oil prices hit 31 month high; gasoline demand and refinery utilization both at a 14 month highs

oil prices rose for the fourth week in five as strong US economic data ​fed optimism on ​the outlook for ​fuel demand.. after falling 2.7% to $63.58 a barrel last week on fears of a deal that would lift sanctions on Iranian crude, the contract price of US light sweet crude for July delivery opened higher on Monday, boosted by signs of continuing economic recovery from Covid-19 in the US and an improved outlook for fuel demand. and climbed $2.47, or 3.9%, to settle at $66.05 a barrel, after a U.S. official said there aren’t yet any signs that Iran would comply with the commitments required to lift US sanctions, casting doubts that Iran would soon be able to resume crude exports...however, oil prices eased on Tuesday after Iran and the U.N. nuclear watchdog said they were extending a recently expired monitoring agreement by a month, allowing more time for negotiations, but still finished 2 cents higher at $66.07 a barrel​,​ as rising demand with the approach of the summer driving season and lifting of coronavirus restrictions supported prices...after slipping below $66 early Wednesday, oil prices rebounded after the EIA reported inventory draws from crude supllies and across all major product stores, and settled 14 cents higher at $66.21 a barrel on reinforced expectations of improving demand ahead of the peak summer driving season...oil prices moved lower early Thursday on demand concerns due to the COVID-19 crisis in Asia and​​ on a potential increase in Iranian supplies, but rebounded to finish 64 cents or 1% higher at $66.85 a barrel, the highest daily close since October 2018, bolstered by strong U.S. economic data that offset traders' concerns about the potential for a rise in Iranian supplies...oil prices opened higher and rose more than 1% early Friday amid hopes that an ongoing economic recovery in the US would have a positive impact on oil demand. but slumped late in the session to finish the day down 53 cents at $66.32 a barrel as traders took profits while awaiting the outcome of next Tuesday’s OPEC+ meeting...nonetheless, oil prices ended with an increase of 4.3% for the week, the biggest weekly gain since the middle of April, and also ended the month ​of May ​4.3% higher, based on front month ​contract ​closing prices...

natural gas prices also finished higher for the seventh time in eight weeks, on higher prices overseas and on a bullish shift the weather forecasts...after falling 1.9% to $2.906 per mmBTU last week as production rose and exports fell, the contract price of natural gas for June delivery opened lower and slumped more tha​n 7 cents early on Monday as production increased and on forecasts for milder weather and less demand over the next two weeks than previously expected​,​ but came back to settle​ just​ 2.0 cents lower at $2.886 per mmBTU, ​still ​the​ lowest close since April 27th...the ​rebound continued into Tuesday as gas prices rose 2.7 cents to $2.913 mmBTU on expectations that rising global prices would boost LNG exports back to record highs in the coming weeks...prices continued rising into Wednesday, the last day of trading for the June contract, as a favorable shift in the weather-demand outlook offset expectations for a triple-digit storage injection​,​ with the EIA's inventory report pending Thursday, as June natural gas rolled off the board priced 7.1 cents higher at $2.984 per mmBTU, while the more actively traded July contract added 5.3 cents to settle at 3.027 per mmBTU...now quoting the contract price of natural gas for July delivery, prices tumbled more than 9 cents on Thursday after a bearish government inventory report, but recovered to end down 6.9 cents or 2.3% at $2.986 per mmBTU...however, natural gas futures rose again on Friday to their highest in more than a week, buoyed by forecasts for warmer weather in two weeks and a projected increase in liquefied natural gas (LNG) exports, and settled 2.8 cents higher at $2.986 per mmBTU, thus posting an apparent 2.8% increase for the week, even as the July natural gas contract, which had closed the prior week at $2.977 per mmBTU, only gained 0.3% on the week...

the natural gas storage report from the EIA for the week ending May 21st indicated that the amount of natural gas held in underground storage in the US rose by 115 billion cubic feet to 2,215 billion cubic feet by the end of the week, which still left our gas supplies 381 billion cubic feet, or 14.7% below the 2,596 billion cubic feet that were in storage on May 21st of last year, and 63 billion cubic feet, or 2.8% below the five-year average of 2,278 billion cubic feet of natural gas that have been in storage as of the 21st of May in recent years....the 115 billion cubic feet that were added to US natural gas storage this week was above the average forecast of a 107 billion cubic foot addition from an S&P Global Platts survey of analysts, and was also above the average addition of 91 billion cubic feet of natural gas that have typically been injected into natural gas storage during the second week of May over the past 5 years, as well as above the 105 billion cubic feet added to natural gas storage during the corresponding week of 2020...  

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending May 21st showed that because of a modest increase in our oil exports, a modest increase in our oil refininng, and a modest decrease in our oil imports, we needed to withdraw oil from our stored commercial crude supplies for the sixth time in fourteen weeks and for the 28th time in the past forty-four weeks....our imports of crude oil fell by an average of 13​8,000 barrels per day to an average of 6,273,000 barrels per day, after rising by an average of 923,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 127,000 barrels per day to an average of 3,433,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,840,000 barrels of per day during the week ending May 21st, 265,000 fewer barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly unchanged at 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 13,840,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 15,239,000 barrels of crude per day during the week ending May 21st, 123,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 473,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 927,000 barrels per day less than what our oil refineries reported they used during the week...to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+927,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting there must have been a error or errors of that magnitude in this week's oil supply & demand figures that we have just transcribed.....however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as they're published, just as they're watched & believed to be accurate by most everyone in the industry....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,905,000 barrels per day last week, which was 0.5% more than the 5,875,000 barrel per day average that we were importing over the same four-week period last year... the 473,000 barrel per day net withdrawal from our crude inventories included a 235,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commerical purposes, and a 237,000 barrel per day withdrawal from our designated commercially available stocks of crude oil....this week's crude oil production was reported to be unchanged at 11,000,000 barrels per day even though the rounded estimate of the output from wells in the lower 48 states rose by 100,000 barrels per day to 10,500,000 barrels per day, becuase an 8,000 barrel per day decrease in Alaska's oil production to 448,000 barrels per day caused the subtraction of 100,000 barrels per day from the rounded national total (by the EIA's math)....our prepandemic record high US crude oil production was at a rounded 13,100,000 barrels per day during the week ending March 13th 2020, so this week's reported oil production figure was 16.0% below that of our production peak, yet still 30.5% above the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 87.0% of their capacity while using those​ ​15,238,000 barrels of crude per day during the week ending May 21st, up from 86.3% the prior week, and the highest refinery utilization since March 20th of last year...while the 15,239,000 barrels per day of oil that were refined this week were 17.3% higher than the 12,991,000 barrels of crude that were being processed daily during the pandemic impacted week ending May 22nd of last year, they were still 9.1% below the 16,767,000 barrels of crude that were being processed daily during the week ending May 24th, 2019, when US refineries were operating at a still low 91.2% of capacity...

even with this week's increase in the amount of oil being refined, the gasoline output from our refineries decreased by 5,000 barrels per day to 9,748,000 barrels per day during the week ending May 21st, after our gasoline output had increased by 165,000 barrels per day over the prior week...while this week's gasoline production was 35.9% higher than the 7,171,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 2.3% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 1.2% below the gasoline production of 9,863,000 barrels per day during the week ending May 10th, 2019....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 112,000 barrels per day to 4,665,000 barrels per day, after our distillates output had decreased by 102,000 barrels per day over the prior week...but since the pandemic pullback of last year didn't appear to impact distillates' production, this week's distillates output was still 2.4% lower than the 4,780,000 barrels of distillates that were being produced daily during the week ending May 22nd, 2020...

with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the second time in eight weeks, and for the eighth time in twenty-eight weeks, falling by 1,745,000 barrels to 232,481,000 barrels during the week ending May 21st, after our gasoline inventories had decreased by 1,963,000 barrels over the prior week...our gasoline supplies decreased this week because the amount of gasoline supplied to US users increased by 255,000 barrels per day to a 14 month high of 9,479,000 barrels per day, even as our exports of gasoline fell by 100,000 barrels per day to 733,000 barrels per day while our imports of gasoline fell by 47,000 barrels per day to 1,034,000 barrels per day...after this week's inventory decrease, our gasoline supplies were 8.8% lower than last May 22nd's gasoline inventories of 255,000,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year... 

meanwhile, even with the increase in our distillates production, our supplies of distillate fuels decreased for the 13th time in 23 weeks and for the 27th time in thirty-nine weeks, falling by 3,013,000 barrels to 129,082,000 barrels during the week ending May 21st, after our distillates supplies had decreased by 2,324,000 barrels during the prior week....our distillates supplies fell by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 403,000 barrels per day to 4,461,000 barrels per day, while our imports of distillates rose by 6,000 barrels per day to 273,000 barrels per day, and while our exports of distillates fell by 186,000 barrels per day to 908,000 barrels per day....after seven consecutive inventory decreases, our distillate supplies at the end of the week were 21.4% below the 164,327,000 barrels of distillates that we had in storage on May 22nd, 2020, and about 8% below the five year average of distillates stocks for this time of the year...

finally, with the increase in both our refining and in our oil exports, our commercial supplies of crude oil in storage fell for the 17th time in the past twenty-eight weeks and for the 26th time in the past year, decreasing by 1,662,000 barrels, from 486,011,000 barrels on May 14th to 484,349,000 barrels on May 21st, after our crude supplies had increased by 1,320,000 barrels the prior week....after this week's decrease, our commercial crude oil inventories were about 2% below the most recent five-year average of crude oil supplies for this time of year, but were still about 36% above the average of our crude oil stocks as of the the third week of May over the 5 years at the beginning of this decade, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the Covid lockdowns of last spring, our commercial crude oil supplies as of May 21st were 9.4% less than the 534,422,000 barrels of oil we had in commercial storage on May 22nd of 2020, but still 1.6% more than the 476,493,000 barrels of oil that we had in storage on May 24th of 2019, and also 11.5% more than the 434,512,000 barrels of oil we had in commercial storage on May 25th of 2018...      

This Week's Rig Count

The US rig count rose for the 33rd time over the past 37 weeks during the week ending May 28th, but it's still down by 42.4% from the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US was up by 2 to 457 rigs this past week, which was also up by 156 rigs from the pandemic hit 301 rigs that were in use as of the May 29th report of 2020, but was still 1,472 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 ​an attempt to put US shale out of business....

The number of rigs drilling for oil was up by 3 to 359 oil rigs this week, after rising by 4 oil rigs the prior week, now giving us 137 more oil rigs than were running a year ago, but still just 22.3% 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 down by 1 to 98 natural gas rigs, which was still up by 21 natural gas rigs from the 77 natural gas rigs that were drilling a year ago, but still just 6.1% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008....

The Gulf of Mexico rig count was unchanged at 14 rigs this week, with all 14 of those rigs drilling for oil in Louisiana's offshore waters....that was 2 more Gulf of Mexico rigs than the 12 rigs drilling in the Gulf a year ago, when again all 12 Gulf rigs were drilling for oil offshore from Louisiana....since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig totals are equal to the Gulf rig counts...however, in addition to those rigs offshore, a rig continued to drill through an inland lake in St Mary parish Louisiana, while there were no such "inland waters" rigs running a year ago...

The count of active horizontal drilling rigs was up by 3 to 415 horizontal rigs this week, which was also up by 144 rigs from the 271 horizontal rigs that were in use in the US on May 29th of last year, but 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 to 27 directional rigs this week, which was still up by 4 from the 23 directional rigs that were operating during the same week a year ago....meanwhile, the vertical rig count was unchanged at 15 vertical rigs this week, and those were also up by 8 from the7 vertical rigs that were in use on May 29th 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 May 28th, the second column shows the change in the number of working rigs between last week's count (May 21st) and this week's (May 28th) count, the third column shows last week's May 21st 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 29th of May, 2020..    

it appears we have a few more changes than our totals would indicate....checking first for the details on the Permian basin in Texas from the Rigs by State file at Baker Hughes, we find that that four oil rigs were added in Texas Oil District 8, which is the core Permian Delaware, ​while a rig was pulled out from Texas Oil District 7C, which encompasses the southern counties of the Permian Midland, which gives us a net increase of three rigs in the Texas Permian...since the Permian basin only saw a two rig increase nationally, that means that the rig that was removed from New Mexico had to have been pulled out of the far west reaches of the Permian Delaware, to account for the national Permian basin change...elsewhere in Texas, we see that three rigs were removed from Texas Oil District 1, and that two rigs were added in Texas Oil District 2, that one rig was removed from Texas Oil District 3, and that three rigs were added in Texas Oil District 4, several combinations of which could have been targeting the Eagle Ford shale, which stretches in a narrow band across the southeast part of the state, to thus account for the one rig increase in that basin...meanwhile, it's evident that the rig pulled out of Colorado had been drilling in the Denver-Julesburg Niobrara chalk, ​but since we don't see evidence of an Oklahoma basin increase in the table above, we have to figure the two rig increase in that state was in basins that Baker Hughes doesn't track...lastly, we have the two natural gas rigs removed from the Pennsylvania Marcellus, which apparenly were ​partly ​offset by a natural gas rig addition in a basin that Baker Hughes doesn't track, which could have been one of those Oklahoma additions...

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Road deicer or radioactive wastewater? Ohio groups face-off over selling AquaSalina to public - The Columbus Dispatch - Drive through Ohio in winter and chances are you'll see an Ohio Department of Transportation truck spraying the roads with some kind of deicer.  Most of the time, it's a mixture of rock salt and water. But when temperatures dip below 20 degrees Fahrenheit, ODOadds other chemicals to keep the brine from freezing.   One of those additives is AquaSalina. It's made in Brecksville in northeast Ohio by Nature’s Own Source LLC, and owner Dave Mansbery has been singing its praises for years.  It's ancient seawater. It works up to -15 degrees Fahrenheit. It's 70% less corrosive than traditional deicers and more effective per lane mile, Mansbery told an Ohio House Committee.  He wants to take the next step: Selling AquaSalina to all Ohioans for their sidewalks, driveways and porches. But Mansbery can't do that without removing some existing Ohio laws. That's where Rep. Bob Young, R-Canton, comes in. He introducedHouse Bill 282, which would end a requirement that AquaSalina users pay a $50 registration fee to the Ohio Department of Natural Resources and report where every gallon gets spread. The Buckeye Environmental Network wants to stop that from happening.Why? Director Teresa Mills said she has three simple reasons: "It's radioactive. It's radioactive. It's radioactive." AquaSalina is made by refining the salty mixture of water and other chemicals that comes up the pipelines from conventional oil and gas wells.  Mansbery claims the radiation emitted by AquaSalina is safe. Bananas emit radioactive particles called potassium-40, and Mansbery, who didn't respond to a request for comment, says a jug of AquaSalina gives off less radiation."In principle that is correct," said Dr. John Stolz, a professor who runs the Center for Environmental Research and Education at Duquesne University in Pittsburgh. He studied AquaSalina in his lab and told the USA TODAY Network Ohio bureau there are critical differences between a banana and this particular deicer. Bananas are beta emitters, which is a kind of radiation that can be blocked by clothing. Radium emits both alpha and gamma radiation."Gamma has no mass and can go right through your body," Stolz said. Radium also gets "hotter" as it decays whereas bananas do not.

Oberlin, OH Still Fighting to Shut Down Long-Running NEXUS Pipe --Radical environmentalists continue to use the City of Oberlin, Ohio to try and advance their agenda of ending the use of natural gas pipelines. And Oberlin willingly lets them do it. We’re referring to the latest court filing by Oberlin (actually by Big Green lobbyists using Oberlin) contesting the Federal Energy Regulatory Commission (FERC) decision to approve the NEXUS pipeline, a pipeline from the Utica Shale into Michigan that’s been flowing for years connecting to a pipeline that exports some of the gas into Canada. Oberlin says FERC’s approval of NEXUS is faulty because some gas gets exported and is not “in the public interest.”The case sits before the lefties of the U.S. Court of Appeals for the District of Columbia (DC Circuit). When an interstate pipeline like NEXUS gets built, it has the right under federal law to use eminent domain to “condemn” property owned by landowners who refuse to negotiate and allow it to cross their land, like a tiny strip of land owned by Oberlin. It’s in the law, called “in the public interest.” But the Oberlin lawsuit argues if *some* of the gas flowing through the pipe gets exported, as is the case with *some* (not all) of the gas in NEXUS (flowing to Canada), such a situation is not “in the public interest” because U.S. citizens are not using/benefiting from 100% of the gas.Unfortunately, the judges of the D.C. Circuit left the door open for antis to try and manipulate our laws via the back door of the courts (see DC Circuit Court/Antis Continue to Hassle Long-Done NEXUS Pipe). The court asked FERC to respond to the cockamamie claims in the lawsuit. FERC responded to the court’s demand justifying its decision to approve NEXUS. FERC says in their response that under U.S. law (called the Natual Gas Act) if natural gas is exported by a pipeline to a country that is a free trade partner, as is Canada, such a project IS considered “in the public interest” (see FERC Says NEXUS Approval in Public Interest re Exports to Canada). It’s right there–in the law! (Maybe antis don’t read?)Even if you take all of the gas out of NEXUS that goes to Canada, FERC says enough gas stays right here and is used in the U.S. to justify the NEXUS project anyway, without the exports.Yet the radicals keep pushing:An Ohio city told the D.C. Circuit that gas intended for foreign markets should not be used by the Federal Energy Regulatory Commission as a reason to grant the developer of a $2.1 billion gas pipeline eminent domain authority for its construction under the Natural Gas Act.The D.C. Circuit told FERC in September 2019 that it needed to address questions raised by Oberlin, Ohio, about why shipments to Canada meant the since-completed Nexus pipeline was necessary and worth giving Nexus Gas Transmission LLC power to exercise eminent domain to build it. The commission explained itself in September 2020.*When are the taxpayers in Oberlin going to wise up and stop this nonsense from happening in their name?

Gateway Royalty Sounds Alarm on Ohio's HB No. 152 -- Gateway Royalty, which invests in oil and gas production by buying a portion of the mineral owner's royalty interest, is sounding the alarm about an industry backed bill that would require unleased mineral owners to accept net proceeds royalties from the well operator. Ohio's H.B. No. 152 seeks to amend R.C. section 1509.28, which provides for the mandatory pooling of unleased mineral owners in drilling units approved by the Chief of the Ohio Division of Oil and Gas Resources Management. Under the existing statute, an unleased mineral owner can choose to (1) participate in unit operations under lease terms negotiated with the unit operator, (2) participate under the terms of the unit order, or (3) elect to not participate and pay a nonconsenting penalty charge in an amount determined by Chief. H.B. No. 152, if enacted, "would fundamentally alter an unleased mineral owner's options in ways that would greatly benefit the Unit Operator to the detriment of the mineral owner," says Chris Oldham, Gateway Royalty's president. The mineral owner's first option (which is the default option if the mineral owner declines the other two) requires the mineral owner to accept a royalty of 1/8th of the net proceeds received by the operator. "Net proceeds" is defined in the bill as "proceeds on the sale of production less any and all taxes and fees levied on or as a result of production and less all post production costs incurred between the wellhead and the point of sale." Based on some of the current operators' cost deductions, a 12.5% royalty under a net lease is the equivalent of a 6.25% royalty interest or less. According to Oldham, an unleased mineral owner should be permitted to negotiate for a "gross proceeds/no deduct" royalty, as well as for a royalty percentage greater than 12.5%. Oldham says that many oil and gas leases are gross proceeds leases in which the royalty is a negotiated percentage of the gross sale price. Oldham says that this percentage was traditionally 12.5% (1/8th), but with the Utica shale boom the percentage is now "more often between 16 and 20 percent." H.B. No. 152, Oldham says, "removes the ability of an unleased mineral owner to negotiate for a gross proceeds royalty and for a royalty percentage above 12.5%."

Ohio HB 152 Forced Pooling Bill Disadvantages Unleased Landowners - Gateway Royalty is sounding the alarm over a new bill that’s quickly advancing in the Ohio legislature. Ohio’s House Bill (HB) 152 allows drillers to force-pool landowners if 65% of a drilling unit is signed to a lease–a pretty low bar if you ask us. But that’s not even the worst part. The reluctant landowner would receive a standard 12.5% royalty, no matter what the royalty is for the rest of the leases in the unit, AND post-production deductions would be taken out. Landowners could realistically see a 6.25% royalty…or less! It’s time to burn up the phone lines to either get this bill changed, or defeated.Gateway Royalty is a royalty owner itself–a company that buys future royalty payments for a one-lump payment now. Some landowners find the arrangement beneficial. Gateway is for all intents a “landowner” in this case. Think of them as a super landowner, with their ear to the ground for issues that affect royalties. Gateway outlines the problems with HB 152 in the press release below: H.B. No. 152, if enacted, “would fundamentally alter an unleased mineral owner’s options in ways that would greatly benefit the Unit Operator to the detriment of the mineral owner,” says Chris Oldham, Gateway Royalty’s president. The mineral owner’s first option (which is the default option if the mineral owner declines the other two) requires the mineral owner to accept a royalty of 1/8^th of the net proceeds received by the operator. “Net proceeds” is defined in the bill as “proceeds on the sale of production less any and all taxes and fees levied on or as a result of production and less all post production costs incurred between the wellhead and the point of sale.” Based on some of the current operators’ cost deductions, a 12.5% royalty under a net lease is the equivalent of a 6.25% royalty interest or less. According to Oldham, an unleased mineral owner should be permitted to negotiate for a “gross proceeds/no deduct” royalty, as well as for a royalty percentage greater than 12.5%. Oldham says that many oil and gas leases are gross proceeds leases in which the royalty is a negotiated percentage of the gross sale price. Oldham says that this percentage was traditionally 12.5% (1/8^th), but with the Utica shale boom the percentage is now “more often between 16 and 20 percent.” H.B. No. 152, Oldham says, “removes the ability of an unleased mineral owner to negotiate for a gross proceeds royalty and for a royalty percentage above 12.5%.”The mineral owner’s first option (which is the default option under the Bill) requires the operator to pay the unleased mineral owner a bonus of 75% of the current market rate for a bonus payment per acre. This provision is also unacceptable because it does not represent fair market value, according to Oldham.  The second option to unleased mineral owners under the Bill is to participate in the unit operations as a consenting party under the terms of the joint operating agreement (“JOA”) attached to the unit operation application. Oldham says this is not a viable option because very few mineral owners, if any, can take the risk and liability of a working interest owner, let alone have the financial ability to join in the drilling, completion and production operations of these Utica horizontal wells, which cost a minimum of $6.0 million to $8.0 million per well. The third option is to participate in the unit operations as a nonconsenting party under the terms of the JOA along with a 300% non-participation charge payable from the nonconsenting owner’s share of production. Oldham says the third option is not viable either because there is a high probability that the mineral owners’ interest will never pay out. Oldham says since neither the second nor third option is viable, the unleased mineral owners “will be stuck with the first option.”

Pennsylvania gas production continues to climb  - Pennsylvania gas companies produced a total of 1863 Bcf in Q1 2021, up 5.4% from the same period one year earlier. Not only has gas production climbed, but the rate of growth has accelerated from the previous four quarters, according to recent statistics from the state’s Department of Environmental Protection. Gas producers have consistently put out growing amounts of gas over the last four years, but that rate of growth has fluctuated over time. The growth rate of Pennsylvania’s gas production reached a peak of 18.6% in Q3 2018 and gradually fell from then through 2020. Last year, growth was around 3% for most of the year, but began to climb again at the start of 2021. The state reported the industry spud 133 new horizontal wells in the first quarter of 2021, a decline of 20 wells, or 13.1% from the same period one year earlier. Despite the year-on-year decline in new wells, the trend was up 34 wells from the previous quarter and the first quarterly increase since the first quarter of 2020. New wells slowed dramatically last year because of the decline in prices and weak demand for gas. At the end of March, the state reported a total of 10,438 producing wells. Horizontal wells account for 99% of the production in the state. That total was up 4.9% from the previous year, the smallest year-over-year growth rate on record. The growth rate in producing wells has slowed as producers drill fewer wells and shut in or plug existing wells, the state reported. Without a significant uptick in new wells, new gas production will likely slow or even stagnate, the state reported. Gas wells in Susquehanna, Washington, Green, Bradford counties account for nearly 69% of the state’s production, with Bradford county showing the largest growth in production. Pennsylvania’s total annual production was 7290 Bcf in 2020, second only to Texas, which produced 10,291 Bcf in 2020. The average price for Pennsylvania gas was $2.53/MMBtu in Q1, 2021, a significant discount to the price of gas at Henry Hub, which was $3.44/MMBtu. That average price was the strongest in more than five quarters, and the growth rate was steeper than the growth rate of prices at Henry Hub, the state reported.

Call For Fracking Transparency — Pennsylvania Attorney General Josh Shapiro and other Democratic members of the Senate held a virtual press conference Tuesday to discuss legislation to increase transparency and oversight of management of gas drilling in the fracking industry. Eight recommendations were made based on the report of a two-year investigation that included testimony from homeowners that live within proximity of drilling sites and current and former state employees, according to a news release from PA Senate Democrats. Findings of the report include: numerous families, close to wells or other industrial sites, described unexplained rashes, sudden nosebleeds, and respiratory issues.Senate Democrats aim to usher in reforms through bills that were specifically recommended by the Grand Jury report.  The eight reforms detailed in the release include:

1. Expanding no-drill zones in Pennsylvania from the required 500 feet to 2,500 feet;
2. Requiring fracking companies to publicly disclose all chemicals used in drilling and hydraulic fracturing before they are used on-site;
3. Requiring the regulation of gathering lines, used to transport unconventional gas hundreds of miles;
4. Adding up all sources of air pollution in a given area to accurately assess air quality;
5. Requiring safer transport of the contaminated waste created from fracking sites;
6. Conducting a comprehensive health response to the effects of living near unconventional drilling sites;
7. Limiting the ability of Pennsylvania Department of Environmental Protection employees to be employed in the private sector immediately after leaving the Department;
8. Allowing the Pennsylvania Office of Attorney General original criminal jurisdiction over unconventional oil and gas companies.

“Under this package of bills, citizens and others could report potential environmental crimes directly to the Attorney General’s office for investigation without having to go through other agencies first,” said Sen. Santarsiero. “This would speed up the process for investigations and convictions for environmental crimes and make it clear to potential polluters that damaging our land and water will be met with real consequences.”

Ethane analysis points to severe underestimation of methane emissions in oil and gas production -- A new analysis of emissions from ethane, which are tied to methane emissions and largely attributable to oil and gas companies, shows that the U.S. Environmental Protection Agency is underestimating methane generated by the industry by 46% to 76%. Researchers have long suggested that the EPA underestimates the level of methane emissions in the U.S., but pinpointing the sources of these emissions is difficult, given that methane comes from a variety of sources, including agriculture and wetlands. The new study, published May 5 in the Journal of Geophysical Research: Atmospheres, details a method of analyzing ethane emissions that links a previously underestimated share of methane emissions to the oil and gas industry, providing new information that could inform future climate change efforts. "As far as I'm aware, this is the only paper that's figured out that oil and gas methane emissions [estimates] are too low without actually measuring methane emissions," said lead author Zachary Barkley, an atmospheric scientist at Pennsylvania State University. "There is clearly an ethane/methane source here — oil and gas wells — which are being underestimated, and it needs to be accounted for."Methane is an important greenhouse gas that traps heat 28 times more effectively than carbon dioxide over a 100-year span. According to the study, methane emissions stabilized in the early 2000s but have been increasing since 2007. Oil and gas infrastructure is prone to methane leaks through valves and other equipment during production and extraction. Gas flares, a common industry practice, are also common sources of methane emissions. The EPA keeps an inventory of these emissions, but the agency's calculations tend to be based on old measurements, according to Barkley."We know CO2 a lot better than we know methane, and so that's raised a lot of alarm in part because a lot of the climate projections did not account for this methane increase," Barkley said in an interview with The Academic Times. "We're doing so much to try and offset CO2, and now we can barely offset the changes we're seeing to the methane, so there's this big rush to try and figure out what's causing it, and one of the big sectors that's been looked at is oil and gas."The EPA classifies methane and ethane as "negligibly reactive" volatile organic compounds, or VOCs, which are any organic compounds that react with light in the atmosphere. As a result, the agency exempts methane and ethane from emissions limitations. In April, environmental groups including the Center for Biological Diversity petitioned the EPA to remove methane and ethane from its "negligibly reactive" list. "What happens when you do these studies with methane is you end up reporting your results, and then the oil and gas company will come after you and say, 'Well, how do you know it wasn't a cow? How do you know it wasn't a landfill?'" Barkley said. "When you only use ethane, no methane, and you come up with the same result as all these other papers that show that the EPA inventory is off, it just completely kills that argument, because there's nothing else it can be coming from."

Sen. Bob Menendez introduces bill to ban offshore drilling in Atlantic Ocean | Video  - U.S. Sen. Bob Menendez announced he would introduce the COAST Act (or Clean Ocean and Safe Tourism Anti-Drilling Act) to keep oil rigs away from the Atlantic Ocean, including the Jersey Shore. The bill would prevent the U.S. Department of the Interior from issuing leases for exploration, development or production of oil or gas in the Atlantic Ocean and the Straits of Florida. In January, President Biden paused drilling in those areas as part of his administration’s effort to combat climate change, blocking a move by the former Trump administration to open most of the coast to drilling.

Bill inspired by South Portland fuel tank emissions earns committee’s endorsement - Petroleum tank farms in Maine would have to continuously monitor emissions and take other steps to reduce off-gassing from aboveground tanks under a bill that received a committee endorsement on Monday. The bill is a response to concerns in South Portland about noxious odors and air pollution emanating from massive tanks located along the city’s waterfront in close proximity to schools, residential neighborhoods and businesses. Although those concerns date back decades, momentum has built since 2019 to tighten monitoring and reporting of emissions from petroleum tanks amid a high-profile dispute between state and federal regulators over emissions levels. The proposal, which faces additional votes in the full Legislature, would direct Maine’s Board of Environmental Protection to develop rules requiring the installation of “fenceline” monitoring stations around facilities with aboveground tanks. The low-cost monitors would then track levels of potentially hazardous emissions drifting into local neighborhoods. The bill also would require use of “floating roofs” – which reduce the accumulation of gases by sitting on the surface of the petroleum – in tanks larger than 39,000 gallons, and insulation in heated, fixed-roof storage tanks to reduce temperature changes that can create additional gases. The bill also would direct the BEP to mandate the collection of emissions created when loading fuels into empty tanker trucks, and the installation of technology capable of monitoring at least monthly for leaks from storage tanks, piping and fittings.

Oil Refineries' Benzene Pollution a Concern in Eastern KY  -- A Marathon oil refinery in eastern Kentucky is emitting benzene into the air at levels higher than what the federal Environmental Protection Agency says require action to curb. Benzene is a well-known carcinogen that can cause leukemia. According to a report from the Environmental Integrity Project, benzene readings at the Boyd County refinery jumped 233% between 2019 and 2020. Ilan Levin, associate director at the group, said last year's levels were 11% above the EPA action level. "These are not necessarily Clean Air Act violations," said Levin. "But the data indicates clearly that we've got a problem at many of these U.S. refineries." Levin added in 2015, the EPA required all refineries in the U.S. to install benzene pollution monitors. Nationwide, more than 530,000 people live within three miles of a refinery. The EPA estimates 57% are people of color and 43% live at incomes below the poverty line. Levin said he believes lax regulation and oversight of oil refineries threaten public health, and said the EPA should respond more rapidly to short-term spikes in benzene emissions. "Actions often include investigations, requests for information from these refineries," said Levin. "That's what EPA needs to do for a handful of these refineries, especially those that are getting worse." Levin explained benzene often wafts into communities at levels higher than what's being reported, because refineries can point to other nearby sources and claim the emissions aren't theirs. He said the data adds to a growing body of evidence about who's most likely to suffer the consequences of air pollution. "That points to the fact that people of color, and lower-income folks, are disproportionately hit by industrial pollution," said Levin. He notes the same communities were hit especially hard by COVID-19, where residents lack affordable health care and have higher rates of chronic illness that make them especially vulnerable to air pollution.

More US E&Ps, Utilities and Midstreamers Join Coalition to Reduce Natural Gas Emissions - Since early March, nine oil and natural gas producers, utilities and pipeline and storage operators have joined a coalition that pledges to reduce collective methane emissions to 1% or lower. Our Nation’s Energy Future (ONE Future), with members in the upstream, midstream and downstream sectors, now numbers 45. As members, each company would report methane emissions and hold a seat on the ONE Future board. Privately owned exploration and production (E&P) companies BKV Corp., THQ Appalachia I LLC (THQA) and Jonah Energy LLC, joined in April. Denver-based BKV holds assets in the Marcellus Shale in Pennsylvania, as well as the Barnett Shale in North Texas. According to ONE Future executive director Richard Hyde, BKV “has grown rapidly to become a Top-20 natural gas producer in the United States.” Supported by Tug Hill Operating LLC, THQA also targets the Marcellus, as well as Utica Shale and the Upper Devonian formation in northern West Virginia. “Through the utilization of technology, we strive to improve the efficiency of our operations, minimize our environmental impact, and create lasting partnerships within the communities where we live and work,” said THQA COO Sean Willis. Jonah Energy, based in Sublette County, Wyoming, holds assets within the Jonah Field. The independent produces 550 MMcf/d. Two new utility members, Black Hills Corp. and DTE Energy, plan to report methane intensity associated with distribution operations. Through subsidiaries, Black Hills provides natural gas to customers across Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. Detroit-based subsidiary DTE Gas delivers gas to 1.3 million customers in Michigan. More midstream companies have also joined ONE Future’s efforts to reduce methane emissions while promoting natural gas. Each company pledged to report results from their gathering, processing, transmission, or storage sectors.Western Midstream Partners LP (WES) joined in March. WES owns properties across Texas, New Mexico, Colorado, Utah, and Wyoming. Blue Racer Midstream LLC, which joined in April, operates processing facilities in the Utica and Marcellus shales. Most recently, Targa Resources Corp. joined in early May. The midstream company operates natural gas pipelines in the Permian Basin and in Oklahoma.

State lawmakers consider bill to preempt local natural gas restrictions -- Michigan lawmakers have joined nearly two dozen other states looking to stop local climate change efforts that involve electrifying various building and transportation components to reduce carbon emissions.House lawmakers today debated House Bill 4575 — sponsored by state Rep. Michele Hoitenga, R-Manton — in the House Committee on Regulatory Reform.  The co-owner of an oil and gas drilling consulting business with her husband Philip, Hoitenga introduced the largely preemptive bill as an effort to stop local governments from adopting, maintaining or enforcing an ordinance that “prohibits the use of an appliance that uses gas in a new or existing residential building or structure.” The bill, introduced in late March, would amend the Stille-DeRossett-Hale Single State Construction Code Act of 1972. It’s cosponsored by seven other Republicans.Hointenga said during the committee, which she co-chairs, that the bill is meant to “protect consumers from unintended consequences.”“Gas plays a significant role in sustaining a clean energy future,” she said, referring to the broader transition away from coal. “We must be realistic … when undergoing such profound energy usage changes.”Representatives from the Michigan Chamber of Commerce, the Home Builders Association of Michigan, DTE Energy and the Utility Workers Union of America testified in support of the bill. Multiple oil and gas trade groups, Michigan Realtors, the Michigan Restaurant and Lodging Association and the Michigan Licensed Beverage Association also support H.B. 4575.Citing a potential “patchwork” of local ordinances, DTE Gas Director of Sales and Marketing H.J. Decker said the gas utility “supports policies and regulations that expand the use of natural gas.” DTE Gas’ parent company, DTE Energy, has also publicly announced a net zero carbon emissions target by 2050.According to a House Fiscal Agency analysis, more than 20 states have either adopted or introduced bills that would “prohibit local governments from making building code changes that would ban the use of gas appliances in new construction.” The legislation is opposed by the city of Ann Arbor, where officials have adopted the A2Zero Plan that includes strategies to electrify homes and businesses. The plan more broadly calls for the city to reach net zero emissions by 2030 through renewable energy generation and purchases, energy efficiency, weatherization measures and electrifying transportation.

Gas Pipelines: Harming Clean Water, People, and the Planet --Oil and gas pipelines crisscross the United States, and new ones are still being built. It would take volumes to document all the dangers they pose to people, nature, and the planet, but here’s a start: greenhouse gas emissions, violations of indigenous treaty rights and sovereignty, destruction of endangered species habitat, taking of private property without public benefit, contamination of drinking water sources and streams and rivers, ruination of farms and landscapes, deaths and injuries from explosions, damage to wild ecosystems, and environmental injustice.The International Energy Agency has called for an immediate end to new investments in fossil fuel pipelines. With all the cleaner alternatives available, the only benefit of new pipelines is to increase the corporate profits of pipeline owners. Yet while the potential for harm is well known, government agencies keep rubber-stamping permits.FERC has approved dozens of new interstate gas pipelines over the past five years. Here are examples of the worst offenses associated with some of them (stay tuned for more on oil):

• Mariner East 2 pipeline travels 350 miles from Ohio and West Virginia through Pennsylvania. A gas liquids pipeline developed by Energy Transfer Partners (ETP), its construction led to contamination of drinking water sources for dozens of families and farms along the pipeline route. It’s also responsible for 320 spills between 2017 and 2020, reportedly releasing into the environment up to 405,990 gallons of drilling fluid, with more than 260,000 gallons spilled illegally into Pennsylvania waterways. One spill last August released more than 8,000 gallons of drilling fluids into a wetland and stream system that drains into Marsh Creek Lake, a drinking water reservoir near Philadelphia. Building the pipeline has also caused dozens of sinkholes, reportedly endangering some homes and damaging others.
• Also an ETP project, Rover is a 713-mile gas pipeline that travels from West Virginia, through Pennsylvania and Ohio, to Michigan. It’s reported that the company “racked up more than 800 state and federal permit violations while racing to build two of the nation's largest natural gas pipelines.” One spill alone was more than 2 million gallons. The Federal Energy Regulatory Commission (FERC) denied Rover a so-called “blanket certificate”—the authority to conduct routine construction activities without first seeking permission from FERC—precisely because it concluded Rover “could not be relied upon to comply with the environmental regulations required for all blanket certificate projects.” The full life cycle greenhouse gas emissions generated by the project are estimated to be 145 million metric tons. And FERC recently proposed a $20 million fine for Rover because it allegedly destroyed a historic Ohio property without notifying authorities or obtaining permission.
• Another one of ETP’s greatest hits, the Revolution Pipeline in Pennsylvania is only 40 miles long but in that short distance has caused significant damage. A 2018 explosion on this pipeline destroyed a home and resulted in a civil penalty of $30.6 million. Fortunately, no people were hurt. The Pennsylvania Department of Environmental Protection also determined that Revolution pipeline destroyed at least 23 streams and 17 wetlands and damaged another 120 streams 70 wetlands. There arehundreds of additional allegations related to this project.
• Still under construction, Mountain Valley Pipeline would stretch from West Virginia across the Appalachian Mountains to Virginia. It’s a joint venture of EQM Midstream Partners, NextEra Energy, Con Edison Transmission, AltaGas Ltd., and RGC Midstream. With hundreds of planned water crossings, MVP has already agreed to pay more than $2 million in penalties for more than 350 water quality violations cited by Virginia and West Virginia, and it’s not even close to being completed. No other large pipeline has ever been approved across this many miles of steep slopes and high landslide risk areas—more than 200 miles of “high landslide susceptibility.” Steeper slopes typically mean greater threats to clean rivers and streams as well as increased risks of explosions. The full life cycle greenhouse gas emissions that the project would generate if fully utilized are estimated at almost 90 million metric tons a year—the equivalent of 23 average U.S. coal plants or over 19 million passenger vehicles. MVP faces numerous lawsuits alleging violations of our bedrock environmental laws, including the Endangered Species Act, the Clean Water Act, and the National Environmental Policy Act.

Comment period for key Mountain Valley Pipeline water permits is here - The long-delayed Mountain Valley Pipeline needs water crossing permit approval if it is to ever be completed.The time is now to weigh in on whether the project should get it.Public comments are due Friday to the U.S. Army Corps of Engineers on Mountain Valley Pipeline LLC’s proposal to discharge dredged and/or fill material into wetlands and other waters, while West Virginia environmental regulators are taking comments ahead of a virtual public hearing set for June 22 on whether they should approve a water permit for the project.Mountain Valley Pipeline LLC, the joint venture that owns the pipeline, still has applications pending with West Virginia and Virginia state environmental regulators for about 300 water crossings while it seeks approval from the Federal Energy Regulatory Commission to tunnel under 120 additional waterbodies.The West Virginia Department of Environmental Protection last month asked for an additional 90 days beyond the 120 days the U.S. Army Corps of Engineers gave the agency to review Mountain Valley Pipeline LLC’s water permit request. The Virginia Department of Environmental Quality in March requested an additional year to review the pipeline permit application.Both departments said Monday that they haven’t heard back from the Corps. The Corps could not be reached for comment.The Mountain Valley Pipeline is designed to be a 303-mile natural gas pipeline system traveling from Northwestern West Virginia to Southern Virginia crossing Wetzel, Harrison, Doddridge, Lewis, Braxton, Webster, Nicholas, Greenbrier, Fayette, Summers and Monroe counties in the Mountain State. It is projected 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 U.S. Pipeline developers have proposed a 125-foot-wide temporary right-of-way to construct the pipeline and a 50-feet-wide permanent right-of-way to maintain and operate the pipeline once in service. Mountain Valley anticipates that the project will have temporary impacts to more than 21,000 linear feet of streams and 10 acres of wetlands in West Virginia during the construction phase.

Hurst: Mountain Valley Pipeline is not the future Virginia needs | Columnists --There is no need for the MVP and it should be cancelled. Over the past two years, MVP’s construction has polluted creeks and streams in Virginia and West Virginia, dried wells and ponds, and ruined farms. The company proved it could not prevent massive amounts of sediment from choking our streams, with state officials eventually ordering a fine of over $2 million for over 300 violations of the project permit. This destructive process — conducted on private land, seized for corporate greed — has resulted in the loss of livelihoods for many in the communities I represent. That is why I introduced HB 646 in 2020 which increased penalties for violations. The bill passed and was signed by the governor. The pipeline is now projected to cost $6.2 billion, twice as much as originally estimated, and it is 3-½ years behind its original schedule. If completed, the pipeline could generate greenhouse gas emissions equivalent to 26 coal plants —the last thing we need during this critical time. Unfortunately, Mountain Valley Pipeline and its proposed North Carolina extension, “Southgate,” are not intended to serve the communities they disrupt. Instead, they would link to a national pipeline network that some argue is already overbuilt, at a time when demand for natural gas is in decline. While construction inches forward, the environmental and legal risks continue to mount. As MVP tries to link an incomplete mainline project with the Southgate extension, courts have overturned various permits allowing the pipeline to cross waters, national forests, and the habitats of protected species. The North Carolina Department of Environmental Quality recently rejected, for the second time, a request for a water permit required for construction in the state. MVP also needs new water permits from Virginia, West Virginia, and a federal agency in the wake of litigation. Given all of the observed harms and uncertain future, this project must be cancelled.

U.S. natgas futures fall to near 4-week low on milder weather (Reuters) - U.S. natural gas futures slid to a near four-week low on Monday as production increased and on forecasts for milder weather and less demand over the next two weeks than previously expected. Traders noted cooler weather would cut the amount of gas power generators burn to keep air conditioners humming. Front-month gas futures NGc1 fell 2.0 cents, or 0.7%, to settle at $2.886 per million British thermal units, their lowest close since April 27. That also put the front-month down for a fifth day in a row for the first time since early March. Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 90.9 billion cubic feet per day (bcfd) so far in May, up from 90.6 bcfd in April. That is still well below November 2019's monthly record of 95.4 bcfd. With the milder weather on the horizon, Refinitiv projected average gas demand, including exports, would ease from 85.0 bcfd this week to 84.6 bcfd next week. The forecast for next week was lower than Refinitiv forecasts on Friday. The amount of gas flowing to U.S. LNG export plants averaged 10.9 bcfd so far in May, down from April's monthly record of 11.5 bcfd. The decline was due to short-term issues and normal spring maintenance at a few Gulf Coast plants and the gas pipelines that supply them. U.S. pipeline exports to Mexico, meanwhile, averaged 6.0 bcfd so far in May, just off April's monthly record of 6.1 bcfd, Refinitiv data showed. 

U.S. natgas edges up as rising global prices seen boosting exports -  (Reuters) - U.S. natural gas futures edged up on Tuesday on expectations a rise in global prices will boost U.S. exports back to record highs in the coming weeks. That U.S. price gain came despite forecasts for milder weather, lower demand and a steady increase in output. On their second to last day as the front-month, gas futures NGc1 for June delivery rose 2.7 cents, or 0.9%, to settle at $2.913 per million British thermal units. On Monday, the contract closed at its lowest since April 27 after declining for five days in a row. The July NGN21 contract, which will soon be the front-month, gained about 2 cents to $2.98 per mmBtu. Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 90.9 billion cubic feet per day (bcfd) so far in May, up from 90.6 bcfd in April. That is still well below November 2019's monthly record of 95.4 bcfd. The amount of gas flowing to U.S. LNG export plants averaged 10.9 bcfd so far in May, down from April's monthly record of 11.5 bcfd. The decline was due to short-term issues and normal spring maintenance at a few Gulf Coast plants and the gas pipelines that supply them. But with European TRNLTTFMc1 gas prices near their highest since September 2018 and Asian JKMc1 prices over $10 per mmBtu, analysts said they expect buyers around the world to keep purchasing near-record amounts of U.S. gas.

June Natural Gas Futures Contract Rolls Off Board Following Robust Gain -- Natural gas futures on Wednesday built on the gains of a day earlier as a favorable shift in the weather-demand outlook offset expectations for a triple-digit storage injection with the federal government’s pending inventory report Thursday. eia storage may 21 The June Nymex contract gained 7.1 cents day/day and rolled off the board after settling at $2.984/MMBtu on Wednesday. It had gained 2.7 cents on Tuesday. The June contract hovered near the $3.00 level over much of its span at the front of the curve, but it fell short of breaking through and staying above that threshold. July, which takes over as the prompt month Thursday, gained 5.3 cents to $3.027. NGI’s Spot Gas National Avg. rose a half-cent to $2.700. In terms of demand for natural gas to cool homes and businesses, forecasts on Wednesday improved from earlier in the week, with more intense heat likely next week in the Midwest and East, Bespoke Weather Services said. Both are key regions for natural gas consumption. “The forecast has stepped warmer overall,” Bespoke said Wednesday. While cooler air is still expected in the nation’s midsection and in the Northeast over the looming Memorial Day weekend, any chills “look quite brief before upper level ridging sets up shop once again in the eastern U.S. This keeps total demand over the next 15 days as a whole above normal, even with the cooler period in play.

Larger-than-expected US gas storage build prompts Henry Hub price drop - US natural gas storage fields injected 115 Bcf for the week ended May 21 -- much more than expected -- prompting Henry Hub futures to decline across the board May 27. Storage inventories increased to 2.215 Tcf over the latest reporting week, US Energy Information Administration data showed. The build proved greater than the 107 Bcf addition expected by an S&P Global Platts' survey of analysts. It was outside the range of expectations as responses to the survey ranged from a 94 to 112 Bcf injection. It was also above the five-year average of 91 Bcf, according to EIA data. It marked the first time in a month the injection was more than the average. Strong export demand and tepid production levels had resulted in an underwhelming injection season thus far. US supply and demand fundamentals showed significant slackening during the reference week, as the last gasp of heating demand the week earlier finally dissipated, sending demand from the residential-commercial and industrial sectors nearly 6.5 Bcf/d lower, according to S&P Global Platts Analytics. A bump in power burn demand, which rose by 1.7 Bcf/d on the week, was diminished by a 600 MMcf/d drop in LNG feedgas deliveries, leaving total demand 5.2 Bcf/d lower week on week for an average 81.8 Bcf/d. Upstream, supplies were essentially flat. The injection might be the sole triple-digit increase for the entire 2021 injection season, as forecasts for the week in progress and the week ahead point to a tighter market as hotter weather is expected to boost power burn demand, leaving less gas available to inject into storage. Storage volumes now stand 381 Bcf, or 15%, less than the year-ago level of 2.596 Tcf and 63 Bcf, or 3%, less than the five-year average of 2.278 Tcf. On May 27, in its first day holding the prompt-month position, the July NYMEX Henry Hub contract dropped 7 cents/MMBtu, with the balance of summer through October following it lower. The winter contract strip from November-March was less prone, but not by much, as prices tumbled more than 6 cents/MMBtu. This pushed the balance of summer below the $3/MMBtu support level, now trading closer to $2.95/MMBtu, while the winter strip remains firmly above at $3.13/MMBtu, though selling pressure appears to be rising. Platts Analytics' supply and demand model currently forecasts an 80 Bcf injection for the week ending May 28. This would once again grow the deficit to the five-year average as power burn demand begins to heat up. Total demand is up 1.7 Bcf/d week over week as a decline in residential-commercial and industrial demand pared down the effects of a roughly 3.4 Bcf/d increase in power burn demand.

July Natural Gas Futures, Cash Prices Sink After Bearish Inventory Report - Dragged lower after a bearish government inventory report, natural gas futures plunged on Thursday after rallying more than 7.0 cents into the expiration of the June contract a day earlier. The July Nymex contract, in its debut as the front month, dropped 6.9 cents day/day and settled at $2.958/MMBtu. It had closed above $3.00 on Wednesday. August also lost substantial ground, falling 6.7 cents on Thursday to $2.978. NGI’s Spot Gas National Avg. shed 6.0 cents to $2.640 as temperatures cooled in the Upper Midwest and forecasts called for light demand this coming weekend. Trading on Thursday was for gas delivered Friday through Monday, May 31. Natural gas trading on Friday will be for June gas delivery on Tuesday June 1. Futures traders pulled back after a disappointing U.S. Energy Information Administration (EIA) storage result that eclipsed the high end of analysts’ projections and signaled weaker demand than most had in their models. EIA reported an injection of 115 Bcf natural gas into stockpiles for the week ended May 21. Temperatures during the storage report week were cooler than normal over the southern United States and along the Mid-Atlantic Coast but warmer than normal – and generally comfortable — over the Mountain West and northern portions of the country. The weather minimized demand in key regions, according to NatGasWeather. Still, cooling demand had emerged in the West, and analysts anticipated a lighter build than what EIA delivered. Prior to the report, a Bloomberg poll showed a median estimate of 106 Bcf while a Reuters survey landed at a median build of 106 Bcf. A Wall Street Journal survey found an average build expectation of 101 Bcf. NGI’s model called for a 107 Bcf injection. The estimates compare with a 105 Bcf increase in storage a year earlier and a five-year average injection of 91 Bcf. The build for the May 21 week lifted inventories to 2,215 Bcf. That compared with the year-earlier level of 2,596 Bcf and the five-year average of 2,278 Bcf. But the increase for last week nevertheless signaled some easing in demand. In addition to weather, liquefied natural gas (LNG) export levels last week retreated from recent highs above 11 Bcf. That downward trend, while thought to reflect maintenance interruptions, extended into this week and curbed the influence of a major catalyst for natural gas prices this spring. LNG feed gas volumes hovered just below 10 Bcf on Thursday, NGI data showed.

U.S. natgas futures rise to one-week high on surging global prices (Reuters) - U.S. natural gas futures rose on Friday to their highest in more than a week, buoyed by forecasts for warmer weather in two weeks and a projected increase in liquefied natural gas (LNG) exports. Higher temperatures in two weeks were expected to boost demand for fuel to power generators and keep air conditioners humming. Still, traders said demand next week was likely be similar to this week, kept in check by mild weather and the Memorial Day holiday on Monday. Front-month gas futures NGc1 rose 2.8 cents, or 0.9%, to settle at $2.986 per million British thermal units, their highest close since May 18. For the week, the contract was up about 3% after falling about 2% last week. For the month, the contract was up about 2% after gaining about 12% last month. Data provider Refinitiv said gas output in the Lower 48 U.S. states has averaged 91 billion cubic feet per day (bcfd) in May, up from 90.6 bcfd in April. That, however, was still well below November 2019's monthly record of 95.4 bcfd. With warmer weather coming after the U.S. Memorial Day holiday week, Refinitiv projected average gas demand, including exports, would rise from 83.6 bcfd this week to 84.1 bcfd next week with a projected increase in LNG exports and 90.1 bcfd in two weeks as warmer weather boosts air conditioning use. The forecast for next week was slightly higher than Refinitiv predicted on Thursday. The amount of gas flowing to U.S. LNG export plants has averaged 10.8 bcfd so far in May, down from April's monthly record of 11.5 bcfd. The decline was attributable to short-term issues and normal spring maintenance at a few Gulf Coast plants and the gas pipelines that supply them. But with European gas prices near their highest since September 2018 and Asian prices above $10 per mmBtu, analysts said they expect buyers around the world to keep purchasing all the LNG the United States can provide. U.S. pipeline exports to Mexico, meanwhile, have averaged 6.0 bcfd so far in May, just off April's monthly record of 6.1 bcfd, Refinitiv data showed.

Council approves one-year extension for $542 million liquefied natural gas facility -- The Jacksonville City Council approved Houston-based Eagle LNG Partners LLC’s request for another year to start construction on its estimated $542 million liquefied natural gas export facility in North Jacksonville. The Council voted 17-0 to extend Eagle LNG’s deadline to begin construction from May 31 this year to May 31, 2022. The deal is tied to a city incentive of $23 million. Council approved Ordinance 2021-0241, which authorizes the extension, as part of its May 25 consent agenda. An Eagle executive said April 22 that coronavirus-related border closures in some Caribbean and Central American countries over the past year and quarantine orders kept the company from completing customer contracts with the government-owned and private utility companies that would receive the LNG shipping from Jacksonville. “We did lose a year. There’s no question,” said Linda Berndt, Eagle LNG vice president of government and public relations. “We asked for the year extension because of how slow some of these islands will be in recovery but we want to go sooner than a year.” Eagle LNG will have until Dec. 31, 2025, to complete the facility on 200 acres at 1632 Zoo Parkway along the St. Johns River with 12 new full-time jobs in place. Council voted in December 2019 to award Eagle LNG a Recapture Enhanced Value Grant up to $23 million, based on 50% of the incremental increase in ad valorem taxes, according to a legislative summary filed with the bill. Eagle’s investment outside the U.S. could be nearly double what it plans in Jacksonville. Company President Sean Lalani said in November 2019 that Eagle is prepared to spend up to $1 billion for receiving infrastructure in unidentified Central American and Caribbean Island nations. Eagle’s North Jacksonville facility will use lower volume LNG carrier ships to target small, relatively underserved markets that need less supply to operate than utilities in Asian, North American and European counties, according to company executives.

Exports, global demand lift top US producers’ NGL prices, revenues in Q1 - Robust international demand for liquefied petroleum gas drove a sharp spike in realized prices during the first quarter, boosting the NGL revenues of some U.S. shale producers more than 100% above the prior-year period.The 10 largest shale producers covered by S&P Global Market Intelligence recorded year-over-year gains in realized NGL prices of 77% to as much as 180% during the quarter. Both oil and NGL prices improved from the same period a year earlier and even from fourth-quarter 2020 levels. The average Brent crude oil futures prompt month contract gained 22% from the year-ago period, while the average Mont Belvieu NGL spot price grew more than 130%.Executives at Appalachian NGL producer Southwestern Energy Co., which posted the highest year-over-year increases in both NGL prices and revenues, said they expect NGL and oil prices to remain strong.“The 2021 [West Texas Intermediate] strip price has improved over $8 per barrel since we set our guidance in February, with transportation demand improving and OPEC+ compliance shaping supply increases to better match demand recovery,” Southwestern Energy President and CEO William Way said during the company’s quarterly earnings call. “The NGL landscape also remains promising, with low propane storage levels and increased global demand for both ethane and propane.” Antero Resources Corp., the country’s third-largest natural gas producer and Appalachia’s biggest NGL producer, also discussed the “welcomed, but not at all surprising” improved NGL prices on its earnings call. Antero said a major driver of first-quarter free cash flow was increasing commodity prices — particularly C3+ NGL prices, which averaged more than $40/b during the quarter. Analysts from Northland Capital Markets said in a May 12 note that they anticipate Antero’s net realizations will generate $300 million to $400 million of free cash flow through year-end, as Asian and European LPG prices stay high. “Summer exports, fall harvest season and winter weather are all on deck to sustain propane prices above the forward curve,” the analysts said.The second-largest NGL producer in Appalachia, Range Resources Corp., attributed the quarter’s improved NGL and condensate prices to “strong demand in a market that saw decreased supply.” Range posted a pre-hedge NGL price realization of $26.35/b, its highest since late 2018, and an NGL premium of $1.52/b to Mont Belvieu.“Preliminary results for U.S. propane and butane, or LPG, revealed that Q1 2021 domestic demand was 13% higher year on year, while supply decreased by 4%,” Range Senior Vice President and COO Dennis Degner said during an earnings call. “Looking forward, we see propane and butane market prices, as storage balances of these NGLs are much tighter relative to last year.”

Massive LNG export projects along the Louisiana coast could capture 1 million tons of carbon - A company proposing four liquefied natural gas export terminals in south Louisiana plans to capture climate-changing greenhouse gases from at least two of its projects for storage deep underground to prevent carbon from entering the atmosphere. Arlington, Virginia-based Venture Global LNG expects to use advanced technology to capture carbon from the liquefaction process, compress the CO2, then inject it into saline aquifers for permanent storage. The company did not say what percentage of total carbon produced would be captured for storage, and not enough is known from permit documents about its plant emissions to determine how significant the reduction is. The company said it could extend the carbon capture effort beyond the two projects to all four of its proposed terminals in Louisiana. One already is under construction in coastal Cameron Parish, where another project is proposed. Two others are proposed south of New Orleans. "Our location in Louisiana uniquely positions us to pioneer the deployment of this technology due to geology that can support industrial-scale injection and storage of CO2," Mike Sabel, chief executive officer of Venture Global, said in a news release. "Through this historic carbon capture and sequestration project, we will build upon our existing state-of-the-art technology to develop even cleaner LNG at our facilities to displace coal around the world." Demand for a cleaner version of LNG is high among countries that have plans to reach net-zero carbon emissions by 2050. Carbon is a greenhouse gas that contributes to climate change by entering the atmosphere and causing the Earth's protective ozone layer to deteriorate. The company said the 1 million tons of carbon captured each year would equal the emissions of 200,000 cars no longer driving on the road for 20 years. Venture Global LNG said it already has completed "comprehensive engineering and geotechnical analysis" for the carbon sequestration plan for two projects — its Calcasieu Pass site south of Lake Charles and Plaquemines LNG south of New Orleans — and is awaiting regulatory approvals. Between the two export terminals, the company expects to sequester 500,000 tons of carbon each year.

Crews continue to work on cleaning up oil spill along Norfolk creek — The U.S. Coast says it is continuing to respond to an oil spill in Norfolk. Officials say a waste oil tank that was on shore overflowed into Steamboat Creek on Tuesday afternoon. We don't know how much oil got into the water, but the Coast Guard says the source is secured. About 300 feet of shoreline is said to be affected. The Coast Guard said the "responsible party has been identified and is fully cooperating and participating in all response efforts." As of Thursday, the Coast Guard said oil spill response teams have collected about 200 gallons of waste oil and water mix, along with 185 bags of oiled debris since cleanup efforts began. The Virginia Department of Health says cleanup is expected to take several weeks and urges people to avoid the area. People should not enter Steamboat Creek to fish or swim. The VDH said nearby residents may smell oil as cleanup continues. A Coast Guard Sector Virginia pollution investigation team, Virginia Department of Environmental Quality, Virginia Department of Emergency Management, and the Norfolk Fire Marshal’s Office are working with local agencies to coordinate cleanup operations and assess any environmental impacts.

Cleanup of oil spill continues off Elizabeth river - A huge operation is underway in Norfolk to stop the damage from an oil spill in Steamboat Creek. The U.S. Coast Guard, several Virginia state agencies, and the city of Norfolk are working to clean up the oil and assess the damage. Discovered Tuesday afternoon, the spill reportedly came from a “waste oil tank overflow incident” on shore. About 300 feet of shoreline was impacted, but the Coast Guard still don’t know just how much oil was discharged into the water. The agency says the source is now secured. Coast Guard Sector Virginia, Virginia Department of Environmental Quality, Virginia Department of Emergency Management, and City of Norfolk Fire-Rescue teams are working with other agencies to get the spill under control. Oil spill response teams deployed one mile of boom and have collected at least 200 gallons of waste oil mixed with water. They’ve cleaned up 130 bags of oiled debris in the first 24 hours since they first responded to the spill. “Our focus is the unity of effort amongst our partner agencies in this ongoing clean up,” says Lt. Savannah Kuntz, the Coast Guard Federal On Scene Coordinator Representative. “Our goal is to minimize impacts to environmentally sensitive areas and species present, and we are so thankful to have state and local partners that are pivotal in our efforts.”

Colonial Pipeline says temporary network disruption resolved  (Reuters) -Colonial Pipeline, the largest fuel pipeline in the United States, on Friday said it had resolved a temporary network disruption, just weeks after a ransomware attack crippled fuel delivery for several days in the southeast region. Colonial earlier on Friday experienced a network issue, the company said, but restored service to its network. The issue was not associated with malware, the company said. The company had earlier said shippers were having problems entering and updating nominations for deliveries. The "system functionality has returned to normal," the company said. The reason for the network issues was not immediately clear. Colonial's shipping nomination system is operated by a third party, privately-held Transport4, or T4, which handles similar logistics for other pipeline companies. T4 on Friday said its application was working for all customers and carriers. It did not comment on Colonial's current network issue and said that data between T4 and Colonial was transacting normally. Friday's network problems are the second occurrence of such issues since the attack earlier in the month. Colonial is the largest fuel system in the United States, accounting for millions of barrels of daily deliveries to the U.S. East Coast and Southeast. Shortly after Colonial restored operations from the hack, it suffered a brief network outage that prevented customers from planning upcoming shipments on the line. At the time, Colonial said the disruption was caused by efforts by the company to harden its system, and was not the result of a reinfection of its network. The southeast United States is still recovering from the six-day line outage from earlier this month and the supply issues it caused in the region. Around 6,000 gas stations were still without fuel this week, according to tracking firm GasBuddy, down from a peak of more than 16,000. Almost 40% of gas stations in the capital, Washington, were without supplies on Thursday, GasBuddy said. More than 20% of stations in North Carolina, Georgia and South Carolina were also empty. The hack also boosted gasoline prices earlier than expected this year. Heading into Memorial Day weekend, the traditional start of the summer driving season, U.S. motorists are seeing the highest gasoline prices in seven years.

Colonial ransomware hack spurs first-ever cybersecurity regulations for pipeline industry - The Department of Homeland Security is moving to regulate cybersecurity in the pipeline industry for the first time in an effort to prevent a repeat of a major computer attack that crippled nearly half the East Coast’s fuel supply this month — an incident that highlighted the vulnerability of critical infrastructure to online attacks.The Transportation Security Administration, a DHS unit, will issue a security directive this week requiring pipeline companies to report cyber incidents to federal authorities, senior DHS officials said. It will follow up in coming weeks with a more robust set of mandatory rules for how pipeline companies must safeguard their systems against cyberattacks and the steps they should take if they are hacked, the officials said. The agency has offered only voluntary guidelines in the past.The ransomware attack that led Colonial Pipeline to shutter its pipeline for 11 days this month prompted gasoline shortages and panic buying in the southeastern United States, including in the nation’s capital. Had it gone on much longer, it could have affected airlines, mass transit and chemical refineries that rely on diesel fuel. Colonial’s chief executive has said the company paid $4.4 million to foreign hackers to release its systems.The cyberattack spurred DHS Secretary Alejandro Mayorkas and other top officials to consider how they could use existing TSA powers to bring change to the industry, said the officials.Gas stations in the Southeastern U.S. saw long lines on May 10, as Colonial Pipeline tries to restore operations following a ransomware attack. (The Washington Post)“The Biden administration is taking further action to better secure our nation’s critical infrastructure,” DHS spokeswoman Sarah Peck said in a statement. “TSA, in close collaboration with [the Cybersecurity and Infrastructure Security Agency], is coordinating with companies in the pipeline sector to ensure they are taking all necessary steps to increase their resilience to cyber threats and secure their systems.”

US pipeline operator reporting hacks to federal government — US pipeline operators need to carry out cybersecurity assessments under the Biden administration’s directives. Ransomware hacking disrupted gas supply in some states this month. The Transportation Security Administration directive issued Thursday will also allow owners and operators of national pipelines to report cyber incidents to the federal government and cyber security coordinators to work with authorities in the event of such attacks. Mandatory to be available at all times Shut down Colonial Pipeline.. Pipeline companies that previously operated on voluntary guidelines followed security directives that reflected the government’s focus on cybersecurity prior to the May attack on Colonial, a senior department of Homeland Security. If you don’t, you may face fines starting at $ 7,000 per day. Officials said. “The progress of ransomware attacks in the last 12-18 months poses national security risks and is concerned about the impact on key functions of the state,” said one official. It was. Anonymity to discuss regulatory details prior to official release. Crime organizations, often based in Russia or elsewhere in Eastern Europe, used encryption to scramble target data and unleash a wave of ransomware attacks demanding ransom. Victims include state governments, local governments, hospitals, medical researchers, and businesses of all sizes, and some victims are unable to even carry out their daily work.

Gas Shortage 2021: Why is Georgia dependent on just one gasoline pipeline? - The six-day shutdown of the Colonial Pipeline, which depleted the fuel supplies of more than two-thirds of metro Atlanta service stations, showed just how vulnerable Georgia is to interruptions to its energy supply. The cyberattack earlier this month made it painfully clear that, in a pinch, there are few practical alternatives to replace the pipeline’s massive capacity. The state is far from alone. The 5,500-mile-long pipeline supplies about 45% of the East Coast’s gasoline, diesel and jet fuel. The Southeast is even more reliant. Colonial delivers more than 70% of transportation fuels to Georgia, South Carolina, North Carolina and Virginia, according to the federal Energy Information Administration, including to crucial arteries such as Hartsfield-Jackson International Airport. Why Georgia’s fuel supply isn’t more diversified is shaped by a confluence of factors — and there are no easy fixes. Unlike many states in the Gulf, Midwest and the Rockies, Georgia doesn’t produce or refine any oil, so all petroleum products must be transported here. Pipelines, which pump fuel from refineries across long distances to customers, are often the most cost-effective option but face increasing opposition from elected officials, property owners and the public. Alternatives are expensive or still years away from widespread adoption. Multiple government reports in recent years warned about the state’s dependency on pipelines. Gulf Coast storms, including hurricanes Katrina and Harvey, and a 2016 pipeline leak in Alabama previewed the havoc that could be wreaked if such systems are impeded. “Georgia is extremely vulnerable to supply interruptions from weather and human interference,” a 2019 report from the state-run Georgia Environmental Finance Authority concluded.While there are alternatives for transporting fuels, none of them comes cheap. Trucking petroleum from the Gulf Coast is inefficient, since the vehicles are limited by how much they can carry. And transportation by rail can be pricey. Meanwhile, the century-old Jones Act requires that all goods transported domestically via ships must be carried on U.S.-built vessels that are owned and operated by Americans. Such tankers can be expensive to build and operate, and it’s sometimes cheaper to import foreign oil. Because of that, Georgia has relied on pipelines for transporting its oil — Colonial, built in the 1960s, and the smaller Products (SE) Pipe Line, built in the 1940s and known, until recently, as the Plantation Pipeline. The latter carries about 720,000 barrels per day compared to its competitor’s 3 million barrels. Both have headquarters in Alpharetta.

Salvors remove diesel fuel from capsized liftboat Seacor Power --Salvage crews have removed all diesel fuel from the tanks of capsized liftboat Seacor Power in the Gulf of Mexico, the U.S. Coast Guard said on Wednesday.Salvors removed approximately 20,363 gallons of diesel fuel from the overturned vessel using the hot tapping method, which involves drilling into the fuel tanks, making a hose connection, and transferring the fuel to portable tanks, the Coast Guard said.Approximately 4,500 gallons of hydraulic fluid still on board will need to be removed after the vessel is raised as the tanks are currently inaccessible, the agency said, adding the tanks have not been compromised.Now that diesel fuel has been removed, salvors will shift their focus toward removing debris and refloating the vessel. The Coast Guard said it expects the vessel will not be raised before June, as the timeline depends on many factors, including primarily the safety of salvage crews, weather conditions and any new structural changes that may occur.The Coast Guard said it continues to monitor for any oil discharges, and the liftboat's owner Seacor Marine has an oil spill response organization (OSRO) standing by.There were 19 people on board when the U.S.-flagged Seacor Power overturned in extreme weather conditions in the Gulf of Mexico last month. Six people were rescued by the Coast Guard and Good Samaritan vessels, six people died in the accident andseven remain missing. The incident is under investigation by the National Transportation Safety Board (NTSB) and the Coast Guard.

Gas well explodes in St. Mary Parish, burning four people, state says -- A natural gas well exploded in St. Mary Parish on Tuesday afternoon following an oil well blowout, causing at least four injuries.The Texas Petroleum Investment Company was in the process of sealing a natural gas well on Little Wax Bayou in Belle Isle on Sunday afternoon when the well blew out for unknown reasons, according to the Louisiana Department of Natural Resources. Wild Well Control, a Houston well control company, responded to the blowout Monday afternoon.However, while working on the uncontrolled spill, the exposed gasoline became ignited and caused an explosion Tuesday. It is unclear what caused the ignition. At least four people — all Wild Well employees — had burns on their hands and faces, according to Wild Well Control. At least one of those injured has been transported by air to Our Lady of Lourdes Regional Medical Center in Lafayette, according to their spokesperson, Elisabeth Arnold.

Four people injured after gas well explosion in Louisiana bayou - Officials confirm four people were wounded in an explosion at a natural gas well in the inland waters of St. Mary Parish on Tuesday. Workers from Wild Well Control, an oil spill response company, were trying to get a blowout under control at a well owned by Texas Petroleum Investment Co. when a spark ignited the natural gas coming from the well, according to Patrick Courreges of the Louisiana Department of Natural Resources. The Wild Well personnel sustained burns to their hands and face, Courreges said. The well is located in the marsh along Big Wax Bayou, west of Belle Isle near the Atchafalaya River delta. A review of state oil and gas data shows the well was first drilled in 1965. TPIC received a permit to plug and abandon the well in March and had been working on that when the blowout began Sunday. "Contractors working to cap a well in the Belle Isle Field were injured when a spark ignited natural gas," TPIC spokesman David Margulies said in a written statement Wednesday. "The incident began on Sunday while workers were attempting to plug the abandoned well. The gas flow at the well has stopped and the fire is out. The workers are receiving medical treatment and crews are on the scene to protect the environment and bring the well under control." Margulies updated his statement Wednesday afternoon to add that Tuesday's fire "was extinguished within two hours and gas flow has been minimized." The company had called in crews from Houston-based Wild Well Control, which says on its website that it's the world's leading provider of emergency well control response services. I TPIC says on its LinkedIn profile that its a Houston-based privately owned company that operates more than 2,000 producing wells along the Texas, Louisiana, Mississippi and Alabama coast. The Louisiana State Police Emergency Response Unit was on the scene Tuesday afternoon around 5:00 p.m. with HAZMAT equipment, Trooper Thomas Gossen said. Randall Mann of Acadian Ambulance said four helicopters and five ground units responded to take four patients to area hospitals. One went to New Orleans by helicopter, two by ambulance and another was taken to a Lafayette hospital by helicopter. Authorities say crews had been working to stop the well blowout since Sunday and the emission of gas seemed to be under control when it ignited. The fire stopped burning after Tuesday's accident, but Courreges said Wednesday that crews were still working to make sure the well is secure.

$1 billion refinery bid rebuffed by Shell for shuttered Convent site in Louisiana, group says -A group that says it was rebuffed in an effort to buy Royal Dutch Shell's Convent oil refinery for $1 billion says it is determined to buy and also build a new refinery to process lighter oil piped in from the Bakken shale play in the North Dakota area."We were trying to take advantage of existing infrastructure at the Convent refinery that was earlier indicated to be for sale," said Coleman Ferguson, who represents proposed buyer American Clean Energy Refining LLC and had worked at Texaco for more than three decades and is familiar with the Convent refinery. "If they (Shell) don't want to sell the refinery for some reason we're still interested in the docks, tanks and infrastructure. We are going to build a refinery we've just got to find a site," he said.The startup company looks to build a second stand-alone refinery for $2 billion, which was planned to be on the Shell site, with capacity of 300,000 barrels of "frack oil" each day, he said.Shell did not directly comment on the group's effort to buy the Convent refinery."Despite an extensive marketing process, a viable buyer was not identified," said Curtis Smith, spokesperson for Shell in an email."In the marketing process of the Convent Refinery and all other assets globally, we consider a wide range of qualifications and factors, including a prospective buyer’s ability and experience to safely operate a complex manufacturing site."The company had begun marketing its refinery in July 2020, but moved into shutdown mode several months later, laying off hundreds of workers and hundreds more contractors. Shell said it has found positions within the company for about 60% of the Convent workers.Now the refinery is in the "final steps of the preservation process and will soon be a fully idled and preserved asset," according to Shell. The company continues to "actively evaluate" its options, including "potential future marketing efforts."

Valero goes 'all-in' on renewable diesel, carbon capture - San Antonio-based Valero Energy Corp. is staking its future on the belief that not all cars and trucks will be powered by electricity in the years to come and the world will still need liquid fuels. The independent refiner is going all in on carbon capture projects and renewable diesel, a fuel produced from animal fats and waste products, such as used cooking oils. Other U.S. firms are doing the same. Houston refiner Phillips 66 said it plans to produce 800 million gallons of renewable diesel annually by 2024, and Ohio-based Marathon Petroleum said in March it would convert a California refinery to produce the fuel. For their part, European oil and gas majors — BP, Shell and Total, all three of which produce and refine oil — are aggressively positioning themselves for a future significantly less dependent on fossil fuels. They’re pouring billions into solar, wind and even hydrogen projects. Once it’s refined, renewable diesel can power any diesel vehicle on the road today. Valero, ranked 32nd on the list of Fortune 500 companies, estimates the fuel reduces emissions by 80 percent compared with regular diesel. Since 2018, Valero has spent hundreds of millions of dollars to expand its renewable diesel business. The company boosted production at its diesel refinery in St. Charles, La., and is building a new production facility at its Port Arthur refinery that will be completed in 2023.

They Wanted to Keep Working. ExxonMobil Locked Them Out. - The lockout began May 1, known in most parts of the world as International Workers’ Day. In a matter of hours, the ExxonMobil Corporation escorted 650 oil refiners in Beaumont, Texas, off the job, replacing experienced members of United Steelworkers (USW) Local 13 – 243 with temporary workers — and hoping to force a vote on Exxon’s latest contract proposal. USW maintains the proposal violates basic principles of seniority, and more than three weeks after the union members were marched out of their facility, they remain locked out. “We would have rather kept everyone working until we reached an agreement,” Bryan Gross, a staff representative for USW, tells In These Times. “That was our goal.” Because strikes and lockouts are often measures taken under more dire circumstances, either when bargaining has completely stalled or is being conducted in bad faith, USW proposed a one-year contract extension. But Exxon rejected the offer, holding out for huge changes to contractual language regarding seniority, safety and layoffs. “It’s a control issue,” Gross adds. “Exxon wants control.” As the oil industry attempts to deskill (and ultimately deunionize) its labor force, refinery workers like those in Beaumont find themselves under siege. Not only is their industry buckling beneath the weight of a global health crisis, but climate change has come to threaten their very livelihoods. Many workers remain skeptical of existing plans for a just transition. Since the coronavirus pandemic began in March 2020, refiners have taken drastic measures to offset steep drops in the price of oil by reducing production, selling assets and even closing some facilities. While the unionization rate in the oil and gas industry is currently higher than the rest of the U.S. workforce (15% compared with nearly 11%, per Reuters), BP, Marathon Petroleum Corporation and Cenovus Energy have cut labor costs by either downsizing or subcontracting to non-union workers. Exxon appears to be following along. Local 13 – 243 member J.T. Coleman, who has worked at the Beaumont refinery for a decade now, fears that hiring so many of these non-union workers to operate the facility could get somebody hurt. “We’re familiar with the equipment,” he says. “They’re not trained like we are.” USW has filed complaints with the National Labor Relations Board accusing Exxon of refusing to bargain, modifying their agreement with the union and coercion. Exxon did not immediately respond to a request for comment from In These Times. The complaints come at a time when the future of oil, in Texas and beyond, has never been more uncertain. In February, three severe winter storms walloped the state, killing 100 people and leaving millions without power. Similar storms hit Texas in both 1989 and 2011, but state lawmakers failed to heed calls from experts to upgrade the power grid at the time. When temperatures plunged below freezing this February, many sources of power in the state failed, including those generated from natural gas.

Bechtel Tapped to Design Natural Gas-to-Gasoline Plant in Texas  --Energy developer Nacero Inc. has tapped global engineering and construction contractor Bechtel to design a $6.5 billion to $7 billion plant the firm plans to build in the Permian Basin — a facility Nacero says would be the nation’s first natural-gas-to-gasoline manufacturing facility. Nacero on May 25 awarded a front-end engineering and design (FEED) contract to Bechtel for the 115,000-barrel-per-day facility, which project officials say will incorporate carbon capture, sequestration and 100% renewable power. The Odessa Development Corp. and Houston-based Nacero on April 22 announced plans to build the plant in Penwell, Texas, just outside of Odessa. “This project is truly a game changer,” said Bechtel Energy president Paul Marsden in a release. "Decarbonization is a key to our energy transition here in the U.S. and around the world,” Bechtel Energy president Paul Marsden said in a statement to ENR. "Nacero and their pioneering approach to lower-carbon gasoline are a great fit for these ambitions. Efforts like this also empower everyday people to contribute to the energy transition towards net zero. It is really powerful.” Once Bechtel completes the FEED contract, it will deliver a lump-sum price proposal for engineering, procurement and construction. Project officials say Bechtel will employ sustainable design practices and work toward reducing the project’s carbon footprint, both in the supply chain and during construction. “For America to achieve its domestic energy and climate change mitigation goals, we need big vision and laser-focused execution. Bechtel is center stage in helping us get there,” Nacero president and CEO Jay McKenna said in a release. At its peak, construction of the four-year first phase is expected to employ 3,500 skilled construction workers on site and would produce 70,000 barrels-per-day of gasoline component, ready for blending. The second phase is expected to take two more years and will increase capacity to 100,000 barrels per day. When fully operational, the plant will employ 350 full-time operators and maintenance personnel.

Interior OKs Trump-era drilling leases despite Biden freeze -- Monday, May 24, 2021 -- The Interior Department has issued dozens of oil leases sold in the final weeks of the Trump administration — and could issue over 200 more — drawing the ire of an environmental group that argues the move is a violation of the Biden administration's leasing freeze.President Biden ordered a moratorium on new oil and gas leasing shortly after taking office. That pause — which bars the regular auction of drilling rights in federal lands and waters — is in place while the administration conducts a comprehensive review of the federal oil and gas program that considers both the climate impacts and economic benefits of developing the country's vast stores of fossil fuels.Interior has issued roughly three dozen oil and gas leases since that order. Most are from a Trump administration sale in January in New Mexico, the largest federal oil-producing state, where Biden's oil lease moratorium has met with mixed reviews from Democratic leadership.Jeremy Nichols, climate campaign director for WildEarth Guardians, said those leases shouldn't have been finalized. Nichols, whose organization noticed with surprise the issuance of the New Mexico leases this month, said a lawsuit is "definitely on the table.""It's just unfortunate," he said in an email. "With [Interior Secretary] Deb Haaland acknowledging that leasing under Trump flouted science, public and Tribal input, and integrity, it's a shame that there may be a need to litigate more."The New Mexico leases aren't the only ones that were auctioned off in the waning days of the Trump administration, conveying 10-year rights to develop minerals in those areas. More than 200 other oil and gas leases were sold about six months ago by the Interior Department.Alyse Sharpe, a Bureau of Land Management spokesperson, said that "the Bureau is actively reviewing the leases from the December 2020 lease sales to ensure they comply with applicable federal laws and regulations and in light of various pending lawsuits."

Line 5 causing division and cross-border tensions - As both Canada and the U.S. await the heavily anticipated court decision of the Line 5 pipeline, people are holding their breath and hopeful for good news. Michigan and its Governor Gretchen Whitmer has ordered Canadian-owned Enbridge to close its 67-year-old pipeline over concerns about its environmental safety, which delivers a massive amount of oil and energy requirements (540,000 barrels a day) to Ontario, Quebec, and midwestern states, as well as more than half the propane consumed in Michigan. Concerns about the pipeline’s aging condition and potential environmental dangers are years in the making. Late in 2020, Whitmer brought a salvo to the dispute, giving Enbridge until May 12, 2021 to cease operations of the pipeline, with Enbridge not complying. The two sides are to meet again in mid-May. While Whitmer and the state are ordering the pipeline to close, business leaders in Michigan, Ohio, and Wisconsin are urging the court to keep Line 5 in operation. In the article, Christopher Guith, senior vice president, policy, at the U.S. Chamber of Commerce’s Global Energy Institute said, “unfortunately, millions of Americans and Canadians are likely to pay the price [of this political theatre].” After seeing events unfold at gas stations in the U.S. after the Colonial pipeline hack, shutting down Line 5 could have massive negative ramifications from an economic standpoint – higher prices, lost jobs, as well as a disruption of daily lives of individuals and companies. Recently former Saskatchewan premier Brad Wall says he finds it upsetting that it took a potential shutdown for the federal government to finally take a stance and defend Canadian oil. Speaking to CJME in Saskatchewan, Wall said, “It took the threat of the shutdown significantly impacting our central Canadian fellow citizens to get the federal government to find interest in pipelines,” he said. “Maybe even the spectre of a shutdown will help convince voters in central Canada to demand something different from federal parties in terms of their energy policy.29dk2902l “Any protracted shutdown is not good for the industry and the timing is not great.”

Part Of The Plan - Crude Oil Industry Prepares As Capline Pipeline Closes In On 'Flip Day' - Over the next few months, a variety of market players — crude oil producers, midstreamers, refiners, and exporters — will be making preparations for one of the most anticipated infrastructure additions in recent years. Actually, it’s not technically new; it’s the long-planned reversal of the 632-mile, 40-inch-diameter Capline, which for a half-century transported crude north from St. James, LA, to Patoka, IL. Line-filling will begin this fall and Capline will start flowing south from Patoka in January 2022, providing Western Canadian and other producers with new pipeline access to Gulf Coast markets. Upstream of Patoka, the impending reversal has been spurring the development of new pipeline capacity to supply the soon-to-be-southbound Capline, and in Louisiana, refiners and exporters have been making plans for the crude that will be flowing their way into St. James. Today, we discuss the broad impacts of the “new” Patoka-to-St.-James pipeline. Big enough for a full-grown Great Dane to walk through without scraping his ears, Capline is the biggest-bore crude oil pipeline ever built in the Lower 48. Originally called the Cajun Pipeline (and subsequently shortened to Capline), the project was a genuine gamechanger in that it enabled large volumes of imported oil and offshore Gulf of Mexico production to be transported north to a slew of refineries in the Midwest, with the Patoka hub serving as a key distribution point at Capline’s northern terminus.  As shown by the time-faded 1988 map in Figure 1, a number of new pumping stations were added along the pipeline’s route through the 1970s and early ‘80s, gradually increasing Capline’s throughput to a staggering 1.2 MMb/d.Throughout the 2010s, there was talk that Capline’s flow direction might be reversed, thereby providing another way for crude oil from Western Canada, the Bakken, and even the Niobrara and SCOOP/STACK to reach export docks and refineries in Louisiana. Finally, in August 2019, Capline’s current owners — Plains All American (with a ~54% ownership interest), Marathon Petroleum Corp. (MPC; ~33%) and BP (~13%) — announced that they had sanctioned the Capline reversal project, with plans to feed crude into the pipeline at two primary points: at the Patoka hub and in northern Mississippi, the latter at a proposed interconnection between Capline and an extension of the Diamond Pipeline. (More on that in a moment.)

More Canadian heavy crude US-bound -- Heavy Canadian crude shipments to the US are set to rise as more pipeline expansions come on stream and oil sands output climbs above pre-Covid levels. Pipeline capacity to ship heavy crude from Canada to the US is scheduled to rise by at least 420,000 b/d this year. The expansions are expected to increase Canadian heavy crude's market share in the US Gulf coast refining hub and could lead to higher heavy sour crude exports. Canadian crude accounted for close to 56pc of all US imports in March. And oil sands output has rebounded. Heavy crude production from oil sands projects involving steam extraction rose to a record 1.7mn b/d in March, 160,000 b/d higher than in the same month last year, according to the Alberta Energy Regulator. Alberta's oil production rose to 3.6mn b/d in March, about 50,000 b/d higher than February and 40,000 b/d up on March last year. Oil sands production made up the bulk of the increase, averaging 3.1mn b/d (see graph). The largest boost to export capacity will come from Enbridge's Line 3 replacement project, which will increase capacity from western Canada to the US midcontinent by 370,000 b/d. Enbridge has completed about 60pc of the work in Minnesota and the line is on track to start up in the fourth quarter, chief executive Al Monaco says. The project will expand Line 3 capacity from Alberta to Wisconsin to 760,000 b/d from 390,000 b/d and will enable Enbridge to capitalise on growing heavy crude demand amid a declining global heavy supply outlook, Monaco says. The nearly 700km Minnesota segment is the last section needed to complete the project, but regulatory and legal issues have delayed progress. Opponents are suing to stop the expansion and the Minnesota Court of Appeals heard arguments in March on a challenge to the state's approval. Producers expect the expansion to provide substantial relief to pipeline congestion. Enbridge needed to reject 52pc of requests for space on its two largest heavy crude lines for June, representing just over half of its near 3mn b/d Mainline system. Enbridge has had to reject on average 47pc of all nominations for capacity on the lines in the first six months of this year. The rejections should drop to 10pc once Line 3 comes into service, Canadian producer MEG Energy says. Congestion has led MEG to revise down its expected Canadian crude sales to the US Gulf coast for 2021. Volumes on the BP 2 crude pipeline in Indiana should increase by 10pc towards the end of 2021 when the Line 3 expansion goes into service, BP Midstream says. The BP 2 line moves crude from the Griffith terminal in Indiana to BP's 430,000 b/d Whiting refinery. Enbridge is also boosting capacity on its 280,000 b/d Express crude pipeline from Hardisty, Alberta, to Casper, Wyoming. The firm plans to complete the second phase of the 50,000 b/d expansion in the second quarter. The line connects to the Platte system, which moves crude from Casper to Wood River, Illinois. Enbridge boosted capacity on the Mainline system by 100,000 b/d in 2019 and is considering further increases. The company told investors in December that it has the option to increase Mainline capacity by another 200,000 b/d and to expand other lines including Flanagan South, from Flanagan, Illinois, to Cushing, Oklahoma, the Southern Access extension from Flanagan to Patoka in Illinois, and the Seaway pipeline from Cushing to the Houston area. Enbridge is also weighing a plan to reverse its 180,000 b/d Southern Lights pipeline from Illinois to Alberta to add more southbound capacity. Midstream firm TC Energy was planning a 50,000 b/d expansion of its Keystone pipeline system from Hardisty to Patoka, but says it does "not have a timeline to share" on any increase in capacity.

Line 3 construction will resume in June  -- Heavy construction activity will resume in June on Enbridge's Line 3 replacement pipeline. Environmental activists and some Indigenous communities still oppose it. — The relative calm of the spring thaw in northern Minnesota will soon give way to the sounds of heavy machinery putting huge segments of pipe into the ground. Enbridge Energy will resume major construction activity next week on its $4 billion Line 3 pipeline. The project, when completed, will carry Canadian oil across the top of the state to a terminal in Superior, Wisconsin. It's replacing the original Line 3 which was built in 1968. "We're replacing it with a pipe where the pipe wall is almost twice the thickness, and the actual alloy is actually stronger, so it would be stronger even if it were the same thickness as before," Mike Fernandez, a senior vice president at Enbridge, told KARE. "And the stations that have been set up operationally are more sophisticated from a technologically standpoint." The planning and permitting process began in 2014, after the Canadian company determined the original pipeline was aging in too many places. "We were doing more and more integrity digs and we were finding pipes that were rusting," Fernandez explained. "And so, we came to the conclusion, along with the Obama Administration, that we needed to look at replacement rather than continuing to do more and more integrity digs." The Minnesota Public Utilities Commission approved the Line 3 project in 2018, and again the following year after their original decision was nullified by a court ruling. By then work was well underway on the segments in Wisconsin and Canada. Work on the Minnesota portion began in December of 2020 after all the state and federal permits had been approved. Worked paused for the spring thaw and now labor contracts are in place to shift back into high gear, with a combined work force of more than 5,000. Many environmental organizations and some Native American Minnesota communities remain opposed. Three lawsuits aimed at stopping the project and blocking it from being used after it is built are still being debated in federal and state court. Others are planning to stop or delay construction through acts of civil disobedience.

US oil, gas rig count climbs 4 to 547 as Permian drilling hits 13-month high- The US oil and gas rig count climbed four to 547 in the week ended May 26, rig data provider Enverus said May 27, as Permian basin drilling activity pushed to a 13-month high. The number of active oil-focused rigs climbed one to 424 while the number of rigs chasing mostly gas was up three at 123. But the modest nationwide increase belies a steep increase in the Permian basin rig count, which climbed seven to 244 - the highest since the week ended April 22, 2020. It was the biggest one-week jump in Permian rigs since the week ended March 24. Rig counts were mixed across the other major oil-focused plays. SCOOP-STACK rig count was up two at 24, the highest since April 2020, while Bakken operators added a single rig for a total 18, putting the rig count there at the highest since May 2020. But the Eagle Ford rig count was steady at 41, and operators in the Denver-Julesburg play dropped a single rig leaving a total 13 active in the basin. Rig counts were mostly higher across the major gas-focused basins. Haynesville operators added two rigs for a total 52 active in the play, while the Marcellus basin rig count was up one at 34. Notably the dry portion of the Marcellus saw a gain of two rigs for a total of 22, while in the wet portion rig counts fell one to 12. The Utica basin rig count was steady at 11. Despite pushing to a one-year high last week, Bakken rig counts are still only around one-third of their prepandemic level seen in early 2020. Platts Analytics expected production to decline in line with the sharp decline in rig counts seen last year. Instead, operators have relied on the basin's large number of drilled-but-uncompleted wells and reduced flaring rates to not only uphold, but grow production, in recent months. But these forces are unlikely to maintain growth going forward as the number of DUCs dwindles and infrastructure constraints reduce anti-flaring efforts, according to a forecast by S&P Global Platts Analytics. From May 2020 through April 2021, the number of Bakken DUCs dropped from 877 to 647, according to data by the US Energy Information Administration. Flaring rates in the Bakken also fell from 13% in March 2020 to 8% in February 2021, providing additional gas that previously would have been flared, according to the North Dakota Industrial Commission. Platts Analytics therefore expects production to slide from 2.1 Bcf/d at the start of summer to 1.7 Bcf/d by October. The EIA expects Bakken production to decline 55 MMcf/d month over month in June.

U.S. crude output soars 14.3% in March -EIA - (Reuters) - U.S. crude oil output jumped 14.3% to 11.2 million barrels per day (bpd) in March from 9.8 million bpd in February, the U.S. Energy Information Administration (EIA) said in its monthly 914 production report on Friday. Output sank 1.3 million bpd in February when extreme weather froze natural gas and oil wells and cut power supplies to million of customers in Texas and other South Central U.S. states. That 1.4 million bpd increase in March was the biggest monthly gain on record, according to EIA data going back to 2005. Most of the increases were in the biggest producing states with Texas up 26.4% to an 11-month high of 4.7 million bpd and New Mexico up 17.6% to a record 1.2 million bpd. In North Dakota, meanwhile, output gained just 1.4% to 1.0 million bpd. Meanwhile, monthly gross natural gas production in the U.S. Lower 48 states jumped by a record 7.8 billion cubic feet per day (bcfd) in March to an 11-month high of 102.6 bcfd after falling by a record 8.1 bcfd in February to a 31-month low of 94.8 bcfd, EIA said. Gross natural gas output peaked at 107.1 bcfd in December 2019. In top gas producing states, output rose 18.5% in Texas to 27.8 bcfd in March and held steady in Pennsylvania near a record high of 21.2 bcfd. 

Unlike IEA, Rystad Energy sees need for hundreds of new oilfields  - Thousands of new oil wells and hundreds of new oilfields will be needed to meet global demand even if it falls sharply towards the middle of the century, Oslo-based consultancy Rystad Energy said on Friday. Its analysis stands in sharp contrast to the conclusions of the International Energy Agency (IEA), which said last week that investors should not fund new oil, gas and coal projects if the world wants to reach net-zero emissions by mid-century. The IEA's scenario sees oil demand declining to 24 million barrels per day (bpd) by 2050, while Rystad sees oil demand falling to 36 million bpd by the same time. "Given that output from oil wells declines by an average of more than 20% per year, the international oil industry will still need to drill thousands of new wells in existing fields, as well as developing around 900 new oilfields with collective resources of about 150 billion barrels of oil," the consultancy said in a note. Most of these projects were expected to be redevelopment, extensions or tie-backs to existing platforms, meaning the required investments will be moderate as existing infrastructure is reused, it added. Rystad said developments were needed to deliver about 10 million bpd in 2030s, as it saw a slower fall in demand than the IEA, which the consultancy said was overestimating the impact of biofuel growth and behavioural changes. Even if oil demand remains at 36 million bpd in 2050, it should be possible to reach the target of limiting the temperature rise to 1.5 degrees Celsius compared to pre-industrial times, it added. Rystad's analysis is likely to be welcomed by oil companies and oil producing countries, such as Norway, which have questioned the IEA's analysis as it undermines the case for the industry to carry on producing oil in the medium term. The Organization of the Petroleum Exporting Countries (OPEC) has said a lack of investments in new projects could lead to more volatile prices.

Biden budget aims to raise $35B from cutting fossil fuel tax benefits  -President Biden’s budget proposal released Friday takes aim at specific tax provisions that benefit the fossil fuel industry and projects that eliminating these measures will generate $35 billion over the course of a decade. The new $6 trillion budget proposal is a more detailed proposal than the “skinny” version released last month, which had called for spending an additional $14 billion on tackling climate change and proposed funding increases for the Energy Department, Interior Department and Environmental Protection Agency. The White House has also previously, in its infrastructure plan, said that it wanted to “eliminate tax preferences for fossil fuels,” but the new proposal gets much more specific. “These oil, gas, and coal tax preferences distort markets by encouraging more investment in the fossil fuel sector than would occur under a more neutral tax system,”a Treasury Department document states, outlining the administration’s tax proposals. Among the benefits Biden hopes to cut are those received by the fossil fuel industry for enhanced oil recovery, a method of extraction that allows companies to get to fuel they wouldn’t be able to otherwise reach, and another for “intangible” costs like wages, repairs, supplies and other expenses that are needed for oil and gas drilling. Biden is also targeting a provision that allows oil and gas companies to deduct as much as 15 percent of the revenue they get from a well. Biden's budget is a proposal and Congress will enact its own spending plans, but the budget is reflective of an administration's policy priorities and goals. Industry criticized the parts of the budget that would eliminate these benefits, arguing that it would push production overseas. “Increased taxes on American energy will only undermine economic recovery and job creation, push natural gas and oil investments overseas and lead to less government revenue, not more,” American Petroleum Institute President and CEO Mike Sommers said in a statement to The Hill.

Biden administration lists lesser prairie chicken under Endangered Species Act, setting up clash with oil and gas industry - The Biden administration called for new protections under the Endangered Species Act for an iconic birdof the Great Plains on Wednesday, a move with major consequences for the oil and gas industry.U.S. Fish and Wildlife Service officials proposed listing as endangered a portion of the lesser prairie chicken’s population living in Texas and New Mexico, whose range overlaps with the oil- and gas-rich Permian Basin. The agency stopped short of awarding the same protections to the birds’ northern population, in Oklahoma and Kansas, on the grounds that their numbers had declined less drastically. The decision, one of nearly two dozen new conservation measures the administration has adopted in the past four months, underscores President Biden’s push to unravel his predecessor’s environmental policies. In a separate move Wednesday, the Environmental Protection Agency abolished a rulerestricting what sort of studies the agency can use in crafting public health rules. Biden has targeted Trump’s energy and environmental policies or proposed one of his own at the rate of about one a day, according to a Washington Post analysis.Although administration officials have emphasized the need to heed scientific findings on climate change and other pressing environmental threats, Wednesday’s actions highlight the difficult terrain they must navigate.For a small bird, the lesser prairie chicken has had an outsize impact on national politics. It has roamed millions of acres over several states in the Great Plains, grasslands that have been carved up over the years to make way for corn and soybean fields, sprawling cities, and the Midwestern drilling rigs used to suck oil and gas out of the ground. The chickens have lost about 90 percent of their historic population, Fish and Wildlife Service officials said.

North Dakota, Using Taxpayer Funds, Bailed Out Oil and Gas Companies by Plugging Abandoned Wells -  When North Dakota directed more than $66 million in federal pandemic relief funds to clean up old oil and gas wells last year, it seemed like the type of program everyone could get behind. The money would plug hundreds of abandoned wells and restore the often-polluted land surrounding them, and in the process would employ oilfield workers who had been furloughed after prices crashed.The program largely accomplished those goals. But some environmental advocates say it achieved another they didn’t expect: It bailed out dozens of small to mid-sized oil companies, relieving them of their responsibility to pay for cleaning up their own wells by using taxpayer money instead.Oil drillers are generally required to plug their wells after they’re done producing crude. But in practice, companies are often able to defer that responsibility for years or decades. Larger companies often sell older wells to smaller ones, which sometimes go bankrupt, leaving the wells with no owner.These “orphaned wells” become the responsibility of the federal or state governments, depending on where they were drilled. While oil companies are required to post bonds or other financial assurance to pay for plugging them, in reality those bonds cover only a tiny fraction of the costs, leaving taxpayers on the hook. One estimate, by the Carbon Tracker Initiative, a financial think tank, found that those bonds cover only a tiny fraction of the expected costs of cleaning up the nation’s oil and gas wells.But in North Dakota, it turned out that most of the wells the state plugged were not truly orphaned, but had solvent owners. After the industry warned last year that the pandemic-driven oil-crash was threatening its finances, state regulators stepped in, assumed ownership of more than 300 wells, and used CARES Act funds to plug them, meaning the companies avoided paying anything themselves.“What happened was a bunch of people got a free ride,” said Scott Skokos, executive director of the Dakota Resource Council, a grassroots environmental group in the state. Skokos said it only deepened his sense that the state had bailed out the industry. In October, regulators were granted permission from state lawmakers tosend about $16 million of the CARES Act funds as grants to oil companies to help them buy water to hydraulically fracture new wells, a step the regulators said was necessary to expend the funds by the end of the year. Nine companies took advantage of the program. In one case, a single company, Continental Resources, received $5.4 million, according to state records.Wyoming also sent about $30 million in Covid relief funds to oil companies as grants to either frack new wells or revive or plug old ones.

Judge will not let North Dakota intervene in Dakota Access dispute -A federal judge will not allow the state of North Dakota to intervene in the lawsuit over the Dakota Access Pipeline. The decision came in Friday’s order from U.S. District Judge James Boasberg, who also declined to grant the Standing Rock Sioux Tribe’s request to shut down the pipeline during an ongoing environmental review. He denied North Dakota’s request “without prejudice,” which means the state could try to intervene again down the road. The attorney general’s office will watch how the case proceeds, said Troy Seibel, chief deputy attorney general for North Dakota. Boasberg "didn’t feel as though he needed us to be in the case right now, but he left the door open for us to get into the case in the future," Seibel said. The attorney general’s office had asked the judge to allow North Dakota to become a formal party in the tribal lawsuit, to defend the pipeline. State officials did not want Boasberg to side with Standing Rock and grant an injunction forcing the line to shut down. Boasberg’s ruling allowing Dakota Access to continue operating came as a relief to North Dakota’s oil industry, as the line has the capacity to carry about half of the state’s daily oil output to market. State officials were thrilled with that part of the ruling. They feared a shutdown would have led to job losses in the Bakken oil patch and a hit to tax revenue collected from oil production.

Judge Allows DAPL to Keep Pumping Oil Despite Lack of Permit - A federal judge ruled Friday the Dakota Access Pipeline may continue pumping oil despite lacking a key federal permit while the Army Corps of Engineers conducts an extensive environmental review. The Standing Rock Sioux and other tribes challenging the pipeline, which they say is operating illegally beneath a reservoir near their reservation, failed to "demonstrate a likelihood of irreparable injury," according to James Boasberg of the D.C. District Court, who criticized the Biden administration repeatedly in his ruling and noted the tribes' burden of evidence was far higher than the government's. It also highlights how Supreme Court precedent has made NEPA "virtually impossible to enforce," according to Eric Glitzenstein, the Center for Biological Diversity director of litigation. "Here, an environmentally devastating pipeline was constructed in flagrant violation of the law, and yet there is no remedy because of recent Supreme Court rulings that severely undercut lower courts' ability to halt a project before NEPA review can even take place," he told E&E. "We have the Roberts court to thank for that absurd outcome."

PIPELINES: All eyes on Army Corps after Dakota Access dodges shutdown -- Monday, May 24, 2021 -- Tribes challenging the Dakota Access pipeline said they will be closely monitoring a crucial environmental review of the project after a federal judge on Friday declined to halt operation of the conduit.

Dakota Access Pipeline gains win-win with court ruling and Biden inaction | S&P Global Platts --The future of the 570,000 b/d Dakota Access Pipeline is still at risk, but the primary crude artery out of the Bakken Shale is in a much stronger position after a federal court ruling kept the oil flowing and the Biden administration opted against intervening on an existing pipeline system. The May 21 court ruling essentially decided there is a minimal threat of oil spills from the four-year-old pipeline and the risk fails to rise to the necessary "irreparable harm" level needed to shutter the 1,200-mile pipeline, even though DAPL is basically being allowed to operate illegally without the necessary federal permitting that was previously yanked. The US Army Corps of Engineers -- now under President Joe Biden -- could have decided to close the pipeline for now while a court-ordered environmental review is conducted that could put DAPL back in good legal standing after it is completed in March 2022. But the Army Corps punted the decision to US District Judge James Boasberg of the District of Columbia, who instead criticized the Army Corps for inaction. "That was essentially Biden's chance to exert some influence and he didn't take it," Ajay Bakshani, analyst for East Daley Capital. told S&P Global Platts May 24. "It's definitely positive for the Bakken." The end result is DAPL will keep operating -- with plans to expand capacity by the end of the year -- although a negative Environmental Impact Statement from the Army Corps next year could again threaten DAPL's viability. The DAPL case was closely watched by industry and environmental observers alike because it could potentially set a standard for attempting to close existing pipelines and other fossil fuel infrastructure. Now, drilling activity should ramp again with the removal of much of the legal uncertainty, according to S&P Global Platts Analytics. Platts Analytics expects Bakken crude and condensate production to rise from 1.1 million b/d in May to 1.34 million b/d by the end of 2022. Impacts on other pipelines While Biden has opposed some proposed projects, most notably the Keystone XL Pipeline, he has not taken stances in legal fights against other pipelines, including DAPL, the Line 5 shutdown fight in Michigan, Enbridge's Line 3 Replacement project, and the planned Byhalia Connection near Memphis that is part of the Diamond Pipeline extension project. The White House clearly wants to support environmental concerns and tribal rights, but there also remains the need to ensure energy security, and closing existing pipelines can cause major disruptions, said James Coleman, an energy law professor at Southern Methodist University said May 24 in an interview. Coleman pointed out the recent, regional fuel shortage issues from the one-week closure of the Colonial Pipeline from a cyberattack. "It's still a little bit of a black box, but their actions on Dakota Access certainly are good news for other existing pipelines, such as Line 5," he said. Any additional legal appeals are a long-shot at best, Coleman said, so the future of DAPL largely remains in the Army Corps' court. "It puts the Biden administration in a tough position," he said. "This isn't the end of the road for the plaintiffs because the Biden administration could change its mind at any time."

Oil spill reported on Crow Indian Reservation -An oil spill of unknown size and duration has been reported on the Crow Indian Reservation.Richard Mylott, a spokesperson for Region 8 of the Environmental Protection Agency, said his understanding is that the spill is coming from a gathering line, a pipeline used to transport crude oil from a wellhead to a central collection point. Gathering lines generally transport a lower volume of oil than transmission lines. He said there are currently no known impacts or threats to surface waters.  “EPA will continue to monitor reports and will respond to any requests or needs for assistance,” he said.  According to DrillingEdge, which compiles information about oil and gas wells,Soap Creek Associates, Inc., has 31 operational wells in the area of the reported spill. Those wells produced 3,100 barrels of oil this past January.Montana Free Press first learned of the spill through communication with Richard White Clay, who has been active with the Crow Allottee Association, an organization that advocates for the interests of landowners on the Crow reservation. He said another association member with an allotment near Soap Creek reported the spill to him. “They found an oil spill in their creek and they sent some photos over,” he said.  The National Pipeline Mapping System lists an incident involving a hazardous liquid material on the Crow Reservation between Fort Smith and Lodge Grass. Credit: National Pipeline Mapping SystemThe National Pipeline Mapping System shows there has been an incident involving a pipeline transporting a hazardous liquid between Lodge Grass and Fort Smith. According to NPMS, there are four pipeline operators with oversight of pipelines in Big Horn County: Cenex Pipeline, LLC; WBI Energy Transmission, Inc.; Northwestern Corporation; and Phillips 66 Pipeline, LLC. It’s unknown if any of those companies operate the gathering line that’s believed to be the source of the spill. In a Tuesday morning email to MTFP, Clifford Serawop, Superintendent of the Bureau of Indian Affairs’ Crow Agency office, said BIA’s Land Service staff would be responding to the incident.  “Even though it’s allotted land, it’s still land that’s held in trust, so we want to make sure we take care of it,” Serawop said.Allotted land conveys ownership to a landowner with restrictions on its transfer and use. The land is held in trust for tribal members by the federal government.Montana Department of Environmental Quality spokesperson Moira Davin said DEQ is aware of the spill, but is not acting as the lead on a response. “It sounds like EPA and reservation staff will be the main leads,” she said.

Biden Backs Massive Alaska Drilling Project Approved Under Trump -The Biden administration is facing backlash from climate activists and scientists after filing a court briefWednesday in defense of a major Trump-era Alaska drilling project that's expected to produce up to 160,000 barrels of oil a day over a 30-year period — a plan that runs directly counter to the White House's stated goalof slashing U.S. carbon emissions."This is a complete denial of reality," said Jean Flemma, director of the Ocean Defense Initiative and former senior policy adviser for the House Natural Resources Committee. "The project is expected to produce about 590 million barrels of oil. Burning that oil would create nearly 260 million metric tons of CO2 emissions — about the equivalent of what is produced by 66 coal-fired power plants."Approved by the Trump administration in October of last year, fossil fuel giant ConocoPhillips' multi-billion-dollar Willow Master Development Plan aims to establish several new oil drilling sites in part of Alaska's National Petroleum Reserve and construct hundreds of miles of pipeline.Environmental groups promptly sued the Trump Bureau of Land Management and Interior Department over the move, charging that the agencies signed off on Willow "despite its harms to Arctic communities, public health, and wildlife, and without a plan to effectively mitigate those harms."But in a briefing submitted in the U.S. District Court for Alaska on Wednesday, Biden administration lawyers defended the Trump agencies' decision to greenlight Willow against the environmental coalition's legal challenge."The agencies took a hard look at the Willow Project's impacts, including impacts from the alternative proposed water crossings and impacts from building gravel roads and other infrastructure," the filing reads. "The analysis did not suffer for lack of specific project information." The Biden administration's filing does not explain how support for the massive drilling project — a top priority of Alaska's Republican Sens. Lisa Murkowski and Dan Sullivan — comports with the White House's pledgejust last month to cut U.S. carbon emissions in half by 2030.

Biden administration backs Alaska oil project approved under Trump - The Biden administration defended a proposed ConocoPhillips oil development in Alaska on Wednesday, backing the project pushed by Alaskan Sen. Lisa Murkowski, the centrist lawmaker the administration has wooed as a potential swing vote.The decision by the Interior Department to defend in court the Trump administration’s October 2020 decision and allow the Willow project in the National Petroleum Reserve-Alaska to proceed comes despite Interior Secretary Deb Haaland's opposition to the project last year when she was a member of Congress.The NPR-A region on Alaska's North Slope has been producing oil for decades and is separate from the Alaska National Wildlife Refuge. President Joe Biden issued a moratorium blocking drilling in ANWR on his first day in office, freezing the Trump administration's plans to allow oil exploration there.The Willow project, consisting of five wells that collectively could produce up to 160,000 barrels of oil a day, would be one of the first major new oil projects in Alaska in years. The development would include a new gravel mine, airstrip, more than 570 miles of ice roads and nearly 320 miles of pipeline to the Alaskan landscape. The Justice Department, in a court filing with the U.S. District Court of Alaska, defended the Trump-era decision to allow the project against environmental advocacy groups' allegations that Interior had failed to adequately assess the project's environmental impacts.Both Alaska Republican Sens. Dan Sullivan and Murkowski discussed the project during an Oval Office meeting with Biden on Monday. Sullivan said he left behind information on the project and Biden promised to get back to him shortly.“I talked extensively with the president on the Willow project,” Sullivan told POLITICO on Wednesday. “I told him ‘It hasn’t been controversial until you guys put a pause on it.’”  Biden was receptive to the project, Murkowski said, and she said she told him the Alaska lawmakers had briefed "just about everyone in your Cabinet and any senior adviser who would listen."

Biden Admin Sides with Trump Admin on ConocoPhillips Project  - -- The Justice Department is defending the Trump administration’s approval of a massive ConocoPhillips Alaska Inc. project in federal court, over the objections of environmentalists who say the government didn’t adequately consider the venture’s effect on polar bears and the climate. In a filing with the U.S. District Court for the District of Alaska, the Biden administration said Wednesday that Conoco’s Willow project in the National Petroleum Reserve-Alaska was approved only after years of analysis, consultation and public input. “Plaintiffs seek to stop the extraction of resources from the petroleum reserve by cherry-picking the records” of the Bureau of Land Management, the Fish and Wildlife Service and the Army Corps of Engineers, the administration told the court. President Joe Biden previously directed the Interior Department to review its 2020 approval of the Willow project, which has the potential to produce 150,000 barrels of oil per day. The project could include as many as five drilling sites, hundreds of miles of ice roads, an airstrip and a gravel mine site, among other infrastructure. Conservation and indigenous groups have argued the Interior Department’s Bureau of Land Management failed to sufficiently analyze the environmental and climate impact of the project. Environmentalists also have argued that planned gravel mining activities imperil a potential denning habitat for polar bears. In February, the Ninth Circuit Court of Appeals issued an emergency order blocking ConocoPhillips from opening a gravel mine site and building roads. The three Republican members of Alaska’s congressional delegation -- Senators Lisa Murkowski and Dan Sullivan as well as Representative Don Young -- pressed the issue with Biden in the Oval Office on Monday after he signed into law a measure that allows cruise ships to resume visits to the state, according to a person familiar with the matter. Sullivan even handed the president and White House staff a full-color one-page briefing on the project to help make his case. In its filing with the court, the Biden administration argued the federal government followed applicable clean water, animal protection and environmental laws in approving the project. And, the administration noted, the Willow venture is set to take place on “valid leases” within the petroleum reserve, where Congress has specifically mandated oil development. Environmentalists blasted the administration’s move Wednesday. “It’s incredibly disappointing to see the Biden administration defending this environmentally disastrous project,” Kristen Monsell, a lawyer at the Center for Biological Diversity said in a news release. “President Biden promised climate action and our climate can’t afford more huge new oil-drilling projects.”

Biden officials condemned for backing Trump-era Alaska drilling project -- Joe Biden’s administration is facing an onslaught of criticism from environmentalists after opting to defend the approval of a massive oil and gas drilling project in the frigid northern reaches of Alaska.In a briefing filed in federal court on Wednesday, the US Department of Justice said the Trump-era decision to allow the project in the National Petroleum Reserve in Alaska’s north slope was “reasonable and consistent” with the law and should be allowed to go ahead.This stance means the Biden administration is contesting a lawsuit brought by environmental groups aimed at halting the drilling due to concerns over the impact upon wildlife and planet-heating emissions. The US president has paused all new drilling leases on public land but is allowing this Alaska lease, approved under Trump, to go ahead.The project, known as Willow, is being overseen by the oil company ConocoPhillips and is designed to extract more than 100,000 barrels of oil a day for the next 30 years. Environmentalists say allowing the project is at odds with Biden’s vow to combat the climate crisis and drastically reduce US emissions.“It’s incredibly disappointing to see the Biden administration defending this environmentally disastrous project,” said Kristen Monsell, an attorney at the Center for Biological Diversity, one of the groups that have sued to stop the drilling. “President Biden promised climate action and our climate can’t afford more huge new oil-drilling projects.”The Arctic is heating up at three times the rate of the rest of the planet and ConocoPhillips will have to resort to Kafkaesque interventions to be able to drill for oil in an environment being destroyed by the burning of that fuel. The company plans to install “chillers’ into the Alaskan permafrost, which is rapidly melting due to global heating, to ensure it is stable enough to host drilling equipment. Monsell said the attempts to refreeze the thawing permafrost in order to extract more fossil fuel “highlights the ridiculousness of drilling in the Arctic”. Kirsten Miller, acting executive director of the Alaska Wilderness League, said Willow “is the poster child for the type of massive fossil fuel development that must be avoided today if we’re to avoid the worst climate impacts down the road”.

Cosco bulker spills oil off Sakhalin after fuel tank breach - (video) A bulk carrier, identified as Cosco’s Kang Shun, had its hull breached during entry into Boshnyakovo Anchorage, western Sakhalin Island coast, causing it to spill oil into the sea.A collision with a bunker barge caused a breach in one of the ship’s fuel tanks and close to one tonne of fuel oil leaked into the sea, according to the statement by the regional branch of the Russian Ministry of Emergencies (EMERCOM).A response team was deployed to treat the oil spill and no injuries were reported on the 55,600 dwt supramax, which at the time of the accident had some 12,000 tons of coal on board. The incident took place on May 21. As of this afternoon local time, the ship has yet to depart.

Sakhalin ship collision results in oil spill: report - A collision between a bulk carrier and a smaller ship resulted in a bunker fuel spill off the coast of Sakhalin. According to marine news provider Maritime Bulletin, the lighter struck the larger ship in the fuel tank area, an action that resulted in the spill a few days ago. Oil booms were deployed and a clean up operation is underway although the amount of bunker fuel spilt was not reported. While major spills from ships have fallen significantly since the Exxon Valdez incident and subsequent Oil Pollution Act (1990), enacted under President Geoge Bush's administration, smaller spills, some involving bunkering operations, are more common. According to the International Tanker Owners Pollution Federation, there were no spills from ships over 700 metric tonnes last year and three incidents where betwen 7 and 700 mt of oil were spilt. The total volume of oil lost to the environment from tanker spills in 2020 was approximately 1,000 mt, according to ITOPF.

Russian Watchdog Says No Significant Contamination Detected In Oil Spill Area In Norilsk - Specialists from Russia's environmental watchdog, Rosprirodnadzor, have not found any signs of significant pollution in the country's northern city of Norilsk near the area of a major diesel spill at a power station last May, the agency's head, Svetlana Radionova, said on Monday. "Rosprirodnadzor is controlling the situation. There is no significant contamination and what we can see now [was] expected. The main thing is that there are forces and means, and the work is under control. It [the Nornickel mining giant] has an understanding that it will clean everything until the territory is completely cleaned of even minor contaminants," Radionova wrote on Instagram. The official noted that during a regular check-up of the site, oily film was detected on the surface of the stream, formed due to melting snow and flowing from under the road mound, adding that the soil is treated with sorbents. Late last May, some 21,000 tonnes of diesel fuel leaked from a thermal power plant of the Norilsk-Taimyr Energy Company, which is affiliated with Nornickel, and contaminated two rivers and surrounding soil. It was initially believed that the spill had been caused by the melting of permafrost that supports the faulty power plant's fuel tank in motion. A criminal case was launched into the incident. Russia's environmental watchdog, in turn, opened a probe and estimated the damage at 148 billion rubles ($2 million). Nornickel disagreed with the amount and conducted its own probe which estimated the damage at seven times less than that. Norilsk-Taimyr Energy Company eventually made the 146.2 billion ruble payments to compensate for the damage.

New report helps UK MCA prepare for offshore oil spill challenges -- The UK Maritime and Coastguard Agency's (MCA) future oil spill response plan will be informed by a new report that maps out possible threats to the UK's coastal areas, marine life, and traffic as a result of hydrocarbon releases from energy industry operation and shipping. The report on the review of the hydrocarbon release risk on the UKCS over the next decade was delivered for the MCA, by Xodus Group, in association with London Marine Consultants. The review evaluated the risk of a serious mineral oil release occurring in UK waters from vessels of more than 1,000 gross tonnage (GT), including oils carried as cargo, bunker fuel, and from offshore installations. It includes the nature of risk and the likelihood of a serious hydrocarbon release in UK waters considering developments in ship and rig design and operations, and analysis of historical releases and near misses. The report also provides a look-ahead during the 2020s, to anticipate how changes in the industry, aging infrastructure, and/or decommissioning will affect the level of risk. The review will inform the MCA’s oil spill preparedness planning and associated activities for the next decade and consists of five reports: Oil cargo and bunkers; Qualitative review of the spill risk from ships; The offshore risk, overall assessment of the risk and a summary report for the project.

Dutch court rules oil giant Shell must cut carbon emissions by 45% by 2030 in landmark case — A Dutch court on Wednesday ruled oil giant Royal Dutch Shell must reduce its carbon emissions by 45% by 2030 from 2019 levels. That's a much higher reduction than the company's current aim of lowering its emissions by 20% by 2030. The landmark ruling comes at a time when the world's largest corporate emitters are under immense pressure to set short, medium and long-term emissions targets that are consistent with the Paris Agreement. The climate accord is widely recognized as critically important to avoid an irreversible climate crisis. Shell's current climate strategy states that the company is aiming to become a net-zero emissions business by 2050, with the company setting a target of cutting its CO2 emissions by 45% by 2035. A spokesperson for Shell said the company "fully expect to appeal today's disappointing court decision." "We are investing billions of dollars in low-carbon energy, including electric vehicle charging, hydrogen, renewables and biofuels," the spokesperson said via email. "We want to grow demand for these products and scale up our new energy businesses even more quickly." Shares of Shell were trading 0.2% higher in London. The stock price is up almost 10% year-to-date, having tumbled nearly 40% in 2020. The lawsuit was filed in April 2019 by seven activist groups — including Friends of the Earth and Greenpeace — on behalf of 17,200 Dutch citizens. Court summons claimed Shell's business model "is endangering human rights and lives" by posing a threat to the goals laid out in the Paris Agreement. Under the Paris Agreement — a deal adopted in 2015 and signed by 195 countries — nations agreed to a framework to prevent global temperatures from rising by any more than 2 degrees Celsius, although the accord aims to prevent global temperature rises exceeding 1.5 degrees Celsius.Roger Cox, a lawyer for environmental activists in the case, said in a statement that the ruling marked "a turning point in history" and could have major consequences for other big polluters. Meanwhile, Sara Shaw, Friends of the Earth's international program coordinator for climate justice and energy, said the organization hoped the verdict would "trigger a wave of climate litigation against big polluters to force them to stop extracting and burning fossil fuels."

US blacklists 13 ships working on Nord Stream 2 pipeline project - The US has imposed sanctions on thirteen vessels involved in the construction of the Nord Stream 2 gas pipeline from Russia to Germany, shortly after exempting the pipeline’s Russian operator and CEO. The US Treasury Department added two Russian-flagged AHTS vessels Vladislav Strizhov and the Yury Topchev to a sanctions list on Friday and prohibited their dealings with US banks and companies. Another eleven vessels from Russia’s Marine Rescue Service, including the pipe layer Akademik Cherskiy and offshore support vessel Artemis Offshore, were placed on a less restrictive sanctions list, prohibiting US firms provision of goods and services. Russia’s Marine Rescue Service and Samara Heat and Energy property fund were likewise placed on that less restrictive sanctions list. Last week, the US said it won’t sanction the pipeline’s Russian-owned operator, Nord Stream 2 AG, nor its CEO, Matthias Warnig. The sanctions against the vessels are seen as a symbolic move as the vessels are Russian-owned and flagged and are expected to continue pipe laying operations. Another Russian pipe layer on the US sanctions list, Fortuna, has already started operations on the Nord Stream 2 in German waters. Nord Stream 2, which crosses the Baltic Sea, bypassing Ukraine, has been opposed by the US, which claims it will increase German reliance on Russian gas and make Berlin more susceptible to Russian politics.

Russia’s Northwest Komi Republic hit by 100-ton oil spill -  A ruptured pipeline in Russia’s northwestern region of Komi has leaked 100 tons of oil last week, including nine tons that flowed into a local river, posing a threat the area’s ecosystems and populated areas, the state environment watchdog Rosprirodnadzor said on Monday. The pipeline is operated by Russian oil producer Lukoil, officials have determined. It comes nearly a year after a leak from a fuel storage facility operated by Russian mining giant Norilsk Nickel led to the worst Arctic oil spill in history.Local media report that the leak came from a pipeline that connects the Oshskoye oil field in the neighboring Nenets autonomous district to a nearby Lukoil storage facility. The oil has reached the Kolva river and traveled downstream to Usinsk, a town of 45,000 people located 2,000 kilometers northeast of Moscow.Environmentalists and officials fear the slick could travel via tributary rivers and eventually reach the Barents Sea.Lukoil said in a release that it has dispatched 150 workers to staunch the spill, though the Meduza independent Russian news site reports that as many as 230 liquidators have arrived to eliminate the slick. Initial estimates said that the spill involved six to seven tons of fuel. But on Sunday, Lukoil’s subsidiary, Lukoil-Komi,  admitted that 90 tons of oil had spread into local soil and waterways.  “The leak occurred at a distance of about 300 meters from the coastline of the Kolva River,” the city administration of Usinsk, which declared an emergency last Wednesday,  said on its social media account. “Therefore, the bulk of the oil-derived liquid […] spread into the soil, mainly occupying a natural lowland close to the leak.” While oil booms are usually used to contain oil spills on water, there is too much moving ice on the Kolva at this time of year to use that technique, officials said.“The work to eliminate the consequences of the oil spill will be extremely difficult because of the ice drift in the river,” Komi Republic head Vladimir Uyba told the Independent Barents Observer. Activists have feared that Lukoil is hiding the real magnitude of yet another disastrous oil spill in Russia’s Arctic. Locals had reportedly noticed dead fish in the river on May 10, before the accident was officially confirmed, according to a report in The Moscow Times.

Lukoil oil spill headed towards the Barents Sea - An oil spill in the Komi Peninsula is four to five-times bigger than initially thought, and may flood into the Barents Sea on Russia’s north-eastern coast if unchecked, environmentalists warned on May 17.Komi officials declared an emergency last week after oil spilled out of the Oshskoye field, operated by Russian oil major Lukoil. The oil spread into the soil and local waterways, but was thought to have been contained on land. Initially Lukoil said 20 tonnes of oil product had spilled, but now it is reported that closer to 90-100 tonnes have leaked, nine tonnes of which have already got into the local Kolva river that empties into the Arctic region’s Barents Sea, officials in the town of Usinsk 1,500 km north-east of Moscow said as cited by the Moscow Times. If the 100 tonnes figure is confirmed that would make the spill five times larger than last year’s spill by mining giant Norilsk Nickel, then dubbed the Exxon Valdez of Russia.The energy-rich Komi region witnessed one of the worst oil spills in Russian history in August 1994, when its ageing pipeline network sprang a leak that was officially said to have totalled 79,000 tonnes, or 585,000 barrels. Independent estimates put the figure at up to 2mn barrels, reports Reuters.Russia already suffered its worst post-Soviet environmental disaster last year after a power unit belonging to Norilsk Nickel spilled over 20,000 tonnes of oil into rivers in the Pyasino region flowing to the Kara Sea in June 2020, making it one of the worst ecological catastrophes in the history of the Arctic region. Comparable to the 37,000-tonne spill of the Exxon Valdez tanker, the spill was declared a federal emergency by the Kremlin and Norilsk was fined $2bn for the accident.The Lukoil spill is the first environmental disaster this year, but the polluted water has been swiftly carried downstream from the Kolva into the connecting Pechora and Usa rivers and is now advancing toward the Barents Sea, environmentalists say. The local authorities said around 230 people were working to contain the spill, but environmentalist fear that the size of the spill is too big to prevent it flowing into the sea and causing yet another environmental catastrophe. The oil slick already in the water will take many days to clear up, Komi Environment Minister Alexei Kuznetsov told the state-run TASS news agency on May 17.

Komi oil spill may cost 1 billion rubles in damage  – Izvestia - A recent oil spill in the Russian Arctic may cost as much as 1 billion rubles ($13 million) in damage, experts told the Izvestia newspaper.Authorities in the republic of Komi declared an emergency on May 14 after the spill at the Oshskoye field, operated by a subsidiary of oil giant Lukoil, in the neighboring Nenets autonomous district spread into local soil and waterways. At first, Lukoil reported that 20 tons of oil had spilled into local soil and waterways, but a few days later authorities said that number was closer to 90 tons. The spill on land has been largely contained, but nine tons of crude oil reached the Kolva river, Lukoil estimated.If nine tons of oil reached the river, the government is likely to assess damage at around 700 million rubles, Andrei Loboda from the Humanity social project told Izvestia. However, that figure could rise to 1 billion rubles if the pollution has spread from the Kolva to the Usa and Pechora rivers. Russia’s environmental protection watchdog Rosprirodnadzor told Izvestia that it is waiting for results of analyses of water and soil samples from the affected area before it estimates the cost of the damage.

Total to supply LNG to India’s steel industry - Steel giant ArcelorMittal Nippon Steel (AMNS) has signed with France’s Total for the supply of up to 500,000 tons of liquefied natural gas (LNG) per year to run its steel and power plants located in Hazira, Gujarat state. The LNG will be sourced from Total’s global portfolio and offloaded either in Dahej or Hazira LNG Terminal, on the west coast of India until 2026. Total said it sees the deal as a contribution to the decarbonisation of India’s steel industry, which still rely heavily on coal. “The supply of LNG will contribute to the reduction of AMNS’s carbon emissions, in line with Total’s ambition to offer its customers energy products that emit less CO2 and to support them in their own low-carbon strategies,” said Thomas Maurisse, senior VP LNG at Total. The French supermajor is the world’s second largest privately owned LNG player, with a global portfolio of nearly 50 mt/y by 2025 and a global market share of around 10%.

Fears of oil leak after vessel sinks off Coromandel coast {rnz.co.nz} Maritime officials are monitoring a launch that sank on the Coromandel Peninsula last night, to make sure no oil is leaking. The vessel was carrying 200 litres of marine diesel oil when it apparently hit rocks in Humbug Bay near Whitianga, Waikato Regional Council said in a statement.Swells of between three and four metres are expected this afternoon, which could push the launch onto the rocks.Salvors are preparing to recover the vessel, depending on weather conditions.

Sri Lanka braces for major oil spill as cargo vessel expected to sink - A Singapore-flagged cargo vessel, which caught fire near the Colombo beach last week, may sink, raising severe environmental concerns in the island nation, according to media reports on Wednesday. Desperate attempts to extinguish the fire seemed to fail as authorities prepared for a major oil spill. The Colombo Gazette newspaper reported that the MV 'X-PRESS PEARL' was "unstable" and "expected to sink". Apart from the 325 metric tonnes of fuel in its tanks, X-Press Pearl was loaded with 1,486 containers carrying about 25 tonnes of hazardous nitric acid. The Marine Environment Protection Authority has warned that any oil spillage will move towards the sensitive Negombo lagoon, which is a major tourist attraction, the report said. The authorities had earlier asked local people to avoid coming in contact with the debris and slush from the ship. The cargo vessel was carrying a consignment of chemicals and raw materials for cosmetics from Hazira in Gujarat to Colombo Port. It caught fire 9.5 nautical miles from the coast in Colombo, where it was anchored outside the Port of Colombo on May 20. A major operation was launched to extinguish the flames of the ship. A special team of the Sri Lankan Navy, Sri Lanka Ports Authority and Marine Environment Protection Authority reached the fire-hit container ship on May 21. Following a call for help, the Indian Coast Guard (ICG) on Tuesday sent two ships — ICG's Vaibhav and patrol vessel Vajra — and an ICG aircraft to firefight and augment pollution control measures. Due to rough seas and bad weather, the cargo ship is now tilted to the right, as a result, some of the containers on board have tumbled into the sea and some of them have sunk, officials said. News channels on Wednesday showed catastrophic images of the south-west coast from Colombo to Negombo covered with black slush, debris and industrial-sized containers bent out of shape.

Sri Lanka monitors oil spill from burning vessel - Pieces of items from the burning foreign ship X-Press Pearl are seen washed to the shore of Kapungoda, outskirts of Colombo, Sri Lanka, May 26, 2021. Sri Lankan authorities said on Wednesday it is monitoring an oil spill from a burning foreign vessel near the Port of Colombo, warning that the oil spill may waft towards the Negombo lagoon in the west coast of the country. Till Wednesday noon, rescue teams from the Sri Lanka Navy and the Indian Navy were involved in joint efforts to douse the flames onboard the container ship “X-PRESS PEARL” registered under the flag of Singapore, which was carrying 1,486 containers with 25 tons of Nitric Acid and several other chemicals and cosmetics from the port of Hazira, India on May 15.

Oil Inches Up Amid Resume of Iran Nuclear Deal Talks| Al Bawaba - Oil was up Monday morning in Asia, with investor sentiment boosted by signs of the U.S.’ continuing economic recovery from COVID-19 and the improved outlook for fuel demand. Investors are also monitoring the progress of talks to revive a 2015 Iranian nuclear deal that is likely to increase global crude supply. Brent oil futures gained 0.63% to $66.77 by 1:13 AM ET (5:13 AM GMT), with the contract rolling over to the Aug. 21 contract on May 23. WTI futures were up 0.63% to $63.98. Iranian President Hassan Rouhani said during the previous week that the U.S. was “ready” to lift sanctions on the country's oil, banking and shipping sectors, causing oil prices to fall. "Iran's oil production has been rising in recent months, likely in anticipation of a lifting of the sanctions," ANZ analysts said in a note. However, Iranian speaker of parliament Mohammad Bagher Ghalibaf said on Sunday that the expiry of the three-month monitoring deal between Iran and the U.N.’s International Atomic Energy Agency would cease the latter’s access to images from inside some Iranian nuclear sites. Talks between the two sides continue in Vienna throughout the week. On the weather front, investors are monitoring a low-pressure system located over the western Gulf of Mexico, which has a 60% chance of becoming a cyclone in the next 48 hours according to the U.S. National Hurricane Center. Elsewhere in the U.S., the spread of COVID-19 continues to slow down, with the country ending its first week since June 2020 with no days of infections exceeding 30,000. Death rates continue to fall in France and Italy, furthering improving the fuel demand outlook. In Asia, however, several countries continue to deal with COVID-19 outbreaks. The total number of COVID-19 deaths in India stood at 303,720 as of May 24, according to Johns Hopkins University data. Meanwhile, the Organization of the Petroleum Exporting Countries and allies (OPEC+) has reportedly pushed back its Joint Technical Committee meeting, initially due to have taken place on May 25, has reportedly been postponed to May 31. However, the cartel’s ministerial meeting will still take place as scheduled on Jun. 1.#160;

Oil prices up sharply as U.S. official raises doubt that Iran will comply with nuclear commitments -  Oil futures climbed Monday, finding support as a U.S. official said there aren’t yet any signs that Iran will comply with the nuclear commitments required to lift sanctions on the country, casting doubts that Tehran would soon be able to resume crude exports. A lack of cooperation by Iran, as well as “skeptical comments about Iranian compliance” by U.S. Secretary of State Antony Blinken, both “lower the odds that a new agreement is reached and therefore, suggest sanctions are not likely to be lifted in the near to medium term,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch.  On ABC’s “This Week” with George Stephanopoulos, Blinken said the U.S. hasn’t yet seen whether Iran is “ready and willing to make a decision to do what it has to do” to have sanctions removed. Talks between Iran and world powers have been continuing, with reports of some progress. Oil prices had posted declines for last week amid increasing expectations that a new nuclear deal would be reached, said Richey. On Monday, West Texas Intermediate crude for July delivery rose $2.47, or 3.9%, to settle at $66.05 a barrel on the New York Mercantile Exchange. That was the highest front-month contract finish since May 17, according to Dow Jones Market Data. July Brent crude, the global benchmark, added $2.02, or 3%, at $68.46 a barrel on ICE Futures Europe.

Oil Prices Decline As Tension Arises in Iran, US Nuclear Talks | Al Bawaba - Oil prices declined on Tuesday as the ongoing tension between Iran and the US in negotiations to revive the 2015 nuclear agreement and lift Iranian oil export sanctions raised investor caution. International benchmark Brent crude was trading at $68.12 per barrel at 0744 GMT for a 0.36% drop after closing Friday at $68.37 a barrel. American benchmark West Texas Intermediate (WTI) was at $65.78 per barrel at the same time for a 0.40% fall after ending the previous session at $66.05 a barrel. The downward oil price movement was driven by the toing and froing between Iran and the US in negotiations on potentially lifting the current US sanctions on Iranian oil exports and the US’s return to the 2015 nuclear deal, leading investors to take a “wait and see” stance. Iranian President Hassan Rouhani said Monday the US has no other option than to lift all sanctions on Iran, which violates the 2015 nuclear deal with world powers. Iranian Foreign Minister Javad Zarif urged the US administration on Monday to lift current sanctions against Iran, which were imposed under former US President Donald Trump. In response to a recent statement by US Secretary of State Antony Blinken regarding US sanctions on Iran, Zarif said on Twitter: “Lifting Trump's sanctions, is a legal and moral obligation. NOT negotiating leverage.” “Didn’t work for Trump - won't work for you”, Zarif said. Zarif called on authorities to release Iran’s billions of dollars taken hostage abroad because of Washington’s “bullying.”Speaking on ABC News' This Week With George Stephanopoulos, Blinken said on Sunday that the lifting of US sanctions on Iran depends on Tehran's compliance with its nuclear commitments toward Washington. "Iran, I think, knows what it needs to do to come back into compliance on the nuclear side, and what we haven't yet seen is whether Iran is ready and willing to make a decision to do what it has to do. That's the test and we don't yet have an answer," Blinken said. 

Oil edges up as rising demand faces Iran supply worries (Reuters) -Oil prices moved a shade higher on Tuesday as rising demand from the approach of the Northern Hemisphere’s summer driving season and lifting of coronavirus restrictions mixed with worries that Iran’s possible return to the market will cause a supply glut. After gaining over 5% in the prior two sessions, Brent futures rose 19 cents, or 0.3%, to settle at $68.65 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 2 cents to settle at $66.07. That was the highest close for both benchmarks in a week. In post-settlement trade, Brent crude pared gains slightly and U.S. crude fell to $65.99 after trade group the American Petroleum Institute released weekly inventory estimates. U.S. crude oil and fuel inventories fell last week, according to two market sources, citing American Petroleum Institute figures on Tuesday. Crude stocks fell by 439,000 barrels in the week ended May 21, the data showed, according to the sources, who spoke on condition of anonymity. API did not respond to a request for comment. During the session, crude prices were supported by the decline in the U.S. dollar to a 19-week low versus a basket of currencies as inflation worries recede. A weaker dollar makes it less expensive for holders of other currencies to buy commodities priced in dollars, like oil. The small price moves in oil came as the market waited for direction from weekly U.S. oil inventory reports that are expected to show U.S. crude inventories declined by 1.1 million barrels last week. “Oil prices … remain at high levels as the high season for oil demand is approaching and as restrictions are lifted in much of Europe and the United States,” said Louise Dickson, oil markets analyst at Rystad Energy. Parts of Europe and the United States are recording fewer COVID-19 infections and deaths, prompting governments to ease restrictions. However, in areas such as India – the world’s third-biggest oil importer – infection rates remain high. Indirect negotiations between the United States and Iran are due to resume in Vienna this week. Talks were resurrected after Tehran and the U.N. nuclear agency extended a monitoring agreement on the Middle Eastern country’s atomic program. Analysts have said Iran could provide about 1 million to 2 million barrels per day (bpd) in additional oil supply if a deal is struck and sanctions lifted.

WTI Rebounds After Inventory Draws Across Crude & Products - WTI slipped back below $66 this morning as investors weighed signs of an improving demand outlook in some regions against the prospect of more crude supply flowing from Iran. “The potential for a return of Iranian oil supply into the market has been keeping oil prices from gaining further,"  The swings in crude and product stocks in the last couple of weeks have been noisy thanks to the Colonial Pipeline shutdown. This week we should start to put that behind us, although product stocks may still be impacted.  API

• Crude -439k (-1mm exp)
• Cushing -1.153mm
• Gasoline -1.986mm (-1.1mm exp)
• Distillates -5.137mm (-2mm exp)

DOE

• Crude -1.66mm (-1mm exp)
• Cushing -1.008mm
• Gasoline -1.745mm (-1.1mm exp)
• Distillates -3.013mm (-2mm exp)

Analysts expected inventory draws across the entire complex and last night's API data confirmed that and the official data just confirmed that further with significant drawdowns in stocks across crude, gasoline, and distillates (7th week in a row).. It is also worth noting, as Bloomberg points out that Midwest gasoline stockpiles are of great interest with a big travel weekend ahead starting at the end of the work week. This means more folks getting out of Chicago and Detroit to breathe in the forest air in places like Wisconsin and Upper Michigan for Memorial Day.

Oil settles higher on stronger demand outlook as U.S inventories fall - Oil prices settled higher on Wednesday as a drop in U.S. crude stockpiles reinforced expectations of improving demand ahead of the peak summer driving season, offsetting worries that a possible return of Iranian supply would cause a glut. Brent settled up 16 cents, or 0.3%, to $68.87 a barrel and U.S. West Texas Intermediate (WTI) crude settled up 14 cents, or 0.2%, at $66.21 a barrel. Both benchmarks pared losses after government data showed U.S. crude stocks at the Cushing, Oklahoma, storage hub fell last week to the lowest since March 2020. Refiners ramped up utilization rates to pre-pandemic levels. Gasoline product supplied rose to 9.5 million barrels per day, a proxy for demand, while distillate demand was also higher. Gasoline consumption generally rises beginning around U.S. Memorial Day, which is May 31 this year, when people take to the roads. Prices found some support from lifting of coronavirus curbs. "An urge to 'hit the roads' in heading out on vacations that were precluded by the pandemic last year will be supporting the gasoline market," But market players were also closely watching developments in Iranian-U.S. nuclear talks which could lead to lifting sanctions on Iran's energy industry and releasing Iranian oil on the market. "Prices should remain supported over the summer with the only thing keeping oil from price increases being the potential return of Iranian oil," Iran's government spokesman Ali Rabiei said he was optimistic Tehran would reach an agreement soon, although Iran's top negotiator said serious issues remained. Analysts have said Iran could provide additional supply of about 1 million to 2 million bpd if a deal is struck. Iran and global powers have held talks in Vienna since April to work out steps Tehran must take on nuclear activities and Washington should take on sanctions to return to full compliance with the pact Iran reached with world powers in 2015. Russia said the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, should consider a possible increase in Iranian output when assessing further steps. OPEC+ is bringing back 2.1 million barrels per day (bpd) of oil production through July, easing cuts to 5.8 million bpd.

Oil prices edge higher, boosted by U.S. economic data - (Reuters) -Oil prices rose 1% on Thursday, bolstered by strong U.S. economic data that offset investors' concerns about the potential for a rise in Iranian supplies. Brent rose 59 cents, 0.9%, to settle at $69.46 a barrel. U.S. West Texas Intermediate (WTI) crude rose 64 cents, or 1%, to settle at $66.85 a barrel. The number of Americans filing new claims for unemployment benefits dropped more than expected last week, according to data from the U.S. Labor Department. The U.S. economy, which in the first quarter notched its second-fastest growth pace since the third quarter of 2003, is gathering momentum, with other data on Thursday showing business spending on equipment accelerated in April. "That's given us more of a risk-on attitude about the markets," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "We're back to focusing on supply and demand." The prospect of Iranian supplies re-entering the market has pressured prices. Iran and global powers have been negotiating since April about Washington lifting sanctions on Iran, including its energy sector, in return for Iranian compliance with restrictions on its nuclear work. Those talks will be a major issue for a June 1 meeting of the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+. The group is likely to continue gradually easing oil supply curbs at a meeting on Tuesday, OPEC sources said, as producers balance expectations of a recovery in demand against a possible increase in Iranian supply. Analysts said any increase in supply from Iran would be gradual, with JP Morgan estimating Iran could add 500,000 barrels per day (bpd) by the end of this year and a further 500,000 bpd by August 2022. Concerns also remain about demand in India, the world's third-largest oil consumer. India has been hard-hit by the coronavirus, and only about 3% of its population has been fully vaccinated, according to the Reuters vaccine tracker https://graphics.reuters.com/world-coronavirus-tracker-and-maps/vaccination-rollout-and-access.

Oil futures end mixed, score gains for week and month - Oil futures saw choppy trading on Friday, with U.S. prices ending the session lower following five consecutive session gains, but prices tallied a rise for the week, as well as the month of May. The moves for oil come just a day after prices for U.S. benchmark crude marked their highest settlement since 2018. “The growth in the U.S. is expected to overwhelm the drag of weakness in India and Southeast Asia.” On Friday, West Texas Intermediate crude for July delivery  fell 53 cents, or 0.8%, to settle at $66.32 a barrel on the New York Mercantile Exchange following five consecutive gains. Prices based on the front-month contract on Thursday rose 1% to mark the highest settlement since Oct. 29, 2018. The front-month July Brent crude, which expired at the end of the session, climbed 17 cents, or 0.2%, to end at $69.63 a barrel on ICE Futures Europe, with prices marking their highest finish since March 11 of this year, according to Dow Jones Market Data. August Brent contract,, which is now the front month, fell 48 cents, or 0.7%, to settle at $68.72 a barrel. Based on the front-month contracts, WTI crude rose 4.3% for the week, as well as the month. Brent saw a weekly advance of 4.8% and monthly climb of 3.5%. Traders also awaited the outcome of a meeting on Tuesday of OPEC+, the Organization of the Petroleum Exporting Countries and their allies, who will assess the latest oil-market conditions and decide on production levels. A current OPEC+ agreement calls for a gradual increase in production, which began in May and will run through July. Some commodity experts expect that OPEC+ may adjust its plans to ease output limits based on expected Iranian production, with negotiations between Washington and Tehran under way since April.  However, he said that “no change to current policy is expected.” Meanwhile, the recovery in the U.S. from COVID is giving way to rising demand for crude and its byproducts, analysts say. Data from the Energy Information Administration released Wednesday showed weekly declines for domestic crude, gasoline and distillate supplies. Still, Baker Hughes on Friday reported that the number of active U.S. drilling rigs for oil was up a fourth straight week, up three at 359 this week, implying that an increase in oil production may be on tap. On Friday, June gasoline fell 0.5% to $2.14 a gallon, with prices up nearly 3.5% for the week and up 3.4% for the month. Read U.S. gasoline demand may hit a record this summer: GasBuddy June heating oil added 0.6% to about $2.04 a gallon, settling 2.8% higher for the week, with a monthly rise of 6.4%. The June contracts expired at the end of the trading session. July natural gas tacked on almost 1% to settle at $2.99 per million British thermal units. Prices based on the front-month contracts ended 0.3% higher for the week and were up nearly 1.9% for the month.

Light Crude Up 4.3% for the Week  | Rigzone  Oil posted its biggest weekly gain since the middle of April ahead of the U.S. Memorial Day weekend that kicks off the country’s summer driving season. West Texas Intermediate rose 4.3% this week. A spate of positive U.S. economic data this week continued to highlight the recovery taking shape in the world’s largest oil-consuming country, while Americans are expected to unleash demand built up during the pandemic from this weekend onward. With more drivers taking to the road and with some of the lowest gasoline stockpiles in almost 30 years, some see the U.S. facing a supply squeeze on par with those seen when a hurricane knocks out oil refineries in Texas and Louisiana. “The demand outlook appears very robust, especially in the U.S., and it’s really improving in Europe as well,” said Edward Moya, senior market analyst at Oanda Corp. “There’s optimism that the advanced economies are going to have Covid in the reaview mirror by the end of the summer.” Still, futures declined on Friday, snapping a five-day winning streak, as prices have remained stuck in a $10 range since March. Supply concerns remain over international talks to revive the Iran nuclear accord, which could pave the way for more oil flowing from the country. At the same time, the Organization of Petroleum Exporting Countries and its allies meet next week, with delegates saying the alliance looks set to rubberstamp oil-output increases. “The most immediate risk to the upside would be an agreement at the nuclear talks between world powers and Iran in Vienna,” Bob Yawger, head of the futures division at Mizuho Securities, said in a note. “Nobody wants to get caught long over the weekend and see an agreement get done.” WTI for July delivery declined 53 cents to settle at $66.32 a barrel. Brent for July settlement, which expires Friday, was up 17 cents at $69.63 a barrel. The more active August contract lost 48 cents to $68.72 a barrel. Ministers from the OPEC+ alliance are set to meet on June 1 to assess the global market and their production policy. All but four of 24 analysts and traders surveyed by Bloomberg predict they’ll ratify an 840,000-barrel-a-day increase scheduled for July, completing a three-part process to revive just over 2 million barrels this summer.

Opec+ set to proceed with plans to boost July oil production -- The OPEC+ group is expected to confirm next week its May-July plan to ease the oil production cuts by the planned 840,000 barrels per day (bpd) in July, OPEC+ delegates and two dozen analysts told Bloomberg News on Thursday. The ministers of the OPEC+ group are meeting on Tuesday, June 1, and at present, no surprises are expected, despite this year’s track record of decisions surprising the market to both the bullish and bearish sides. The collective OPEC+ oil production is set to rise by 350,000 bpd in both May and June and by more than 400,000 bpd in July. Additionally, Saudi Arabia is also gradually easing its extra unilateral cut of 1 million bpd over the course of the next few months, beginning with monthly production increases of 250,000 bpd in both May and June. Overall, OPEC+ is expected to return to the market as much as 2.1 million bpd by July. The decision from early April signaled the confidence of the leaders of the OPEC+ alliance that the market would be able to absorb that much supply as vaccination programs are accelerating and people start traveling more. OPEC+ and all analysts expect global oil demand to rebound strongly in the second half of 2021 and nearly reach pre-crisis levels by the end of the fourth quarter this year. Despite the resurgence of COVID in major oil-importing markets in Asia such as India and Japan, OPEC and its allies, as well as forecasters and analysts, expect the market to absorb the additional barrels, even in case Iran returns legitimately among the oil exporters at some point in the second half of this year. Russia estimates that the global oil market is currently in a deficit of around 1 million bpd, Deputy Prime Minister Alexander Novak said on Wednesday. Earlier this week, Goldman Sachs kept its outlook for oil prices to rise to $80 per barrel by the end of the year despite the possibility of Iran’s oil returning to the market. 

US Imported Oil Twice From Iran In Last Two Quarters Despite Sanctions - EIA Data - The United States imported crude oil and petroleum products from Iran twice between the last two quarters despite Washington's sanctions against Tehran, Energy Information Administration (EIA) data revealed on Friday. The estimated import of 36,000 barrels per day in October 2020 and 33,000 barrels daily in March this year appear to be the first such purchases made by the United States from Iran since 1993 at least, the EIA data showed. The EIA did not explain how the Iranian imports showed up on its log, despite current US sanctions prohibiting any country from importing Iranian oil. The United States has a long history of sanctions against Iran, dating back to 1984, when it prohibited weapon sales and all US assistance to Iran. President Barack Obama in 2012 issued sanctions targeting Iranian financial institutions designed to effectively choke off the sale of Iranian oil. Obama also lifted those sanctions in 2016 after Iran signed a nuclear deal with the United States and other world powers, pledging not to make atomic weapons. Obama's successor Donald Trump, however, canceled that nuclear deal in 2018 and put new, intensified sanctions on Iran. President Joe Biden, after entering office in January this year, had allowed negotiations to begin on a fresh nuclear deal with Iran. The Biden administration is also not enforcing sanctions against Iran as strenuously as the Trump administration. It is between the handover from Trump to Biden and the first couple of months of the current administration that the US imports from Iran occurred, EIA data shows.

Israel-Gaza Clash: Conflict of Narratives, Victory of Remote Warfare - As the 11 days of clashes between Gaza and Israel ends in a ceasefire, the military analysis truly begins. The Israeli army will painstakingly review all of its operations, especially the new weapons and tactics, to judge how successful they were and what improvements are needed.Hezbollah in Lebanon has far more rockets than Hamas in Gaza, so one of the Israeli army worries will be how Hamas and other factions were able to carry on firing from such a small area right to the end, night after night.The fact that Israel’s Iron Dome defences intercepted most of the rockets from Gaza and even shot down a Hamas drone will be counted as a success – especially for the arms companies seeking to promote Israeli expertise to new markets.Hamas, meanwhile, will conduct its own analysis and will try to increase its stockpile and hide its missiles more effectively. It will want to improve its ability to fire multiple barrages – all the better to overwhelm Israel’s missile defences – and will seek to develop guidance systems. For now, there are celebrations in Gaza that the bombardment is over. For Hamas, its narrative is simple: “We stood firm, the Israelis didn’t dare invade us and we kept firing to the end.”During the last 11 days, a total of 232 people were killed in Gaza, including 65 children, against 12 killed in Israel. These tragic statistics are still far lower than the 2014 conflict, when 2,250 Palestinians were killed in Gaza, while five Israeli civilians and 67 soldiers were killed.The difference between the two conflicts is that in 2014, Israel sent troops into Gaza and by doing so, lost soldiers, including many from its elite Golani brigade. As the post-conflict ‘war of narratives’ runs its course, Israel’s premier, Benjamin Netanyahu, will certainly claim victory. With Israel’s surveillance and intelligence capabilities, including drones, satellites, communications interception and many other complex systems, the Israeli army claims to have been very effective. However, the ability of Hamas to deploy ten-round multiple rocket launchers, and hide them underground prior to launch, will be a major focus point for the Israeli army’s improvement, not least with an eye to Hezbollah. According to an article in the 19 May print edition of Jane’s Defence Weekly, one of the barrages aimed at the coastal Israeli cities of Ashdod and Ashkelon involved firing 137 rockets in five minutes. The Israeli army will also want to work on its abilities to prevent Hamas smuggling more rockets into Gaza, especially its system of speedboats operating out of Lebanon and Egypt.

Israeli provocations continue as scale of Gaza damage emerges - A fragile ceasefire between Israel and Palestinian groups Hamas and Islamic Jihad held for a third day on Sunday despite inflammatory threats by the Israeli government and police-backed fascistic attacks by Israeli settlers on Palestinians on the occupied West Bank. The Israeli provocations intensified as more residents in Gaza emerged from their homes on the weekend to survey the massive damage caused by the 11-day Israeli bombardment. The full extent of the destruction became clearer, even as Israeli drones buzzed incessantly overhead. The United Nations said nearly 450 buildings had been damaged, including six hospitals, 53 schools and 11 primary healthcare centres. More than 1,000 housing units in 258 buildings had been destroyed, and another 14,500 homes suffered damage. More than 100,000 people had been internally displaced, and about 10 times that number—half the population of the tiny Gaza Strip—had little access to piped water because of the destruction of three major desalination plants, as well as power lines and sewage works. At least 248 Palestinians were killed, including 66 children and 39 women, and 1,948 others injured in Israeli attacks on Gaza, according to the Palestinian Health Ministry. Health authorities in the West Bank separately confirmed 31 killed in that region, totalling 279 across all Palestinian territories, compared to 12 deaths in Israel. Under these conditions, dozens of Jewish settlers, flanked by heavily-armed Israeli special forces, entered the Al-Aqsa Mosque compound in occupied East Jerusalem yesterday, further raising tensions hours after Palestinian worshippers were beaten and assaulted by the Israeli police. Citing witnesses, Palestinian news agency WAFA said Israeli police had earlier on Sunday assaulted Palestinians who were performing dawn prayers at the mosque and “excessively beat” them in order to make way for Israeli Jewish settlers to storm the compound—Islam’s third-holiest site. It was the violent police storming of the mosque two weeks ago, combined with moves to evict more Palestinians from their homes in the Jerusalem neighbourhood of Sheikh Jarrah, that triggered the 11-day conflict.

‘This Is the Price of War’: Israeli Newspaper Publishes Photos of All 67 Palestinian Children Killed in Gaza Onslaught -  Human rights advocates and journalists applauded the Israeli newspaper Haaretzfor its “unprecedented” cover story Thursday—one featuring the photos and stories of 67 Palestinian children killed in the latest bombardment campaign by the Israel Defense Forces.“This is the price of war,” the headline read.The article came a day after the New York Times published its own extensive account of the youngest victims of Israel’s most recent 11-day offensive, in which the IDF frequently targeted residential areas of Gaza, known as the world’s largest open-air prison.Haaretz‘s focus on the children killed in Gaza was especially noteworthy, said author and Brooklyn College professor Louis Fishman, considering the newspaper’s “readers also send their children to fight in Israel’s wars.”“This is unprecedented,” Fishman tweeted. While Haaretz leans to the center-left editorially, Israeli’s mainstream media has traditionally not covered the Palestinian casualties of the IDF’s military campaigns and the Israeli government’s violent policies, said journalist Khaled Diab.As Diab tweeted, previous attempts by organizations in Israel to publicize the human cost of the IDF’s assaults have been repressed.Haaretz‘s front page represented “a bold move,” tweeted journalist Saima Mohsin, adding, “Will it make a difference?”Others on social media took note of the unprecedented cover story. “Conversations around Israel/Palestine are changing in Jewish communities across the globe,”tweeted rabbi and author Abby Stein. “It’s about time.” As Jewish Currents editor-in-chief Arielle Angell wrote last week in The Guardian, since Israel’s 2014 50-day assault on Gaza, which killed more than 2,100 Palestinians, rights advocates have “seen the growth of a small but committed Jewish anti-occupation movement [and] the last week and a half have brought an even larger circle of the community to a place of reckoning.”In Israel the Haaretz front page appeared to touch a nerve, garnering at least one outraged response from Oded Revivi, head of the Efrat Regional Council in an Israeli settlement in the West Bank, who said Haaretz‘s article was evidence that “people pity the wrong mothers.”On social media, Mairav Zonszein of the International Crisis Group said rather than the “price of war,” the Haaretz front page specifically shows the price of “Israel’s “continued military rule, dispossession, discrimination, and violence.”

Massive War Study Shows 91% Of All Global Casualties From Explosives Were Civilians --  On the heels of Israel's recent bombardment of the Gaza Strip, a London-based charity revealed Tuesday that civilians accounted for 91% of people killed or injured when explosive weapons were used in populated areas worldwide from 2011 to 2020. The new Action on Armed Violence (AOAV) report (pdf) is based on data collected as part of the group's Explosive Violence Monitoring Project. It emphasizes that the data, taken from English-language media reporting, "is not an attempt to capture every single casualty of every incident around the world." However, the report provides insight on the devastating impact of using explosive weapons—including air-dropped bombs, artillery shells, improvised explosive devices (IEDs), and mortars—in densely populated areas and demands global commitments to end such violence."Since the monitor began, AOAV has recorded the appalling suffering caused across the globe by both manufactured and improvised weapons," the report says. "We call on states and other users to commit politically to stop using explosive weapons with wide area effects in populated areas. The harm recorded over the last 10 years and reflected in this report illustrates the stark urgency needed for a political declaration detailing such a commitment."AOAV tallied 357,370 deaths or injuries in 28,879 incidents across 123 countries and territories—and at least 262,413 of those casualties or 73% were civilians. Overall, explosive weapons killed 155,118 people—of which 92,588 or 60% were civilians—and injured 202,252 people, of which 169,825 or 84% were civilians.