light synthetic crude output, company President Tim McKay said in an interview Thursday. Work on the Horizon upgrader coincides with maintenance at other cites. Suncor Energy Inc. plans a major overhaul of its U2 crude upgrader, cutting output by 130,000 barrels a day over the entire second quarter. Syncrude Canada Ltd. will curb 70,000 barrels a day during the quarter because of maintenance in a unit. The supply cuts out of Northern Alberta, following a surprise OPEC+ decision to not increase output next month, could add more support to the recent rally in crude prices. OPEC+ had been debating whether to restore as much as 1.5 million barrels a day of output in April but decided to wait. The Saudi-led alliance closely monitors other major oil producers as it seeks to manage the entire global market, and surging production in North America was its biggest headache in recent years -- especially from U.S. shale but also from Canada. “The U.S., Saudi Arabia, Russia, Canada, Brazil and other well endowed countries with hydrocarbon reserves -- we need to work with each other, collaboratively,” Saudi Energy Minister Prince Abdulaziz bin Salman said after the group’s meeting on Thursday. Canada’s contribution to balancing the market with less production, much like slowing output in the U.S., is not a deliberate market-management strategy but significant nonetheless. Even though the output cuts are short-term, the battered oil-sands industry shouldn’t be a concern for the Saudis in the long run either, judging from McKay’s outlook for the industry. “I can’t see much growth in the oil sands happening because there is going to be less demand in the future,”

Keystone Pipeline Co. Taps Lobbyist Brother of Biden Adviser - A lobbying firm run by the brother of White House counselor Steve Ricchetti has signed the Canadian-based company behind the Keystone XL pipeline project, which President Joe Biden effectively halted upon taking office. Jeff Ricchetti, who runs Ricchetti Inc., will be lobbying on behalf of TC Energy Corp., regarding “legislative issues affecting energy infrastructure, the safe and efficient transportation of natural gas,” according to a disclosure form recently filed with the Senate. The presidential permitting for the pipeline to link oil sands in Canada to U.S. refiners was approved by the Trump administration after previously being rejected by President Barack Obama. On his first day in office, Biden issued an executive action revoking the Keystone XL pipeline’s cross-border presidential permit. The pipeline has drawn strong criticism from environmentalists but is backed by the energy and construction industries as well as the Canadian government.

USD Group nearing completion of Hardisty-to-Port Arthur, crude-by-rail network | S&P Global Platts — The US Development Group is nearing a mid-year completion of its rail terminal network from Alberta to the Texas Gulf Coast that would move more heavy Canadian crude specifically designed for long-haul rail transport, the company said March 4. The USD Group-Gibson Energy joint venture includes building a diluent recovery unit at its Hardisty terminal hub and a new Port Arthur terminal in Texas that would receive the oil sands crude by rail. The diluent recovery unit is designed to remove the diluent from the Canadian bitumen. The resulting crude is called DRUbit, a proprietary heavy Canadian crude oil specifically designed for safer rail transport. The remaining diluent, which is mostly condensate, then goes back to the mining and processing facilities to be blended with the heavy oil sands to prepare crude for pipeline transport. USD CEO Dan Borgen said March 4 that construction would be finished by the end of the second quarter, but that commissioning and startup could extend into early in the third quarter. "We are progressing on schedule and on budget," Borgen said on the company's earnings call. "We are pleased to see the industry begin to get behind the program." The diluent recovery unit would start out by processing 50,000 b/d that is contracted with ConocoPhillips and eventually ramp up to at least 100,000 b/d, he said. The crude would move to the USGC along the Canadian Pacific and Kansas City Southern railway networks. Apart from the new Port Arthur terminal, crude volumes also can ship to USD's existing Texas Deepwater hub in Houston. "The return to normal in Canada is actually happening at a faster rate than in the US," Borgen said. "We are now moving into where crude-by-rail matters." Indeed, Canadian oil production has recovered from its pre-pandemic volumes of about 5 million b/d of crude oil, condensate and diluent, while US production is still down by at least 2 million b/d from its pre-COVID-19 volumes. Imports of Canadian crude to the US Midwest and USGC combined are expected to recover to around 2.9 million b/d in March from less than 2.6 million b/d in May 2020, according to S&P Global Platts Analytics. However, crude-by-rail volumes are not yet recovered and may take quite some time. Canadian crude-by-rail exports plunged from an all-time high of 411,991 b/d in February 2020 to an eight-year low of 38,867 b/d in July as the pandemic took hold. Exports have since rebounded to 190,454 b/d in December, according to the Canada Energy Regulator.

Valero looks to reroute Mexico imports, double capacity as it finalizes storage network -- Valero is looking to reroute its fuel imports to Mexico, while more than doubling its storage capacity, as the company finalizes the construction of a network of terminals in the country by 2022, ahead of an expected recovery in demand, the company's Mexico head of operations said March 5. Valero will be in a position to import all the fuel it distributes in Mexico through two Gulf of Mexico import terminals in the ports of Altamira and Veracruz for which the company has long-term contracts. The terminals will feed a network of smaller inland terminals by rail, Valero's Carlos Garcia told S&P Global Platts. "Our goal is to supply the Mexican market with fuels that have been produced at our refineries through a network that we control, so that we can ensure the quality of the product and reliability of the supply," Garcia said. Valero began its Mexican operations in 2018 with terminals in the states of Chihuahua and Nuevo Leon that were supplied by rail from its refinery in McKee, Texas, Garcia said. When Valero's network of terminals under development is completed, the company will have a total storage capacity of roughly 6 million barrels in key areas of the country, he said. This will allow Valero to stop bringing fuels to Mexico from Houston by rail. "We will only use rail to move the product inland, which is safer than trucks," Garcia said. Valero is the world's largest independent oil refiner, with an output of more than 3 million b/d of refined products from its refineries, mostly located in Texas. According to data from Mexico's Energy Secretariat, private companies operating in the country imported 337,000 b/d of gasoline, diesel and jet fuel over 2020. Valero imported a little over 40,000 b/d into Mexico in 2020, Garcia said. The Veracruz terminal, the largest of the planned terminals in Mexico, with a total capacity of 2.1 million barrels, was recently completed by IEnova, the Mexico unit of California-based Sempra Energy. IEnova is also building two 640,000/b terminals in the Puebla and Mexico City region, also under long-term contracts with Valero. The three terminals will create a network that will allow Valero to better serve the center of the country, Garcia said.

Analysis: How Exxon Is Being Forced To Accept The Reality Of Bad Fossil Fuel Investments - Last August, ExxonMobil warned that it may need to remove 20 percent of its oil and gas proved reserves from its books. While that was a shocking number from the oil major, reality proved to be even more of a shock to the company. On February 24, Exxon reported that it would actuallyremove over 30 percent of its proved reserves from its books — essentially wiping out the value of its Canadian tar sands holdings from its books.According to the Securities and Exchange Commission (SEC), proved reservesare “the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.”Proved reserves are the concept on which the whole oil business is based. It is a main factor in how oil and gas companies are valued and in determining how much money banks will loan companies. Much of oil and gas lending is known as reserved-based lending.Exxon’s latest move is even more remarkable, however, because it has a reputation for being resistant to properly valuing reserves, often lagging behind the other oil major companies in making these downward adjustments.In this case, the market — and the SEC— forced Exxon’s hand on the matter. SEC rules require that oil and gas companies value reserves based on the average price of oil from the previous 12 months.  In its latest SEC filing released this week, Exxon explains that this requirement essentially meant removing all of the value for its Canadian tar sands investments from its reserves.Along with wiping out the value of its tar sands holdings, Exxon also noted that it wrote off “approximately 1.5 billion oil-equivalent barrels, mainly related to unconventional drilling in the United States.” Unconventional drilling refers to the fracking business, which has been a financial disaster for many of those involved.

Israeli court slaps 7-day gag order on oil spill - A Haifa court slapped a seven-day gag order on the investigation into the source of a huge oil leak that has polluted Israel’s entire Mediterranean coast with tar. The ruling by the Haifa Magistrate’s Court came at the request of the Environmental Protection Ministry, which is probing the spill. The order prohibits publishing any details that may identify suspects, vessels, relevant ports, cargo and shipping lines, according to The Times of Israel. The Environmental Protection Ministry secured satellite images, dated February 11, of a suspicious black patch on the sea surface some 50 kilometers (31 miles) off the coast and footage showing 10 ships that were in the area around that time. Maya Jacobs, who heads the Zalul marine protection organization, reacted to the court order by saying, “When those active in the sea and creating the dangers of spills are wealthy oil and shipping companies with influence over regulators, Zalul demands a transparent investigation and the removal of the order.” Environmental Protection Minister Gila Gamliel pledged that authorities would use every means possible to locate whoever was responsible for the spill and prosecute. She announced that she had agreed with Prime Minister Benjamin Netanyahu on submitting a proposal for government approval on Monday for immediate funding for beach rehabilitation and advancement of legislation on preparedness for marine spills that should have been passed years ago. Meanwhile, nine local authorities belonging to the Sharon Carmel Towns Association stopped cleanup work at contaminated beaches under their jurisdiction Monday, after the Finance Ministry refused to approve a program and budget submitted by the Environmental Protection Ministry.

Israel clears Greek tanker over Mediterranean oil spill -- Israeli authorities said Sunday they had cleared a Greek tanker of suspicion in relation to an oil spill that caused massive tar pollution on the Mediterranean coastline, devastating marine life. It is seen as Israel's worst maritime pollution incident in decades. Powerful winds and unusually high waves pummelled Israel's entire Mediterranean coastline on February 17, with tonnes of tar staining 160 kilometres (96 miles) of beach from its borders with the Gaza Strip to Lebanon. Volunteers have teamed up with authorities to clean the beaches, while officials from the environmental protection ministry launched an investigation into the source of the spill. After an Israeli media report had named the Greek oil tanker Minerva Helen as a possible culprit, the ship's owner, Minerva Marine Inc., firmly denied any connection to the spill. On Sunday, the ministry said that "following an inspection conducted in Greece on the Minerva Helen tanker, it has been cleared of suspicion of involvement in the severe tar event on Israel's beaches". The ship's owner said the Israeli media report was an "unfounded an inaccurate allegation". It said the ship had been in the Mediterranean in the days before the storm, "without any cargo on board" and therefore could not be linked to a spill. The company also pledged to "cooperate with any relevant authority" interested in the Minerva Helen's movements. On Saturday, in the Greek port city of Piraeus, Israeli inspectors conducted "an extensive examination" of the Minerva Helen that "positively ruled out the vessel as the source of the pollution", the environmental protection ministry said in a statement. The investigation was conducted in coordination with Greek authorities, with assistance from the Hellenic Coast Guard, the ministry added.

Cyprus coast not affected by oil spill off Israel - The fisheries department said no signs of tar have been seen on the Cypriot coastline, as neighbouring Israel is dealing with what has been described as one of the worst ecological disasters in decades following a large oil spill from an unknown source. In a statement on Thursday, the department said it had been notified around a week ago by Israel’s ministry of environmental protection about the pollution in its sea and coast. Since then, it added, the department has been closely monitoring Cyprus’ maritime area through satellite images received from the European Maritime Safety Agency for images of possible oil spills. So far, there has been no depiction of a possible oil spill in Cyprus’ maritime area, it said. Moreover, the search and rescue coordination centre informed Israeli authorities that there had not been any marine incident or marine oil pollution up until February 17 in Cyprus’ area. Responding to a request by the Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea (REMPEC), the Department of Fisheries and Marine Research sent satellite images taken on February 6 and 12, depicting possible oil spills, to be further assessed, it added. Israel has been tackling a large oil spill from an unknown source, which reportedly devastated sea life and dumped tonnes of tar across the coastline from Israel to southern Lebanon. The thick clumps of tar showed up on the neighbouring country’s beaches.

Mystery Israeli oil spill leads to multimillion dollar clean-up - A massive oil spill off the coast of Israel is being called the worst ecological disasters in the Mediterranean country’s history. The cause and full extent of the damage is still unknown, but Israeli authorities are investigating. Several tankers are under suspicion. The spill was discovered when patches of tar began washing up on more than 100 miles of Israel’s coastline this past week. According to the Times of Israel, some 70 tons of tar and contaminated material have been scraped off and collected along the country’s shores since cleanup efforts began. Beaches have been shut down, and the sale of fish and other seafood from the area is now prohibited. The Israeli government approved a $13.8 million response budget that will come from the state’s Fund for the Prevention of Marine Pollution, created some 40 years ago to pay for cleanups as well as equipment and training to respond to oil spills. There is still a fog of war with respect to what happened. Ten ships are under investigation including the Greek ship, called the Minerva Helen, which was an initial focus of authorities according to the Times of Israel. Minerva Marine, a longstanding player in the sector with a current fleet of dozens of tankers, said in a statement that the allegations were “unfounded and inaccurate” and claim to have evidence that the vessel was in no way involved. Whoever is found responsible, this disaster will raise questions about how the regulations and liability of oil spills and environmental pollution are handled. The Israeli Minister of Environmental Protection, Gila Gamliel, and Prime Minister Benjamin Netanyahu headed to the port town of Ashdod on Monday to assess the damage. The director of Israel’s Nature and Parks Authority, Shaul Goldstein, said that the spill will setback ecological renewal and protection efforts by decades. Curiously, a court in Haifa issued a gag order, prohibiting the publication of incident details. Officials says that the restrictions are in place to avoid undermining the investigation:

IMO regional pollution centre assists with oil spill incident in Israel - The IMO-administered Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea (REMPEC) is assisting the competent authorities of Israel with technical expertise regarding the beaching of a large quantities of tar balls on the Israeli shoreline.The cause of the pollution is yet to be identified. As of 23 February 2021, 1,000m3 of tar balls have already been collected.REMPEC is supporting the identification of the source of the pollution by obtaining information from satellite images from Maritime Support Service (EMSA). So far, 10 vessels have been found to have been in the vicinity of the possible original position of the spill and the investigation continues.The Centre has also invited neighbouring countries to report any pollution in the last three weeks. No pollution has been reported by countries who responded.The REMPEC Mediterranean Assistance Unit (MAU) is working to assess the potential impact to neighbouring countries. This will be done using the results of forecasting model from the Mediterranean Operational Network for the Global Ocean Observing System (MONGOOS), a Member of the MAU. The Centre is also in contact with the Lebanese Competent Authorities, following reports of pollution of the Lebanese shoreline.

Volunteers struggle to clean oil spill as new stains keep arriving - Volunteers are struggling to clean the shores of Israel after a large-scale tar pollution which still has repercussions as new stains arrive to what were fairly cleaned beaches, the Environmental Protection Ministry said on Sunday. Pollution levels at Rosh HaNikra beach went up to moderate-heavy as new stains washed ashore. While many beaches are depicted as blue (very light) on the pollution ‘Stop-Light’ map created by the ministry, Dor Beach is orange (light to moderate) and a spot on Hof Hasharon park is red (moderate to heavy). Some tar was carried ashore to Tel Baruch beach in Tel Aviv, Bustan HaGalil shore, and Havat HaMaychalim beach in Haifa. The ministry explained that the rocks on these shores make cleaning operations hard and cautioned that further stains can hit the beaches in the future according to currents and sea-level changes. Some 70 tons of toxic tar had already been cleaned from Israel’s beaches last week, the Nature and Parks authority announced. However, the ministry believes that around 1.2 kilotons (1,200 tons) of tar has so far washed ashore since the spill. Volunteers and wildlife experts are hard at work to clean the shores and save the lives of seagulls and sea turtles injured by the tar. It is suspected that a young whale had died as a result of the pollution.

Israel eliminates 12 of 35 vessels suspected in oil spill --The oil spill that has caused the contamination of almost the entire stretch of Israel’s Mediterranean coast with tar is “without doubt a case of malice,” Environmental Protection Minister Gila Gamliel told a press briefing Monday. “Either the ship dumped oil into the sea on purpose, or the oil leaked out because of a fault,” she said. Either way, the ship’s owner “lacked compassion toward [marine] wildlife and nature and did not inform the authorities.” Tar contamination has affected 160 kilometers (100 miles) of the Mediterranean coastline’s 195 kilometers (121 miles), with tar still washing up on many beaches. It has also polluted beaches in Lebanon. The Environment Ministry believes that a spill identified 44 kilometers (27 miles) off shore on February 11 was responsible for the disaster. According to the Financial Times, 210 vessels passed within 50 kilometers of the shores of Israel and Lebanon between February 10 and 12. Gamliel said Monday that the ministry had investigated 35 vessels over recent days, eliminating 12 of them. Rani Amir, who directs the ministry’s National Unit for the Protection of the Marine Environment, pushed back against criticism of a lack of advance warning technology such as access to satellite images, saying that most of the contamination would have been inevitable anyway, especially as stormy weather would have prevented sending boats out to surround the slick and treat it at sea. He added that divers would not be sent to retrieve blocks of tar from the seabed until laboratory results determine exactly what the leaked substance is and whether the waters are safe. Gamliel also said that plans to increase the flow of oil through the southern port of Eilat looked like a “step in the wrong direction” and called for an urgent discussion by all relevant government bodies. In October, a memorandum of understanding was signed between the state-owned Europe-Asia Pipeline Co. (EAPC), formerly the Eilat-Ashkelon Pipeline Co., and MED-RED Land Bridge, a joint Israeli-UAE venture, to use Israel as a land bridge between the Red Sea and the Mediterranean for the transport of Gulf oil to markets in Europe.

Lebanon seeks U.N. help over Mediterranean oil spill pollution - Lebanon's Foreign Ministry on Tuesday moved to file a report with the U.N. in which it asked for technical assistance in the face of a Mediterranean oil spill that has contaminated at least half of coastline. The report, prepared by the National Council for Scientific Research at the request of caretaker PM Hassan Diab, highlights the magnitude of the damage, describes it as an environmental disaster and warns that the recovery could take several years, the National News Agency said. The report also calls on the U.N. to “determine the reasons behind this spill and identify the culprit so that Lebanon can demand compensations for the severe environmental damage it has incurred.” “This is considered an environmental disaster and (Lebanon) has no ability to address it and contain its protracted damage” on its own, the report says. MP Enaya Ezzeddine of the Development and Liberation bloc has said that the amount of tar that has polluted the sand beaches of south Lebanon in recent days has been estimated to be at around two tons. “The cleaning process will be arduous and painstaking and it requires followup and cooperation between municipalities, scout associations and local, national and international NGOs and environmental groups,” Ezzeddine added. Lebanese on Saturday raked balls of tar away from a turtle beach in the South after a massive slick washed ashore after hitting neighboring Israel. A storm more than a week ago threw tons of the sticky, black substance onto the beaches of Israel, apparently after leaking from a ship. Within days the spill had spread to south Lebanon, where clumps of tar contaminated beaches stretching from the border town of Naqoura to the southern city of Tyre, all the way to the capital Beirut. The swathe of coastline, which includes some of the country's best preserved beaches, is a nesting site for turtles which usually appear later in the year. On Saturday morning, mask-clad volunteers and members of the civil defense sifted blobs of tar out of sand on the beach of the Tyre Coast Nature Reserve, an AFP journalist said. The protected zone covers 3.8 square kilometers of beach as well as adjacent sea waters. As well as endangered loggerhead and green sea turtles, the beach provides shelter for the Arabian spiny mouse.

Israel finds ship behind oil spill off its coast, ministry says -- Israel has located the ship responsible for an oil spill that blackened its beaches with tar last month, the environment ministry said on Wednesday, without giving details. The country’s investigation has focused on an unidentified ship that passed about 50 km (30 miles) off the coast on Feb. 11 as the likely source of what environmentalist groups are calling an ecological disaster that could take years to clean up. Environmental Protection Minister Gila Gamliel will give more details about the ship later on Wednesday, her ministry said. Clumps of sticky black tar from the spill have also washed up on the coasts of south Lebanon and the Gaza Strip. The ministry, which has been working with European agencies, had conducted a broad search that it said included dozens of vessels.

Chevron Pacific Indonesia says Dumai oil spill is not toxic waste PT Chevron Pacific Indonesia or CPI on late Sunday evening acknowledged that there had been a pipe leakage from one of its pipes located at the Port Of Chevron Pacific Indonesia-Dumai in the Riau Province. This incident occurred at 14:50 Western Indonesia Time (WIB) on Saturday, February 27, according to the oil firm’s corporate communications manager Sonitha Poernomo in a statement on the following day of February 28. The spokesperson was unable to explain the detailed amount of crude oil that spilled to the area’s waters as it is currently being calculated by the firm’s mitigation team. However, the firm’s early estimates conclude that it does not reach thousands of barrels. “At the time the pipes in the port were not in use and field officials immediately cleaned the area and fixed the leaking pipe,” said Sonitha Poernomo. She assured that the crude oil spill is not hazardous and toxic waste (B3 waste) as it was confirmed that it came from the company’s port pipeline. Upon mitigating further loss, Chevron Pacific Indonesia installed oil booms to prevent a broader spread of oil and constantly cleaned the oils that managed to escape the pipes. The company has also worked together with the Dumai City administration to further protect local residents and the environment. Dumai chief of environmental pollution control, Afdal Syamsir, said local officials have mobilized mitigation teams to the site of the oil spill and prevented further losses to the environment.

Iran launches vessel to deal with oil spill in Gulf (Xinhua) -- Iran's Ports and Maritime Organization (PMO) has launched a home-made oil spill response vessel (OSRV) to boost environment protection efforts in the Gulf, the Press TV reported Thursday. The ship is 55.5 meters long, 13 meters wide and six meters in height. It has a draft of four meters and a storage capacity of 550 cubic meters for recovered oil, according to the report. The OSRV is also equipped with a 350-meter drum oil skimmer, a dispersant system, a powerful pump and an electronically controlled diesel engine that allows it to sail with a speed of 16 knots, it said. The PMO has spent 25.27 million U.S. dollars on building the vessel, which is fully designed by Iranian shipbuilders, it added.

Offshore Project Commitments Set for Record Boost  - According to a new Rystad Energy report, offshore project commitments are expected to not only recover going forward but their number is also set to reach a new record in the five-year period towards 2025.The report showed that the commitment count is forecasted to hit 592 projects from the beginning of 2021 up until the end of 2025, with growth expected across shallow water (0-410 feet), deepwater (410-4,921 feet) and ultra-deepwater (beyond 4,921 feet) depth levels. Total offshore project commitments declined during 2016-2020 to 355 projects, from 478 during 2011-2015, Rystad highlighted.Shallow water commitments are expected to take the largest share of the total offshore project pie, rising to 356 from 206 in the last five years, and 323 projects during 2011-2015. The number of deepwater projects is forecasted to rise to 181, from 106 in 2016-2020 and 115 in the five years before that. Rystad noted that it was expecting about 55 ultra-deepwater projects from this year until 2025, which it outlined was up from 43 in the previous five years.Ultra-deepwater activity is projected to be primarily concentrated in South America, with over 50 percent of the total committed value, while the Middle East is likely to lead shelf developments with 40 percent of the total value, Rystad highlighted. Deepwater investments are forecasted to be less dependent on any particular region, with a quarter of greenfield expenditure expected in Europe.“The growth in commitments will stimulate rising demand for floating production, storage and offloading vessels as well as subsea tiebacks,” Rajiv Chandrasekhar, an energy service analyst at Rystad, said in a company statement.“The search for large new fields in deep and remote waters became much more economically viable after dayrates for drilling rigs and offshore supply vessels fell in the wake of the oil price crash in 2014 and 2015. This offers significant support for companies interested in deepwater,” he added.For the purpose of its analysis, Rystad defined that a project is committed when more than 25 percent of its overall greenfield capital expenditure is awarded through contracts.

Murban futures aim to consolidate UAE position as global oil power, but uptake may take time — Abu Dhabi's move to launch its Murban oil futures contract this month will strengthen its position as a global oil power, but challenges over adoption remain, according to leading experts and analysts. The Abu Dhabi National Oil Company has confirmed that trading of the contract will begin on March 29, marking a major change in how the oil rich emirate prices its crude exports. Murban is Abu Dhabi's flagship crude grade and makes up more than half of the UAE's total output. "What it does show is that Abu Dhabi and the UAE is continuing to consolidate its role as a major producer in the future," Dan Yergin, vice chairman of IHS-Markit, told CNBC on Thursday. "It continues to add capacity and sees itself as a global economic hub, and it wants that reflected in the crude stream," Yergin told CNBC's "Capital Connection." Wider impact After its launch was delayed by nearly a year due to regulatory hurdles, the futures contract for Murban, trading on the new ICE Futures Abu Dhabi Exchange, will let the market determine the price of Abu Dhabi's oil and replace the less transparent retroactive pricing methods that have been used in years past. "The announcement further cements ADNOC's shift toward benchmarking Murban as a price setter for the Middle East crude market, particularly for light sour barrels, a plan that has been in motion for several years," Amrita Sen, chief oil analyst at Energy Aspects said. It may take time for Murban to gain a foothold in the pricing of Mideast Gulf crude exports, with many companies likely to take a wait-and see stance. Azlin Ahmad CRUDE OIL EDITOR, ARGUS MEDIA However, experts are divided over whether the contract will dramatically elevate the status of the grade among its rivals or expand its share in the increasingly competitive Asian markets, where 90% of Murban is sold. Abu Dhabi also thinks the futures contract can be used as a regional benchmark to price other crudes from the Gulf, but concerns around adoption remain. "Murban has the potential to be a significant development in the evolution of crude trading in the Middle East, but we'll have to see how readily the market adopts the contract," Herman Wang, managing editor of OPEC and Middle East news at S&P Global Platts, told CNBC. 'It may take time' Saudi Arabia, the largest producer in the Gulf, currently uses a method linked to Omani crude futures traded on the Dubai Mercantile Exchange. Most other producers base their monthly crude price on the Dubai and Oman crude price assessments operated by S&P Global Platts. "In a market that tends to hold on to familiar benchmarks, even if flawed, for a long time, it is difficult to see who, beyond ADNOC, might be the first to explore this new pricing option," Azlin Ahmad, crude oil editor at Argus Media, said in a recent research note. "All this suggests that it may take time for Murban to gain a foothold in the pricing of Mideast Gulf crude exports, with many companies likely to take a wait-and see stance."

Saudi and Russia are at loggerheads again, but OPEC meeting 'unlikely to ruin the oil party' - — A group of some of the world's most powerful oil producers will hold a crucial meeting on Thursday to discuss reversing some of the output cuts it made last year. OPEC and its non-OPEC partners, an energy alliance sometimes referred to as OPEC+, will convene via videoconference in a bid to reach consensus over how to manage supply to the market. The group last year agreed to restrict the amount of oil it produces in an effort to prop up oil prices as strict public health measures coincided with an unprecedented fuel demand shock. This week's supply decision comes at a time when oil prices have rebounded to pre-virus levels, production in the U.S. has taken a hit from freezing storms and the coronavirus pandemic continues to cloud the outlook. OPEC's de facto leader Saudi Arabia has publicly encouraged allied partners to remain "extremely cautious" on production policy, warning the group against complacency as it seeks to navigate the ongoing Covid-19 crisis. Non-OPEC leader Russia, meanwhile, has indicated it wants to push ahead with a supply increase. Analysts broadly expect OPEC+ to hike output from current levels, but questions remain over how much exactly and which countries will be affected. At an industry event last month, Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman reportedly said to those trying to foresee the energy alliance's next move: "Don't try to predict the unpredictable." Both Saudi and Russia 'will get what they want' Tamas Varga, analyst at PVM Oil Associates, told CNBC via telephone that he believed OPEC and non-OPEC partners had done an "amazing job" in rebalancing the market. However, while the global oil demand is recovering, he warned that the recovery is still "very, very fragile." "What really matters here is Russia and Saudi Arabia. The breakeven price for Russia's budget is much lower than that of Saudi Arabia, so you will see a kind of gap in the views between these two countries," Varga said. OPEC+ initially agreed to cut oil production by a record of 9.7 million barrels per day last year, before easing cuts to 7.7 million and eventually 7.2 million from January. OPEC kingpin Saudi Arabia has since taken on voluntary cuts of 1 million from the beginning of February through March.Alexander Novak, Russia's deputy prime minister, appeared to signal Moscow's intent for a supply increase last month, claiming the market has already balanced. "Russia wants to move back towards normal production as quickly as possible while Saudi Arabia wants to enjoy high prices a little while longer and rather keep the market on the tight side than the loose side. We think both will get what they want," Bjarne Schieldrop, chief commodity analyst at SEB, said in a research note. Russia will likely be allowed to increase output further, he added, while Saudi Arabia will return "some or potentially all" of its 1 million barrels per day unilateral cut. Analysts expect OPEC+ to discuss allowing as much as 1.3 million barrels per day back into the market on Thursday.

Oil dips as Chinese fuel demand doubts outweigh vaccines, U.S. stimulus hopes - Oil prices were up on Monday as fears that Chinese oil crude consumption is slowing overshadowed rising optimism about COVID-19 vaccinations and a U.S. economic stimulus package increasing fuel demand. Brent crude fell 81 cents, or 1.3%, to trade at $63.61 per barrel, and U.S. West Texas Intermediate (WTI) fell 97 cents, or 1.58%, to trade at $60.53 per barrel. Both contracts finished February 18% higher. China's factory activity growth slipped to a nine-month low in February, sounding alarms over Chinese crude buying and pressuring oil prices. "One negative is more and more talk about Chinese oil demand maybe faltering, that they bought all the oil that they're going to need for a while," . "There's some talk that their strategic reserves are filled up, and so some people are betting against the Chinese continuing to drive oil prices." Support for the market came from rising COVID-19 vaccinations stirring up economic activity along with a $1.9 trillion coronavirus-related relief package passed by the U.S. House of Representatives on Saturday. If approved by the Senate, the stimulus package would pay for vaccines and medical supplies, and send a new round of emergency financial aid to households and small businesses, which will have a direct impact on energy demand. The approval of Johnson & Johnson's COVID-19 shot also buoyed the economic outlook. Outside of China, some manufacturing data was positive, helping to keep prices from moving lower. German activity hit its highest level in more than three years and Euro zone factory activity raced along, driven by rising demand. OPEC oil output fell in February as a voluntary cut by Saudi Arabia added to agreed reductions under a pact with allies, a Reuters survey found, ending a run of seven consecutive monthly increases. The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, meet on Thursday and could discuss allowing as much as 1.5 million barrels per day of crude back into the market. ING analysts said OPEC+ needs to avoid surprising traders by releasing too much supply. "There is a large amount of speculative money in oil at the moment, so they will want to avoid any action that will see (those investors) running for the exit," the analysts said.

Oil slips more than 1% ahead of key meeting between OPEC and allies Oil prices slid on Tuesday before this week's OPEC+ meeting where producers are expected to ease supply curbs as economies start to slowly recover from the coronavirus crisis. OPEC Secretary General Mohammad Barkindo said the outlook for oil demand was looking more positive, particularly in Asia, and headwinds from last year continued to abate. Brent crude dipped 99 cents, or 1.55%, to $62.70 per barrel, after easing back from last week's more than one-year peak above $67. U.S. West Texas Intermediate (WTI) was 28 cents higher at $60.92 per barrel, also down from last week's high. Prices slipped after a recent rally on expectations that the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, would add more oil to the market from April as they ease back on last year's deep supply cuts. "With the speculative market heavily long, the past three sessions' falls look corrective ahead of Thursday's meeting," said Jeffrey Halley, market analyst at OANDA. OPEC+, which meets on Thursday, could discuss allowing as much as 1.5 million barrels per day (bpd) back into the market. OPEC oil output fell in February as a voluntary cut by Saudi Arabia added to reductions agreed to in a previous OPEC+ pact, a Reuters survey found, ending a run of seven consecutive monthly increases. In Asia, China's factory activity growth slipped to a nine-month low in February, which could curtail Chinese crude demand. Oil buying by the world's top importer has recently eased. "There are signs that the physical market is not as tight as futures markets suggest," ING Economics said in a note.

U.S. oil futures settle below $60 for first time in more than a week -- Oil futures fell on Tuesday (link), with U.S. prices settling below the $60 mark for the first time since Feb. 19. Traders weighed prospects for crude production, with the Organization of the Petroleum Exporting Countries and its allies expected to make a decision on output levels by Thursday. At an OPEC+ technical meeting held Tuesday, S&P Global Platts reported (link) that OPEC Secretary General Mohammad Barkindo said producers must emphasize "cautious optimism." The pandemic still poses downside risks to the economy, but "encouraging global economic developments and resilient demand in Asia are upside factors," Barkindo said. April West Texas Intermediate crude fell 89 cents, or 1.5%, to settle at $59.75 a barrel. That was the lowest front-month contract finish since Feb. 19, FactSet data show.

WTI Extends Losses After Surprise Crude Build –m Oil prices tumbled today, leaving WTI back below $60 after OPEC+ headlines suggested "the market could handle more barrels" and a broad equity market sell-off didn't help."We have come a long way from a year ago," OPEC chief Mohammad Barkindo said."The days of GDP and oil demand figures being in the red because of the pandemic-induced shock appear to be behind us." Sounds a little optimistic. This week's inventory data will likely be extremely noisy, dominated by the turmoil in Texas.API

• Crude +735k (-1.805mm exp)
• Cushing +732k
• Gasoline -9.993mm (-2.125mm exp) - biggest draw ever
• Distillates -9.053mm (-2.90mm exp) - biggest draw since Jan 2003

Huge product draws suggest demand but with refineries largely shut-in due to Texas, inventories were crushed to meet what demand there was elsewhere. Crude stocks surprisingly rose (again no demand from refiners) WTI extended its losses after the surprise crude build...

Oil slips on concerns that OPEC+ may be set to pump up supply - Oil prices were down in early trade on Wednesday, extending several days of losses, amid uncertainty over how much supply producing countries will push to restore to the market at a meeting this week while the coronavirus pandemic persists. U.S. West Texas Intermediate (WTI) crude futures fell 18 cents, or 0.3%, to $59.57 a barrel by 0122 GMT, down 6% since Feb. 25, when they hit their highest close since May 2019. Brent crude futures dipped 7 cents, or 0.1%, to $62.63 a barrel, down 7% from a 13-month high hit last week. The Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, are set to meet on Thursday, at a time when they are generally positive on the oil market outlook compared with a year ago when they slashed supply to boost prices. OPEC+ sources last week said an output increase of 500,000 barrels per day (bpd) looked possible without building inventories. Saudi Arabia's voluntary cut of 1 million bpd is due to end in April, but it is unclear whether it will restore all of that supply right away. "The days of GDP and oil demand figures being in the red because of the pandemic-induced shock appear to be behind us," OPEC Secretary General Mohammad Barkindo said on Tuesday, speaking ahead of a meeting of OPEC+'s Joint Technical Committee (JTC). However, a JTC document seen by Reuters cited continued uncertainties in physical markets and risks of the coronavirus pandemic persisting with COVID-19 mutations. "The question the group must answer this week is whether the rebound in demand is strong enough to sustain an increase in output," ANZ analysts said in a note. Reinforcing concerns of potential oversupply, the American Petroleum Institute industry group reported U.S. crude stocks rose by 7.4 million barrels in the week to Feb. 26, in stark contrast to analysts' estimates for a draw of 928,000 barrels. "The unexpectedly large crude inventories build hit at a worrying time for oil bulls," said Stephen Innes, global market strategist at Axi.-

Oil Inventories Soar Most Ever; Gasoline Stocks Drained Most Since 1990 --  Oil prices surged back higher overnight after a brief dip on the API-reported surprise crude build (and massive product draws), as hopes that OPEC+ won't hike output too much prevail. The widespread view among the Organization of Petroleum Exporting Countries and its allies is that the oil market can absorb extra barrels, according to people familiar with the matter.“The question is not ‘if’ but rather ‘by how much’ the petro-nations will ease supply curbs,” said Norbert Ruecker, an analyst at Julius Baer Group Ltd.“The economic recovery and the likely leisure and travel activity bounce will fuel oil demand and extra supplies will be needed to avoid an over-tightening.”As we saw with API data, the Texas turmoil will make this inventory/production/demand data very noisy. DOE:

• Crude +21.563mm (-1.805mm exp) - biggest build ever
• Cushing +485k
• Gasoline -13.624mm (-2.125mm exp) - biggest draw ever
• Distillates -9.719mm (-2.90mm exp) - biggest draw since Jan 2003

After API's data (massive build in crude, massive draws in products), DOE's official data was stunning to behold with a record build in crude and record draw in gasoline stocks... Graphics Source: Bloomberg After tumbling in the prior week, Gasoline demand rebounded last week, but remains well below pre-COVID levels... After plunging the prior week due to the storm in Texas (tied with the record drop in August during the hurricane season), US crude production returned very modestly last week... At least 15 refineries, accounting for a combined 4.2 million barrels per day of capacity, were still experiencing ongoing outages last week. Front-month WTI futures were trading around $61 ahead of the official data and slipped lower on the crazy data... But the algos were quick to return and push it higher.

Oil Prices Get Boost from Fuel Inventory Data  -- Oil jumped the most in more than a week after a U.S. government report showed a record drop in domestic fuel inventories from the aftermath of a deep freeze that shuttered refineries in several states. Crude futures in New York climbed 2.6% on Wednesday, snapping a three-day streak of losses. U.S. gasoline inventories tumbled last week by the most since 1990 after a polar blast wiped out more than 5 million barrels a day of refining capacity in late February along the U.S. Gulf Coast, according to Energy Information Administration data. Crude stockpiles swelled with refineries still shut. “Absent the magnitude of the changes, things came in pretty much as expected with the enormous product draw more than offsetting the record crude build.” The U.S. data also showed gasoline supplied, a gauge for demand, surged the most since May, supporting those who say the oil market needs more barrels from producers as OPEC+ heads into a meeting on Thursday. The group is poised to agree on a coordinated production hike to cool the rapid surge in crude prices. Oil has rallied more than 25% so far this year, shepherded by the OPEC+ alliance’s continued production curbs and expectations for demand to meaningfully rebound as Covid-19 vaccines are rolled out worldwide. That strength though has paved the way for the alliance to unleash more barrels, with OPEC Secretary-General Mohammad Barkindo saying Tuesday that both the wider economic outlook and oil-market fundamentals continue to improve. The group could return the bulk of the 1.5 million-barrel-a-day hike that’s up for debate. There are two parts to the potential production ramp-up that OPEC+ will discuss. The first is whether the cartel will proceed with a 500,000-barrel-a-day collective increase in April. The second is the question of how Saudi Arabia could phase out its extra reduction of 1 million barrels a day. “Elevated price levels will incentivize the cartel to taper their output cuts, but given the uncertainty, the market is likely to be on edge heading into tomorrow’s meeting,” TD Securities commodity strategists including Bart Melek said in a note. West Texas Intermediate for April delivery rose $1.53 to settle at $61.28 a barrel. Brent for May settlement climbed $1.37 to end the session at $64.07 a barrel. In the U.S., the decline in both gasoline and distillate inventories coincides with a spate of refinery outages left in the wake of the cold snap: Plants processed crude at the lowest level on record last week. While some refineries, like Motiva Enterprises LLC’s Texas site, have been able to restart key processing units, many that shut due to the freeze are still in the process of making repairs or restarting operations. Meanwhile, much of the crude production hit by the cold temperatures has been restored. Crude supplies grew by a record 21.56 million barrels, signaling weak demand from refiners at the time.

Oil strengthens on prospect of OPEC+ maintaining supply cuts, drop in U.S. inventories -Oil prices rose more than $1 per barrel on Thursday after Saudi Energy Minister Prince Abdulaziz bin Salman urged caution and vigilance at the beginning of a meeting of OPEC ministers and their allies about the future of supply cuts. Brent crude futures were up $1.11, or 1.7%, at $65.18 a barrel while U.S. West Texas Intermediate (WTI) crude rose $1.07, or 1.8% to $62.35. Ministers from OPEC members and their allies started a meeting to discuss the future of an oil output cut at 1300 GMT. Analysts and traders say a four-month price rally from below $40 a barrel is now out of step with demand and that physical sales are not expected to match supply until later in 2021. But with prices above $60, some analysts have predicted OPEC+ producers will increase output by about 500,000 barrels per day (bpd) and expect Saudi Arabia to at least partially end its voluntary reduction of 1 million bpd. Three OPEC+ sources on Wednesday said some members believe that output should remain unchanged and that it was not immediately clear whether Saudi Arabia would end its voluntary cuts or extend them. "The market ... can take back at least 500,000 bpd (excluding Saudi's extra cuts) from April and even more in following months, in line with the recovery we expect in oil demand," said Rystad's head of oil markets, Bjornar Tonhaugen. "Some mild negative price reaction will take place, though, if the decision is to increase output. Such a development would prevent some steep stock draws that had been priced in for a while for coming months." In the United States, despite a record surge of more than 21 million barrels in crude oil stockpiles last week, gasoline stocks fell by the most in 30 years as refining plunged to a record low because of the Texas freeze. Giving a floor to prices, Yemen's Houthi forces said on Thursday that they had fired a missile at a Saudi Aramco facility in Saudi Arabia's Red Sea city of Jeddah. There was no immediate confirmation from Saudi authorities.

OPEC+ extends most oil output cuts into April, Saudi keeps voluntary curb (Reuters) - OPEC and its allies agreed to extend most oil output cuts into April, offering small exemptions to Russia and Kazakhstan, after deciding that the demand recovery from the coronavirus pandemic was still fragile despite a recent oil price rally. OPEC’s leader Saudi Arabia said it would extend its voluntary oil output cut of 1 million barrels per day (bpd), and would decide in coming months when to gradually phase it out. The news pushed oil prices back towards their highest levels in more than a year with Brent trading up 5% above $67 a barrel as the market had expected OPEC+ to release more barrels. [O/R] OPEC+ had cut output by a record 9.7 million bpd last year as demand collapsed due to the pandemic. As of March, it is still withholding about 7 million bpd, or 7% of world demand. The voluntary Saudi cut brings the total to about 8 million bpd. Under Thursday’s deal, Russia was allowed to raise output by 130,000 bpd in April and Kazakhstan by another 20,000 bpd to meet domestic needs. “Everybody (else) is going to maintain the freeze,” Saudi Energy Minister Prince Abdulaziz bin Salman told a news conference to outline the deal. He said Saudi Arabia would decide in the next few months when to gradually phase out its 1 million bpd voluntary cut “at our time, at our convenience”. “We are not in a hurry to bring it forward,” he said. The Saudi minister and Russian Deputy Prime Minister Alexander Novak, lynchpins in the OPEC+ group, had earlier told OPEC+ ministers the recovery in demand was fragile. Novak said after the meeting that OPEC+ had to tread cautiously to avoid overheating the market.Russia has been insisting on raising output to avoid prices spiking any further and lending support to shale oil output from the United States, which is not part of OPEC+. But in February Moscow failed to raise output, despite being allowed to do so by OPEC+, because harsh winter weather hit its production at mature fields. Novak said Moscow needed extra barrels to meet recovering demand at home.

OPEC : 14th OPEC and non-OPEC Ministerial Meeting - opec.org - The 14th Meeting of OPEC and non-OPEC Ministers took place via video conference on Thursday March 4, 2021, under the Chairmanship of HRH Prince Abdul Aziz bin Salman, Saudi Arabia’s Minister of Energy, and Co-Chair HE Alexander Novak, Deputy Prime Minister of the Russian Federation. The Meeting emphasized the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a rebalancing of the global oil market in line with the historic decisions taken at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on 12 April 2020 to adjust downwards overall crude oil production and subsequent decisions. The Ministers noted, with gratitude, the significant voluntary extra supply reduction made by Saudi Arabia, which took effect on 1 February for two months, which supported the stability of the market. The Ministers also commended Saudi Arabia for the extension of the additional voluntary adjustments of 1 mb/d for the month of April 2021, exemplifying its leadership, and demonstrating its flexible and pre-emptive approach. The Ministers approved a continuation of the production levels of March for the month of April, with the exception of Russia and Kazakhstan, which will be allowed to increase production by 130 and 20 thousand barrels per day respectively, due to continued seasonal consumption patterns. The Meeting reviewed the monthly report prepared by the Joint Technical Committee (JTC), including the crude oil production data for the month of February. It welcomed the positive performance of participating countries. Overall conformity with the original decision was 103 per cent, reinforcing the trend of aggregate high conformity by participating countries. The Meeting noted that since the April 2020 meeting, OPEC and non-OPEC countries had withheld 2.3bn barrels of oil by end of January 2021, accelerating the oil market rebalancing. The Meeting extended special thanks to Nigeria for achieving full conformity in January 2021, and compensating its entire overproduced volumes. The ministers thanked HE Timipre Sylva, Minister of State for Petroleum Resources of Nigeria, for his shuttle diplomacy as Special Envoy of the JMMC to Congo, Equatorial Guinea, Gabon and South Sudan to discuss matters pertaining to conformity levels with the voluntary production adjustments and compensation of over-produced volumes. In this regards the Ministers agreed to the request by several countries, which have not yet completed their compensation, for an extension of the compensation period until end of July 2021. It urged all participants to achieve full conformity and make up for previous compensation shortfalls, to reach the objective of market rebalancing and avoid undue delay in the process

Oil Surges As OPEC+ Agrees To Keep Output Unchanged In April - Crude gains accelerated two hours after the start of today's meeting following headlines that OPEC+ has agreed to keep output unchanged in April, with a delegate adding that OPEC+ decided not to hike output by 500kb/d in April.Energy Intel's Amena Bakr adds that Saudi Arabia may voluntarily extend its cut to April, however on condition that "compensation" volumes must be committed. Additionally, Bakr notes that the Saudis were the ones who proposed a rollover of existing production quotes for April and May.As B loomberg summarizes...  "there we have it. The group has agreed to roll over production for a month at current levels, including the voluntary Saudi cut. That’s a very bullish outcome. Prices up almost $3 a barrel."Of course, nothing is decided until the meeting concludes, but it appears that OPEC+ is willing to sacrifice production if it means much higher oil price for the next 1-2 months.The messages are mixed however:

• Saudi Arabia is mulling extending its 1 million b/d voluntary cut for a third month into April
• So far, most OPEC+ nations appear to back a roll-over of their production cuts into next month
• But Russia is resisting, insisting that Moscow should be allowed to increase its oil production.

Crude prices surge as OPEC+ extends most oil output cuts into April, Saudi keeps voluntary curb - Crude prices surged Thursday after OPEC and its allies agreed to extend most oil output cuts into April, offering small exemptions to Russia and Kazakhstan, after deciding that the demand recovery from the coronavirus pandemic was still fragile despite a recent oil price rally. OPEC's leader Saudi Arabia said it would extend its voluntary oil output cut of 1 million barrels per day (bpd), and would decide in coming months when to gradually phase it out. The news pushed oil prices back toward their highest levels in more than a year with Brent, the global benchmark, trading up five per cent above $67 US a barrel as the market had expected OPEC+ to release more barrels. The price of West Texas Intermediate, the North American benchmark, also rose, closing at $63.83 US a barrel on Thursday, up $2.55. The price of Western Canada Select climbed to $52.65 US a barrel, up $2.84. "For Canada, absolutely a net positive event," "All of this just trickles straight through to further cash flows for Canadian oil producers, most of whom are sitting near or at their highest production levels." Canadian oil producers got a lift with shares of MEG Energy Corp. surging nearly 10 per cent while Vermilion Energy Inc. rose 5.6 per cent and Cenovus Energy Inc. gained 4.9 per cent. OPEC+ had cut output by a record 9.7 million bpd last year as demand collapsed due to the pandemic. As of March, it is still withholding about 7 million bpd, or seven per cent of world demand. The voluntary Saudi cut brings the total to about 8 million bpd. Under Thursday's deal, Russia was allowed to raise output by 130,000 bpd in April and Kazakhstan by another 20,000 bpd to meet domestic needs.

Oil prices surge past recent highs on OPEC’s crude production decision -Oil surged to the highest in nearly two years after the OPEC+ alliance surprised traders with its decision to keep output unchanged, signaling a tighter crude market in the months ahead. Futures in New York climbed 4.2%, rising the most since Saudi Arabia last shocked markets with its January pledge to unilaterally cut output. Global benchmark Brent also jumped on Thursday. The OPEC+ producer alliance agreed during a virtual gathering to hold output steady in April. Saudi Arabia said it is in no hurry to bring back supply and will maintain its 1 million barrel-a-day voluntary production cut. “The decision to maintain the current OPEC+ supply cuts for the month of April has given the oil bulls exactly what they needed as far as the tight-supply narrative goes,” OPEC+ has helped drain a global glut that accumulated during the pandemic through its supply management, pushing crude futures up more than 30% so far this year. The strength is evident across many corners of the oil market, with key timespreads widening further in a bullish backwardation structure -- an indication of tightening supplies -- and data from brokers showing rallies in key swap markets in the North Sea. Meanwhile, Brent options volume rose to the highest since March 2020, according to preliminary trade data compiled by Bloomberg. The OPEC+ decision represents a victory for Saudi Arabia, which has advocated for production restraints to keep crude prices supported. However, higher prices could spur additional drilling activity by U.S. shale explorers, with domestic oil rigs already at the highest since May 2020. Saudi Arabia appeared unfazed by that risk: Saudi Energy Minister Prince Abdulaziz bin Salman told reporters after the meeting that the U.S. mantra of “drill, baby, drill is gone forever.” “The longer prices stay up, the greater the likelihood we will eventually see a supply response from the U.S. But, it’s not going to be as immediate as it would have been in the past.” OPEC+ had been debating whether to restore as much as 1.5 million barrels a day of output. As part of the agreement, Russia and Kazakhstan were granted exemptions. The group’s next meeting is scheduled for April 1 to discuss production levels for May. West Texas Intermediate for April delivery rose $2.55 to settle at $63.83 a barrel, the highest since April 2019. Brent for May settlement climbed $2.67 to end the session at $66.74 a barrel, the highest since late February. The ramifications of a swiftly tightening oil market may also impact prices at the pump, with U.S. retail gasoline prices approaching $3 per gallon for the first time in six years.

Oil surges after OPEC+ hold cuts, strong U.S. jobs growth - Oil prices jumped about 3% on Friday, hitting their highest levels in more than a year, following a stronger-than-expected U.S. jobs report and a decision by OPEC and its allies not to increase supply in April. Brent futures rose $2.62, or 3.9%, to settle at $69.36 a barrel. The session high for the global benchmark was its highest since January 2020. West Texas Intermediate (WTI) crude rose $2.26, or 3.5% to settle at $66.09 a barrel. For the week, Brent was up 5.2%, rising for a seventh week in a row for the first time since December, while WTI was up about 7.4% after gaining almost 4% last week. Both contracts surged more than 4% on Thursday after the Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, extended oil output curbs into April, granting small exemptions to Russia and Kazakhstan. "OPEC+ settled for a cautious approach ... opting to increase production by just 150,000 barrels per day (bpd) in April while market participants looked for an increase of 1.5 million bpd," said UBS oil analyst Giovanni Staunovo. Investors were surprised that Saudi Arabia had decided to maintain its voluntary cut of 1 million bpd through April even after the oil price rally of the past two months on the back of COVID-19 vaccination programs around the globe. Some forecasters revised their price expectations upward following the OPEC+ decision. Goldman Sachs raised its Brent crude price forecast by $5 to $75 a barrel in the second quarter and $80 a barrel in the third quarter of this year. UBS raised its Brent forecast to $75 a barrel and WTI to $72 in the second half of 2021. In addition, the market got a boost after a report showed the U.S. economy created more jobs than expected in February. The nonfarm payroll report "shows that Americans are closer to pre-pandemic behavior that will drive strong demand for crude," said Edward Moya, senior market analyst at OANDA in New York. Traders also noted the rising dollar, which hit its highest since November, was limiting the gain in crude prices. A stronger dollar makes oil more expensive for holders of other currencies. However, analysts and traders have said that slow physical crude sales and recovery for demand not predicted until around the third quarter suggest that the price rally is unwarranted.

Oil Soars Above $66 With Saudi Supply Gamble Buoying Crude Bulls -  Oil rallied to the highest in nearly two years in New York after OPEC+ shocked markets with a decision to keep supply limited as the global economy starts to recover from a pandemic-driven slump. U.S. benchmark crude futures topped $66 a barrel on Friday, while its global counterpart Brent neared the key $70 level. The producer alliance’s supply curbs and the rollout of Covid-19 vaccines have aided a stellar rebound for crude from the depths of the coronavirus-related fallout. OPEC+’s surprise decision on Thursday to keep output steady in April boosted prices further and led to strength in the market’s structure. Major banks upgraded price forecasts, with some calls for oil reaching north of $100 next year. “In some ways, even more important than the lack of oil was the message that came with it: They’re not really worried about price, not worried about tightening,” Crude has soared more than 30% so far this year with OPEC+’s output restraint holding the market over until a full-fledged comeback in consumption. The group’s latest decision represents a victory for Riyadh, which has advocated for tight curbs to keep prices supported. “Overall, this was the most bullish outcome we could have expected,” JPMorgan Chase & Co. analysts wrote in a note to clients. Saudi Arabia’s bold and unexpected gamble to restrain production is founded upon its view that this time around higher prices will not lead to a big increase in output by American shale drillers. Saudi Energy Minister Prince Abdulaziz bin Salman said in an interview after the meeting that shale companies were now more focused on dividends. West Texas Intermediate for April delivery advanced $2.26 to settle at $66.09 a barrel, the highest level since April 2019. Futures surged 7.5% this week, the largest weekly gain in a month. Brent for May settlement climbed $2.62 to end the session at $69.36 a barrel. Oil’s rebound this year stands to intensify the debate about a potential resurgence in inflation, and complicate the task facing the Federal Reserve as it supports the U.S. recovery. The Treasury market is already looking for signs of faster price gains, with yields rising rapidly. Meanwhile, U.S. employers added more jobs than forecast in February. 

Saudis Bet Against Return of USA Shale Glory Days  - -- Saudi Arabia just made a high-stakes wager that the glory days of U.S. shale, which transformed the global energy map in the last decade, are never coming back. By keeping a tight grip on supply at Thursday’s meeting of the OPEC+ alliance of oil producers, Saudi Energy Minister Prince Abdulaziz bin Salman showed he’s focused on boosting prices -- and confident that this time around it won’t encourage American producers to surge back and steal market share. “‘Drill, baby, drill’ is gone for ever,” said Prince Abdulaziz, who’s orchestrated the revival of the oil market after last year’s catastrophic collapse. His swagger comes mixed with a good dose of diplomatic tension: Russia, Saudi Arabia’s most important OPEC+ partner, has tried to convince Riyadh for several months to increase output, fearing that rising oil prices would ultimately awaken rival shale producers. The Saudis are certain the American industry has reformed itself. If the prince is right, OPEC+ will be able to both push prices higher now and recover market share later without worrying that rivals in Texas, Oklahoma and North Dakota will flood the market. But if Riyadh has miscalculated -- and it’s got shale wrong before -- the danger will be lower prices and production down the line. The Saudis have so far convinced their allies the strategy will work. After a quick virtual meeting on Thursday, OPEC+ agreed to prolong its production cuts, defying expectations of an output hike. Russia, however, secured an exemption for itself and Kazakhstan, and will increase output marginally in April. Brent crude jumped 5% to a one-year high of almost $68 a barrel after the decision. Front-month futures extended gains on Friday and a raft of banks updated their price forecasts, including Goldman Sachs Group Inc., which increased its estimates by $5 -- to $75 next quarter and $80 in the following three months. “This is an incredibly bold move on the part of OPEC+ to extend the oil price rally,” said KPMG Global Energy Sector Leader Regina Mayor. If history is a guide, however, trouble may be brewing. The OPEC+ coalition, which groups Saudi Arabia, Russia and almost two dozen other oil producers, has in the past underestimated its American rivals, who year after year produced more than most expected. From a low point of less than 7 million barrels a day in 2007, the U.S.’s total petroleum output more than doubled to hit an all-time high of almost 18 million barrels a day by early 2020, forcing the cartel to cede market share. “This is a risky take,” Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd., said Friday in a Bloomberg Television interview. While U.S. oil companies probably won’t raise output this year, in 2022 “there’s nothing really stopping them, especially the small and mid-cap producers.” Sen sees prices hitting $70 a barrel as soon as next week, $80 by the end of the year and a possible climb to $100 in 2022. For now, U.S. total oil output remains constrained, hovering at 16 million barrels due to the impact of last year’s slump, which briefly saw benchmark prices trade below zero. Under pressure from shareholders, shale producers have promised restraint, putting profits before the growth they relentlessly pursued during the boom years. Although drilling has risen from the lows of 2020, it’s well below previous levels. In addition, President Joe Biden is trying to temper the worst excesses of the industry, including the indiscriminate natural gas flaring that’s a byproduct of shale’s success. Under a different oil minister, Saudi Arabia attacked shale producers in 2014 and 2015, flooding the market and forcing prices lower -- a strategy that ultimately failed. Prince Abdulaziz is doing the opposite, because oil higher prices will eventually benefit shale producers. Yet, he’s convinced the industry won’t repeat its past excesses.

Goldman hikes Brent forecast, says 'shale discipline' behind OPEC strategy (Reuters) - Goldman Sachs Commodities Research raised its Brent forecast for second and third quarter by $5 a barrel after OPEC and its allies kept the deal unchanged, and said ‘discipline of shale producers’ is likely behind the group’s slower output increase. The Wall Street bank now sees Brent prices at $75 a barrel in second quarter and at $80 a barrel in third quarter of 2021, it said in a note dated Thursday. U.S. shale producers have quickly responded to oil price gains in recent years, winning market share as Saudi Arabia and other major producers have cut output, although they held back on boosting production since pandemic-led demand destruction last year. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) on Thursday agreed to extend most oil production cuts until April, after deciding that the demand recovery from the coronavirus pandemic was still fragile. “OPEC’s supply strategy is working because of its unexpectedness and suddenness,” Goldman said. “We believe it is now clear that OPEC+ is in fact pursuing a tight oil market strategy, with our updated supply-demand balance pointing to OECD (inventories) falling to their lowest level since 2014 by the end of this year.” The bank lowered its OPEC+ production forecast by 0.9 million (bpd) over the next six months, and said shale, Iran and non-OPEC supplies are likely to remain highly inelastic to prices until the second half of 2021, allowing OPEC+ to quickly rebalance the oil market. “Key will be the potential shale supply response, although the latest earnings season suggests investors are still a long way away from rewarding growth,” the bank said, and raised its 2022 U.S. shale production forecast by 0.3 million bpd. Brent crude futures rose 1.2% to $67.57 a barrel by 0609 GMT on Friday and U.S. West Texas Intermediate (WTI) crude futures advanced 1.2% to $64.60 per barrel.

Column: OPEC+ keeping output cuts won't surprise the physical crude market (Reuters) - The decision by OPEC and its allies to extend crude oil output cuts into April came as something of a surprise to a market expecting some level of increase, but it shouldn’t have. The problem for the prevailing narrative is that it’s focused on what is happening in the paper crude market, the widely followed and traded Brent and West Texas Intermediate futures. They have been signalling increasing tightness in the global oil market as the world starts to recover from the economic impact of the coronavirus pandemic, coupled with the ongoing supply restrictions imposed by the producer group, referred to as OPEC+. The paper market has a point: oil demand does look like it will be heading higher, but the problem is a matter of timing. The market is priced for a sharp increase in demand right now, and in the next few months. But the physical crude market is telling another story, with traders there saying there are plenty of cargoes available, especially for delivery to the top-importing region of Asia. The physical market has largely already sorted out what they are buying for April, and they are now looking more at loading programmes for May and June. It’s quite likely that the OPEC+ group looked at what refiners were wanting in April and concluded that there was not yet enough demand to warrant pumping more crude in that month. If the paper market then takes OPEC+’s decision to keep its output down by about 7 million barrels per day (bpd) and bid up prices, then that’s just a serendipitous bonus for the producers. The Brent market duly did what was expected, with the front-month contract rising as much as 5.7% to a one-year high of $67.75 a barrel, before retreating slightly to end Thursday’s trade at $67.17. But the front-month contract expires on March 31, making it largely irrelevant to the physical market. The bullishness seen in paper crude contrasts with reports from physical traders, where in recent days there have been reports of several West African cargoes being offered for re-sale, and refiners in China, the world’s biggest crude importer, cutting back on purchases. There were some interesting comments from Prince Abdulaziz bin Salman, the energy minister of top exporter Saudi Arabia, after Thursday’s meeting of OPEC+. He says the kingdom is not in any hurry to end its voluntary, additional 1 million bpd of output cuts.If the Saudis genuinely believed the market was tight, adding those barrels back would be the first step and would reduce the risk of prices rising too rapidly, choking demand and the nascent global recovery. Another point the Saudi minister made was that countries complaining of high prices should use up inventories of cheap crude bought during the price collapse last year, a sign that OPEC+ doesn’t yet believe inventory levels have dropped to what could be considered more normal levels. But perhaps Salman’s bravest comment was an apparent suggestion that U.S. shale oil isn’t the force in the market it used to be. “Drill, baby, drill is gone forever,” he said, referencing the U.S. Republican Party’s political slogan to promote the expansion of onshore production.

Biden Bombs Syria and Claims Self Defense - by Caitlin Johnstone — On orders of President Biden, the United States has launched an airstrike on a facility in Syria. As of this writing the exact number of killed and injured is unknown, with early reports claiming “a handful” of people were killed. Rather than doing anything remotely resembling journalism, the western mass media have opted instead to uncritically repeat what they’ve been told about the airstrike by US officials, which is the same as just publishing Pentagon press releases. Here’s this from The Washington Post:The Biden administration conducted an airstrike against alleged Iranian-linked fighters in Syria on Thursday, signaling its intent to push back against violence believed to be sponsored by Tehran.Pentagon spokesman John Kirby said the attack, the first action ordered by the Biden administration to push back against alleged Iranian-linked violence in Iraq and Syria, on a border control point in eastern Syria was “authorized in response to recent attacks against American and coalition personnel in Iraq, and to ongoing threats.”He said the facilities were used by Iranian-linked militias including Kaitib Hezbollah and Kaitib Sayyid al-Shuhada.The operation follows the latest serious attack on U.S. locations in Iraq that American officials have attributed to Iranian-linked groups operating in Iraq and Syria. Earlier this month, a rocket attack in northern Iraq killed a contractor working with the U.S. military and injured a U.S. service member there. So we are being told that the United States launched an airstrike on Syria, a nation it invaded and is illegally occupying, because of attacks on “US locations” in Iraq, another nation the US invaded and is illegally occupying. This attack is justified on the basis that the Iraqi fighters were “Iranian-linked”, a claim that is both entirely without evidence and irrelevant to the justification of deadly military force. And this is somehow being framed in mainstream news publications as a defensive operation.This is Defense Department stenography. The US military is an invading force in both Syria and Iraq; it is impossible for its actions in either of those countries to be defensive. It is always necessarily the aggressor. It’s the people trying to eject them who are acting defensively. The deaths of US troops and contractors in those countries can only be blamed on the powerful people who sent them there.The US is just taking it as a given that it has de facto jurisdiction over the nations of Syria, Iraq, and Iran, and that any attempt to interfere in its authority in the region is an unprovoked attack which must be defended against. This is completely backwards and illegitimate. Only through the most perversely warped American supremacist reality tunnels can it look valid to dictate the affairs of sovereign nations on the other side of the planet and respond with violence if anyone in those nations tries to eject them.

“Biden is Not Obama”: Israel Very Pleased With Biden’s Decision to Bomb Syria — Israeli officials told Walla News on Friday that Israel is highly pleased with President Biden’s decision to bomb Shia militia targets in eastern Syria.  Although the airstrikes hit an Iraqi militia, the attack is being framed as a move against Iran, and the officials compared Biden to President Obama, who they view as soft on Iran due to the 2015 nuclear deal.  “The Iranians didn’t realize that Biden is not Obama, and that if they will continue down this road of miscalculation they will eventually get hit,” one Israeli official told Walla.  According to a report from Axios, Israel was given advanced notice of the Syria airstrikes on Thursday morning. The notification took place during talks of the so-call “working group,” a forum the US and Israel are using to discuss Iran issues that is headed by each countries’ national security advisors.  Israel has been bombing Syria for years and frequently targets Shia militias that they always claim are linked to Iran. Last week, Israel bombed Damascus, Syria, killing nine people who were described as pro-government militia fighters.

Rockets fired at Iraqi airbase hosting U.S.-led coalition troops - Ten rockets were fired at an Iraqi military base hosting U.S.-led coalition troops Wednesday, the latest in a series of rocket attacks in Iraq, with this one just days before the pope is due to visit the country.The rockets targeted the Ain al-Asad air base, northwest of Baghdad, at 7:20 a.m. local time Wednesday (11:20 p.m. ET Tuesday). The attack was confirmed in a tweet from Col. Wayne Marotto, the military spokesman for Operation Inherent Resolve, the 83-member coalition to defeat the Islamic State militant group. There are approximately 1,400 coalition troops at the sprawling base.Iraqi security forces are leading the response and investigation, he added."A U.S. civilian contractor suffered a cardiac episode while sheltering and sadly passed away shortly after," Pentagon press secretary John Kirby said in a statement. He later said it remained unclear if the rocket attack had caused the cardiac arrest. Major Gen. Tahseen al-Khafaji of the Iraqi security forces told NBC News that there was no damage reported at the base. Security forces were investigating who was behind the attack, he added.

Rocket attack on base in Iraq raises threat of US escalation - A rocket attack on the sprawling Ain al-Asad air base in Iraq’s western province of Anbar early Wednesday has heightened the threat of a further escalation of US military aggression in the country and the wider region. The 10 rockets that fell on the base, which houses US and other NATO troops, claimed no casualties, but one US civilian contractor died of a heart attack while sheltering during the assault. Iraqi security officials said little damage was inflicted on the base, while witnesses told local media they had seen flames and a long plume of black smoke. Raising the prospect of another round of US military action, President Joe Biden told reporters, “We are following that through right now... we’re identifying who’s responsible and we’ll make judgments.” The rocket attack follows last week’s US air strikes against facilities near the Iraqi border used by Iranian-backed Iraqi Shia militias in Syria. Those strikes, the first military action ordered by the new Democratic president, were initially reported to have killed 17 people, while later reports said that just one person died. While there was widespread speculation that the rockets fired on Ain al-Asad were in retaliation for the US strike in Syria, as of Wednesday evening no group had claimed responsibility. The area surrounding the base is overwhelmingly Sunni and not under the control of the predominantly Shia Hashed al-Shaabi, or Popular Mobilization Forces (PMF), an official arm of Iraq’s military, which the US military attacked last week in Syria.

Houthi Rebels Claim Missile Attack On Saudi Aramco Facility - The Houthi rebels in Yemen claimed they have struck an Aramco facility in Jeddah in a missile attack, Russia’s Sputnik reports, citing a statement by the rebel group. The Associated Press later also reported the attack.“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 said.The news comes just days after Saudi Arabia said it had intercepted a Houthi ballistic missile over the capital, Riyadh. The Saudi side has yet to confirm or deny the attack.The Houthis last targeted Saudi oil facilities last November. The group—which the outgoing U.S. administration in January designated as a terrorist group—said they had hit a distribution center property of Saudi Arabia’s state oil company. The group also warned that “operations will continue,” advising foreign companies and residents of Saudi Arabia to be cautious.The report came in late November, a week after Saudi Arabia said it had thwarted a Houthi attack on an oil products terminal near the border between the Kingdom and Yemen. The Saudi side confirmed the hit.Since 2015, Saudi Arabia and Iran have been essentially fighting a proxy war in Yemen, where the Saudis lead a military Arab coalition to “restore legitimacy” in the country, while the Houthi movement, which holds the capital Sanaa, is backed by Iran.The Houthi rebels have often claimed they have hit oil infrastructure assets in Saudi Arabia and have taken responsibility for several high-profile attacks in the region.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. But Saudi Arabia and the United States have said that it was Iran—and not the Houthis—who was responsible for the attack.

At least 20 killed by suicide car bomb near restaurant in Somalia capital (Reuters) - At least 20 people were killed and 30 wounded by a suicide car bomb just outside a restaurant near the port in Somalia’s capital Mogadishu late on Friday, an emergency services official said. The blast sent plumes of smoke into the sky and triggered gunfire, witnesses and state-owned media reported. “So far we have carried 20 dead people and 30 injured from the blast scene,” Dr. Abdulkadir Aden, founder of AAMIN Ambulance services told Reuters. The blast occurred at the Luul Yemeni restaurant near the port, witnesses said. “A speeding car exploded at Luul Yemeni restaurant. I was going to the restaurant but ran back when the blast shook and covered the area with smoke,” resident Ahmed Abdullahi, who lives near the site, told Reuters. Somalia’s state-controlled Radio Mogadishu reported there was also destruction of property and that police had cordoned off the area.