oil prices tumbled by the most in 5 months this week on rising tension between Biden and Putin, and on a new wave of Covid infections across Europe...after slipping 0.7% to $65.61 a barrel last week in an inevitable correction of an 80% runup over 18 weeks, the contract price of US light sweet crude for April delivery opened slightly lower on Monday as the dollar strengthened and weighed on commodities priced in the currency, then rallied into positive territory by midday on strong Chinese economic news and ongoing supply restraint from major oil producers before fading to close 22 cents lower at $65.39 a barrel, pressured by expectations that ongoing damage from the freeze off in Texas would continue to boost crude inventories....oil prices continued lower on Tuesday as traders awaited signs of further recovery in consumption and closed down 59 cents at $64.80 a barrel as Germany, France and other European states suspended the use of the AstraZeneca coronavirus vaccine, threatening the recovery of fuel demand...oil prices jumped back above $65 late Tuesday after the API reported that US crude inventories had unexpectedly dropped, but fell back after the market opened on Wednesday and settled 20 cents lower at $64.80 a barrel after government data showed a weekly build in crude, gasoline and distillate supplies...oil prices opened lower on Thursday and tumbled throughout the day to a 10% loss by midafternoon on concern over rising tensions between the U.S. and Russia and a slowdown in the European vaccine rollout, but recovered to post just a 7% loss at $60.00 a barrel, still the steepest drop in 6 months, with a sharp rise in the value of the dollar after a Fed meeting where no action was taken also driving the selloff...however, oil prices rebounded after opening lower again on Friday after investment banks from Goldman Sachs to Morgan Stanley said the Thursday sell-off was excessive and offered an opportunity to buy, and rallied to close $1.42 or 2.4% higher at $61.42 a barrel, on reports of an attack on an oil facility in Saudi Arabia, but still finished the week 6.4% lower, oil's worst week since October, as a new wave of coronavirus infections across Europe dampened hopes that fuel demand would recover anytime soon...
natural gas prices also fell this week, albeit not as precipitously, as weather forecasts suggested little demand for heating thru the remainder of the season...after falling 3.7% to $2.600 per mmBTU last week as the weather continued to moderate with the end of the heating season approaching, the contract price of natural gas for April delivery opened more than 4 cents lower on Monday and tumbled to an 11.6 cent loss at $2.484 per mmBTU as forecasts called for spring weather and less heating needs over the remainder of this month and into April...gas prices recovered 7.8 cents of that loss on Tuesday, as signs of sustained strength in LNG demand offset forecasts for mild weather and light heating demand, but fell back 3.4 cents to $2.528 per mmBTU on Wednesday as traders mulled forecasts for mild spring weather and expectations for only a modest storage withdrawal report the next day....natural gas prices fell another 4.7 cents to $2.481 per mmBTU on Thursday — the 10th decline in 12 trading sessions — after a bearish storage report and forecasts that indicated further moderating heating demand...however, gas prices reversed the slide on Friday as LNG output reached record levels, and a brightening economic outlook offset festering worry about weak weather-driven demand and gas prices settled 5.4 cents higher at $2.535 per mmBTU, but still finished 2.5% lower on the week...
the natural gas storage report from the EIA for the week ending March 12th indicated that the amount of natural gas held in underground storage in the US fell by 11 billion cubic feet to 1,782 billion cubic feet by the end of the week, which left our gas supplies 253 billion cubic feet, or 12.4% below the 2,035 billion cubic feet that were in storage on March 12th of last year, and 93 billion cubic feet, or 5.0% below the five-year average of 1,875 billion cubic feet of natural gas that have been in storage as of the 12th of March in recent years....the 11 billion cubic feet that were drawn out of US natural gas storage this week was less than the average forecast of a 17 billion cubic foot withdrawal from an S&P Global Platts survey of analysts, and was also less than 15 billion cubic foot withdrawal from natural gas storage seen during the corresponding week of a year earlier, and far less than the average withdrawal of 59 billion cubic feet of natural gas that have typically been pulled out of natural gas storage during the same week over the past 5 years...
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending March 12th indicated that even after another big increase in our oil refining and a decrease in our oil imports, we still had a modest surplus of oil left to add to our stored commercial crude supplies, which increased for the 4th week in a row and for the 12th time in the past thirty-four weeks....our imports of crude oil fell by an average of 332,000 barrels per day to an average of 5,323,000 barrels per day, after falling by an average of 636,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 113,000 barrels per day to 2,520,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,803,000 barrels of per day during the week ending March 12th, 219,000 fewer barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was unchanged at 10,900,000 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 13,703,000 barrels per day during this reporting week...
meanwhile, US oil refineries reported they were processing 13,433,000 barrels of crude per day during the week ending March 12th, 1,123,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that 342,000 barrels of oil per day were being added to the supplies of oil stored in the US....totalling those amounts, 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 72,000 barrels per day less than what what was added to storage plus what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+72,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting there was a small error or errors in this week's oil supply & demand figures we have just transcribed....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....
further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,467,000 barrels per day last week, which was 13.9% less than the 6,351,000 barrel per day average that we were importing over the same four-week period last year.....the 342,000 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 unchanged at 10,900,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at 10,400,000 barrels per day, while a 1,000 barrel per day decrease to 460,000 barrels per day in Alaska's oil production had no impact on the rounded national total....last year's US crude oil production for the week ending March 13th was rounded to 13,100,000 barrels per day, so this reporting week's rounded oil production figure was 16.8% below that of a year ago, yet still 29.3% 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 76.1% of their capacity while using those 13,433,000 barrels of crude per day during the week ending March 12th, up from 69.0% of capacity during the prior week, but except for the pandemic impacted months of 2020, still one of the lowest refinery utilization rates of the last 30 years...hence, the 13,433,000 barrels per day of oil that were refined this week were still 15.1% fewer barrels than the 15,820,000 barrels of crude that were being processed daily during the week ending March 13th of last year, when US refineries were operating at a seasonal low 86.4% of capacity...
even with the jump in the amount of oil being refined, the gasoline output from our refineries was lower for the 11th time in 18 weeks, decreasing by 128,000 barrels per day to 8,877,000 barrels per day during the week ending March 12th, after our gasoline output had increased by 704,000 barrels per day over the prior week...with our gasoline production remaining depressed, this week's gasoline output was still 11.0% lower than the 9,974,000 barrels of gasoline that were being produced daily over the same week of last year....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 524,000 barrels per day to 4,228,000 barrels per day, after our distillates output had increased by 806,000 barrels per day from a twenty-six year low of 2,898,000 barrels per day over the prior week...but even after that two week rebound in our distillates' production, this week's output was still 9.8% less than the 4,686,000 barrels of distillates that were being produced daily during the week ending March 13th, 2020...
even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the thirteenth time in eighteen weeks, and for 17th time in 35 weeks, rising by 472,000 barrels to 232,075,000 barrels during the week ending March 12th, after our gasoline inventories had decreased by a record 25,493,000 barrels over the prior two weeks...our gasoline supplies managed to increase this week despite the production drop because the amount of gasoline supplied to US users decreased by 284,000 barrels per day to 8,442,000 barrels per day, and because our imports of gasoline rose by 333,000 barrels per day to 910,000 barrels per day, and because our exports of gasoline fell by 97,000 barrels per day to 580,000 barrels per day...even after this week's inventory increase, our gasoline supplies were 3.6% lower than last March 13th's gasoline inventories of 240,819,000 barrels, and about 4% below the five year average of our gasoline supplies for this time of the year...
meanwhile, with modest recovery in our distillates production, our supplies of distillate fuels increased for the 1st time in 8 weeks and for the 9th time in twenty nine-weeks, rising by 255,000 barrels to 137,747,000 barrels during the week ending March 12th, after our distillates supplies had decreased by 5,504,000 barrels during the prior week....our distillates supplies also rose this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 459,000 barrels per day to 4,028,000 barrels per day, while our exports of distillates rose by 213,000 barrels per day to 688,000 barrels per day, and while our imports of distillates rose by 52,000 barrels per day to 524,000 barrels per day...and after this week's inventory increase, our distillate supplies at the end of the week were 10.1% above the 125,120,000 barrels of distillates that we had in storage on March 13th, 2020, even as they remained about 2% below the five year average of distillates stocks for this time of the year...
finally, even with the recovery in our refinery throughput and the decrease in oil imports, our commercial supplies of crude oil in storage (not including the commercial oil being stored in the SPR) ended the week higher for the seventh time in the past eightteen weeks and for the 29th time in the past year, increasing by 2,369,000 barrels, from 498,403,000 barrels on March 5th to 500,799,000 barrels on March 12th, after our commercial oil inventories had increased by a record 35,361,000 barrels over the prior two weeks...after this week's modest increase, our commercial crude oil inventories remained 6% above the most recent five-year average of crude oil supplies for this time of year, and were still 49.6% above the 5 year average of our crude oil stocks as of the second week of March at the beginning of the decade, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the spring lockdowns of last year, after generally rising over the prior two years except for during the 10 weeks prior to the Texas freeze and except for during the past two summers, after generally falling over the year and a half prior to September of 2018, our commercial crude oil supplies as of March 12th were 10.4% more than the 453,737,000 barrels of oil we had in commercial storage on March 13th of 2020, 14.0% more than the 439,483,000 barrels of oil that we had in storage on March 15th of 2019, and also 16.2% more than the 430,928,000 barrels of oil we had in commercial storage on March 9th of 2018...
This Week's Rig Count
The US rig count rose for the 24th time over the past 27 weeks during the week ending March 19th, but it still remains down by 46.8% from what it was a year ago....Baker Hughes reported that the total count of rotary rigs running in the US was up by 9 to 411 rigs this past week, which was still down by 361 rigs from the 772 rigs that were in use as of the March 20th report of 2020, and was 1,518 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....
The number of rigs drilling for oil increased by 9 rigs to 318 oil rigs this week, after falling by 1 oil rig the prior week, still leaving us with 346 fewer oil rigs than were running a year ago, and less than a fifth of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations was unchanged at 92 natural gas rigs for the 4th week in row, which was still down by 14 natural gas rigs from the 106 natural gas rigs that were drilling a year ago, and just 5.7% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those rigs drilling for oil or gas, one rig classified as 'miscellaneous' continued to drill in Lake County, California this week, while a year ago there were two such "miscellaneous" rigs deployed...
The Gulf of Mexico rig count was unchanged at 13 rigs this week, with 11 of those rigs drilling for oil in Louisiana's offshore waters and 2 drilling for oil in Alaminos Canyon offshore from Texas...that was 6 fewer Gulf of Mexico rigs than the 19 rigs drilling in the Gulf a year ago, when 17 Gulf rigs were drilling for oil offshore from Louisiana, one 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 10 to 372 horizontal rigs this week, which was still down by 324 rigs from the 696 horizontal rigs that were in use in the US on March 20th 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 1 rigs to 14 directional rigs this week, and those were also down by 35 from the 49 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 down by 2 from the 27 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 19th, the second column shows the change in the number of working rigs between last week's count (March 12th) and this week's (March 19th) count, the third column shows last week's March 12th 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 20th of March, 2020..
after several weeks of Permian basin oil rigs moving from New Mexico to Texas, this week it appears they were moving in the opposite direction....checking first for the details on the Permian basin in Texas from the Rigs by State file at Baker Hughes, we find that there were 2 rigs pulled out of Texas Oil District 8, which corresponds to the core Permian Delaware, while one rig was pulled out of Texas Oil District 7B, which includes the easternmost extent of the Permian Midland basin, which together means there was a net decrease of 3 rigs in the Texas Permian....however, since the national Permian rig count was up by 4, that means that the 7 rigs that were added in New Mexico must have been set up in the farthest west reaches of the Permian Delaware, to balance the national Permian total....elsewhere in Texas, there were 2 rigs added in Texas Oil District 1, another rig added in Texas Oil District 3, and yet another rig added in Texas Oil District 4, any three of which could account for the three rig increase in the Eagle Ford shale, which stretches in a narrow band through the southeast part of the state...at the same time, there were also 2 rigs pulled out of Texas Oil District 6, which had been drilling for natural gas in the western part of the Haynesville shale...the Haynesville shale shows no net change, however, because two natural gas rigs were set up to target that formation in northwestern Louisiana at the same time...other than that, the only other change evident this week was the oil rig that was pulled out of North Dakota's Williston basin at the same time...
DUC well report for February
Monday of this past week saw the release of the EIA's Drilling Productivity Report for March, which includes the EIA's February data for drilled but uncompleted oil and gas wells in the 7 most productive shale regions....that data showed a decrease in uncompleted wells nationally for the 9th month in a row, as both completions of drilled wells and drilling of new wells both decreased and remained far below the pre-pandemic levels, with wells drilled down for the first time since July and completions down for the first time since May....for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 102 wells, falling from 7,188 DUC wells in January to 7,086 DUC wells in February, which was also 15.9% fewer DUCs than the 8,426 wells that had been drilled but remained uncompleted as of the end of February of a year ago...this month's DUC decrease occurred as 380 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during February, down from the 417 wells that were drilled in January, while 482 wells were completed and brought into production by fracking, down from the 606 completions seen in January, and down by more than half from the 1,137 completions seen in February of last year....at the February completion rate, the 7,086 drilled but uncompleted wells left at the end of the month represents a 14.7 month backlog of wells that have been drilled but are not yet fracked, up from the 12.5 month DUC well backlog of a month ago, with the understanding that this normally indicative backlog ratio is being skewed by a completion rate that is now one-third of the previous norm...
both oil producing regions and natural gas producing regions saw DUC well decreases in February, as only the Haynesville shale reported a single DUC increase...the number of uncompleted wells remaining in the Niobrara chalk of the Rockies' front range fell by 30, decreasing from 503 at the end of January to 467 DUC wells at the end of February, as 39 wells were drilled into the Niobrara chalk during February, while 69 Niobrara wells were being fracked....in addition, DUCs in the Eagle Ford of south Texas decreased by 22, from 1,033 DUC wells at the end of January to 1,011 DUCs at the end of February, as 35 wells were drilled in the Eagle Ford during February, while 57 already drilled Eagle Ford wells were completed...there was also a decrease of 22 DUC wells in the Bakken of North Dakota, where DUC wells fell from 702 at the end of January to 680 DUCs at the end of February, as 17 wells were drilled into the Bakken during February, while 39 of the drilled wells in that basin were being fracked...at the same time, the number of uncompleted wells remaining in Oklahoma's Anadarko decreased by 13, falling from 764 at the end of January to 751 DUC wells at the end of February, as 18 wells were drilled into the Anadarko basin during February, while 31 Anadarko wells were being fracked....meanwhile, DUC wells in the Permian basin of west Texas and New Mexico decreased by 2, from 3,275 DUC wells at the end of January to 3,273 DUCs at the end of February, as 167 new wells were drilled into the Permian, while 169 wells in the region were completed...
among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 14 wells, from 564 DUCs at the end of December to 550 DUCs at the end of February, as 66 wells were drilled into the Marcellus and Utica shales during the month, while 80 of the already drilled wells in the region were fracked....however, the natural gas producing Haynesville shale of the northern Louisiana-Texas border region saw their uncompleted well inventory increase by 1 to 314, as 38 wells were drilled into the Haynesville during February, while just 37 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of February, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) decreased by a total of 89 wells to 6,222 wells, while the uncompleted well count in the natural gas basins (the Marcellus, Utica, and the Haynesville) decreased by 13 wells to 864 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...
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Federal judge orders no new fracking in Wayne National Forest - Farm and Dairy - A federal judge blocked new oil and gas development in Ohio’s only national forest.The decision comes after a ruling last year found the Bureau of Land Management and U.S. Forest Service failed to adequately consider the environmental impacts hydraulic fracturing could have on Wayne National Forest.The U.S. District Court of the Southern District of Ohioordered a review of U.S. Bureau of Land Management’s 2016 environmental assessment and the U.S. Forest Service’s consent to lease that gave the OK to lease the federal lands.Pending review, the order also prohibits new leases in Wayne National Forest, prohibits new drilling permits and surface disturbance on existing leases and halts water withdrawal from the Little Muskingum River for any drilling that’s already occurring.Judge Michael Watson said in his opinion that the Bureau of Land Management and Forest Service failed to take the requisite “hard look” at the impacts of fracking in the Wayne, including impacts to air quality, surface area disturbance and cumulative impacts on the Indiana Bat and Little Muskingum River. Environmental groups sued the Forest Service and Bureau of Land Management in May 2017 over plans to permit fracking in the Wayne.The Ohio Environmental Club, Sierra Club, Heartwood and Center for Biological Diversity argued that the federal agencies relied on outdated information and ignored “significant environmental threats” before opening the Wayne’s 40,000-acre Marietta unit to unconventional gas development in October 2016. The Wayne National Forest is Ohio’s only national forest. It’s split into three non-contiguous sections. The Marietta unit is the eastern most section and consists of more than 268,000 acres of private and federal lands. There are already about 1,200 active vertical wells in the entire forest.The Bureau of Land Management sold 679 acres in Monroe and Washington counties in its first lease auction in December 2016 and another 1,147 acres in a second auction in March 2017.
Ohio lawmakers seek to limit local authority over fossil-fuel use—Ohio Republican lawmakers are again looking to hamstring local governments’ ability to pass pro-environmental ordinances -- this time, by cutting off potential attempts by communities to rein in the use of fossil fuels.Twin bills introduced in the Ohio House and Senate would, if passed, prevent local governments from limiting residents’ use of natural gas. A third bill, introduced in the House, would prevent local bans on oil or gas pipelines, as well as restrictions on the use of any fossil fuel for electricity generation.Environmental activists in Ohio and other states who feel stymied by GOP-dominated state legislatures have increasingly turned to local governments to pass a wish-list of initiatives that promote green energy and cut carbon emissions.Republican lawmakers, who oppose such efforts for both ideological and practical reasons, have increasingly focused on heading them off. Last fall, Gov. Mike DeWine signed a bill imposing a one-year moratorium on local bans of plastic bags.The bills to block limits on natural gas use, House Bill 201 and Senate Bill 127, will ensure residents have access to a reliable source of heat in the winter, said state Rep. Jason Stephens, a Lawrence County Republican who introduced the House version.Stephens said while he hasn’t heard of any Ohio cities restricting natural gas use, dozens of cities on the East and West Coasts have voted to ban natural-gas hookups for new buildings to reduce emissions that cause global warming.Bills similar to Stephens’ prohibiting such bans have already been passed in Arizona, Tennessee, Oklahoma and Louisiana.Stephens, who chairs the Ohio House Energy and Natural Resources Committee, said people he talked to from the natural gas industry indicated this was “a big concern” for them. Given Ohio’s significant natural gas reserves, Stephens said, “It only makes sense to me that if we have that abundant source of energy, that we make sure that we are allowed to use it and we don’t restrain folks who want access to it.”
Ohio legislation would stop towns from banning natural gas – Three bills recently introduced to the Ohio legislature seek to stop local governments from limiting the use of certain types of energy.House Bill 201 and Senate Bill 127 would prevent local governments from limiting the use of natural gas.The House version was introduced by Rep. Jason Stephens, R-Kitts Hill. It was sent to the House Energy and Natural Resources Committee, which Stephens chairs, on March 16. The Senate version, introduced by Sens. Michael Rulli, R-Salem, and George Lang, R-West Chester, was sent to the committee on March 17.Similar legislation has popped up in Indiana, Iowa, Kansas and other states this year. Tennessee, Oklahoma, Arizona and Louisiana enacted laws in 2020 prohibiting bans on natural gas.It all stems from moves on the West Coast to prohibit or limit the use of natural gas in new buildings.It started in Berkley, California. The city council there passed the nation’s first ban on natural gas hookups in new buildings in 2019. Since then dozens of other cities, mostly in California, have passed similar restrictions. Most recently, Seattle enacted legislation to ban natural gas in new buildings in early February.While he hasn’t heard of any Ohio cities considering such an action, Stephens told Farm and Dairy that he thought it best to address the issue before it became an issue. Before becoming a state representative in 2019, Stephens worked in local government for 20 years. He’s seen how a village or city can make decisions seemingly on a whim.If someone does not want natural gas coming to their house, “just take the meter out,” Stephens said. There’s no reason to eliminate the choice for others who do want to use gas to heat their homes or power their stoves.“It just made sense to me that if people have access to natural gas, if they like it, they should continue to have access to it without a government at any level saying they can’t,” Stephens told Farm and Dairy.Another similar piece of legislation, House Bill 192, would prohibit local governments from prohibiting energy generation from fossil fuels. The bill would also prohibit local governments from banning the construction or use of oil and gas pipelines. Sponsor Rep. Al Cutrona, R-Canfield, said in a press release that the purpose of the bill is to prevent possible rate increases.“Ohioans should not be penalized with increased rates if their local government passes new restrictions that so drastically impact utilities’ energy generation practices,” he said in the release.
When A Gas Plant Moves Next Door – WOSU - Kevin and Marlene Young built their house in the country, so they had space for horses. “I was raised around horses, and that’s my love,” Marlene said. With names like Buckeye Blast and Creekside Pete, their horses aren’t just pets. They built a half mile track to train them as racehorses. Their horses have won tens of thousands of dollars in prize money. Surrounded mostly by farmland here in Guernsey County, Ohio, 65 miles west of the Pennsylvania border, they have space to grow grass for hay. The Youngs also built their home into something of a tourist business. When a scenic railroad started running on the train tracks along their property, it would stop here. They opened an antique shop, and even hosted weddings in the outdoor setting. “We’re getting ready to retire. I thought we had it handled,” Marlene said. Visiting them now, things don’t seem handled. Big trucks drive past the house throughout the day. The farm field next door has become an industrial construction site. The air is often filled with dust — there’s a thick layer of it on their new truck. Some nights, bright construction lights shine through their windows. “I mean, come on man, that’s unbelievable,” Marlene said. In the summer of 2019, Caithness Energy started building one of the largest natural gas power plants of its kind in the nation. Thanks to fracking, cheap natural gas is replacing coal to generate electricity. According to the U.S. Energy Information Administration, this site is one of 30 natural gas-fired generators planned in Ohio and Pennsylvania. EIA expects 231 new utility-scale natural gas generators to be built in the U.S. by 2024. There’s already a pipeline that will run natural gas from the region to this site. Once constructed, the Guernsey Power Station will generate 1,875 megawatts, enough power the company says for 1.5 million homes. But the Youngs don’t want to live next door to it. Like others who live nearby, they say the construction has caused cracks in their walls. Before it was a farm field, the site was a coal mine. To stabilize it, Caithness got a permit from the Ohio EPA to drill about a thousand holes in the ground and fill them with cement grout. The land was also known to flood, so the company is moving dirt in some spots to raise it 20 feet. But Kevin said when it rains, water now runs off, flooding his property.“This way, I’m taking all the water,” he said. “It’s like a lake.” In November, Ohio EPA issued two notices of violation to Gemma Power Systems, the company building the plant for Caithness, for problems with erosion and sediment running off the property. But much damage has already been done. One of their horses got startled by the construction equipment just over the fence, and injured itself. “And she was laid up for a month, and we had to dress this leg every day,” Kevin explained.Between incidents like that, and the dusty air, the Youngs have stopped training their horses, sometimes even putting them on respirators.
Rebuttal: Oil and gas industry are good for Ohio communities despite report - -- From the car dealers selling vehicles so quickly they can barely keep up with demand, to the construction crews who are as busy as they have ever been, area businesses in Ohio’s shale country are thriving thanks to the investments and economic activity being generated by the oil and gas industry. As commissioners from these counties, we see how the industry is benefitting our communities and constituents every day. That is why we were stunned to see a recent article in The Dispatch argue that the oil and gas industry has not been an economically uplifting force in our communities.The February article, "Report: Ohio fracking counties saw declines in jobs, population and income," blatantly distorted and misrepresented facts while detailing a report by theOhio River Valley Institute, an organization of radical activists whose main purpose is to promote renewable energy sources.The facts are that the oil and gas industry has invested more than $60 billion in Ohio to support upstream activities such as drilling, extraction and leasing since 2011. That number comes from a report out of Cleveland State University which was commissioned by JobsOhio. That same report showed that from July 2019 to December 2019, the industry invested more than $400 million in Belmont County alone. Let that sink in, $400 million in one county in just six months. In that same time period the industry invested $206,280,000 in Harrison County and $168,480,000 in Guernsey County. The report also indicates that the industry has provided more than $1 billion to build and repair roads since 2011. The numbers are clear, the oil and gas industry is an economic engine in eastern Ohio. The shale boom has made our communities more prosperous than they have ever been, and you don’t have to take our word for it. We invite anyone who wants to see for themselves to visit our counties and spend some time speaking to the locals.
FERC, in signal on pipeline compliance, takes action on Rover, Midship — The Federal Energy Regulatory Commission took two steps March 18 that its new chairman said should send a "clear message" to natural gas pipeline companies that the commission will "not look the other way" when companies fail to meet responsibilities. The commission ordered Energy Transfer Partners and Rover Pipeline to show why they should not pay a proposed $20.2 million civil penalty in relation to allegations of misleading FERC about the destruction of an Ohio farmhouse during the application process for the 3.25 Bcf/d, 711-mile Rover project (IN19-4). FERC also directed Cheniere Energy's Midship Pipeline to remedy outstanding restoration issues on certain tracts of land and encouraged the company to enter dispute resolution to help address remaining damage that occurred during construction, according to FERC Chairman Richard Glick. The 199.7-mile, 1.4 Bc/d pipeline project, designed to move gas to the US Gulf Coast and Southeast markets from Oklahoma 's Anadarko Basin, has faced concerns from landowners about outstanding impacts to properties following construction (CP17-458, CP19-17). Glick called attention to both actions at the start of FERC's March 18 open meeting."I think it is important to remind pipeline developers that when they apply for a certificate of public convenience and necessity that they must be truthful, and that when they receive a certificate, which conditions the right to build and operate the pipeline with a requirement of the developer repairing the damage it creates during construction, that they need to take that responsibility seriously." "This commission is not going to look the other way," he added. In his view, FERC has several options and "revocation of the certificate itself, must be on the table" for projects that fail to meet responsibilities.During a press briefing with reporters, Glick underscored his view that "we need to send a clear message to certificate holders" that when they agree to a duty of candor or to act in an environmentally sound manner, "you mean that and we're not going to look the other way."The commission voted 5-0 to issue the show cause order in relation to Rover and gave the company 30 days to respond to the enforcement staff report.
Ascent Resources to Curb Utica Spending, Stay Disciplined in 2021 - Ascent Resources Utica Holdings LLC, Ohio’s largest oil and natural gas producer, plans to cut spending this year and hold production flat to 2020 levels as the industry continues to take a more conservative financial approach. The Ohio pure-play has issued 2021 capital guidance at a range of $550-600 million and intends to maintain production at 2 Bcfe/d. Ascent spent $657 million last year and produced just over 1.9 Bcfe/d after curtailing 40 Bcfe of volumes, as other operators did when commodity prices were hit by the Covid-19 outbreak.The company intends to run up to four operated rigs this year on its acreage in the southeast part of the state. It plans to spud up to 65 wells and turn up to 70 to sales.Ascent, which is privately owned, is forecasting up to $150 million of free cash flow (FCF) this year based on current market conditions. The company reported $114 million of FCF for full-year 2020.“Ascent has successfully delivered on its operational and financial objectives in 2020,” CEO Jeff Fisher said. He added that the company was able to navigate through the challenging year by “staying disciplined, leveraging our operational capabilities and improving our balance sheet.” Ascent is also the nation’s eighth largest natural gas producer. The company holds 340,000 net acres in Ohio that came together after the late Aubrey McClendon was ousted from the helm of former Utica Shale heavyweight, Chesapeake Energy Corp., and founded Ascent’s predecessor before it was spun-off and became independent.Ascent produced nearly 1.9 Bcfe/d in the fourth quarter, which included the impact of 9 Bcfe of curtailments. Ascent produced 2.3 Bcfe/d in 4Q2019. Fourth quarter net income was $169 million, compared to net income of $65.3 million in the year-ago period. The company reported a net loss of $590 million for the full year, including a $100 million impairment on unproved oil and gas properties. That’s compared with 2019 net income of $466 million. Last year’s average realized prices, including the impact of derivatives, were $2.71/Mcfe, down from $3.02 in 2019.
Why Frack Wastewater Injected Underground Doesn't Always Stay There -- Salty wastewater produced by fracking for oil and gas has to go somewhere. Often, it’sinjected into disposal wells deep underground. But sometimes that wastewater can find its way back to the surface and cause environmental problems. How? We turned to three experts to find out.
Pennsylvania lawmakers urge Gov. Wolf to protect residents following EHN fracking investigation – EHN -On the heels of an Environmental Health News (EHN) study, 35 members of the Pennsylvania House and Senate have issued a public letter calling on state Governor Tom Wolf to take "immediate action in response to the ongoing harm" from fracking.The letter, led by State Senator Katie Muth and State Representatives Sara Innamorato, points to a study recently published by EHN that found evidence of exposure to harmful chemicals in families living near fracking wells."Recent studies, such as the multifamily investigation published by the Environmental Health News, highlight the true risk so many Pennsylvania families face due to toxic and radioactive contamination caused by fracking," said Senator Muth in a statement.The two-year investigation, which is documented in a four-part series, found alarming evidence of toxic industrial chemicals linked to fracking in the urine of families living nearby, in addition to finding harmful chemicals like benzene, toluene, and naphthalene in the families' air and drinking water. Several children in the study had biomarkers for exposure to cancer-causing chemicals in their bodies at levels that exceed those seen in the average adult cigarette smoker.The study, led by EHN reporter Kristina Marusic, is the first time families in western Pennsylvania have been tested for exposure to chemicals emitted from fracking operations—and only the second study nationwide to examine such impacts from oil and gas drilling."The initial outcomes are alarming in terms of the effects on the long-term health and safety of these residents," the lawmakers wrote. "This study adds to an ever-growing mountain of evidence comprising more than ten years of epidemiological studies from across the United States that demonstrate a connection between a person's proximity to shale gas development and a host of negative human health conditions, significant ecological impacts, and dire economic projections for the affected individuals."The letter urges Governor Wolf to use the same biomonitoring techniques employed inEHN's investigation to conduct similar testing on a wider scale, and points out that last month the commissioners of the Delaware River Basin Commission, including Gov. Wolf, banned fracking in the Delaware River Basin, which includes parts of eastern Pennsylvania.
Advocacy group says Shell's Falcon Pipeline under investigation for safety issues -Shell's controversial multistate pipeline is under investigation by several state and federal agencies for issues that an environmental advocacy group said poses serious threats to public safety, workers and natural resources. FracTracker Alliance, a nonprofit that focuses on the oil-and-gas industry, obtained documents that indicate an investigation into safety matters with the Shell Falcon Pipeline involving the Pennsylvania Department of Environmental Protection, the state Attorney General, the Pipeline Hazardous Materials Safety Administration and the U.S. Environmental Protection Agency. According to a release, the investigation focuses on potential "noncompliance with construction and public safety requirements and alleged cover-up of incidents that could put the public at risk."A Shell Pipeline spokesman said that government and regulatory agencies have provided oversight throughout the construction process. "It’s our view we have demonstrated an unwavering commitment to safe construction and operations through the robust design and installation of the Falcon Pipeline," a spokesman said. "Construction and inspection procedures related to Falcon meet or exceed all safety standards and requirements."The 97.5-mile pipeline system will pass through Ohio, West Virginia and Pennsylvania to deliver ethane to Shell Chemicals' petrochemical plant in Potter Township. Installation of the pipeline is complete and has been connected on the supply ends and to the cracker plant. While there is no ethane product in the pipeline at this time, Shell officials expect it to become an active pipeline at some time in the next two months. A spokesman said officials do not expect final commissioning of the pipeline until sometime in 2022.Falcon has come under fire for potential impacts to the Ambridge reservoir and other major drinking water sources in the region. The pipeline was installed between 4,100 and 5,1000 feet east of the reservoir and crosses 61 feet below the water authorities' raw water line, which connects the reservoir to a treatment plant. The route, in total, runs between two dozen towns in Pennsylvania and three bodies of water in the Ambridge reservoir watershed alone.
Falcon Pipeline, which provides natural gas to Shell cracker plant, under investigation for possible corrosion - PGH City Paper -Last year, a natural gas pipeline being constructed through Southwestern Pennsylvania garnered the attention of Pennsylvania’s Department of Environmental Protection, who then notified federal agencies in charge of regulating pipelines and other environmental concerns. In a February 2020 letter to the federal Pipeline and Hazardous Materials Safety Administration, Pa. Department of Environmental Protection Secretary Patrick McDonnell wrote that issues “pose a possible threat of product release, landslide, or even explosion.” According to the Pittsburgh Post-Gazette, McDonnell mentioned witnesses with “first-hand knowledge of bad corrosion coatings, falsification of records and reports, retaliatory firings and other actions by Shell,” who owns the Falcon Pipeline. This led PHMSA to conduct an investigation into the pipeline, which is currently ongoing. The Falcon Pipeline will run 98 miles through Southwestern Pennsylvania, West Virginia, and Ohio and will deliver ethane to the cracker plant in Beaver County, which will refine the natural gas liquid into plastic pellets. When completed, oil giant Shell will run both the Falcon Pipeline and the cracker plant. The investigation is focused on possible noncompliance of public safety requirements during construction of the pipeline and an alleged cover up of incidents that could put the public at risk, according to the FracTracker Alliance, an advocacy organization that obtained documents in connection to the investigation. FracTracker Alliance is particularly concerned with allegations of corrosion of the Falcon Pipelines, as corrosion failure is the second leading cause of incidents occurring on pipelines. “Residents of the Ohio River Valley know too well the serious and life-threatening impacts that have come from rushed pipeline construction in the wake of the fracking buildout,” says Erica Jackson of FracTracker Alliance in a press release. “We hope that regulators will take all necessary action to protect public welfare and bring justice for workers who may have been unfairly terminated.” A spokesperson for Shell confirmed to the Post-Gazette that federal officials conducted audits of the Falcon Pipeline and said PHMSA officials “found no issues with installed coatings.” Shell said it also completed inspection of all the welds as an effort to prevent corrosion, and installed more emergency shutoff valves than necessary and buried the pipeline deeper than and used a thicker pipe than federally mandated.
Federal, state agencies probing Shell's Falcon ethane pipeline after whistleblowers' allegations - Early last year, Pennsylvania’s top environmental official tried to raise an alarm at the highest level of the federal agency responsible for pipeline safety. “I write to you regarding a very serious public safety matter for Pennsylvania,” the letter from Patrick McDonnell, secretary of Pennsylvania’s Department of Environmental Protection, began.The DEP, he said, had credible information that some sections of Shell Pipeline’s Falcon project “may have been constructed with defective corrosion coating protection.” He also mentioned witnesses with “first-hand knowledge of bad corrosion coatings, falsification of records and reports, retaliatory firings and other actions by Shell.”A coating protects the metal pipeline from being exposed to elements that can cause it to corrode. Corrosion doesn’t typically occur early in the pipeline’s life, but is a leading cause of ruptures in older pipelines. “These are very serious allegations, they deserve thorough investigation and appropriate resolution,” Mr. McDonnell stressed to Howard Elliott, administrator of the Pipeline and Hazardous Materials Safety Administration. It was, in fact, PHMSA that received intelligence from a whistleblower in early 2019 with concerns about how the project was being handled. The federal agency oversees the installation and operation of pipelines, not environmental matters. So when it came across concerns of potential underreporting of drilling mud spills on the pipeline, PHMSA sent that information to the DEP.For months, the two agencies exchanged information. The DEP, alarmed about what it was finding, had also started to loop in investigators from the Pennsylvania attorney general’s office. It briefed officials at the U.S. Environmental Protection Agency and made contact with the U.S. Occupational Safety and Health Administration, which was also contacted by a whistleblower on the Falcon project.As late as January 2020, DEP investigators were emailing with the head of safety at PHMSA about the Falcon pipeline, while at the same time sending the language of Mr. McDonnell’s letter to PHMSA’s head to various DEP lawyers for review. mWhat Mr. McDonnell was saying — that a PHMSA inquiry into potential corrosion defects was “incomplete” and urging the agency to take a more serious look at the issue, while essentially copying its superiors on the note — was a serious action.PHMSA confirmed that its investigation into the project was ongoing. “We looked into the concerns raised by the DEP but the results are not yet available,” the agency said. A spokesman for Shell Pipeline said PHMSA officials “conducted three on-site audits of the Falcon Pipeline and found no issues with installed coatings.”The company also listed steps it took to prevent corrosion. Since the pipeline was installed, Shell said, it had completed “100% post-installation inspections of all welds,” pressure-tested the pipeline and conducted an inline inspection, the results of which were shared with PHMSA. Little is known about the scope of the DEP’s findings. Mr. McDonnell’s letter to PHMSA was one of a handful of documents that surfaced after the environmental advocacy group FracTracker Alliance requested public records related to the agency’s investigation. A log of 111 documents that were not released, however, suggests the DEP was in contact with at least two confidential informants, had access to photos and notes from the pipeline job, and followed up with other agencies to see how their investigations were progressing. Within its own jurisdiction, the DEP issued several notices of violation to Shell Pipeline.
Whistleblower Claims Dangerous Defects in Pipeline for Shell's Pennsylvania Plastics Plant --A whistleblower has alleged that the Falcon pipeline — a 98-mile-long fossil fuel pipeline that will soon feed Shell’s massive plastics manufacturing site under construction in western Pennsylvania — was built with defective protection against corrosion. That's according to public records obtained by the nonprofit FracTracker Alliance and which reveal that state regulators complained last year that federal authorities had failed to adequately investigate the reports of defects.In that letter, dated February 26, 2020, obtained by FracTracker via a right-to-know request, Patrick McDonnell, secretary of the Pennsylvania Department of Environmental Protection, wrote to the nation’s top pipeline safety regulator describing “a very serious public safety matter for Pennsylvania.”“The Pennsylvania Department of Environmental Protection (PA DEP) has received what appears to be credible information that sections of Shell’s Falcon Pipeline project in western PA, developed for the transportation of ethane liquid, may have been constructed with defective corrosion coating protection,” McDonnell wrote, adding that PA DEP had obtained and sent federal pipeline regulators additional information “which appears to corroborate the whistleblower’s original allegations.”The letter appears to be the first public reference to allegations that the Falcon pipeline's corrosion protection may be faulty. FracTracker also obtained a log of over a hundred emails and documents apparently related to one or more informants on Falcon, largely involving discussions between attorneys with the PA DEP and other state and federal agencies. The state declined to provide FracTracker with the documents listed in that log, though it did provide a summary of the contents of each communication and indicate who was involved, in some cases providing full names of state officials, in others listing a “Confidential Informant.”The February 2020 letter outlines serious concern among state regulators. “While PA DEP does not regulate the construction, maintenance or operation of the pipeline itself, our staff was alarmed by the whistleblower’s allegations,” McDonnell wrote, “and concerned for the safety of people living along the pathway of the Falcon Pipeline.” The letter asserts that federal authorities had done an inadequate job of responding to the whistleblower’s allegations, despite the dangers posed when anti-corrosion coatings on pipelines fail. “Corroded pipes pose a possible threat of product release, landslide, or even explosion,” McDonnell added. But, he went on, the federal Pipeline and Hazardous Materials Safety Agency (PHMSA) conducted only a “brief inquiry in 2019” that reported finding no coating problems. “PA DEP believes PHMSA’s initial inquiry was incomplete,” McDonnell continued, “and has referred the matter to other authorities for investigation of the safety of the corrosion protection on the Falcon Pipeline.”
Shell says cracker plant will begin operations in 2022 - The long-awaited and highly polarizing cracker plant will be fully operational in 2022. Shell Pennsylvania Chemicals, owner-operator of the massive facility in Beaver County, made that announcement on Tuesday. That was the first time the company targeted a launch date more specific than “the early 2020s.” Plastics manufacturing will be the hallmark of a facility that is under construction along a 340-acre tract in Potter Township, located below Interstate 376 and along the banks of the Ohio River. And plastics manufacturing is why this is a polarizing endeavor, one that is opposed by a number of environmental support groups, which are concerned about potential impacts from the operation. Ethane, sourced from natural gas in the Marcellus and Utica shale plays, will be converted to polyethylene pellets, a feedstock for plastics production. This $6 to $10 billion project has been in the works for almost a decade. Shell initiated discussions about building a cracker in the Beaver Valley in mid-2012, and did not make a final decision to invest in this until June 2016. Route 18 had to be partially rerouted near the site and the property, once home to a zinc plant, required remediation. Construction on the plant itself did not begin until November 2017. An estimated 7,000 workers have toiled there over the past 3½ years, some of whom endured a monthslong shutdown beginning last spring because of COVID-19. The facility reopened later in the year. When operational, the facility will be the first cracker operation in the United States, outside of the Gulf Coast, in 20-plus years.
Environmental danger lurks beneath - Mountaineer NGL Storage plans to store 3 million barrels of highly toxic and flammable fracked-gas liquids next to, or under, the Ohio River in caverns created by three salt wells, each using 1.7 million gallons of fresh water daily.Ten percent of the resulting 30-million barrels of super-saline water would be kept for cavern pressurization. This polluted water is to be held in a huge pond below the Ohio River high water mark in Monroe County, OH, upon abandoned mines and mine entrances. With such unstable footing the pond could fail contaminating drinking water for five-million people.On the 200-acre site are also adjacent fracked wells and gas pipelines. Such infrastructure near large gas impoundments has touched off disasters elsewhere.However, even after six environmental organizations successfully sued the Ohio Department of Natural Resources for issuing the well permits without the required public notice, public comment, draft permit or a fact sheet, Mountaineer is continuing its risky plan.Meanwhile, local facilities that separate liquids from the gas reduce pressure by flaring. Along with chemicals known to cause asthma, heart damage and immune disorders, this flaring emits cancer-causing radioactivity.These risks are unjustifiable. A March, 2020, institute for Energy Economics and Financial Analysis report concludes that a plastics-production complex, supplied by the gas-liquids storage, is not economically feasible--even without considering clean-up and health care costs. And according to industry which reliably overstates benefits, the storage project will provide only 15 temporary jobs. Nevertheless, proponents – industry and politicians – expect that this storage hub will retrieve fracking from insolvency by supporting plastics production. If the hub indeed saves Appalachian fracking we are in deep trouble both globally and locally. Fracking is currently a principal source of atmospheric methane, an exceptionally powerful greenhouse gas. In West Virginia, this new extreme-extraction method is poisoning billions of gallons of water yearly, destroying aquifers. It is also radioactive in all parts, emits highly toxic air pollution, and is eliminating an increasingly valuable asset, our wild mountain beauty.
Pennsylvania and methane: Why cutting emissions is critical for health - Methane, a greenhouse gas 84 times more potent than carbon dioxide in the near term, heats the planet at an accelerated rate. This warming contributes to the formation of ground-level ozone, or smog, that is harmful to our environment and human health. Research by the Appalachian Mountain Club shows that hikers and outdoor enthusiasts are especially vulnerable because ozone often accumulates at high elevations such as mountain summits, where air pollution transported by wind can build up. Also, hikers breathe in air more deeply, thereby increasing their exposure. Think about it: Who among us hasn’t at some point gotten winded while hiking or biking? What was the air quality like on that day? Of even greater concern is the next generation of hikers who are being exposed to poor air quality. Pennsylvania already has the third highest rate of childhood asthma in the nation, turning an afternoon ramble on the storied Appalachian Trail just west of the Lehigh Valley into a struggle for far too many children. This is not the future they deserve. Again, methane contributes to warming and increased smog. Sites in natural gas drilling regions emit air toxics, ozone precursors, as well as climate-disrupting methane. Air pollution travels, so pollution generated in these regions can easWe believe it’s critical to protect our natural resources and ensure that the outdoors can be enjoyed by all — these spaces are centrally important to the lives of many, especially right now. Key to that, as outlined in our climate and energy policy, is the understanding that natural gas’s benefits are undermined if the industry is not appropriately regulated. Recent studies show that emissions of methane — essentially natural gas –— are consistently being under-reported to the state of Pennsylvania and actually exceed over 1.1 million tons. That’s especially concerning given that the actual emissions and leaks from oil and gas infrastructure carry double the climate impact of all the cars on Pennsylvania’s roads combined.
Survey seeks Columbia Gas disaster victim input - The state wants to hear from residents and businesspeople impacted by the Sept. 13, 2018 gas disaster in the Merrimack Valley. Feedback through an online survey is now needed so state officials can develop and implement energy efficiency programs in Lawrence, Andover and North Andover, which were directly affected by the gas disaster. "We want the residents to drive this bus as much as we can. The decisions will be rooted in the priorities of the communities," "We really see ourselves as caretakers. It's not our money. It's the Merrimack Valley's money. We want it spent the way folks in the Merrimack Valley want it spent," Last summer, Columbia Gas, the natural gas provider at the time of the disaster, reached a $56 million agreement with the state for its role in the gas explosions and fires. As a result of the fires and explosions caused by overpressurized pipelines operated by Columbia Gas, Leonel Rondon, 18, of Lawrence, was killed, three firefighters and 19 civilians were hurt, and damages are estimated at $1 billion. About 50,000 people were forced to evacuate and the severity of the damage depended on the age of appliances. Five homes were destroyed and 131 properties damaged, according to findings by the National Transportation Safety Board. The $56 million was earmarked for debt relief for gas bills for thousands of low-income gas customers, as well as to enable clean energy and energy efficient efforts in homes and buildings in the three communities.
Gas utilities seek to scale back engineering rules - — Gas companies are trying to water down proposed regulations that would require certified engineers sign off on construction work. The state Department of Utilities is considering rules to require the utilities to get a review and a stamp from a professional engineer for "complex projects" that pose a risk to public safety. The rules stem from a 2018 law signed by Gov. Charlie Baker in response to the Merrimack Valley gas disaster. But gas companies have complained that the scope of the proposed regulations will make them too costly, and that they are unnecessary. A group of utilities, including National Grid and Eversource, submitted a litany of proposed changes seeking to limit the kinds of projects that would have to be reviewed. "Routine, low-risk, non-complex work, such as the installation of service lines that do not involve two or more tie-ins, bypass of a distribution line to supply service or changes to system operating pressures, do not need a (professional engineer's) stamp," the utilities wrote to regulators. "And using resources on those types of simple tasks will be wasteful and costly without achieving any incremental public safety benefit." Tom Kiley, president and CEO of the Northeast Gas Association, noted that a lack of qualified natural gas engineers could prevent cities and towns from moving ahead with projects, which he argues would jeopardize public safety. "The current pool of qualified engineers will not be sufficient to handle the workload," he wrote to regulators. "This could lead to work delays and stoppages." Meanwhile, engineering trade groups point out the new regulations won't be a panacea in preventing future disasters.
Water utilities, state environmental regulators wary of bill that would relax oil and gas tank oversight --The West Virginia Department of Environmental Protection’s deputy secretary told state lawmakers earlier this month the department did not support a proposed bill that would relax oversight of certain oil and gas tanks located near public water intakes.Scott Mandirola explained to the House Health and Human Resources Committee that efforts to prevent drinking water contamination from oil and gas tanks would not be as effective without the tank oversight that House Bill 2598 would erase.Mandirola said 887 tanks would no longer be regulated under the Aboveground Storage Tank Act as of last month if House Bill 2598 became law, according to Department of Environmental Protection data. The DEP currently must inspect tanks within zones of critical concern at least once every three years; the state defines a zone of critical concern as consisting of a five-hour water-travel time in streams to a water intake.Current law also requires tank operators to submit spill prevention response plans, as well as registration and certified inspection of such tanks.But Mandirola estimated about 38 tanks would be inspected once a year based on current data, a scenario in which all 887 would be inspected about once every 23 years.The numbers don’t add up,” Mandirola said.The Health and Human Resources Committee disagreed.“The DEP through their testimony gave a lot of assumptions on several things,” Delegate Vernon Criss, R-Wood, said.With the full House of Delegates passing the regulatory rollback last week after the Health and Human Resources Committee signed off on the bill, the concerns about future relaxed tank oversight that Criss dismissed as assumptions are deep-seated among not only state environmental and health regulators, but water utilities. “We don’t support that,” said Todd Grinstead, executive director of the West Virginia Rural Water Association, a statewide group of nearly 300 water and wastewater systems. “Obviously, our main concern is protecting the source water for the water treatment plant, and I just think anytime you deregulate a tank of that size in a zone of critical concern, that’s a little bit of a concern for us.” The Morgantown Utility Board also disapproves of the bill. “At Morgantown Utility Board, our mission is the safeguarding of public health,” Chris Dale, the board’s communications director, wrote in an email. “Therefore, we oppose HB 2598 and any bill that loosens regulatory requirements protecting our raw water resources.”
Proposed pipeline extension into North Carolina gains new life in court— A proposed extension of the Mountain Valley Pipeline from Virginia into North Carolina has gained new life in an ongoing court battle. The Roanoke Times reported Thursday that the 4th U.S. Circuit Court of Appeals threw out a decision by North Carolina's Department of Environmental Quality.The appeals court ruled that the state agency did not properly explain the reasons why it had denied a water quality certification for that portion of the natural gas pipeline. The portion is called MVP Southgate. And it would start at the main pipeline's terminus in Virginia's Pittsylvania County and run for 75 miles into North Carolina.The federal appeals court ordered North Carolina regulators to address why certification was denied outright instead of giving it conditional approval. The court also asked the regulators to address inconsistent statements about the project's impact on bodies of water. The main portion of the pipeline would run for 300 miles in West Virginia and southwest Virginia. North Carolina's denial was based in large part on uncertainty over whether the mainstem of the pipeline would ever be completed. At the time, the project was lacking three sets of federal permits following legal challenges by legal groups. But Mountain Valley has since regained two of the three permits for its main pipeline. And it says it's proceeding with plans for the extension.
North Carolina Regulators Fail to Adequately Explain MVP Southgate Denial, Court Rules - North Carolina’s Department of Environmental Quality (DEQ) did not adequately explain its decision to deny a water quality certificate for Mountain Valley Pipeline LLC’s (MVP) Southgate expansion project, a federal appeals court has ruled. The U.S. Court of Appeals for the Fourth Circuit in a ruling handed down late last week granted a petition filed by MVP seeking to vacate the DEQ’s decision last August to deny state certification for the project. MVP’s Southgate project would consist of 75 miles of 16-inch and 24-inch diameter line to extend the original 303-mile, 2 million Dth/d mainline project’s reach into North Carolina. At the time, the DEQ predicated its decision to deny the certification, required under Section 401 of the Clean Water Act, on uncertainty surrounding the mainline project’s completion given multiple legal and regulatory setbacks.However, the Fourth Circuit said the DEQ “failed to explain why it chose to deny certification instead of conditioning certification upon the Mainline Project receiving its permits.” The court ordered the state’s environmental regulator to revisit its decision and explain its rationale.Still, the ruling may provide only limited relief to MVP, which has dealt with adverse decisions from the Fourth Circuit previously. The court appeared to take issue only with the DEQ’s explanation of its decision and not the decision itself, finding that DEQ’s “denial is consistent with the state’s regulations and the Clean Water Act.”Meanwhile, MVP continues to work toward completion of its mainline, recently disclosing a new strategy to obtain waterbody crossing permits needed to wrap up construction on the oft-delayed project.MVP is designed to transport Marcellus and Utica shale gas from West Virginia into Virginia. The Southgate extension would receive gas from MVP in Virginia and transport it to new delivery points in Rockingham and Alamance counties, NC.
Gas pipeline moves to condemn Piedmont properties, but gas might never flow - The company behind a controversial proposed natural-gas pipeline has filed dozens of federal lawsuits against local landowners, even though there are serious doubts it will ever carry gas.“There’s so many ifs with this project that it should not be difficult for a federal judge in Greensboro, North Carolina, to say, ‘What’s the hurry here?’” said Chuck Lollar, an eminent-domain lawyer in Norfolk, Va., representing a number of landowners trying to keep the Mountain Valley Pipeline (MVP) from getting easements across their properties. The MVP Southgate would carry Marcellus and Utica Shale gas from the MVP terminus in Pittsylvania County, Va., to the Dominion Energy distribution system south of Graham. The collaboration of five energy companies behind the project filed more than 35 condemnation suits in the U.S. District Court for the Middle District of North Carolina in January against more than 100 landowners in North Carolina including 38 in Alamance County, according to a letter District 63 state Rep. Ricky Hurtado wrote to the Federal Energy Regulatory Commission last month.Many of those property owners would lose up to 3 acres, according to court filings. Others could lose up to 10 acres, according to Hurtado. Federal law, Lollar said, gives natural gas companies a lot of power to take land through eminent domain once they have failed to get it through negotiation or contract. And for its part, MVP Southgate says it has taken the time and effort to work with landowners. “In November 2018, Mountain Valley initiated negotiations with landowners to obtain the required rights of way,” according to a company email to the Times-News. “To date, Mountain Valley has successfully negotiated easements through mutual agreement for almost 75 percent of the affected parcels along the entire route.”Many of those landowners are fighting that condemnation using some of the same arguments pipeline opponents have brought out since the MVP project started.“(T)here presently exists access to an ample supply and capacity to meet existing and future demands in natural gas in North Carolina and Southern Virginia, and the Extension Pipeline then is not a public necessity,” according to the response filed on behalf of a Rockingham County landowner. Lollar said the rationale for the pipeline is serving the domestic market, but fracking has turned the United States from a net importer to an exporter, and the goal of these pipelines is to export liquefied natural gas not to serve American's needs.
'Lipstick on a pig.' Landowners skewer FERC -- Thursday, March 18, 2021 -- Landowners in the path of natural gas pipelines slammed the Federal Energy Regulatory Commission yesterday for its handling of their complaints.
Mountain Valley Pipeline's extension opposed by existing Transco pipeline- There’s new opposition to the Mountain Valley Pipeline, this time from a fellow natural gas pipeline..When Mountain Valley announced a 75-mile extension into North Carolina three years ago, its plan was to lay part of the buried pipeline next to the Transcontinental Pipeline, which has been in service since the 20th century.But in court documents filed Monday, attorneys for that pipeline wrote that “MVP’s proposed location is simply irresponsible.”Also known as Transco, the Oklahoma-based pipeline is fighting an attempt by Mountain Valley to use eminent domain to acquire easements on private property — some of it seized by Transco through the same controversial process years ago.In other words, Mountain Valley is attempting to take by eminent domain land that was taken by eminent domain.To build a second pipeline so close to the first “raises significant safety concerns for Transco and the general public,” according to responses to Mountain Valley’s legal actions filed in federal courts in Danville and Greensboro.Among the concerns cited: Mountain Valley’s extension, called MVP Southgate, could interfere with a cathodic protection system and possibly cause a leak to occur; restrict access needed by Transco to its pipeline; and endanger the older pipeline with heavy equipment and blasting during construction.Transco is asking federal judges in Virginia and North Carolina to deny Mountain Valley’s requests to acquire space in or along its easements.Mountain Valley has also filed eminent domain cases against the private owners of land crossed by Transco’s easements, which were acquired either voluntarily or through eminent domain decades ago.
U.S. natural gas consumption was lower in 2020 in all sectors except electric power – EIA - U.S. natural gas end-use deliveries in 2020 decreased in three out of four consuming sectors relative to 2019, according to the U.S. Energy Information Administration’s (EIA) Natural Gas Monthly. Despite mild winter weather and the economic effects of COVID-19, the second-highest annual amount of natural gas was delivered in the United States to end users in 2020, averaging 75.8 billion cubic feet per day (Bcf/d) for the year. The highest annual amount of natural gas consumption in the United States occurred in 2019, when end-use deliveries reached 77.6 Bcf/d.The electric power sector consumed the most natural gas of any sector—31.7 Bcf/d in 2020, a 2% increase from the previous year. In 2020, natural gas prices were the lowest they had been in decades. Lower natural gas prices made natural gas more competitive in the electric power sector, especially compared with coal. Natural gas-fired electricity generation has been growing throughout the United States. Natural gas-fired generation replaced much of the lost generation from coal plant retirements in recent years, making natural gas the largest input fuel for power generation nationally. Natural gas accounted for nearly 40% of all power generation in 2020, accounting for more generation than coal and nuclear, the next two largest sources, combined.U.S. industrial consumption of natural gas decreased 2% in 2020. COVID-19-related closures and less demand reduced industrial consumption for much of the year. Industrial natural gas consumption has increased in 8 out of the past 10 years because of growth in dry natural gas production and relatively low natural gas prices.Weather patterns have been the primary drivers of residential and commercial natural gas consumption volumes in the United States. Economic patterns also affect U.S. commercial natural gas consumption. The winter months of 2020 (January–March 2020 and November–December 2020) were milder than the previous two winters in the United States, resulting in less heating demand. Natural gas consumption in the commercial sector, which includes restaurants, hotels, and schools, decreased by 11%.A small amount of end-use deliveries of natural gas go to the U.S. vehicle fuel sector, representing about 0.2% of total deliveries in 2020. In addition, a substantial volume of natural gas is consumed through producing, processing, and distributing natural gas. EIA considers these volumes as a component of total consumption, but they are not included in the end-use delivery sectors that EIA reports.
LNG Gains Prop Up April Natural Gas Futures; Cash Prices Drop - Natural gas futures on Tuesday found momentum as signs of sustained strength in liquefied natural gas (LNG) levels offset forecasts for mild weather and light heating demand. The April Nymex contract settled at $2.562/MMBtu, up 7.8 cents day/day. May gained 7.4 cents to $2.597. On Monday, the prompt month dropped 11.6 cents and fell to its lowest level since early January. Even with Tuesday’s gain, the April contract finished in the green only twice over the past 10 trading sessions. NGI’s Spot Gas National Avg., meanwhile, fell 14.5 cents to $2.410 on Tuesday. Cash prices were led lower by steep drops in the Northeast region. LNG export volumes topped 11 Bcf for the fourth time in five days, hitting 11.58 Bcf on Tuesday, according to NGI estimates. Analysts said Asian demand for U.S. supplies of the super-chilled fuel continue to prove strong, supporting a recovery to near record levels after delivery interruptions caused by the Texas deep freeze in February. “LNG feed gas has been strong,” NatGasWeather said. However, the firm said weather forecasts for the final third of March continued to show warmer temperatures and weakening demand for natural gas to run furnaces – the principal reason futures have struggled to get into positive territory this month. “The overnight data failed to trend any colder and remains quite bearish” from Sunday (March 21) through March 29, NatGasWeather said Tuesday. The data “maintained moderate demand early and late this week” but “exceptionally comfortable” temperatures “for the start of spring, with highs over most of the U.S. March 21-29 reaching the 50s to 80s.”
Weather Worry Weighs Down April Natural Gas Futures Natural gas futures dropped back into the red on Wednesday as traders mulled forecasts for mild spring weather and its dampening effect on demand along with polls that showed expectations for only a modest storage withdrawal. The April Nymex contract declined 3.4 cents day/day and settled at $2.528/MMBtu. May fell 4.2 cents to $2.555. The prompt month had gained 11.6 cents Tuesday, a rare advance in March, though analysts attributed that bounce in part to technically oversold conditions. Robust liquefied natural gas (LNG) levels – above 11 Bcf/d throughout this week, near records – also provided a boost. Still, light domestic demand, the key detriment to futures this month, re-emerged as an overriding concern Wednesday. The prompt finished in the red for the ninth time over the past 11 sessions. Weaker weather demand also kept next-day cash prices in check across much of the country. NGI’s Spot Gas National Avg. ticked up 3.0 cents to $2.440. “The pattern maintains its skew in the warmer direction rather solidly, thanks to warmer than normal conditions primarily from the Midwest to East, with the strongest anomalies coming this weekend into the first half of next week,” Bespoke Weather Services said of forecasts for the rest of this week and next. “This keeps March on pace to be quite warm…Outside of the two cold weeks in February, this warmer state has been very persistent, and we still believe this continues as we move into April,”
ANALYSIS: US natural gas storage volumes decline 11 Bcf as heating season winds down | S&P Global Platts - US natural gas storage volumes in the week ended March 12 decreased by 11 Bcf, to 1.782 Tcf, the US Energy Information Administration reported March 18, as heating season rapidly winds down and Henry Hub futures slide further. The withdrawal was weaker than the 17 Bcf draw expected by an S&P Global Platts' survey of analysts. It was also less than the 15 Bcf draw reported during the same week last year as well as the five-year average withdrawal of 59 Bcf, according to EIA data. Strong injection activity in the South Central region's salt dome facilities drove the bearish draw. South Central region salt dome inventories began February right around the five-year average, but after reporting the largest draw in the EIA's historical data, the salts began to carve out a new five-year minimum. The last two weeks have demonstrated how flexible the salt facilities are, with activity turning to a net injection of 12 Bcf for the week ended March 5, and another 21 Bcf build for the week ended March 12, according to EIA data. The US averaged 3 degrees warmer than normal for the week ended March 12. Total demand dropped more than 6 Bcf/d, with residential and commercial falling by almost 5 Bcf/d, according to S&P Global Platts Analytics. Weaker weather-driven power loads and very strong wind output pushed gas burns down nearly 1.6 Bcf/d week over week too. Storage volumes now stand 253 Bcf, or 12.4%, less than the year-ago level of 2.035 Tcf and 93 Bcf, or 5%, less than the five-year average of 1.875 Tcf. The NYMEX Henry Hub April contract slipped 4 cents to $2.48/MMBtu in trading following the release of the weekly storage report, which represented a decline of 15 cents from the week prior. Platts Analytics' supply and demand model currently forecasts a 32 Bcf withdrawal for the week ending March 19, which would measure 19 Bcf weaker than the five-year average, as the heating season enters its final weeks. Balances have tightened, with colder weather and stronger exports increasing the call on storage. Total demand has increased nearly 1.5 Bcf/d when compared to the prior week. Much of the gains were observed in LNG feedgas, which grew by 600 MMcf/d, as strong inflows into all the US facilities helped to push the weekly average north of 11 Bcf/d. An early forecast for the week ending March 26 points to an 8 Bcf pull. The first net addition to storage typically occurs in the week ending April 2. Ove the past five years, the injection season began with 1.8 Tcf in underground storage. If the current forecast for the next two storage weeks hold, the heating season will end with 1.742 Tcf in storage. The lingering impact of refinery and petrochemical outages along the US Gulf Coast from the February cold blast have delayed the recovery of industrial gas demand, contributing to a lower end-of-winter stock draw, with March storage likely to finish about 200 Bcf above the Platts Analytics' base case forecast of 1.5 Tcf. These bearish headwinds have pushed the Henry Hub summer strip down to $2.60/MMBtu from $3.00/MMBtu last month, with risk prices could fall below $2.50/MMBtu.
Absent Expectations for Heating Demand, April Natural Gas Futures Fall - Natural Gas Intelligence - Natural gas futures fell further on Thursday — the 10th decline in the last 12 trading sessions — after a bearish storage report and forecasts that showed continued expectations for moderating heating demand. The April Nymex contract settled at $2.481/MMBtu, down 4.7 cents day/day. May lost 4.4 cents to $2.511. Diminished near-term weather demand also dragged cash prices lower. NGI’s Spot Gas National Avg. shed 1.0 cent to $2.430. Both the domestic and European weather models “held moderate demand late this week, then very light demand late this weekend through next week,” NatGasWeather said Thursday. For the final week of March, the firm added, “most of the U.S. will be mild to warm with highs of 40s to 60s” over the north “and 60s to 80s across the southern U.S. for light to very light national demand.” A third straight bearish storage report from the U.S. Energy Information Administration (EIA) punctuated concerns about waning demand during spring. The agency on Thursday reported a withdrawal of 11 Bcf from natural gas storage for the week ended March 12 – shy of market expectations and well off the five-year average withdrawal of 59 Bcf for the comparable week. “It was much warmer than normal over the northern and central U.S., while slightly cool over the West Coast and Southeast” during the report period, NatGasWeather said. Polls ahead of the report estimated a withdrawal in the range of 16-22 Bcf for the week. A Bloomberg survey found a median of 18 Bcf, while the median forecast in a Reuters poll landed at a pull of 16 Bcf. The Wall Street Journal’s weekly survey produced a 22 Bcf average decrease. NGI estimated a 14 Bcf pull for the latest week. The latest report marked the third-consecutive result that was bearish relative to expectations.
April Natural Gas Futures Forge Ahead as LNG Volumes Reach Record Levels, Economy Musters Momentum - Natural gas futures on Friday edged higher as robust liquefied natural gas (LNG) levels and a brightening economic picture offset festering worry about weak weather-driven demand heading into the spring shoulder season. The April Nymex contract climbed 5.4 cents day/day and settled at $2.535/MMBtu. May rose in tandem, gaining 5.5 cents to $2.566. It marked the second time during the trading week the prompt month advanced, but only the third gain over the past 13 sessions as traders have fixated on waning heating demand and modest storage pulls. Forecasts for the week ahead called for generally mild conditions and modest demand for natural gas. The outlook remains “in a generally lower than normal demand state, heading into a time of year where demand is of course lower anyway,” Bespoke Weather Services said. As weather demand faded, NGI’s Spot Gas National Avg. fell 16.0 cents to $2.270. Asian demand for U.S. exports was strong throughout the winter and now, heading into spring, European demand is mounting as storage levels on the continent dwindled substantially in recent months. “Since Winter Storm Uri resulted in reduced outages and gas conservation for residential use in Texas, LNG demand has risen 10.0 Bcf/d in the past month,” Weissman said. “Further demand gains are possible — perhaps even eclipsing 12.0 Bcf/d if all terminals achieve maximum demonstrated demand levels at the same time. Gains in LNG feed gas and Gulf Coast industrial demand for natural gas this week may help offset declines in weather-driven demand, allowing small withdrawals to continue near term.”
US LNG feedgas demand sets another record as total approaches 12 Bcf/d | S&P Global Platts — US LNG feegas demand hit a new record March 19 as total deliveries approach 12 Bcf/d, S&P Global Platts Analytics data show. Capacity could rise come fall when Venture Global LNG's Calcasieu Pass terminal in Louisiana – the seventh major US liquefaction facility – may be ready to ship its first cargo. Platts Analytics expects full dispatch economics out of the US to continue in the months ahead, due in part to supportive summer prices on the back of a tighter than expected winter, with greater room available in European storage for injections. Shipping costs are significantly cheaper than the start of the year, outweighing short-term swings in prices and demand. The 11.8 Bcf/d in total gas deliveries to existing US LNG export terminals topped the previous record of 11.65 Bcf/d set during the morning cycle March 17. Cheniere Energy's two terminals – Sabine Pass in Louisiana and Corpus Christi Liquefaction in Texas – account for more than half of the total demand. The Platts JKM for May was assessed 14.4 cents/MMBtu lower at $6.550/MMBtu on March 19. JKM is the benchmark for spot-traded deliveries of LNG to Northeast Asia. While prices were lower day-on-day, netbacks remain high enough to incentivize robust shipments from the US. Asia Pacific freight was assessed at $30,000/day on March 18, compared with $45,000/day a month ago, and $165,000/day two months back, according to Platts data. Venture Global recently said in a US regulatory filing that it could ship its first cargo in late 2021, a year ahead of schedule. It also said the 23.4-mile TransCameron pipeline, which will connect to interstate pipelines and allow feedgas to reach the terminal, will begin service "very soon." The developments would be bullish for US LNG feedgas demand. Venture Global provided the update in a filing to the Federal Energy Regulatory Commission requesting a waiver of certain rules on buy and sell transactions that would conceivably allow it to market upstream gas producers' output directly to foreign buyers. Cheniere secured such agreements with two shale producers.
Asia became the main export destination for growing U.S. LNG exports in 2020 -- U.S. exports of liquefied natural gas (LNG) continued to grow in 2020, averaging 6.5 billion cubic feet per day (Bcf/d) on an annual basis, according to the U.S. Energy Information Administration’s Natural Gas Monthly. LNG exports increased 1.5 Bcf/d, or 31%, compared with 2019 levels. U.S. LNG exports were relatively high from January through May. In the summer months, they declined to record lows following record declines in international natural gas and LNG prices. By October, U.S. LNG exports started to increase again, despite brief interruptions caused by Hurricanes Laura and Delta. In November and December 2020, U.S. LNG exports reached all-time highs. U.S. LNG was exported to 38 countries, a record number, and Asia overtook Europe to become the main export destination in 2020.LNG exports to Asia increased 67% in 2020 compared with 2019, accounting for almost half, or 3.1 Bcf/d, of all U.S. LNG exports. U.S. LNG exports to China averaged 0.6 Bcf/d in 2020—after China lowered tariffs on imports of LNG from the United States from 25% to 10%—the largest increase by country. In 2019, when tariffs were at 25%, only two U.S. LNG cargoes were shipped to China. India increased imports of U.S. LNG by an average of 0.1 Bcf/d, especially in the spring and summer when LNG prices were at record lows. U.S. LNG exports to Japan grew by 0.2 Bcf/d, primarily in the fourth quarter of 2020 because of seasonal winter demand.U.S. LNG exports to Europe averaged 2.5 Bcf/d, an increase of 0.6 Bcf/d compared with 2019. Europe had been themain destination for U.S. LNG exports in 2019, accounting for 39% of U.S. LNG exports. In 2020, U.S. LNG exports to Turkey increased by 0.3 Bcf/d and to the United Kingdom, Spain, Greece, and Lithuania by 0.1 Bcf/d each. U.S. LNG exports to several countries in Latin America (Colombia, Chile, Argentina, Mexico) and the Middle East (Jordan and the United Arab Emirates) declined by a combined 0.5 Bcf/d in 2020 compared with 2019. U.S. LNG exports to Mexico declined by 0.3 Bcf/d because of COVID-19 mitigation efforts that reduced demand for natural gas. Growing U.S. exports by pipeline to Mexico also displaced more expensive LNG imports. In contrast, Brazil more than doubled its U.S. LNG imports—an average annual increase of 0.2 Bcf/d—as a result of drought conditions that limited hydroelectric power generation and increased demand for natural gas-fired power generation.
Wild Thing - Understanding the Volatile Relationship Between LNG and Global Gas Markets - To fully grasp just how much the U.S. LNG export market has changed in the past year, we have to go back about one year to March 2020, before the pandemic effects had set in. It may be hard to imagine those pre-COVID days now, so allow us to set the stage. The U.S. had just finished adding 25 MMtpa (3.34 Bcf/d) of liquefaction and export capacity over the course of 2019 and early 2020. Feedgas deliveries and LNG exports during this period were predictable for the most part, ramping up as the liquefaction trains were completed and then consistently operating near full utilization of capacity as the units were brought online and commercial contracts kicked in. So, in March of last year, feedgas demand was near what were then record highs, with little indication of volatility outside of routine maintenance events. It seemed like all LNG could do was grow — which was a story LNG developers were happy to promote.Then COVID-19 hit, decimating global demand, sending global gas prices to all-time lows and turning the economics for exporting U.S. LNG upside down for the first time since early 2016 when the first train at Cheniere Energy’s Sabine Pass terminal began exporting. We discussed the unraveling of the U.S. LNG export market that followed in a number of blogs last spring and summer, including Break It to Me Gently, Undone and LNG Interruption. The upshot is that offtakers of U.S. LNG began cancelling cargoes and, by summer, feedgas demand plummeted (dashed blue oval in Figure 1). Feedgas deliveries in July and August averaged just 3.66 Bcf/d, or about 40% of where they were in the first quarter of 2020 and just 42% of capacity at the time. Cancellations lessened by late summer as pandemic lockdowns eased, first in Asia and later Europe, and global prices improved. But just as U.S. LNG exports were poised to begin a recovery, a record-setting hurricane season wreaked havoc on the operations of Gulf Coast LNG terminals, particularly in Louisiana (see You Spin Me Round). Throughout the fall, nearly every U.S. LNG terminal faced some kind of outage, port closure, or shut-in for maintenance.
ENERGY POLICY: FERC makes major shift on pipeline CO2 emissions -- Friday, March 19, 2021 -- The Federal Energy Regulatory Commission assessed a natural gas pipeline project's contribution to climate change for the first time yesterday as it shifted policy on renewables.Recent completions of natural gas pipeline projects increase transportation capacity – EIA -From November 2020 through January 2021, approximately 4.4 billion cubic feet per day (Bcf/d) of new natural gas pipeline capacity entered service, according to the U.S. Energy Information Administration’s (EIA) Natural Gas Pipeline Project Tracker. Four projects have recently been completed and entered service:
- Saginaw Trail Pipeline - Consumer Energy’s $610 million intrastate Saginaw Trail Pipeline entered service in late November 2020. The project replaced and expanded natural gas pipelines and infrastructure in Saginaw, Genesse, and Oakland Counties in Michigan, increasing natural gas capacity by 0.2 Bcf/d.
- Buckeye Xpress Project - Columbia Gas Transmission’s (CGT) 0.3 Bcf/d Buckeye Xpress Project began operations in December 2020. The $709 million project involved infrastructure improvements and replaced 66 miles of existing natural gas pipeline with more reliable 36-inch pipe in Ohio and West Virginia. The project increases transportation capacity out of the Appalachia Basin into CGT’s interconnection in Leach, Kentucky, and the TCO Pool in West Virginia.
- Permian Highway Pipeline - Kinder Morgan’s Permian Highway Pipeline (PHP) entered service in early January. The 430-mile pipeline brings 2.1 Bcf/d of additional natural gas capacity from the Waha Hub, located in West Texas near production activities in the Permian Basin, to Katy, Texas, near the Gulf Coast. It has additional connections to Mexico.
- Agua Blanca Expansion Project - Whitewater/MPLX’s Agua Blanca Expansion Project, which entered service in late January, connects to nearly 20 natural gas processing sites in the Delaware Basin. It transports an additional 1.8 Bcf/d of natural gas to the Waha Hub in West Texas. The project will also connect with the Whistler Pipeline, which is scheduled to be completed in the third quarter of 2021 and is expected to move 2.0 Bcf/d of natural gas from the Permian Basin to the Texas Gulf Coast.
In December, Tellurian withdrew its application to build the Permian Global Access Pipeline in Texas and Louisiana, effectively canceling the project. The proposed 2.0 Bcf/d project would have transported natural gas from the Permian Basin to a proposed liquefied natural gas (LNG) facility in Gillis, Louisiana. EIA’s Natural Gas Pipeline Project Tracker and the Liquids Pipeline Projects Database provide information about important natural gas and petroleum infrastructure in the United States. EIA updates its Natural Gas Pipeline Project Tracker quarterly, based on the best available information from pipeline company websites, trade press reports, and government documents. These data reflect reported plans. These resources are not forecasts and do not reflect EIA’s assumptions on the likelihood or timing of project completion.
Michigan GOP reps ask Biden to support Line 5 pipeline - — Michigan Republicans in Congress are urging President Joe Biden to oppose the closure of Line 5, warning of the potential consequences of shutting down the four-mile-long dual pipeline in the Straits of Mackinac. They recently wrote to Biden after he revoked the permit for the Keystone XL pipeline in his first week in office, citing "deep concerns" about the pressure to also shut down Enbridge Energy's Line 5 over environmental concerns. Michigan Gov. Gretchen Whitmer has said she has revoked Enbridge's easement for Line 5 in preparation for a May shutdown, but the issue will be decided in court.The dual pipeline that runs under the Straits of Mackinac is part of a longer line that transports oil and natural gas liquids from Canada through Wisconsin and Michigan into Sarnia, Ontario. The lawmakers in their letter said closing Line 5 would cost thousands of union jobs, close refineries and reduce energy supplies, including 15% of northwest’s Ohio’s fuel supply and 43% of southeastern Michigan’s supply.Line 5 also supplies 65% of the propane used in Northern Michigan and Upper Peninsula, the representatives said.
Al Gore, Memphis activists rally against Byhalia Connection pipeline -Former Vice President Al Gore voiced his opposition to the Byhalia Connection and put Memphis elected officials on notice during a rally against the pipeline Sunday afternoon.A few hundred people were on hand for the event at Alonzo Weaver Park in South Memphis, which featured speeches from Gore, U.S. Rep. Steve Cohen, community activists and landowners that would be affected by the pipeline’s path.The proposed crude oil pipeline, a joint venture from Plains All American and Valero Energy, would span 49 miles. On its current route, it would be constructed through predominately Black communities in South Memphis and over a Memphis Light, Gas & Water wellfield drawing water from the Memphis Sands aquifer. Gore, an environmental activist and former member of Congress representing Tennessee, called the pipeline “a reckless, racist rip-off” in his speech. “They’re putting the risk on Memphis and they’ve taken the reward for themselves,” he said. “That is why it is a rip-off.”The pipeline would connect two existing pipelines, including the Diamond Pipeline that supplies the Valero Memphis Refinery with crude oil, which Plains says would make U.S. crude oil transportation more efficient. Construction is planned for later this year, with the pipeline coming into service nine months after.In a letter addressed to Memphis residents Saturday, Plains Vice President Roy Lamoreaux said the company has secured the necessary environmental permits from federal, state and local agencies to start construction. Cohen asked President Joe Biden in February to rescind a pipeline permit granted by the U.S. Army Corps of Engineers.The permit can be rejected or modified if the Biden administration asks the Corps of Engineers to do so, one of “several ways to stop this,” Gore said.Gore also pointed out two pipeline-related actions local officials could take this week. A Memphis City Council will consider an ordinance against the project Tuesday. The ordinance is sponsored by Councilman Edmund Ford, Sr. and Councilman Jeff Warren. A Shelby County Commission decision to sell county land for the pipeline has been delayed until Wednesday.“They can’t use eminent domain against Shelby County,” Gore said. “They need Shelby County to say ‘Yes, sir’ to the pipeline company.”Gore said if officials side with pipeline companies, voters can let their voices be heard at the next election.
Oil drilling platform construction begins in Apalachicola River basin -A Texas-based petroleum company has begun construction of two exploratory drilling platforms on land it's leased in the Apalachicola River floodplain in rural Calhoun County, an area critical to the state's water supply.The state Department of Environmental Protection (DEP) in December 2019 granted Cholla Petroleum of Dallas six permits to dig deep wells into the upper Floridan Aquifer, the principal source of drinking water for much of northern and central Florida."Apalachicola Riverkeeper remains strongly opposed to these exploratory oil and gas wells as they pose significant ecological along with economic risk to the region," said Georgia Ackerman, the group's executive director. "We will continue to monitor the permit activities and address concerns with residents, local and state officials." While environmental groups have asked the DEP to deny the permits, the Calhoun County Commission has expressed support for the project as went through the approval pipeline. Residents of Blountstown and other areas, however, have voiced concern over the project's impact on the environment and the local economy. The exploratory drilling would punch into the Floridan aquifer, which environmentalists said could put the water supply for the Panhandle at risk of contamination. The permits do not authorize hydraulic fracking or commercial production, DEP spokeswoman Dee Ann Miller has said. A March 5 letter from Cholla Petroleum Vice President Mitch Myers to the DEP announced construction would begin on pads 1 and 3. The pads are within the Apalachicola River basin, close to flowing river waters during normal high flows, an article in the Apalachicola Riverkeeper blog said. "At those times, 95% of the Apalachicola River floodplain is connected aquatic habitat," the organization said. "Moreover, during major flood events, the drilling pads would be surrounded by flowing water."
Louisiana oil and gas industry in danger after President Biden cancels 80-million-acre oil lease sale – Louisiana officials say the state’s oil and gas industry is in danger. This comes after President Joe Biden cancelled a March oil lease sale in the Gulf of Mexico. Nearly 80 million acres of available leases would have been sold this week. The damage to Louisiana’s oil and gas companies started in January when President Biden signed an executive order banning all new oil and gas leases on public land and waters for 60 days. “Right now I think we’re still pretty much in the holding pattern. It was a 60-day ban, and he was going through relook at it, the president,” Louisiana Oil and Gas Association President Mike Moncla said. Moncla says their worst fear was that the president would extend that ban past 60 days. “Since that time, Governor Edwards has sent him a great letter letting him know exactly what that would mean to Louisiana, all of the economic and finances that come from our offshore work,” he said. He says as the 60-day ban comes closer to its end, President Biden isn’t easing restrictions. He’s enforcing new ones, cancelling the 80-million-acre Gulf of Mexico oil lease sale that was scheduled for March 17 in New Orleans. “It would kill our state. It would kill workers,” Moncla added. “It would kill jobs, and it would be a terrible thing.” Moncla says all they can do now is wait. “We’re hoping that Governor Edwards’ letter may have talked some sense into the president and that he won’t extend that 60 days,” he told News Ten. Moncla says the Gulf of Mexico supports 250,000 jobs between Louisaiana, Texas, and Mississippi and 98,000 Louisiana jobs offshore.
The future of Big Oil flaring in the Permian Basin and the climate challenge - When a raging snowstorm and frigid temperatures hit Texas last month, oil and gas behemoths responsible for producing and processing the lion share of the nation's reserves, including Exxon, Occidental and Marathon Petroleum, shut down production at oil wells and refineries across the state. For many oil producers in the Permian Basin of West Texas and New Mexico, the shutdown put upstream and downstream operations in a squeeze. Downstream, multiple refining operations flared during shutdowns, releasing air pollutants from processing units. Upstream, as oil drilling came back online, there was risk of needing to flare or halt oil production in the field until the broader energy market, including refining and utility generation, stabilized. Indeed, satellite imagery showed increased flaring at oil and gas production sites in the Permian Basin did take place, according to the Environmental Defense Fund. But at Occidental, a choice was made to shut down some operations. "There were a couple of plants that had difficulty coming back online," Occidental's CEO Vicki Hollub said during a recent CNBC Evolve event focused on energy innovation. "We could have put our production back online and just flared the gas. We chose not to do that. We left the production shut down because we didn't want to flare." The decisions made during the Texas power crisis are part of a broader debate with the oil and gas industry over flaring, the process of releasing greenhouse gas emissions through burning, which has long been a controversial topic for environmental advocates and climate policy experts. The practice, which is commonly used by oil and gas companies to relieve the pressure that builds up during oil production, is responsible for releasing CO2 and methane into the atmosphere. The flaring issue is a global one. According to the World Bank Group, global gas flares burn approximately 140 billion cubic meters of natural gas every year, emitting more than 300 million tons of CO2. Hundreds of companies, governments and oil corporations around the world have signed onto the organization's Zero Routine Flaring by 2030 Initiative, which aims to eliminate all routine flaring within the next decade. While flaring is often used in cases where there's safety concerns or maintenance issues, routine flaring means the flaring of gas associated with oil production. Zubin Bamji, program manager of the World Bank's Global Gas Flaring Reduction Partnership, said reducing gas flaring is attainable for many of these companies and is a "low-hanging fruit" among other methods to reduce emissions. Some experts say U.S. companies, specifically, need a more ambitious goal toward stopping routine flaring. The World Bank agreement focuses predominantly on reducing emissions in countries lacking the regulatory capacity and the infrastructure, but some experts say U.S. companies can accomplish the feat by 2025.
States looking to decarbonize may need to weigh their gas's origin – study | S&P Global Market Intelligence - As U.S. states look to decarbonize, where they get their natural gas may be an important part of their emissions profiles, according to a recent study. Calculating the upstream greenhouse gas intensity of each state's gas supplies, researchers at Georgia Tech's School of Civil and Environmental Engineering found that gas consumed in 2018 in the Lower 48 had methane emissions profiles that ranged from 0.9% to 3.6% of the total gas withdrawn that supplied states' consumption."It really does make a difference where your natural gas is coming from and what that production leak rate is from your basin," said Diana Burns, the study's lead author who is pursuing a master's degree in environmental engineering at Georgia Tech. "It can be high enough that it makes a big impact on greenhouse gas emissions."Kansas, Arizona and New Mexico consumed natural gas that emitted over three times more methane during production than most Northeast states in 2018, the study found. Methane, the key component of natural gas, has a shorter atmospheric life than carbon dioxide but has a much stronger warming effect. As a result, researchers and environmentalists have pointed to methane emission reductions, particularly from the oil and gas industry, as an opportunity to help mitigate climate change in the near-term.As U.S. states look to decarbonize, where they get their natural gas may be an important part of their emissions profiles, according to a recent study.Calculating the upstream greenhouse gas intensity of each state's gas supplies, researchers at Georgia Tech's School of Civil and Environmental Engineering found that gas consumed in 2018 in the Lower 48 had methane emissions profiles that ranged from 0.9% to 3.6% of the total gas withdrawn that supplied states' consumption."It really does make a difference where your natural gas is coming from and what that production leak rate is from your basin," said Diana Burns, the study's lead author who is pursuing a master's degree in environmental engineering at Georgia Tech. "It can be high enough that it makes a big impact on greenhouse gas emissions."Kansas, Arizona and New Mexico consumed natural gas that emitted over three times more methane during production than most Northeast states in 2018, the study found. Methane, the key component of natural gas, has a shorter atmospheric life than carbon dioxide but has a much stronger warming effect. As a result, researchers and environmentalists have pointed to methane emission reductions, particularly from the oil and gas industry, as an opportunity to help mitigate climate change in the near-term.
Gasoline Demand Has Peaked, Global Forecaster Says – WSJ - The world’s thirst for gasoline isn’t likely to return to pre-pandemic levels, the International Energy Agency forecast, calling a peak for the fuel that has powered personal transportation for more than a century. The Paris-based energy watchdog, in its closely followed five-year forecast, said an accelerating global shift toward electric vehicles, along with increasing fuel efficiency among gasoline-powered fleets, will more than outweigh demand growth from developing countries. The forecast comes as auto makers have pivoted recently to boost their EV fleets, after years of industry skepticism about whether car buyers would ever embrace fully electric models. General Motors Co. said it would stop selling gas-powered vehicles by 2035. Volvo Cars of Sweden has said it would be all-electric by 2030. The shift toward electric vehicles has been driven by government regulation, hefty incentives in developed countries and broader consumer acceptance of the technology thanks in part to popular models like those sold by Tesla Inc. EVs still make up a small proportion of the world’s overall fleet, and auto makers say they expect to see growing demand for gas-burning internal combustion engines, particularly in the developing world, for years to come. The coronavirus pandemic has upended global fuel consumption, raising questions about whether it will change the world’s energy mix more generally in the years ahead. Energy watchers have long debated the timing of “peak oil,” a point at which demand for crude will start to wane. Amid the demand-crushing pandemic that started last year, some forecasters, including those at the Organization of the Petroleum Exporting Countries, have said that day might have already dawned in the developed world. The IEA said Wednesday that it foresees global crude demand recovering, reaching as much as 104 million barrels a day by 2026, up about 4% from 2019 levels, thanks to the developing world. Economic powerhouses such as China, India and other Asian countries would account for 90% of the net increase in oil demand over the coming five years, the agency said. But for the first time, the agency said it no longer forecasts a complete rebound in demand for gasoline—the product that for years underpinned the world’s thirst for crude. “We do not think gasoline consumption will come back to 2019 levels again,” said IEA Executive Director Fatih Birol. Global jet fuel demand, meanwhile, would fully return but at a slow pace and not before 2024, the agency said. U.S. air travel has been risingamid stabilizing or falling Covid-19 cases in many parts of the country and an accelerated vaccination drive. The Transportation Security Administration, which tracks how many U.S. travelers pass through airport security checkpoints, recorded 1.4 million passengers on Friday. That marked a one-year high but still less than half comparable numbers in 2019.
U.S. crude oil production fell by 8% in 2020, the largest annual decrease on record – EIA -- U.S. crude oil production averaged 11.3 million barrels per day (b/d) in 2020, down 935,000 b/d (8%) from the record annual average high of 12.2 million b/d in 2019. The 2020 decrease in production was the largest annual decline in the U.S. Energy Information Administration’s records. The production decline resulted from reduceddrilling activity related to low oil prices in 2020.In January 2020, U.S. crude oil production reached a peak of 12.8 million b/d. In March 2020, crude oil prices decreased because of the sudden drop in petroleum demand that resulted from the global response to the coronavirus (COVID-19) pandemic. The declining prices led crude oil operators to shut in wells and limit the number of wells brought online, lowering the output for the major oil-producing regions. In May, U.S. crude oil production reached its lowest average monthly volume for the year at 10.0 million b/d.In 2020, more crude oil was produced in Texas than in any other state or region of the United States, accounting for 43% of the national total. Crude oil production in Texas averaged 4.87 million b/d in 2020, a decrease of 205,000 b/d (4%) from the record high of 5.07 million b/d set in 2019.The Federal Offshore Gulf of Mexico saw the largest decrease in crude oil production, falling by 245,000 b/d (13%) to an annual average of 1.65 million b/d in 2020. Several hurricanes and tropical storms struck the Gulf of Mexico last year, causing operators to evacuate platforms and shut in production. North Dakota had the second-largest decrease at 242,000 b/d (17%) to an annual average of 1.18 million b/d. Oklahoma had the largest percentage decrease at 19%, falling to an annual average of 469,000 b/d. The largest statewide increase in crude oil production in 2020 was in New Mexico, where it increased by 133,000 b/d (15%) to a record annual average high of 1.04 million b/d. The growth in New Mexico came from the Permian Basin, which spans parts of western Texas and eastern New Mexico.
US oil, gas rig count up 10 on week to 502, despite Permian slowdown: Enverus -- The US oil and gas rig count climbed 10 to 502 in the week ended March 17, Enverus data showed, reaching a fresh 11-month high despite a pullback in Permian drilling activity. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up The number of rigs chasing mostly oil was up four week on week to 375, the highest since the week-ended April 15, while the gas-focused rig count was up six to 127, the highest since the week-ended April 8. The increase puts the total US rig count up 98, or 23%, since the start of 2021, and up 223, or nearly 80%, from its early July nadir. Rig counts were higher across all of the major named basins outside of the Permian, which shed two rigs leaving a total of 224, and in the Utica shale, where rig counts were flat at 11. It was the first pullback in Permian drilling since the week ended Feb. 17, when severe freezing winter weather paralyzed oil field operations across most of Texas. Outside of the one-week dip, Permian rig counts have been steadily higher this year, rising 42, or 23%, since the week ended Dec. 30. Operators added a single rig each in the oil-focused Eagle Ford (37 rigs), SCOOP-STACK (18), Denver-Julesburg (16), and Bakken (15) basins. On the gas side, Haynesville basin rig counts climbed one to 47, and operators in the Marcellus play added a single rig for a total 33. Prices were little changed week on week, with oil slightly higher and gas slightly lower. For oil, WTI averaged $65.28/b for the week ended March 17, up 60 cents; WTI Midland averaged $65.95/b, up 38 cents; and the Bakken Composite averaged $65.56/b, up 4 cents. For gas, Henry Hub averaged $2.55/MMBtu, down 8 cents on week; and Dominion South averaged $2.07/MMBtu, down 16 cents. While US drilling activity has closely mirrored a sharp run-up in crude prices since the end of 2020, capital discipline is likely to present headwinds to further increases, analysts said. "There's no desire to increase activities currently, and even when oil markets balance, response is likely to be muted," "If the current price deck holds, companies will have ample flexibility, and we would look for incremental capital return" to shareholders."
Shale Producers Find Themselves in Unusual Position -- Shale’s newfound prudence after last year’s crash is putting producers in the unusual situation of reducing oil output just as prices surge. More focused than ever on keeping spending in check, shale drillers haven’t been boring new wells fast enough to keep up with output declines in older ones. So, next month, their combined production will edge lower by 47,000 barrels a day to about 7.46 million, according to the U.S. Energy Information Administration. That’s despite an oil price jump of more than 30% this year. The impact of the coronavirus on energy consumption was so bad last year that several heavily indebted shale producers went under after years of being bankrolled by Wall Street. Now, producers don’t seem to be in a rush to start another boom, and their backers aren’t either. That’s good news for Saudi Arabia, which has sought to bring prices up without unleashing a new supply glut. “We are still observing only about 50% of last year’s rig count activity,” EIA analyst Jozef Lieskovsky said by email. “With such a low rig count, even with the increased productivity, production declines in all regions are possible.” The number of rigs drilling for oil in the U.S. started plunging when the pandemic hit, reaching just 172 in August, down from 683 late in March 2020, according to Baker Hughes data. They are now at little more than 300. In theory, producers also have the option of fracking wells that have been drilled but left uncompleted, known as DUCs. But that wouldn’t help them conserve much capital because the process of blasting a mixture of water, chemicals and sand into the ground to unleash oil and gas from shale rock is the most expensive part of a well’s development. DUCs also require some work before they can be fracked if they’ve been lying idle for too long. Output will be slightly lower in nearly all key shale regions except for the Permian Basin of West Texas and New Mexico, which is estimated to produce a meager 11,000 barrels a day more, the EIA said in its Drilling Productivity Report.
JP Morgan: U.S. Shale Production Set To Climb -Current oil prices are high enough to warrant increased U.S. shale activity in the second half of the year if prices hold around these levels, according to JP Morgan.“At current prices, most U.S. onshore operators are economic, leaving a vast group of operators, from large public companies to private players, in good position to ramp up activity in 2H21 and build solid momentum for higher volumes in 2022,” analysts at JP Morgan said in a weekly note as carried by Reuters.Early on Friday, the spot U.S. benchmark WTI Crude was trading at over $65 per barrel, at $65.76 as of 7 a.m. ET.Following the largest ever annual collapse in U.S. crude oil production in 2020, the U.S. shale patch is not rushing to ramp up production in 2021, even though oil prices have rallied by 30 percent this year. U.S. producers, especially large listed companies, are expected to stick to capital discipline and reward shareholders rather than ramp up production. However, smaller privately held oil firms are benefiting from higher oil prices as their primary way of generating cash is increased production. This could spoil the oil management policy of the OPEC+ group again. Most analysts believe that most public companies will stick to discipline. OPEC+ also seems to have gambled on expectations that U.S. shale will look at higher profits instead of production this time - unlike in any of the previous oil price spikes in recent years - when it decided not to raise production from April, except for small increases for Russia and Kazakhstan.In view of the recent high prices, JP Morgan now expects U.S. oil production to average 11.36 million bpd in 2021, slightly up from 11.32 million bpd last year. The EIA still sees U.S. crude oil production this year slightly down from last year, at 11.1 million bpd. However, in its latest Short-Term Energy Outlook published this week, EIA expects U.S. production in 2022 at 12.0 million bpd, up by 500,000 bpd compared to the February STEO forecast because of higher expected crude oil prices.
Oil Sector Revival Has Producers Eyeing Boom Times --If you thought coronavirus had hobbled the oil industry for good, think again. Just a year after a Saudi-Russian price war and the coronavirus pandemic triggered the worst oil crash in decades, a stunning reversal is under way. “The next five years may be the best five years we’ve ever had for hydrocarbon investing,” Wil VanLoh, head of Quantum Energy Partners, one of the US oil patch’s biggest private investors, told me recently. Yet despite a glut so great it briefly forced oil prices below zero, consumption still averaged 91m barrels a day — more than the world consumed daily in 2012. Morgan Stanley thinks demand will be back above 100m barrels later next year (2022).. Goldman Sachs expects that marker to be passed before 2021 is out. Investors are suddenly flocking to previously out-of-fashion companies that promise to meet the world’s renewed hunger for crude. The revival in the industry’s fortunes is especially obvious in the US shale patch, the most dynamic corner of the global oil business. Famous for ruinous debt and high spending in pursuit of breakneck production growth, the shale business is suddenly — and surprisingly — profitable. The market likes operators’ pledges to spend cash flows on dividends, not rigs; debt repayment, not private jets. Shares in some shale companies are up by about 200 per cent since early November. For some old crude market hands, all of this is proof that oil remains a cyclical business.
Privately-held shale drillers poised to create headaches for OPEC --The battered and bruised U.S. shale industry is finding a resurgence in one of the most unlikely places: private operators most investors have never heard of. Take the case of little known, closely held DoublePoint Energy. It’s now running more rigs in the Permian Basin than giant Chevron Corp. Meanwhile, family-owned Mewbourne Oil Co. has about the same number of rigs as Exxon Mobil Corp. That’s emblematic of what’s happening across the industry. Once minor players, private drillers held half the share of the horizontal rig count as of December. It’s the first time in the modern shale era that they have risen to the level of the supermajors. After years of unwieldy supply growth, the big guys are finally starting to show restraint. They’ve dialed back drilling after the pandemic sent oil prices into collapse. Now that the market is on the rise again, the majors and publicly-traded counterparts are mostly sticking to the mantra of discipline, all but ending shale’s decade-long assault on OPEC for market share. But private operators’ ambitious growth plans present the cartel with a wild card as prices rebound and it attempts to lift its own production. With oil prices up close to 30% in the past two months, traders and analysts are watching shale producers closely for signs that they’re opening the spigots. Most big publicly traded explorers are listening to investors’ pleas and planning to keep production flat. But the contrast in output strategy from the private companies underscores just how anarchic the oil market is. America’s oil production currently stands at about 9.7 million barrels a day, about 3 million barrels a day less than a year ago before prices collapsed, according to the Department of Energy. That means the U.S. lost production equivalent to Iran and Angola combined, or two Gulf of Mexicos, in just 12 months. The question is where does it go from here. A Bloomberg survey of major forecasters including Enverus and Rystad Energy showed a variance of 700,000 barrels a day, more than half of Nigeria’s production, indicating how much uncertainty surrounds large, private producers whose plans are mostly shielded from public view. If private drillers keep expanding at their current pace, it could eventually mean that U.S. production ends up on the higher end of analyst forecasts. And that, of course, could weigh on prices. “In a few months, a lot of private operators will return in an aggressive manner to add wells and rigs because they are able to realize returns faster as oil prices are improving,” . The private drillers are on pace to spend $3 billion in just the first three months of this year, doubling from their lowest levels of 2020,
Angry Okla. farmers fight pipeline builder — and FERC - E&E News -- Cody McComas says he still doesn't know why a pipeline crew with a dump truck stole $40,000 worth of topsoil from his central Oklahoma farm. But he says it's only one of the indignities he's suffered at the hands of Cheniere Energy Inc. since it started laying the Midship pipeline through his property. He says he's lost two years of crops with no end in sight and tried in vain to get the company to fix the damage done to his land — and he hasn't been paid a dime."This is what we do for a living. We're proud of this land," said McComas, who grows alfalfa and corn near Minco, Okla. "They laugh about it, like it's no big deal."McComas is not alone. Dozens of other Oklahoma landowners say Cheniere and its construction contractor cut a swath of destruction through their farms and still haven't repaired the damage a year after the company started pumping natural gas. They say their fields are flooded, vital topsoil is gone and chunks of construction debris are strewn across the pipeline's 200-mile path.The conflict has turned Cheniere's Midship project into one of the most bitter battles in the country's pipeline debate, with lawsuits, threats of violence, accusations of extortion and even sabotage.It's a prime example, critics say, of the Federal Energy Regulatory Commission's bureaucratic indifference to the people in the path of the energy projects it approves."We've tried to get FERC in to enforce something," McComas said. "It's been a lost cause." Cheniere's primary business is taking natural gas produced in the U.S. and exporting it to other countries (Energywire, May 30, 2019). Midship doesn't connect to either of Cheniere's terminals on the East Coast, but some of the gas is committed to Cheniere for export. The company has been a standard-bearer for gas exports, which former President Trump made a key element of his "energy dominance" agenda. Carl Icahn, a Trump confidant who briefly served in the Trump White House as a special adviser, is a major shareholder. The company has also hired several Obama administration alumni. After FERC approves a pipeline route, the company building it can use eminent domain to take people's land for the project, long before paying them. Pipeline builders are supposed to negotiate first before going to court to condemn land. But farmers along the Midship line say Cheniere swiftly filed for condemnation after making lowball offers. The offers were sometimes less than the value of the crops they'd lose, they said, or fractions of what other companies had paid for burying other pipelines on their land. The landowners eventually get their property back, with conditions about what can be done with it. But during construction, the pipeline controls the roughly 100-foot "right-of-way" easement where the pipeline is placed. Sometimes landowners aren't allowed to set foot on their own land during the process. McComas said crews repeatedly threatened to call the sheriff when he or his family members got close to the easement. Landowners along the Midship line also said Cheniere wouldn't listen to their concerns over where the pipeline was being built. Steve Barrington, whose family runs a farming operation near Bradley, said he warned company representatives they were putting the line through a wet area on his land with a high-water table that would cause problems. But he was ignored and said his concerns were treated dismissively. "They wouldn't talk to us," he said. "We're just a bunch of dumb redneck farmers." Now he says it will cost more than $5 million to fix the damage to his farm.
Spurred by pipeline protests, Kansas could deter them further Protests over pipelines in the past years, such as those over the Dakota Access Pipeline in North Dakota in 2016 or ongoing ones against the Line 3 pipeline in Minnesota, have driven the fossil fuel industry into action. The American Fuel and Petrochemicals Manufacturers is pushing a bill beefing up criminal penalties for trespassing or damaging infrastructure facilities. Senate Bill 172 is more than halfway to becoming law, having had its hearing in the Kansas House on Wednesday. "There are proper ways in our society to protest things," said Sen. Mike Thompson, R-Shawnee, who chairs the committee sponsoring the bill. "Peacefully protesting, not damaging property, like we've seen with many of the organized activities in the Pacific Northwest, that damaged billions of dollars of infrastructure and people's businesses." In short, it is meant to send a clear message to supposedly violent climate protesters, despite conflicting reports that police and private security officers initiated some of the past aggression. "As we well know, that critical infrastructure affects us all," Thompson said. "We had the arctic outbreak a week or so ago, and we were all impacted by the loss of electricity." Senate Bill 172 would replace the crime of tampering with a pipeline with four different crimes ― trespassing, aggravated trespassing, criminal damage and aggravated criminal damage to a critical infrastructure facility. Such facilities include those associated with petroleum, electric, chemical, water, natural gas, broadband, railroads, trucking, steel or oil. Trespassing a facility would be a Class A nonperson misdemeanor, while aggravated trespassing (with the intent to damage or tamper) would be a severity level 7 nonperson felony. Criminal damage would be a severity level 6 nonperson felony, and aggravated damage (with the intent to impede operations) is level 5. Opponents worried the penalties were too harsh. "What about those teenagers, the clever teen that goes up and writes a 'V' and 'I' on the Agra water tower?" said Zack Pistora, of the Kansas Sierra Club. "Should they be getting over a year, and a felony on their record, jail time?" Others said the bill was a moot political point as there hasn't been a significant pipeline protest in the state. If anything, they said, it could chill free speech and deter even peaceful environmental protests. The bill "is harmful because it strips us of our ability to let you know when something is not right. You're tying our hands and how we can communicate with you about injustices,"
Senate Confirms Fracing Foe as Interior Secretary -- The Senate narrowly confirmed Deb Haaland as Interior secretary on Monday, clearing the way for the lawmaker from New Mexico to become the first Native American to serve in any president’s cabinet. “It is long, long, long past time that this country had a Native American leading the Interior Department,” said Senator Ron Wyden, a Democrat from Oregon, said before the vote. “We have got a nominee who is qualified. She is fair. She is going to concentrate on bringing people together, and she is going to make history.” Haaland, a member of the Laguna Pueblo tribe west of Albuquerque, New Mexico, is expected to resign her seat in the House, where she has represented New Mexico since 2019. The Senate’s 51-40 vote underscored deep opposition from Republicans who worry Haaland’s criticism of fossil fuels means she will discourage oil development across hundreds of millions of acres of federal land under the Interior Department’s control. President Joe Biden already ordered a pause in the sale of drilling rights across federal lands and waters. “Based on her own public statements and actions, Congresswoman Haaland is more radical in her positions than President Biden,” said Senator Cynthia Lummis, a Republican from Wyoming, said before the vote. “As secretary, she will continue the job-killing, anti-energy attack on Wyoming’s livelihood that President Biden started during his first week in office.” Senate Democrats said Haaland has a special relationship with the land that will aid her leadership of the Interior Department charged with managing so much of it. The agency oversees grazing, hunting, recreation, energy development and other activities on about a fifth of U.S. land, some 700 million subsurface acres of minerals and 2.5 billion acres of the outer continental shelf. The Interior Department also holds trust title to 56 million acres for tribal nations, and its Bureau of Indian Affairs serves as the prime U.S. government contact for 578 federally recognized tribes. Oil production on federal lands in Haaland’s home state of New Mexico once paid for a free-college program and provides more than a third of the state’s budget. “Congresswoman Haaland knows firsthand how the decisions that we make here in Washington, and particularly in the Interior Department, affect communities across the country, especially in tribal communities and rural Western states,” said Senator Martin Heinrich, a Democrat from New Mexico, said before the vote. “She is the leader that we need at Interior to take on the important work of restoring our landscapes, opening up new outdoor recreation opportunities for all Americans and putting our public lands to work in confronting the climate crisis.” In the House, Haaland has advocated greater consultation with tribes, conservation of federal lands and federal-tribal collaboration to prevent violent crimes. She worked to block drilling near the sandstone mesas and ruins of northwest New Mexico’s Greater Chaco region. Haaland also has been an outspoken critic of fracking and was an original cosponsor of the Green New Deal resolution outlining a vision for rapidly decarbonizing the U.S. economy.
Career staff to resume U.S. federal drilling permit approvals - Interior Dept (Reuters) - The Biden administration on Monday said U.S. Bureau of Land Management (BLM) office staff would resume processing oil and gas drilling permits later this week following a two-month period when those approvals were limited to senior officials in Washington. In an emailed statement, the Interior Department said BLM officials would process applications for permits “and related sundry activities on valid, existing leases in a timely manner.” The department, which oversees BLM, also said it would begin providing monthly updates on pending and approved drilling permits on federal lands in an effort to improve transparency for the industry and the public. On its first day in office, the administration of President Joe Biden stripped Interior Department agencies and bureaus of their authority to issue drilling permits. The order, which expires on March 21, appeared to be a first step toward delivering on Biden’s campaign pledge to ban new leasing on federal acreage, though permits have continued to be processed in Washington. Later in January, the administration paused new oil and gas leases, triggering criticism from the oil industry and Republican lawmakers. The Interior Department will launch a formal review of the program on March 25 with a public forum.
As spring thaws the Minnesota ice, a new pipeline battle fires up - In the north woods of Minnesota, the mighty Mississippi River looks like a frozen creek. And if you stroll one particular spot near Palisade, you'll find giant pipe, heavy machines and competing signs. A few read "No trespassing" in block letters. The rest say "Water is life" and "Stop Line 3" in hand-painted colors. It is the latest front in the pipeline wars. Originally built in the 1960s, the Enbridge Line 3 crude oil pipeline snakes 1,097 miles from the tar sands of Canada to Superior, Wisconsin. Of the roughly 340 miles through Minnesota, the replacement pipeline includes new sections and added capacity and is cutting through some of the most pristine woods and wetlands in North America. In little camps along the way, a small-but-growing group of protesters is out to stop them, driven by ancient prophesy and the promises of a new President.When Joe Biden killed plans for the Keystone XL pipeline within hours of taking the oath, many Native American tribe members and environmentalists saw it as validation for all the cold nights spent protesting another pipeline at Standing Rock. Though they failed to stop the oil now flowing through the Dakota Access Pipeline, maybe this was a sign Biden would take their side in the David versus Goliath fight to stop Line 3. And maybe people would finally heed an ancient warning known as The Seven Fires Prophecy.In Ojibwe tribal lore, an environmental moment of reckoning was predicted in the time of the Seventh Fire, when "the light skinned race will be given a choice between two roads," one green and lush, the other black and charred. A wrong choice, it was warned, would "cause much suffering and death to all the Earth's people." The Ojibwe are of the largest groups of Native Americans north of Mexico with tribal members stretching from present-day Ontario in eastern Canada all the way into Montana.As a half-dozen female tribal elders sing and pray alongside the frozen Mississippi, it's obvious that for some bands, the fight is sacred and eternal. The question is how many will join them in the face of tougher legal challenges, increased pressure from police and the limits of the pandemic. "There have been over 130 people arrested so far in just the last few months," tribal attorney and activist Tara Houska told CNN. Some are physically arrested at construction sites, but police also watch social media feeds to identify trespassing protesters and send summons in the mail. Before we walked the frozen river, Houska attended her hearing with a judge over Zoom and was ordered to post $6,000 bail. "They seem to think that it's going to deter us from protecting the land. They are fundamentally missing the point of what water protectors are doing, which is willing to put ourselves our freedom, our bodies, our personal comfort on the line for something greater than ourselves," Houska said.
Jane Fonda Arrives in Minnesota to Back Line 3 Opponents --A "freshly vaccinated" Jane Fonda arrived in Minnesota on Sunday to join the ongoing protests against Canadian oil giant Enbridge's Line 3 pipeline, a multibillion-dollar tar sands project that scientists and activists have called an "urgent threat" to local waters and the global climate. In a Facebook post announcing her arrival in Northern Minnesota, the 83-year-old activist and Oscar-winning actress said the Ojibwe Water Protectors "have invited me to join them in the fight to stop Line 3.""We were driving down the highway and pulled over to see the impacts of the nearly one million barrels of tar sands per day being brought from Alberta, Canada to Superior, Wisconsin by Enbridge, a Canadian pipeline company responsible for the largest inland oil spill in the U.S.," she continued.Fonda—an active participant in social justice causes for decades, which includes being arrested on the steps of the U.S. Capitol building in October 2019 after launching the #FireDrillFriday campaign to pressure federal lawmakers to address the climate crisis—noted that "Enbridge seeks to build a new pipeline corridor through untouched wetlands and the treaty territory of Anishinaabe peoples, through the Mississippi River headwaters to the shore of Lake Superior.""We will be at the rivers that are being threatened by Line 3 over the next few days," she said, "gathering to pray and send a message to Enbridge that water is life." In an accompanying video, Fonda added that "we're here to try to stop it."
PUBLIC LANDS: BLM drilling data may shift Biden oil politics -- Tuesday, March 16, 2021 -- The Interior Department said yesterday it will publish monthly data on drilling permits for federal lands, enlightening a debate over whether the Biden administration's energy policies are hindering the oil industry.
Diesel from 485-gallon overfill at Town Pump rising to surface in Butte wetlands -- Walking his dog along the Blacktail Creek trail near the northeast corner of Harrison Avenue and I-90 in Butte on Sunday, Montana Tech professor David Hutchins noticed something wasn’t right: Absorbent pads and booms had been placed at a storm drain leading into Blacktail Creek. Walking under I-90 to the wetlands on the other side, Hutchins observed great plumes of rainbow-colored sheen bubbling to the surface and spreading through the cattails, and the whole area reeked of diesel fuel. “The smell was almost overwhelming to where I was almost concerned it might be flammable,” Hutchins said. What he saw and smelled was the result of a 485-gallon diesel fill overflow at Town Pump No. 4 at 3700 Harrison Ave., which took place five weeks ago on Jan. 30, and was never reported to the general public. An unknown amount of that diesel made its way into Blacktail Creek on Feb. 3. According to Bill McGladdery, director of corporate communications for Town Pump, the overflow occurred when Butte-based Red Mountain Truck Lines Inc. overfilled an underground storage tank at the station. The company immediately began cleanup with its personnel and notified the Montana Department of Environmental Quality an hour later. The Montana Department of Transportation, Montana Fish, Wildlife and Parks and Butte-Silver Bow County were notified within a couple days, McGladdery said. Disaster and Emergency Services was also contacted, and after petroleum was discovered in Blacktail Creek, the National Response Center was notified as well. The National Response Center report states the incident occurred “due to operator error.”
Soil excavation begins at Town Pump after 485-gallon diesel spill in January - With permission from the Montana Department of Environmental Quality, crews have begun excavating diesel-contaminated soil at the Town Pump at Harrison and Elizabeth Warren avenues in Butte. Red Mountain Truck Lines overfilled an underground storage tank at the Town Pump on Jan. 30, causing 485 gallons of diesel to spill, according to Bill McGladdery, director of corporate communications for Town Pump. Some of the diesel ran down into the gutter and made its way to the engineered stormwater retention wetlands on the southeast side of Harrison Ave and I-90. An unknown amount of diesel crossed under the highway and entered Blacktail Creek on only Feb. 3, McGladdery said. On Friday, Hunter Brothers Construction personnel and Water & Environmental Technologies engineers were hard at work excavating soil contaminated with diesel at the site. Bill Henne, the project lead for WET, said DEQ issued the permit to excavate the source area at the Town Pump Thursday. Dirt samples were analyzed as they were removed, the depth increasing until it meets DEQ standards of 50 parts per million diesel. Samples must be taken for every 625 square feet, Henne said. Henne on Friday said excavation of the source area was expected to continue at least until Monday, and all contaminated dirt must remain in a repository on site.Town Pump recently acquired a permit for use of a camera to evaluate diesel residue in the stormwater main along Harrison Avenue from Elizabeth Warren Avenue to I-90. The camera is mobile, moving up to 1,000 feet at a time before being retrieved from manholes, projecting video back to the crew along the way. “It's kind of like a colonoscopy,” McGladdery said. Meanwhile, down at the Montana Department of Transportation’s engineered wetlands near the highway, WET continues to monitor the site twice daily, and a heavy sheen and strong diesel smell remains among the cattails. On Thursday, DEQ requested Town Pump put up signs to alert the public, and there are now seven signs reading “Restricted Area.”
Keystone XL pipeline: Texas and Montana lead coalition of states suing Biden administration over pipeline - Twenty-one states, led by Texas and Montana, filed suit on Wednesday against President Joe Biden's decision to revoke the permit for the Keystone XL pipeline -- an effort by Republican state attorneys general to combat the new administration's efforts to address climate change. Texas Attorney General Ken Paxton and Montana Attorney General Austin Knudsen argued in the complaint that Congress, not Biden, has the authority to change the policy. Biden's order "cites no statutory or other authorization permitting the President to change energy policy as set by Congress in this manner," Paxton and Knudsen wrote in the complaint, arguing that "the President lacks the power to enact his 'ambitious plan' to reshape the economy in defiance of Congress's unwillingness to do so." Bringing the suit on "behalf of many of the States through which Keystone XL runs," they're joined by the attorneys general of Alabama, Arizona, Arkansas, Georgia, Kansas, Kentucky, Indiana, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Utah, West Virginia and Wyoming in challenging Biden's move. Biden revoked the permit for the pipeline on his first day in office through executive action as part of a series of moves aimed at combating climate change, The oil industry and Republicans quickly condemned Biden's decision in January to rescind the permit for the controversial pipeline. The move resulted in the layoff of "thousands of union workers," according to TC Energy, the Canadian company behind the Keystone pipeline. Climate and energy experts, meanwhile, told CNN at the time that the project was inconsistent with both the Biden administration's climate goals and with American energy needs in light of existing oil supply. Energy Secretary Jennifer Granholm, the former governor of Michigan, has said that the Energy Department created a jobs office that will work "hand in glove" with the department's fossil fuels officials to make sure "we leave no worker behind."
21 State Attorneys General Chose a Texas Federal Court to File Suit Against the Biden Administration Regarding Keystone XL Pipeline – RedState - Today, Texas, joined by 20 other states (Alabama, Arkansas, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Utah, and Wyoming), sued the Biden Administration over the cancellation of the permit for the Keystone XL pipeline project, which was done via an Executive Order on Biden’s first day in office. I wrote about the Biden Administration’s plan to take that step in this article. Texas has gone back to the well once again in choosing the Southern District of Texas as the locale for its action over the Keystone XL pipeline, but this time it chose the Galveston Division.The Galveston Division has one full-time federal District Court Judge — Judge Jeffrey Brown, appointed by ……. President Trump.See how this works?Apparently, the Texas Attorney General’s Office was paying attention when left-wing interest groups and the Democrat Party were filing suits in Washington, Oregon, California, and New York to challenge Trump administration policies. The complaint is 46 pages long, and I’ll have to save for another day a deep-dive into the nature of the claims raised. Frankly, I have been pondering over writing an article making the case that the pipeline project is not actually “all dead,” but only “mostly dead”, and that there’s a big difference between the two. I’ll save that for another time, too.
Exxon Says Activist’s Plan Is Threat to Cash Flow, Dividend -- Exxon Mobil Corp. said proposals put forth by an activist investor pushing for changes at the oil giant threaten future cash flows and the sustainability of its dividend. Exxon said in a letter to shareholders Tuesday that Engine No. 1’s approach ignores the role oil and natural gas will play in the future, and the leadership role the oil giant intends to take in reducing emissions through the development of lower-carbon technologies. “To put it bluntly, we have a plan that will grow earnings and cash flow, pay and grow the dividend, fund future growth and position the company to have a meaningful role in the energy transition. Engine No. 1 does not, ” Chief Executive Officer Darren Woods and lead director Kenneth Frazier said in the letter. Woods has sought to reposition Exxon as a reliable cash cow in the wake of Covid-19 by aggressively cutting capital spending, delaying growth plans and slashing the company’s workforce. The simple goal is to ensure the sustainability of the S&P 500 Index’s third-largest dividend, worth $15 billion a year. The stock’s yield rose to the highest on record last year as the drop in oil prices threatened the payout but it has since reversed course, now standing at around 5.9%. Woods and Frazier accused Engine No. 1 of making false statements and said its board candidates lacked the experience or knowledge to help lead Exxon through what they called “one of the most complex and challenging transitions the world has ever faced.” The pair encouraged investors to vote for Exxon’s slate, which includes activist investor Jeff Ubben and two other new directors. The newly-formed Engine No. 1 disclosed a stake in Exxon in December and has nominated four candidates for the board. The hedge fund, whose stake amounts to about 0.02% of Exxon’s shares, has criticized the company for poor returns and poor environmental stewardship. It has called on Exxon to set more aggressive targets of being net-zero greenhouse-gas emissions by 2050, and said its nominees will help guide that transition.
Oil firms knew decades ago fossil fuels posed grave health risks, files reveal -The oil industry knew at least 50 years ago that air pollution from burning fossil fuels posed serious risks to human health, only to spend decades aggressively lobbying against clean air regulations, a trove of internal documents seen by the Guardian reveal.The documents, which include internal memos and reports, show the industry was long aware that it created large amounts of air pollution, that pollutants could lodge deep in the lungs and be “real villains in health effects”, and even that its own workers may be experiencing birth defects among their children. But these concerns did little to stop oil and gas companies, and their proxies, spreading doubt about the growing body of science linking the burning of fossil fuels to an array of health problems that kill millions of people around the world each year. Echoing the fossil-fuel industry’s history of undermining of climate science, oil and gas interests released a torrent of material aimed at raising uncertainty over the harm caused by air pollution and used this to deter US lawmakers from placing further limits on pollutants.In internal memos and reports, Imperial Oil, an Exxon subsidiary,acknowledged in 1967 the petroleum industry was a “major contributor to many of the key forms of pollution” and took surveys of “mothers who worried about possible smog effects”. In an internal technical report in 1968, Shell went further, warning that air pollution “may, in extreme situations, be deleterious to health” and acknowledging the oil industry “reluctantly” must accept that cars “are by far the greatest sources of air pollution”. The report states that sulphur dioxide, given off by the burning of oil, can cause “difficulty in breathing” while nitrogen dioxide, also given off by vehicles and power plants, can cause lung damage and that “there will be a clamor to reduce [nitrogen dioxide] emissions, probably based on suspected long-term chronic effects”. Small particles given off by fossil fuels, meanwhile, are the “real villains in health effects”, the Shell report admits, as they can bring toxins, including carcinogens, “deep into the lungs which would otherwise be removed in the throat.” These microscopic specks of soot and liquid, known as particulate matter, are expelled when fuels are burned and inhaled by people. In 1971, Esso, a forerunner to Exxon, sampled particles in New York City and found, for the first time, the air was rife with tiny fragments of aluminium, magnesium and other metals. Esso scientists noted that gases from industrial smokestacks were “hot, dirty and contain high concentrations of pollutants” and suggested further testing was needed for symptoms including “eye irritation, excess coughing, or bronchial effects”.
New Chapter 11 Filing - Nine Point Energy Holdings, Inc. | Bankruptcy & Restructuring Law -- On March 15, 2021, Nine Point Energy Holdings, Inc., a Denver-based private exploration & production company focused on the Williston Basin, and its affiliate Foxtrot Resources LLC, filed for chapter 11 protection in the Bankruptcy Court for the District of Delaware (Case No. 21-10570). Nine Point Energy Holdings, Inc. reports $100 million to $500 million in both assets and liabilities. A link to the Nine Point Energy Holdings, Inc. petition can be found here.
Haaland confirmed to lead Interior; Alaska senators vote yes - Both of Alaska’s U.S. Senators joined Democrats in voting to confirm Deb Haaland as Interior secretary Monday. The vote was 51-40. Haaland is the first Native American cabinet secretary. She has tremendous support among Alaska Natives and across Indian Country. Alaska Congressman Don Young, who worked with Haaland on the House Resources Committee, also endorsed her confirmation. But members of Congress from other oil states opposed Haaland, pointing out that she has rallied against pipeline construction and resource extraction on federal land. Sen. Lisa Murkowski said Haaland will hear from her on Alaska issues frequently. “I wish that I could say, ‘Yes, I’ve got every degree of confidence.’ I don’t,” she said in an interview after the vote. “So my obligation is to make sure that I am on top of this all the time.” Murkowski said she impressed on Haaland when they met that she will have to embrace all parts of the job of leading the Interior Department. “Which is not only the American Indian, Alaskan Native, Native Hawaiian portfolio. It is management of all of our nation’s public lands, our resources,” Murkowski said. Murkowski and Sen. Dan Sullivan were among only four Republican senators to support Haaland. The others are Susan Collins of Maine and Lindsey Graham of South Carolina. Alaska tribal organizations applauded her confirmation. So did Alaska Native corporations. Many of the corporations are involved in the business of resource extraction. Their congratulations were tempered.
Fight over drilling in the Arctic National Wildlife Refuge was transformed by Indigenous activists - On Jan. 6, as insurrectionists stormed the Capitol, the Trump administration held the first lease sale of the Arctic National Wildlife Refuge. The auction marked a historic moment in the decades-long battle over the refuge’s coastal plain, 1.5 million acres of tundra along the Beaufort Sea in northeastern Alaska. Yet the highly anticipated sale was a flop; major oil companies shied away, and most tracts went to an Alaskan state-funded corporation that doesn’t even own drilling equipment. Although large swaths have been auctioned off, whether this land will be drilled or protected remains uncertain. The national media often describes the Arctic Refuge controversy as a story of wilderness versus oil, a conflict pitting environmentalists against the fossil fuel industry. But that overlooks the political advocacy of the Gwich’in Nation, whose communities reside across northeastern Alaska and northwestern Canada. Since 1988, the Gwich’in have transformed the debate, turning it into a struggle for human rights and environmental justice. Their voices have been essential to keeping oil drills out of the Arctic Refuge. In fighting against the colonial violence of fossil fuel development, the Gwich’in have engaged in a struggle infused with existential meaning: a push to hold onto their identities and cultural traditions, to honor their ancestors, to ensure a future for their children and subsequent generations, and to maintain sacred bonds with their surroundings, which have existed for millennia. In June 1988, members of the Gwich’in Nation traveled from far-flung communities to Arctic Village, 100 miles above the Arctic Circle, to respond to the urgent threat of Reagan’s drilling plan. They knew that the refuge debate had been dominated by environmentalists and multinational energy corporations. Their voices had been marginalized, and it was time to make their concerns known, to explain how the drilling controversy was not just a question of wilderness versus oil.It was the future of their communities, dotted across places now known as Alaska, Yukon and the Northwest Territories; it was the thousands of years they had stewarded these lands; it was the massive herd of caribou they relied upon and cared for; it was their culture, identity and food security. It was a system of settler colonialism, fixated on short-term profits and unsustainable resource extraction, set against Indigenous ways of knowing the land, of relations with the caribou and other creatures that spanned the full sweep of Gwich’in time. They believed it was time to take action.At the end of the 1988 gathering, Gwich’in leaders allied with environmentalists, but on their own terms. “We’re not fighting because that place looks beautiful,” Sarah James, one of the leaders, explained. “We’re fighting because our way of life depends on the land. In order for it to take care of us, we have to take care of the land in return.” They formed a new political advocacy group — the Gwich’in Steering Committee — to ensure that the voices of their people were no longer ignored. The Gwich’in Steering Committee changed public perceptions of the Arctic Refuge. Even as environmentalists continued to celebrate this land as America’s “last great wilderness,” Gwich’in representatives helped non-Indigenous people understand the refuge differently — not as a faraway wilderness but as part of their ecological homeland. By reframing the refuge, the Gwich’in challenged a long colonial history of Indigenous exclusion and erasure from public lands. They turned a traditional wilderness battle into something else entirely: a fight for environmental justice.
President Biden weighing new sanctions to block Russian gas pipeline: BBG (Reuters) - President Joe Biden's administration is weighing additional sanctions to block construction of the nearly completed Nord Stream 2 pipeline from Russia to Germany, potentially including the project's parent company Nord Stream 2 AG, Bloomberg News here reported on Thursday citing three people familiar with the matter. The sanctions would come in the form of an interim report that may also single out an insurance company that has been working with the vessels laying the pipeline in the Baltic Sea as well as other companies providing support vessels and materials to the project, according to the report. Nord Stream 2 will bypass Western ally Ukraine, potentially depriving it of valuable transit fees. It will also increase European energy dependency on Russia and compete with shipments of U.S. liquefied natural gas. The U.S. State Department is tracking efforts to complete the Nord Stream 2 pipeline and evaluating information regarding entities that appear to be involved, U.S. Secretary of State Antony Blinken said on Thursday. “Any entity involved in the Nord Stream 2 pipeline risks U.S. sanctions and should immediately abandon work on the pipeline,” Blinken said in a statement. He added that the Biden administration is committed to complying with 2019 and 2020 legislation with regards to the pipeline and sanctions.
Mediterranean oil spill is ‘eco-terrorism’ by Iran, Israel says - The Jerusalem Post - Iran intentionally polluted the Mediterranean Sea and Israel’s shores in an act of ecological terrorism, causing the greatest environmental disaster in Israel’s history, Environmental Protection Minister Gila Gamliel said on Wednesday. “This pollution has people who are responsible for it and have to pay the price. Our nature is damaged, our animals are harmed, thanks to merciless environmental criminals,” Gamliel said. Gamliel explained that, following a two-week investigation, the Environmental Protection Ministry found that the ship that leaked the crude oil, called the Emerald, was owned by a Libyan company and sailed from Iran to Syria. It departed Iran, turning off its automatic identification system (AIS) – which transmits its location to other ships in the area. It turned the AIS on as it went through the Suez Canal, and then off again as it approached Israel’s shores. The ship remained within tens of kilometers of Israel’s shores, within Israel’s economic waters, for nearly a full day, spilling large amounts of oil on February 1-2, with its AIS off. Then it continued on to Syria, where it turned on its transmitter, and it returned to Iran, turning off its AIS as it passed Israel. It is currently in Iran. The tar reached Israeli shores on February 17. “Now we see Iran is not just terrorizing [Israel] with [attempts at attaining] nuclear weapons and entrenching itself in our region, but also by harming the environment,” Gamliel said. “They’re not just hurting Israel. Nature and animals don’t just belong to one nation. This is a battle that crosses borders.”Gamliel said that Israel will demand compensation from the International Oil Pollution Compensation Fund and the ship’s insurers. “We will settle the score with the polluters in the name of all Israelis for the harm to our health, nature, animals and view,” she vowed. “We cannot abandon our sea. Our sea is our natural treasure that we must protect.” The US National Oceanic and Atmospheric Administration and the European Maritime Safety Agency, as well as Israeli maritime research company Windward, helped the Environmental Protection Ministry investigate the oil spill. None of the agencies knew about the oil spill before the tar reached Israeli shores, over two weeks after it occurred. Samples of the tar, which the Environmental Protection Ministry examined, showed that it came from crude oil, which sharply reduced the number of suspected ships from 35 to four. Two were found to have been too far away, and another was examined by local authorities in Spain and by Israeli investigators in Greece. The fourth is the Emerald, currently in Iran.
Israels beaches see more tar as oil spill consequences continue -As Israel's shores continue to sustain the damages incurred by the oil spill, more tar has surfaced along the coasts, including the Betzet, Beit Yanai, Tel Dor and Dor Habonim beaches, Walla reported, citing the Nature and Parks Authority on Friday.The oil spill that struck the Mediterranean Sea in February has been dubbed an ecological disaster, leading to the death of many animals, and the washing up of massive quantities of tar — over 70 tons — on Israel's shores. The Environmental Protection Ministry has estimated that the amount that washed up is a small amount of what is still in the ocean: 1,200 tons.Tar lumps were sighted as early as February 15, prompting calls for emergency protocols and cleaning crews.While the tar can be cleaned up on smooth sand beaches, it is much harder to clean from rocky beaches, so the tar remains.Hundreds of volunteers have arrived at the 160 km stretches of the Israeli coastline that has sustained the tar pollution to clean it up, including IDF soldiers with disabilities. The beach pollution "is one of the most dire we've ever seen in Israel," according to Nature and Parks Authority Director-General Shaul Goldstein. The texture of the tar seems to be from an oil or gas spill passing along Israel's shores.This interactive map shows how severe the tar spills are in different parts of the coast, in a traffic light system, red signifying beaches that have not been cleaned up at all, and green marking light pollution levels. Environmental Protection Minister Gila Gamliel has pointed the finger at Iran, calling the intentional spill "eco-terrorism." Her claims were later backed up by Lloy'd List, a leading international shipping journal.
Israel says tanker suspected of oil spill off coast has Syrian owners -Information collected by an Israeli-founded private intelligence firm has revealed the identity of the owners of the Emerald, the tanker suspected of spilling massive amounts of oil off the Israeli coast in February, the Environmental Protection Ministry said Sunday. The investigation by the firm Black Cube found that Emerald – which is registered in the Marshall Islands – is owned by a company called Emerald Marine LTD. Black Cube claims to have found the ownership by using international shipping listings. It also said it recorded a senior captain working for Emerald Marine LTD and a brother of an Emerald Marine LTD owner. The ministry stressed in a statement that Black Cube conducted the investigation on its own. The information Black Cube gave the ministry indicated further that a company names Oryx Shipping has ownership over the Emerald. Oryx Shipping is registered in Piraeus, Greece, and owned by the Syrian Malah family. Its ships are insured by The Islamic P&I Club, known as one of the only firms in the world willing to insure Iranian vessels. The information provided by Black Cube indicates that the Malah group holds a number of shell companies in the Marshall Islands, Panama, and even one British company. All of these are registered to the same address in Piraeus. When representatives of Black Cube visited the address, they found an apartment there, with no signs indicating a business presence More than 1,000 tons of tar are estimated to have washed onto Israel’s Mediterranean coastline last month, causing extensive environmental damage and forcing the closure of beaches to the public. Israel’s Nature and Parks Authority called the incident one of the country’s worst environmental disasters, and the cleanup is expected to take months. Earlier this month, the Environmental Protection Ministry identified the Emerald as the ship it believed was responsible for the oil spill. Its investigation determined the ship was smuggling oil from Iran to Syria when the spill occurred in early February. Environmental Protection Minister Gila Gamliel has claimed that the oil spill was an intentional attack by Iran, but has provided no evidence for her claim.
Shell Completes $2.5B Deal - Shell’s holly owned subsidiary, QGC Common Facilities Company Pty Ltd, has revealed that it has completed the sale of a 26.25 percent interest in the Queensland Curtis LNG (QCLNG) Common Facilities to Global Infrastructure Partners Australia for $2.5 billion. The sale, which was first announced on December 21, 2020, is consistent with Shell’s strategy of selling non-core assets in order to further high-grade and simplify its portfolio, Shell noted. Shell said the sale will contribute to its expected divestment proceeds, without impact on people or the operations of the QCLNG venture. The transaction has no impact on the ownership structure of QGC or QCLNG. Shell remains the operator and majority interest holder in QGC, together with CNOOC and Tokyo Gas, whose interests remain unchanged following the completion of the deal. QCLNG Common Facilities include LNG storage tanks, jetties, and operations infrastructure that service QCLNG’s LNG trains. Global Infrastructure Partners Australia is an affiliate of Global Infrastructure Partners, which is an independent infrastructure fund manager that makes equity and debt investments in infrastructure assets and businesses. Earlier this month, Shell Egypt and one of its affiliates signed an agreement with a consortium, made up of subsidiaries of Cheiron Petroleum Corporation and Cairn Energy plc, for the sale of Shell’s upstream assets in Egypt’s Western Desert for a base consideration of $646 million, plus additional payments of up to $280 million. In February, Shell Canada Energy reached an agreement with Crescent Point Energy Corp. to sell its Duvernay shale light oil position in Alberta for a total consideration of $707 million. Back in January, the Shell Petroleum Development Company of Nigeria Limited completed the sale of its 30 percent interest in Oil Mining Lease (OML) 17 in the Eastern Niger Delta, and associated infrastructure, to TNOG Oil and Gas Limited for a consideration of $533 million.
EPA ordered to pay oil and gas company $110k --In a scathing Environment Court decision, the Environmental Protection Authority has been ordered to pay $110,000 to an oil and gas company it prevented from disconnecting a floating production station from the Tui Oil Field off the coast of Taranaki. The EPA issued abatement notices to stop BW Offshore removing the Umuroa from the field early last year, saying the company could not rely on a 2017 EPA ruling allowing them to do so. The regulator was concerned unplugging flowlines connecting the vessel to Tui risked spilling oil into the ocean. The Umuroa was contracted to Tui operator Tamarind Taranaki which collapsed in December 2019, leaving the government with an estimated $155 million bill to decommission the field. Initial legal wrangling failed to overturn the abatement notices and eventually, a two-day appeal was heard in the Environment Court which cancelled them in October. In the same month the Umuroa went into voluntary liquidation.. BW Offshore said it had cost $31 million to have the vessel at Tui in 2020 while it missed out on $46 million in potential earnings elsewhere. In November, the company made an application for court costs against the EPA of almost $300,000. It argued the basis for the EPA abatement notices was without merit or substance. "The EPA did not file any expert evidence to support its arguments, in circumstances where it would reasonably have been expected to do so if there had been a proper basis for the abatement notices," BW Offshore said. The EPA submitted that no order for costs against it should be made against it. "As a regulatory consent authority the EPA has performed it duties properly and acted reasonably, and the appeal arose out of a genuine dispute about legal rights - the effect of the 2017 Ruling - which was in the interests of the parties to resolve," it argued. In his decision, Judge Smith noted that it was unusual to award costs against a regulatory body, but that the EPA's actions displayed a level of blame that met the threshold for this.
Argentina's Illegal Oil and Gas Waste Dumps Show 'Dark Side' of Vaca Muerta Drilling, Says Criminal Complaint - On December 21, 2020, environmental crimes investigators in the western Argentine province of Neuquén carried out araid against a company that handles fracking waste in the heart of the Vaca Muerta shale basin, a booming oil and gas field in northern Patagonia. They seized a cache of documents, and opened an investigation into the potential illegal handling of massive volumes of fracking waste.The raid on the Argentine waste company Comarsa by the office of Environmental Crimes and Special Laws, a unit under Neuquén’s chief prosecutor, was prompted by a lengthy criminal complaint filed to the office just a few days earlier by a group of environmental lawyers. Within the complaint, the lawyers document what they describe as a decade-long illegal accumulation of toxic fracking waste at multiple sites in the city of Neuquén, the largest city in Patagonia with a population over 300,000. The sites are located within the city and also on the outskirts of Añelo, a small desert town of 8,000 about an hour and a half drive northwest of Neuquén and the unofficial drilling capital of the Vaca Muerta.But the criminal complaint didn’t just target Comarsa, one of the leading handlers of fracking waste in the Vaca Muerta. It also pointed fingers at the municipalities of Neuquén and Añelo, the Secretariat of Territorial Development and Environment (environmental regulators for the province of Neuquén), and the region’s top oil producers, including ExxonMobil and Chevron. “The Vaca Muerta oil dumps are the result of a series of maneuvers that are part of a collusion between companies and state authorities,” Rafael Colombo, a lawyer for the Argentine Association of Environmental Lawyers, or AAAA, said in a press release when he filed the criminal complaint in December. According to AAAA, Comarsa earns huge sums “for the treatment of waste that they never treat,” Colombo said, “then they get the State to give them public lands to end up disposing of hazardous waste illegally.” The illegal fracking waste sites are the “dark side” of Vaca Muerta, he said.
Exclusive: India readies Saudi oil import cut as stand-off escalates - sources (Reuters) - Indian state refiners are planning to cut oil imports from Saudi Arabia by about a quarter in May, in an escalating stand-off with Riyadh following OPEC’s decision to ignore calls from New Delhi to help the global economy with higher supply. Two sources familiar with the discussions said the move was part of the government’s drive to cut dependence on crude from the Middle East. Indian Oil Corp, Bharat Petroleum Corp., Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals Ltd are preparing to lift about 10.8 million barrels in May, the sources said on condition of anonymity. State refiners, which control about 60% of India’s 5 million barrels per day (bpd) refining capacity, together import an average 14.7-14.8 million barrels of Saudi oil in a month, the sources said. India, the world’s third-biggest oil importer and consumer, imports more than 80% of its oil needs and relies heavily on the Middle East. Hit hard by rising oil prices, India’s oil minister Dharmendra Pradhan has repeatedly called on the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to ease supply curbs. He has blamed Saudi’s voluntary cuts for contributing to a spike in global oil prices. OPEC+ decided this month to extend most cuts into April. Responding to Pradhan’s request, Saudi energy minister Prince Abdulaziz bin Salman suggested India dip into strategic reserves filled with cheaper oil bought last year. India’s oil ministry responded by asking refiners to speed up their diversification of crude sources and reduce reliance on the Middle East. Indian refiners could not cut April oil imports from Saudi Arabia as nominations were placed before the OPEC+ decision in early March, the sources said, adding that plans for May were preliminary and final May nominations would be known in early April. Saudi Arabia has cut April oil supplies for some Asian refiners but has maintained average monthly volumes for Indian refiners. The Kingdom has, however, rejected demand from Indian companies for extra supplies.
India plans to cut Saudi oil import as Riyadh ignores calls from New Delhi - Indian state refiners are planning to cut oil imports from Saudi Arabia by about a quarter in May, in an escalating stand-off with Riyadh following OPEC's decision to ignore calls from New Delhi to help the global economy with higher supply. Two sources familiar with the discussions said the move was part of the government's drive to cut dependence on crude from the Middle East. Indian Oil Corp, Bharat Petroleum Corp., Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals Ltd are preparing to lift about 10.8 million barrels in May, the sources said on condition of anonymity. State refiners, which control about 60% of India's 5 million barrels per day (bpd) refining capacity, together import an average 14.7-14.8 million barrels of Saudi oil in a month, the sources said. India, the world's third-biggest oil importer and consumer, imports more than 80% of its oil needs and relies heavily on the Middle East. Hit hard by rising oil prices, India's oil minister Dharmendra Pradhan has repeatedly called on the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to ease supply curbs. He has blamed Saudi's voluntary cuts for contributing to a spike in global oil prices. OPEC+ decided this month to extend most cuts into April. Responding to Pradhan's request, Saudi energy minister Prince Abdulaziz bin Salman suggested India dip into strategic reserves filled with cheaper oil bought last year.
US crude's maiden sprint past Saudi makes it India's flavor of the month — India's dramatic surge in US crude inflows has helped the exporter to displace Saudi Arabia for the first time, as refiners queued up for lighter feedstock anticipating robust demand for gasoline and other products, while staying away from Middle Eastern supplies following OPEC-led output cuts. While the surprise twist in buying pattern -- that saw US crude imports jumping to the second spot in February, from fifth in 2020 -- stems partly from evolving demand trend, analysts told S&P Global Platts, it also signals New Delhi's objection to the surprise production cuts, which has prompted the country to aggressively diversify its import basket. "India's displeasure with rising oil prices in general and Saudi production cuts in particular has created a market opportunity for US crude at a time when US demand is still reeling from the pandemic -- and indeed may be permanently crippled by the wave of refinery closures triggered by COVID-19," said Antoine Halff, adjunct senior research scholar at Columbia University's Center on Global Energy Policy. "What remains to be seen is whether this marriage of convenience can last and whether Saudi Arabia will willingly cede market place to the US for the longer term," said Halff, who is also the founding partner and chief analyst at Kayrros. US crude imports by India stood at 12.69 million mt in 2020, up nearly 29% from a year earlier, helping the country move up to fifth position from sixth in 2019, data from GAC Shipping (India) Private Ltd. showed. But in February, inflows from the US was 2.11 million mt, about 32% higher than 1.61 million mt inflows from Saudi Arabia. This pushed US to the second spot. Iraq retained its position as the top supplier, with shipments of 2.89 million mt in the same month.
EIA expects crude oil prices to rise through April because of lower OPEC production -In its March Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) expects Brent crude oil prices will average $64 per barrel (b) in the second quarter of 2021 and then fall to less than $60/b through the end of 2022. Higher crude oil prices in March and April are primarily a result of lower crude oil production from members of the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+), as announced at their March 4 meeting.In February 2021, OPEC+ cuts, combined with supply disruptions in the United States, contributed to monthly global petroleum inventory withdrawals that EIA estimates totaled 3.7 million b/d, the largest monthly withdrawal since December 2002. The Brent crude oil futures price averaged $63/b in early March leading up to the OPEC+ meeting, and the OPEC+ announcement put further upward pressure on crude oil prices.The front-month Brent futures price briefly surpassed $70/b in intraday trading in the days following the announcement, not only because of the announcement but also because of an attack on the Ras Tanura oil facilities in Saudi Arabia on March 7. As a result of the extension of OPEC+ production cuts, EIA expects draws on global petroleum and other liquids inventories of 1.8 million b/d and 0.6 million b/d in the first and second quarters of 2021, respectively. The sustained OPEC+ production curtailment through April suggests that supply will remain constrained in the near term, even as demand continues to increase. As a result, EIA expects that further inventory withdrawals to meet rising crude oil demand will keep crude oil prices elevated through at least the end of April. EIA’s forecast of downward oil price pressure and increased crude oil availability has several key uncertainties.The speed of actual demand recovery, based on COVID-19 vaccination rates and the degree to which travel and employment conditions return to pre-COVID norms, remains an important uncertainty on the demand side. At the same time, the degree to which OPEC+ production cuts will continue after April remains a source of uncertainty on the supply side, especially because increasing crude oil prices will encourage OPEC+ participants to agree to production increases in later meetings or to relax compliance with the existing agreement. Finally, the responsiveness of U.S. tight oil production to higher oil prices is also uncertain.
Oil Prices Decline As Dollar Keeps Strengthening -- Oil declined for a second day as the market’s underlying structure weakened and the dollar strengthened. Futures edged 0.3% lower in New York on Monday, paring earlier losses as U.S. equities reversed a decline. While the Bloomberg Dollar Spot Index faded from a session high, a small gain for the greenback still weighed on commodities priced in the currency. Crude wasn’t able to shake off declines entirely as key calendar spreads weakened. West Texas Intermediate crude’s nearest timespread settled at its deepest contango structure since January, signaling oversupply. Flagging demand for U.S. exports is hitting the market at the same time as domestic oil output has outpaced the recovery in refineries after last month’s deep freeze. “There’s a little bit of consolidation after the pretty sizable move” in prices, said Stewart Glickman, energy equity analyst at CFRA Research. “Inventory levels are not terrible, but demand isn’t all the way back.” Prices are up more than 30% this year, but the rally is reviving some worries that further gains will trigger a comeback in U.S. shale production. Traders are also watching for signs that more Iranian barrels may hit the market amid U.S. efforts to return to the nuclear deal. “The possibility of Iranian oil coming back onto the market at some point,” is weighing on the supply outlook, said Tariq Zahir, managing member of the global macro program at Tyche Capital Advisors LLC. “Getting them back into the nuclear deal, allowing some sanctions to be lifted and oil to be sold, that’s a lot of oil in the market.” Meanwhile, risks to the demand recovery remain, with Europe’s biggest countries suspending use of AstraZeneca Plc’s Covid-19 shot in another delay for the European Union’s vaccination campaign. The rebound for energy consumption will hinge on how well economies are able to open back up after Covid lockdowns. West Texas Intermediate for April delivery fell 22 cents to $65.39 a barrel. Brent for May settlement declined 34 cents to $68.88 a barrel. Still, a growing number of major investment banks have boosted their outlook for crude prices with OPEC+ currently keeping output restrained and bright spots emerging for demand. Bank of America Global Research raised its full-year forecasts for global and U.S. benchmark crude futures, while Citigroup Inc. predicts Brent may even hit $80 a barrel in the next few months. In China, industrial output surged in the first two months of the year, underscoring the strength of its V-shaped rebound and reinforcing expectations for increased energy demand. China processed more than 14 million barrels a day of crude in January and February, and refiners have kept consumption above that level every month since June. There are also bullish demand signs elsewhere, with U.S. air passenger numbers hitting a 12-month high on Friday, while road use is creeping up in parts of Europe..
Oil slips, retreats from gains notched on strong Chinese data (Reuters) - Oil prices edged lower on Monday, pulling back from early gains fostered on strong Chinese economic news and ongoing supply restraint from major oil producers. Crude benchmarks have steadily climbed throughout 2021 as major oil producers restrained supply and coronavirus vaccine distribution quickened, feeding hopes of stronger economies and fuel demand. Brent crude futures for May settled at $68.88 a barrel, losing 34 cents. U.S. West Texas Intermediate crude for April settled at $65.39 a barrel, shedding 22 cents. China's industrial output growth quickened in January-February, beating expectations, while its daily refinery throughput data rose 15% from a year earlier, data showed. Top oil exporter Saudi Arabia cut supply of April-loading crude to at least four north Asian buyers by up to 15%, while meeting the normal monthly requirements of Indian refiners, refinery sources told Reuters on Friday. The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, decided this month to extend most supply cuts into April. A massive U.S. stimulus package passed this month, raising prospects for global economic growth. Washington is considering tax increases on corporations, high earners and fuel, to pay for a sweeping infrastructure plan, which could crimp oil demand, analysts say. "They will be putting people to work and they will be putting businesses back in the field to develop infrastructure, but between now and then, someone's got to pay for it," said Bob Yawger, director of energy futures at Mizuho. "The majority of it looks like it's going to be a tax event, so that's negative for demand." Prices were pressured by expectations that last month's winter storm in Texas could keep boosting crude inventories. "There's talk that because of the Texas power outages, we may see another increase in inventories this week," said Phil Flynn, senior analyst at Price Futures Group in Chicago, referencing U.S. oil inventory data released on Tuesday and Wednesday. Still, analysts said a pact by top producers to rein in output and a rebound to demand due to vaccine roll-outs will keep pushing prices upward despite any temporary setbacks
Oil Retreats as Market Awaits Demand Recovery - -- Oil retreated for a third day to trade below $65 a barrel, as the market awaits signs of further recovery in consumption.West Texas Intermediate fell 1.5%, with futures consolidating after a run that’s seen them rise about 30% so far this year. On Monday, WTI’s nearest timespread slipped into a bearish contango structure, signaling short-term oversupply, however the rest of the curve remains in a bullish backwardation.Though there are signs of recovering demand in some parts of the world, other regions -- notably Europe -- are lagging. Road-fuel consumption is growing in India and the U.S., while Italy has headed back into lockdown.Oil’s been on a strong run as supply cuts from OPEC and its allies tighten the market and expectations grow for a rebound in travel over the northern hemisphere’s summer. But there are mixed signs emerging as Iranian oil flows heavily to China and the pace of coronavirus vaccination rollouts remain uneven across the globe.“The market is now immediately looking for physical clues as an explanation to this front-end weakness,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “In the background though, Covid-19 vaccines keep being rolled out and global oil demand in general and the U.S. specifically keeps rebounding.” WTI lost 1.5% to $64.44 a barrel at 7:31 a.m. in New York.Brent also fell 1.4% to trade at $67.92. In the U.S., coronavirus cases rose last week at the slowest pace since the pandemic began. At the same time, retail gasoline sales increased to just 1% below year-ago levels, according to GasBuddy. That’s good news for an industry that relies on the busy summer driving season to buoy profits.
Oil drops as COVID-19 vaccine halt threatens demand (Reuters) - Oil prices fell for a third day on Tuesday, as Germany, France and other European states suspended the use of a major coronavirus vaccine, threatening the recovery of fuel demand. Brent crude fell 49 cents to settle at $68.39 a barrel, while U.S. crude dropped 59 cents to end at $64.80 a barrel. Earlier this month, Brent reached its highest since early 2020, while U.S. crude hit a 2018 high. Germany, France and Italy said they would suspend use of the Oxford/AstraZeneca COVID-19 vaccine after reports about possible serious side effects, although the World Health Organization said there was no established link to the vaccine. Europe’s medicines watchdog said the benefits of the AstraZeneca vaccine outweigh its risks. Investors are worried the slow pace of vaccinations in the European Union could hurt economic recovery and fuel demand. “For oil demand to fully recover, a successful and rapid inoculation of the global population needs to take place,” said Bjornar Tonhaugen, Rystad Energy’s head of oil markets. “Before the recent setback, there was positivity that the campaigns under way were on the right track.” The pandemic eviscerated demand for oil. Prices have recovered to levels seen before the global health crisis, but gains have been capped by slow progress of vaccine rollouts in many countries. In the United States, crude inventories are rising as refineries have yet to recover fully from a mid-February deep freeze in Texas that halted their operations. “Short-term direction will be set by the weekly U.S. inventory reports,” PVM analysts said in a note, adding that the dollar’s strength against other currencies also weighed on oil prices.
WTI Jumps Back Above $65 After Crude Stocks Unexpectedly Dropped - Oil prices ended lower today, with WTI back below $65, as traders weighed demand amid global recovery expectations against Europe's vaccination debacle."The crude demand outlook still remains the key for higher prices and if short-term risks continue to grow due to virus variants, oil prices could be in for modest 10% pullback," Moya said. He also said in a market update Tuesday that the suspension of the use of AstraZeneca's vaccine by some European nations "should diminish the crude demand outlook in the short term."Road-fuel use is picking up in India and the U.S., but in France, consumption remained 10.8% lower in February year-over-year, according to the country’s petroleum-industry federation UFIP.Additionally, on the supply side, OPEC+ alliance’s aggressive supply management that has helped shepherd prices up from unprecedented lows last year is facing an emerging threat of Iranian oil.Oil prices have fallen as "U.S. refiners struggle to bounce back from the Texas power crisis" in mid-February when the state was hit by a frigid temperatures, said Phil Flynn, senior market analyst at The Price Futures Group."Expectations of another crude build is holding us back."Crude stocks were expected to have risen for the 4th straight week (and sit at their highest since December), albeit very modestly. API:
- Crude -1.00mm (+400k exp)
- Cushing
- Gasoline -930k (-1.4mm exp)
- Distillates +904k (-900k exp)
After two weeks of somewhat chaotic and storm-impacted inventory data, API reported a surprise draw in crude stocks...WTI hovered between $65 and $64.50 ahead of the print and jumpe dback above $65
WTI Extends Losses As Crude Stocks Surge To 4-Month Highs - Oil prices rollercoastered overnight, rallying on the surprise API-reported crude draw and then slumping during the EU session amid demand concerns (driven by the terrible vaccine rollout). "The hope now is that Europe can get its sluggish vaccine rollout back on track." Oil weakness was exacerbated by IEA's latest report that said a supercycle was unlikely, demand won't return to pre-pandemic levels until 2023 and could peak earlier than previously thought. After the prior two weeks of record-breaking swings in inventories, this last week is expected to show only modest changes, with crude stocks sitting at their highest since early December. DOE
- Crude +2.396mm (+400k exp)
- Cushing -624k
- Gasoline +472k (-1.4mm exp)
- Distillates +255k (-900k exp)
Despite refinery utilization recovering from the weather chaos in Texas, crude stocks increased last week (significantly more than API and was expected). Graphics Source: Bloomberg US Crude production has yet to accelerate along with higher prices and more rigs... WTI hovered around $64.50 ahead of the official inventory data and reversed its rebound on the print...
Oil Falls After EIA Reports Inventory Build on All Fronts - U.S. oil prices fell yesterday after U.S. government data showed a weekly build in crude, gasoline and distillate supplies. A rise in stocks across the board together with little chance of an oil supercycle dragged WTI crude futures, which edged down 20 cents or 0.3%, to settle at $64.60 a barrel on Wednesday. The federal government’s EIA report revealed that crude inventories rose by 2.4 million barrels compared with expectations of a 400,000-barrels increase. The continued revival in domestic production from February’s winter storm-led shut-ins and the underwhelming recovery in refinery demand primarily accounted for the higher-than-expected stockpile build with the world’s biggest oil consumer. This puts total domestic stocks at 500.8 million barrels — 10.4% more than the year-ago figure and 6% higher than the five-year average. On a somewhat positive note, the latest report showed that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) fell 624,000 barrels to 48.2 million barrels. Meanwhile, the crude supply cover was up from 40.5 days in the previous week to 41.8 days. In the year-ago period, the supply cover was 28.7 days. Gasoline supplies increased for the first time in three weeks. The 472,000-barrels build is attributable to stuttering demand. Analysts had forecast gasoline inventories to fall by 1.4 million barrels. At 232.1 million barrels, the current stock of the most widely used petroleum product is 3.6% less than the year-earlier level and 4% below the five-year average range. Distillate fuel supplies (including diesel and heating oil) rose last week after falling for seven weeks in a row. The 255,000-barrels increase reflected ramped-down usage. Meanwhile, the market looked for a supply decline of 900,000 barrels. Current inventories — at 137.7 million barrels — are 10.1% higher than the year-ago level but 2% less than the five-year average. Refinery utilization was up 7.1% from the prior week to 76.1%. Oil prices settled marginally lower on Wednesday as crude and product inventories rose, pointing to the still-fragile fundamentals in the energy market. Selling pressure was also fueled by a report from the Paris-based International Energy Agency ("IEA"), which dashed hopes of an oil supercycle (or a sustained period of rising prices), suggesting ample supplies.
Oil Sinks To Lowest This Month On U.S. - Russia Tension, Rising Inventory -- Crude oil futures plunged more than 5% in their biggest intraday loss since December, 2020, with some analysts citing concerns over rising tensions between the U.S. and Russia.April WTI crude fell 5.8% to $60.85/bbl and May Brent fell 5.5% to $64.23/bbl, both hitting at least two-week lows. The fifth day of declines for both contracts also marks the longest losing streak for WTI since February 2020 and for Brent since September 2020.
"U.S.-Russia tensions are increasing, with the U.S. threatening sanctions on Russia," ... one way Russia could retaliate is to target shale producers by flooding the market with oil.
President Biden earlier this week essentially called Russian President Putin "a killer," prompting Russia to recall its ambassador to the U.S. for consultations.
Analysts say Europe's sluggish vaccine rollout also remains a weight on crude, raising questions about the speed of the recovery in demand.
"Even if the AstraZeneca vaccine recovers public confidence, this will likely not be the last inoculation issue to arise as countries race to vaccinate as many people as possible all while new mutations are constantly being discovered," says Rystad Energy analyst Louise Dickson.Also, U.S. government data continues to show rising crude inventories after last month's Texas freeze forced shutdowns at refineries, and traders say stockpiles could grow further since WTI recently switched from backwardation to contango, where front-month oil is cheaper than the second-month. "Contango is bearish because it encourages [firms to] store crude oil and sell it further down the curve at a profit," Mizuho's Bob Yawger says. And the latest report from the International Energy Agency said pre-pandemic global oil demand is unlikely to return for at least another two years.
Oil Sees Biggest Single-Day Loss Since April 2020 --Oil prices began crashing on Thursday afternoon, falling nearly 9%. WTI slid 8.68% to $58.99 per barrel by 4:04pm ET, while Brent had slipped 8.01% to $62.55 per barrel. It is the biggest drop in absolute terms since April 2020, when oil slipped into negative territory.Analysts have been volleying predictions during the recent price rally, with bulls signaling there is more room to run, making proclamations of a coming supercycle. Others, more cautious in their outlooks, have warned for a couple of weeks that the optimism present in the oil markets were unjustified.The recent rally was largely on the back of OPEC+ production cuts—or rather, the fact that they agreed to hold production steady in April, instead of ramping up production as the market had anticipated. The passing of the 3rd round of stimulus in the United States had also bolstered oil market sentimentBut a rising dollar, increased crude inventories in the U.S., growing fears of a resurgence in coronavirus cases and vaccine safety concerns in Europe have proven worthy adversaries.Those concerns are linked directly to oil demand resurgence. And markets are viewing this demand picture as less favorable today, as shown by crude futures which show the market backwardation is waning.WTI’s front-month contract is once again trading at a discount to the following month. Crude oil WTI April contract is now trading at $59.46 per barrel, while the May contract is trading at $59.57. WTI’s April contract is now down $5.14 on the day.This is the fifth day in a row for oil price declines and the biggest drop in absolute terms since Apr 2020
Oil drops 7% on Europe vaccine snag, U.S.-Russia tensions - Oil futures dropped 7% on Thursday, falling for a fifth straight session to finish at their lowest in more than two weeks, with some analysts noting concern over rising tensions between the U.S. and Russia, as well as a slowdown in the European vaccine rollout.“U.S.-Russia tensions are increasing, with the U.S. threatening sanctions on Russia,” Phillip Streible, chief market strategist at Blue Line Futures, told MarketWatch. “One way Russia could retaliate is to target shale producers by flooding the market with oil.”U.S. President Joe Biden, when asked in an interview earlier week about whether Russian President Vladimir Putin is a killer, said “I do.” Russia then announced on Wednesday it’s recalling its ambassador to Washington for consultations.On Thursday, West Texas Intermediate crude for April delivery fell $4.60, or 7.1%, to settle at $60 a barrel on the New York Mercantile Exchange, with prices suffering their largest one-day percentage loss since Sept. 8, according to Dow Jones Market Data.May Brent crude, the global benchmark, declined by $4.72, or 6.9%, at $63.28 a barrel on ICE Futures Europe. That marked its largest daily percentage loss since June of last year. Prices for both WTI and Brent, based on the front-month contracts, settled at their lowest since March 2.Oil has also been unable to shake off weakness tied to the rise in U.S. crude inventories. The Energy Information Administration reported Wednesday that U.S. crude inventories rose by 2.4 million barrels for the week ended March 12. The rise followed increases reported by the agency in each of the previous three weeks.“Crude stocks have been swelling for the past four weeks, largely as a postmortem effect of the February freeze in Texas that slashed the demand for oil input into refineries,” said Louise Dickson, oil markets analyst at Rystad Energy, in market commentary.“In terms of the inventory builds, these will take time to clear out, but the U.S. appears to be moving in the right direction with its vaccine rollouts and lifting restrictions across many states that should spur economic recovery and end-user oil consumption,” she said.A sluggish vaccine rollout in Europe also remains a weight on crude, analysts said, raising questions about the speed of the recovery in demand for crude.“Even if the AstraZeneca vaccine recovers public confidence, this will likely not be the last inoculation issue to arise as countries race to vaccinate as many people as possible all while new mutations are constantly being discovered,” said Dickson. Gasoline inventories, which had fallen sharply in previous weeks as a result of refinery shutdowns, also rose last week, according to the EIA.
Oil Prices Make Comeback -- Oil came back from a sell-off that investment banks from Goldman Sachs to Morgan Stanley said was excessive and offered an opportunity to buy, with physical crude markets still showing signs of strength in the long run. Futures in New York rose 2.4% on Friday, after a plunge of more than 7% in the previous session. While the market may have gotten too long for its own good, the recent price weakness is likely temporary as signs remain that demand is set to recover and supplies will tighten. “What happened yesterday is not indicative of overly soft physical markets,” said Michael Tran, an analyst at RBC Capital Markets. “The market was getting pretty stretched, so given the general headlines of China slowing to some degree, Covid returning in Europe and demand maybe not being as robust as people had thought, these are all just convenient opportunities for the market to rebase, retrench and reload heading into the summer.” Still, prices are headed for the worst week since October. A combination of factors conspired to bring a 30%-plus rally this year to a screeching halt: Treasury yields that pushed the dollar higher, signs of weaker consumption in Asia in the short-term and the unwinding of long positions by commodity trading advisors. Technical indicators had shown a market correction was overdue. But even after the abrupt setback, futures are still up more than 20% so far in 2021 on prospects for a recovery this year from the coronavirus pandemic and OPEC+’s output discipline thus far. The sell-off will prove to be “transient” and this week’s decline presents a buying opportunity, Goldman analyst Damien Courvalin said in a note. There will still be a swift rebalancing of the market, with vaccinations driving an increase in mobility, he said. Undersupply is likely to continue through this year should demand accelerate and OPEC+ continuing to show output restraint, Morgan Stanley said in a report. In that case, the market should remain in deficit, allowing inventories for countries in the Organization of Economic Cooperation and Development to normalize during the third quarter, analysts Martijn Rats and Amy Sergeant wrote. Meanwhile, Saudi Arabia said a drone attack at an Aramco refinery in Riyadh had no impact on oil supplies, according to the country’s state-run Saudi Press Agency, which said Yemen’s Iran-backed Houthi rebels were behind the attack. West Texas Intermediate for April delivery added $1.42 to settle at $61.42 a barrel in New York. More actively traded May contract is set for a 6.4% weekly decline. The S&P 500 Energy Index rose Friday after slumping 4.7% on Thursday, recouping some of the losses from its biggest decline in more than three months. For now, there are signs of weakness in physical market demand, particularly in Asia. At the same time, Europe’s vaccine rollout remains sluggish -- another headwind for the recovery in consumption. The oil market’s structure also weakened markedly. Key gauges of supply for West Texas Intermediate and Brent crude veered nearer to a bearish contango structure, signaling oversupply.
Oil prices rise 2% but post weekly decline on demand fears (Reuters) - Oil rose more than 2% in volatile trading on Friday, but finished the week about 7% lower as a new wave of coronavirus infections across Europe dampened hopes that fuel demand would recover soon. Brent crude settled up $1.25 a barrel, or 2%, at $64.53 a barrel. West Texas Intermediate (WTI) U.S. crude rose $1.42, or 2.4%, to $61.42. During the session, both traded within a wide range of more than $2 a barrel. The weekly loss for both benchmarks was just under 7%. On Thursday, oil slid 7% as large European economies reimposed lockdowns, while vaccination programs there were slowed by distribution issues and fears of side effects. Prices rose on Friday as many market players viewed the sell-off as overdone. “The sell-off is going to put into motion some things that could have slowed the rally,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “OPEC is going to be more concerned about COVID, so this increases the odds that they will extend production cuts yet again, and with the sharp drop in the price of oil, it might reduce the incentive of the U.S. shale producers to get ahead of their skis.” U.S. shale production has swelled global oil supplies as fuel demand cratered during the pandemic. U.S. drillers added nine oil rigs in this week, the biggest weekly increase since January, oil services firm Baker Hughes said.[RIG/U] Concerns about vaccine rollouts capped oil’s gains. Germany, France and other countries have announced resumption of inoculations with the AstraZeneca shot after regulators declared that vaccine safe. But the earlier halt has made it harder to overcome resistance to vaccines. Britain announced it would have to slow its COVID-19 vaccine rollout next month because of a supply delay. Goldman Sachs said oil market headwinds related to European Union demand and Iran supply would slow market rebalancing in the second quarter, though it expects the Organization of the Petroleum Exporting Countries and allies to act to offset that. Iran has moved record amounts of crude oil to top client China in recent months while India’s state refiners have added Iranian oil to their annual import plans on the assumption that U.S. sanctions on the OPEC supplier will soon ease. Goldman expects a significant increase in global oil demand in the coming months, lifting its Brent price forecast to $80 a barrel this summer. Hedge funds and other money managers raised their net long U.S. crude futures and options positions in the latest week, the U.S. Commodity Futures Trading Commission (CFTC) said
The devastating impact of the 10-year US-orchestrated war on Syria --March 15 marks a decade since the start of the campaign by Washington and its regional allies to topple the regime of Syrian President Bashar al-Assad. The Obama administration utilised anti-government protests in several Syrian cities that were suppressed with lethal force in March 2011, as in Libya before it, as the pretext for a large-scale operation in pursuit of its geo-strategic interests—against a regime with which it had long been at odds. The CIA and Washington’s regional allies—the Gulf petro-monarchs, Turkey and Israel—financed, sponsored, trained and aided a succession of Islamist militias as their proxies to carry out the task of unseating Assad. These Sunni sectarian forces, some of whom like al-Nusra Front were linked to al-Qaeda, were ludicrously hailed as “revolutionaries.” A plethora of pseudo-left groups and academics also hailed these “revolutionaries,” in many cases discredited former regime figures. No attempt was made to describe their political programme or to explain why feudal Gulf despots who outlaw all opposition to their rule at home would support a progressive revolution abroad. Despite this assistance, these opposition forces proved unable to topple Assad, testifying to the lack of popular support for their far-right, often jihadist politics. Today, the situation in Syria, formerly a middle-income country, is in UN Secretary-General Antonio Guterres’s words a “living nightmare,” where, “The scale of the atrocities shocks the conscience.” The appalling suffering produced by imperialist warmongering—other than that in the opposition-held Idlib province—has largely been ignored by the world’s media. The fighting has led to the deaths of more than 400,000 people. It has spawned the world’s largest refugee and displacement crisis, forcing around 5.6 million people to flee the country, with another 6.1 million displaced within Syria. Nearly 11.1 million people—around 60 percent of the population—need humanitarian assistance. About half of those affected by the refugee crisis are children. Half the children have never lived a day without war. Their life expectancy has fallen 13 years. More than half a million children under the age of five in Syria suffer from stunting due to chronic malnutrition. Nearly 2.45 million children in Syria and a further 750,000 Syrian children in neighbouring countries are out of school. According to a recent report by World Vision, the war has cost the Syrian economy a massive $1.2 trillion in lost GDP. Worse is yet to come with 60 percent of the population likely to face hunger this year as the cost of an average food basket rose by over 230 per cent in the last twelve months.
Russia Reveals Total Number Of Soldiers Killed In Syria, Blasts "Morally Bankrupt" US Policies -- The First Deputy Chairman of the Defense Committee of the State Duma, Andrei Krasov, announced that 112 Russian soldiers were killed during the entirety of the armed conflict in Syria, according to Sputnik Arabic.The deputy’s statements came during a meeting with the State Duma Committee for Health Affairs, during which he said:"According to recent military data provided by the Russian Ministry of Defense, about 112 soldiers have been killed in Syria since the beginning of the armed conflict."This figure is far lower than the over 260 Russian armed forces deaths put forth by non-state monitoring groups like the anti-Assad Syrian Observatory for Human Rights (SOHR).The Russian military officially entered the war in Syira on September 30, 2015 and have since established a number of bases across the country, including its main installation at the Hmemim Airport in Latakia.Among the most prominent field achievements made by the Syrian forces, with the support of Russia, was the lifting of the three-year-long siege on the city of Deir Ezzor, which was imposed on the administrative capital by the Islamic State (ISIS/Daesh).Furthermore, the Syrian Arab Army was able to retake a large amount of territory in the central part of the country that was occupied by the Islamic State since 2015; this included the ancient city of Palmyra (Tadmur) and the strategic Al-Sha’er Gas Fields. While the Syrian conflict has witnessed a significant decrease in violence since 2015, clashes are still ongoing in the central part of the country, where the Islamic State has reemerged.
U.S. Government Turns Somalia Into Failed State to Steal Its Oil for Shell and Exxon-Mobil - ‘United States foreign policy in Somalia has always sided with the wrong side.” That’s how Mohamed Haji Ingiriis, a young Somali historian studying for his doctorate at Oxford, summarized Washington’s legacy there in an interview with CovertAction Magazine. Instead of promoting what it claims to—peace, stability, “nation-building”—the U.S. government, Ingiriis elaborates, keeps Somalia “wartorn,” a “failed state.” The Somali people pay the cost—the ultimate cost, in thousands upon thousands of cases—as a result. But not everyone loses.Petroleum industry analysts call Somalia “promising,” “one of the last truly unexplored oil frontiers.” And major firms are keen to profit there. Shell and ExxonMobil, for example, paid Mogadishu $1.7 million in 2019 for 30-year rights to offshore blocks, and Somalia launched “its first offshore oil and gas exploration licensing round” last year to attract other companies. Developments like these suggest Somalia’s business climate is improving, after decades of conflict made it an unattractive, if not unviable, investment site. The International Monetary Fund and World Bank recently heralded the country’s financial reforms, for example, citing its Petroleum Act, oil production sharing agreements, and related measures as key developments.But if Somalia is open for business, it is a victory for state violence. Because to create a legal and political landscape in which oil firms can profit, the perpetually weak, unpopular Somali government had to fight to extend its reach beyond Mogadishu in order to secure control of new territories at the expense of Islamist militants like al-Shabaab. In this fight, the Somali government and its allies—Ethiopia and the U.S.—have brutalized the Somali public.Mogadishu officials, in their latest National Development Plan, explain that al-Shabaab “diminish[es] prospects for development activities.” The group has threatened oil and gas drilling projects in Somalia’s Puntland region, and, through repeated attacks, forced a change in routes for a crude oil pipeline running from Uganda to the East African coast. Disruptions like these alarm the U.S. government as well, because oil is one of Washington’s core concerns on the continent.
Biden administration to enforce Trump-era sanctions on Iran oil shipments - A key tenet of the prior Trump administration's crackdown on China and Iran was to punish those Chinese companies caught transferring sanctioned Iranian oil, which was often done through 'ghosting' or at other times offshore ship-to-ship transfers in order avoid detection. Since President Biden took office there's been wide reports that China's 'illicit' imports of Iranian oil have soared, resulting in critics and Iran hawks charging the White House with "turning a blind eye" in terms of sanctions enforcement based on existing laws on the books, also as Biden is seeking a path back to engagement with Iran on the US rejoining the JCPOA nuclear deal.This week a senior Biden admin official has admitted in comments to FT that such banned Iranian oil exports to China have been increasing "for some time now" as Beijing continues to be Tehran's lifeline for circumventing oil sanctions, which has been ongoing for years now. China has also played a major part in keeping Venezuela's oil exports afloat. But now, as FT reports Wednesday "The Biden administration has told Beijing it will enforce Trump-era sanctions against Iranian oil as shipments from the Islamic regime to China have soared, a senior US official said."Despite the White House still saying it's "prioritizing" re-entry into the nuclear deal, efforts which have been stalled thus far as Tehran is demanding the easing of sanctions as a first step, the senior official revealed to FT: "We’ve told the Chinese that we will continue to enforce our sanctions.""There will be no tacit green light," the official added, but enforcement might take the form of what's dubbed these "secondary sanctions" targeting Chinese companies caught transferring Iranian oil. However, it remains the possibility that these too could ease assuming Washington and Tehran re-enter talks. The senior official described to FT further that this could theoretically come as "either as part of a mutual set of steps or as part of a full return into compliance" with the JCPOA. "Ultimately, our goal is not to enforce the sanctions; it is to get to the point where we lift sanctions and Iran reverses its nuclear s teps."
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