oil prices at new 31 month high; refinery utilization and throughput at post pandemic highs

oil prices rose for the fifth week in the past six and finished at a 31 month high on ongoing OPEC+ production restraint and on falling US crude supplies...after rising 4.3% to $66.32 a barrel last week as strong US economic data fed optimism on the outlook for fuel demand, the contract price of US light sweet crude for July delivery rose 0.9% in off market trading on Memorial Day on growing optimism that fuel demand would grow in the next quarter, and hence opened higher on Tuesday, boosted by Chinese data showing that their factory activity grew at its fastest pace this year in May, and then jumped 4% to $68.87 a barrel, the highest since October 2018, when the OPEC+ alliance forecast a tightening global crude market, before giving up over a dollar of the early gains to settle $1.40 higher at $67.72 a barrel...but oil prices opened higher again on Wednesday, and rose steadily throughout the day to finish $1.11 higher at $68.83 a barrel after OPEC and allied producers decided to only gradually restore global supplies, with with reports that there would be a delay in supply from Iran due to the slow pace of talks with the US also contributing...prices rallied in off hours late Wedesday after the API reported a big draw from crude supplies and then jumped 1% early Thursday after the EIA confirmed the sizable crude inventory draw, but fell back quickly to close 2 cents lower at $68.81 a barrel as traders became concerned that the data also showed showed domestic gasoline supplies rising by the most since early April...however, the oil price rally resumed Friday as expectations for a demand pick-up from summer activity began to come to fruition and on news that nonfarm payrolls in the U.S. increased by 559,000 jobs last month, as July oil rose 81 cents to settle at $69.62 a barrel, thus finishing the week nearly 5% higher, and at the highest level since October 2018...

since we now have clearly reached a new interim high for oil prices, we'll include a longer term graph of prices so you can see how that has developed...

the above is a screenshot of the interactive oil price chart from barchart.com, which i have set to show front month oil prices weekly over the past 5 years, which means you're seeing prices as they were quoted in the media; that same chart can be reset to show prices of individual monthly oil contracts over time periods ranging from 1 day to 30 years, as the menu bar on the top indicates, and also to show oil prices by the minute, hour, day, week or month...the bars across the bottom show trading volume for the weeks in question, with down weeks indicated by red bars and up weeks indicated in green...note that since this graph shows closing prices, it does not show how prices briefly drop to negative $40 in April, when the OPEC agreement broke down during a squabble between Russia and the Saudis...

meanwhile, natural gas prices rose for the eighth time in nine weeks on forecasts for hot weather and high AC demand during the first half of June...after rising 0.3% to $2.986 per mmBTU last week on higher prices overseas and on a bullish shift the weather forecasts, the contract price of natural gas for July delivery opened 5 cents higher on Tuesday on a notably warmer outlook for June temperatures, and rose 11.8 cents, or 4.0%, to settle at $3.104 per mmBTU, their highest close since May 17th....however, natural gas prices retreated a bit ​on ​Wednesday, as a majority of the previously reported production decline ​had ​recovered by midweek, with the July contract settling 2.9 cents lower at $3.075 per mmBTU...another large injection of gas into storage and reduced intensity in projected June heat put another hit on prices Thursday, as natural gas settled down 3.4 cents to $3.041 per mmBTU...but prices recovered late Friday after midday forecasts called for hotter weather over the next two weeks than was previously expected, with gas prices rising 5.6 cents to $3.097 per mmBTU, thus finishing 3.7% higher for the week...

the natural gas storage report from the EIA for the week ending May 28th indicated that the amount of natural gas held in underground storage in the US rose by 98 billion cubic feet to 2,313 billion cubic feet by the end of the week, which still left our gas supplies 386 billion cubic feet, or 14.3% below the 2,699 billion cubic feet that were in storage on May 28th of last year, and 61 billion cubic feet, or 2.6% below the five-year average of 2,374 billion cubic feet of natural gas that have been in storage as of the 28th of May in recent years....the 98 billion cubic feet that were added to US natural gas storage this week was above the average forecast of a 87 billion cubic foot addition from an S&P Global Platts survey of analysts, and was also a bit above the average addition of 96 billion cubic feet of natural gas that have typically been injected into natural gas storage during the fourth week of May over the past 5 years, as well as just above the 95 billion cubic feet that were 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 28th showed that after a decrease in our oil imports and a decrease​ ​in our crude production, we needed to withdraw oil from our stored commercial crude supplies for the seventh time in the past fifteen weeks and for the 29th time in the past forty-five weeks....our imports of crude oil fell by an average of 641,000 barrels per day to an average of 5,631,000 barrels per day, after falling by an average of 138,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 889,000 barrels per day to an average of 2,544,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,087,000 barrels of per day during the week ending May 28th, 248,000 more barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells reportedly fell by 200,000 barrels per day to 10,800,000 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 13,887,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 15,597,000 barrels of crude per day during the week ending May 28th, 358,000 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 818,000 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 892,000 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 (+892,000) 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 rose to an average of 5,951,000 barrels per day last week, which was 0.7% less than the 5,992,000 barrel per day average that we were importing over the same four-week period last year... the 818,000 barrel per day net withdrawal from our crude inventories included a 93,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commerical purposes, and a 726,000 barrel per day withdrawal from our designated commercially available stocks of crude oil....this week's crude oil production was reported to be 200,000 barrels per day lower at 10,800,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 200,000 barrels per day lower at 10,400,000 barrels per day, while an 8,000 barrel per day decrease in Alaska's oil production to 440,000 barrels per day had no impact on the rounded national total...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 17.6% below that of our production peak, yet still 28.1% 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 88.7% of their capacity while using those 15,597,000 barrels of crude per day during the week ending May 28th, up from 87.0% the prior week, and the highest refinery utilization since Feb 14th of last year...while the 15,597,000 barrels per day of oil that were refined this week were 17.2% higher than the 13,307,000 barrels of crude that were being processed daily during the pandemic impacted week ending May 29th of last year, they were still 7.9% below the 16,938,000 barrels of crude that were being processed daily during the week ending May 31st, 2019, when US refineries were operating at a still fairly low 91.8% of capacity...

even with this week's increase in the amount of oil being refined, the gasoline output from our refineries decreased by 182,000 barrels per day to 9,566,000 barrels per day during the week ending May 28th, after our gasoline output had decreased by 5,000 barrels per day over the prior week...while this week's gasoline production was 23.0% higher than the 7,779,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 4.1% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 4.8% below the gasoline production of 10,049,000 barrels per day during the week ending May 31st, 2019....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 142,000 barrels per day to 4,807,000 barrels per day, after our distillates output had increased by 112,000 barrels per day over the prior week...while the pandemic pullback of last year didn't appear to impact distillates' production, this week's distillates output was still 2.0% more than the 4,714,000 barrels of distillates that were being produced daily during the week ending May 29th, 2020...

even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the seventh time in nine weeks, and for the 21st time in twenty-nine weeks, rising by 1,499,000 barrels to 233,980,000 barrels during the week ending May 28th, after our gasoline inventories had decreased by 1,745,000 barrels over the prior week...our gasoline supplies increased this week because the amount of gasoline supplied to US users decreased by 333,000 barrels per day to 9,146,000 barrels per day, and because our exports of gasoline fell by 173,000 barrels per day to 560,000 barrels per day, while our imports of gasoline fell by 101,000 barrels per day to 933,000 barrels per day...even after this week's inventory increase, our gasoline supplies were 9.2% lower than last May 29th's gasoline inventories of 257,795,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year... 

meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased for the first time in eight weeks and for the 11th time in 24 weeks, rising by 3,720,000 barrels to 132,802,000 barrels during the week ending May 28th, after our distillates supplies had decreased by 3,013,000 barrels during the prior week....our distillates supplies finally rose this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 648,000 barrels per day to 3,813,000 barrels per day, ​and because our imports of distillates rose by 243,000 barrels per day to 516,000 barrels per day​ ​while our exports of distillates rose by 70,000 barrels per day to 978,000 barrels per day....but after seven consecutive inventory decreases prior to this week, our distillate supplies at the end of the week were still 23.8% below the 174,261,000 barrels of distillates that we had in storage on May 29th, 2020, and about 8% below the five year average of distillates stocks for this time of the year...

finally, with the increase in our refining and decrease in our oil imports, our commercial supplies of crude oil in storage fell for the 18th time in the past twenty-nine weeks and for the 26th time in the past year, decreasing by 5,079,000 barrels, from 484,349,000 barrels on May 21st to 479,270,000 barrels on May 28th, after our crude supplies had decreased by 1,662,000 barrels the prior week....after this week's decrease, our commercial crude oil inventories were about 3% below the most recent five-year average of crude oil supplies for this time of year, but were still about 35% above the average of our crude oil stocks as of the the fourth 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 28th were 10.0% less than the 532,345,000 barrels of oil we had in commercial storage on May 29th of 2020, and 0.8% less than the 483,264,000 barrels of oil that we had in storage on May 31st of 2019, but still 10.3% 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 fell for just the 4th time over the past 38 weeks during the week ending June 4th, but it's still down by 42.5% from the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US was down by 1 to 456 rigs this past week, which was still up by 172 rigs from the pandemic hit 284 rigs that were in use as of the June 5th report of 2020, but was still 1,473 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 unchanged at 359 oil rigs this week, after rising by 3 oil rigs the prior week, which is now 153 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 97 natural gas rigs, which was still up by 21 natural gas rigs from the 76 natural gas rigs that were drilling a year ago, but still just 6.0% 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 down by 1 to 13 rigs this week, with all 13 of those rigs drilling for oil in Louisiana's offshore waters....that was the same number of Gulf of Mexico rigs that were drilling in the Gulf a year ago, when again all 13 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 this week, whereas there were no such "inland waters" rigs running a year ago...

The count of active horizontal drilling rigs was unchanged at 415 horizontal rigs this week, which was still up by 162 rigs from the 253 horizontal rigs that were in use in the US on June 5th of last year, but less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014....meanwhile, the directional rig count was down by 2 to 25 directional rigs this week, which was still up by 1 from the 24 directional rigs that were operating during the same week a year ago....on the other hand, the vertical rig count was up by one to 16 vertical rigs this week, and those were also up by 9 from the​ ​7 vertical rigs that were in use on June 5th 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 June 4th, the second column shows the change in the number of working rigs between last week's count (May 28th) and this week's (June 4th) count, the third column shows last week's May 28th 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 5th of June, 2020..    

as you can see, there were just a few changes this week...checking first for the details on the Permian basin in Texas from the Rigs by State file at Baker Hughes, we find that two oil rigs were pulled out of Texas Oil District 8, which is the core Permian Delaware, while another rig was pulled out from Texas Oil District 8A, which encompasses the northern counties of the Permian Midland, which thus gives us a net decrease of three rigs in the Texas Permian....since the Permian basin only saw a one rig decrease nationally, that means that the two rigs that were added in New Mexico had to have been set up to drill in the far west reaches of the Permian Delaware, to account for the national Permian basin change...elsewhere in Texas, we find that a rig was added in Texas Oil District 6, which accounts for the Haynesville shale increase, but that there was no change in Texas Oil District 10, which means that the two Granite Wash rigs that were pulled out this week had to have been drilling across the panhandle border in Oklahoma...elsewhere in Oklahoma, we have the addition of an oil rig in the Ardmore Woodford, and another rig addition in a basin that Baker Hughes doesn't name, leaving Oklahoma with no net change...at the same time, the oil rig that was pulled out of Louisiana's Gulf waters was the only change in that state...meanwhile, natural gas rigs were down by one despite the Haynesville shale increase because the last natural gas rig that had been deployed in the Permain was pulled out this week, while one of the two remaining Eagle Ford natural gas rigs was also shut down, while an Eagle Ford oil rig was started up in its place, thus leaving the Eagle Ford showing no net rig change from a week ago..

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Network of companies looking to move fracking wastewater in barges up and down Pittsburgh's rivers -  Mil­lions of gal­lons of briny, toxic, waste­wa­ter from shale gas drill­ing and frack­ing op­er­a­tions could soon be loaded onto barges and pushed down the Al­le­gheny, Mo­non­ga­hela and Ohio riv­ers. A loose net­work of river tank ter­mi­nal and barge com­pa­nies has floated plans to be­gin ship­ping waste­wa­ter con­tain­ing pe­tro­leum con­den­sates, can­cer-caus­ing chem­i­cals and ra­dio­ac­tive ma­terial, be­tween as many as seven river ter­mi­nal sites spread out over hun­dreds of miles of the re­gion’s ma­jor wa­ter­ways. The barg­ing of waste­wa­ter on riv­ers has been dis­cussed for at least a dozen years, but like a tow on a sand­bar, the in­dus­try ini­tia­tive has been re­peat­edly side­lined due to per­mit­ting is­sues, en­vi­ron­men­tal con­cerns and the risk of con­tam­i­na­tion of pub­lic wa­ter sup­plies that draw from the riv­ers. Although shale gas well drill­ing and frack­ing have been in a trough due to low nat­u­ral gas prices, in­ter­est in barg­ing waste­wa­ter has re­kin­dled in re­cent years as trans­port and dis­posal of the mixed liq­uid wastes have be­come cost­lier for the drill­ing in­dus­try. In meet­ings, let­ters and emails with reg­u­la­tors, barge com­pa­nies and ter­mi­nal own­ers have pressed reg­u­la­tory agen­cies to is­sue au­tho­ri­za­tions, ap­prov­als and per­mits. And drill­ing in­dus­try pub­li­ca­tions are tout­ing the pub­lic safety and eco­nomic ben­e­fits of mov­ing waste­wa­ter by tanker barge. Last month, in the first pub­li­cized ac­knowl­edge­ment that the idea of waste­wa­ter barg­ing is start­ing to move again, Belle Ver­non-based Gutt­man Realty Co. re­ceived a grant of al­most $500,000 from the Penn­syl­va­nia Depart­ment of Com­mu­nity and Eco­nomic Devel­op­ment’s Com­mon­wealth Financ­ing Au­thor­ity to ret­ro­fit the ex­ist­ing tank and barge load­ing ter­mi­nal along the Mo­non­ga­hela River in Speers, Wash­ing­ton County, 43.5 river miles above Pitts­burgh’s Point. The changes would al­low the Speers ter­mi­nal to ac­cept tanker truck­loads of waste­wa­ter, also known by the shale gas in­dus­try term “pro­duced wa­ter,” ac­cord­ing to an April news re­lease tout­ing the grant from State Rep. Bud Cook, R-Belle Ver­non. “The fa­cil­ity will be mod­i­fied,” the re­lease stated, “to ac­cept waste wa­ter from the nat­u­ral gas in­dus­try by truck to be stored in ex­ist­ing tanks and ul­ti­mately trans­ported by barge to the treat­ment fa­cil­ity in Ohio.” Using barges to trans­port waste­wa­ter also will re­duce truck traf­fic, die­sel ex­haust, truck-auto col­li­sions and road dam­age, the re­lease stated.But mul­ti­ple en­vi­ron­men­tal or­ga­ni­za­tions from the tri-state area have strong con­cerns and many ques­tions about those plans, say­ing river waste­wa­ter trans­port is poorly reg­u­lated and in­creases risks of chem­i­cal and ra­dio­ac­tive spills, and those spills can con­tam­i­nate wa­ter­ways that are drink­ing wa­ter sources for mil­lions of peo­ple, and, in­creas­ingly, rec­re­ational ven­ues. They say drill­ing and frack­ing waste­wa­ter con­tains salty brines, drill­ing and frack­ing chem­i­cals and nat­u­rally oc­cur­ring ra­dio­ac­tive ma­terial flushed from shale for­ma­tions thou­sands of feet un­der­ground. Ra­dium-226 and ra­dium-228, both found in brine waste, are known car­cin­o­gens and can cause bone, liver and breast can­cer in high con­cen­tra­tions, ac­cord­ing to the U.S. Centers for Dis­ease Con­trol and Preven­tion. The waste­wa­ter can also con­tain other ra­dio­ac­tive com­po­nents, in­clud­ing Po­tas­sium 40, Tho­rium 232, and Ura­nium 238.

America Is Building Mountains of Radioactive Fracking Waste & the One in Joe Biden's Hometown Is Under Criminal Investigation - A Public Herald Exclusive Podcast (with transcript)A community group’s letter about a landfill accepting fracking’s radioactive waste caught the attention of the Pennsylvania Attorney General’s Environmental Crimes Unit. In the heart of President Joe Biden’s hometown of Scranton, Pennsylvania, theFriends of Lackawanna are fighting the massive expansion of Keystone Sanitary Landfill, a waste dump that accepts radioactive material created by fracking for oil and natural gas.“This is the future of our community at stake,” said Michele Dempsey from Friends of Lackawanna. “Our community lives or dies on this [expansion] decision, and so we gave it our hearts and souls.” Dempsey’s community is just one of many across America where, since fracking began, state and federal regulators have sent radioactive material to residual waste sites. As this waste piles up in public and private landfills, the size and risk of these “TENORM Mountains” looms large.In Dunmore, according to resident Sharon Cuff, three new anti-landfill candidates were newly elected in the May 2021 primary: Mark Conway (Mayor), William O’Malley (City Councilor) and Katherine Oven (City Councilor).Dempsey, Cuff, and Maloney are part of Friends of Lackawanna, a non-profit group dedicated to protecting the health  and safety of Lackawanna County from a proposed165-foot vertical expansion of Keystone across 435 acres, which includes a 145-million cubic yard capacity increase. Any day now, the expansion could be approved by the Pennsylvania Department of Environmental Protection (DEP), dramatically increasing the amount of radioactive material from fracking waste accepted at Keystone until it becomes higher than the Statue of Liberty. Keystone has a dirty history of contaminating groundwater, alleged illegal dumping, and other faulty operations that have led to federal investigation and litigation. The latest is its trouble with landfill leachate, the contaminated liquid that leaches out of landfill debris after rainfall.In December 2020, Keystone was punished by the DEP for contaminating groundwater with leachate and for storing it above regulatory limits, in violation of the Solid Waste Management Act. But records reviewed by Public Herald show that during the leachate investigation DEP did not require radiological testing of the leachate, despite outcry from Friends of Lackawanna. Radioactive material within the fracking waste buried at Keystone and other landfills is water soluble, which means that when it rains, radionuclides like cancer-causing radium-226 end up in landfill leachate. After receiving little help from Pennsylvania DEP about radioactivity and other concerns, the Friends of Lackawanna stopped hearing from DEP all together. So the group reached out to their District Attorney, who referred them to the Pennsylvania Attorney General’s Environmental Crimes office.

Behind Pennsylvania's “Green” Activists: Pennsylvanians Against Fracking - Capital Research Center - Pennsylvanians Against Fracking is a front for the far-left Food and Water Watch (FWW), one of the country’s leading anti-fracking groups. FWW zealously opposes all forms of carbon-based fuels. Its website states that “we must end fossil fuels” and “a national ban on fracking is key.” FWW practices a kind of environmental fundamentalism, warring on “fake climate solutions” put forward by Democratic politicians and corporations who pay lip service to global warming. Most recently, the group attackedCalifornia Gov. Gavin Newsom (D), a leftist luminary, for supposedly shilling for Big Oil because his executive order banning future sales of gasoline-burning cars by 2035 didn’t go far enough.This sometimes has the amusing effect of putting FWW at odds with the larger environmental activist movement, with the group calling cap-and-trade a “drastic and ineffective” “scheme” for putting a price on carbon that’s “ultimately paid by consumers.” FWW has pressured Biden to “keep his public lands fracking ban promise,” issuing a March 2021 press release noting that “On the campaign trail, Joe Biden was crystal clear aboutending fracking on public lands.” This clashes with repeated reassurances from many on the professional Left and the media that the Biden administration isn’t interested in banning fracking on federally owned lands and Biden’s own campaign promises that he wouldn’t push for such a policy.Naturally, Pennsylvanians Against Fracking (PAF) has goals that are just asradical as the national organization: a ban on all new oil and gas wells and a statewide moratorium on fracking.Because PAF isn’t a standalone nonprofit but a website owned and operated by FWW, it doesn’t file its own IRS Form 990 report. Donations to the group are directed toward its parent and individual donors are impossible to identify, although a number of major grantors to FWW have been identified. Among them is Heinz Endowments, which isn’t a major donor to FWW but granted it $160,000 in 2019 “to strengthen community protections from shale development.” FWW’s top donors over the last two decades include:

• $33 million from the Greater Kansas Community Foundation;
• $30 million from the Columbus Foundation, an Ohio-based funder of environmental groups;
• $15 million from the Silicon Valley Community Foundation;
• $6 million from the Jewish Communal Fund;
• $4.3 million from Schwab Charitable Fund, a donor-advised fund provider (a kind of charitable savings account for anonymous donors);
• $2.4 million from Fidelity Investments Charitable Gift Fund, a donor-advised fund provider; and
• $1.6 million from the Park Foundation, an anti–natural gas funder.

Why Biden Isn’t Cracking Down on Fossil Fuels - Picture this predicament, described by our climate reporter Lisa Friedman in her latest article as “a paradox worthy of Kafka”: In order to break through the earth and tap the oil in the National Petroleum Reserve in Alaska, ConocoPhillips must install “chillers” into the thawing permafrost.And why is it thawing in the first place? Because of global warming, brought on by burning the very sort of fossil fuels that ConocoPhillips is extracting.With Joe Biden’s election in November, environmental advocates had hoped that such drilling on U.S. soil might become a thing of the past. But as Lisa documents in her article, ConocoPhillips’s work in Alaska is just one of several drilling and pipeline projects that Biden’s administration has recently gotten behind. Rather than turn back the Trump administration’s support for fossil fuels, Biden is in some cases defending it.The reasons are complicated — and have a lot to do with the tricky politics of governance while Democrats have only the narrowest control of Congress. To help us understand what’s been going on, and what the consequences might be for the environment, I caught up with Lisa today. Here’s what she told me.Hi, Lisa. On the campaign trail last year, Joe Biden criticized the Trump administration for continuing the country’s dependence on fossil fuels. But this month, Biden’s administration has taken a number of steps to endorse actions taken by Trump that would increase drilling on U.S. land and allow a major pipeline project to go forward. Catch us up on what’s happening.When Joe Biden was campaigning for president, he said he wanted to see the United States “transition” away from oil and other fossil fuels in favor of renewable energy, and yes, he also criticized many of his predecessor’s moves that locked in oil, gas and coal development in the United States.Since he’s taken office, Biden has put climate change front and center. He’s set an ambitious goal to cut greenhouse gas emissions by 50 percent from 2005 levels by the end of this decade, and he’s made a huge push on things like electric vehicle charging stations, offshore wind development and other clean energy production.Over the past month, though, his administration has also taken some steps that really worry environmental groups. In at least three cases, the Biden administration has offered support in court or declined to block oil and gas projects that could lock in decades more of the fossil fuel pollution that is heating the planet. The most recent is the administration’s support for ConocoPhillips’s multibillion-dollar oil drilling project in Alaska’s National Petroleum Reserve, known as the Willow project, which was approved by the Trump administration and is slated to produce more than 100,000 barrels of oil a day for about 30 years.

More MU Cos. Join ONE Future Low Methane Emissions Group - A coalition of upstream (drilling), midstream (pipeline), and downstream (utility) companies formed an industry group called ONE Future back in 2014. The aim of the group is to lower methane emissions across all aspects of the natural gas infrastructure system nationwide and to emit (lose into the atmosphere) no more than 1% by 2025. A number of Marcellus/Utica companies have joined (see our previous ONE Future stories here). Since March, nine more companies have joined, including Blue Racer Midstream, Tug Hill Operating, and Banpu. It’s a stampede!  Blue Racer joined on April 1: Our Nation’s Energy Future (ONE Future) today announced the addition of three new members to its Coalition – Blue Racer Midstream, DTE Energy (Gas), and Jonah Energy LLC. These new members bring the Coalition to 41 companies strong. Blue Racer Midstream operates a natural gas gathering system, as well as processing plants and fractionation facilities in the Utica Shale and Marcellus Shale. Their facilities process and separate wellhead production into natural gas residue, ethane, propane, isobutane, normal butane, mixed butane, and natural gasoline. Blue Racer’s lean gas gathering pipelines connect producers to downstream pipelines and markets. They will report within the Gathering & Boosting and Processing Sectors. Detroit-based DTE Energy’s natural gas utility is one of the nation’s largest gas utilities, safely delivering natural gas to 1.3 million Michigan families and businesses in over 500 communities within Michigan. DTE Gas will report its methane intensity associated with their distribution sector of its utility. Jonah Energy is one of the nation’s leading sustainable natural gas producers. Jonah’s leadership challenges the status quo by providing extremely low emission natural gas and industry-leading wildlife conservation measures, while evaluating new technology and future opportunities to lead in a cleaner and low carbon economy. Jonah Energy will report its methane intensity within the Production sector.

W. Cornwall supervisors hear public comment on pipeline pump station application - The latest local skirmish in the nearly decade-long, litigation-filled saga of the Mariner East Pipeline took place Wednesday, June 2, at the Quentin Fire Hall, where local residents addressed the West Cornwall Township Board of Supervisors. The board is considering a permit application that would allow the pipeline’s owner to operate two pump station buildings on Route 322.The supervisors heard from eight township residents who expressed concerns that the pump station could release dangerous gasses – colorless, odorless, and combustible – either through a leak or an explosion, and that Sunoco wasn’t adequately planning for such an event. They also cited the multiple violations committed by Sunoco while constructing the pipeline through the county and what they described as Sunoco’s failure to adequately communicate with residents throughout the project. None of the speakers asked the supervisors to outright deny Sunoco’s application, but all asked that a series of conditions be placed on the use of the buildings.

Brookline Tries Again For A Fossil-Free Future -On June 2 Brookline voted, again, to become the first municipality in Massachusetts with an ordinance designed to keep fossil-fuel hookups out of new buildings. This was the town’s second attempt to get builders to go all-electric in future construction.Brookline’s first attempt, which was overwhelmingly approved in Town Meeting in 2019, was declared unlawful by Attorney General Maura Healey because it superseded state authority. Healey said she supported Brookline’s clean-energy goals, however.This time, instead of banning fossil-fuel installations in future construction, Town Meeting members proposed two carefully-worded warrant articles. Instead of a ban, the proposals require that people applying for special construction permits agree to go fossil-free in exchange for permit approval. Both proposals passed by margins of more than 200 to 3.Brookline Town Meeting member Lisa Cunningham, one of the leaders of the effort, says municipalities must take action because the state, which is legally obligated to reduce climate emissions to net zero by 2050, has no mechanism for limiting fossil fuel use. Buildings account for 27% of the state's greenhouse gas emissions.Brookline’s new ordinances "won’t get us where we have to go,” Cunningham said, “but it is a first step and we really need to stop making this problem worse; we need to make it better.”

What Cimarex-Cabot deal may say about the Marcellus Shale - The pending merger of Cabot Oil & Gas with Cimarex, a Denver-based shale producer, helps to rewrite the story of Marcellus and Utica Shale development, although analysts say it won’t change much in the near-term. Cabot is one of the largest natural gas producers in Pennsylvania, a pure-play dry gas operator that sits close to the potentially strong markets of New York and New England but, like all the others, are constrained by a lack of pipeline development. Its regional headquarters is in Pittsburgh but most of its drilling is in Susquehanna County. The northeastern part of Pennsylvania has received a lot of attention lately, not only with the $17 billion all-stock merger of Cabot and Cimarex but also the $3 billion pending acquisition of Alta Resource Development’s northeastern Pennsylvania acreage by EQT Corp.  While a major center of the Marcellus and Utica shale is located in southwestern Pennsylvania, both north and south of Pittsburgh, data shows the top county in the state for natural gas production remains Susquehanna. So what happens there helps determine the course of the state’s natural gas industry. Cimarex is involved in shale production in two basins far west of Pennsylvania, including the Permian Basin that is oil-rich but whose natural gas production has limited pricing and markets for the Marcellus and Utica energy companies. Executives were upbeat on the prospects of the Marcellus, and called it “underappreciated.” “They see additional M&A opportunities on the horizon, some of which would presumably be in the Appalachian Basin given their core focus on the area and enthusiasm around the play as a source of gas and the importance of maintaining both gas and oil production in their portfolio,” said Enverus senior M&A analyst Andrew Dittmar. Rystad Energy’s Head of Shale Research, Artem Abramov, doesn’t see any immediate challenges for the Marcellus but sees the potential for the combined company’s interest being moved elsewhere if pipelines continue to be a problem to build. “It is possible that with the persistent infrastructure challenges in the northeast, the new entity will have opportunities to prioritize Delaware (basin) instead of fighting hard for transportation agreements in the Marcellus region,” Abramov said. “So if anything, the new outlook is a slight upside for the Delaware part of the portfolio and a slight downside for the Marcellus.” 

How Southwestern's Haynesville acquisition diversifies its portfolio --Three years ago, Southwestern Energy went all-in on the Appalachian basin by selling off its Fayettesville shale assets for $1.8 billion. Wednesday, Southwestern announced a $2.7 billion deal that will move it from being a pure-play Marcellus and Utica Shale producer to a second shale basin in northern Louisiana. Southwestern is one of the 10 biggest natural gas producers in Pennsylvania. It has a large presence in Washington County, acquired in 2014 along with wells elsewhere in Pennsylvania from Chesapeake Energy. It's grown even further, in West Virginia and Ohio, buying Montage Resources in November 2020 for $193 million. Southwestern has about 3 billion cubic feet of natural gas production in the Marcellus and Utica shales. Indigo Natural Resources will bring 1 billion cubic feet of natural gas production per day in the Haynesville and Bossier shales, one on top of the other in what is called stacked pay. Unlike the Cabot Oil & Gas Corp/Cimarex merger announced last month that will diversify by not just basin but by type — oil, natural gas and natural gas liquids — Southwestern and Indigo combined will be centered on natural gas and natural gas liquids. "It's a very logical move for us, being a leading natural gas company to focus on the two leading natural gas basins in the United States," Bill Way, president and CEO of Southwestern Energy, told analysts Wednesday. Way ticked off what Southwestern considered to be the benefits of the merger: Indigo's strong balance sheet, the production accretive to free cash flow by about 30% in 2022, giving Southwestern better access to the Gulf Coast LNG and industrial markets, and about 1,000 new locations to drill for dry natural gas. Southwestern and Indigo together will have about 85% of its 4 billion cubic feet of combined daily production as natural gas.

Water quality impact to be key consideration as Mountain Valley Pipeline hangs in limbo -The Mountain Valley Pipeline faces a consequential summer. So do the streams and wetlands that the pipeline’s developers are seeking permission to cross. The U.S. Army Corps of Engineers will decide by July 2 whether to grant or deny additional time to West Virginia and Virginia environmental regulators to consider water permit requests from the joint venture that owns the pipeline, according to Corps Huntington District spokesman Brian Maka. 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 asked last month for an additional 90 days beyond the 120 days the Corps of Engineers gave the agency to review Mountain Valley Pipeline’s water permit request. In March, the Virginia Department of Environmental Quality requested an additional year to review the pipeline permit application. Both departments previously said that they hadn’t heard back from the Corps. The Mountain Valley Pipeline is designed to be a 303-mile natural gas 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. Pipeline developers have proposed a 125-foot-wide temporary right-of-way to construct the pipeline and a 50-foot-wide permanent right-of-way to maintain and operate the pipeline once in service. Mountain Valley anticipates that the project will have temporary effects on more than 21,000 linear feet of streams and 10 acres of wetlands in West Virginia during the construction phase. The pipeline already has had adverse impacts on West Virginia’s waters. State environmental regulators proposed a consent order earlier this year requiring Mountain Valley to pay a $303,000 fine for violating permits by failing to control erosion and sediment-laden water. That penalty followed a $266,000 fine from the same regulators in 2019 for similar erosion and water contamination issues. The Virginia Department of Environmental Quality fined Mountain Valley $2.15 million that same year for water quality violations. “Based on what I’ve seen thus far, I don’t know how they can permit this activity knowing that there are going to be additional impacts to water resources because of MVP’s track record,” West Virginia Rivers Coalition staff scientist Autumn Crowe said. The North Carolina Department of Environmental Quality reissued a denial of a water quality permit for the planned Southgate extension of the project in April. The Rivers Coalition has staunchly opposed the Mountain Valley Pipeline, joining legal challenges against it. The nonprofit has argued that the planned disturbance of wetlands would permanently alter the soil and hydrology of affected wetlands and that the buried pipeline within streambeds would create an increased risk during flooding.

Gas leak causes massive fire in the middle of Massachusetts street - A dozen homes were evacuated after a gas leak caused a massive fire in the middle of a Massachusetts street Saturday morning.The Marshfield Police Department reported the gas leak near Plain Street around 9:24 a.m. ET and closed off the street where large flames shot up 30 to 40 feet into the sky.The police reported no injuries but residents had to be evacuated while firefighters fought to control the blaze. Marshfield fire Chief Jeffrey Simpson told ABC affiliate WCVB that no utility crews were working in the area at the time the fire started, but firefighters found a downed power line which they think may have ignited the leaking gas from a 6-inch underground main. Firefighters kept the flame going to prevent the gas from pooling in the area and causing a bigger explosion, Simpson said.  "First time in my career I want to see a fire burn, burn, burn," he said. By 7:02 p.m., the authorities said crews were able to isolate the gas line and shut it down, and the fire was put out. Three dozen homes were left without gas, according to the Marshfield police.

'We Won't Pay:' North Brooklyn Pipeline Opponents Launch Gas Bill Strike --  If you don’t want to pay for National Grid’s controversial North Brooklyn Pipeline, don’t pay. That’s the message of the No North Brooklyn Pipeline Coalition, which announced a gas bill strike at midday today, in protest of the pipeline. The pipeline, which is already built, will carry fracked gas under Brownsville, Bed-Stuy, Bushwick, Williamsburg and Greenpoint, ending at a National Grid Depot on Newtown Creek. The coalition is encouraging Brooklynites and others opposed to the pipeline to withhold $66 of their National Grid gas bills, until the state rejects a recent rate hike proposal. They say that’s how much the utility wants to raise Brooklynites’ bills to pay for its controversial pipeline. If 15,151 ratepayers take up the bill strike pledge, National Grid would be short $1 million. National Grid told BK Reader protestors were setting “a dangerous precedent” by telling people not to pay their bills. But strike organizer Lee Ziesche said the people had done everything possible to oppose the pipeline “in the right way,” but it seemed the utility and state didn’t hear them. “We submitted thousands and thousands of comments, we had people who never get involved in these things getting involved, and they just ignored us. “We know they listen to money, so we’re withholding money, because that’s the only thing they care about.”

Battle Brews Over Banning Natural Gas to Homes – WSJ - A growing fight is unfolding across the U.S. as cities consider phasing out natural gas for home cooking and heating, citing concerns about climate change, and states push back against these bans. Major cities including San Francisco, Seattle, Denver and New York have either enacted or proposed measures to ban or discourage the use of the fossil fuel in new homes and buildings, two years after Berkeley, Calif., passed the first such prohibition in the U.S. in 2019. The bans in turn have led Arizona, Texas, Oklahoma, Tennessee, Kansas and Louisiana to enact laws outlawing such municipal prohibitions in their states before they can spread, arguing that they are overly restrictive and costly. Ohio is considering a similar measure. The outcome of the battle, largely among Democratic-led cities and Republican-run states, has the potential to reshape the future of the utility industry, and demand for natural gas, which the U.S. produces more of than any other country. Proponents of phasing out natural gas say their aim is to reduce planet-warming emissions over time by fully electrifying new homes and buildings as wind and solar farms proliferate throughout the country, making the power grid cleaner. Homes and businesses account for about 13% of the nation’s annual greenhouse gas emissions, according to the Environmental Protection Agency, mostly because natural gas is used in cooking, heating, and washers and dryers. Climate activists say reducing that percentage is critical for states with goals to slash carbon emissions in the coming decades. Opponents in the gas industry counter by citing the higher costs of making many homes fully electric, and pointing to the added security of having a second home energy source to heat and cook with during extreme weather events. They also highlight the preference many home and professional chefs have for using gas-fired stoves. New all-electric homes are cost-competitive with those that use gas in many parts of the country, but retrofits can be considerably more expensive, depending on the existing heating and cooking systems and the cost of effectively converting them. A recent study by San Francisco found that retrofitting all housing units that now use natural gas would cost between $3.4 billion and $5.9 billion, costs that would fall on residents, the city or both. Induction ranges, which use magnets to heat pots and pans directly, can be more expensive to buy than gas ranges, especially in professional kitchens. Restaurant associations across the nation have raised concerns about going electric. Utilities that supply both electricity and natural gas could face more muted impacts if the shift accelerates. But those that supply only natural gas face the prospect of slower growth or even a reversal of demand, especially if momentum builds to electrify both new and existing homes.

Emails: Utilities drafted talking points against gas bans -- Tuesday, June 1, 2021 --  Lawmakers in roughly a dozen states are using strikingly similar talking points as they unleash a wave of legislation aimed at forbidding municipalities from banning natural gas in buildings. A Pennsylvania legislator wants to forbid municipalities from restricting gas hookups because he says it's fossil fuel discrimination. In Georgia, the sponsor of similar legislation said it would protect "freedom of choice." The leader of a Texas bill says, "If a citizen wants to have gas in their home they can." That's no coincidence. Documents obtained by E&E News show how the natural gas industry has honed a unified message as it rushes to block efforts in a small but growing number of cities that seek to limit gas consumption in buildings. Talking points, crafted by a consortium of gas utilities, encourage energy companies and their allies to extol the dangers of limiting gas hookups. They argue such measures threaten to lock homeowners and businesses into costly energy options and stress the importance of fuel diversity. They also tout the environmental benefits of gas, which has elbowed out coal in the power sector and helped reduce carbon emissions. The industry has even coined a term for the pro-gas fight: "energy choice." The gas industry's message has been echoed in statehouses across America since the start of 2020. Eighteen states have passed laws prohibiting municipalities from restricting gas hookups on new construction. A handful of others, including North Carolina, Ohio and Pennsylvania, are weighing similar plans. Industry representatives have often partnered with builders' associations, restaurant groups and real estate agents to make their case. The race to enact legislation is a response to local mandates restricting gas hookups in new buildings. These energy entry points at new residential structures can dictate which fuels will be used to heat rooms and water and for cooking over the lifetime of a home. More than 40 California cities have adopted measures restricting gas hookups, and cities in other parts of the country have started to mimic those policies as a way to address climate change. Seattle enacted similar restrictions earlier this year, and the New York City Council introduced a proposal to limit new gas hookups last week.

NCSU study finds vulnerable bear brunt of gas pipelines - NC Health News --For years, individual case studies have found that natural gas pipelines traverse primarily through socially vulnerable communities, resulting in cries of environmental injustice and lawsuits against big gas companies.Now, researchers at N.C. State University have taken those studies a step further with a deep data dive to show that the nation’s counties with the most socially vulnerable populations have significantly higher pipeline densities. The findings suggest that people living in those counties are at greater risk of facing water and air pollution, public health and safety issues, and other negative impacts associated with the natural gas pipelines, said Laura Oleniacz, a spokeswoman for N.C. State.“This is what the communities themselves have been saying for a long time,” said Ryan Emanuel, the study’s lead researcher and a professor in N.C. State’s Center for Geospatial Analytics. “For the first time, we gathered all of this together and zoomed out and took a national look and said, ‘You know what, these pipelines don’t exist in a vacuum.’”The study has been peer reviewed and is being published in GeoHealth, a journal that focuses on the intersection of environmental and Earth sciences, and health. The authors drew their conclusions using data on socially vulnerable communities from the Centers for Disease Control and Prevention and natural gas pipeline data from the U.S. Energy Information Administration, Emanuel said. The researchers used the CDC’s data to examine socially vulnerable communities on a county-by-county basis.  The CDC defines social vulnerability as “the potential negative effects on communities caused by external stresses on human health. Such stresses include natural or human-caused disasters, or disease outbreaks.”

FERC Approves Scaled Back Pipe Connecting MU Gas to Gulf Coast --Enjoy the Republican majority on the Federal Energy Regulatory Commission (FERC) while you have it. That majority will end soon. Three FERC Republican commissioners have approved Enable Midstream Partners’ Gulf Run natural gas pipeline which will, in part, connect Marcellus/Utica gas supplies to the Gulf Coast for exporting (see New Pipeline Designed to Connect M-U Gas to Gulf Coast LNG Exports). Both of FERC’s leftwing Democrats, Chairman Richard “Dick” Glick and his sidekick NRDC lawyer Allison Clements, voted against the project. Why are we not surprised? The Gulf Run pipeline will run from northern Louisiana to Gulf Coast markets. The pipeline will connect to other pipelines, and that’s how Marcellus/Utica gas will reach it and go on to the Gulf Coast. In fact, the plan is to connect to multiple pipelines that in turn connect to not only the Marcellus/Utica, but also to the Haynesville, Barnett, and the Mid-Continent shale region too. Gulf Run was originally supposed to flow 2.75 billion cubic feet of gas per day (Bcf/d) running through 165 miles of 42-inch pipeline. The scaled-back version Enable filed with the FERC calls for 134 miles of pipeline that will flow 1.65 Bcf/d. The project is designed to transport natural gas from some of the most prolific natural gas producing regions in the U.S., including the Haynesville, Marcellus, Utica and Barnett shales and the Mid-Continent region, to the U.S. Gulf Coast and is backed by a 20-year commitment for 1.1 billion cubic feet per day (Bcf/d) from cornerstone shipper Golden Pass LNG. The planned 42-inch pipeline provides for approximately 1.7 Bcf/d of capacity, allowing for upside potential beyond Golden Pass LNG’s commitment. The cost for the project is currently estimated at approximately $540 million, and pipe for the project was recently acquired at favorable pricing relative to market. The contractor bidding process is underway, and the project is anticipated to be placed into service in late 2022.*

FERC must fix its broken approach to pipelines --Experts worldwide agree that avoiding the most devastating impacts of climate change will require a speedy transition away from fossil fuels. Yet in recent years, the U.S. federal government has rubber-stamped nearly every proposal advanced to construct natural-gas pipelines. This practice locks in fossil fuel infrastructure for decades and forces consumers to pay for pipelines that are not needed now or in the future.It’s time to change course and take an approach that avoids bad investments and climate pollution. The Federal Energy Regulatory Commission, the government agency that oversees interstate pipelines, has broad authority to act in the public interest in assessing pipeline applications. The commission should use its authority to meaningfully consider climate impacts and reject proposals that are inconsistent with national energy needs. While an ongoing proceeding offers FERC the opportunity to revise its policies, it will likely require a change in the commission’s membership later this year to allow these crucially important reforms to occur.The debate over FERC’s pipeline approval policy erupted into public view late last month at a tense meeting during which two pipeline extension projects were approved in a 3-2 vote along party lines. Despite the well-recognized link between pipelines and climate change, FERC’s three Republican commissioners dismissed the proposals’ climate-change impacts as insignificant and approved both applications over calls for further study from the two dissenting Democratic commissioners.The emissions impacts from the two proposals are hardly trivial. One of the projects, located in eastern Minnesota, will be the source of up to 925,000 metric tons of greenhouse gas emissions per year, which translates to roughly $50 million in annual climate-change costs, according to calculations based on widely used, conservative climate-damage valuations from the federal government. The total direct construction costs of the project are approximately $57 million — an amount vastly exceeded by the approximately $500 million in climate-change costs expected to accrue over the life of the initial contracts. Yet immediately after calculating the project’s emissions, the majority abruptly concluded that the project’s climate impacts are insignificant and do not merit further attention. The commission’s dismissive approach to the climate impacts of these projects is its latest evasion of its responsibility to fully consider whether a pipeline would serve the public interest. In 2017, the U.S. Court of Appeals for the D.C. Circuit found that FERC’s practice of ignoring the greenhouse gas emissions resulting from the combustion of natural gas is unlawful.

U.S. natgas futures jump to 2-week high on warmer outlook (Reuters) - U.S. natural gas futures rose 4% to a two-week high on Tuesday on forecasts for warmer than previously expected weather over the next two weeks that should boost the amount of gas power generators burn to keep air conditioners humming. Traders also noted that output was on track to decline at the same time soaring global gas prices were pushing U.S. exports close to record highs. Front-month gas futures NGc1 rose 11.8 cents, or 4.0%, to settle at $3.104 per million British thermal units, their highest close since May 17. Despite the big gain on Tuesday, speculators last week boosted their futures and options shorts on the New York Mercantile Exchange (NYMEX) to the highest since July 2020 because forecasts then were calling for mild weather through mid June. That helped cause the first drop in speculative net long positions on the NYMEX and Intercontinental Exchanges in four weeks. Data provider Refinitiv said gas output in the Lower 48 U.S. states slipped to a preliminary 89.7 billion cubic feet per day (bcfd) on the first day of June, down from an average of 91.0 bcfd in May. That compares with a monthly record high of 95.4 bcfd in November 2019. With warmer weather coming, Refinitiv projected average gas demand, including exports, would rise from 85.4 bcfd this week to 90.2 bcfd next week. The forecast for this week was higher than Refinitiv predicted on Friday before the long U.S. Memorial Day weekend. 

Natural Gas Futures Slip Ahead of Fresh EIA Data; Tetco Issue Still Unresolved -- After a double-digit gain to start the week, natural gas futures retreated a bit Wednesday as a majority of the previously reported production decline recovered midweek. With traders eyeing another potential bearish storage injection, the July Nymex gas futures contract settled 2.9 cents lower at $3.075. August fell 3.2 cents to $3.094. Spot gas prices continued to strengthen across most of the country, though Southern California recorded steep losses despite the continuation of record heat. NGI’s Spot Gas National Avg. ultimately went unchanged at $2.850. As for futures, the July Nymex contract fell early. Though some pullback was expected after the sharp spike on Tuesday, the losses were cemented once revisions in the production came to light. However, the news of Texas Eastern Transmission’s (Tetco) force majeure that reinstated a 20% pressure reduction and reduced southwest flows out of Pennsylvania remained front and center. Wood Mackenzie analyst Dan Spangler said flows would be cut by up to 1 Bcf/d, similar to the restrictions implemented last summer following the Danville explosion in the summer of 2019. The pipeline is also capping flows north through Pennsylvania at the Uniontown compressor station to 2.7 MMcf/d. “While this capacity is higher than recent flows, it constrains an outlet for gas that would otherwise be able to travel southwest,” Spangler said. Tetco’s pressure reduction is because of an amended corrective action order from the Pipeline and Hazardous Material Safety Administration (PHMSA). Tetco indicated that PHMSA had “temporarily approved” the pipeline company’s ability to recommence operations at its “full maximum operating pressure” as of late December 2020 following the completion of its remedial work plan.

US gas storage fields post second consecutive above-average weekly injection -- US natural gas storage fields injected just above the five-year average for the week ended May 28, but below-normal builds are expected in the weeks ahead as gas-fired power generation accelerates and LNG exports outpace June expectations. Storage inventories increased 98 Bcf to 2.313 Tcf, the US Energy Information Administration reported June 3. The build proved greater than the 87 Bcf addition expected by an S&P Global Platts' survey of analysts, but just above the five-year average build of 96 Bcf, according to EIA data. It was the second consecutive week the injection was more than most market expectations. Storage volumes now stand at 386 Bcf, or 41%, less than the year-ago level of 2.699 Tcf, and 61 Bcf, or 2.6%, less than the five-year average of 2.374 Tcf. The NYMEX Henry Hub July contract dipped 2 cents to $3.05/MMBtu in trading on June 3. Summer prices have given back nearly half of the 12 cents of gains picked up on June 1, following reports of a systemwide capacity reduction on Texas Eastern Transmission that is expected to reduce supplies in the US Gulf Coast area for a still undetermined length of time. Even so, the summer strip is sitting well above the $3 level after dipping below it for a week in late May. Capacity reductions notwithstanding, doubts about the tightness in supply-demand balances continue to swirl, particularly as storage inventory builds repeatedly have come in higher than market surveys anticipate, according to Platts Analytics. Platts Analytics' supply and demand model currently forecasts 75 Bcf injection for the week ending June 4, which would measure about 20 Bcf less than the five-year average. Demand fundamentals for the week in progress have unwound the previous week's gains in power generation demand while also seeing a recovery in residential and commercial and industrial loads following losses the week before. Total supplies are down roughly 900 MMcf/d on the week, for an average 94.4 Bcf/d, as offshore production has extended last week's decline by another 200 MMcf/d while net Canadian imports have also pulled back an additional 600 MMcf/d. Downstream, power demand has fallen 2.1 Bcf/d while res-comm and industrial are up by a combined 1.7 Bcf/d. Taken together with a roughly 800 MMcf/d increase in export demand—both LNG feedgas and exports to Mexico—total demand is up by a net 400 MMcf/d week over week. Altogether, balances have trended 1.3 Bcf/d tighter from the reference week, though this is being driven mostly by weaker supply rather than stronger demand.

U.S. natgas futures rise on hotter midday forecasts - (Reuters) - U.S. natural gas futures rose almost 2% on Friday after midday forecasts called for hotter weather over the next two weeks than previously expected. Traders said they expect that extra heat will prompt power generators to burn more gas to keep air conditioners humming. Front-month gas futures NGc1 rose 5.6 cents, or 1.8%, to settle at $3.097 per million British thermal units. That put the front-month up about 4% for the week after it gained almost 3% last week. Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 91.3 billion cubic feet per day (bcfd) so far in June, up from 91.0 bcfd in May but still well below the monthly record high of 95.4 bcfd in November 2019. One reason production has slid in recent months is that drillers have not added enough rigs to keep up with natural declines in well output. The number of rigs drilling for gas in the United States this week fell by one to 97. That put the gas rig count down for a fourth week in a row for the first time since May 2020 as drillers focus more on improving cash flow, paying down debt and returning money to shareholders rather than increasing output. RIG/U With warmer weather coming, Refinitiv projected average gas demand, including exports, would rise from 84.6 bcfd this week to 88.0 bcfd next week and 89.7 bcfd in two weeks. The forecast for next week was a little lower than Refinitiv predicted on Thursday due to milder weather.

Colonial hack exposed TSA’s light-touch oversight of pipeline cybersecurity - Three times over the past year, Colonial Pipeline and the Transportation Security Administration discussed scheduling a voluntary, in-depth cybersecurity review — an assessment the federal agency began doing in late 2018 to strengthen the digital defenses of oil and natural gas pipeline companies, according to a company official and an industry official familiar with the matter.But no such review of Colonial’s systems has occurred, according to a Colonial spokesman. And the pipeline company has previously told federal officials it wants to first complete a headquarters move to a new building — probably in November — though the spokesman, Kevin Feeney, said on Friday that it may allow a review sooner.It’s unknown whether the government-run cybersecurity assessment would have helped Colonial avert the ransomware attack that locked up some of its computer systems this month — and led the company to shut down its entire pipeline, leaving large swaths of the East Coast with fuel shortages.But a range of current and former officials and cybersecurity experts say the company’s ability to avoid a government review underscores how a voluntary, arms-length approach by federal officials over nearly two decades has left key elements of the nation’s critical infrastructure at risk.“I’m very concerned whenever I see a lack of urgency given the potential threats we face,” said Rep. Jim Langevin (D-R.I.), co-founder of the Congressional Cybersecurity Caucus. “You’re leaving so many areas exposed by not having a review — and addressing at least the vulnerabilities that you can identify.” Now, in the attack’s wake, the Department of Homeland Security, which houses the TSA, is reversing course, scrapping two decades of a voluntary regime for pipeline cybersecurity and moving for the first time to mandatory rules. But a review of the TSA’s history since it was handed oversight of pipeline security in 2001 shows a government culture of closely partnering with energy giants and industry trade groups in setting guidelines that were voluntary. No penalty resulted for a failure to obey them.

Big Oil Fought Cybersecurity Regulations, Making Pipeline Attacks Easier - The American Petroleum Institute, the top trade group for the oil and gas industry, spent years opposing federal cybersecurity regulations before the Colonial Pipeline ransomware attack. After the attack, watchdog groups say API is still opposing strong federal regulation and pushing for taxpayer “subsidies” instead. Colonial Pipeline, one of the largest pipelines in the country, which carries 45% of the fuel from Texas to New York, was forced to shut down after a ransomware attack by the foreign cybercriminal group known asDarkSide. Cybersecurity experts believe that Colonial lacked advanced cybersecurity defenses that can monitor networks for irregularities and detect threats like DarkSide’s infiltration tools. But Colonial is not the first pipeline affected by cyberattacks and many other pipelines in the U.S. may have similar vulnerabilities. A ransomware attack hit an unidentified natural gas facility in 2020, forcing it to shut down for two days, according to the Department of Homeland Security. The Cybersecurity and Infrastructure Security Agency said after the attack that the owner of the facility “did not specifically consider the risk posed by cyberattacks” or prepare employees to deal with one. Federal officials have been sounding the alarm on the lax cybersecurity measures for years. Federal Energy Regulatory Commissioners Neil Chatterjee and Richard Glick warned in a 2018 op-ed that a lack of federal cybersecurity standards left energy firms vulnerable to cyberattacks. The Government Accountability Office in 2019 found that federal cybersecurity guidelines were badly out of date and lacked preparation to respond to an attack on critical infrastructure. After the Colonial attack, the cybersecurity firm Byos estimated that “less than 25% of the U.S. oil and gas industry has adequate cybersecurity in place,” according to Bloomberg News. One of the reasons that the federal government failed to enact regulations to protect critical infrastructure before the Colonial Pipeline attack appears to be a relentless campaign against federal regulations by the energy industry and API, which has spent more than $20 million on lobbying expenditures since 2018. Last year, API argued that “voluntary frameworks and public-private solutions, rather than prescriptive federal regulations, offer businesses the know-how and flexibility to respond to the ever-changing security landscape.” The group says its member companies believe the private sector “should retain autonomy and the primary responsibility for protecting companies’ assets” against cyberattacks. In the aftermath of the Colonial attack, API has changed its tune only slightly, arguing that it is “premature” to discuss regulations “until we have a full understanding of the details surrounding the Colonial attack.” API CEO Mike Sommers even suggested that it was just as important to protect the industry from regulators as from cyberattacks. A progressive watchdog group accused the group of trying to cash in on the cyberattack. “In the wake of dangerous cyber threats, the American Petroleum Institute is apparently angrier with the government for stepping up to stop future attacks than they are with the hackers doing the attacking,” Kyle Herrig, president of the left-leaning watchdog group Accountable.US, said in a statement to Salon. “The government has an obligation to protect American interests from cyberattacks including pipelines and other infrastructure — API treating these serious threats as a cash cow to line oil industry pockets while lobbying against the government stepping up protections shows they have the wrong priorities.”

Memphis Council delays vote to preserve aquifer – = The Memphis City Council is expected to make a final decision within the next few weeks on an ordinance regarding the Memphis Sand Aquifer and its preservation. On Tuesday, the council delayed a vote until July 6 to recognize the importance of the aquifer as the sole source of drinking water for many Shelby County residents while recognizing the impact contamination would have on the local environment. The ordinance was sponsored by Councilmembers Jeff Warren and Edmund Ford in regards to the controversial Byhalia Connection Pipeline, a joint venture between Texas-based Plains All American Pipeline and Valero Energy Corporation.The 45-mile crude oil pipeline would pass through mostly Black neighborhoods from Memphis into Marshall County, Mississippi. Residents and opponents of the pipeline fear any leak from the pipeline could contaminate the Memphis Aquifer. Because of this, several groups launched legal battles against the pipeline, including Memphis Against the Pipeline and Southern Environmental Law Center (SELC). A new study conducted by the Center for Applied Earth Science and Engineering Research at the University of Memphis showed that there are two points along the path of the pipeline where shallow aquifers connected to the Memphis Aquifer, increasing the risks of contamination. If the ordinance passes, pipeline officials would have to seek approval from the Memphis Underground Review Board and prove that public water supply wells are 1,000 feet from the project boundary. An investigation would also be launched into the potential impact a company carrying hazardous materials would have on minority populations and neighborhoods historically burdened by environmental pollution. Opponents of the pipeline, including former Vice President Al Gore, called the pipeline an example of environmental racism, recognizing that Black neighborhoods tended to shoulder the risks of being exposed to toxics from nearby industrial facilities.  A study identified Southwest Memphis as a hotspot for air pollution, noting that residents faced cancer risks “four times higher than the national average.”

Kinder Morgan to pay $1.2B for Crestwood-Consolidated Edison natural gas JV -Houston-based Kinder Morgan Inc. (NYSE: KMI) will acquire Stagecoach Gas Services LLC for $1.225 billion. Stagecoach is a natural gas pipeline and storage joint venture between New York-based Consolidated Edison Inc. (NYSE: ED) and Houston-based Crestwood Equity Partners LP (NYSE: CEQP). It includes four natural gas storage facilities with 41 billion cubic feet of FERC-certificated working gas capacity plus 185 miles of natural gas pipelines. Stagecoach Gas Services operates in the core of the Northeast Marcellus and Utica Shale plays, with the pipeline connecting to multiple points in Pennsylvania and New York, including interstate pipelines like the Tennessee Pipeline, a Kinder Morgan subsidiary. Fitch Ratings Inc. said in a June 1 note that it believes the cash-funded acquisition will not have a material impact on the company’s business risk. "Kinder had a $1.4 billion cash balance as of March 31, 2021, boosted by a first-quarter 2021 $759 million gross margin from the February 2021 winter storm and cold snap," Fitch's note said. "The storm demonstrates the value of gas storage and pipeline assets, and Fitch views the Stagecoach assets favorably given the regulatory issues facing construction of new assets, particularly in the northeast."

Winter storm windfall put Kinder Morgan in position for Stagecoach purchase - A $1 billion boon to Kinder Morgan Inc.'s balance sheet from February's severe weather enabled the natural gas pipeline giant to offer to buy Stagecoach Gas Services LLC from Crestwood Equity Partners LP and Consolidated Edison Inc., analysts said. Mizuho Securities USA LLC Managing Director Gabriel Moreen agreed with analysts at Scotiabank and Raymond James & Associates Inc. that Kinder Morgan was "effectively taking the [winter storm] proceeds and redeploying them." "I think the acquisition should be well received, but I think investors still want to know Kinder Morgan's capital return plans," Moreen said in an interview. Stagecoach Gas, which Kinder Morgan agreed to acquire for roughly $1.23 billion, comprises four gas storage facilities in New York and Pennsylvania with a total working capacity of 41 Bcf and 185 miles of pipelines. The pipelines have interconnects to major interstate gas pipelines, including Kinder Morgan's Tennessee Gas Pipeline Co., connecting gas supplies to Northeast U.S. demand markets. Scotiabank told clients June 1 that while they "expect the sticker price to cause some upfront heartburn" for shareholders, Kinder Morgan "is expected to be one of the few operators that could have potentially captured operating synergies" from buying Stagecoach, given the connection to Tennessee Gas. For Crestwood, the deal announcement "eliminates some uncertainty as investors had been somewhat concerned" that it would buy out ConEd's 50% stake, Raymond James said. Crestwood took a $120 million impairment during the first quarter on Stagecoach to make the company more attractive to potential buyers. "We had an indication that the market value of Stagecoach's assets was below its carrying value," "We also had a very comparable transaction announced in a similar time frame with the Natural Gas Pipeline Co. of America LLC trade, coming in at the 11x to 12x range, which was kind of also in the ZIP code of how we assessed fair value." After Kinder Morgan and Brookfield Infrastructure Partners LP agreed in February to farm out a 25% stake in the Natural Gas Pipeline system to a fund managed by ArcLight Capital Partners LLC, Crestwood valued its 50% share in Stagecoach at $666 million.

Kinder Morgan urges new tax credits as midstream firms embrace carbon capture - Kinder Morgan Inc. CEO Steven Kean called for additional federal policy incentives to build out CO2 pipeline infrastructure as more North American midstream companies announced carbon capture, utilization and sequestration initiatives. Extended Tax Code Section 45Q credits are offered to industrial manufacturers that capture carbon emissions and either store them permanently or put them to use in applications that reduce life cycle emissions. U.S. President Joe Biden's administration plans to make the credits more accessible to developers, but Kean warned that converting existing pipelines to transport CO2 will not be viable without new subsidies. "You really do need to move this stuff in liquid form, which means ... very high-pressure pipe," the CEO said June 2 during a conference hosted by Sanford C. Bernstein & Co. LLC. "If you think about [natural] gas and liquids pipelines running at 800 to 1,000 psi, call it — there's various newer pipelines at 1,440 or something like that — but you need to move the CO2 in liquid format, call it 2,000 psi. You can't just simply retrofit." Kean did acknowledge that "there may be some solutions around that by doing the compression and liquefaction at the other end of the pipe." The Kinder Morgan CEO said in April that the gas pipeline giant would consider bringing in joint venture partners as it seeks to expand beyond sequestration and pipeline transportation to carbon capture.

In Blow to Big Oil, Corporate Subsidy Quietly Dies in Texas - WHEN ORGANIZERS SET out to overturn Texas’s giveaway program for the oil and gas industry, they had a long game in mind. Over 20 years, the tax exemption program known as Chapter 313 had delivered $10 billion in tax cuts to corporations operating in Texas — with petrochemical firms being the biggest winners. This year, for the first time in a decade, the program was up for reauthorization. Organizers decided to challenge it for the first time. At the beginning of last week, as Texas’s biennial legislative session approached its end, the aims of organizers remained modest. “We thought it would be a victory if the two-year reauthorization passed so we could organize in interim,” said Doug Greco, the lead organizer for Central Texas Interfaith, one of the organizations fighting to end the subsidy program. At 4 a.m. last Thursday, it became clear that something unexpected was happening: The deadline for reauthorization passed. “The bill never came up,” Greco told The Intercept. Organizers stayed vigilant until the legislative session officially closed on Monday at midnight, but the reauthorization did not materialize. The lapse in authorization coincided with three other groundbreaking blows to oil and gas corporations. A Dutch court ruled that Shell Oil is liable for its climate impacts and must reduce its greenhouse gas emissions. Exxon Mobil shareholders booted out two members of the corporation’s board of directors for its failures on the climate crisis. And Chevron shareholders voted to force the company to cut its emissions. With all four developments coming on the same day, the failure to reauthorize the subsidies in Texas fell under the radar. Taken together, the moves demonstrate changing opinions about climate change and fossil fuel companies; one analyst referred to the news about Shell, Exxon, and Chevron as “the start of a new era for Big Oil.” Between the court decisions, shareholder activism, and the unwillingness of Texas legislators to continue unpopular handouts to oil companies, the public may no longer be willing to go along with business as usual for fossil fuel firms.

Permian Study Finds Overproduction Leading to More Methane Leaks - The energy-rich region of the southwestern U.S. known to geologists and fossil fuel enthusiasts as the Permian Basin has expanded its production more quickly than any other oil and gas region in recent years, reaching 38% of U.S. oil and 17% of gas production in 2020. With this scale has come a gush of greenhouse gas emissions, although just how much has until recently been impossible to say. Between September and November 2019, a team of scientists from the NASA Jet Propulsion Laboratory, the University of Arizona, and Arizona State University flew multiple times over the 21,000 square miles of the Permian Basin with airplanes bearing sensors that allowed them to pinpoint “super-emitters” of methane. About 29% of the total lost gas quantified in flyovers between September and November 2019 came from “routinely persistent” sources, indicating that these leaks could be largely eliminated with repairs and diligent monitoring. The releases represented just 11% of emissions sites from a total of 1,100 unique sources studied. While carbon dioxide is a bigger driver of global warming and lasts longer in the atmosphere, methane—the main component of natural gas—traps more than 80 times as much heat over a 20-year period. Halting methane emissions from the oil and gas industry has jumped to the top of climate to-do lists in part because policy analysts have identified it as one of the cheapest and easiest ways to hold down global temperatures.

With the World Focused on Reducing Methane Emissions, Even Texas Signals a Crackdown on ‘Flaring’ -  The practice of burning off unwanted natural gas from oil wells releases hazardous pollutants, which disproportionately affect communities of color.  This practice of burning off unwanted natural gas from oil wells has been commonplace and largely condoned by Texas regulators across the state’s shale fields for years. But now winds of change have begun blowing here in Texas, as climate activists at the state and national level focus on flaring and on methane, the largest component of natural gas and a climate super-pollutant 86 times more potent at warming the atmosphere than carbon dioxide over a 20-year period.  In advance of April’s climate summit in Washington, leading environmental groups called on President Biden to cut the nation’s methane emissions by 40 percent by 2030, as the best way to slow global warming over the next two decades. The U.S. Senate followed up on April 28 by reimposing Obama-era controls on methane leaks from oil and gas wells that had been rolled back by the Trump administration. Even the Texas Railroad Commission, the state’s pliant regulator of the fossil fuel industry, deferred consideration of a series of flaring applications from oil companies in February—applications it had routinely approved for years—after one commissioner said flaring should be “a necessary last resort” during emergencies and not a wasteful and polluting practice to dispose of unwanted natural gas.  Flaring the gas is preferable to simply “venting” it into the atmosphere, another common practice. Burning the gas turns methane, the super-polluting greenhouse gas, into carbon dioxide, the primary cause of climate change, which is less warming. But both flaring and venting, beyond their impact on climate change, pose serious health threats to nearby residents like Rhyne. Flaring releases a variety of hazardous air pollutants, including volatile organic compounds like benzene, a carcinogen, and contributes to ground-level ozone, a pollutant that causes respiratory illness and heart disease. Ever since Apache first started drilling in 2016, Rhyne said, flaring and venting have become prevalent.  Phil West, a spokesman for Apache, said flaring, while “sometimes-necessary,” is a practice Apache uses “sparingly.”

Emissions from Texas’s Permian Basin will be a climate test for Joe Biden – Vox --Around 265 million years ago, much of modern-day Texas was underwater, and the vast region known as the Permian Basin was a flourishing coral reef. Today, the organisms that once thrived there have been transformed into enormous deposits of fossil fuels — and they have made the area one of the most treacherous front lines in President Joe Biden’s domestic fight against climate change. The Permian Basin, which stretches hundreds of miles across West Texas and southeast New Mexico, accounts for 40 percent of US oil production and 15 percent of its natural gas, according to February data. Less than a year after oil prices dipped into negative territory because of the Covid-19 pandemic, production in the region has bounced back almost to pre-pandemic levels. Already, the region is the nation’s No. 1 source of methane, a greenhouse gas that warms the planet far more efficiently than carbon dioxide in the short term. The US oil and gas industry has pinned much of its future hopes on the region, especially in the next decade: If it gets its way, the Permian Basin will still grow through 2029, outranking every country except for Saudi Arabia in liquid fuel production, according to one analysisfrom Oil Change International. At this rate, by 2050, it would account for 39 percent of the world’s new oil and gas emissions. The world can’t afford this if it is to meet international climate goals. That’s what the International Energy Agency recently made clear in a report that argued for halting new investment in fossil fuel production, starting in 2021. Yet under Biden, the Permian could undergo expansion if the industry sees through its plans to export its gas and oil. That means any credible US response to the climate crisis will need to include a plan for the West Texas Permian Basin. But wrangling Texas oil and gas emissions could test President Biden’s powers like nothing else. When Biden signaled early in his presidency that fighting climate change must involve reining in the fossil fuel industry, Texas Gov. Greg Abbott immediately signaled that he would protect the state’s oil and gas industry at all costs. On January 28, Abbott signed anexecutive order to direct every state agency to use all lawful powers and tools to challenge any federal action that threatened the Texas energy sector. Biden has committed to slash US climate pollution in half by 2030 to contain the worst of global warming, but the administration has few levers to limit pollution in a red state infamous for deregulating the industry. The Texas side of the Permian is the biggest challenge. The land is entirely state- and privately-held, compared to the federal lands in New Mexico, which makes it hard to discourage future oil production by blocking new leases. And unlike New Mexico, the state regulators and politicians have shown no interest in coming to terms with the Permian’s pollution. That leaves the Biden administration with a thorny choice: It could take a gentler approach and regulate the Permian’s climate emissions but risk not doing enough. Or it could swing a political sledgehammer by declaring a climate emergency and cutting off the Permian from its global customers — which could provoke intense backlash from Abbott, industry, and voters in upcoming elections.

Opportunities for CO2 sequestration through enhanced oil recovery, part 2.  No doubt about it. The global effort to reduce emissions of carbon dioxide — the most prevalent of the greenhouse gases — is really heating up. Yes folks, CO₂ is in the spotlight, and everyone from environmental activists and legislators to investors and lenders want to slash how much of it is released into the atmosphere. There are two ways to do that. First, produce less of it. That’s what the development of no- or low-carbon sources of power and the electrification of the transportation sector are intended to accomplish. The second way is to capture more of the CO₂ that’s being emitted and make it go away, and the most cost-effective means to that end is sequestration — permanently storing CO₂ deep underground, either in rock formations or in oil and gas reservoirs through a process called enhanced oil recovery, or EOR. Sure, there’s an irony in using and sequestering CO₂ to produce more hydrocarbons, but the volumes of CO₂ that could be squirreled away for eternity through EOR are enormous, and the crude produced might credibly be labeled “carbon-negative oil.” In today’s blog, we continue our look at the rapidly evolving CO₂ market and the huge opportunities that may await those who pursue them.As we said in Part 1 of this blog series, CO₂ EOR technologies have been around for almost 50 years.  During most of that time, however, EOR has been a footnote in the financial statements of all but a handful of companies. But now, ESG and the momentum to address the climate-change challenge sooner rather than later has thrust CO₂ EOR to center stage. Whether they are involved in CO₂ capture or not, oil and gas companies are fond of EOR. Unlike solutions that rely on technologies like solar photovoltaics and lithium-battery storage (outside the sweet spot of most oil companies), CO₂ EOR uses processes and techniques that are quite familiar to hydrocarbon producers, as well as being proven and used in several major basins. So we know they work, and can be scaled up to handle far greater volumes of CO₂ than they do today. We’ll get back to just how much CO₂ is sequestered using EOR a little later, but first let’s consider the big picture. For starters, how big is this CO₂ problem in the first place?The answer? Really big. In fact, it’s hard to wrap your head around the sheer magnitude of the GHGs being emitted into the atmosphere. As shown in Figure 1, more than 50 gigatons (billion metric tons) of GHGs are released each year across the globe, here calibrated to CO₂-equivalent volumes. CO₂ alone (lavender bar segments) accounts for about four-fifths of the total, followed by methane (light green bar segments) and nitrous oxide (yellow bar segments). The blue line represents the U.S. portion of the worldwide CO₂ annual total: about 5 gigatons. If you squint looking at Figure 1, you’ll see that U.S. CO₂ emissions have been gradually declining since 2005, when they reached almost 6 gigatons. Much of that decline is tied to shifts in the U.S. power generation sector from coal to natural gas and renewables. In contrast, GHG emissions by the rest of the world increased by almost 10 gigatons of CO₂ equivalent over the same period, mostly due to economic growth in China, India, and other emerging markets, with some reduction in 2020 due to the COVID pandemic.

New program partners education organizations with oil and gas companies to fill job gaps - Permian Strategic Partnership is teaming oil and gas companies with education organizations to fill gaps in the workforce. The Catalyst Workforce Development program is in the early stages of the project, but it’s been in the works for over a year. Phase one of the project includes collecting data from oil and gas companies about the highest demand jobs - and then figuring out how to teach skills for those jobs. PetroSkills - an oil and gas skill training company - and the University of Texas Petroleum Extension are working together to align the needs of the industry with what’s taught in school. “Our main goal is to make sure people who grow up here, live here, part of the community have the training and skills that they need to successful and stay here,” said PSP director of education and workforce initiatives, Molly Young. After a challenging year for oil and gas, the launch of the Catalyst project is bringing renewed energy to the industry. “I think there’s so much energy right now around the industry coming back up and recovering from COVID and all the economic impacts that happened in the last year. This is a great thing to rally around where we can both our industry and education partners together to work on something meaningful,” said Young. The Catalyst project will involve K-12 school districts and community colleges, and four-year universities in the Permian Basin. Young says she hopes the young people of this community will see this as an investment in their futures and encourage them to stay here and work.

We Energies' Ixonia proposal survives appeal - — It’s not a “done deal” yet, but it’s getting there. A We Energies liquid natural gas storage tank proposed for Ixonia on Thursday survived a conditional use permit appeals process conducted by the Jefferson County Zoning Board of Adjustment. According to Jefferson County Corporation Counsel Blair Ward and county Administrator Ben Wehmeier, the conditional use permit for the controversial facility that We Energies is hoping to install in Ixonia could face another citizens group appeal at the Jefferson County Circuit Court level and the structure also must pass muster with the state’s Public Service Commission. Dating to April, the Jefferson County Zoning Board of Adjustment has struggled with 1,104 pages of written record from a Jefferson County Planning and Zoning Committee decision to permit We Energies a conditional use to build a proposed liquified natural gas processing and storage facility in Ixonia.  The appeal alleged that members of the planning and zoning committee made a number of errors Nov. 11, 2020 when they granted We Energies the conditional use permit. Among those errors, according to the appeal, was a misinterpretation of the definition of a “utility” in the county zoning ordinance, which allowed the proposed facility to qualify as a conditional use in an agricultural preservation zone; failure to consider more appropriately zoned areas, such as industrial districts, as a site for the plant; and incorrectly concluding that all criteria in state statutes required to allow a “utility” use in a farmland preservation district had been satisfied. On Thursday, the board of adjustment spent approximately seven hours deliberating before returning its decision that the conditional use permit appeal should be denied. The vote was 2-1, with Weiss and Sayre-Hoeft voting to allow the permit. Roberts cast the dissenting vote. The proposed We Energies facility would include a 15-story, 150-foot-diameter tank to store 12 million gallons of liquified natural gas. The plant also would have equipment to process vaporized natural gas into a liquid and back again, a section of pipeline connecting to a main natural gas pipeline plus an electric substation.  . The Ixonia residents who filed the appeal alleged, among other impacts, that the proposed large industrial-type facility would reduce their property values, as well as the use and enjoyment of their properties; change the rural character of the area and cause noise, odors, light pollution and increased truck traffic. They also claimed the facility would endanger their safety, due to the possibility of a leak, fire, explosion or other event at the plant.

Michigan rejects Canada's claim that Line 5 pipeline dispute is cross-border treaty issue - The dispute over the cross-border Line 5 pipeline is entirely for Michigan to deal with, the state's attorney general argues in a legal brief released Wednesday that flatly rejects Canada's depiction of a foreign-policy matter that Ottawa and the White House must resolve. In a sternly worded 21-page legal filing, Attorney General Dana Nessel excoriates the arguments of the pipeline's owner, Calgary-based Enbridge Inc., as "meritless" and "baseless," and waves away the submissions of the federal Liberal government, neighbouring states and various industry stakeholders as little more than policy-based window-dressing. Enbridge is trying to convince Michigan court Judge Janet Neff that the case needs to be heard by a federal judge because it raises "substantial federal questions" about Gov. Gretchen Whitmer's effort to shut down the line for fear of an environmental disaster in the Great Lakes. Nessel disagrees. "This case is a state-law action through and through," her brief begins. Michigan is "invoking powers that are unique to a state sovereign," it says, and asserting claims under Michigan laws "over a strip of land that is owned by the state, located within the state, and held in trust by the state for the public benefit of its people." The dispute first erupted in November when Whitmer — citing the risk of a catastrophe in the Straits of Mackinac, the waterway where Line 5 traverses the Great Lakes — abruptly revoked the easement that had allowed the line to operate since 1953. Enbridge insists the pipeline is safe and has already received the state's approval for a $500-million effort to dig a tunnel beneath the straits that would house the line's twin pipes and protect them from anchor strikes. The company has made it clear it has no intention of shutting down the pipeline voluntarily.

Telecommunications firm interested in using new Line 5 tunnel - A Marquette-based telecommunications company is one of the first third party companies to express interest in using a tunnel scheduled to be built beneath the Straits of Mackinac. Peninsula Fiber Network, which provides services for telecommunication providers and operates a 911 network in most Michigan counties, filed a letter of intent with the state to use the tunnel, company General Manager Scott Randall said. "We would place a significant fiber-optic facility ... within the utility corridor within the tunnel," Randall said Wednesday to the Mackinac Straits Corridor Authority. "We would make that available to any other provider who wants to utilize that route. Doing so, we feel would help ensure stable and secure communications for the state of Michigan.” There currently is one other fiber optic cable connecting the Upper and Lower peninsulas that runs along the Mackinac Bridge, Peninsula Fiber Network said. Enbridge Energy still is pursuing a final federal permit from the U.S. Army Corps of Engineers as well as authorization from the Michigan Public Service Commission for construction of the roughly 4-mile tunnel under the straits and the location of a new segment of Line 5. Enbridge is preparing a request for proposals for construction of the tunnel as well as a tenant manual for third party utilities interested in using the tunnel.

Does the U.S. Really Need Another Oil Pipeline? - A decades-old pipeline called Line 3, run by the Canadian company Enbridge, is in the midst of a controversial upgrade sparking fierce resistance from Indigenous communities living along the route. Line 3 is being replaced in order to enable the transport of nearly 800,000 barrels of dirty tar sands crude oil per day from Calgary, Canada, to Wisconsin. The majority of the pipeline cuts across northern Minnesota through the heart of lands where the Anishinaabe people have treaty rights to hunt, fish and harvest wild rice and maple syrup.Line 3 joins a growing list of controversial oil pipeline projects targeted by the burgeoning Indigenous-led climate justice movement. In his last year in office, President Barack Obama responded to the powerful and internationally hailed convergence at Standing Rock in South Dakota by halting work on the Dakota Access Pipeline project. Almost a year earlier, he had canceled the Keystone XL pipeline—which was another major target of climate protesters. Entering office in January 2017, President Donald Trump promptly revived both projects and eventually greenlit the Line 3 pipeline. Once Joe Biden entered the White House in early 2021, he canceled the doomed Keystone Pipeline but has yet to take action on reversing Trump’s approval of DAPL or canceling the Line 3 project.Indigenous leaders, embodying the spirit of Standing Rock five years ago, have been resisting the Line 3 replacement project and are now calling on all Americans, including those who are not Indigenous, to join them for what is being called a “Treaty People Gathering” from June 5 through 8 to demand an end to the project. One of them is Nancy Beaulieu, co-founder of the Resilient Indigenous Sisters Engaging(RISE) Coalition, and the northern Minnesota organizer for 350.org. Beaulieu explained to me in an interview that, “as Indigenous people, we have the inherent responsibility to protect the waters and all that is sacred. And as settlers—people who signed those treaties with our ancestors—they have an obligation to uphold those treaties.” In other words,“everyone has a responsibility to the treaties” signed with tribal nations.Non-Indigenous Americans have largely forgotten not only that we have treaty obligations, but also that we live in a nation with a bloody history of settler colonialism. Former Republican Senator Rick Santorum demonstrated that ignorance in his tone-deaf comments on CNN—which later got him fired—when he said, “We birthed a nation from nothing. Yes, there were Native Americans, but there isn’t much Native American culture in American culture.”Leaders like Beaulieu are determined to fight such erasure by reviving the conversations around treaty obligations and how the fight against pipelines and climate change is central to Indigenous stewardship of the natural world. She sees the June gathering as building on the Standing Rock mobilization and the Keystone pipeline activism, saying it is “the same exact thing but with different tribes.”

1,000 Civil Disobedience Arrests Expected if Minnesota Gov. Walz Doesn't Stop Line 3 Tar Sands Pipeline --The coming month will be critical for the controversial Enbridge Line 3 tar sands oil pipeline, currently under construction in Northern Minnesota, AP reports."Due to the urgency of the climate crisis crisis and the fact that Indigenous leaders have not consented to the Line 3 project," organizers from 300 groups warned President Biden in a letter last week, "large-scale non-violent civil disobedience is now being organized for early June along the Line 3 pipeline route."  Organizers are calling on Biden to halt the pipeline, and will convene a "Treaty People Gathering" June 5th through 8th. Construction on the project to dramatically increase the amount of oil the pipeline can carry is scheduled to resume soon and Gov. Tim Walz (D) is waiting for a Minnesota Court of Appeals ruling expected by June 21 — the state Department of Commerce, two tribes, and other opponents argue that the company's demand projections failed to meet the legal requirements. Organizers did not share details of their plans because police are also preparing for their protests but Winona LaDuke, founder of the Indigenous-based environmental group Honor the Earth, told the AP she expects "over 1,000 people are going to get arrested" if Walz fails to halt the project.

They’re Shoving A Pipe Down Our Throat’: Inside Winona LaDuke’s Fight Against Line 3 – — You’ve likely heard about Line 3 by now. It’s a pipeline that would bring tar sands oil through northern Minnesota to Superior, Wisconsin. Part of it would run alongside an existing pipeline corridor but some of the route requires carving out a new path. Construction on the Minnesota portion started in December and is expected to pick back up June 1. But the resistance to the project hasn’t let up.Line 3 construction legal challenges and protests have been ongoing for months and years. We recently traveled to the Bemidji area to meet the women leading the resistance and to see what they say they are fighting to protect.  “Well we are quite ferocious competition,” said Winona LaDuke of Honor the Earth.  You could call her a Harvard-educated economist, an author, farmer, and nonprofit organizer. Or you could call her a former vice presidential candidate and an Anishinaabe.LaDuke is all that. And she’s a water protector who’s been fighting a pipeline route near the White Earth reservation she lives on for eight years.She took us to see the Shell River and Shell Lake, one of her biggest concerns.“This is the Shell River coming out of Shell Lake, and this river is crossed four times by Enbridge,” LaDuke said.The pipeline will cross not only this river but the Mississippi River twice along with more than 200 other bodies of water, according to LaDuke. “It’s a really beautiful lake, it is a lake that is full of wild rice,” LaDuke said. “There’s a lot of life in this river, and they don’t deserve it.”Enbridge, a Canadian based energy company, is behind the project. It moves roughly a quarter of the crude oil produced in North America. It says the rest of the pipeline is already built and the Minnesota portion is half-finished. But LaDuke says a spill would be devastating.

Enbridge's Line 3 oil pipeline enters critical month in June (AP) — June will be a critical month for Enbridge Energy’s Line 3 crude oil pipeline as the company resumes construction and opponents mobilize for large-scale protests and civil disobedience. One prominent opponent, Winona LaDuke, founder of the Indigenous-based environmental group Honor the Earth, said she expects thousands of people from across the state and country to join the protests along the route in northern Minnesota. Both sides are also waiting for a major ruling from the Minnesota Court of Appeals in June on a legal challenge by environmental and tribal groups that are seeking to overturn state regulators’ approval of the project. The opponents also hold out hope that Democratic Gov. Tim Walz and President Joe Biden will intervene. “I expect that unless Walz stops the project over 1,000 people are going to get arrested,” LaDuke said. Line 3 carries Canadian crude from Alberta. It clips a corner of North Dakota on its way across northern Minnesota to Enbridge’s terminal in Superior, Wisconsin. Enbridge says the 1960s-era pipeline is deteriorating and can run at only about half its original capacity. It says the new line, made from stronger steel, will better protect the environment while restoring its capacity and ensuring reliable deliveries to U.S. refineries. The Canadian and Wisconsin replacement segments are already carrying oil. The Minnesota segment is about 60% complete as a planned construction pause for the spring thaw ends June 1. Enbridge plans to finish the work and put the line into service in the fourth quarter, said Mike Fernandez, the Calgary-based company’s chief communications officer. That adds to the urgency for opponents, who are organizing a “Treaty People Gathering” for June 5-8 and preparing for mass arrests. More than 250 “water protectors” already have been arrested since major construction began in December. The opposition says the replacement pipeline, which would carry Canadian tar sands oil and regular crude, would aggravate climate change and risk spills in sensitive areas where Native Americans harvest wild rice, hunt, fish, gather medicinal plants and claim treaty rights.

Sexual violence along pipeline route follows Indigenous women’s warnings  On 15 May, a woman met a pipeline worker at a bar in Minnesota and agreed to go to his house, but when they arrived, there were four other people there and she felt uncomfortable. “She wanted to leave, she tried to leave,” said Amy Johnson, executive director of the Violence Intervention Project (VIP) in Thief River Falls, who spoke to the woman on the phone. “It was very scary with those other men there. She said he had her in the bedroom and she couldn’t leave.” The Canadian company Enbridge is building the Line 3 oil pipeline through Minnesota, a $2.9bn project that replaces a corroded, leaking pipeline and increases its capacity from 390,000 to 760,000 barrels a day. The project has brought an influx of thousands of workers who are staying in hotels, campgrounds and rental housing along the pipeline route, often in small towns like Thief River Falls, and on or near Native reservations. Before Minnesota approved the pipeline, violence prevention advocates warned state officials of the proven link between employees working in extractive industries and increased sexual violence. Now their warnings have come true: two Line 3 contract workers were charged in a sex-trafficking sting, and crisis centers told the Guardian they are responding to reports of harassment and assault by Line 3 workers. Johnson said VIP, a crisis center for survivors of violence, has received more than 40 reports about Line 3 workers harassing and assaulting women and girls who live in north-western Minnesota. An Enbridge spokesperson, Michael Barnes, said it has “zero tolerance for illegal behavior by anyone associated with our company or its projects”, and said anyone caught or arrested would be fired. Barnes said the two workers facing trafficking charges were fired by the contractor. He also said before construction began, the company worked to raise awareness of human trafficking by partnering with contractors, tribes, local officials and Truckers Against Trafficking, which combats human trafficking. After a lull in construction due to muddy spring conditions, workers are now returning to Minnesota. Enbridge’s CEO, Al Monaco, said Line 3 was on schedule to be completed by the end of the year, but Indigenous groups and environmentalists are attempting to stop the project through peaceful protest, divestment campaigns and court action.

Enbridge entering a new phase of construction on Line 3 — and a new phase of protests - The first months of construction on Enbridge Energy’s Line 3 oil pipeline were relatively uneventful. Cold weather and the COVID-19 pandemic limited protests across the 337-mile route in northern Minnesota, and the Canadian company quickly finished about 60 percent of its work on the project after starting in December. After a short spring break on mainline construction required by Minnesota regulators, however, Enbridge is now entering a new phase of construction — and a new phase of protests. As the company restarted construction this week, opponents of the project geared up for a wave of larger demonstrations aimed at slowing or stopping the pipeline. A court decision on a key legal challenge to Line 3 is also expected in June, making the final stretch of construction a pivotal one for the future of Enbridge’s new pipeline. Enbridge broke ground on Line 3 in 2020 after six years of environmental and regulatory reviews on the project. It’s intended to replace an older pipeline that cuts a similar route through the northern part of the state before ending at a terminal in Superior, Wisconsin. The existing 34-inch pipeline was built in the 1960s and is a corroding spill risk that operates at roughly half capacity. The new Line 3 will be a larger 36-inch pipeline capable of carrying 760,000 barrels of crude oil a day. The U.S. portion of the Line 3 project — which includes small new sections in North Dakota and Wisconsin — will cost about $4 billion in total. Supporters say the new Line 3 will be safer than the old pipeline and safer than transporting oil by truck or train. Enbridge also promised thousands of construction jobs and other economic benefits to northern Minnesota. Opponents, including some tribes and environmental groups, say Enbridge shouldn’t build new fossil fuel infrastructure amid climate change. They also argue a new pipeline carries its own spill risks in areas where tribes retain rights to hunt and gather wild rice. The Line 3 route includes 22 river crossings in water-rich central Minnesota, including the headwaters area of the Mississippi River. Minnesota regulators sided with Enbridge, and the company began construction in December. There have been protests and arrests of activists along the pipeline route, but so far, no large-scale demonstrations have taken place. That’s in part because of the COVID-19 pandemic. Some prominent organizers said they didn’t want mass gatherings in rural areas where the health care system was already strained. The frigid winter weather also likely kept some people away from the remote construction project.Various groups opposed to the construction of Line 3 have come together to organize a weeklong event in Mahnomen starting June 5 called the Treaty People Gathering to demonstrate resistance to the pipeline and educate attendees about treaty rights. Organizers expect this will be the largest protest so far, with some 1,200 people confirmed to attend from around the country. A march is planned early Monday morning and various forms of resistance are planned through the week.

Oil demand will reach pre-pandemic levels in mid-2022, analyst says - Travel is picking up in the United States and Europe, but the rebound in global oil demand hinges on Covid-19 response in Asian markets, according to Energy Aspects analyst Amrita Sen. New Covid restrictions are going in place in Southeast Asia, and it could delay a full return in demand for crude until the middle of 2022, she said in an appearance on CNBC's "Closing Bell." "Chinese demand is booming, but as we know India is struggling. A lot of other Asian countries are going back into lockdowns of some form," Sen said Tuesday. While India continues to grapple with a crippling second wave of Covid-19, new daily case counts have surged elsewhere in the region. In the past month, total cases in Thailand, Vietnam, Cambodia and other countries have more than doubled, according to data from Worldometer. In response to rising infections, new restrictions, including business closures, have gone into effect in some countries like Malaysia, Thailand and Vietnam. The latter country was an outlier in mitigating the disease's spread in the early days of the health crisis. "The reality is that Asia is also quite obsessed with zero case count, rather than learning how to live with Covid, which the West is doing, like another flu effectively," Sen said. When it comes to the U.S., work commutes have yet to return to normal, but pent-up demand and discretionary travel, such as over the Memorial Day weekend, are driving gasoline demand, Sen said. But all eyes remain on the Asian markets where some countries face vaccination challenges. Malaysia, for example, has administered at least one dose of a vaccine to about 6% of its residents, according to an Our World in Data tracker. Meanwhile, about 40% of Americans have been fully vaccinated. "Vaccination rates are low there, so we need Asia to get vaccinated," Sen said. "That's when globally demand can get back to 2019 levels."

U.S. oil and gas leasing review to be released in ‘early summer’ -official -President Joe Biden’s administration expects to release results of its review of the federal oil and gas leasing program by early summer, Interior Secretary Deb Haaland said on Friday. Biden announced the review shortly after taking office in what was widely viewed as a first step to fulfilling his campaign promise of banning new federal drilling leases to fight climate change. Lease auctions have been paused in the meantime, upsetting the oil and gas industry and the state governments that host it, who argue the move risks killing jobs and hurting the economy. “The oil and gas review is in process right now,” Haaland said on a call with reporters to discuss the department’s budget request. “Everyone’s been working really hard on it. We expect to have it released in early summer.” Haaland did not say how long the pause on lease auctions could last. Some 25% of U.S. oil and gas production comes from federal lands and waters. The Biden review is intended to weigh the economic benefits of federal drilling against its environmental and climate costs. Haaland’s remarks came as the department detailed large increases in spending proposed by the White House here on measures to address climate change, including wildfire mitigation and preparedness, permitting renewable energy projects on public lands and cleaning up abandoned fossil fuel infrastructure. The proposal for fiscal 2022 represents an increase of $2.5 billion, or 17%, over the enacted Interior budget for this year. It includes nearly $2 billion in new climate-related investments, the department said. The budget must be approved by Congress before taking effect.

Impacted Residents Petition – Continuous Air Quality Monitoring | Open Letter to the Erie Board of Trustees - Board of Trustees,  Attached you will find a petition signed by over 200 of your constituents. It includes testimony from more than 80 impacted residents who desperately need your help. We Implore (sic) you to do the right thing and vote to purchase/implement continuous Air Quality Monitoring for our struggling community. Let this be the first step towards accountability and meaningful legislative change. As residents of Erie, Colorado, we are deeply concerned over the toxic stew of air pollutantsreleased from oil & gas operations into our communities every day. Exposure to volatile organic chemicals (VOCs) such as benzene and ethylbenzene are linked to increased risk for asthma, low birth weight, cancer, cardiac problems, and other respiratory issues1. Residents near oil & gas operations suffer headaches, dizziness, and nose bleeds in addition to the nuisances of noise, odor, and traffic. Current air quality standards set forth by the CDPHE are insufficient to protect our health, safety, and welfare. We need industry-standard, robust, and permanent air quality monitoring in Erie to properly correlate these air quality issues with the symptoms experienced by Erie residents near fracking operations. Given the proliferation of oil & gas operations within and along its borders, the Town of Eriemust be protective of its residents to understand and act on the negative impacts of oil & gas on our air quality. We demand the Town engage with Boulder A.I.R to install long-term permanent air quality monitoring stations in Erie, as well as Ajax Analytics to provide short-term/immediate response air quality monitoring. This blended approach will be a crucial first step along the way to protecting Erie residents from the negative impacts of unconventional oil & gas exploration.

OIL AND GAS: House lawmakers team up for bipartisan orphaned wells bill -- Wednesday, June 2, 2021 -- Two oil-state lawmakers are calling for a national orphaned well program to clean up the bevy of abandoned oil and gas relics on federal lands.

Hydrogen 'hub' planned for North Dakota; project could include synfuels plant sale - Several companies are partnering to try to make North Dakota a hydrogen “hub” that would harness the state’s abundant natural gas resources, and their first project could involve the sale of Basin Electric Power Cooperative’s Great Plains Synfuels Plant near Beulah. The facility began operating in 1984 and produces a number of products, including synthetic natural gas derived from lignite coal. It’s faced financial difficulties in recent years amid low gas prices. Subsidiary Dakota Gasification Co. operates the plant and employs 525 people. Sukut and leaders of Bakken Energy and Mitsubishi Power Americas, along with state officials, spoke about the effort Wednesday at the state Capitol. The deal involving the synfuels plant isn’t done, but company leaders are hopeful it will come to fruition.Bakken Energy, a North Dakota company formerly known as Bakken Midstream, is working with Basin to acquire the plant. It also has plans in the works to build a power plant near Williston that runs on ethane, a component of natural gas.The hub the company envisions would involve hydrogen production, storage, transportation and consumption, with facilities spread out across the state. Mitsubishi also is developing a hub in Utah, along with hydrogen storage facilities in the eastern United States and other hydrogen-related sites elsewhere in the country. The hydrogen market is expected to grow significantly in the decades ahead, and it’s viewed by supporters as a way to curb climate change.Japan, where Mitsubishi is based, and South Korea are considered leaders in hydrogen-powered vehicles. There’s great potential for hydrogen to fuel large trucks and trains, said Steve Lebow, founder and chairman of Bakken Energy. Hydrogen produced in North Dakota could be used in many ways down the road, such as for transportation, he said. Browning added that hydrogen could be important to the future of steelmaking, as well as power generation and electricity storage.Company leaders are not revealing many details about the potential project at the synfuels plant, but their larger vision for a statewide hub would involve redeveloping the facility. Even if a deal doesn't materialize, Bakken Energy still plans to work toward creating a hub, CEO Mike Hopkins said.The companies are planning to produce hydrogen from synthetic gas made at the synfuels plant, as well as from gas produced in the Bakken oil fields.

Feds approve expansion of North Dakota natural gas pipeline(AP) — Federal regulators have approved a natural gas pipeline in western North Dakota, a move state officials believe will help curb the wasteful flaring of excess gas and increase state tax revenues by millions of dollars annually by allowing more oil drilling in the area. Federal Energy Regulatory Commission officials this week approved a certificate of public convenience and necessity for WBI Energy Inc.’s North Bakken Expansion project. The company, a subsidiary of Bismarck-based MDU Resources Group Inc. said the expansion would add 250 million cubic feet of natural gas per day to a pipeline network. The company said the project includes construction of about 62 miles beginning in Tioga of 24-inch natural gas pipeline and 20 miles of 12-inch pipe, a new compressor station and additional infrastructure. The company said the project would cost $260 million and employ up to 450 people during construction. The project, which would traverse four western North Dakota counties, would be completed late this year or early next, North Dakota Pipeline Authority Director Justin Kringstad said. The line would connect to the Northern Border Pipeline south of Watford City, where the gas would be sent to Iowa, Chicago and other markets, Kringstad said. Natural gas, a byproduct of oil production, is far less valuable than crude. Natural gas production grew by 6% in March to 2.879 billion cubic feet per day. The industry captured 94% of the gas it produced and is meeting the 91% target set by state regulators to help alleviate the wasteful flaring of excess gas. The state’s daily oil output in March, the latest figures available, increased 2% to 1.108 million barrels per day. Kringstad said oil drilling in the area north of Lake Sakakawea is hamstrung by the lack of natural gas infrastructure. “If a new gas transmission project was not developed, the region north of the lake would continue to see depressed activity levels since the gas capture infrastructure is not available to meet the flaring guidelines,” Kringstad said. “By bringing this system online, it frees up the ability for more drilling and associated oil and gas production north of Lake Sakakawea,” Kringstad said. “For every day this system is operating at its starting capacity, North Dakota’s oil tax revenue increases by over a $1 million per day.”

PIPELINES: Judge overrides Biden admin on Keystone XL permit -- Wednesday, June 2, 2021 -- \A federal judge last week overrode the objections of the Biden administration and kept alive a lawsuit challenging presidential authority to issue cross-border permits for pipelines.

Why Biden Approved ConocoPhillips' Willow Field In Alaska: It's All About Securing The TAPS -- Fitzsimmons -- SeekingAlpha -- - May 30, 2021  Link here.

• Some investors were highly surprised when President Biden's Justice Department supported the continued development of Conoco's massive Willow field in Alaska.
• I was not. As I wrote earlier on Seeking Alpha, ironically Biden could be great for Conoco Phillips' stock.
• One thing is clear: Biden is an energy pragmatist. He wants to see the Trans-Alaskan Pipeline flowing because it is an issue of national security.
• And the Alaskan Pipeline needs new oil to keep it operating.
• One could also argue that 100,000 bpd from a conventional reservoir like Willow is much more environmentally friendly than the equivalent number of shale wells.

Shell Oil Company, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its interest in Deer Park Refining Limited Partnership, a 50-50 joint venture between Shell Oil Company and P.M.I. Norteamerica, S.A. De C.V. (a subsidiary of Petroleos Mexicanos, or Pemex). The transaction will transfer Shell’s interest in the partnership, and therefore full ownership of the refinery, to Pemex, subject to regulatory approvals.“Shell did not plan to market its interest in the Deer Park refinery; however, following an unsolicited offer from Pemex, we have reached an agreement to transfer our interest in the partnership to them,” said Huibert Vigeveno, Shell’s Downstream Director. “Pemex has been our strong and active partner at the Deer Park Refinery for nearly 30 years, and we will continue to work with them in an integrated way, including through our on-site chemicals facility, which Shell will retain. Above all, we remain committed to the wellbeing of our employees and will work closely with Pemex to ensure the continued prioritization of safe operations. We’re proud of our 90-plus year history as an operator and neighbor at Deer Park and we will continue to play an active role in the community”. The consideration for this transaction is $596 million which is a combination of cash and debt, plus the value of hydrocarbon inventory. This transaction allows Shell to further focus its refining footprint while also maintaining integration optionality and retaining value through its Chemicals and Trading activities. The transaction is expected to close in Q4 2021.

Biden freezes oil leases in Alaska refuge pending new environmental review - The Biden administration is suspending all oil and gas leases in Alaska's Arctic National Wildlife Refuge pending a deeper look at the environmental impacts of drilling in the sensitive region, the Interior Department said Tuesday.The suspension of the leases, which POLITICO first reported earlier in the day, follows President Joe Biden's January 20 executive order that identified “alleged legal deficiencies” in the original leasing program and put in place a temporary moratorium on any oil- and gas-related activities in the refuge. The executive order also left open the possibility that the department would undertake a new environmental review to address potential legal flaws in the program.Interior Secretary Deb Haaland wrote in a secretarial order calling for the suspension that those legal deficiencies, "including the inadequacy of the environmental review required by the National Environmental Policy Act," prompted the temporary moratorium activities around the leases ANWR. The agency will publish its intent to start the review in the Federal Register in the next 60 days.A new environmental analysis could impose additional restrictions on development in the refuge or potentially nullify the leases altogether, undoing one of the signature policy achievements of the Trump administration. But Tuesday's secretarial order does not go as far as green groups have requested in an ongoing lawsuit, which aims to void the leases that were awarded earlier this year.The move comes after the Biden administration disappointed environmental groups last week by lending its support to developing ConocoPhillips' Willow project in the National Petroleum Reserve-Alaska, the area that lies to the west of ANWR. The Arctic Refuge’s coastal plain, a 1.6 million-acre stretch of tundra on Alaska’s North Slope, was opened to oil and gas development as part of the 2017 Tax Cuts and Jobs Act. The language included in the bill was drafted by Sen. Lisa Murkowski (R-Alaska) and gave power and authority over the leasing program to the secretary of the Interior, acting through the Bureau of Land Management. The Fish and Wildlife Service, which manages the refuge, played only a marginal role in the environmental review process.The opening of the coastal plain to drilling marked the culmination of a nearly four-decade-long battle by the oil industry to gain access to the refuge, which is home to federally listed polar bears whose population numbers have declined dramatically in recent decades largely due to diminishing sea ice. The area opened to development also provides critical calving habitat for the Porcupine caribou herd.

Alaska Delegation, Governor Rebuke Biden Administration For Cancelling Lawful ANWR Leases -U.S. Senators Lisa Murkowski and Dan Sullivan, Congressman Don Young, and Governor Mike Dunleavy (all R-Alaska) today criticized the U.S. Department of the Interior for announcing it will suspend all oil and gas leases for portions of the non-wilderness Coastal Plain (1002 Area) of the Arctic National Wildlife Refuge (ANWR), pending the outcome of another environmental review. The leases were issued in January pursuant to the 2017 Tax Cuts and Jobs Act, which authorized responsible energy development in ANWR.ANWR spans 19.3 million acres, an area of land roughly equal in size to South Carolina, in northeast Alaska. In 1980, Congress designated more than eight million acres within ANWR as federal wilderness as part of the Alaska National Interest Lands Conservation Act (ANILCA). That same legislation set aside the 1.57-million acre Coastal Plain for petroleum exploration and potential future development, which is supported by a majority of Alaskans.“The Biden administration’s actions are not unexpected but are outrageous nonetheless,” said Senator Murkowski. “Suspending leases in Alaska’s 1002 Area is in direct conflict with the 2017 Tax Cuts and Jobs Act, through which Congress mandates an oil and gas leasing program be established on the non-wilderness Coastal Plain, and ordered at least two lease sales by 2024. In addition, The Act specifically states that the purpose of the 1002 area of ANWR is oil and gas development.  The oil and gas leasing program established by the Trump Administration meets the legal mandates required by Congress including imposing a framework with a range of environmental safeguards that are successfully guiding production elsewhere in northern Alaska. This action serves no purpose other than to obstruct Alaska’s economy and put our energy security at great risk. Alaskans are committed to developing our resources responsibly and have demonstrated our ability to do so safely to the world.” 

Biden Urged to Go Further After 'Strong Step' Toward Protecting Arctic Refuge From Drilling - Environmental campaigners in Alaska and across the country are cautiously celebrating the Biden administration's Tuesday decision to suspend some fossil fuel drilling leases that were sold in the Arctic shortly before former President Donald Trump left office while also calling on Congress to provide permanent protections to one of the planet'smost biodiverse places."We strongly support the Biden administration's commitment to preserving the Arctic National Wildlife Refuge, one of the last great expanses of untouched wilderness areas in America," said Kristen Miller, acting executive director of Alaska Wilderness League. "The leasing program and resulting lease sale were the result [of] a substantial flawed and legally deficient process that must be reversed.""Suspending these leases is a step in the right direction and we commend the Biden administration for committing to a new program analysis that prioritizes sound science and adequate tribal consultation," Miller continued. "The Arctic refuge Coastal Plain is sacred to the Gwich'in people who were roundly ignored by the Trump administration, as well as the Iñupiat that have lived on the Coastal Plain for generations.""There is still more to be done," she added. "Until the leases are canceled, they will remain a threat to one of the wildest places left in America. Now we look to the administration and Congress to prioritize legislatively repealing the oil leasing mandate and restore protections to the Arctic refuge Coastal Plain."Bernadette Demientieff, executive director of the Gwich'in Steering Committee, echoed that call for additional action."After fighting so hard to protect these lands and the Porcupine caribou herd, trusting the guidance of our ancestors and elders, and the allyship of people around the world, we can now look for further action by the administration and to Congress to repeal the leasing program," she said. "There is so much more to do to protect these lands for future generations."

Biden Suspends Oil Leases in Arctic National Wildlife Refuge While Supporting Drilling Elsewhere in Alaska - The Department of the Interior on Tuesday suspended oil and gas leases in Alaska's Arctic National Wildlife Refuge until a comprehensive analysis can determine the environmental impact of drilling in the area.A review "identified defects in the underlying record of decision supporting the leases, including the lack of analysis of a reasonable range of alternatives'' required under the National Environmental Policy Act (NEPA), ABC News reported.  The suspension includes 10-year leases that the Bureau of Land Management (BLM) issued on Jan. 6, 2021, which span more than 430,000 acres of the refuge, a press release stated. The lease suspension follows President Joe Biden's executive order, instated on his first day in office, which placed a temporary moratorium on oil and gas lease activities, NBC News reported. Spanning nearly 20-million-acres, Alaska's Arctic National Wildlife Refuge houses polar bears, caribou, snowy owls and migrating birds from six continents, and is sacred land for the Indigenous Gwich'in people, NBC News wrote. However, some argue that suspending the leases doesn't go far enough to protect the wilderness."There is still more to be done. Until the leases are canceled, they will remain a threat to one of the wildest places left in America," Kristen Miller, conservation director of the Alaska Wilderness League said in a statement. The decision to suspend leases in the refuge also came just one week after the Biden administration defended another Trump-era oil and gas project. The Willow Project in the North Slope of Alaska is slated to produce more than 100,000 barrels of oil a day for the next 30 years, The New York Times reported. The ConocoPhillips drilling endeavor would be located in the National Petroleum Reserve–Alaska, an area earmarked by the federal government for oil extraction, according to a press release by the Office of Alaska Governor Mike Dunleavy. Gov. Dunleavy argues that communities in the area rely on oil and gas projects, while environmental groups sued the federal government, arguing that the environmental impacts of the project had not been taken into account, The New York Times wrote.

How Third-Party Auditors Make Oil Industry Fraud Possible -- Major accounting firm KPMG is under fire from investors who filed a class action lawsuit against the firm for overstating the asset values of now-defunct oil exploration company Miller Energy Resources. And last month, a judge dismissed KPMG’s attempt to have the case thrown out.At issue in the lawsuit, filed in 2016, is a $4.55 million purchase by Miller Energy in 2009 for land and offshore oil assets in Alaska which included existing oil production infrastructure. Miller Energy then claimed those same assets were worth approximately half a billion dollars, a claim which would require approval by third-party auditors.But according to the Securities and Exchange Commission (SEC), the property and old oil infrastructure in Alaska was worth only a fraction of those claims; inflating its value beyond its worth amounted to fraud, according to the SEC. The SEC stated that “Miller Energy overvalued the Alaska assets by more than $400 million.” But the oil company wasn’t the only one at fault, said the SEC. In January 2016, the SEC sent a cease and desist order for Miller Energy detailing the major fraud case and focusing in part on the role that third-party auditors such as KPMG played in making it possible.The onshore and offshore Alaskan oil assets purchased by Miller Energy had been abandoned by the previous owner because the asset retirement obligations (AROs) — the amount of money required to properly decommission the existing assets — were likely greater than the value of the remaining oil in the ground. The property was essentially worthless once the cost of the AROs was considered. But Miller Energy then told the SEC in 2010 that property was worth half a billion dollars and KPMG signed off on that estimate for several years, starting in 2011.In an August 2017 cease and desist order for KPMG, the SEC summarized the extent of KPMG’s failure to perform a valid audit of Miller Energy:“[T]he KPMG engagement team performed an inadequate assessment of the risks associated with the Miller Energy engagement. Among other things, KPMG’s initial evaluation, which was completed by Riordan and approved by KPMG management, failed to adequately consider Miller Energy’s bargain purchase, its recent history as a penny-stock company, its lack of experienced executives and qualified accounting staff, its existing material weaknesses in internal control over financial reporting, its long history of reported financial losses, and its pressing need to obtain financing to operate the newly acquired Alaska Assets.”The Miller Energy executive who signed off on the overvaluation ultimately paid an SEC fine of $125,000, while KPMG was fined $1 million. Oil reserves fraud — in which companies overestimate the amount of oil that can be produced from their assets — has been recognized as a growing problem in the oil and gas industry, as DeSmog has previously reported. But in order for companies to succeed in convincing investors of their incredible claims, it is critical to have independent third-party auditors — like KPMG — to support these claims.

Installed Keystone XL pipe will remain underground, for now -Hundreds of workers are back in southeast Alberta to work on the Keystone XL pipeline project, although instead of construction activity, crews will spend the summer fixing up the land. TC Energy suspended the project in January after U.S. President Joe Biden pulled the presidential permit for the proposed pipeline, which would have transported oil from Alberta to the American Midwest. About 150 km of pipe was installed in Alberta and — for now — TC Energy plans to leave it underground. In a regulatory filing last week, the company said it will work to preserve the pipe and two constructed pumping stations to maintain their integrity. "Our first priority is to make sure we wind down construction activities safely and with care for the environment and that is what we continue to focus on," TC Energy said in an email to CBC News. "A longer-term plan is being developed to deal with the assets that have already been constructed and we continue to evaluate our options."

Oil Group to Press Canada to Postpone Emissions Rules Oil-sands producers will ask the Canadian government to delay new greenhouse-gas rules to give scientists time to figure out how to halt their emissions. ``We'll be talking to the government about their timeline for this,'' Pierre Alvarez, president of the Canadian Association of Petroleum Producers, said yesterday in a telephone interview. ``This is going to take a bunch of work.'' Oil-mining operations in western Canada's tar-soaked swamps and valleys that begin operations after 2012 will have to store carbon emissions rather than releasing them into the atmosphere, Canadian Environment Minister John Baird said yesterday. Exxon Mobil Corp., BP Plc and ConocoPhillips are among the members of Alvarez's trade group. Canada's oil sands hold about 177 billion barrels of oil that can be recovered using current technology, equivalent to all the reserves of Iran and Libya combined. Oil prices more than tripled in the past five years as worldwide demand, led by China and India, expanded faster than supplies. Before the new carbon rules were announced, oil and gas companies had already decided to cut spending in Canada by 3.1 percent this year to $27.7 billion, according to a team of Citigroup Global Markets Inc. analysts led by Geoff Kieburtz. That compares with estimated increases of 6.5 percent for the U.S. and 12 percent outside North America. Alvarez declined to say whether the carbon rules will discourage investment in new oil-sands projects. Baird, the environment minister, said the regulations will be completed next year. Carbon dioxide, or CO2, is a so-called greenhouse gas linked to climate change. U.S. oil futures rose above $100 a barrel for the first time in January, making high-cost developments like oil sands more attractive, and touched an all-time high today at $109.72. ``If oil stays anywhere near its present levels, the CO2 costs probably would not make it uneconomic,'' said Gene Pisasale, who helps oversee about $25 billion in investments, including about 1.8 million ConocoPhillips shares, at PNC Wealth Management in Baltimore. Companies including Royal Dutch Shell Plc, Saudi Aramco and Marathon Oil Corp. have $15 billion in refinery expansions planned from Michigan to Texas to process more crude from Canada's oil sands. Canadian supplies are needed to replace dwindling output from Texas, Oklahoma, Louisiana and Mexico, John Hofmeister, Shell's U.S. chairman, said in September.

Abandoned oil and gas wells will be cleaned up despite backlog: Alberta regulator - – There’s lots of life in Alberta’s conventional oil industry and plenty of resources and political will to clean up the mess it leaves behind, says the head of the province’s energy regulator. “Will there be halcyon-days growth in the sector? Probably not,” said Alberta Energy Regulator president Laurie Pushor. “We still see an industry that is healthy and anticipating relatively stable production.” Pushor spoke to The Canadian Press after his first year on the job, a year that saw 20 per cent layoffs at his agency at a time when the government is asking it to do more. There are also growing worries over the industry’s environmental liabilities and concern about the growth of coal mining in the Rocky Mountains. “This organization has had a profound amount of change,” he said Thursday. Pushor acknowledged problems with how Alberta ensured industry has cleaned up after itself. A recent report from the University of Calgary found more than half the province’s wells no longer produce, but remain unreclaimed. The regulator’s own predictions suggest such wells will double between 2019 and 2030. The regulator wasn’t making sure companies that bought old wells had the wherewithal to operate and close them safely, Pushor said. Companies would pass the regulator’s tests, then collapse anyway. “We were seeing failures of companies that had positive ratings.”

Rusty container causes oil spill in Austrian Lake -- Oil Has Spilled Into A Lake In Austria During Cleaning Works, Police In Salzburg Said On Sunday. According to the statement, a steel container began leaking as it was being removed from the Lake Wolfgang near Salzburg and caused the spill. Divers had been removing old containers and tyres from the lake. They already recovered about 20 rusty barrels filled with water, when one of them unexpectedly leaked oil, DPA reported. The fire brigade immediately placed containment barriers around the patch of oil and sprayed it with a binding agent to keep it from spreading. A specialist company was hired to siphon off the oil in an area of about 30 square kilometres, according to the statement. There was no immediate indication of environmental damage.

Govt worried of oil spill in Lake Victoria  - There is a looming danger of an explosion and eventual spill of more than 30,000 litres of diesel in Lake Victoria by fuel tankers that sank alongside MV Kaawa Ferry more than 16 years ago. The warning was sounded by Dr Tom Okurut, the executive director of the National Environment Management Authority (Nema), during the inauguration of the new Nema board in Kampala yesterday. “MV Kabalega sank in Lake Victoria when it was coming from Mwanza and the oil is still in the tankers. There have been attempts to lift up the boat but they have failed and the tanks are expanding and can explode any time, causing an oil spill,” Dr Okurut said . “We are trying to use some technology to suck out the oil without spilling it into the lake and see if this can be successful,” he added. When asked what the impact of the oil spill could be on aquatic life, he said oil is lighter than water and when it spills, it will float, cutting off oxygen supply, thereby killing marine life. MV Kabalega, a train wagon ferry operated by the Uganda Railways Corporation (URC), sank in May 2005, about 150 feet between Kuye Islands and Mazinga Sub-county and Bukasa in Kyamuswa Sub-county in what is known to be the Ssese chain of islands, following a collision with another URC owned ferry, popularly known as MV Kaawa. At the time of the collision, MV Kabalega, which was loaded with about 6,800 tonnes of wheat and oil, was headed to Port Bell in Uganda while MV Kaawa was headed out to Tanzania’s Lake Victoria port of Mwanza. MV Kaawa struck Kabalega’s bow sending the railway wagons on its deck into the water. The ferry’s tank was also ruptured, allowing water to make a rapid entry that eventually sank it.

Pakistan, Russia sign agreement to develop Pakistan Stream Gas Pipeline - Pakistan and Russia have signed an inter-government agreement to develop Pakistan Stream Gas Pipeline for gas transportation from Karachi to Kasur. According to the Pakistan Embassy in Russia, a protocol on amendments to the Agreement on North-South Gas Pipeline Project was signed by Pakistan’s Ambassador in Moscow Shafqat Ali Khan and Russian Minister for Energy Nikolay Shulginov in Moscow. The agreement signed after successful negotiations between Pakistan’s Ministry of Energy and Russian Ministry of Energy. As per the protocol, the project has been renamed as “Pakistan Stream Gas Pipeline”. Pakistan Stream Gas Pipeline (SPV) would be set up within 60 days of the agreement signing. The pipeline project is a flagship strategic venture between Pakistan and Russia that would strengthen bilateral cooperation.

Cyclone Tauktae: Oil leak spotted around aground barge off Palghar coast in Maharashtra  -In the aftereffects of cyclone Tauktae, oil leak was spotted on Saturday around the barge "Gal Constructor'' which had run aground during cyclone Tauktae off the Palghar coast in Maharashtra.The Indian Coast Guard said a "silvery oil sheen" of 50 metres in width was spotted and all precautions are being taken.The spill had not reached the shore, the officials said.As many as 137 people had been rescued from the barge after the cyclone hit it on May 17.Palghar district disaster control chief Vivekanand Kadam told PTI that the leak was spotted close to Vadrai coast in Palghar, near Mumbai."Officials from the Maharashtra Maritime Board as well as Coast Guard personnel are on the spot, trying to plug the leak as and when the tide allows," Kadam said.The Coast Guard said in a statement that Gal Constructor was carrying approximately 78 kilo litres of High Flash High Speed Diesel (HFHSD) but had no crude oil on board, and no breach of the oil tank was reported.The barge had been deployed by contractor firm Afcons on behalf of state-run ONGC to service its oil and gas fields near the Mumbai coast. The company arranged Seacare which has laid a boom of 400 metres around the barge while two fuel barges have been hired for the removal of oil, the Coast Guard said."No oil spill has been reported on shore as of now," the release added.The situation was being closely monitored and the district administration is on alert in case oil reaches the shore and clean-up is required, it said.

Mumbai: 85 floating tanks to remove 79,000 litres of barges oil -  A salvage team has started work on sponging out 79,000 litres of lube oil from the barge Gal Constructor which broke anchor, drifted and ran aground off Palghar during cyclone Tauktae about a fortnight ago. Oil removal started after 1,000 litres leaked into the sea, which was contained using booms within a radius of 400 metres around the barge. The oil was stored in the barge as lubricant for machinery. Diesel too was stored on the vessel for operations like generating electricity.The barge is about 2 km from Palghar’s Wadrai Coast, where the depth of sea is up to three metres at places. Fifteen tanks of capacity 1,000 litres each have been sent to the location for oil removal, and 70 more will reach within three days, said a shipping industry source. The tanks are being hauled by small mechanised boats. No oil spill has been reported onshore yet. “Neither has a breach of the oil tanks aboard the barge been reported. Work is on to recover the spilt oil, which has been contained around the grounded barge with the help of booms,” a source from the Directorate General of Shipping told TOI.The oil captured within the boom radius is being removed by absorbent pads. The barge’s operator had hired it from Tirupati Vessels and has engaged Smit Salvage and the firm Seacare for removal of oil from the barge. “POL (petrol, oil, and lubricant) onboard is 79 KL, which will be pumped into plastic tanks of 1,000 litres. A total of 85 tanks will be used to transport the barge’s POL,” said an official.

ICG ships continue its efforts to control the fire onboard MV X-Press Pearl off Colombo (UNI) Indian Coast Guard (ICG) on Sunday said that its ships have been is working tirelessly to extinguish the massive fire onboard container vessel MV X-Press Pearl off Colombo in Sri Lankan water. The ICG and Sri Lankan Navy jointly have taken up this challenging round-the-clock fire-fighting operation named as Operation Sagar Aaraksha 2 since May 25. “At present, three ICG ships and four tugs deployed by Sri Lanka are involved in the operation and continuously fighting the fire by spraying foams and sea water using external fire-fighting systems. The non-stop joint firefighting efforts have yielded positive results with increasing signs of fire being under control. Smoke density has also reduced. The fire has been localised to a small area near the aft section of the vessel”, the officials in the ICG said. They also said that two ships ‘Vaibhav’ and ‘Vajra’, in addition to their fire-fighting capabilities, are also equipped with adequate Pollution Response (PR) capabilities for oil spill. The presence of a specialised PR vessel ICGS Samudra Prahari since May 29, has provided added strength to overall fire fighting capabilities while ICG Dornier aircraft sorties are being undertaken daily from Madurai for aerial assessment of the situation. Reports from the ships and aircraft indicate that there has been no oil spill.Further, with the careful and measured execution of firefighting operation, no change has been observed in trim and draught of the vessel indicating that the stability and watertight integrity of the vessel is intact, the ICG officials added.

Officials fear disaster as ship full of chemicals, oil sinks off Sri. Lanka.. -- A fire-stricken container ship off the coast of Sri Lanka that started to sink Wednesday is becoming a source of concern for a potential environmental disaster, according to local officials.The ship, called the MV X-Press Pearl, could create an oil spill emergency as it was filled with chemicals including nitric acid and carrying nearly 350 metric tons of oil, CNN reported.Operators of the ship, X-Press Feeders, told NBC News that efforts to remove the ship from shallow waters failed Tuesday, raising fears of an ecological disaster.“The ship's aft portion is now touching bottom at a depth of 21 meters (70 feet)," the company wrote in a statement, adding that the forward area is still afloat but spewing smoke.Sri Lankan government officials shared later on Tuesday that the ship was successfully moved to deeper waters, but expressed concern that oil could begin to leak from the ship."Emergency measures are [being] taken to protect the lagoon and surrounding areas to contain the damage form any debris or in case of an oil leak," Sri Lanka's State Minister of Fisheries, Kanchana Wijesekera, wrote in a tweet detailing the situation.X-Press Feeders on Tuesday said that an inspection team boarded the ship after mitigating the fire and discovered that the ship's engine room was flooded."There are now concerns over the amount of water in the hull and its effect on the ship's stability," X-Press Feeders said.  The X-Press Pearl was en route from India to Malaysia when, on May 20, a fire broke out on board. It was carrying 1,486 containers, with 81 containers holding "dangerous goods," including 25 metric tons of nitric acid at the time, according to CNN. A criminal investigation headed by Sri Lankan authorities was launched into how the fire began on the ship. The mysterious explosion and sinking of the support ship comes after Iran, in April, accused Israeli forces of attacking an Iranian military ship that had been linked to alleged spying activities by the Iranian government.  A U.S. official at the time said that Israel had notified the U.S. that they had attacked the vessel as a retaliatory measure following earlier strikes on Israeli vessels by Iranian forces.  Israel and Iran since 2019 have engaged in back-and-forth attacks on ships traveling through the eastern Mediterranean and Red seas.

Plastic Pellet Spill From Burning Ship Causes ‘Worst Beach Pollution’ in Sri Lanka’s History  --A chemical-laden ship sank off the coast of Sri Lanka Wednesday, after burning for nearly two weeks.The accident has already led to one of the worst marine disasters in the country's history, as tons of plasticpellets from the burning ship have already contaminated its fishing waters and washed up on its shores,Reuters reported."This is probably the worst beach pollution in our history," Sri Lanka's Marine Protection Authority (MEPA) chairman Dharshani Lahandapura told AFP.  The ship, a Singapore-registered container vessel named MV X-Press Pearl, caught fire May 20 after an explosion while it was anchored off of Sri Lanka's western coast, according to Reuters. It was carrying 1,486 containers, including 25 metric tons (approximately 28 U.S. tons) of nitric acid and other chemicals. Some of these chemical-filled containers fell overboard in the fire. However, it is believed that most of the cargo was destroyed in the flames, according to AFP. Up until now, the biggest devastation from the incident has been the plastic pellet pollution. The government moved Wednesday to suspend fishing along 50 miles of Sri Lanka's coastline, grounding 5,600 boats, according to Reuters. "I have never seen anything like this before," Dinesh Wijayasinghe, a 47-year-old who works in a hotel in the coastal town of Negombo, told The New York Times. "When I first saw this, about three to four days ago, the beach was covered with these pellets. They looked like fish eyes." This pollution is devastating both for the region's marine life and for the people who depend on it for their livelihoods. Microplastics and other charred remains from the ship have been found as far down as two feet deep in the sand, according to AFP. There are fears the pollution will harm mangroves and coral reefs and make it harder for fish to breed in shallow waters."No one is able to say how long we will have the adverse effects of this pollution," 30-year-old fisherman Fisherman Lakshan Fernando told AFP. "It could take a few years or a few decades, but in the meantime what about our livelihoods?"At the same time, the plastic pollution could have a lasting impact on human health. "The pellets can soak and absorb the chemicals from the environment," marine biologist Dr. Asha de Vos told The New York Times. "This is an issue because when we eat whole fish, we will also be eating these chemicals." There are now concerns an oil spill could make the environmental disaster even worse, CNN reported. The vessel has 350 metric tons (approximately 386 U.S. tons) of oil in its tank. This could reach a 30-kilometer (approximately 19 mile) stretch of coastline, including pristine beaches.

Oil spill fear deepens as ship on fire starts to sink off Sri Lanka - (EFE).- A cargo ship with chemicals on board that has been on fire for the last nearly two weeks off the Sri Lankan coast began to sink Wednesday, officials said, sparking fears over a catastrophic oil spill and extensive marine pollution. The Sri Lankan Navy told the media that the X-Press Pearl vessel, carrying 1,500 containers of nitric acid and other chemicals, was sinking near the western coast. Minister of State for Fisheries Kanchana Wijesekera wrote on Twitter that the “sinking vessel is been towed away to deep waters by the salvage company with the support of the navy and other stakeholders involved.” The minister said the fisheries department had suspended vessels entering from the Negombo Lagoon and fishing from Panadura to Negombo with an immediate effect after the ship started sinking. “Emergency preventing measures are taken to protect the lagoon and surrounding areas to contain the damage form any debris or in case of an oil leak. Vessels fishing in around the area and high seas are also informed of possible debris and to be vigilant.” The Singapore-registered container was heading from India to the Colombo harbor when it caught fire off Sri Lankan waters last nearly two weeks ago. The authorities have since tried to extinguish the flames. But strong winds associated with the monsoon have complicated the operation. The burning ship has caused the plastic waste spillage off the west coast. Sri Lanka Navy launched a mass-scale beach cleanup after plastic pallets from the ship washed ashore. It is the second ship that caught fire off Sri Lankan water in a span of few months. In September, a large crude oil carrier MT New Diamond caught fire and suffered an engine room explosion that left one of its crew dead. The Sri Lankan and Indian firefighting missions battled for over a week to control the fire.

International experts deployed for Sri Lanka oil spill - Foreign experts have been deployed to help Sri Lanka contain a potential oil leak from a burnt-out container ship partially sunk off Colombo, the ship's operator said Friday. Representatives from the International Tankers Owners Pollution Federation (ITOPF) and Oil Spill Response (OSR) were onshore monitoring the MV X-Press Pearl, X-Press Feeders said. "They continue to coordinate with MEPA (Marine Environment Protection Authority) and the Sri Lankan navy on an established plan to deal with any possible spill of oil and other pollutants," the company said. Its chief executive, Shmuel Yoskovitz, apologized to Sri Lanka for the disaster, which saw the ship burn for 13 days and inundated the island's beaches with huge amounts of plastic pellets. With the ship's stern now on the sea bed and the bow slowly sinking, environmentalists fear an oil leak could cause even greater degradation to marine life. Choppy seas and poor visibility prevented navy divers from checking the hull for a second day Friday, Sri Lanka navy spokesperson Indika de Silva told AFP. He said a team reached the sinking vessel and made a cursory inspection on Thursday, but could not carry out their mission because of poor visibility. Meanwhile, the MEPA has placed oil dispersants and skimmers should the vessel leak its 350 tons of fuel oil on board. An Indian coastguard vessel in the area has equipment to deal with any oil slick, according to the Sri Lankan navy, which has requested assistance with the operation. Sri Lanka's Harbour Master Nirmal Silva said Thursday that no oil had leaked so far. "Looking at the way the ship burnt, expert opinion is that bunker oil may have burnt out, but we are preparing for the worst-case scenario," Silva said.

OMV confirms hydraulic oil spill off Taranaki coast - An oil spill off the Taranaki coast has been reported to authorities, Austrian-owned oil and gas company OMV says.On Monday, an OMV New Zealand spokeswoman confirmed hydraulic fluid, also known as hydraulic oil, had been spilled during a site survey last week.”Approximately 90 kilometres off the coast of Taranaki, hydraulic fluid was lost to the ocean during operations conducted from the vessel MMA Vision,” she said. “OMV takes its commitments to the environment seriously and, as abundance of caution, OMV asked the vessel operator to return to port for investigation and repair.”  A helicopter which flew out to examine the scene on Friday morning found no signs of the spill, she said.OMV’s Maui B platform. The Austrian-owned oil and gas company has confirmed hydraulic oil was spilled during a site survey off the Taranaki coast last week. (File photo)OMV has operated in New Zealand since 1999 when it acquired shares in the Maari oil field, 80km off the South Taranaki coast.It now also owns the Maui gas field and has a 74 per cent share in the Pohokura gas field.

OPEC oil output rise in May limited by Nigeria, Iran losses --OPEC oil output has risen in May as the group agreed to ease supply curbs under a pact with allies, a Reuters survey showed, although a drop in Iranian exports and involuntary reductions in African members limited the increase. The 13-member Organization of the Petroleum Exporting Countries has pumped 25.52 million barrels per day (bpd) in May, the survey found, up 280,000 bpd from April. Output has risen every month since June 2020 with the exception of February. Hoping for a global demand recovery, OPEC and allies, known as OPEC+, decided from May 1 to ease more of the record supply cuts made in 2020. OPEC+ meets on Tuesday and delegates expect producers to stick to the existing plan. The OPEC+ agreement allows for a 277,000 bpd increase in OPEC output in May versus April, plus Saudi Arabia had pledged to add 250,000 bpd as part of a plan to gradually unwind a 1 million bpd voluntary cut had made in February, March and April. But with reductions in other countries offsetting the Saudi move, the increase in May OPEC output found by the survey is less than expected, and the group is still pumping much less than called for under the deal. OPEC compliance with pledged cuts was 122% in May, the survey found, versus 123% in April. The biggest increase in May of 340,000 bpd came from Saudi Arabia as it began to unwind the voluntary cut and raised output as part of the May 1 OPEC+ boost. OPEC’s No. 2 producer Iraq also pumped more in May, the survey found, adding an extra 70,000 bpd and pushing output beyond its quota. Libya, one of the OPEC members exempt from making voluntary cuts, boosted output in May after a force majeure on oil loadings from the port of Hariga was lifted. These increases were limited by involuntary reductions elsewhere in the group. The biggest drop was in Nigeria, where exports slowed from a number of terminals. Angolan supply, in long-term decline, also declined. Iran, which has managed to raise exports since the fourth quarter despite U.S. sanctions, exported less in May due to lower demand in China.

US sells off Iranian crude oil seized off coast of UAE - The U.S. has sold some 2 million barrels of Iranian crude oil after seizing an oil tanker off the coast of the United Arab Emirates, court documents and government statistics show. The Iranian crude oil showed up in new figures released over the weekend by the U.S. Energy Information Agency, raising the eyebrows of commodities traders as Tehran remains targeted by a series of American sanctions. The EIA figures included just over 1 million barrels of Iranian ``crude oil imports`` in March ..The oil came from the MT Achilleas, a ship seized in February by the U.S. off the coast of the Emirati port city of Fujairah. U.S court documents allege the Achilleas was subject to forfeiture under American anti-terrorism statues as Iran's paramilitary Revolutionary Guard tried to use it to sell crude oil to China. The U.S. has identified the Guard as a terrorist organization since the administration of former President Donald Trump.Prosecutors say shippers tried to disguise the shipment by labeling it as ``Basra light crude'' from neighboring Iraq. The U.S. government brought the Achilleas to Houston, Texas, where it sold the just over 2 million barrels of crude oil within it for $110 million, or at around $55 a barrel, court documents show. The money will be held in escrow amid a court case over it. When asked Monday about the case, Iranian Foreign Ministry spokesman Saeed Khatibzadeh said he had ``no details'' about it. ``Since the time of the former U.S. president, Mr. Bill Clinton, no oil has been purchased from Iran because of their laws,'' Khatibzadeh said.

Russia to consider ditching dollar-denominated oil contracts if faced with more U.S. sanctions Russian Deputy Prime Minister Alexander Novak on Thursday said the oil and gas-rich country may soon be tempted to move away from U.S. dollar-denominated crude contracts if President Joe Biden's administration continues to impose targeted economic sanctions. "Well, ideally we would prefer not to move away from the dollar as it is an international currency used for settlements," Novak told CNBC's Hadley Gamble at the St. Petersburg International Economic Forum, according to a translation. "But if our American partners create this type of situation we shall have no other choice but gradually do that," he added. His comments come shortly after Russia announced it would completely remove U.S. dollar assets from its National Wealth Fund. Russian Finance Minister Anton Siluanov said at the same event Thursday that the changes could be expected within a month, according to Reuters. Russia's NWF accumulates oil revenue and was initially dedicated to supporting the country's pensions system. The move comes ahead of a summit between Russian President Vladimir Putin and U.S. President Joe Biden later this month. "We shall continue to be the world leader in the fossil fuels market and we shall diversify by going into the LNG and petrochemicals (markets)," Novak said, referring to the acronym for liquefied natural gas. "Plus develop new energy production, clean energy," he continued, citing hydrogen, carbon storage technologies and the development of new fuels, among other projects. Russia's economy has been operating under international sanctions since 2014 after its annexation of Crimea. Its role in a pro-Russian uprising in east Ukraine, 2016 U.S. election interference, a nerve agent poisoning in the U.K. and its role in the SolarWinds cyberattack, among other incidents, have also all prompted further sanctions. For its part, Russia denies any involvement or wrongdoing. International benchmark Brent crude futures traded at $71.56 a barrel on Thursday afternoon in London, up around 0.3%, while U.S. West Texas Intermediate futures stood at $68.99, roughly 0.2% higher. Oil prices have climbed more than 30% since the start of the year. In Oct. 2019, Russia's largest oil company Rosneft set the euro as the default currency for all new exports of crude oil in an attempt to shield it from the impact of U.S. sanctions.

It could be a hot summer ahead for oil prices --Oil prices could temporarily spike to $80 per barrel or more this summer as demand comes roaring back. The reopening economy has already sent crude up about 40% since the start of the year, but a surge in driving by Americans, as well as an increase in goods transportation and air travel, could pressure prices further. For consumers, that means the typical early summer peak in gasoline prices could come later in the season. Unleaded gasoline was $3.04 per gallon on average Wednesday, about a penny higher than last week but more than 50% higher than a year ago, according to AAA. Brent futures, the international crude benchmark, settled up 1.6% at $71.48 per barrel Wednesday, the highest since Jan. 8, 2020. West Texas Intermediate futures for July were 1.6% higher at $68.83 per barrel, after hitting a high of $69.65, the highest since Oct. 23, 2018. "Demand is ramping up very quickly because everybody's driving, and we have the reopening of Europe, which is really starting to happen," said Francisco Blanch, global commodities and derivatives strategist at Bank of America. "India seems to have hit an inflection point, in terms of cases, which in my mind could mean you also get a return of mobility." Energy analysts agree the world is in for a period of higher prices, but they do not agree how high or for how long. Blanch said Brent has already hit his $70 target for the quarter, but he has a much more bullish longer-term view than others. "We think in the next three years we could see $100 barrels again, and we stand by that. That would be a 2022, 2023 story," Blanch said. "Part of it is the fact we have OPEC kind of holding all the cards, and the market is not particularly price responsive on the supply side and there is a lot of pent-up demand ... We also have a lot of inflation everywhere. Oil has been lagging the rise in prices across the economy." Members of OPEC and their allies, a group known as OPEC+, are gradually returning oil to the market. They agreed to implement their previously planned production increase of 350,000 barrels a day in June and another 450,000 barrels a day starting in July. Saudi Arabia also agreed to step back from its own cuts of about a million barrels a day, which was put in place earlier in the year. OPEC+ had agreed in April to increase output by more than 2 million barrels a day by the end of July. The U.S. industry is producing about 11 million barrels a day, down from about 13 million before the pandemic. But analysts say it's not clear how fast or whether U.S. companies will restore that production. "The sensitivity of producers to price changes has declined because of capital discipline," said Blanch. He said there is pressure on companies to be cautious in how they use capital after the collapse in prices last year. "Right now we're in a position where prices are rising, companies are reluctant to invest," Blanch said. "They are paying down debt and increasing dividends."

Oil up, near $70 a barrel as demand outlook improves (Reuters) -Oil prices firmed on Monday, with Brent trading near $70 a barrel on growing optimism that fuel demand will grow in the next quarter, while investors looked ahead to see how producers will respond at this week's OPEC+ meeting.Trading was thin as U.S. and UK markets were closed on Monday due to public holidays. Brent crude futures settled up 60 cents, or 0.9%, at $69.32 a barrel, off the a session high of $69.82. U.S. West Texas Intermediate crude rose 0.9% and last traded at $66.91 a barrel. Both contracts were set for a second monthly gain.Analysts expect oil demand growth to outstrip supply despite the possible return of Iranian crude and condensate exports. "Despite the mobility restrictions that are still in place, oil demand is recovering dynamically around the world," Commerzbank (DE:CBKG) said.Iran has been in talks with world powers since April, working on steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with the 2015 nuclear pact.The Organization of the Petroleum Exporting Countries and allies including Russia will meet on Tuesday.The group known as OPEC+ is expected to stay the course on plans to gradually ease supply cuts until July."Trading excitement often drives the market just before OPEC+ meetings, and there is confidence that the oil producer group will demonstrate supply restraint at its meeting on Tuesday," Louise Dickson, oil markets analyst at Rystad Energy said in a note to clients. A Joint Technical Committee (JTC) for the alliance kept its global oil demand growth forecast for 2021 unchanged at about 6 million barrels per day, two sources from the group told Reuters on Monday.

Oil jumps to two-year high as OPEC and allies reconfirm gradual production increase— A group of some of the world's most powerful oil producers agreed on Tuesday to continue gradually easing production cuts amid a rebound in oil prices. OPEC and its oil-producing allies, known as OPEC+, will boost output in July, in accordance with the group's April decision to return 2.1 million barrels per day to the market between May and July. Production policy beyond July was not decided on, and the group will meet again on July 1. International benchmark Brent crude futures traded at $71.17 a barrel on Tuesday, up around 2.7%, while West Texas Intermediate crude futures stood at $68.65, for a gain of more than 3% and the contract's highest level in more than two years. Oil prices have climbed more than 30% this year. The Middle East-dominated group, which is responsible for over one-third of global oil production, is seeking to balance an expected upswing in demand with the potential for an increase in Iranian output. The alliance announced massive crude production cuts in 2020 in an effort to support prices when the coronavirus pandemic coincided with a historic demand shock. Ahead of the meeting, analysts expected the group to keep output steady. "I think the event itself is going to be a nonevent. We expect them to basically reconfirm the plan that they laid out on April 1," Jeffrey Currie, global head of commodities research at Goldman Sachs, told CNBC's "Street Signs Europe" on Tuesday. "I think the bigger issue underlying this is: How are they going to deal with Iran?" Iran is in discussions with six world powers to revive its 2015 nuclear deal. The restoration of a deal could lead to more oil on the global market in coming months. "It's too early to give specific numbers around Iran," Currie said. "So I think the best you can hope for in terms of how they are going to deal with Iran is the indication that they are willing to offset any increases in Iran. That could be the positive upside surprise coming out of this meeting." OPEC Secretary General Mohammad Barkindo said Monday that he did not believe higher Iranian supply would be a cause for concern. "We anticipate that the expected return of Iranian production and exports to the global market will occur in an orderly and transparent fashion," Barkindo said in a statement. "I think everybody is expecting Iran to add a lot of volume. So beyond the July increase, they aren't likely to come out with any commitment," Amrita Sen, chief oil analyst at Energy Aspects, told CNBC's "Squawk Box Europe" on Tuesday. "We know that as demand rises, we will need more OPEC barrels, but I think Iran is going to be the big question mark for them," Sen said. OPEC+ initially agreed to cut oil production by a record of 9.7 million barrels per day last year as global fuel demand collapsed, before easing cuts to 7.7 million and eventually 7.2 million from January. By July, the group's production cuts will be on track to stand at 5.8 million. "The most consequential issue for OPEC+ over the short term relates to the potential rise of Iranian production as a result of the US and Iran returning to JCPOA compliance,"

Oil Hits Highest Since October 2018 With Saudis Upbeat on Demand - - Oil resumed its advance, reaching the highest settlement in over two years with the OPEC+ alliance forecasting a tightening global crude market and a nuclear deal with Iran still up in the air. West Texas Intermediate crude rose 2.1 percent, while global benchmark Brent settled above $70 a barrel for the first time since 2019. Prices rallied as members of the OPEC+ alliance sounded upbeat notes about the global consumption rebound. Saudi Arabia Energy Minister Prince Abdulaziz bin Salman said “the demand picture has shown clear signs of improvement,” while his Russian counterpart also spoke of the “gradual economic recovery.” Adding further support, the prospect of an immediate resolution in talks to revive the 2015 nuclear accord has been delayed for now. Iranian officials said the Persian Gulf country and world powers are unlikely to reach a final agreement in the current round of talks, cooling speculation that sanctions on Tehran’s key oil exports might soon be lifted. WTI for July delivery climbed $1.40 to settle at $67.72 a barrel. Brent for August settlement rose 93 cents to $70.25 a barrel, the highest since May 2019. , “it looks like we could be in for a tight summer.” A robust economic recovery in the U.S. and Europe has given the Organization of Petroleum Exporting Countries and its allies the confidence that markets can absorb additional barrels, with the producer group agreeing Tuesday to press ahead with an increase of 841,000 barrels a day in July, following hikes in May and June. That comes as the International Energy Agency signaled a speedier demand recovery than its previous estimates, seeing global oil demand in one year possibly rebounding to levels seen before the pandemic. The oil market’s structure was also showing signs of strength on Tuesday. The spread between WTI’s nearest two December contracts -- a favored trade for hedge funds to express views on the oil market -- rallied to its widest backwardation since the two contracts began trading, indicating tight supply. Down the curve, the spread between the December 2022 and December 2023 contracts has surged further above $3 a barrel in backwardation. The oil glut built up during the coronavirus pandemic has almost gone and stockpiles will slide rapidly in the second half of the year, according to an assessment of the market earlier this week from an OPEC+ committee. At the forefront of the global demand recovery, the U.S. has been showing signs of solid travel patterns even before this past weekend marked the start of the traditional peak fuel consumption period. U.S. gasoline demand in week ended May 28 reached the highest level since start of pandemic to 9.534 million barrels a day, Descartes Labs said in survey based on movements of cellular devices.

Oil Algos Confused After Big Crude Draw, Product Build -  Oil prices rallied on the day as signs of a demand recovery from the US to Europe stoke optimism among producers and analysts in the crude market, combined with waning hopes for an Iran nuke deal.Oil is in “strong demand right now,” with economies around the world opening up, Daniel Yergin, the oil historian and vice chairman at consultant IHS Markit Ltd., said in a Bloomberg Television interview. "Oil is bid on the Iran timeline to adding barrels getting kicked further into the future--sometime between August and the fall," After last week's across-the-board draws, analysts expected another week of demand dominance. API

• Crude -5.36mm (-3.3mm exp)
• Cushing +741k
• Gasoline +2.51mm (-1.1mm exp)
• Distillates +1.585mm (-1.6mm exp)

While crude stocks tumbled more than expected, gasoline and distillate stocks unexpectedly rose last week... WTI hovered just below $68.80 ahead of the API print and barely budged on the mixed data... “Summer and the reopening of the economy is bullish for demand,” while “it looks much less likely we’ll have Iranian barrels any time soon than it did last week.” But, the question now is whether oil prices can hold their gains "amid strong demand, despite plenty of downside risk on the supply side,"

WTI Extends Gains After Sizable Crude Inventory Draw, Shrugs Off Unexpoected Product Builds - Oil prices are holding gains, with WTI around $69, after last night's bigger than expected crude draw reported by API, helped by signs of demand rebounding in the US (PMI/ISM) offsetting China concerns.Crude prices have extended gains this week on OPEC’s new outlook and because nuclear talks between Iran and world powers stalled.“There will always be a good amount of supply to meet demand,” Saudi Energy Minister Prince Abdulaziz bin Salman said at a forum in St. Petersburg on Thursday.“We’ll have to see demand” before producers increase supply, he said.Additionally, Saudi Arabia increased oil prices for customers in its main market of Asia by more than expected after Brent crude surged above $70 a barrel and OPEC forecast that global demand would heavily outstrip supply over the rest of the year. DOE

• Crude -5.079mm (-3.3mm exp)
• Cushing +784k - biggest build since Feb
• Gasoline +1.499mm (-1.1mm exp) - biggest build since April
• Distillates +3.72mm (-1.6mm exp) - biggest build since March

Crude stocks fell notably last week but product inventories unexpectedly rose... US Crude production continues to remain 'disciplined' (in fact, falling 200kb/d last week) despite the soaring prices and surging rig counts....

"We'll See $200 Oil": Russia & OPEC Ministers Blast IEA's 'Net Zero By 2050' Plan As "La-La-Land" - After in recent months crude oil prices have clearly recovered from their COVID-19 slump on steadily increasing demand, Russian Deputy Prime Minister Alexander Novak addressed the much anticipated decision-making at the upcoming OPEC+ conference set for August and the expectation that it will decide to raise output significantly beyond the current pandemic-induced strategy of gradually releasing more barrels into a strengthening oil market.Novak said in his Thursday remarks at the St Petersburg International Economic Forum that while it remains "premature" to talk about output decisions for August, he affirmed "The current oil price is good enough for Russia," adding: "Oil prices reflect the balance of supply and demand," and noted it's expected the seasonal oil demand will increase in the third quarter of the year. On Wednesday Brent crude futures touched their highest price since September 2019 at $71.99, with the international benchmark gaining 1.6%, following the day prior the benchmark seeing a rise of almost 3%.Novak confirmed the upcoming OPEC+ conference will address and finalize oil output for August and other months, while stressing that oil prices shooting too high "may force users to switch to other energy sources."On that front in particular, he blasted current IEA proposals and a "road map" being pushed which in the end could lead to $200 a barrel oil(!):If the world were to follow the International Energy Agency’s controversial road map, which said investment in new fields would have to stop immediately to achieve net-zero carbon emissions by 2050, "the price for oil will go to, what, $200? Gas prices will skyrocket," Novak said.And naturally Qatar and Saudi Arabia seconded that dire assessment, vowing to continue expanding their oil and gas facilities while pointing the finger at the climate activists for seeking to starve industry cash. Bloomberg presents the Gulf statements Thursday as follows: The "euphoria" around the transition to clean energy is "dangerous," Qatar’s Energy Minister Saad Sherida Al Kaabi said at the St Petersburg International Economic Forum in Russia on Thursday."When you deprive the business from additional investments, you have big spikes" in prices, he stressed further.

Oil hits over 1-year high on OPEC+ supply discipline, demand prospects  (Reuters) – Oil prices surged on Wednesday, hitting their highest in more than a year from a decision by OPEC and allies to stick to the plan to gradually restore supply, along with the slow pace of nuclear talks between Iran and the United States. Brent rose $1.1, or 1.6%, to settle at $71.35 a barrel. It reached $71.48 a barrel, its highest since January 2020. U.S. West Texas Intermediate (WTI) crude rose $1.11, or 1.6%, to settle at $68.83 a barrel. It hit $69.00 during the session, its highest since October 2018. “The oil market welcomed the OPEC+ decision to stick with its existing production plan, and in conjunction with positive global demand indications, prices are gaining further today,” said Louise Dickson, Rystad Energy oil markets analyst. Expecting a recovery in demand, the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, agreed on Tuesday to maintain their plan to gradually ease supply curbs through July. The OPEC+ meeting took 20 minutes, shortest in the group’s history, indicating unity among members and their confidence in the market’s recovery, analysts said. OPEC+ data shows the group is now more upbeat about the pace of rebalancing in the oil market than it was a month ago. Graphic: Oil Market Balances – https://graphics.reuters.com/GLOBAL-OIL/rlgvddlxyvo/chart.png Saudi Energy Minister Prince Abdulaziz bin Salman said solid demand recovery in the United States and China and the pace of COVID-19 vaccine rollouts can only lead to further rebalancing of the global oil market. “We expect oil prices to move well beyond $70 per barrel towards mid-year,” said Norbert Rucker, analyst at Swiss bank Julius Baer. Analysts also said the slow progress of the Iran nuclear talks provides breathing room for demand to catch up before Iranian oil returns to the market if a deal is reached. Talks aimed at reviving Iran’s nuclear pact with global powers were expected to adjourn for a week, diplomats said, with remaining parties to the deal due to meet on Wednesday evening to sign off on the move. In the United States, crude stocks fell by 5.36 million barrels in the week ended May 28, according to two market sources, citing American Petroleum Institute figures released after the markets settled. Gasoline inventories rose by 2.5 million barrels and distillate stocks climbed by 1.56 million barrels.

U.S. oil futures post another finish at the highest since 2018  Oil futures climbed sharply on Wednesday (link), with U.S. prices at their highest in over two and a half years. Most of oil's rise is "driven by expectations that gasoline inventories will take a hit" in supply data due out Thursday, and "anticipation that Americans, who stayed home last year, will be taking to the road again," said James Williams, energy economist at WTRG Economics. The Energy Information Administration will release its weekly supply report on Thursday, a day later than usual because of Monday's Memorial Day holiday. Oil prices, however, appeared to gain more ground during the session following reports of a fire at a state-owned refinery in Iran (link). That followed news that the largest warship in Iran's navy caught fire (link) and sank on Wednesday. The events are "raising the overall risk premium in the Middle East," said Phil Flynn, senior market analyst at The Price Futures Group. "The biggest downside risk is the return of Iranian supply and that looks more unlikely." West Texas Intermediate oil for July delivery climbed $1.11, or 1.6%, to settle at $68.83 a barrel on the New York Mercantile Exchange. Front-month contract prices ended at their highest since October 2018, FactSet data show.

Oil steady after mixed U.S. crude inventory report -  (Reuters) -Oil prices steadied on Thursday following two straight days of gains that took oil futures to highs not seen in a year, after weekly U.S. crude stocks fell sharply while fuel inventories rose more than expected. Brent futures settled at $71.31 a barrel, down 4 cents after touching its highest since May 2019 earlier in the session. U.S. crude settled at $68.81 a barrel, losing 2 cents. WTI prices rose as high as $69.40, the strongest since October 2018, after gaining 1.5% in the previous session. U.S. crude inventories dropped by 5.1 million barrels last week, compared with expectations for a decrease of 2.4 million barrels, while gasoline stocks grew by 1.5 million barrels and distillate stockpiles jumped by 3.7 million barrels. [EIA/S] “They burned through a lot of crude oil though, and we had builds in gasoline and distillate,”  “You don’t want to be burning that much crude and then the customers don’t want it.” Gasoline demand jumped last month on panic buying following the closure of the Colonial Pipeline, the largest U.S. refined products line, which meant drivers were less likely to need to fill up their tanks over Memorial Day weekend, the start of peak summer driving season. “Gasoline demand was off week-over-week which may disappoint some people, but it’s still solid,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. Oil prices have risen in recent days on expectations from forecasters, including the Organization of the Petroleum Exporting Countries (OPEC) and its allies, that oil demand will exceed supply in the second half of 2021. OPEC+ agreed on Tuesday to continue with plans to ease supply curbs through July, giving oil prices a boost, in anticipation of improved consumption. The OPEC+ meeting lasted 20 minutes, the quickest in the group’s history, suggesting strong compliance among members and the conviction that demand will recover once the COVID-19 pandemic shows sign of abating. Also supporting prices was a slowdown in talks between the United States and Iran over Tehran’s nuclear program, which reduced expectations for a return of Iranian oil supplies to the market this year.

Oil Continues Winning Streak On Demand Recovery And Production Restraint - Brent on Friday topped $72 per barrel for the first time since 2019, and analysts think $70- plus oil could be here to stay as demand recovery continues and supply discipline on the part of the Organization of the Petroleum Exporting Countries (OPEC) is exerted. Trader optimism on Friday was due to factors that had been building earlier in the week, including OPEC agreeing on Tuesday to stick to agreed supply restraints, and news that nonfarm payrolls in the U.S. increased by 559,000 jobs last month. Also boosting oil was a slowdown in talks between the U.S. and Iran over Tehran’s nuclear program. Brent on Friday rose 58 cents to settle at $71.89 per barrel, after touching $72.17, its highest since May 2019; West Texas Intermediate rose 81 cents to settle at $69.62.   “After much dilly-dallying, Brent appears to have found a new home above $70; summer and the reopening of the global economy is bullish for oil demand in the second half of the year.” John Kemp, commodities analyst for Reuters, pointed out that U.S. shale restraint should also be credited for pushing up oil prices: on Friday he noted that while the number of rigs has already more than doubled from its cyclical low in August 2020,   He added, that "The number of active rigs has grown by an average of just 3.5 per week over the last 15 weeks, down from an average of 6.2 per week over the previous 20 weeks"; also, the number of rigs active last week (359) was far below the number in January 2020 (670) and April 2019 (825), when prices were at a similar level - meaning production is "likely to grow more slowly than previously expected in late 2021 and the first half of 2022." More heartening news came on Friday in the form of data from Vortexa showing that Asia exported about 417,000 barrels per day (bpd) of jet fuel to Europe and North America combined in April-May, nearly 32 percent higher than the 316,000 bpd for February-March; also, jet fuel volumes in floating storage facilities have consistently stayed at zero for the past four weeks for the first time since March last year, according to Kpler., “A pick-up in air travel in the U.S. and Europe amid falling [Covid] infection rates and possible relaxing of travel restrictions this summer, that contrasts against the weak fundamentals in Asia, is expected to support a widening of East-West jet fuel arbitrage in the near term.”

Oil Prices Up for Second Straight Week  | Rigzone -  Oil and gasoline futures both posted their second weekly gain in a row as expectations for a demand pick-up from the northern hemisphere’s summer begin to come to fruition. Futures in New York rose nearly 5% this week, the largest such increase since mid-April. A string of data this week so far affirmed the market’s bet that higher vaccination rates and continuing reopening efforts are unleashing pent-up demand this summer. On the supply side, oil is garnering support from deferred expectations on a renewed nuclear deal with Iran and OPEC+’s cautious approach to bringing back output. Meanwhile, global benchmark Brent ended the week above the psychological $70-a-barrel mark for the first time in over two years, nearing a technical level that may spur renewed flows into the market. “The domestic story remains good and OPEC+ seems to be not aggressively increasing supply,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. The market has been hoping for a return to “a more normal travel season, and that’s the data we’re seeing in the U.S. and Europe.” Without an immediate revival of the Iran nuclear accord looming over the market, traders see prices grinding higher as the summer demand story unfolds. U.S. government data this week served as confirmation that the world’s largest oil-consuming country is in the midst of a demand revival with the onset of the summer travel season, while other countries are also showing strength. A gauge of gasoline consumption inched up for a third straight week at the highest since March 2020, according to the latest Energy Information Administration weekly storage report. In the U.K., government data showed road fuel sales jumped last week to near pre-pandemic levels. “It looks like the economy is back, certainly in the U.S., and vaccines are starting to spread, which is making people want to be long oil heading into the weekend,” said Michael Lynch, president of Strategic Energy & Economic Research. Once more countries start getting a hold on the Covid-19 spread, “economies are going to start booming with pent-up consumer demand.” Prices WTI for July delivery rose 81 cents to settle at $69.62 a barrel. Brent for August settlement gained 58 cents to end the session at $71.89 a barrel. Contract climbed 3.3% for the week. While the rebound remains patchy in parts of Asia, the sharp recovery taking shape in the west is spurring calls for OPEC+ to ensure the market doesn’t overheat.

Goldman says a nuclear deal with Iran could send oil prices higher. Not everyone agrees – A nuclear deal between the U.S. and Iran could send energy prices higher — even if it means more supply in the oil markets, according to Goldman Sachs' head of energy research. While it appears to be contradictory, a deal that brings Iranian barrels back to the market could actually see oil prices rise, said Damien Courvalin, who is also a senior commodity strategist at the bank. Talks in Vienna are ongoing as Iran and six world powers — the U.S., China, Russia, France, U.K. and Germany — try to salvage the 2015 landmark deal. Officials say there's been progress, but it remains unclear when negotiations could conclude and oil prices have been seesawing as a result. A deal would lift sanctions on Iran and bring Tehran and Washington back to complying with the Joint Comprehensive Plan of Action (JCPOA). The U.S. unilaterally withdrew from the nuclear deal in 2018 and reimposed crippling sanctions on Iran which dealt a blow to the Islamic Republic's oil exports. If that announcement comes in the next few weeks, in our view, it actually starts that bullish repricing. Courvalin explained his rationale. He pointed to how oil prices rose in April after OPEC+ said they would gradually raise output from May by adding back 350,000 barrels a day. "An increase in production … is announced that is above anyone's expectations — ours included. And yet prices rally, volatility comes down," he said. "Why? Because we lifted an uncertainty that was weighing on the market since last year," he told CNBC's "Squawk Box Asia" last week. Investors wondered if OPEC would end up in a price war when it tried to increase production, but the oil cartel presented a "convincing path going forward," Courvalin said. "You could argue the same for Iran," he added. Simply knowing will likely "lift some of that uncertainty." "If that announcement comes in the next few weeks, in our view, it actually starts that bullish repricing," he said at that time. Opposing views Other analysts say an agreement could mean lower prices for oil, at least in the short term. Morgan Stanley said in a research note that an increase in Iranian exports will probably cap Brent crude at $70 per barrel, and expects the international benchmark to trade between $65 and $70 per barrel for the second half of 2021.

Iranian warships possibly headed to Venezuela reportedly spark US concern -Two Iranian naval vessels possibly destined for Venezuela are reportedly prompting surveillance from U.S. national security officials.Sources close to the matter told Politico that an Iranian frigate and a former oil tanker called the Makran were traveling south along the eastern coast of Africa.The ultimate destination of the ships is unknown, as is the purpose of their voyage, but U.S. officials told the news outlet that they may be going to Venezuela.Politico noted that Iran and Venezuela have formed closer ties over the years, cooperating on gasoline shipments and projects focusing on cars and cement factories. Both countries are also currently under harsh sanctions by the U.S.A source familiar with Venezuelan President Nicolás Maduro’s administration told Politico that senior officials have advised against welcoming the Iranian vessels. Iran is one of the few allies Venezuela has, having been isolated by most other countries.Iran has sent multiple fuel tankers to Venezuela as its oil refining sector has diminished, with Venezuela sending cash back to Tehran.If Iranian vessels do indeed travel into the Western Hemisphere, the action could endanger the ongoing Iran nuclear negotiations in Vienna, which the U.S. is engaging in indirectly. Iran has regularly protested against the presence of U.S. warships in the Persian Gulf, Politico noted, and has often threatened to make a similar move but has so far not followed through with those threats. Sen. Rick Scott (R-Fla.) released a statement on Sunday in response to Politico's report, stating Iranian warships are not welcome in the Western Hemisphere. He called on President Biden to speak out against the presence of Iranian warships."For years, I have been warning that Nicolas Maduro’s brutal regime has worked to turn Venezuela into prime real estate for Communist China, Iran and our adversaries to gain a critical foothold in the Western Hemisphere," Scott said."Now, the U.S. national security community believes that the Iranians, undoubtedly emboldened by the Biden Administration’s weakness and desperate desire to reenter the failed Iran nuclear deal, are making a direct and serious threat to America’s national security," he added.

Iran's largest warship catches fire, sinks  - The Iranian navy’s largest warship erupted in flames on Wednesday before sinking in the Gulf of Oman, according to state media reports. The Associated Press reported that the semiofficial Fars and Tasnim news agencies in Iran reported that the ship sank near the port of Jask, located about 790 miles southeast of Tehran, despite attempts by firefighters to save the vessel. While the warship Kharg, named after the island that serves as Iran’s main oil terminal, did not escape the flames, Reuters reported that emergency responders were able to safely rescue the ship’s crew. The cause of the fire is unknown, though state media reported that it began around 2:25 a.m. in the Persian Gulf’s Strait of Hormuz, where it was conducting a training mission. Fars published video of thick, black smoke rising from the ship Wednesday morning, and satellite photos from the U.S. National Oceanic and Atmospheric Administration detected a fire at the Jask port starting shortly before the blaze was reported by state media. Fars reported that “all efforts to save the vessel were unsuccessful and it sank," according to Reuters. The Kharg, which was built in Britain and entered the Iranian navy in 1984 following Iran’s 1979 Islamic Revolution, served as one of few ships held by Iran capable of providing replenishment and support for other vessels while at sea, according to the AP. Pentagon press secretary John Kirby said the United States was "aware of the loss of one of their ships by fire," but was not able to offer further details.

Why Did 72% of Israelis Want Attack on Gaza to Continue? (video and transcript)  --Hi, I’m Paul Jay. Welcome to theAnalysis.news. A survey conducted by direct polls in Israel, that question, 684 Israelis has a margin of error of 4.3 percent, finds that a majority of Israelis didn’t want Israel to negotiate a cease fire that was announced yesterday and they wanted the attacks to continue. In fact, there is a cease fire now in place as we speak, at any rate, but what does this poll tell us about Israeli society? The poll found that 72 percent of the people that responded thought the operation should continue, with the number rising slightly in the south of Israel to 73 percent. Only 24 percent said we should agree to a cease fire, with the figure dropping to 22 percent in the south. When asked whether Israel had made greater achievements in this round of fighting over the previous round, 66 percent said yes, with the figure dropping to 30 percent for those that lived in the south.Now, the question of whether there should have been such an “operation” – another word to use for bombing – whether the question was asked, should there have been such an operation at all? Well, it doesn’t seem like it was asked, at least not in that poll. Now joining us to discuss the state of Israeli society and politics and what the significance of this poll me is, is Shir Hever. He’s a political economist living in Heidelberg, Germany. He was born and raised in Jerusalem. He lived in Tel Aviv before moving to Germany in 2010. His recent book is The Privatization of Israeli Security. Thanks for joining me again Shir.

Poems From Palestine - In the coming weeks we will feature a series of poems from Palestine, curated by the poet and translator Fady Joudah. As the series continues, you’ll be able to scroll down to read all of the poems here, or click the links below to view them separately.

Israeli opposition parties reach agreement to oust Prime Minister Benjamin Netanyahu - — A diverse coalition of Israeli opposition parties said Sunday that they have the votes to form a unity government to unseat Prime Minister Benjamin Netanyahu, Israel's longest-serving leader and its dominant political figure for more than a decade.Under their agreement, reached after weeks of negotiations spearheaded by centrist opposition leader Yair Lapid, former Netanyahu defense minister and ally Naftali Bennett will lead a power-sharing government. Bennett, 49, would serve as Israel’s next prime minister, according to terms of the deal reported by Israeli media, to be succeeded in that role by Lapid, 57, at a later date.“We could go to fifth elections, sixth elections, until our home falls upon us, or we could stop the madness and take responsibility,” Bennett said in a televised statement Sunday evening. “Today, I would like to announce that I intend to join my friend Yair Lapid in forming a unity government.”Netanyahu called the plan “the fraud of the century.”“There is not a single person in Israel who would have voted for Naftali Bennett if they had known what he would do,” he tweeted.Lapid is expected on Monday to inform President Reuven Rivlin of his ability to form a government with the support of Bennett and will have a week to finalize coalition deals. At the end of the week, the government will be put to a vote of confidence in the Knesset.Netanyahu, 71, has struggled to hold on to power after four inconclusive elections in the past two years while facing an ongoing corruption trial. Bennett is one of several former loyalists who have flirted with joining the so-called change coalition, a collection of parties that span the political spectrum but share a desire to end Netanyahu’s 12-year tenure.

Netanyahu Faces Shocking Ouster After Israeli Opposition Reaches Deal To Form Government -It's the end of an era for Israeli politics as embattled prime minister Benjamin Netanyahu, the country's longest serving leader, is facing a shocking ouster after the head of a small hard-line party on Sunday said he would try to form a unity government with Prime Minister Benjamin Netanyahu's opponents, effectively ending Bibi's 12-year rule. In a nationwide address, Yamina party leader and Netanyahu's former defense minister, Naftali Bennett said he had decided to join forces with the country's opposition leader, Yair Lapid in a “unity government" whose "unified" goal has long been removing Netanyahu from office. The pair have until Wednesday to complete a deal in which they are expected to each serve two years as prime minister in a rotation deal.“It’s my intention to do my utmost in order to form a national unity government along with my friend Yair Lapid, so that, God willing, together we can save the country from a tailspin and return Israel to its course,” Bennett said adding that "we could go to fifth elections, sixth elections, until our home falls upon us, or we could stop the madness and take responsibility." This coalition will have one week to finalize deals and then will face a vote in the Knesset. Lapid will inform President Reuven Rivlin of his ability to form a new government with his partners on Monday, according to reports.A unity government would end the cycle of deadlock that has plunged the country into four inconclusive elections over the past two years. It also would end, at least for the time being, the record-setting tenure of Netanyahu, the most dominant figure in Israeli politics over the past three decades.