record jump in oil refining; distillate exports at 11 year low; Saudi cut and Texas freeze leave oil supply short of demand

refinery throughput was 5th lowest in 32 years even after a record increase in refinery throughput; distillate exports at 11 year low, domestic distillate demand at a 16 month high; OPEC report shows February oil supplies fell short of demand after the Saudi's cut and the Texas freeze-off..

oil prices corrected slightly this week after running up more than 80% over the prior eighteen weeks....after jumping 7.5% to a 22 month high at $66.09 a barrel last week after OPEC and other producers committed to holding their oil output steady through the end of April, the contract price of US light sweet crude for April delivery opened higher on Monday, after Saudi Arabia said its oil facilities had been targeted by missiles and drones on Sunday, and a Houthi military spokesman claimed responsibility for the attacks, with the international benchmark trading as high at $71.38 per barrel, before turning lower after the Saudis said their largest oil export terminal at Ras Tanura was unscathed and tumbling to close down $1.04 at $65.05 a barrel, with a stronger dollar serving to further cool prices....oil prices continued sliding in a choppy session on Tuesday, as fears of a supply disruption in Saudi Arabia receded, countering a pause in the dollar’s rally and prospects for tighter supply due to OPEC+ output curbs. and ended down another $1.04 at $64.01 a barrel as analysts suggested that such a price correction was perhaps inevitable...oil prices continued falling in aftermarket trading Tuesday and opened lower on Wednesday after the API reported a huge oil inventory increase, but reversed to settle 43 cents higher at $64.44 per barrel after the Organisation for Economic Cooperation and Development (OECD) projected the global economy was set to rebound with 5.6% growth this year and expand by 4% more next year...oil prices rose again on Thursday as vaccine rollouts bolstered the economic outlook and U.S. fuel supplies fell sharply and finished $1.58 higher at $66.02 a barrel, as the US dollar fell for a third straight day to its lowest level in a week against a basket of other currencies...April oil traded in a narrow range on Friday, supported by production cuts by major oil producers and optimism about a demand recovery in the second half of the year and settled 41 cents lower at $65.61 a barrel, thus contributing to a 0.7% loss on the week, with oil prices held in check by the presence of substantial global oil inventory that would cushion any short-term imbalances...

natural gas prices also finished lower this week as weather continued to moderate with the end of the heating season approaching....after falling 2.5% to a 5 week low of $2.701 mmBTU last week on the report that natural gas inventories fell much less than had been expected, the contract price of natural gas for April delivery opened lower on Monday and slid to a 3.7 cent loss at $2.664 per mmBTU amid mild weather, demand uncertainty and steady gas production... prices barely budged all day Tuesday, closing two-tenths of a cent lower at $2.664 per mmBTU, as generally mild March temperatures continued to offer little support for prices...despite continued mild weather and light heating demand, natural gas prices moved 3 cents higher on Wednesday, but gave most of that up in falling back 2.4 cents to $2.668 per mmBTU on Thursday as the EIA's inventory report disappointed for a second straight week, and forecasts called for easing weather demand...gas traders finally appeared to capitulate on Friday as spring weather appeared to have arrived a few weeks early and natural gas prices fell 6.8 cents to $2.600 per mmBTU, thus ending down 3.7% for the week...

the natural gas storage report from the EIA for the week ending March 5th indicated that the amount of natural gas held in underground storage in the US fell by 52 billion cubic feet to 1,793 billion cubic feet by the end of the week, which left our gas supplies 257 billion cubic feet, or 12.5% below the 2,050 billion cubic feet that were in storage on March 5th of last year, and 141 billion cubic feet, or 7.3% below the five-year average of 1,934 billion cubic feet of natural gas that have been in storage as of the 5th of March in recent years....the 52 billion cubic feet that were drawn out of US natural gas storage this week was less than the average forecast of a 65 billion cubic foot withdrawal from an S&P Global Platts survey of analysts, and was also less than 72  billion cubic foot withdrawal from natural gas storage seen during the corresponding week of a year earlier, and less than the average withdrawal of 89 billion cubic feet of natural gas that have been pulled out of natural gas storage during the same week over the past 5 years...  

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending March 5th showed that despite a big rebound in our oil refining, we again had a large surplus of oil on record left to add to our stored commercial crude supplies, which increased for the fifth time in the past sixteen weeks and for the 14th time in the past thirty-eight weeks....our imports of crude oil fell by an average of 636,000 barrels per day to an average of 5,655,000 barrels per day, after jumping by an average of 1,692,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 282,000 barrels per day to 2,633,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,022,000 barrels of per day during the week ending March 5th, 918,000 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 increased by 900,000 barrels per day to 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 13,922,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 12,310,000 barrels of crude per day during the week ending March 5th, a record 2,407,000 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 1,971,000 barrels of oil per day were being added to the supplies of oil stored in the US....so looking at that data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports and from oilfield production was 359,000 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 (+359,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting an error or errors of that magnitude in the oil supply & demand figures we have just transcribed.... moreover, since last week's fudge factor was at (-957,000) barrels per day, there was a 1,316,000 barrel per day balance sheet difference in the unaccounted for crude oil figure from a week ago, which means the week over week supply and demand changes we have just transcribed are nonsense...however, since most everyone treats these weekly EIA figures as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as published, just as they're watched & believed to be accurate by most everyone in the industry.....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,611,000 barrels per day last week, which was 11.7% less than the 6,354,000 barrel per day average that we were importing over the same four-week period last year.....the 1,971,000 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 900,000 barrels per day higher at 19,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 900,000 barrels per day higher at 10,400,000 barrels per day, while a 6,000 barrel per day decrease to 459,000 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 6th was rounded to 13,000,000 barrels per day, so this reporting week's rounded oil production figure was 17.2% 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 69.0% of their capacity while using those 12,310,000 barrels of crude per day during the week ending March 5th, up from the record low 56.0% of capacity during the prior week, but still one of the lowest refinery utilization rates of the last 30 years...hence, the 12,310,000 barrels per day of oil that were refined this week were also among the lowest in thirty years, 21.6% fewer barrels than the 15,701,000 barrels of crude that were being processed daily during the week ending March 6th of last year, when US refineries were operating at a seasonal low 86.4% of capacity...

with the jump in the amount of oil being refined, the gasoline output from our refineries was higher for the 7th time in 17 weeks, increasing by 704,000 barrels per day to 9,005,000 barrels per day during the week ending March 5th, after our gasoline output had increased by 565,000 barrels per day over the prior week...but even with that two week rebound in gasoline production, this week's gasoline output was still 9.6% lower than the 9,956,000 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 806,000 barrels per day to 3,704,000 barrels per day, after our distillates output had decreased by 723,000 barrels per day to an twenty-six year low of 2,898,000 barrels per day over the prior week...with our distillates' production thus depressed, this week's output was still 21.3% less than the 4,705,000 barrels of distillates that were being produced daily during the week ending March 6th, 2020...

even with the increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the fifth time in seventeen weeks, and for 18th time in 34 weeks, falling by 11,869,000 barrels to 231,603,000 barrels during the week ending March 5th, after our gasoline inventories had decreased by a record 13,624,000 barrels over the prior week...our gasoline supplies decreased again this week despite the production jump because the amount of gasoline supplied to US users increased by 578,000 barrels per day to 8,726,000 barrels per day, and because our imports of gasoline fell by 28,000 barrels per day to 577,000 barrels per day, and because our exports of gasoline rose by 184,000 barrels per day to 677,000 barrels per day...after this week's big inventory decrease, our gasoline supplies were 6.2% lower than last March 6th's gasoline inventories of 246,999,000 barrels, and about 6% below the five year average of our gasoline supplies for this time of the year... 

meanwhile, with only a partial recovery in our distillates production, our supplies of distillate fuels decreased for the 20th time in 28 weeks and for the 29th time in the past year, falling by a 5,504,000 barrels to 137,492,000 barrels during the week ending March 5th, after our distillates supplies had decreased by a near record 9,719,000 barrels during the prior week....our distillates supplies fell again this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, jumped by 699,000 barrels per day to a 16 month high of 4,487,000 barrels per day, while our exports of distillates fell by 345,000 barrels per day to an eleven year low of 475,000 barrels per day, and while our imports of distillates rose by 151,000 barrels per day to 472,000 barrels per day...but even after this week's big inventory decrease, our distillate supplies at the end of the week were still 7.4% above the 128,060,000 barrels of distillates that we had in storage on March 6th, 2020, even as they fell to about 4% below the five year average of distillates stocks for this time of the year...

finally, even with the recovery in our refinery throughput, our commercial supplies of crude oil in storage (not including the commercial oil being stored in the SPR) ended the week higher for the 11th time in the past thirty-three weeks, and for the 29th time in the past year, increasing by 13,798,000 barrels, from 484,605,000 barrels on February 26th to 498,403,000 barrels on March 5th, after our commercial oil inventories had increased by a record 21,563,000 the prior week...after that two week record increase, our commercial crude oil inventories rose to 6% above the five-year average of crude oil supplies for this time of year, and to about 44% above the prior 5 year (2011 - 2015) average of our crude oil stocks as of the first week of March, 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 5th were 10.3% more than the 451,783,000 barrels of oil we had in commercial storage on March 6th of 2020, 11.0% more than the 449,072,000 barrels of oil that we had in storage on March 8th of 2019, and also 15.7%  more than the 430,928,000 barrels of oil we had in commercial storage on March 9th of 2018...    

OPEC's Monthly Oil Market Report

Thursday of this past week saw the release of OPEC's March Oil Market Report, which covers OPEC & global oil data for February, and hence it gives us a picture of the global oil supply & demand situation for the 2nd month after OPEC, the Russians, and other oil producers agreed to increase their oil production by 500,000 barrels per day ​starting January​,​ from their prior commitment to cut production by 7.7 million barrels a day from an October 2018 peak, which had been earlier reduced from the 9.7 million barrels a day cuts they had imposed on themselves during May, June and July, and after the Saudis unilaterally decided to cut their own production by a million barrels per day during February and March....once again, before we look at what this month's report shows us, we want to caution that estimating oil demand while the course of the Covid-19 pandemic remains uncertain is pretty speculative, and hence the demand estimates we'll be reporting this month should again be considered as having a much larger margin of error than we'd expect from this report during stable and hence more predictable periods.. 

the first table from this monthly report that we'll check is from the page numbered 4​9 of this month's report (pdf page 59), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate...for all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures...

as we can see from the above table of their oil production data, OPEC's oil output decreased by 647,000 barrels per day to 24.848,000 barrels per day during February, down from their revised but unchanged January production total of 25,496,000 barrels per day...from that table we can also see that a 930,000 barrels per day decrease in the Saudi's production was the major factor in OPEC's output decrease, and that most of the OPEC members increased their output in February, led by the Nigerian's 161,000 barrel per day production increase, not surprising since several OPEC members had failed to take advantage of the new agreement to increase production in January...recall that last year's original oil producer's agreement was to cut production by 9.7 million barrels per day from an October 2018 baseline for just two months early in the pandemic, during May and June, but that agreement had been extended to include July at a meeting between OPEC and other producers on June 6th....then, in a subsequent meeting in July, OPEC and the other oil producers agreed to ease their deep supply cuts by 2 million barrels per day to 7.7 million barrels per day for August and subsequent months, which was thus the agreement that covered OPEC's output for the rest of 2020...the OPEC+ agreement for January's production, which was later extended to include February's output, was to further ease their supply cuts by 500,000 barrels per day to 7.2 million barrels per day from that original baseline...however, note that war torn Libya and US sanctioned OPEC members Iran and Venezuela have been exempt from the production cuts imposed by these agreements, and as we can see above, they all posted production increases this month...

since there had never seemed to be a published table or listing available of how much each OPEC member was expected to produce under the eased production cuts of August through December, or the new ones ​starting January​ 2021​, we had been including the table that shows the original October 2018 reference production for each of the OPEC members (as well as other producers party to the mid-April agreement), as well as the production level each of those producers was expected to cut their output to during May, June, and July...we'll include that table once again now, though with two modifications to that agreement since, it becomes more difficult to compute the production quotas that each of the OPEC members was expected to hold to in February:

the first column in the above table shows the oil production baseline, in thousands of barrel per day from which each of the oil producers was to cut from, a figure which is based on each of the producer's October 2018 oil output, ie., a date before last year's and the prior year's output cuts took effect, and coincidently the highest monthly production of the era for most of the producers who are party to these cuts; the second column shows how much each participant had originally committed to cut during May and June 2020 in thousands of barrel per day, which was 23% of the October 2018 baseline for all participants except for Mexico, who had their production hedged to profit from lower prices, while the last column shows the production level each participant had agreed to after that cut...the producer's agreement for August through December of last year amended the figures shown above such that each member would be allowed to reduce their production cut shown above (ie, the "voluntary adjustment" shown above) by 20%...for example, Algeria's "cut" was expected to be 241,000 barrels per day from May thru July, which would reduce their oil production to 816,000 barrels per day over that period...under the agreement for August through December of last year, Algeria would reduce their "cut" by 20%, or to 193,000 barrels per day, thus allowing them to produce 864,000 barrels per day during those months...with the agreement for January and February, which was recently extended, Algeria would be able to reduce their production cut by another 5% from the "voluntary adjustment" figure shown above, or to 181,000 barrels per day, thus allowing them to produce 876,000 barrels per day during February....offhand, by comparing the above table's voluntary allocation less 25% from the initial OPEC production cut, it appears that Iraq, Gabon and Kuwait all exceeded their revised allocation during February, but that with the Saudi's additional cuts, the group as a whole still remained below the quota they would have been allowed to produce for the month...

the next graphic from this month's report that we'll highlight shows us both OPEC and world oil production monthly on the same graph, over the period from March 2019 to February 2021, and it comes from page 50 (pdf page 60) of OPEC's March Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale.... 

after the reported 647,000 barrel per day decrease in OPEC's production from what they produced a month earlier, OPEC's preliminary estimate indicates that total global liquids production decreased by a rounded 1,310,000 barrels per day to average 92.28 million barrels per day in February, a reported decrease which apparently came after January's total global output figure was revised up by 470,000 barrels per day from the 93.12 million barrels per day of global oil output that was reported a month ago, as non-OPEC oil production fell by a rounded 670,000 barrels per day in February after that revision, with a freeze-related oil production decrease of 600,000 barrels per day in the US alone accounting for most of the non-OPEC production decrease in February... 

after that decrease in February's global output, the 92.28 million barrels of oil per day that were produced globally in February were 7.62 million barrels per day, or 7.6% less than the revised 99.90 million barrels of oil per day that were being produced globally in February a year ago, which was the second month of additional production cuts of 500,000 barrels per day in an attempt to support prices (see the March 2020 OPEC report (online pdf) for the originally reported February 2020 details)...with this month's increase in OPEC's output, their February oil production of 24,848,000 barrels per day was at 26.9% of what was produced globally during the month, a decrease of 0.3% from their revised 27.2% share of the global total in January....OPEC's February 2020 production was reported at 27,772,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year produced 2,924,000, or 10.5% fewer barrels per day of oil in February 2021 than what they produced a year earlier, when they accounted for 27.8% of global output...  

After the decreases in both OPEC's and global oil output that we've seen in this report, the amount of oil being produced globally during the month fell short of the expected demand, as this next table from the OPEC report will show us...   

the above table came from page 27 of the March Oil Market Report (pdf page 37), and it shows regional and total oil demand estimates in millions of barrels per day for 2020 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2021 over the rest of the table...on the "Total world" line in the second column, we've circled in blue the figure that's relevant for ​February, which is their estimate of global oil demand during the first quarter of 2020... OPEC is estimating that during the 1st quarter of this year, all oil consuming regions of the globe will be using an average of 93.04 million barrels of oil per day, which is a 180,000 barrels per day downward revision from the 93.22 million barrels of oil per day of demand they were estimating for the first quarter a month ago (note that we have encircled this month's revisions in green), still reflecting quite a bit of coronavirus related demand destruction compared to 2019, when global demand averaged 99.98 million barrels per day....but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were producing 92.28 million barrels million barrels per day during February, which would imply that there was a shortage of around 760,000 barrels per day in global oil production in February when compared to the demand estimated for the month..

In addition to figuring February's global oil supply shortfall that's evident in this report, the upward revision of 470,000 barrels per day to January's global oil output that's implied in this report, partly offset by the 180,000 barrels per day downward revision to first quarter demand noted above, means that the 100,000 barrels per day global oil output shortage we had previously figured for January would now be revised to a surplus of 190,000 barrels per day...

Note that in green we've also circled an upward revision of 120,000 barrels per day to 2020's demand, which also means that the supply shortfalls or surpluses that we previously reported for last year​'s months​ would need to be revised....a separate table on page 26 of the March Oil Market Report (pdf page 36) indicates the revisions to 2020 demand included an an upward revision of 240,000 barrels per day to 4th quarter demand, an upward revision of 20,000 barrels per day to 3rd quarter demand, and an upward revision of 250,000 barrels per day to 2nd quarter demand...

a month ago we estimated a revised global shortfall of around 940,000 barrels per day in global oil production during December, a global shortfall of around 1,540,000 barrels per day during November, and a global shortfall of around 2,840,000 barrels per day during October, based on the figures that were published at that time...hence, the upward revision of 240,000 barrels per day to 4th quarter demand would revise those estimated oil shortfalls to 1,180,000 barrels per day for December, 1,780,000 barrels per day for November, and 3,080,000 barrels per day for October...then, in like manner, the global oil supply shortfalls we had previously estimated for the each of the third quarter months would have to be revised higher by 20,000 barrels per day, while the large global oil surpluses we had previously estimated for the second quarter months would have to be revised lower by 250,000 barrels per day....however, despite the upward revision to 2020's demand and OPEC's deep production cuts beginning in May, the quanities of oil produced globally in 2020 still averaged well over 3 million barrels per day more than anyone wanted​...​

This Week's Rig Count

The US rig count fell for just the 2nd time over the past 26 weeks during the week ending March 12th, but it still remains down by 49.2% from what it was a year ago....Baker Hughes reported that the total count of rotary rigs running in the US was down by 1 to 402 rigs this past week, which was still down by 390 rigs from the 792 rigs that were in use as of the March 13th report of 2020, and was also still two fewer rigs than the all time low rig count prior to 2020, and 1,527 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....

The number of rigs drilling for oil decreased by 1 rig to 309 oil rigs this week, after rising by 1 oil rig the prior week, leaving us with 374 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, which was still down by 15 natural gas rigs from the 107 natural gas rigs that were drilling a year ago, and just 5.7% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those rigs drilling for oil or gas, one rig classified as 'miscellaneous' continued to drill in Lake County, California this week, while a year ago there were two such "miscellaneous" rigs deployed...

The Gulf of Mexico rig count decreased by 1 to 13 rigs this week, with 11 of those rigs now drilling for oil in Louisiana's offshore waters and 2 drilling for oil in Alaminos Canyon offshore from Texas...that was 6 fewer Gulf of Mexico rigs than the 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 unchanged at 362 horizontal rigs this week, which was still down by 351 rigs from the 713 horizontal rigs that were in use in the US on March 13th 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 15 directional rigs this week, and those were also down by 33 from the 48 directional rigs that were operating during the same week a year ago....meanwhile, the vertical rig count was unchanged at 25 vertical rigs this week, and those were also down by 6 from the 31 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 12th, the second column shows the change in the number of working rigs between last week's count (March 5th) and this week's (March 12th) count, the third column shows last week's March 5th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 13th of March, 2020..    

obviously, there was a bit more activity this week than the decrease ​of ​one rig nationally would account for....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 new rigs added in Texas Oil District 7C, which includes the southern counties of the Permian Midland basin, and another rig added in in Texas Oil District 8, which corresponds to the core Permian Delaware, while one rig was pulled out of Texas Oil District 8A, which includes the northern counties of the Permian Midland basin, which together means there was a net increase of 2 rigs in the Texas Permian....since the national Permian rig count was only up by 1, that means that the rig that was removed in New Mexico must have been pulled out of the farthest west reaches of the Permian Delaware, to balance the national Permian total....elsewhere in Texas, there was a rig pulled out of Texas Oil District 1 while there was a rig added in Texas Oil District 2, which could have been offsetting changes in the Eagle Ford shale that would net to no change and ​hence ​not show up in the table above...there was also a rig pulled out of Texas Oil District 6, which ​had been drilling for natural gas in the western part of the Haynesville shale....outside of Texas, there were two oil rigs added in Oklahoma's Cana Woodford, while an oil rig was pulled out of North Dakota's Williston basin at the same time...for rigs targetting natural gas, we had two rigs added in Ohio's Utica shale, and another rig added in West Virginia's Marcellus, which were in turn offset by the removal of two natural gas rigs from Pennsylvania's Marcellus and the natural gas rig removed from the Texas Haynesville shale which we mentioned previously...

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Court Blocks Oil, Gas Extraction on Ohio's Only National Forest - Center for Biological Diversity ― A federal judge blocked new oil and gas leasing and fracking in Ohio’s Wayne National Forest late Monday, following a ruling last year rebuking the Bureau of Land Management and U.S. Forest Service for failing to consider threats to public health, endangered species and watersheds before opening more than 40,000 acres of the forest to fracking. Pending completion of new environmental reviews, Monday’s order blocks new leases on the Wayne, prohibits new drilling permits and surface disturbance on existing leases, and prohibits water withdrawals from the Little Muskingum River for already-approved drilling. “This is great news for the future of Ohio’s only national forest,” said Taylor McKinnon, a senior campaigner at the Center for Biological Diversity. “We’re grateful the judge recognized the damage fracking could do to this spectacular forest. The order will protect our climate, endangered wildlife and drinking water for millions of people.” U.S. District Judge Michael Watson said the Forest Service and Bureau of Land Management had “demonstrated a disregard for the different types of impacts caused by fracking in the Forest. The agencies made decisions premised on a faulty foundation.”  “The Wayne is a public forest that we all own. Keeping its air and water clean, as well as its views intact, is a win that we can all celebrate.” In May 2017 conservation groups sued the agencies over plans to permit fracking in the Wayne, saying federal officials had relied on an outdated plan and ignored significant environmental threats before approving the fracking.“This victory, like the Wayne National Forest, belongs to all of us,” said Becca Pollard with the Sierra Club. “Permitting fracking anywhere is a threat to our health and clean air and water, and we're relieved to see the judge rule in favor of protecting the forest. We look forward to working together to ensure that this decision is made permanent and we may continue to enjoy and explore Wayne National Forest."

Court stalls fracking leases in Ohio's only national forest -- Ironton Tribune ― Late on Monday, a federal judge stalled oil and gas leasing in Ohio’s Wayne National Forest, ruling that the Trump administration failed to consider threats to public health, endangered species and watersheds before opening more than 40,000 acres of the forest for fracking.U.S. District Judge Michael Watson said the U.S. Forest Service and U.S. Bureau of Land Management “demonstrated a disregard for the different types of impacts caused by fracking in the Forest. The agencies made decisions premised on a faulty foundation.”Watson’s ruling requires the agencies to redo their environmental analysis of the potential harms from fracking in the Wayne.“Fracking is a dirty, dangerous business,” said Wendy Park, an attorney at the Center for Biological Diversity. “This ruling helps ensure the health of this spectacular forest and its endangered animals and protects the water source for millions of people.”In May 2017 conservation groups sued the Forest Service and the BLM over plans to permit fracking in the Wayne, saying federal officials had relied on an outdated plan and ignored significant environmental threats before approving fracking in the forest. The lawsuit also aimed to void two BLM lease sales. The court will decide later whether to void those existing leases, but a planned March sale will likely be postponed. In today’s ruling the judge said the agencies ignored potential harm from fracking to endangered Indiana bats, the waters of the Little Muskingum River and the region’s air quality.

Federal Judge Deals Another Setback to Oil, Natural Gas Development in Ohio National Forest - -A federal judge has halted oil and gas development in Ohio’s Wayne National Forest (WNF) after a ruling last year found the Bureau of Land Management (BLM) and the U.S. Forest Service (USFS) failed to adequately consider the impact of unconventional development when they opened the land for drilling. The U.S. District Court for the Southern District of Ohio ordered the agencies to further review their authorizations under the National Environmental Policy Act (NEPA). Pending review, this week’s order blocks new leases in the WNF, prohibits new drilling permits and surface disturbance on existing leases, and prohibits water withdrawals from the Little Muskingum River.Judge Michael Watson said the USFS and BLM “demonstrated a disregard for the different types of impacts” caused by unconventional development in the forest. He added that “the agencies made decisions premised on a faulty foundation.” The court found last year that federal regulators specifically failed to consider surface area disturbance, impacts on the Indiana Bat, the Little Muskingum River and regional air quality related to horizontal wells completed with hydraulic fracturing.The decision was another flash point in a long-running battle over whether exploration and production companies should be allowed to operate in the WNF, the state’s only national forest. Last year’s decision threw the future of WNF leasing into doubt when the case proceeded to determine if lease sales should be voided.Four environmental groups, led by the Center for Biological Diversity, filed a lawsuit against BLM and USFS in 2017 to void oil and gas leases and stop unconventional development in the forest.The BLM in 2015 proposed to lease parcels across 40,000 acres in the forest’s Marietta Unit in Monroe, Noble and Washington counties that were nominated by the industry for unconventional development. The Eastern States Office began auctioning parcels shortly thereafter, and more than 2,000 acres in the forest have since been leased for Utica Shale development.The court acknowledged this week, however, that the federal agencies did not completely abandon their duties under NEPA and indicated that remanding the environmental review would likely remedy the case.

Shell targeting 2022 for start of Pennsylvania PE resin unit - Royal Dutch Shell plc is citing 2022 as the likely start date of its massive petrochemicals plant under construction near Pittsburgh.

Pennsylvania agrees to settle gas drilling royalties lawsuit — Pennsylvania reached a settlement in a lawsuit against natural gas driller Chesapeake Energy Corp. for its handling of royalty payments to property owners, state Attorney General Josh Shapiro announced Monday. Speaking in Tunkhannock, a northeastern Pennsylvania town in the heart of heavy Marcellus Shale natural gas production, Shapiro said the agreement called for $5.3 million in restitution and improved royalty payments going forward. “It is the beginning of a new day and new protections for landowners,” said Shapiro, a Democrat, touting terms that include appointment of a mutually agreeable ombudsman to investigate landowners’ complaints. The lawsuit was filed more than five years ago against Oklahoma City-based Chesapeake, which filed for bankruptcy protection in Texas in June. Chesapeake communications and investor relations director Gordon Pennoyer noted the agreement still requires the bankruptcy judge’s approval. “Chesapeake greatly values its relationships with Pennsylvania royalty owners and is pleased to have reached a global resolution with them and the attorney general that addresses royalty owners’ concerns,” Pennoyer said in an email. “The company looks forward to working collaboratively with Pennsylvania royalty owners going forward..” The lawsuit, filed in December 2015 and amended in 2016 to include Anadarko Petroleum, claimed the two companies split up markets, keeping landowners from getting better deals by seeking competitive offers. An appeal in the litigation involving Anadarko about whether the state’s consumer protection law applies is pending before the Pennsylvania Supreme Court.

A Pennsylvania county went from bust to boom times with natural gas. Now, it’s nearly broke. ·— Greene County is going broke. Despite receiving millions in payouts from the natural gas industry to compensate such counties as Greene that host natural gas wells, it is struggling to balance its more than $40 million budget. This year, amid a pandemic, commissioners raised property taxes for the first time since 2010. Without major changes, county budget office projections show that Greene may not have the revenue or reserves to cover its costs by 2023. It’s a financial predicament that seemed all but guaranteed as the coal mining industry here has nearly disappeared, hollowing out the backbone of the local economy. That was, until the natural gas boom — and a massive influx of money that came with it — offered a different path.The windfall seemed to buy Greene County, which is in the southwest corner of the state, time to figure out how it would survive without coal. But nearly 10 years and more than 1,000 natural gas wells later, the county appears to be no better off financially than where it started, having spent through $37.2 million in impact fees without setting aside money to plan for the day the work would inevitably slow. “I quickly came to realize there was no fiscal planning,” said Mike Belding, one of two new county commissioners on the three-seat governing body. “They were just spending money as it came in.” Greene, home to 36,000 residents, is one of 31 counties statewide receiving “impact fee” payouts through a state program initiated in 2012, called Act 13. The funds are distributed yearly, and payouts are based on such factors as the number of wells in an area and population. Only three other counties — Bradford, Susquehanna, and Washington — have received more money than Greene from the impact fees over the lifetime of the program, according to reports filed with the Pennsylvania Public Utility Commission. But unlike others that set the money aside and saved it for future investments, budget reports show Greene has used about $17.5 million to balance its budget since 2015. The other half went to projects that the newest commissioners say were shortsighted and wasteful, such as commissioning a $400,000 comprehensive plan that was never used and a $550,000 business loan program that yielded no returns for the county.

Biden DOJ Backs PennEast Gas Pipeline in Supreme Court Fight -- The Biden administration is throwing its legal weight behind the PennEast pipeline in a high-stakes Supreme Court case that could affect natural gas projects across the U.S.The Justice Department urged the high court to overturn a ruling that blocked PennEast from using federal eminent domain authority to take New Jersey land along the $1 billion project’s route. The filing comes as environmental advocates press the Biden administration to shut down or thwart development of other oil and natural gas pipelines.“The right of eminent domain was well-known at the Founding. As the Court has long recognized, the Constitution conferred that authority on the federal government, including the authority to take State-owned land, for projects within the government’s enumerated powers,” Acting Solicitor General Elizabeth B. Prelogar wrote in the brief.She added that the authority extends to private parties building projects deemed to be in the public interest, and said the lower court handling the case lacked jurisdiction over the appeal in the first place.The Monday brief comes as a disappointment to some environmental advocates who hoped the Biden administration would withdraw support for the PennEast pipeline. The Federal Energy Regulatory Commission and the Justice Department first backed the company’s legal arguments during the Trump administration.Ron Morano, executive director of Affordable Energy for New Jersey, said he hopes “this will be indicative of this administration’s future positions on our energy independence.”Environmentalists were dismayed by the Biden administration’s move. Maya K. van Rossum, head of the Delaware Riverkeeper Network, said the Justice Department’s decision to support PennEast in the case “is an abuse of power and trust and a failure of the current administration to do its duty to protect people and our environment.” Backed by Enbridge Inc., Southern Co., and other companies, PennEast would stretch 116 miles across Pennsylvania and New Jersey, as part of a broader buildout of East Coast gas infrastructure. Construction hasn’t started.

NJ Doesn’t Need Gas Infrastructure Projects Like NESE - -Fossil fuel industry groups that continue to push natural gas as a clean-energy solution do the public a profound disservice. Strictly speaking, natural gas is cleaner than coal, but they are both dirty fossil fuels and coal today accounts for barely 2% of New Jersey’s energy. The relevant comparison is between gas and wind or solar. And, here, there is no comparison. Methane, the main component of natural gas, is not “clean.” It’s a potent greenhouse gas, and rising natural gas production is one of the biggest drivers of climate change. The state’s Energy Master Plan recognizes this and calls for transitioning to 100% clean energy by 2050. New Jersey is no outlier in its aggressive climate and clean-energy policies. When New York State denied permits for the controversial Northeast Supply Enhancement (NESE) pipeline project earlier this year, it said, “the continued long-term use of fossil fuels is inconsistent with…the actions necessary to prevent the most severe impacts from climate change…” NESE would have carried fracked gas from Pennsylvania through sensitive environmental areas of New Jersey and across Raritan Bay into New York. Nevertheless, in paid sponsored content that appeared in this publication, a group calling itself “Affordable Energy for New Jersey” bemoaned the NESE decision and made several false claims calculated to drum up public support for new natural gas infrastructure projects in New Jersey. Let’s set the record straight. It’s absurd for AENJ to suggest that NESE would have provided “affordable energy for New Jersey.” NESE was designed to supply natural gas to customers in New York. New Jersey already has abundant pipeline capacity to meet in-state demand on even the coldest days. AENJ claimed that, without NESE, the only long-term option is a “virtual pipeline” of trucks carrying compressed natural gas (CNG) from Pennsylvania to New York, and that an average of 75 CNG trucks made that trip every day since May 20, 2020. That is false. There was zero CNG trucking during the summer of 2020, and none last winter except for a test using six trucks. National Grid, the utility company that wanted NESE, has no plans to use CNG trucking other than on extremely rare days when the average temperature falls below 10 degrees and brief annual tests of fewer than six trucks. AENJ’s assertion is like claiming that trucks are plowing the streets every night of the year because we might get a huge blizzard this winter.

Foes of South Jersey LNG plan say new frack ban might help their cause - NJ Spotlight News --A historic decision to ban fracking for natural gas in the Delaware River Basin is raising new questions about plans for a South Jersey dock where fracked gas would be exported in liquid form. On Feb. 25, Gov. Phil Murphy and the governors of Pennsylvania, New York and Delaware voted at the Delaware River Basin Commission to formally block the controversial process of harvesting natural gas, on the grounds that it would endanger water supplies for some 15 million people in the basin. Murphy’s vote on that ban is prompting opponents of the dock to ask whether they now have a better chance of stopping the project that he has so far supported. Critics argue that building the dock at Gibbstown in Gloucester County would be at odds with the new policy made explicit in that vote because it would stimulate the production of fracked gas that could contaminate drinking water and add to greenhouse gas emissions even though the gas would be coming from northeastern Pennsylvania outside the Delaware River Basin. And the fracked gas would be transported in a round-the-clock procession of trucks or trains in a region that has finally rejected the technique of harvesting natural gas, which has been blamed for tainting water with toxic drilling chemicals, and industrializing many rural areas where gas wells are built. If successful, the port project would provide new global market access for the abundant gas reserves of Pennsylvania’s Marcellus Shale, one of the richest gas fields in the world, whose development since the mid-2000s has been hindered by low prices and a shortage of pipelines. The Pennsylvania gas would be sold in liquid form to overseas markets, especially in Asia, where prices are much higher than in the U.S. The price of U.S. liquefied natural gas exports was near a five-year high in December but was still at less than half its level during the years 2009-2014, according to the U.S. Energy Information Administration.

The Delaware River Basin Commission Bans Fracking - The Delaware River Basin, a 13,539-square-mile watershed that cuts through Delaware, New Jersey, New York, and Pennsylvania is now off-limits to fracking. In late February, the five-member Delaware River Basin Commission—the interstate government agency that oversees the basin—voted 4–0 to permanently ban the extraction of methane gas in the region. The decision comes a decade after the commission authorized a de facto moratorium on well construction and follows other fracking bans across the East Coast, marking a historic win for anti-fracking activists. The state commissioners—the governors of each state—all voted in favor of the ban. The federal commissioner abstained.After reviewing various studies and research reports on the potential impacts of fracking on the basin, the commission determined that fracking carries too high of a risk of contaminating drinking water. Fracking fluids are likely to leak into the groundwater, it found, and the Marcellus and Utica shale formations that sit below the river basin contain faults and fissures that may provide additional pathways for methane to migrate upward once the drilling occurs.“This ban will protect billions of gallons of drinking water and thousands of acres of forest from fracking wells,” said Jeff Tittel, director of the Sierra Club's New Jersey Chapter. “It also means that there won’t be pipelines built to take that gas to the market, protecting even more land and water.”The decision to ban fracking permanently in the Delaware Basin has been more than 10 years in the making. The commission began its discussions on regulating the gas industry in response to Pennsylvania's shale gas boom in 2008 and proposed regulations to halt drilling as early as 2010. The proposal was controversial, resulting in tense public hearings, and the vote was put on hold after former Delaware governor Jack Markell announced that he would vote no. During the stalemate, landowners in Wayne County sued the commission, arguing that it lacked the authority to ban drilling. The lawsuit was dismissed, and in 2017 the commission updated draft regulations that authorized a permanent ban on fracking in the basin.  The fracking ban, however, did not prohibit external natural gas companies from dumping their fracking wastewater into the basin, nor from taking water from the basin for fracking.

High Volume Fracking Banned In Delaware River Basin Due To Health Risks - -- A commission that oversees the safety and purity of water in the Delaware River basin has banned high volume hydraulic fracturing activities along the river, citing growing concerns over pollution and health risks from “fracking” operations that extract oil and gas.On February 25, the Delaware River Basin Commission, based in New Jersey, announced the approval of a final rule prohibiting high volume hydraulic fracturing (HVHF), according to a press release issued late last month. The prohibition has been added to the commission’s Comprehensive Plan and Water Code.Hydraulic fracturing, more commonly known as “fracking” involves drilling and fracturing shale rock to release oil and gas. The operations involve the injection of water, sand and chemicals into wells at high pressures to crack the surrounding rock, thus releasing the natural gas underground and allowing it to flow to the head of the well.Problems from fracking have previously been linked to negative environmental effects to the surrounding communities, due the impact on drinking water, as well as increased dust and exhaust from drilling rigs, compressors and the transportation of the water, sand and chemicals. The process has also been linked to increased earthquake activity, and the extent of potential harm to humans living close to these operations has remained an open question.The prohibition, Resolution No. 2021-01, gives several reasons for putting the high volume fracking ban in place. It predicts that the practice could lead to spills and releases of fracking chemicals, fluids and wastewater, which would adversely impact surface and ground water. This may eventually impair drinking water sources, and pose widespread health concerns. In addition, the Resolution warns the fluids released by fracking contain pollutants such as salts, metals, radioactive materials, organic compounds, endocrine disruptors and toxic chemicals whose toxicity has yet to be determined.“High-volume hydraulic fracturing and related activities pose significant, immediate and long-term risks to the development, conservation, utilization, management, and preservation of the water resources of the Delaware River Basin and to the Special Protection Waters of the Basin, considered by the Commission to have exceptionally high scenic, recreational, ecological, and/or water supply values,” the Resolution states. “Controlling future pollution by prohibiting high volume hydraulic fracturing in the Basin is required to effectuate the Commission’s Comprehensive Plan, avoid injury to the waters of the Basin as contemplated by the Comprehensive Plan and protect the public health and preserve the waters of the Basin for uses in accordance with the Comprehensive Plan.” In testimony filed with the commission on February 25, the National Resource Defense Council (NRDC), an environmental protection group, called for a ban on all fracking procedures in the Basin, noting that the river provided drinking water to 17 million people. The NRDC testimony (PDF) says the new rules do not go far enough.

House energy committee OKs bill changing how oil and gas wells would be valued for property taxes -The state House Energy and Manufacturing Committee approved referring a bill to the House Finance Committee Tuesday that would change how the State Tax Department values producing oil and gas wells for property tax purposes and the appeals process for all property taxes in the state. This would provide a more expansive definition of operating expenses for gas and oil producers in another industry-friendly move by the committee.House Bill 2581‘s provisions include allowing expenses from lifting, processing, transportation and other industry activities to be subtracted from wells’ income and require the tax department to resurvey well expenses every three years unless natural gas contracts or the average oil price traded on the New York Mercantile Exchange changes more than 20% from the last year a survey was completed, meaning state administrative costs would increase in unstable markets.The bill would expand the jurisdiction of the Office of Tax Appeals to include property tax valuation, classification and taxability, allow petitioners to appeal to a county Board of Equalization and Review or the Office of Tax Appeals and eliminate the Board of Assessment Appeals. “It’s a fairly complicated statute, but right now you’ve got two chances at the county level, so you’re making the same argument to the same body a few months apart wanting a different result, and if you don’t get the result under the current system, you go to the circuit court,” committee counsel Robert Akers said. “So the new system will take you through the Office of Tax Appeals on the way to circuit court.”State Tax Department attorney Steve Stockton said the bill adds another layer to the tax appeal process but doesn’t necessarily make it more complicated.“So more government?” Delegate Kayla Young, D-Kanawha, asked Stockton.“You could look at it that way, yes,” Stockton replied.A fiscal note from the Office of Tax Appeals accompanying the bill estimates it would significantly increase the caseload at the office and envisions the hiring of two more administrative law judges to add to the current two, two staff attorneys and four additional support staff, an increase in staff that the office’s current leased space would not support. The fiscal note, which did not factor in estimated cost of leasing larger office space, estimates the other additional expenses would cost an annual $425,000 to $475,000.

Energy analysis nonprofit says changing gas markets have diminished need for Mountain Valley Pipeline  --A study published Monday by an energy analysis nonprofit suggests that changes in natural gas markets since the Mountain Valley Pipeline was conceived have undercut the economic case for the long-delayed pipeline project.First announced in 2014, the 42-inch-diameter, 303-mile Mountain Valley Pipeline is slated to provide up to 2 billion cubic feet per day of natural gas from the Marcellus and Utica shale formations to markets in the Mid-Atlantic and Southeastern regions of the United States, traveling from Northwestern West Virginia to Southern Virginia.But legal and regulatory challenges have set back the pipeline, which originally was scheduled for completion by the end of 2018 but is now slated for service by the end of 2021. Its price tag has ballooned to at least $5.8 billion, over 50% more than its original cost estimate.Monday’s analysis by the Institute for Energy Economics and Financial Analysis, a nonprofit that supports transitioning to sustainable energy, concludes that lower gas demand and risks to liquefied natural gas exports have lessened the need for the Mountain Valley Pipeline.In addition to citing the project’s cost overruns and unknown cost effects of the project sponsors’ recent decision to start a new individual water permit application process, the IEEFA report notes that natural gas demand in the Southeast and Mid-Atlantic is projected to be much lower than projections anticipated when pipeline developers sought approval from federal regulators for the project in 2015.“Pipeline capacity out of the Appalachian Basin exceeds production. Growth in Appalachian natural gas production is increasingly dependent on a growing export market for Appalachian gas, a prospect that faces significant risks. Thus, Mountain Valley Pipeline faces a significant risk that its capacity will be underutilized,” the report argues. The report also posits that the potential cancellation of the Southgate extension of the pipeline, which would span 75 miles from Southern Virginia into Central North Carolina, weakens the case for the pipeline.The IEEFA report criticizes the Federal Energy Regulatory Commission’s process for evaluating pipeline need, arguing that it does not consider a rapidly changing domestic natural gas market or risks associated with growing liquefied natural gas exports on the domestic gas market.

Report questions business case for Mountain Valley Pipeline - A study released Monday by an analysis firm calls into question the business case for the Mountain Valley Pipeline, which will bring local Marcellus and Utica shale natural gas to markets in the southeast. MVP, which is being built and will be operated by Canonsburg-based Equitrans Midstream Corp. (NYSE: ETRN), is closer than it ever has been to completion since the project was announced in 2014. Most but not all of the legal challenges have been settled and Equitrans told analysts in a conference call last month that it expects to have all the permits in hand within the next six months and MVP in service by the end of the year. The pipeline’s cost has nearly doubled over the years from $3.7 billion to $6 billion. The Institute for Energy Economics and Financial Analysis, which is dedicated to a sustainable energy future, wrote in a report Monday that the pipeline was conceived in a very different gas market and that there’s too much pipeline capacity for the natural gas demand that there is now. “Significant pipeline capacity has been added to take gas out of the Appalachian Basin, even as the outlook for domestic natural gas demand and exports has grown more uncertain,” IEEFA wrote. The report said that natural gas consumption in the Southeast is likely to drop through 2030 and there will be fewer natural gas powered electricity plants built than forecast in 2014. And a potential lift from liquified natural gas production, which would be sent overseas, hasn’t yet materialized, IEEFA said. MVP and Equitrans blasted the report, saying that IEEFA's conclusions were incorrect "and are in alignment with the group's specific policy agenda." "MVP’s 2 Bcf/d (billion cubic feet/day) capacity has been and remains fully subscribed and MVP Southgate has a firm commitment from PSNC/Dominion Energy for 300 MMcf/day, (million cubic feet/day)," spokeswoman Natalie Cox said. "Furthermore, MVP retains strong support from shippers whose need has grown since cancellation of the Atlantic Coast Pipeline last summer. The need for an abundant, reliable energy supply is real, and the unnecessary project delays are affecting consumers." The report said if the extension of MVP called Southgate isn’t approved in North Carolina, then it would likely take out more demand for natural gas.

Pittsylvania NAACP asks DEQ to refer MVP air permit to Air Pollution Control Board - The Pittsylvania County Branch of the NAACP, the National Association for the Advancement of Colored People, passed a resolution March 2 opposing immediate approval of an air permit requested by the Mountain Valley Pipeline (MVP) for its proposed Lambert Compressor Station, currently sited approximately two and a half miles east of Chatham. The group also approved a written comment to DEQ on the draft air permit.The resolution and comment request that Virginia’s Department of Environmental Quality refer the draft air permit to the citizen Air Pollution Control Board. The referral would allow time for further consideration of air quality issues and concerns regarding environmental justice. According to the group’s written comment to DEQ, “Despite MVP and DEQ having acknowledged that the Lambert Compressor Station has the potential to affect communities of color, MVP’s environmental justice consultant did not contact us, the local Pittsylvania Branch NAACP, at all, and neither MVP nor DEQ contacted us until December 2020. We strongly hold that affected and vulnerable community residents of Pittsylvania County have not had access and opportunities to participate in the full cycle of the decision-making process about the MVP Southgate project, including the Lambert Compressor Station.”

Equitrans wins round in circuit court over North Carolina pipeline - An extension of the Mountain Valley Pipeline into North Carolina planned by Equitrans Midstream Corp. won a round in federal court as judges ordered North Carolina regulators to better explain why they denied a key water permit for the project. The Fourth Circuit Court of Appeals vacated the rejection of water quality certification by the North Carolina Department of Environmental Quality, which is a win for the Southgate pipeline that would bring natural gas from the Marcellus and Utica shale through the Mountain Valley Pipeline and then into North Carolina 75-miles via Southgate Pipeline. Neither MVP nor Southgate are yet completed, as they have been stuck in the permitting process and various challenges. MVP could be in-service by the end of the year but Southgate still needs permits to even begin the work. The court sent the issue back for more explanation as to the reasons why it was denied. The agency would be able to reject it again but with more details, according to parties involved. Mountain Valley Pipeline and Equitrans are based in Canonsburg. MVP Southgate spokesman Shawn Day hailed the decision. “MVP Southgate’s design has minimized impacts to surface waters and wetlands to the greatest extent practicable, and the project would comply with all state water quality standards,” Day said. “We look forward to working with the NDEQ to satisfy any concerns that it may have, and we remain committed to building this important infrastructure project to meet North Carolinians’ demand for cleaner and more reliable, affordable natural gas.” A statement from the North Carolina Department of Environmental Quality said the Fourth Circuit ruling had vindicated its concerns. “The ruling upholds the state’s authority to determine that building the Southgate extension at this time poses unnecessary risk to North Carolina’s streams, lakes and wetlands,” the agency said in a statement to WFAE-FM. The agency didn't immediately respond to a request from the Pittsburgh Business Times. One of the case litigants, Appalachian Voices, which opposes the pipeline, said the ruling was a “false victory” for MVP. “The court specifically noted that North Carolina regulators’ denial of the permit aligned with federal and state water quality standards, they just didn’t explain it well,” said Amy Adams, North Carolina program manager at Appalachian Voices. “We do expect the agency to correct this quickly enough, and in the meantime, the half-finished MVP mainline remains an over-budget boondoggle mired in legal setbacks.”

Denial of Mountain Valley Pipeline permit reversed by federal appeals court --An extension of the Mountain Valley Pipeline, threatened by the denial of a key permit from North Carolina, gained new life Thursday. The 4th U.S. Circuit Court of Appeals threw out a decision by the state’s Department of Environmental Quality, ruling that it did not properly explain the reasons why it had denied a water quality certification for a portion of the natural gas pipeline Called MVP Southgate, the extension would start at the main pipeline’s terminus in Pittsylvania County and run for 75 miles into North Carolina. In sending the case back to North Carolina regulators, the 4th Circuit ordered them to address two things: inconsistent statements from a hearing officer who at one point found that the project had lessened its impact on water bodies “to the greatest extent possible,” and why it chose to deny the certification outright rather than give it conditional approval. “On appeal, we hold that the Department’s denial is consistent with the state’s regulations and the Clean Water Act,” Chief Judge Roger Gregory wrote in a decision from a three-judge panel. “Nevertheless, the Department did not adequately explain its decision in light of the administrative record.” The denial was based, in large part, on uncertainty over whether the main portion of the pipeline — a 303-stretch in West Virginia and Southwest Virginia that is currently under construction — would ever be completed.

Biden Can Protect Communities, Halt Mountain Valley Pipeline | NRDC --We have new leadership in Washington under President Biden, and his administration should take action to send the Mountain Valley Pipeline right where it belongs—into the dustbin of history.I recently blogged about 5 key reasons to stop the Mountain Valley Pipeline (MVP), which would transport dirty fracked gas across Appalachia. Unfortunately, despite the science, the imperative to stop global warming, and legal obligations to protect clean water, national forest land, and endangered species habitat, the prior administration—no friend of the environment—kept issuing illegal permits to move this dirty and destructive project forward.But there is still time to change the outcome. In January, President Biden issued an executive order aimed at tackling the climate crisis, protecting public health and the environment, and restoring science in federal decisions. Executive Order 13990 directs federal agencies to review the former administration’s decisions that conflict with the principles of environmental protection, reducing climate change, and using the best available science. The EO also directs agencies to take action to address these inconsistencies where appropriate.What does that mean for MVP? It means that the Biden Administration can reverse anti-environmental actions taken under Trump that greased the skids for the fracked gas MVP. The new administration has already rescinded approval for copper mining at an Apache sacred site in Arizona and cattle grazing on public lands permitted in Oregon without full public input. MVP decisions that Biden should reverse:

• The December 2020 U.S. Forest Service Final Supplemental Environmental Impact Statement and Record of Decision to amend the Jefferson National Forest Land and Resource Management Plan;
• The January 2021 Bureau of Land Management right-of-way and temporary use permit; and,
• The September 2020 U.S. Fish and Wildlife Service Biological Opinion and Incidental Take Statement.

MVP has already harmed landscapes and clean water: West Virginia and Virginia have assessed MVP more than $2 million in penalties for more than 350 environmental violations. And there is more high-risk construction planned: MVP still has to cross hundreds of water bodies along the pipeline route. The Biden Administration can stop future risks to water quality by ensuring that the Assistant Secretary of the Army for Civil Works review the pipeline’s new application for a Clean Water Act permit with stringent consideration of whether it can comply with water quality standards.

NTSB opens public docket for Danville, Kentucky pipeline rupture investigation - The National Transportation Safety Board (NTSB) opened the public docket on Thursday as part of its ongoing investigation of the fatal, 1 August 2019 natural gas transmission pipeline rupture and fire near Danville, Kentucky. NTSB opens public docket for Danville, Kentucky pipeline rupture investigation The docket for this investigation includes more than 3600 pages of factual information, including reports on pipeline operations, integrity management, metallurgical testing, and emergency response efforts. The docket also includes interview transcripts, photographs, employee training records, and other investigative materials. The docket contains only factual information collected by NTSB investigators; it does not provide the final report, nor does it contain analysis, findings, recommendations, or probable cause determinations. As such, no conclusions about how or why the rupture occurred should be drawn from the information within the docket. Analysis, findings, recommendations, and probable cause determinations related to the rupture will be issued by the NTSB in a final report at a later date. A 30 in. pipeline owned and operated by Enbridge Inc., ruptured and released natural gas that ignited. One person was fatally injured in the accident that destroyed five residences, damaged 14 other residences, and burned about 30 acres of land, including railroad tracks. The public docket for this investigation is available online here.

Absent Demand Drivers, April Natural Gas Futures Falter Fourth Consecutive Day; Cash Prices Fall - Natural gas futures on Monday tumbled for a fourth straight day amid mild weather, demand uncertainty and steady production. The April Nymex contract settled at $2.664/MMBtu, down 3.7 cents day/day. May fell 4.1 cents to $2.698. Weak near-term weather demand also weighed on cash prices. NGI’s Spot Gas National Avg. shed 25.5 cents to $2.500. Bespoke Weather Services said that its mid-range forecast on Monday had shifted a tad cooler from a previous outlook on Friday, with the potential for colder air next week. But the current week looks to be exceptionally warm and, overall, conditions are expected to prove mild over the balance of March, minimizing heating demand. “We still have plenty of warmth this week…including a couple of days near daily record levels in terms of national” gas-weighted degree days, Bespoke said. “This skews the 15-day period as a whole warmer than normal, despite the cooler look next week.” Production, which had recovered from the freeze-offs caused by the Arctic blast that derailed Texas’ energy system in February, held steady on Monday near 90 Bcf. Against that backdrop, traders fretted about supply/demand uncertainty created by the weather outlook and punctuated by last week’s bearish Energy Information Administration (EIA) inventory report, Bespoke said.

US gas storage draw measures well below normal for second straight week | S&P Global Platts --US natural gas storage volumes declined less than the market expected for the second consecutive week, weighing again on prices as only three net draws likely remain before injection season begins. Stay up to date with the latest commodity content. Sign up for our free daily Commodities Bulletin. Sign Up Storage inventories decreased by 52 Bcf to 1.793 Tcf for the week ended March 5, the US Energy Information Administration reported the morning of March 11. The withdrawal was weaker than the 65 Bcf draw expected by an S&P Global Platts survey of analysts. It was also less than the 72 Bcf draw reported during the same week last year and the five-year average withdrawal of 89 Bcf. The draw was well below the 98 Bcf pull reported for the week prior as production rebounded 5.5 Bcf/d week over week, according to S&P Global Platts Analytics. Higher US production and softening demand pushed back on other sources of supply, with Canadian imports falling 1.5 Bcf/d. US demand came down sharply on the week alongside a warm-up in temperatures. Total demand dropped more than 6 Bcf/d week over week, with residential and commercial losses accounting for almost all the decline. After last week's massive storage miss, uncertainty was high heading into the March 11 EIA report. Survey responses ranged from a draw of 42 to 86 Bcf. This uncertainty led to gas prices trading in a relatively tight range over the course of the week, with the April NYMEX shifting between $2.60/MMBtu and $2.70/MMBtu. The Henry Hub April contract slipped 3 cents to $2.65/MMBtu in trading following the release of the weekly storage report. Outside of the uncertainty created by last week's EIA report, benign weather forecasts and sizeable wind generation also kept a lid on pricing. Storage volumes now stand 257 Bcf, or 12.5%, less than the year-ago level of 2.050 Tcf and 141 Bcf, or 7.3%, less than the five-year average of 1.934 Tcf. Platts Analytics' supply and demand model currently forecasts a 22 Bcf withdrawal for the week ending March 12, which would measure 37 Bcf weaker than the five-year average, as the withdrawal season enters its final month.

April Natural Gas Futures Flounder Following Bearish Storage Report - Natural Gas Intelligence - Natural gas futures on Thursday lost ground for the sixth time in seven sessions after the latest federal inventory report disappointed for a second straight week and forecasts called for easing weather demand. The April Nymex contract settled at $2.668/MMBtu, down 2.4 cents day/day. May shed 2.5 cents to $2.703. NGI’s Spot Gas National Avg. clawed out a modest gain for the second straight day, rising 1.0 cent to $2.495. [Brighter Days Ahead: Listen in as Price & Markets Editor Leticia Gonzales looks forward at the North American natural gas market as it recovers from the historic freeze that crippled Texas on NGI’s Hub & Flow podcast.] The U.S. Energy Information Administration (EIA) on Thursday reported a withdrawal of 52 Bcf from natural gas storage for the week ended March 5. The result was notably shy of expectations set by analysts ahead of the report. A Bloomberg survey showed respondents predicting a median 78 Bcf withdrawal, while a Reuters poll landed at a median decline in stocks of 76 Bcf. NGI’s model predicted a 104 Bcf pull. A year earlier, EIA recorded a 72 Bcf withdrawal for the period, and the five-year average is a pull of 89 Bcf. “It was warmer than normal over much of the U.S.” during the covered week, hindering heating demand, NatGasWeather said. Still, the firm noted that colder temperatures in the Northeast and parts of the West, coupled with stronger liquefied natural gas (LNG) exports, were expected to fuel enough demand to muster a storage pull in the 70s Bcf. The latest report follows a “stunning” miss a week earlier, the firm noted. Utilities pulled 98 Bcf from storage in the week ended Feb. 26, well off market expectations for a withdrawal in the 130s-140s Bcf. “This week’s bearish miss confirmed weaker demand that carried over from last week’s report instead of prospects for a correction to it,” NatGasWeather added. “This suggests next week’s draw will be near 20-25 Bcf, if not lower and closer to 10 Bcf.” While production and LNG feed gas “have recovered to pre-Arctic blast levels, demand hasn’t.”

Natural Gas Forward Prices Slip as Market Eyeing Near-Term Bottom - Natural gas prices trimmed about a nickel or so from the forward curve as spring appears to have sprung a couple of weeks early. The April contract was down 6 cents on average for the March 4-10 period, while the summer strip (April-October) was down 4.0 cents, according to NGI’s Forward Look. Similar losses were seen further out the curve as the storage picture has improved a bit in recent weeks. An increase in oil prices also is seen as potentially driving some modest increases in associated gas production later this year. The winter 2021-2022 strip fell an average 5.0 cents for the trading period ending Wednesday, while summer 2022 slipped a penny on average, Forward Look data showed. Only New England points registered any notable deviation from other U.S. markets, and even then, losses were not extraordinary. Algonquin Citygates April prices fell 12.0 cents from May 4-10 to reach $2.858, according to Forward Look. The summer strip was down only 2.0 cents to $2.460 as was the winter 2021-2022 strip, which averaged $5.840. Similar declines were seen at Tennessee Zone 6 200L. Technicals continue to point in a bearish direction for benchmark Henry Hub prices, and by extension other U.S. markets, according to EBW Analytics Group. Closing below $2.68/MMBtu early in the period took out key support for the April contract. Friday’s trading was expected to “test further whether futures are forming a near-term bottom.” Some changes in the background state support that theory. EBW analysts noted that weather forecasts had cooled a bit for the coming few days, but then they warm again by the end of the week. Production also has recovered from some maintenance-induced disruptions over the past week, while LNG demand remained strong, according to EBW. Bespoke Weather Services said the weather models were pointing to a possible weak trough swinging into the eastern United States toward days 14-15, though it’s not expected to be a “significant player” in the overall pattern. Any cooling was expected to be short-lived, with the bias of the pattern staying to the warmer side into early April. Power burns also remained weak, even adjusted for weather, according to Bespoke. The firm said the market’s reluctance to send prices even lower indicated there was an expectation that data would improve soon. “It better, given how weak recent supply/demand balances have been, but we simply do not see this showing up yet.”

Judges press FERC on its level of scrutiny into demand for Spire gas pipeline project — — The US Federal Energy Regulatory Commission faced stiff questioning from appeals court justices over whether it too readily accepted a pipeline company's assurances about the need for a natural gas pipeline project backed only by an affiliate. A decision in the case could have implications for the level of scrutiny the commission must use to assess the market need for future gas projects. At issue is the 65-mile Spire STL project, approved by FERC in August 2018 and entered into service in November 2019, moving 400,000 Dt/d of gas from the Rockies Express Pipeline system into the St. Louis Area. The project faced objections from the Environmental Defense Fund, which argued FERC should have looked beyond the project's contract for 88% of capacity with affiliate Spire Missouri to assess the need. Enable Mississippi River Transmission (MRT) and the Missouri Public Service Commission also raised objections during the FERC review that the project was unneeded and would negatively impact St. Louis gas market competition. Of note, then-Commissioner Richard Glick, who now chairs the commission, dissented on FERC's November 21, 2019, rehearing order (CP17-040), contending neither Spire STL not Spire Missouri had explained why capacity on the preexisting pipeline owned by MRT was not sufficient to meet Spire Missouri's needs. He said the order turned the needs demonstration requirement into "a meaningless check-the-box exercise." During oral argument March 8, all three judges on a panel of the DC Circuit Court of Appeals pressed FERC on whether under the circumstances of the Spire case there wasn't a greater burden on the regulator to examine whether there was self-dealing between the pipeline company and its affiliate (Environmental Defense Fund v. FERC, 20-1016). "What more do you need than constructing a pipeline for an affiliate where it's not serving new market and [is] providing no price benefit to customers? That just leaves the obvious red flag that it's for the benefit of the shareholders, not the customer," Judge David Tatel said. "What else do you need that would be more dramatic than this?" And Judge Harry Edwards continued to press the point. "Judge Tatel is asking you very pointedly in this situation where there are no new needs and no cost savings, is it enough for us to accept your argument that in this situation [Spire] offered what they claimed were business reasons and, 'we had no reason to go behind it'. That's strange argument," he said. Defending the decisions, FERC attorney Anand Viswanathan said the commission on rehearing pointed to rationales offered by Spire as being sufficient to overcome concerns raised about overbuilding. Those included enhancing reliability and supply security, reducing reliance on older pipelines and mature basins, and eliminating reliance on propane peak-shaving infrastructure. "Based on that record, FERC found no reason to second-guess the business judgments of the pipeline, Viswanathan said. "Based on that record, I don't think it's fair to say that the commission relied exclusively on the affiliate agreements here." But the judges appeared skeptical of FERC's decision to accept the business judgments. If FERC commissioners are "saying nothing more than there's no reason to second-guess what has been offered, that's really not an agency doing its own independent analysis of the factors that would justify this proposal,

USA Sells 10+ Million Barrels of SPR Oil - The U.S. Department of Energy’s (DOE) Office of Fossil Energy has announced that contracts have been awarded from a recent Congressionally directed Strategic Petroleum Reserve (SPR) crude oil sale. The DOE said it had awarded contracts to seven entities, comprising Glencore Ltd., Marathon Petroleum Supply and Trading LLC, Motiva Enterprises LLC, Phillips 66 Company, Shell Trading (US) Company, Valero Marketing and Supply Company, and the Government of Australia. The awarded contracts represent a total sale of 10.1 million barrels of crude oil, the DOE noted, adding that, of this amount, 4.1 million barrels will be sold from the Bryan Mound site, 3.3 million barrels from the West Hackberry site, and 2.7 million barrels from the Big Hill site. The SPR will schedule deliveries to take place in April and May this year, with early deliveries available in March 2021, the DOE revealed. A total of ten companies responded to the notice of sale, which was issued on February 11, submitting 60 bids for evaluation. The Congressionally directed sale fulfills requirements of Section 403(a)(4) of the Bipartisan Budget Act of 2015 and the Consolidated Appropriations Act of 2018, the DOE outlined. Proceeds of the sale will be deposited in the U.S. Treasury by the end of Fiscal Year 2021. The SPR is the world’s largest supply of emergency crude oil and was established primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program, according to the DOE’s website. The federally owned oil stocks are stored in underground salt caverns at four sites - Bryan Mound, Big Hill, West Hackberry, and Bayou Choctaw - along the coastline of the Gulf of Mexico. The SPR is said to have an authorized storage capacity of 714 million barrels.

Gulf of Mexico- HWCG, Helix extend fast oil spill -- Helix Energy Solutions Group has entered into a new agreement for offshore oil spill response resources with HWCG, a consortium of deepwater oil and gas companies in the Gulf of Mexico who have come together with the shared goal of quickly responding to offshore oil spills. Under the agreement, HWCG’s members are given the opportunity to identify the Helix Fast Response System as a response resource in permit applications to U.S. federal and state agencies, and to deploy the Helix Fast Response System to respond to a well control incident in the U.S. Gulf of Mexico. Developed in 2011, based on Helix’s experience as a responder in the 2010 Macondo well control and containment efforts - the Deepwater Horizon disaster - the Helix Fast Response System consists of the Helix Producer I floating production unit, Q4000 or Q5000 vessels, subsea intervention systems, crude transfer systems, and other well control equipment. Under the terms of the agreement, HWCG will pay Helix an annual retention fee. HWCG’s members will receive a credit against the annual retention fee for every day that a member utilizes the Q4000 or Q5000. The agreement replaces the parties’ prior agreement and is effective April 1, 2021, for an initial two-year term.

Coastal authority backs proposal to boost Louisiana's share of offshore oil, gas revenue --A planned U.S. Senate bill to increase the amount of federal offshore oil revenue shared with Louisiana and other Gulf Coast states, and to set up a similar revenue sharing program for wind energy generated in federal waters, got a vote of support from the Louisiana Coastal Protection and Restoration Authority. The proposed Reinvesting in America's Shoreline Economies and Ecosystems Act would fulfill promises that Sens. Bill Cassidy, R-La., and Sheldon Whitehouse, D-R.I., made last summer to expand revenue sharing for coastal states under the Gulf of Mexico Energy Security Act when it became clear that such an expansion would not be included in the wildly popular Great American Outdoors Act. The senators have not yet introduced the revenue sharing bill. The outdoors act diverts a greater share of outer continental shelf energy revenue – mostly from Gulf of Mexico oil and gas production – to guarantee $900 million a year for improvements to national and local parks and wildlife refuges. It also provides $11.9 billion over five years to chip away at an enormous backlog of deferred maintenance on public lands. While the details of the planned revenue sharing bill won't be known until it is introduced the letter that the coastal authority agreed Wednesday to send to Cassidy and Whitehouse says it would change the 2006 Gulf of Mexico Energy Security Act to increase revenue shared with Gulf Coast states. The states now receive 37 percent of the revenue that is paid to the federal government for some wells drilled or developed in federal Gulf waters since 2017, and a much smaller share for wells developed between 2007 and 2016. The Louisiana Constitution requires that money be used for coastal levees or restoration projects.

Tribes worry Line 5 tunnel construction could bring sex trafficking, violence to Native communities -- When oil and gas companies employ hundreds of out-of-town, typically male workers to work on pipeline projects, an uptick in that area’s rates of sexual violence and sex trafficking usually follows. That’s becoming a concern for Michigan’s Indigenous people, who cite Canadian oil company Enbridge’s impending Line 5 pipeline tunnel project in the Mackinac Straits as a reason to worry for their already-vulnerable tribal communities nearby. The correlation between extractive industry construction like pipeline projects and sex trafficking is well-documented. Temporary housing communities for the labor force building the pipelines, often called “man camps,” result in a temporary population boom in often-rural areas. These create a strain on the area’s social infrastructure and can stretch police services thin if crimes occur. There’s also a lot of documentation of Native women and children experiencing disproportionately high rates of violence, kidnappings and murder. According to research from the National Instutute for Justice, Native American women face a murder rate 10 times higher than the national average. About 84% experience some form of violence in their lifetimes. In Michigan, about 25.5% of all murders of Native Americans go unreported to the FBI. There is no state or national database of missing and murdered Indigenous women.The combination of these realities results in hotbeds of violence for Indigenous populations when an oil construction project comes to town — like one will in the Straits of Mackinac once Enbridge begins work on its Line 5 replacement pipeline. And members of nearby tribes are raising concerns.“I can see that happening to us, no doubt. I think it’s already happening here in northern Michigan,” said Stacey Ettawageshik, a member of the Little Traverse Bay Bands of Odawa Indians (LTBB) and lead advocate for the tribe’s Survivor Outreach Services.“As far as sex trafficking goes, as Indigenous people we are way more at risk than the general population. And although we don’t make up a lot of the population here … there are definitely high rates of violence, sexual violence, especially against Native women,” Ettawageshik said.

Canadian minister: Straits of Mackinac oil pipeline 'nonnegotiable' - Canada isn't taking "no" for an answer when it comes to the Line 5 oil and gas pipeline. Gov. Gretchen Whitmer in November announced plans to revoke the 1953 easementallowing the controversial, 68-year-old twin pipelines to operate on the Straits of Mackinac lake bottom. Canadian oil transport giant Enbridge, which owns and operates Line 5, then announced its intention to defy Whitmer's order to cease operation by May.On Thursday, Canada's natural resources minister told a committee of the House of Commons he believes Line 5 will remain operating over Whitmer's order."We are fighting for Line 5 on every front and we are confident in that fight," Seamus O'Regan told a special House of Commons committee on Canadian-U.S. relations, as quoted by the Canadian Press."We are fighting on the diplomatic front, and we are preparing to invoke whatever measures we need to in order to make sure that Line 5 remains operational. The operation of Line 5 is nonnegotiable."O'Regan called Line 5 "very different" from the Keystone XL pipeline in the U.S. Plains states that President Joe Biden shut down on his first day in office. But he didn't elaborate on the differences.O'Regan said he discussed both Line 5 and Keystone XL with new U.S. Energy Secretary — and former Michigan governor — Jennifer Granholm during their initial conversation last week.Line 5 moves 23 million gallons — about 540,000 barrels — of oil and natural gas liquids per day east through the Upper Peninsula, splitting into twin underwater pipelines through the Straits, before returning to a single transmission pipeline through the Lower Peninsula that runs south to Sarnia, Ontario.The pipeline, and particularly its more than 4-mile underwater section in the Straits, have for years been a source of contention.Enbridge was responsible for one of the largest inland oil spills in U.S. history — a major leak on one of its large oil transmission lines near Marshall in July 2010. That spill fouled more than 38 miles of the Kalamazoo River and took four years and more than $1 billion to clean up. Enbridge in 2016 agreed to a $177-million settlement with the U.S. Justice Department and Environmental Protection Agency, including $62 million in penalties, over the Marshall spill and a 2010 spill on another of its pipelines in Romeoville, Illinois. A similar spill disaster on Line 5 in the Straits would devastate the Great Lakes, shoreline communities and the Michigan economy, critics of the pipeline have long contended. Enbridge officials have countered that Line 5 is safe — despite findings of anchor strikes, missing supports and lost protective coating over recent years.

Some Michigan propane suppliers switching to rail cars in anticipation of Line 5 closure - Propane suppliers reliant on Enbridge’s Line 5 are transitioning to railroad cars to get their products in anticipation of the oil pipeline shutting down in May.Several suppliers in Michigan began exploring alternatives when Gov. Gretchen Whitmer announced the end of an easement that allows the controversial 67-year-old pipeline to run beneath the Straits of Mackinac. From Superior, Wisconsin, Line 5 runs east to the Upper Peninsula then southeast to a Rapid River township refinery, near Escanaba, where natural gas liquids from Line 5 are stripped for propane. On Nov. 13, Whitmer gave Enbridge until May to decommission Line 5 after announcing the easement revocation following a yearlong DNR compliance review. Enbridge says the aging pipeline is safe, but opponents have been arguing for years that the risk posed by an oil spill where Lakes Michigan and Huron connect is too great. Enbridge pushed back on Whitmer’s order, filing a lawsuit and saying it won’t comply with the shutdown absent a court order. Canadian officials have also been vocal against the shutdown, with Seamus O’Regan, Canada’s natural resource minister, telling a special House of Commons committee on Canadian-U.S. relations the country is “fighting for Line 5 on every front and we are confident in that fight.” Some suppliers have already transitioned to railroad cars while others await the result of a legal battle between state attorneys and Enbridge. Still, if the pipeline is shut down, Michigan propane suppliers in the Upper Peninsula will have a few months to figure out an alternate solution to meet their high demands during the fall and winter seasons. Experts and state officials are still identifying alternative energy options if the pipeline is shut down, and Whitmer’s U.P. Energy Task Force is expected to present a report on options at the end of March. Reports from the task force identify trucking and using railroad cars as alternatives to deliver propane, both would require significant infrastructure investment to support demands. Enbridge has plans to build a tunnel to house the pipeline and has received initial approval for permits from the state for the project.

Geologists Share Their Concerns With Drilling For Oil In Big Cypress - By all regards, the Tamiami Trail that streaks from Naples on the west coast of Florida to Miami on the east was an engineering wonder when it was built a century ago. Today, of course, the state and federal governments are spending billions of dollars to restore the watery flow of the Everglades, and part of that work involved lifting up sections of the Tamiami Trail -- U.S. 41 -- and placing them on bridges to allow the water to flow on south unimpeded towards the bay. You can see the successes by driving along the Trail as it cuts right through the heart of Big Cypress National Preserve, a 720,000-acre watery slice of natural wonderment, a wild landscape lurked by Florida panthers, bobcats and black bear and festooned in spring with Cardinal airplants, a species considered endangered by the state, that clutch onto dwarf cypress trees.Against the costly work of what is known as the Comprehensive Everglades Restoration Plan, there are ongoing efforts to seek oil beneath Big Cypress that could result in construction of miniature "dams" that could impact the river of grass as well by altering the flow of water. The damage would not be equal to that done by the Tamami Trail when it was built, but there would be impacts just the same.While the actual practice of drilling oil out from under the national preserve does not greatly concern two geologists well-familiar with the underpinnings of South Florida, the surface infrastructure needed to drill for oil is a concern when risks to the preserve are explored, they told the Traveler in separate interviews.“The issue, at least in my opinion in terms of hydrology and groundwater contamination and those kinds of issues, relates to the surface facilities around the well," said Tom Missimer, who spent 34 years consulting on oil drilling before heading into academia at Florida Gulf Coast University a little more than a decade ago. "The key to me is really not the construction of the well. The issue is if they’re maintaining surface facilities.”Those facilities might include large tanks to store the recovered oil before it's trucked it off to a refinery, or a pipeline system to pump the oil away. Also involved are containment systems for the briny water that is separated from the oil. "Your potential points of contamination are around the site where they collect the oil and water,"

Valero crude oil leak heightens concerns over proposed pipeline | Southern Environmental Law Center --Reports of an 800-gallon crude oil leak last year at a storage site near the terminus of a proposed high-pressure oil pipeline by Valero Energy Corp’s have heightened concerns about the risks the project poses to the Memphis Sand Aquifer, which supplies drinking water to the city.Automated monitoring systems failed to detect the leak, caused by corrosion in 37-year-old pipes, at Valero’s Marshall County storage site in Mississippi. This is just couple counties away from Shelby County, Tennessee, where Memphis is located. Even though pipeline companies are now required to install leak detection systems, these do not always work as planned. In a study of 4,000 oil and fuel spills reported to the Pipeline and Hazardous Materials Safety Administration since 2010, only about seven percent were discovered because of leak detection systems.Valero and Plains All American Pipeline have proposed building a high-pressure crude-oil pipeline through southwest Memphis, home to a number of Black neighborhoods, and directly through the wellfield that provides the local neighborhoods’ drinking water. Community groups have risen in opposition to the dangerous proposal.“This latest leak just proves what we’ve been saying about this all along: There is no such thing as a safe oil pipeline,” said Justin J. Pearson, of Memphis Community Against the Pipeline. “Pipelines leak, almost inevitably. It’s not an abstract risk of harm, it’s something that will almost certainly happen if this project goes through.”The Memphis Sand Aquifer supplies clean, reliable drinking water to Memphis and Shelby County— the largest metropolitan area in the United States that relies exclusively on groundwater for its municipal water supply. see: Hydrogeologic report warns of pipeline threats to Memphis drinking water source.

Pipeline from Memphis to Byhalia draws opposition | MS Business Journal A planned 49-mile pipeline to carry oil from a refinery in Memphis and connect two pipelines at Byhalia (Marshall County, Mississippi) has gotten all its permits – but it has drawn opposition.U.S. Rep. Steve Cohen, a Democrat who represents Memphis, has asked President Joe Biden to rescind the permission the Plains All American project has gotten.On his first day in office, Jan. 20, Biden rescinded the permits for the 1,200-mile Keystone XL pipeline as part of his “transition” to “green energy.”And the effects on the oil industry are already being felt, including in Mississippi.Yak Access, based in Columbia, which lays hardwood mats to create roads in remote areas that need to be reached, such as for oil pipelines, has already taken a major hit because of Biden's order. Same for Jones Lumber Co. which produces the mats in Hazlehurst and Natchez.Neither business responded to messages left to ascertain whether they have contracts or bids on the project.Activists in Memphis and Cohen cite what they say are concerns about the potential contamination of the city's drinking water drawn from the Sand Aquifer located deep below the surface.The city's drinking water, first drawn from “artesian wells” in the late 1800s, is still a point of civic pride for Memphis because of its purity.And the opponents say that the decision to route the 24-inch-diameter pipeline through industrialized areas and low-income minority neighborhoods reflects “environmental racism.”

Refiners Are Emerging from Deep Freeze and Buying U.S. Oil Again -  -- Physical oil prices in the U.S. are rebounding to levels seen before a deep freeze hit Texas last month, showing fuel-making plants are thirsty for crude again. Seven of 18 refineries affected by the cold blast -- making up over 2 million barrels a day of crude processing capacity -- were operating normally as of Monday. Mars Blend, a regional sour crude benchmark, traded this month at the largest premium to Nymex oil futures in nearly three weeks, while other key grades also firmed. Another reason for the strength is due to increased demand for U.S. crude from overseas buyers after OPEC+’s surprise decision to continue limiting supply. As much as 5.5 million barrels a day of crude processing capacity was suspended when arctic temperatures in the U.S. south halted power supply and damaged equipment at refineries in America’s energy hub in February. Crude inventories piled up by a record 22 million barrels as a result. Since then, plants including those operated by Motiva Enterprises LLC and Valero Energy Corp. have restarted, and the rest of the sites will likely resume operation this week. Buying is popping up from South Korea, India, Canada and Europe, although interest from China has been muted because of high inventories. With OPEC producers keeping supply cuts in place in April, some customers that were expecting available supply from Middle East producers, especially of medium-high sulfur crudes, may have to seek alternatives like Mars Blend or Poseidon. Saudi Arabia’s decision to increase official selling prices for its April supply to Asia and the U.S. could also spur additional purchases of U.S. sour crudes.

Texas Output Returning with Caution -Texas fuel makers are racing to restore operations knocked out by mid-February’s brutal winter storm, but they’re also casting a wary eye on improvements in the market and may be reluctant to come back at full throttle. Refiners are gun-shy after 12 months of losing money in a market that was hit hard by Covid-19, prompting several plants to close or slash production. So, even as the market beckons with fatter profit margins, tighter inventories and signs of rising demand, they are weighing the risk of being stuck with a glut of fuel supplies again. It’s easy to see why they would be tempted, though. Gasoline inventories on the Gulf Coast plunged by 11 million barrels in the week ended Feb. 26 as the region’s refining capacity sank to a record low of less than 41%, while gasoline demand rose the most since May. The theoretical profit margin for refining crude oil into gasoline and diesel, known as the crack spread, is trending near its highest since February of 2020. But demand for this time of the year remains significantly lower than in March 2019, when there was no pandemic, and no one can say for sure when life will come back to normal. Refiners are also facing rising costs for tradeable credits known as RINs that are used to show compliance with the nation’s Renewal Fuel Standard. “Margins have improved a lot, especially FCCs,” said Robert Campbell, head of oil products research for Energy Aspects Ltd., in a reference to gasoline-making units. “But RINs are a killer! Adjusting for that, margins are not so great.” As of Friday, seven of 18 refineries impacted by the storm, including those that shut all or some units, were able to operate normally. Most of the rest will likely restore operations by the end of this week.

Trader Says USA Shale Producers Unlikely to Ramp Up Output -- Oil’s surge following OPEC+’s surprise move to maintain cuts in supply shows the producers’ group is in charge of the market, Vitol Group said. The Organization of Petroleum Exporting Countries and its allies shocked the market on Thursday when they opted to keep output curbs largely in place, belying expectations that they would pump more crude to meet rising demand. Benchmark Brent futures jumped toward $70 a barrel at the end of the week. “The market is telling us that OPEC+ have control,” Mike Muller, Vitol’s head of Asia, said Sunday in an online forum hosted by consultant Gulf Intelligence. “We’re going to get a stock-draw that is going to accelerate through the second quarter and that’s why the market is doing what it’s doing.” Oil producers and traders were left reeling last year after the coronavirus pandemic wiped out a third of energy demand, dragging down prices. Surplus crude flooded into storage, swelling stockpiles to the point where U.S. futures dropped below zero. OPEC+ has since implemented unprecedented production cuts, returning prices to pre-pandemic levels. Its decision to maintain output restrictions to support prompt prices -- the cost of barrels sold in the coming months -- indicates the group aims to cut into that mass of stored oil by undersupplying the market. Key OPEC+ member Russia previously voiced concerns that such a move would allow rival drillers in the U.S. to seize market share. Yet shale producers are unlikely to ramp up output, Muller said. “U.S. rig counts are still nowhere close to supporting the U.S. returning to anywhere like the 13 million barrels a day we closed 2019 at,” he said. Muller spoke Sunday before Saudi Arabia said it had thwarted drone and missile attacks on some of its facilities. Brent crude surged past $70 a barrel in early trading on Monday before erasing gains. Further increases in demand could still push prices higher, according to Muller.

Oil and gas pipelines plague US property owners - Some years ago, David Howell got a call from a landowner in Central Texas who had 300 feet of an old oil pipeline buried under his property. It was clearly no longer in use. The area around the pipeline was overgrown and the signage had faded or fallen away. The landowner wanted to build there now, and was wondering if Howell could come remove it.Howell, who owns a pipeline salvage business, thought he could do the work for as little as $1,000. There was no clause in the landowner’s agreement with the pipeline company regarding abandonment, so the company had no responsibility to remove the pipeline. But the landowner nevertheless needed the pipeline company’s permission, as the company still owned the line. The company acquiesced, but it insisted that the landowner use a contractor of its choosing, who was quoting the work at $50,000. The landowner ultimately sold the property rather than deal with the pipeline.“I get a call a week from some landowner who says, ‘I got an abandoned pipeline, can you come take it out?’” Howell said. “Basically [pipeline workers] are putting a pipeline on some schmuck’s property and leaving it there, and that’s happening all over the United States. Hundreds of thousands of miles of pipeline have been just abandoned on peoples’ property.”It’s a familiar story for Howell, who has been salvaging and recycling abandoned pipelines for more than 20 years, and it’s one that could become increasingly common as renewables outcompete oil and—in particular—natural gas pipelines age out of service.There are some 3 million miles of natural gas pipelines buried in the US, shuttling the fuel between drilling sites, storage facilities, power plants, and homes. More than half of all gas transmission lines in the country were installed before 1970, according to data from the Pipeline and Hazardous Material Safety Administration. Those pipelines have an average lifespan of 50 years. And it’s not just old pipelines that are set to go out of service. Younger pipelines are also at risk of falling into disuse as the power sector comes to rely less on natural gas in favor of wind, solar and batteries. Not so long ago, natural gas was heralded as a bridge from fossil fuels to renewables. No clearer sign exists that that bridge has been crossed than the cancellation of several high profile natural gas pipeline projects in the last year, including theAtlantic Coast Pipeline and the Constitution Pipeline. What does that mean for the millions of miles of gas pipelines that are already in the ground?

Oil Industry’s Fight to Roll Back Tribal Sovereignty in Oklahoma - IN A LANDMARK decision last summer, the U.S. Supreme Court confirmed that the eastern half of the state of Oklahoma is reservation land, legally “Indian Country.” Although Oklahoma officials spent acentury ignoring treaties signed by leaders of the Muscogee (Creek) Nation, the justices asserted that the treaties remain the law of the land — meaning, most likely, that the reservations of four other tribal nations that share a distinct legal and political history in Oklahoma also stand.McGirt v. Oklahoma, a major victory for Indigenous nations, is now having legal consequences well beyond the state. The Supreme Court ruling, however, was only the beginning of a new battle to redefine Oklahoma’s identity.On its face, the McGirt case had nothing to do with the oil and gas industry. Jimcy McGirt, convicted to life in prison for child sex abuse, argued that the land where he committed the crimes qualifies as a reservation. Thus, he successfully argued that his conviction should be overturned since he should have been tried in federal, not state, court.The problem for the oil and gas industry is that McGirt’s push to reconsider jurisdiction on the band of territory where the alleged crime took place meant also reconsidering the status of around half of Oklahoma. The decision upended the state’s authority over a swath of land that produces 40 percent of Oklahoma’s total monthly oil and gas production and is home to the global oil pricing hub of Cushing, a town known as the “pipeline crossroads of the world.”Almost immediately after the court ruled, Republican Gov. Kevin Stitt placed representatives of the oil and gas industry at the head of a key commission deciding what the state’s post-McGirt future will look like. Fossil fuel representatives are also moving to deploy a complex legal strategy aimed at forcing the courts to resolve uncertainty about what it now means to produce oil in Oklahoma. Half a year after the landmark ruling, both of these efforts show the central role the oil and gas industry has played in the state, as Oklahoma responds to the Supreme Court.

Energy companies have left Colorado with billions of dollars in oil and gas cleanup — High Country News – When an oil or gas well reaches the end of its lifespan, it must be plugged. If it isn’t, the well might leak toxic chemicals into groundwater and spew methane, carbon dioxide and other pollutants into the atmosphere for years on end. But plugging a well is no simple task: Cement must be pumped down into it to block the opening, and the tubes connecting it to tanks or pipelines must be removed, along with all the other onsite equipment. Then the top of the well has to be chopped off near the surface and plugged again, and the area around the rig must be cleaned up. There are nearly 60,000 unplugged wells in Colorado in need of this treatment — each costing $140,000 on average, according to the Carbon Tracker, a climate think tank, in a new report that analyzes oil and gas permitting data. Plugging this many wells will cost a lot —more than $8 billion, the report found. Companies that drill wells in Colorado are legally required to pay for plugging them. They do so in the form of bonds, which the state can call on to pay for the plugging. But as it stands today, Colorado has only about $185 million from industry — just 2% of the estimated cleanup bill, according to the new study. The Colorado Oil and Gas Conservation Commission (COGCC) assumes an average cost of $82,500 per well — lower than the Carbon Tracker’s figure, which factors in issues like well depth. But even using the state’s more conservative number, the overall cleanup would cost nearly $5 billion, of which the money currently available from energy companies would cover less than 5%. This situation is the product of more than 150 years of energy extraction. Now, with the oil and gas industry looking less robust every year and reeling in the wake of the pandemic, the state of Colorado and its people could be on the hook for billions in cleanup costs. Meanwhile, unplugged wells persist as environmental hazards. This spring, Colorado will try to tackle the problem; state energy regulators have been tasked with reforming the policies governing well cleanup and financial commitments from industry. “The system has put the state at risk, and it needs to change,”

What's next for Biden's freeze on new oil drilling leases - President Biden's decision to halt new oil drilling leases on federal lands will have very minor effects on U.S. production through at least the end of 2022, per the Energy Information Administration's first analysis of the policy change. The leasing freeze is among the most controversial energy decisions from the nascent administration, drawing strong attacks from Republicans and the oil industry. "No effects will likely occur until 2022 because there is roughly a minimum eight-to-ten month delay from leasing to production in onshore areas and longer in offshore areas," EIA's latest monthly outlook states.The change will reduce production by an average of less than 100,000 barrels per day next year compared to what's expected without the freeze. EIA expects continued recovery from the depths of pandemic. Their latest projections show production rising from an average of 11.1 million bpd in Q2 of this year to 12.41 million bpd in Q4 of 2022. What we don't know: The long-term effect of the administration's leasing policy on U.S. production.That's partly because the policy itself is in flux. Yesterday Interior announced a "virtual forum" on March 25 as part of its review. It will help inform an interim report slated for completion this summer. EIA data shows that about 22% of U.S. oil production and 12% of natural gas production in 2019 came from federal lands and waters, Bloomberg notes. It's pretty clear that Biden, who vowed major new restrictions during the campaign, won't revert to prior leasing practices. Interior said in yesterday's announcement that it wants to "put our public lands’ energy programs on a more sound and sustainable conservation, fiscal and climate footing."

In bid to shift oil workers to clean energy, Biden faces pay gap — Texans have found their way to oil and gas fields and refineries for generations, heading to places such as Midland and Beaumont, where, with little more than a capacity for strenuous and dirty work, they could earn incomes that offered entry into the middle class. But as governments shift from fossil fuels to solar panels and wind turbines, hoping to hold off the worst effects of climate change, that way of life is expected to wind down in the decades ahead. President Joe Biden envisions the nation’s oil workers and coal miners finding new jobs in a clean energy economy, building solar farms and manufacturing batteries, and applying their experience to harness other forms of energy. It’s a tall order, requiring not only hundreds of thousands of workers to start new careers but also a massive expansion of the nation’s clean energy industries. Most of the world’s renewable energy technologies, from lithium ion batteries to wind turbines, are produced in China and other East Asian nations, which offer low labor costs. In addition, clean energy jobs in the United States, such as working on wind turbines or installing solar panels, don’t pay nearly as well as those in the oil and gas industry, where even workers in the lower ranks can earn six-figure salaries. “Someone working in a refinery leaving to go install solar panels, they’re probably going to take a 75 percent cut in pay,” said Rick Levy, president of the Texas AFL-CIO, the state’s largest labor union. “What do we do for the folks that have been powering this country for the last 100 years? How do we shape this new economy so jobs can be sustaining in the same way jobs in the fossil fuel industry have been?” It’s a conundrum plaguing communities from Appalachian coal country to Wyoming’s natural gas fields, and perhaps nowhere more than Houston, which has long reigned as the “energy capital of the world.” Oil and gas made Houston’s economy hum, and now civic leaders are starting to ask whether they can take the capital and knowledge built over a century of drilling and refining and use it to create well-paying jobs in new industries such as advanced battery manufacturing and offshore wind farms. Unlike oil, however, clean energy technology can be produced anywhere, regardless of the rocks, minerals and geological formations that lie beneath the surface. China and other East Asian nations have steadily come to dominate global manufacturing, developing supply chains and amassing an expertise in producing the equipment that enables clean energy. More than 70 percent of the world’s solar panels are made in China, according to the research and consulting firm IHS Markit. China now is looking to dominate the market for advanced batteries that will power the coming wave of electric vehicles.

As climate fight shifts to oil, Biden faces a formidable foe (AP) — President Joe Biden’s bid to tackle climate change is running straight through the heart of the U.S. oil and gas industry -- a much bigger, more influential foe than Democrats faced when they took on the coal industry during the Obama years. Coal dominated U.S. power generation for decades, with the bulk of that fuel coming from the massive strip mines of Wyoming’s Powder River Basin — a market that collapsed in recent years as utilities switched to natural gas. Fast forward to 2021 — and oil and gas have eclipsed coal to become the biggest human source of greenhouse gas emissions from public lands and waters, federal production data indicates. That’s made government fuel sales an irresistible target for Democrats as they try to rein in climate change. Biden’s election has put big oil companies on the defensive after largely having their way in Washington under President Donald Trump. But in taking on petroleum companies with a moratorium on oil and gas lease sales, Biden picked a foe that spent lavishly over decades to secure allegiance from Republican lawmakers. The industry is also deeply enmeshed in local economies -- from Alaska and the Gulf Coast to the Rocky Mountain drilling hub of Casper, Wyoming -- posing a challenge to the Democrat as he tries to navigate between strong action on the climate and recovering from the pandemic’s financial devastation. “You’re not hurting the big guys that are doing all the development. You’re hurting these little guys that are dreaming up where no one else thought there was any oil and gas,” said Steve Degenfelder, land manager for family-owned Kirkwood Oil & Gas in Casper, a community of about 60,000 known as The Oil City. Trump’s final months in office saw a huge spike in new drilling permits after his administration sped up approvals. As a result, some companies with the biggest presence on public lands have announced that they are ready to weather changes under Biden. An executive from Devon Energy told investors last month that the company was “ready to roll with the punches” and has about 500 drilling permits in hand. That will last the company for years in Wyoming and New Mexico. “They expected this....They prepared for it,”  “But the difference now is going to be stark. (Oil and gas companies) don’t get to run energy and environmental policy in the way they once did.” Gone from power in Washington are former industry lobbyists including Trump’s Interior Department secretary, David Bernhardt, who oversaw a loosening of rules for drilling. They’ve been replaced in many instances with environmentalists and industry critics. Biden’s nominee for Interior secretary, New Mexico Rep. Deb Haaland, has a history of anti-oil activism. Just a week after his inauguration, Biden announced the sales moratorium while officials review potential climate impacts and whether energy companies are paying enough. He’s following a familiar template -- a 2016 Obama-era moratorium on federal coal sales that Trump and other Republicans seized on as evidence of a “war on coal” by Democrats. That last “war” was against a retreating army: Coal production in Wyoming peaked in 2008 — and by the time of the moratorium, most major coal companies had gone bankrupt and scuttled plans for major expansions. The oil industry stumbled last year during the coronavirus pandemic and a price war, but now companies such as Devon, EOG Resources and Occidental Petroleum are poised to expand their presence on public lands, including in the Powder River Basin. Less insulated against the policy changes are smaller companies such as Kirkwood Oil & Gas, operating in downtown Casper since it was founded by William Kirkwood in 1965. It’s now run by his sons with about 40 employees and drilling in several western states.

Republicans put procedural delay on Haaland's nomination - Two GOP Senators have put holds on Rep. Deb Haaland’s nomination to be Interior Secretary, putting up a procedural hurdle that will delay the New Mexico Democrat's final confirmation vote. Sens. Steve Daines (Mont.) and Cynthia Lummis (Wyo.) said they will force debate on Haaland’s nomination, which would last for 30 hours. Despite the delay, Haaland, a New Mexico Democrat, is still expected to be confirmed since she’ll need just a simple majority to eventually get to the floor. A statement from Daines’s office said the senator thinks it's important to have a floor debate on Haaland’s record. “I will be forcing debate on Rep. Haaland’s nomination to Interior,” Daines said in a statement. “Her record is clear: she opposes pipelines & fossil fuels, ignores science when it comes to wildlife management & wants to ban trapping on public lands. Her views will hurt the Montana way of life and kill Montana jobs. We must consider the impact she will have on the West.” Lummis, in a statement, cited President Biden’s energy policies in her statement. “Congresswoman Deb Haaland will be a champion of this and even more radical policies, and I am committed to doing anything I can to fight the Biden and Haaland job-killing agenda,” she said. Haaland stressed during her Senate confirmation hearing that she’ll be implementing Biden’s agenda, not her own, and said fossil fuels will still play a role in the country’s energy mix.“There’s no question that fossil energy does and will continue to play a major role in America for years to come. I know how important oil and gas revenues are to fund critical services,” she said at the time. “But we must also recognize that the energy industry is innovating, and our climate challenge must be addressed.”

Senate confirms Michael Regan to lead EPA – --The Senate confirmed Michael Regan to lead the Environmental Protection Agency on Thursday, putting the North Carolina regulator in charge of restoring the climate and water pollution regulations that the Trump administration had weakened. Regan spent four years as secretary of the North Carolina Department of Environmental Quality, where his record of fixing environmental problems faced by low-income residents and communities of color drew national attention. It also propelled him to the Cabinet-level position above more prominent state regulators, such as California's Mary Nichols. "Michael Regan is the kind of person who can help unite us in common purpose as we respond to the climate crisis we face, as well as to clean our air, clean our water and strive to make sure that we don’t leave some of our communities, some of our neighbors behind in our efforts to do so," Sen. Tom Carper (D-Del.), chair of the Senate Environment committee, said on the Senate floor ahead of the vote. Regan was confirmed by a 66-34 vote, with 16 Republicans joining all 50 Democrats in support of him. He will be the first Black man to run the EPA, and the second African-American person to do so after Obama’s first-term administrator Lisa Jackson. In North Carolina, he won plaudits from environmentalists for blocking an extension of the Mountain Valley natural gas pipeline and for securing a blockbuster deal with Duke Energy to clean up waste ponds containing coal ash from the state's power plants. He also won a major settlement to address contamination of toxic "forever" PFAS chemicals with manufacturer Chemours. As administrator of the EPA, Regan will lead an agency that will play a major regulatory role in President Joe Biden’s aggressive climate agenda. Topping his to-do list will be crafting a new climate rule for power plants now that a federal court struck down the Trump EPA’s version, strengthening tailpipe emissions limits for cars and light trucks, and reducing methane leaks from the oil and gas sector. The power plant rule that's expected to curb carbon dioxide emissions will be a key driver in Biden's plans to eliminate greenhouse gases from the nation's electricity grid by 2035, and set the country on course to achieve net-zero emissions by mid-century.

The Petroleum Industry May Want a Carbon Tax, but Biden and Congressional Republicans are Not Necessarily Fans - The largest U.S. oil industry trade group is considering an endorsement of carbon taxes for the first time. But the biggest news may be how little that is likely to matter, as U.S. climate policy moves decisively in an entirely different direction.The American Petroleum Institute confirmed that its member companies are trying to arrive at a consensus about carbon pricing—a position that almost certainly will involve trade-offs, including less government regulation, in exchange for the industry’s support of taxes or fees.Economists have long favored making fossil fuels more expensive by putting a price on carbon as the most simple and cost-effective way to cut carbon dioxide emissions. Most big oil companies, including ExxonMobil, BP, Shell, and Chevron, endorse carbon pricing, although they have done little to push for it becoming policy. But API’s move for an industry-wide position comes just as the Biden administration has made clear that it is moving forward with regulation, investment in clean energy research and deployment and a broad suite of other government actions to hasten a transition from energy that releases planet-warming pollution.Unsurprisingly, many view the API move as a cynical effort to stave off a looming green  onslaught. “The American Petroleum Institute is considering backing a carbon tax — but only to prevent ambitious regulation of greenhouse emissions,” tweeted the Center for Biological Diversity.The White House had no immediate comment on the news. But for now, anyway, there is little sign that the Biden administration is prepared to surrender regulatory authority on climate in exchange for a tax. Biden’s team includes avowed advocates of carbon taxes—most notably, Treasury Secretary Janet Yellen. But the unmistakable message from the White House is that it will pursue a government-led drive for action on climate change, not a market-driven approach where taxes or fees do most of the work of weaning the nation off fossil fuels. The administration clearly has been influenced by political and economic thinkers who argue that pricing carbon may be necessary for reaching the goal of net zero emissions, but it would be more politically savvy—and ultimately, more effective—to start with other action to mandate or incentivize cuts in greenhouse gas pollution.

President Biden, please stop Enbridge Line 3 | Opinion - Minnesota Reformer - Another egregious betrayal of Indigenous people’s rights and a cynical betrayal of the U.S. legal process are currently taking place in northern Minnesota over Enbridge Energy’s Line 3 oil pipeline out of Alberta, Canada. The line will carry what’s known as tar sands oil — the dirtiest, most polluting and most expensive-to-extract oil anywhere on the planet. It also is nearly impossible to clean up because it sinks to the bottom of waterways. Already, nearly 150 people (aka “Water Protectors”) have been arrested since construction began Dec. 1, 2020. Line 3 is the pollution equivalent of 50 new coal-fired power plants, and shows us how oil and water don’t mix in our territorial lands of 10,000 interconnected lakes, rivers and aquifers. Oh, and there is also a global pandemic in the plot, where Enbridge is the ongoing, super-spreader threat. Line 3 is yet the latest chapter in the scorched earth history of the many treaty betrayals and genocidal atrocities committed by state and federal governments in Indian Country, and it must be stopped. It is sometimes referred to as the “pandemic pipeline” because of the perfect storm created by COVID-19: A depressed economy, a fearful public, a set of Line 3 hearings that were conducted remotely and did not constitute a public process. Like the Minnesota Pollution Control Agency hearings, which were billed as “telephone town halls” that no one could get on. And if you did, you had only two minutes to tell them why the permits should not be issued. Consequently, for metro agencies, the pandemic also suppressed resistance and meaningful public participation in any form during the final phase of the regulatory process. Then under cover of the pandemic, with all this economic despair and hospitals full with COVID-19 patients, the pipeline becomes an economic lifesaver. For whom? Not those of us who live up north! And it was all shoved through at the end of the Trump administration. The now-$3.7 billion, 337-mile pipeline through Minnesota will cross more than 200 water ecosystems, including the Mississippi River twice, source of drinking water for millions of people. The biting irony about Line 3 is that Enbridge is using Minnesota largely as a pass-through state to flush Line 3 oil to foreign users — not Minnesota consumers, despite what many Line 3 supporters still believe. Probably because in 2018 alone, Enbridge spent $11 million in lobbying (and contributions) to the state, cities, counties, our often gullible Legislature and the Public Utilities Commission (PUC). A big part of Enbridge spending was creating an expensive but phony grass-roots — or “astro-turf” — front called “Minnesotans for Line 3,” a marketing campaign that was eventually exposed for the Enbridge-funded sham that it is.

'A Climate Time Bomb': 370+ Groups Urge Biden to Immediately Halt Line 3 Pipeline -A diverse coalition of more than 370 environmental and tribal rights organizations demanded Monday that President Joe Biden act immediately to halt construction of Enbridge's Line 3 pipeline, a multi-billion-dollar crude oil project that the groups called "an urgent threat" to Minnesota waters and the global climate. In a letter (pdf), the coalition representing more than 10 million people in the U.S. and Canada urged Biden to "take swift action to revoke the Line 3 tar sands oil pipeline's permits and stop its construction," pointing to the president's January decision to pull the plug on the Keystone XL pipeline as a model for future action. "We urge you to direct the Army Corps of Engineers to immediately reevaluate and suspend or revoke the Line 3 project's Clean Water Act Section 404 permit," the groups wrote. "Additionally, we urge you to revoke or amend Line 3's presidential permit, as you did for Keystone XL, to make it clear that the permit does not authorize this massive expansion." "Line 3 is a threat to water, Indigenous rights, and our global climate," the groups warned, "and its rushed construction in the midst of the Covid-19 pandemic is an extreme danger to Minnesotan communities and energy workers alike." With the approval of the state government, Enbridge—a Canada-based energy giant—began construction of the Minnesota portion of its Line 3 replacement project in December despite vocal opposition from Indigenous leaders, who warned the pipeline endangers local waters and tribal lands. If completed, the pipeline would have the capacity to transport more than 750,000 barrels of crude oil per day along a more than 1,000-mile route stretching from Alberta, Canada to Wisconsin, crossing hundreds of lakes and rivers along the way.

Shelter reports assaults, harassment linked to Line 3 pipeline workers - -- Multiple people allegedly assaulted by workers on Enbridge’s Line 3 pipeline in northern Minnesota have sought help from a nonprofit shelter near the construction, according to state government documents obtained by the Reformer through a public records request. Violence Intervention Project in Thief River Falls has seen an increase in calls for service and heard reports of sexual harassment at local businesses since pipeline construction started in December, according to the documents. “We can all agree everyone should be treated respectfully and expect that they can live and work in a safe environment. We are taking these claims very seriously and have an investigation underway,” Enbridge wrote in a statement provided to the Reformer. The assaults and reports of harassment were described in a request for reimbursement from Enbridge’s public safety fund, submitted last month by the anti-violence and anti-human trafficking nonprofit Violence Intervention Project. State permits for pipeline construction stipulated that Enbridge had to create the fund to cover some law enforcement costs and anti-human trafficking efforts associated with the project. Violence Intervention Project requested roughly $250 for hotel rooms for two women allegedly assaulted by pipeline workers. The nonprofit offers hotel rooms for victims when its emergency shelter is full. Finding hotel rooms has been increasingly difficult as pipeline workers fill up local lodging, said Staci Reay, executive director. The cost of hotel rooms has doubled in recent months, she wrote in the reimbursement request. In addition to the assaults, Violence Intervention Project staff members’ daughters have reported being sexually harassed at a gas station near the “Enbridge campground” — where some pipeline workers stay — and receiving sexually explicit messages on their phones when they’re near the gas station, Reay wrote in the request. At a local restaurant, women workers have been moved to the kitchen to avoid harassment from men during their shifts, the request says.

North Dakota gas plant to pay $195K after alleged Clean Water Act violations — Alleged violations of the Clean Water Act at the Hess Corp. gas plant here have resulted in the company agreeing to pay a $195,000 settlement, the U.S. Environmental Protection Agency announced Thursday, March 11. The EPA inspected the western North Dakota gas plant in 2015 and found problems with its ability to contain potential spills of hazardous substances, such as oil, as well as inadequate plans for preventing spills. Hess has since remedied the problems, the EPA said in a statement. Spills from the plant could impact an unnamed tributary of Paulsen Creek, which is a tributary to the White Earth River. The EPA’s analysis shows that a worst-case spill from the plant could extend 61 miles to White Earth Bay on Lake Sakakawea. "Adequate spill prevention and response plans include important requirements and measures that protect public health and the environment," said Suzanne Bohan, director of EPA Region 8’s Enforcement and Compliance Assurance Division. The $195,000 penalty will go to the Oil Spill Liability Trust Fund, a fund that federal agencies use to respond to oil and hazardous substance spills.

PSC sets hearing for pipeline project in McKenzie County --– The North Dakota Public Service Commission will hold a public hearing on March 22, regarding a proposal to covert an existing pipeline to a transmission line and construct a new portion of pipeline in McKenzie County. Bridger Pipeline LLC is proposing to convert about 27 miles of existing pipeline from a crude oil gathering line to a transmission line, along with constructing about 2.4 miles of new eight-inch crude pipeline. No new installations will be required to convert the existing line. Maximum capacity of the pipeline will be 25,000 to 50,000 barrels per day. Estimated cost of the project is $21 million. The project would transport crude oil from an existing terminal at Johnson’s Corner to Bridger’s existing Wilson Station, about 7 miles south of Watford City. The hearing will be held at 8 a.m. in Teddy’s Residential Suites, Watford City. View the hearing online: https://psc.nd.gov/public/meetings/live.php or by phone at 1-888-585-9008, Room Code 259-316-322. Testimony can be given in person during the hearing or by phone by calling 328-4081 to be placed on a list. Following the testimony by the company on March 22, the commission will call back individuals on the list for testimony. Documents or photographs for reference should be provided in advance to ndpsc@nd.gov with a note expressing the intended use.

DAPL has reached a crucial crossroads. Here’s a guide to North Dakota's bitter pipeline dispute | INFORUM— In the last four years, the Dakota Access Pipeline has become a defining conflict, not only in North Dakota but for a national reckoning over America’s climate and energy future. But in the years since the smoke of protest clashes near the Standing Rock Sioux Reservation has cleared, the pipeline dispute has carried on more quietly, with many of the biggest decisions being hashed out in courtrooms in Washington, D.C. With a new president in the White House, DAPL backers and opponents alike have felt that the embattled project may be at another decisive moment. But after a tumultuous year for the pipeline, what has changed, and what is still undecided? If you haven’t followed every twist and turn in the federal courts, we're here to catch you up with a guide to the latest in the years-long pipeline saga.

Weather woes cause Bakken oil production to fall - High winds led to power outages in parts of the Bakken in January, causing oil production to fall, the state’s top regulator said Thursday upon releasing North Dakota’s latest oil figures. The state's daily crude output for January was 1.147 million barrels, a 4% drop from December. Oil data reported to the state lags by several months. “We had a day of 90 mph winds in the oil patch, so electric power was lost through significant portions of oil and gas fields,” State Mineral Resources Director Lynn Helms said. “It took about 10 days to fully restore the power.” The outages knocked about 50,000 barrels per day offline during that time, he said. North Dakota Pipeline Authority Director Justin Kringstad said February could be “another tough month.” Western North Dakota faced bitterly cold temperatures for a number of days, as well as blackouts caused by extreme cold in the southern United States. The U.S. oil pricing benchmark, West Texas Intermediate, has risen above $60 per barrel, where it sat at the start of 2020 before the coronavirus pandemic hit and sent prices crashing. Experts view the current price as a blip and expect it to drop as the year progresses, Helms said. As a result, he does not anticipate companies drilling a significantly greater amount in the Bakken than already planned. Instead, they are likely to bring any remaining wells idled during the pandemic back online, in addition to wells that were drilled during the pandemic but never fracked due to poor economics, he said. Natural gas production fell by just over 1% during January, to 2.848 billion cubic feet per day, and flaring figures held steady. Statewide, oil companies captured 94% of the gas they produced and burned off the rest. North Dakota is meeting its 91% gas capture target that aims to reduce wasteful flaring that results at times from a lack of pipeline and processing infrastructure.

Plan to allow thousands of California oil wells faces vote (AP) — A plan to fast-track drilling of thousands of new oil and gas wells over the next 15 years in California’s prime oil patch was approved Monday by Kern County officials over objections by environmental groups. The Kern County Board of Supervisors voted 5-0 to approve a revised ordinance supported by the influential petroleum industry that creates a blanket environmental impact report to approve as many as 2,700 new wells a year. The revision was necessary after a state appeals court ruled last year that a 2015 ordinance violated the California Environmental Quality Act by not fully evaluating or disclosing environmental damage that could occur from drilling. New drilling permits were not issued while the county returned to the drawing board. County Planning Director Lorelei Oviatt said the new plan, which now fills 72 binders of documents, made 87 revisions, including creating larger buffers between homes and wells, muffling noise during drilling and putting a stricter limit on the number of new wells. The 2015 ordinance would have allowed up to 72,000 wells, but with a lower cap on annual approvals, that number is now reduced to about 43,000 new wells in the 20-year period ending in 2035. “What we project is the worst case scenario on many issues,” Oviatt said, adding that actual permit numbers in recent years were below the cap. Hundreds of people spoke by phone in favor of or against the ordinance or in voicemails played during a daylong public hearing livestreamed from the board’s Bakersfield chambers. Petroleum producers, oil company workers and industry and business groups spoke in favor of the measure, saying it would support high-paying jobs and produce oil under some of the most stringent environmental laws, instead of relying on dirtier imports. Catherine Reheis-Boyd, president of Western States Petroleum Association, said the group supported the plan because it provided certainty by streamlining the process even though it had “introduced many new restrictive and costly requirements and mitigation measures.” Environmentalists, residents and one farmer opposed the ordinance, saying it would clear the way to rubber stamp permits and does not address concerns spelled out by a unanimous 5th District Court of Appeal in Fresno.

'Kern runs on oil': as California confronts climate crisis, one county is ready to drill -- Kern county, which sprawls more than 8,000 square miles, connecting the Sierra Nevada slopes and the Mojave Desert to the counties on the Central Coast, is the oil capital of California. Thecounty produces about 70% of the state’s oil and more than 90% of its natural gas – and it has plans to ramp up production.This week the county approved an ordinance that would allow thousands of new wells to be drilled over the next 15 years. The decision comes despite deep opposition from local farmers and environmental groups, and it puts the county directly at odds with a state that has branded itself as a trailblazer on climate and set ambitious goals to reduce greenhouse gas emissions.In doing so, Kern has become a microcosm of a debate happening across America – and around the world – about how to tackle the climate crisis in communities that are built on fossil fuels.“Kern county runs on oil,” as the county chairman, Phillip Peters, concisely puts it.The debate has been going on for years, according to Ethan Elkind, a director at the Center for Law, Energy and the Environment at University of California, Berkeley, School of Law. “What you are seeing here is the main oil and gas producing county in California is going one direction and the state is trying to go a different direction,” he explains, “and it’s so far unwilling to override the county on the issue of local oil and gas production. It’s a complicated problem. Kern is also a leader in renewable energy production, accounting for roughly 25% of California’s supply, but officials argue there is not yet enough revenue from the new industries. For Kern, a county where nearly 20% live below the poverty line, expanding oil production means expanding the budget. “This is a fiscal imbalance that has to be resolved before you start talking about a just transition,” said Lorelei Oviatt, the director of the Kern county planning and natural resources department, during Monday’s vote to approve the new ordinance. “We are looking at the difference between $1.5m a year and $80m a year. Until that is resolved, the idea of banning fossil fuel extraction does not seem realistic.” Roughly one in seven workers in Kern are employed by the industry or tied to it. A county analysis done last year found that the oil and gas industry funded the county to the tune of almost $200m a year. Roughly half of that, $103m, went to Kern county schools.

Not A Fracking Frenzy: What The New Shale Oil Boom Will Look Like - Moving into the next boom time for the domestic U.S. oil and gas business doesn’t necessarily mean you will be repeating the outcomes of the last one. That’s a point of confusion my previous piece from last week - “The Next U.S. Oil And Gas Boom Suddenly Looms On The Horizon” - appears to have created.One reader pointed out that Vicki Hollub, CEO of Occidental Petroleum OXY -1.1%, had told last week’s CERAWeek conference that she didn’t think the U.S. industry would ever get back to producing 13 million barrels of oil per day. That’s where, according to the U.S. Energy Information Administration (EIA), total U.S. production peaked back in November/December of 2019, before 2020 and the COVID-19 pandemic dawned and threw the industry into its deepest depression in 35 years. It’s a risky proposition to ever say “never” where the the oil industry is concerned, given its 170-year penchant for pretty much always surprising the experts. But I would agree that this nascent new boom does not currently appear likely to create a replay of the 2017-2019 boom, with its 1,100 active rig counts, drilling and fracking bonanzas, crowded highways in the Permian/Delaware Basin, small towns playing host to massive “man camps,” low profits and poor returns on investments. That was a classic production boom in which a series of major new resource plays had simultaneously formed, creating a natural competition among upstream companies to acquire prime acreage positions at often wildly exorbitant per-acre costs and begin the exploitation process. But that initial leasing/exploitation phase that has always characterized any new play area in the business had largely already been completed when last year’s bust hit in earnest, as the Permian/Delaware region had already moved well into the development and infrastructure buildout phase. Other oily shale basins like the Eagle Ford, the Bakken and the DJ Basin are more mature than the Permian, and with no new shale formation discoveries in recent years, the days of the classic leasing/exploitation booms appear to be in the rear view mirror, at least where U.S. shale development is concerned.

Marin County officials investigating oil spill - Officials in Marin County are looking into a potential oil spill from a grounded boat at Dillon Beach. The incident happened early Saturday morning when the 90-foot vessel, the American Challenger, was being towed to Sausalito. The Coast Guard saw the ship become grounded on rocks near Estero de San Antonio. Officials say that overflights saw a light sheen from the ship, but it is unknown if the fuel tanks were damaged in any way. Multiple county agencies, including state environmental officials, are investigating the incident.

Coast Guard says it has concluded tracking Alaska oil spill (AP) — The Coast Guard said it has concluded its monitoring of a diesel fuel leak caused by a fishing boat that sank in Alaska. A 52-foot seiner was reported to have sunk Feb. 27 about three miles southeast of Sitka, the Coast Guard said. About 1,550 gallons of diesel fuel and oily water mixture were removed from the vessel’s fuel tanks, the Coast Guard said. An additional 275 gallons of oil were recovered from the water. The residue was transferred and will be disposed of properly, according to the Coast Guard. “After Hanson Maritime removed the fuel from the vessel’s fuel tanks, and removed the oiled fishing net, all significant threats from the Haida Lady have been removed or mitigated,” “We will continue to work with the owner and our Port partners to monitor the vessel.” The Coast Guard said that the effects on the environment were currently unknown.

Biden administration to launch review of future of federal oil leasing program  (Reuters) - The U.S. Interior Department announced Tuesday it will launch its review of the federal oil and gas leasing program on March 25, a key step that will determine whether the Biden administration will permanently halt new leases on federal land and water. The review will kick off with a public forum on oil and gas leasing on federal land and water, with participants representing industry, environmental conservation and justice groups, labor and others, and commence an online comment period. This input would inform an interim report to be released in early summer outlining next steps and recommendations on the future of the program and what can be done to reform how leases are managed, how much revenue should go to taxpayers and other issues. Biden, a Democrat, in January signed an executive order pausing new oil and gas drilling leases on federal lands in what is widely viewed as the first step to delivering on a permanent ban promised during his presidential campaign and has triggered heavy criticism from the oil industry and Republican lawmakers. Interior did not comment on how long the leasing pause would last. “The federal oil and gas program is not serving the American public well,” said Laura Daniel-Davis, principal deputy assistant secretary of land and minerals management. “This forum will help inform the Department’s near-term actions to restore balance on America’s lands and waters and to put our public lands’ energy programs on a more sound and sustainable conservation, fiscal and climate footing.”

U.S. senators introduce bipartisan oil and gas leasing reform bill - (Reuters) - Two U.S. senators on Wednesday said they have introduced a bipartisan bill aimed at boosting taxpayer returns from federal oil and gas leasing, the latest in a string of moves in Washington seeking to reform drilling on public lands. The bill, authored by Senators Jacky Rosen, a Democrat from Nevada, and Chuck Grassley, a senior Republican from Iowa, would increase the minimum bid price per acre during lease auctions and raise the royalty rate companies must pay on oil and gas produced from the leases. The Biden administration said on Tuesday it would launch a review of federal oil and gas leasing later this month to address widespread criticism that the program is not yielding adequate public revenue as well as contributing to climate change. While the bill proposed on Wednesday would not deliver on President Joe Biden’s campaign promise to stop issuing new leases to fight global warming, it could be applied to existing leaseholders if passed into law. The legislation’s backing by Grassley could be critical to winning support for the reforms in the closely-divided Senate. Similar bills introduced in the House last week did not include any Republican sponsors. Like the House bills, the Senate bill would increase royalty rates for onshore development for the first time in a century to 18.75% from 12.5%, bringing them in line with those paid by offshore drillers. It would also raise the minimum bid for federal acreage to $5 an acre from $2 and lift other fees and costs. “Big Oil continues to take advantage of low royalty rates on federal lands,” Grassley said in a statement. “Congress has not addressed this issue for over 100 years and since then, these oil companies have deprived the Treasury and the American people of billions of dollars.”

Biden wants to end oil subsidies. First he has to find them -- Tuesday, March 9, 2021 -- The Biden administration has vowed to end federal subsidies to fossil fuel companies, but even supporters of the effort say it will be hard to shut off the spigot.

The Nord Stream 2 dilemma: Why a transatlantic dispute is likely to go from very bad to even worse -A simmering geopolitical dispute over an undersea pipeline that would bring gas from Russia to Germany is widely expected to intensify in the coming weeks, with pressure building on President Joe Biden to do more to halt the nearly-complete project. If finished, the 1,230-kilometer (764-mile) Nord Stream 2 pipeline will become one of the longest offshore gas pipelines in the world. It is designed to deliver Russian gas directly to Germany under the Baltic Sea, bypassing Ukraine. Alongside several European countries, the U.S. opposes the pipeline, calling it a "bad deal" for European energy security. Critics also argue the pipeline is not compatible with European climate goals and will most likely strengthen Russian President Vladimir Putin's economic and political influence over the region. Led by Russia's Gazprom, the state-owned gas giant has claimed Nord Stream 2 is "particularly important" at a time when Europe sees a decline in domestic gas production. Advocates of the pipeline also condemn attempts "to influence or stop the project for political reasons." A bumpy road ahead for the project includes the threat of further targeted sanctions led by the U.S., Germany's federal election in late September and an ongoing backlash over the poisoning and arrest of Russian opposition politician Alexei Navalny. "The reason it is so geopolitically contentious is not necessarily about the pipeline or the molecules themselves. It has everything to do with timing and what it says about Europe's relationship with Russia, Germany's relationship with Russia and trans-Atlantic relations," said Kristine Berzina, a senior fellow at the Alliance for Securing Democracy, a national security advocacy group. "The pipeline will either be built or it will not be built. Germany has a role in potentially killing it. Russia is finding alternatives getting around sanctions so that it can be completed but not very much of this pipeline remains," Berzina told CNBC. The project is 94% complete, with over 1,000 kilometers of the pipeline in place and less than 150 kilometers to go before Gazprom can then turn on the taps. One potential stumbling block, analysts say, could be the prospect of a German government that's opposed to the pipeline. The next general election, due to be held on Sept. 26, will determine who will succeed Angela Merkel as the country's chancellor. The problem, however, is the project is so close to completion that September may be too late to scrap the pipeline. "We could well be done with the pipeline by September and, if the pipeline's done, the gas will flow and I think it will be especially difficult to cut off the gas once you actually finish the pipeline. So, we're at a very critical few months, weeks even, to determine whether this product is going to continue or not," Berzina said.

Norilsk Nickel- Mining firm pays record $2bn fine over Arctic oil spill - The world's biggest producer of palladium and a leading player in nickel set aside money to cover the potential fine months before the court ruling. Print contentPrint with images and other mediaPrint text onlyPrintCancelNorilsk Nickel has confirmed it has paid Russia $US2 billion ($2.5 billion) for damage caused by a fuel spill last year which caused the country's worst Arctic environmental disaster. The leak of 21,000 tonnes of diesel into rivers and subsoil from a rusty-looking storage tank at the mining firm's Norilsk power plant in Siberia angered Russian President Vladimir Putin. Norilsk is a remote city of 180,000 situated 300km inside the Arctic Circle. It is 2,900 kilometres north-east of Moscow. The fuel and lubricants spilled into the Ambarnaya River, which feeds a lake from which springs another river that leads to the environmentally-delicate Arctic Ocean. The penalty, by far the biggest fine for environmental damage in Russia, sent a message to companies to modernise their production, Russian officials said. Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume.WatchDuration: 43 seconds43s

Russia reports oil spill at processing station in Far East -- The emergency ministry of Russia’s far eastern Amur region on Sunday reported an oil spill at an oil processing station but said the spill has been contained. The second stage of Russia's East Siberia - Pacific Ocean oil pipeline is working as usual, the ministry added. Oil pipeline monopoly Transneft and the Russian emergency ministry's task force are tackling the accident, the ministry said, without disclosing further detail. The scale of the spill was not immediately clear. Meanwhile, a fire broke out on Russia’s Ob river in Siberia on Saturday due to an accident on an underwater pipeline, Russia’s Rosprirodnadzor state environment watchdog said. Petrochemicals producer Sibur said the fire near the city of Nizhnevartovsk in the oil-rich region of Yugra was quickly localised and that there was no risk to local people or the environment. The accident occurred on a pipeline carrying light hydrocarbons, it said in a statement. Large flames could be seen from a distance belching up smoke into the night sky with snow in the foreground in footage circulated by the RIA news agency.

Burst pipeline causes oil spill at Gazprom Neft field in Siberia(Reuters) - A burst pipeline at an oilfield operated by a subsidiary of Russia’s Gazprom Neft has led to an oil spill on Monday, the subsidiary said, while the pipeline has been repaired on the same day. Gazpromneft-Noyabrskneftegaz said there is no danger to the forestry or water bodies from the spill. RIA news agency, citing the local branch of the emergency services earlier on Tuesday as saying, that oil spilled over an area of 1,100 square metres The incident occurred at the Yarainerskoye oilfield in the Yamal-Nenets region of western Siberia. The emergency services said no oil was spilled into any bodies of water and that clear-up operation had begun.

Gantz says no evidence found so far that oil spill was deliberate - Defense Minister Benny Gantz on Friday said that there was currently no evidence to conclude that the oil spill off Israel’s coast that polluted most of the country’s beaches was a deliberate act of “environmental terrorism.” Speaking to supporters of his Blue and White party, Gantz was asked about Environmental Protection Minister Gila Gamliel’s assertion that Iran deliberately caused the spill of Israel’s coast. “I can’t completely rule out that it was deliberate, but at this stage, we can’t determine that it was done on purpose,” Gantz said. Get The Times of Israel's Daily Edition by email and never miss our top stories Free Sign Up Israeli TV reported Thursday that Israel’s security establishment is investigating the alleged Iranian link to the oil spill. Defense Minister Benny Gantz during a visit to the Druze village of Julis in northern Israel, February 23, 2021 (David Cohen/Flash90)The network said the Environmental Protection Ministry had handed over its report on the matter to security bodies, which were reviewing its findings. Sources in the defense establishment, however, were quoted as saying there was no indication the spill was deliberate. The report added that Israel’s intelligence apparatus has now also been recruited to look further into the claim of Iranian sabotage. A Libyan-owned ship, the Emerald, was smuggling crude oil from Iran to Syria at the time of the spill, the Environmental Protection Ministry said in a statement Thursday, citing satellite images by the TankerTrackers monitoring group. The ship has since returned to Iran and is currently anchored there. In an interview with Channel 12 on Thursday evening, Gamliel again insisted, without providing proof, that the spill constituted an Iranian terror attack on Israel. “There are people who do not look at the risks properly,” she said when challenged on her claim, pointing the finger at Opposition Leader Yair Lapid and saying that “only Netanyahu knows how to deal with the Iranian threat properly.” The environmental group Greenpeace blasted Gamliel for her claims, saying the assertion of a terror attack “is outrageous and factually baseless at this stage.” The group said that in making the claim, the minister “is minimizing the well-known and widespread phenomenon of marine pollution by ship oil spills. The minister’s conduct on the matter smells of electioneering and an attempt to score political points over an ecological disaster.”

Vessel with 130 tonnes of oil runs aground off Mauritius - Mauritius has deployed its coastguard and armed forces after a Chinese-flagged trawler carrying 130 tonnes of oil ran aground off the Indian Ocean archipelago nation. It is the second shipwreck in less than a year off Mauritius after a tanker struck a reef in July last year with 1,000 tonnes of fuel leaking in the country’s worst environmental disaster. The captain of the Lurong Yuan Yu issued distress calls late on Sunday afternoon and sent up flares after becoming stranded off Pointe-aux-Sables, in the northwest of the main island not far from the capital Port Louis. On Monday, Fisheries Minister Sudheer Maudhoo said divers had found “no leak, no breach” in the hull of the ship and that efforts would be made to safely remove the fuel from the hold. “The pumping operation will start tomorrow, and will last four to five days. The authorities will also try to refloat the fishing vessel,” he said. The trawler carries 130 tonnes of fuel oil and five tonnes of lubricants, according to authorities. Traces of oil earlier spotted around the vessel were not “heavy oil” but possibly lubricants, he said. Drone footage showed dark patches in the Indian Ocean waters near the boat. Residents told the AFP news agency they saw fuel lapping at the shore. Floating containment lines have been deployed as a precaution while the coastguard and soldiers have been mobilised.

Shell says Nigeria Delta oil spill dropped by 40% in 2020 (Reuters) - Royal Dutch Shell said on Thursday the volume of crude oil spills caused by sabotage in Nigeria’s oil-rich Delta dropped by 40% in 2020 to 1,400 tonnes.The total number of major spills caused by theft and sabotage also dropped to 122 incidents in 2020 from 156 incidents the previous year, Shell said in its annual report. Shell is the operator of Nigeria main onshore oil and gas joint venture SPDC which has struggled for years to contain spills in the Delta caused due to operational incidents, theft and sabotage.

Gas Imports Surge As China Sees Coldest Winter In Decades - Natural gas imports to China jumped by 17.4 percent on the year in the first two months of the year to 28.68 billion cubic meters thanks to the coldest winter in decades, according to Platts data. The harsh winter in Asia drove a huge spike in demand for natural gas in the region, which led to a surge in spot market LNG prices. Now, this demand isretreating, and prices are down to more normal levels.China is among the world’s top natural gas importers, along with Japan and South Korea, and therefore a prime target for gas exporters. PetroChina, for example, doubled the amount of Russian gas it receives via the Power of Siberia pipeline to 28.8 million cu m daily over the first two months of the year. Sinopec, for its part, ordered 30 cargos of liquefied natural gas for the period to make sure there was an adequate supply of the fuel.China is dependent on imports for a solid portion of its gas consumption, so the country is making an effort to also boost domestic production to reduce this dependence. Last year, despite the pandemic, it made progress in that respect, with natural gas production jumping 15 percent on the year, according to Fitch Ratings. The agency noted domestic production was likely to continue growing thanks to robust demand and efforts to decarbonize the Chinese economy.Yet self-sufficiency in gas is still a dream—and it may remain a dream. China has massive shale gas reserves but exploiting them is challenging because of the complex geology of the deposits and difficulties in attracting foreign investors who could help fund such an endeavor.This means China will remain a huge natural gas importer for the observable future, driving intense competition in the energy industry.

Column: Oil price spikes and permanent consumption losses (Reuters) - Promises by U.S. shale producers to pursue a more restrictive approach to capital investment and production seem to have emboldened Saudi Arabia and its allies in OPEC+ to test the room for higher oil prices. If shale firms respond to higher prices and revenues by returning capital to lenders and investors, rather than increasing output, there may be an opportunity for OPEC+ to let prices rise without losing market share. “Drill, baby, drill is gone for ever. Shale companies are now more focused on dividends,” the Saudi energy minister said in an interview on March 4. “It’s the shale companies which are themselves changing. They have had their fair share of adventure and now they are listening to the call of their shareholders.” The kingdom’s interest in testing support for higher prices comes when many investors are expecting a strong upward cycle, or even supercycle, in oil and other commodity prices. Strong economic growth after the COVID-19 pandemic, coupled with expansionary fiscal and monetary policies, is expected to accelerate consumption growth for oil and other commodities. At the same time, production of oil and other commodities will be constrained by lack of investment during the price slump in 2020 and early 2021 as well as the newfound enthusiasm for “capital discipline”. In the case of oil, some analysts are forecasting one last supercycle over the next few years before widespread deployment of electric vehicles in the late 2020s and through the 2030s starts to hit consumption. Bond investors, too, are anticipating a period of above-average inflation, if not a commodity supercycle, as governments and central banks try to reverse employment and income losses stemming from the epidemic. Yields for U.S. Treasury Inflation-Protected Securities imply traders expect an average all-items U.S. inflation rate of about 2.2% over the next decade. Expected 10-year inflation rates peaked at 2.25-2.5% during the 2007/08 commodity supercycle and a similar level during the period of high oil prices from 2011 through 2014. By comparison, realised consumer price inflation in the United States has averaged about 1.75% per year over the past decade. 

Top Energy Trader Vitol Says OPEC+ Has Control of Oil Market -- Oil’s surge following OPEC+’s surprise move to maintain cuts in supply shows the producers’ group is in charge of the market, Vitol Group said.The Organization of Petroleum Exporting Countries and its allies shocked the market on Thursday when they opted to keep output curbs largely in place, belying expectations that they would pump more crude to meet rising demand. Benchmark Brent futures jumped toward $70 a barrel at the end of the week.“The market is telling us that OPEC+ have control,” Mike Muller, Vitol’s head of Asia, said Sunday in an online forum hosted by consultant Gulf Intelligence. “We’re going to get a stock-draw that is going to accelerate through the second quarter and that’s why the market is doing what it’s doing.”Oil producers and traders were left reeling last year after the coronavirus pandemic wiped out a third of energy demand, dragging down prices. Surplus crude flooded into storage, swelling stockpiles to the point whereU.S. futures dropped below zero.OPEC+ has since implemented unprecedented production cuts, returning prices to pre-pandemic levels. Its decision to maintain output restrictions to support prompt prices -- the cost of barrels sold in the coming months -- indicates the group aims to cut into that mass of stored oil by undersupplying the market.Key OPEC+ member Russia previously voiced concerns that such a move would allow rival drillers in the U.S. to seize market share. Yet shale producers are unlikely to ramp up output, Muller said.“U.S. rig counts are still nowhere close to supporting the U.S. returning to anywhere like the 13 million barrels a day we closed 2019 at,” he said. Muller spoke Sunday before Saudi Arabia said it had thwarted drone and missile attacks on some of its facilities. Brent crude surged past $70 a barrel in early trading on Monday before erasing gains. Further increases in demand could still push prices higher, according to Muller.

No Roaring USA Shale Industry to Respond to OPEC+ --Even though North American production can pick up due to current price levels, there is not a roaring U.S. shale industry to respond to OPEC+ and balance out global supply. That’s according to Rystad Energy Oil Markets Analyst Louise Dickson, who made the statement in a comment sent to Rigzone on Monday. In the statement, Dickson noted that, after oil shot above $100 per barrel in 2014 and triggered the 2015-2016 downturn, U.S. shale sprang back almost immediately, but outlined that things would be different this time around. “We do not anticipate U.S. oil production to return to pre-pandemic levels of 12.8 million barrels per day (in February 2020) until the end of 2023, a much more prolonged recovery driven by capital discipline from shale drillers, as well as natural base decline,” Dickson said in the statement. In the U.S. Energy Information Administration’s (EIA) February Short Term Energy Outlook (STEO), the latest STEO at the time of writing, the EIA estimated that U.S. crude oil production averaged 11 million barrels per day in January, which it highlighted was down slightly from 11.1 million barrels per day in November. The EIA said in its February STEO that it expected production would continue to decline slightly in the coming months, reaching 10.9 million barrels per day in June. “EIA expects production from newly drilled wells will be more than offset by declining production rates at existing wells in the first half of 2021,” the EIA stated in the February STEO. “However, based on EIA’s forecast that West Texas Intermediate crude oil prices will remain near or higher than $50 per barrel during the forecast period, EIA expects drilling will continue to increase. As a result, production from new wells will exceed the declines from legacy wells, and overall crude oil production will increase in the second half of 2021 and in 2022,” the STEO added. According to its February STEO, the EIA estimates that U.S. crude oil production will average 11 million barrels per day in 2021 and rise to 11.5 million barrels per day in 2022. At OPEC+’s latest meeting, the group approved a continuation of the production levels of March for the month of April, excluding Russia and Kazakhstan, who will be allowed to increase production by 130,000 and 20,000 barrels per day, respectively. Saudi Arabia also decided to extend its additional voluntary cut of one million barrels per day for the month of April. Commenting on OPEC+’s move, Dickson said the group’s roll-over was far more conservative than the market expected and that traders were still pricing in the stock draws that will follow in coming months. “We do not expect the price fever to cool down, in the short-term,”

Saudi raises April crude official prices to Asia  (Reuters) - Saudi Arabia’s state oil producer Aramco set its April official selling price (OSP) for its Arab Light crude to Asia at plus $1.40 per barrel versus the Oman/Dubai average, up $0.40 from March, according to a statement issued on Sunday. It set its Arab Light OSP to Northwest Europe at minus $2.20 per barrel against ICE Brent compared with minus $0.50 in March. The OSP to the United States was set at plus $0.95 a barrel over Argus Sour Crude Index (ASCI) for April, $0.10 above March’s premium.

Oil Flirting With $70 Challenges World’s Economic Recovery - The spike in oil prices has focused attention on how the steady rise in energy costs is threatening to create a drag on the global economic recovery and stoking fears of inflation.After surging more than 30% this year on coordinated supply constraints by major exporters and demand returning from the depths of Covid-19 crisis, a missile attack Sunday on a key Saudi Arabian export facility sent Brent crude, the internatio nal benchmark, above $70 a barrel for the first time since January 2020.While prices have since pulled back, the impact on inflation and the overall global recovery depends on how sustained the underlying rally proves to be. For economists, the cause of higher prices is what matters, rather than the price itself. Rising energy costs on the back of strong demand normally indicate robust and resilient growth, while a surge from crimped supply could weigh on a recovery. Morgan Stanley economists estimate that oil would need to average $85 a barrel for the global oil burden to rise above longer-term averages.“For context, the global oil burden last rose above its long-term average in 2005, but with the backdrop of strong global growth, economies were able to withstand the impact of higher oil prices until 2007, when global growth momentum was already weakening and yet oil prices shot up rapidly,” the bank’s economists wrote last week.The run-up in oil prices comes against the backdrop of a global inflation debate that has heated up over the past month. With spikes in bond yields, investors continue to test policy makers, including Federal ReserveChairman Jerome Powell, on their insistence that inflation isn’t a threat this year, even with trillions of dollars of stimulus being pumped into the global economy.Oil and food costs are both bubbling, though as the two most volatile categories of consumer prices they’re easier for policy makers to look past as transitory. And while costs for homes and semiconductors also are on the rise, the prevailing trend worldwide is still one of damped price growth While energy is a prominent component of consumer-price gauges, policy makers often focus on core indexes that remove volatile components such as oil. If the run-up in prices proves to be substantial and sustained, those costs will filter through to transportation and utilities. That scenario would pressure central banks to rein in their support for the economy, though for now officials continue to stress that high unemployment will offset any inflation pressure.

Brent crude breaks $70 after Saudi Arabia's oil facilities attacked by Yemen's Houthis -International benchmark Brent crude futures jumped above $70 for the first time in more than a year on Monday, before giving back those gains to trade in the red. The surge in prices came after Saudi Arabia said its oil facilities were targeted by missiles and drones on Sunday. A Houthi military spokesman claimed responsibility for the attacks. Brent traded as high at $71.38 per barrel, the highest level since Jan. 2020, while U.S. crude futures rose to $67.98 per barrel, a level not seen since Oct. 2018. However, at 12:30 p.m. on Wall Street both contracts were in the red. Brent shed 97 cents, or 1.37%, to trade at $68.41 per barrel, while WTI was 93 cents, or 1.41%, lower at $65.16 per barrel. Saudi Arabia's ministry of energy said a petroleum tank farm at one of the world's largest oil shipping ports was attacked by a drone and a ballistic missile targeted Saudi Aramco facilities, according to state news agency SPA. Such acts of sabotage do not only target the Kingdom of Saudi Arabia, but also the security and stability of energy supplies to the world, and therefore, the global economy. A spokesman said neither attack caused any injury or loss of life or property, but shrapnel from the intercepted missile fell near residential areas in the city of Dhahran, SPA reported. "Such acts of sabotage do not only target the Kingdom of Saudi Arabia, but also the security and stability of energy supplies to the world, and therefore, the global economy," the ministry said via state media. "They affect the security of petroleum exports, freedom of world trade, and maritime traffic." Yahya Sare'e, a spokesman for Yemen's Houthis, said it carried out a "broad joint offensive operation" involving 14 drones and eight ballistic missiles. He said on Twitter that other military sites were also targeted with four drones and seven ballistic missiles, adding that "the hit was precise." "We promise the #Saudi regime painful operations as long as it continues its aggression and blockade on our country," he said in another post. A Saudi-led coalition intervened in Yemen's civil war in 2015 and has continued to fight against the Houthis in what is seen as a proxy war with Iran. The Houthis have reportedly stepped up attacks on Saudi Arabia in recent weeks. The Biden administration last month said it would remove the Iran-backed Houthi rebels in Yemen from the Foreign Terrorist Organization and Specially Designated Global Terrorist lists, according to NBC News. John Driscoll, director at JTD Energy Services, told CNBC that the primary effect of the attacks is psychological. "They serve as a reminder that the Mideast is vulnerable and rife with tensions and rivalries that could overheat at any time," he said in an email. However, he said the run up in prices could be short lived, noting that the Saudis said there was no significant damage to infrastructure. Driscoll also said the timing is "noteworthy," given that the U.S. took military action against Iran and Iraq targets last week. "One senses [that] lines are being drawn in the sand," he said.

Oil Reverses Gains Following Attack on Key Saudi Crude Terminal --Oil slipped in London as the dollar strengthened and investors shrugged off an attack on the world’s largest crude terminal in Saudi Arabia. Global benchmark Brent futures earlier surged above $71 a barrel, the highest since January 2020, before falling as much as 1.5%. The assault on a storage tank farm at the Ras Tanura terminal on Sunday was intercepted, Saudi Arabia said, and oil output appeared to be unaffected. Meanwhile, the Bloomberg Dollar Spot Index rose as much as 0.5% on Monday, reducing the appeal of commodities priced in the currency.  .A much stronger U.S. dollar is “likely adding pressure to oil prices,” . “The recent trend higher in the dominant currency is becoming increasingly difficult to ignore.”Oil has surged more than 30% this year as OPEC+ keeps a lid on production and demand is seen recovering with economies emerging from the coronavirus crisis. The rally quickened last week after the producer alliance made a surprise pledge to leave output steady in April, prompting a raft of investment banks to raise their price forecasts. Forward oil prices point toward further strength, with the Brent strip for 2022 rising as much as over $62 a barrel Monday to its highest intraday level since April 2019.Brent’s rally north of $70 earlier Monday may cause a headache for Asian refiners, which are warning that the rapid surge and spike in volatility will hurt demand and whittle away still-tight processing margins. Saudi Arabia has also boosted its official selling prices to buyers in the region for April.Saudi Arabia said the Ras Tanura site on the country’s Gulf coast was targeted by a drone from the sea. The terminal is capable of exporting about 6.5 million barrels a day -- almost 7% of demand -- and, as such, is one of the world’s most protected facilities. It’s the most serious attack on Saudi oil installations since a key processing facility and two oil fields came under fire in September 2019.

Oil logs first loss in 4 sessions, as buying after attack on Saudi oil facilities fades - Oil futures pulled back Monday, posting their first loss in four sessions after an attack on Saudi oil facilities briefly lifted global benchmark Brent crude prices above $70 a barrel for the first time since early last year.Warplanes from a Saudi-led coalition dropped bombs on Yemen’s rebel-held capital San’a on Sunday, following attacks on Saudi Arabia’s oil and military facilities. The coalition blamed the administration of President Joe Biden for the attacks by Iran-backed Houthi rebels after a decision to remove them from U.S. terror lists.Saudi Arabia, however, said its largest oil export terminal at Ras Tanura in the Persian Gulf was unscathed after a drone attack, S&P Global Platts reported Sunday.“Production appears to have been unaffected,” though the market’s concern “seems to be more the frequency of attacks rather than their severity,” said Marshall Gittler, head of investment research at BDSwiss, in a Monday note.The price of the front-month May Brent crude BRNK21, +0.01% contract fell $1.12 or 1.6%, to settle at $68.24 a barrel, after hitting a high of $71.38 a barrel on Sunday. It was the first time the global benchmark traded above $70 since January 2020, according to FactSet data. April West Texas Intermediate crude CLJ21, -0.70%, U.S. benchmark, lost $1.04, or 1.6%, at $65.05 a barrel after hitting a higher near $68 overnight.Both contracts are up more than 30% year to date, adding more than 7% last week following a surprise move by the Organization of the Petroleum Exporting Countries and its allies to rollover current production cuts through end-April. Meanwhile, prices fell despite the weekend attack on Saudi oil facilities, suggesting that investors aren’t responding to supply disruptions, Cieszynski said. “This may be due to the market being well supplied, with major oil producers, who decided last week to keep production curbs in place, able to easily “backfill any disruptions.”

Oil slips below $68 as rally fizzles before U.S. supply report (Reuters) - Oil fell to around $68 a barrel on Tuesday in a choppy session, pressured as concerns faded of a supply disruption in Saudi Arabia, which countered a pause in the dollar’s rally and prospects for tighter supply due to OPEC+ output curbs. On Monday, crude hit its highest level since the start of the coronavirus pandemic, a day after Yemen’s Houthi forces fired drones and missiles at Saudi oil sites. Saudi Arabia said it thwarted the strike, however, and prices slipped as supply fears eased. Brent crude settled down 72 cents, or 1.06%, at $67.52 a barrel. The contract pulled back after trading as high as $69.33. It reached $71.38 on Monday, the highest since Jan. 8, 2020. U.S. West Texas Intermediate (WTI) fell $1.04, or 1.6% to settle at $64.01 a barrel. The contract hit its highest on Monday since October 2018. In post-settlement trade, U.S. crude extended losses. U.S. crude oil stockpiles rose sharply in the most recent week, according to trading sources, citing data from industry group the American Petroleum Institute released after settlement. Crude inventories rose by 12.8 million barrels in the week to March 5, compared with analysts’ expectations in a Reuters poll for a build of 816,000 barrels, sources said. [L1N2L72S5] “This is more of the same as refineries remain shut down,” said Phil Flynn, senior analyst at Price Futures group, speaking after the API data was released. Last week’s record decline in U.S. inventories came after the shutdown of Gulf Coast refineries due to the recent winter storm in Texas. “The market seems to be softening on those concerns. It’s had an incredible run, and it’s due for a correction,” Flynn said.

WTI Holds Losses After Huge Surprise Crude Build  --After surging to its highest since 2018 (on Saudi oil terminal explosions), oil prices have tumbled for the second straight day with WTI back below $64 as EIA forecast U.S. crude oil production in 2022 at 12.02m b/d, up from the 11.53m b/d projected in February.“Then we had the OPEC surprise and the Saudi attack, triggering the last key surge where now a lot of the recovery and demand expectations due to the vaccines’ success has already been priced in.”After last week's utter chaos in the inventory data (due to Texas storm impacts), this week is likely to be just as noisy as things switched back on.API

• Crude +12.792mm (-833k exp)
• Cushing +295k
• Gasoline -8.499mm (-4.167mm exp)
• Distillates -4.796mm (-3.667mm exp)

And as expected, this week's data is chaotic too - a huge crude build for the second week in a row and major product draws... WTI hovered just below $64 ahead of the print, dropped and popped after but maintained its losses... Further price gains from output cuts “have pretty much run their course,” Doug King, RCMA Group Chairman, said in a Bloomberg Television interview.“You can tighten as much as you want, but if you destroy the refining margins and product demand isn’t there, then effectively you don’t really get much further up the chain.”In its monthly Short-Term Energy Outlook, the EIA said that while the price Brent oil, the global benchmark, is currently high due to OPEC+ supply restrictions, it expects it to average US$58 per barrel in the second half of the year.

WTI Extends Gains Despite 2nd Week Of Massive Crude Builds, Gasoline Demand Spikes  --Oil prices are higher this morning, despite last night's API-reported massive crude build, but trading has been chaotic to say the least amid Russia production headlines and 'fake' CPI data. Aditionally, an improved OECD forecast for global economic recovery helped buoy crude prices."When it comes to lifting market sentiment, there is very little that can rival an upgrade to the post-COVID economic recovery," said Stephen Brennock of broker PVM.We suspect the effects of the storm driven demand and production issues will remain in this week's data.  DOE:

• Crude +13.789mm (-833k exp)
• Cushing +526k
• Gasoline -11.869mm (-4.167mm exp)
• Distillates -5.504mm (-3.667mm exp)

After last week's chaotic swings in inventories (and API's overnight), with crude stocks rising by the most on record, this week is expected to see some normalization. It didn't... crude stocks soared as product stocks plunged once again...Graphs Source: BloombergThese two weeks have pushed up US crude stocks to their highest since early December... Gasoline demand jumped significantly as more states reopened (and Texas thawed out) While higher prices are expected to bring more U.S. supplies back online, US crude production has merely rebounded to pre-storm levels... WTI puked briefly this morning amid headline on Russian production but that was panic-bid right back up on clarifications. But prices were tumbling ahead of the official inventory data then reversed after the print - preumably on the gasoline draw?!

Oil rises as recovery optimism outweighs U.S. inventory build --Oil prices rose on Wednesday despite a large jump in U.S. crude inventories in the aftermath of last month's Texas winter storm. An upbeat forecast for global economic recovery supported prices. Brent crude gained 38 cents, or 0.56%, to settle at 467.90 per barrel and U.S. West Texas Intermediate crude settled 43 cents, or 0.67%, higher at $64.44 per barrel. U.S. crude oil stocks jumped 13.8 million barrels last week, far exceeding forecasts for a 816,000-barrel rise, as the nation's oil industry continued to feel the effects of a winter storm mid-February that stalled refining and forced production shut-ins in Texas. Producers appear to be coming back online faster than refiners, swelling inventories, analysts said. Crude production rose to 10.9 million barrels per day, rebounding to near levels before the freeze, while refinery utilization rates jumped 13 percentage points, but that only brought overall capacity use to 69%, far below seasonal averages for this time of year. "This could be a little bit of a headwind for prices because the production number is coming up faster than people thought," The pandemic-hit global economy is set to rebound with 5.6% growth this year and expand 4% next year, the Organisation for Economic Cooperation and Development (OECD) said in its interim economic outlook. Its previous forecast had been for growth of 4.2% this year. "When it comes to lifting market sentiment, there is very little that can rival an upgrade to the post-COVID economic recovery," . Oil prices have been steadily rallying for several months as OPEC+ - consisting of the Organization of the Petroleum Exporting Countries and allies - kept supply curbs in place. After briefly touching $70 per barrel earlier this week, Brent crude has edged off. OPEC+ agreed last week to largely maintain production cuts in April. Saudi Arabia's foreign minister said that the kingdom and Russia were keen for fair oil prices and will continue their cooperation in the framework of the OPEC+ group.

Oil prices rise on economic outlook, drawdown in fuel stocks(Reuters) - Crude oil prices rose on Thursday as vaccine rollouts bolstered the economic outlook and U.S. fuel stocks fell sharply, although gains were capped by a surge in crude oil inventories after last month’s Texas storm. Brent crude oil futures for May rose 40 cents, or 0.6%, to $68.30 a barrel by 0105 GMT, while U.S. West Texas Intermediate crude for April was up 48 cents, or 0.7%, at $64.92. “Gasoline stocks fell... (which) provided the bullish offset and eventually sent oil prices higher on the strong demand for end products, hence an economic recovery,” said Stephen Innes, Chief Global Markets Strategist at Axi. “Given the powerful signals from the U.S. re-opening narrative, it still suggests that the path of least resistance for oil prices is higher.” U.S. gasoline stocks fell by 11.9 million barrels in the week to March 5 to 231.6 million barrels, the Energy Information Administration (EIA) said, compared with expectations for a 3.5 million-barrel drop. Crude inventories, however, rose by 13.8 million barrels in the week to March 5 to 498.4 million barrels, compared with analysts’ expectations in a Reuters poll for an 816,000-barrel rise, as the nation’s oil industry continued to feel the effects of a winter storm mid-February that stalled refining and forced production shut-ins in Texas. Globally, stocks also remain ample with crude oil in storage at major land and sea hubs rising last week, according to analysts and ship trackers. Meanwhile, the U.S. House of Representatives gave final approval on Wednesday to one of the largest economic stimulus measures in American history, a sweeping $1.9 trillion COVID-19 relief bill that gives President Joe Biden his first major victory in office. Saudi Arabia’s foreign minister on Wednesday said the kingdom would take deterrent action to protect its oil facilities, following attacks by Yemen’s Iran-aligned Houthi movement on energy sites

Oil prices climb 2% as dollar slips  (Reuters) - Oil prices rose more than 2% on Thursday on a weaker dollar and expectations that a crude glut would be short-lived due to a steep fall in U.S. fuel stocks and a resumption of operations by Texas refiners.Brent crude oil futures for May settled up $1.73, or 2.6%, to $69.63 a barrel while U.S. West Texas Intermediate crude for April ended the session $1.58 or 2.5% higher, at $66.02.“The complex has recovered back to above yesterday’s highs with major assistance from a weak dollar/strong equity combo,” Jim Ritterbusch, president of Ritterbusch and Associates said.“We feel that the energy complex could remain in a stall well into next week with WTI bounded roughly by parameters of about $63 to $68 before any renewed up-spike.”U.S. Treasury yields fell on Thursday as concern about a strong pick-up in inflation eased and focus turned to an auction of 30-year government debt. The dollar fell for a third straight day and was at its lowest level in a week against a basket of currencies.

Oil settles near $70/bbl on hopes of recovering demand  (Reuters) - Oil settled near $70 a barrel on Friday, supported by production cuts by major oil producers and optimism about a demand recovery in the second half of the year. Benchmark Brent settled down 41 cents, or 0.6%, to $69.22 a barrel. U.S. West Texas Intermediate crude also ended down 41 cents to $65.61 a barrel. Brent and U.S. crude ended the week roughly flat after prices touched a 13-month high on Monday, following seven straight weeks of gains. “Demand for risky assets such as oil continues to be buoyed by the White House relief package and an almost daily flow of optimistic vaccine headlines,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois. The Organization of the Petroleum Exporting Countries forecast a stronger oil demand recovery this year, weighted to the second half. OPEC, Russia and its allies decided last week to maintain its output curbs almost unchanged. U.S. drillers are also holding back, cutting the number of oil and natural gas rigs operating for the first time since November, according to data from energy services firm Baker Hughes Co. “The stronger-than-expected rebound in the second half of this year implies that the global economy and hence oil demand outlook is close to shaking off its COVID woes,” 

Oil ends lower, contributing to a loss for the week  Oil futures ended lower Friday, pulling back a day after a rally led by optimism over U.S. gasoline demand helped push the global crude benchmark to its highest close since May 2019.West Texas Intermediate crude for April delivery fell 41 cents, or 0.6%, to settle at $65.61 a barrel on the New York Mercantile Exchange. May Brent crude also declined by 41 cents, or 0.6%, to $69.22 a barrel on ICE Futures Europe, after posting on Thursday (link) the highest finish for a front-month contract since May 28, 2019.For the week, front-month U.S. benchmark crude prices finished 0.7% lower, according to Dow Jones Market Data. Global benchmark Brent crude lost 0.2% to snap a seven-week winning streak.Despite the decision earlier this month by the Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, to extend the production cuts (link)through April, "oil prices haven't spiked further this week due to the presence of substantial global oil inventory that cushions short-term imbalances," "Traders are aware that the current high price is primarily due to throttling of production by OPEC+ members and that such measures are temporary." he told MarketWatch. However, "the current price is very comfortable and quite frankly, generous, for most producers and therefore nobody wants to spoil the party."Raj also said that even though Saudi Arabia agreed to extend its voluntary output cut of one million barrels a day through April, the kingdom is "free to draw from its "massive oil storage and enjoy the uptick in oil prices.""As Saudi Arabia continues to draw oil from its storage, the physical market has been cushioned and price spikes have been dampened," News earlier this week of attacks on Saudi oil facilities (link), blamed on Iran-backed Houthi rebels, didn't provide any lasting support to oil prices."Given substantial spare capacity among all major producers at the present time, supply side concerns such as the Middle-East tensions or geo-political risks are irrelevant, since any production outage can easily be met by capacity elsewhere,"  Gasoline futures led the way higher on Thursday, with the April contract ending at a 2 1/2-year high, boosted by concerns over tightening U.S. inventories. April gasoline rose 0.6% Friday to $2.15 a gallon, settling at the highest since July 2018. It also gained 4.1% for the week. April heating oil also climbed 0.4% at $1.9675 a gallon to tally a weekly climb of 1.2%.. April natural gas settled at $2.60 per million British thermal units, down nearly 2.6% for the session and down 3.7% for the week.

Biden and Europe allies worry Israel is preparing a substantial attack on Iran -Israel suspects Iran intentionally dispatched a ship to dump hundreds of tons of crude oil onto its beaches, the area's worst ecological disaster in decades, in revenge for the November assassination of the country's top nuclear scientist, according to Israeli officials and media.But Israeli officials tell Insider the statement from the environmental minister directly blaming Iran released Wednesday was premature as the military and intelligence services have yet to make a final determination on both Iranian culpability and the appropriate level of response to what would be the most brazen act of environmental terrorism in recent history."That statement should have never been made," a former Israeli intelligence official, who still consults for the government and therefore cannot be named, told Insider. "The IDF and Mossad are responsible for investigating attacks on the Israeli homeland, determining the responsibility and suggesting a course of action to respond. That process is underway and it is not the portfolio of the environmental minister to start wars with Iran."For the past two weeks, tons of crude oil have washed ashore on Israel and Lebanon's beaches destroying wildlife and causing ecological damage that could take years to restore, according to environmental experts. But after the minister directly accused Iran of a complex operation to drop the oil offshore, the issue took on a new dimension as fears in Washington ands Europe rose over the possibility of an Israeli response.When pressed on whether Israeli military and intelligence services suspect an Iranian operation as described by the minister - who said a Libya-flagged ship sailed from Iran to Israel and dumped the oil offshore before stopping in Syria and returning to Iran - the former official conceded that was the case.

Iranian investigator says Israel likely behind container ship attack (Reuters) - Israel is highly likely to have been behind an attack in the Mediterranean this week that damaged an Iranian container ship, an Iranian investigator said on Saturday, Iran’s media reported.The Shahr e Kord vessel was hit by an explosive object which caused a small fire, but no one on board was hurt, Iran said on Friday. Two maritime security sources said initial indications suggested the ship was intentionally targeted by an unknown source.“Considering the geographical location and the way the ship was targeted, one of the strong possibilities is that this terrorist operation was carried out by the Zionist regime (Israel),” an unnamed member of the Iranian team investigating the incident was quoted as saying by semi-official Nournews. Israeli Defence Minister Benny Gantz declined to comment directly about the incident when addressing a webinar on Saturday hosted by his Blue and White party, but he said Iran regularly sent weapons to its proxies in the region.

Iran cracks down on contentious pop music video with arrests (AP) — Iranian authorities have arrested multiple music producers connected to a California-based Iranian pop singer, his management company and Iranian media said Thursday, in Tehran’s latest effort to halt what it deems decadent Western behavior.The arrests come as Iranian social media has been awash with criticism of popular underground Iranian singer, “Sasy,” or Sasan Heidari Yafteh's, new music video. Called “Tehran Tokyo,” the video features actresses, including an American porn star, gyrating in kimonos and short bodycon dresses atop cars and inside bars. The clip racked up 18 million views within a week. Over the years, Sasy has become known for contentious lyrics that Iranian conservatives see as tainting the country's moral probity. In a previous song also featuring a porn actress, he instructed teenagers to take alcohol shots if they can't fall asleep and to scroll through Instagram instead of finishing their homework.

U.S. Aircraft Carrier Deploys In Mediterranean As Damascus Prepares To Push On The Northwest --The USS Dwight D. Eisenhower aircraft carrier and its Carrier Strike Group have entered the Mediterranean Sea. This makes it, currently, the closest aircraft carrier to the Middle East. It has been quite a while since the US hasn’t had one of its super warships deployed in or near the Persian Gulf. Starting in the spring of 2019, the U.S. Navy has been publicly ordered to keep a near-constant presence in the region, as if this were something new. US Secretary of Defense Lloyd Austin announced that a global posture review is taking place, and it would be reconsidered whether a carrier was even needed in the region. Still, the Mediterranean Sea is quite nearby, and the removal of the Carrier Strike Group (CSG) from the Persian Gulf was a political move. It’s Lloyd Austin’s dream to have a CSG in every hotspot in the world, but resources don’t allow for that. Still, the US has the amphibious warship USS Makin Island (LHD-8) in the Persian Gulf with a detachment of F-35B fighter jets, so it still has a hefty presence. In Syria itself, as the primary US competitor, alongside Iran, Russian forces are preparing to set up a permanent military base near the city of Palmyra in the Badia Desert. This is not yet confirmed, but according to satellite photos it has a helipad as a runway. This base is likely planned to support the Syrian Arab Army (SAA) further in their push against both ISIS and Turkish proxies. On March 9th, the SAA carried out heavy shelling on the positions of Turkish proxies in the village of Jabal Al-Zawiya, in southern Idlib. Separately, Pro-Turkey opposition factions reportedly thwarted an attempt by the SAA to advance on the Qalaat front in the northern countryside of Latakia.  In the days leading up to this, the SAA has been preparing for a large push in the province of Aleppo.This is likely an attempt to form a uniform front, which can exert equal pressure along the frontline and thin the enemy’s forces to provide opportunity for a breach. Turkey and its proxies are sure to offer heavy resistance to any advance by the SAA, but so far it appears that this may not be enough.

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