After briefly hitting a 6 year high early this week, oil prices finished lower for the first time in seven weeks, as traders worried that the collapse of talks between OPEC and other ol producers would lead to a increase in crude supplies...after rising 1.5% to a 32 month high at $75.16 a barrel last week, the contract price of US light sweet crude for August delivery opened higher on Tuesday after the holiday and climbed to its highest level in nearly seven years after a Monday OPEC meeting was called off without an agreement and OPEC+ sources said there would be no oil output increase in August, but then drifted lower during the session and ultimately settled down $1.79, or 2.4%, at $73.37 per barrel as traders feared that the strife would lead some producers to open the taps and start exporting more barrels....prices remained volatile on Wednesday as traders assessed the ongoing impasse among OPEC+ producers over plans to boost output, with oil initially trading 1% higher before tumbling again to close down $1.17 at $72.20 a barrel, as traders feared what this week's collapse in Opec+ talks might mean for worldwide production... oil prices finally rose on Thursday, rebounding from early losses after EIA data showed a much bigger drop in US crude and gasoline inventories than was expected, and finished trading 74 cents, or 1% higher at $72.94 a barrel as US crude production remained “lackluster” despite improved prices...the rally on falling oil and product inventories carried into a second day on Friday and the August oil contract saw $1.62 added to its price and settled at $74.56 a barrel after Citigroup analysts said the global oil market will remain in “deep deficit” of more than 3 million barrels per day through the third quarter of the year....however, oil prices still finished the week 0.8% lower, their first weekly loss since mid-May, as worries about trouble within OPEC tempered the recent bull market in oil...
meanwhile, natural gas prices also fell from last week's 30 month high as weather forecasts moderated over the major gas consuming regions...after rising 5.1% to $3.700 per mmBTU last week as an unprecedented heat wave set all-time record high temperatures across the Pacific Northwest, the contract price of natural gas for August delivery opened higher on Tuesday and rose more than 3% to another 30 month high at $3.822 per mmBTU, before turning lower to end down 6.3 cents, or 1.7% at $3.637 per mmBTU, after forecasts showed a broader area of normal-to-below normal temperatures in the major gas consuming areas...natural gas prices moved lower again on Wednesday, falling another 4.2 centts to $3.596 per mmBTU, as traders mulled weather-driven demand, stagnated liquefied natural gas (LNG) levels, and the potential storage injection with the EIA's report due Thursday morning...but natural gas prices bounced back on Thursday, bolstered by an anemic increase in inventories that pointed to a tight supply/demand balance, igniting concerns about adequate storage levels, as the August contract closed 9.2 cents higher at $3.688 per mmBTU....natural gas prices moved higher again most of Friday, lifted by supply concerns, steady domestic demand and a broader rally in commodities. but shed their gains in the final hour as traders took profits and settled 1.4 cents lower at $3.674 per mmBTU...as a result, natural gas prices finished 0.7% lower for the week, just the 3rd small downturn in the past fourteen weeks....
the natural gas storage report from the EIA for the week ending July 2nd indicated that the amount of natural gas held in underground storage in the US rose by 16 billion cubic feet to 2,574 billion cubic feet by the end of the week, which left our gas supplies 551 billion cubic feet, or 17.6% below the 3,125 billion cubic feet that were in storage on July 2nd of last year, and 190 billion cubic feet, or 6.9% below the five-year average of 2,764 billion cubic feet of natural gas that have been in storage as of the 2nd of July in recent years... the 16 billion cubic feet increase in US natural gas in storage this week was below the median forecast for a 29 billion cubic foot addition from a Reuters survey of analysts, and was way below the average addition of 63 billion cubic feet of natural gas that have typically been injected into natural gas storage during the same week over the past 5 years, as well as well below the 57 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 July 2nd showed that even after a sizeble decrease in our oil exports and a modest decrease in our refinery throughput, we still needed to withdraw oil from our stored commercial crude supplies for the seventh consecutive week, and for the 23rd time in the past thirty-four weeks….our imports of crude oil fell by an average of 532,000 barrels per day to an average of 5,875,000 barrels per day, after falling by an average of 536,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 1,089,000 barrels per day to an average of 2,628,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,247,000 barrels of per day during the week ending July 2nd, 557,000 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 was reportedly 200,000 barrels per day higher at 11,300,000 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 14,547,000 barrels per day during this reporting week…
meanwhile, US oil refineries reported they were processing 16,115,000 barrels of crude per day during the week ending July 2nd, 164,000 fewer barrels per day than the amount of oil they used during the prior week, while over the same period the EIA’s surveys indicated that a net of 1,150,000 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 418,000 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 (+418,000) 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…..furthermore, since last week’s EIA fudge factor was at (+1,350,000) barrels per day, that means there was a 932,000 barrel per day balance sheet difference in the crude oil fudge figure from a week ago, thus rendering the week over week supply and demand changes that we have just transcribed meaningless…. however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we’ll continue to report them as they’re published, just as they’re watched & believed to be accurate by most everyone in the industry….(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….
further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,492,000 barrels per day last week, which was 2.2% less than the 6,636,000 barrel per day average that we were importing over the same four-week period last year… the 1,150,000 barrel per day net withdrawal from our crude inventories included a 981,000 barrel per day withdrawal from our commercially available stocks of crude oil, and a 169,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commercial purposes…over the past four weeks, total US crude inventories have been falling at a 1,205,000 barrel per day clip, the largest four-week decline of crude supplies in EIA records going back to 1982....this week’s crude oil production was reported to be 200,000 barrels per day higher at 11,300,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 200,000 barrels per day higher at 10,900,000 barrels per day, while an 10,000 barrel per day decrease in Alaska’s oil production to 438,000 barrels per day had no impact on the rounded national total….US crude oil production had hit a pre-pandemic record high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 13.7% below that of our production peak, but 34.1% above the interim low of 8,428,000 barrels per day that US oil production had fallen to during the last week of June of 2016…
meanwhile, US oil refineries were operating at 92.2% of their capacity while using those 16,115,000 barrels of crude per day during the week ending July 2nd, down from 92.9% of capacity the prior week, and a bit below normal for summertime operations…while the 16,115,000 barrels per day of oil that were refined this week were 12.3% higher than the 14,347,000 barrels of crude that were being processed daily during the pandemic impacted week ending July 3rd of last year, they were still 7.6% below the 17,438,000 barrels of crude that were being processed daily during the week ending July 5th, 2019, when US refineries were operating at a close to summertime normal 94.7% of capacity…
even with this week’s decrease in the amount of oil being refined, the gasoline output from our refineries was much higher, increasing by 976,000 barrels per day to 9,578,000 barrels per day during the week ending July 2nd, after our gasoline output had decreased by 749,000 barrels per day over the prior week…since this week’s gasoline production was among the highest on record, it was thus 16.7% higher than the 9,045,000 barrels of gasoline that were being produced daily over the same week of last year, and 1.3% higher than the gasoline production of 10,418,000 barrels per day during the week ending July 5th, 2019….meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 62,000 barrels per day to 4,967,000 barrels per day, after our distillates output had decreased by 83,000 barrels per day over the prior week…while this week’s distillates output was still 4.4% more than the 4,756,000 barrels of distillates that were being produced daily during the week ending July 3rd, 2020, it was 7.3% below the 5,358,000 barrels of distillates that were being produced daily during the week ending July 5th, 2019..,…
even with the big increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the fourth time in fourteen weeks, and for the 20th time in thirty-four weeks, falling by 6,075,000 barrels to 235,497,000 barrels during the week ending July 2nd, after our gasoline inventories had increased by 1,522,000 barrels over the prior week...our gasoline supplies decreased this week because the amount of gasoline supplied to US users increased by 870,000 barrels per day to a record 10,043,000 barrels per day, and because our exports of gasoline jumped by 402,000 barrels per day to 848,000 barrels per day, while our imports of gasoline rose by 226,000 barrels per day to 1,016,000 barrels per day…after this week’s inventory decrease, our gasoline supplies were 6.4% lower than last July 3rd’s gasoline inventories of 251,682,000 barrels, and about 2% below the five year average of our gasoline supplies for this time of the year…
meanwhile, even with the decrease in our distillates production, our supplies of distillate fuels increased for the fourth time in thirteen weeks and for the 14th time in 29 weeks, rising by 1,616,000 barrels to 138,692,000 barrels during the week ending July 2nd, after our distillates supplies had decreased by 859,000 barrels during the prior week….our distillates supplies rose this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 330,000 barrels per day to 3,840,000 barrels per day, and because our exports of distillates fell by 201,000 barrels per day to 1,027,000 barrels per day while our imports of distillates fell by 114,000 barrels per day to 131,000 barrels per day while …but after nine inventory decreases over the past thirteen weeks, our distillate supplies at the end of the week were 21.8% below the 177,262,000 barrels of distillates that we had in storage on July 3rd, 2020, and still about 6% below the five year average of distillates stocks for this time of the year…
finally, even with the drop in our oil exports and the increase in our oil production, our commercial supplies of crude oil in storage fell for twelveth time in the past twenty weeks and for the 28th time in the past year, decreasing by 6,866,000 barrels over the week, from 452,342,000 barrels on June 25th to 445,476,000 barrels on July 2nd, after our crude supplies had decreased by 6,718,000 barrels the prior week….with this week’s decrease, our commercial crude oil inventories fell to about 7% below the most recent five-year average of crude oil supplies for this time of year, but were still 29.3% above the average of our crude oil stocks as of the the 1st weekend of July over the 5 years at the beginning of the past 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 this July 2nd were 17.4% less than the 539,181,000 barrels of oil we had in commercial storage on July 3rd of 2020, and are now 2.9% less than the 458,992,000 barrels of oil that we had in storage on July 5th of 2019, but are still 9.9% more than the 405,248,000 barrels of oil we had in commercial storage on July 6th of 2018…
This Week’s Rig Count
The number of drilling rigs active in the US increased for the 36th time out of the past 42 weeks during the week ending July 9th, but it’s still down by 39.6% from the pre-pandemic rig count….Baker Hughes reported that the total count of rotary rigs running in the US increased by four to 479 rigs this past week, which was also up by 221 rigs from the pandemic hit 258 rigs that were in use as of the July 10th report of 2020, but was still 1,450 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global oil market in an attempt to put US shale out of business….
The number of rigs drilling for oil was up by 2 to 378 oil rigs this week, after rising by 4 oil rigs the prior week, and that’s also 197 more oil rigs than were running a year ago, while it’s still just 23.5% 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 up by 2 to 101 natural gas rigs, which was also up by 26 natural gas rigs from the 75 natural gas rigs that were drilling during the same week a year ago, but still just 6.3% 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 up by 3 to 17 rigs this week, with 16 of those rigs drilling for oil in Louisiana’s offshore waters and one drilling for oil offshore from Texas….that was five more than the 12 rigs that were drilling in the Gulf a year ago, when 10 Gulf rigs were drilling for oil offshore from Louisiana and two more were deployed for oil in Texas waters….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 count… in addition to those rigs offshore, we currently continue to have a rig drilling through an inland body of water in Terrebonne Parish of southern Louisiana, whereas there were no such “inland waters” rigs running a year ago…
The count of active horizontal drilling rigs was up by 4 to 433 horizontal rigs this week, which was also up by 213 rigs from the 220 horizontal rigs that were in use in the US on July 10th of last year, but less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014….at the same time, the directional rig count was up by one to 31 directional rigs this week, and those were up by 12 from the 19 directional rigs that were operating during the same week a year ago….on the other hand, the vertical rig count was down by 1 to 15 vertical rigs this week, and those were also down by 4 from the 19 vertical rigs that were in use on July 10th 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 July 9th, the second column shows the change in the number of working rigs between last week’s count (July 2nd) and this week’s (July 9th) count, the third column shows last week’s July 2nd 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 10th of July, 2020..
with an increase of 3 directional rigs in the Gulf of Mexico, there's very little left to show on the basin table 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 an oil rig was added in Texas Oil District 7C, which includes the southern counties of the Permian Midland, while an oil rig was pulled out in Texas Oil District 8A, which encompasses the northern counties of the Permian Midland, and hence the Permian basin rig count was unchanged...however, there was an increase of two natural gas rigs in Texas Oil District 6, one of which was in the Haynesville shale, which thus accounts for the Texas rig change this month...the Haynesville shale rig count remained unchanged, however, because a Haynesville rig was concurrently removed from northern Louisiana....Louisiana's rig count was up by one despite that, and despite the removal of an inland waters rig in St Mary parish, with the addition of three rigs in the state's offshore waters...while there was a rig added in the Niobrara chalk in Wyoming, there was also one pulled out of that formation in Colorado, and hence the Niobrara count remained unchanged...likewise, while there was a rig added in the Marcellus shale in West Virginia, there was also one pulled out of the Marcellus in Pennsylvania, and hence the Marcellus rig count also remained unchanged...meanwhile, the natural gas rig count was up by two with the addition of one in Ohio's Utica shale and the two in Texas Oil District 6, partly offset by the removal of one in Louisiana's Haynesville shale...
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New Ohio law bans cities from enacting prohibitions on natural gas - A move to ban natural gas hookups in new buildings in New York City and San Francisco has Ohio lawmakers rushing to head off similar efforts here. House Bill 201, signed into law by Gov. Mike DeWine Thursday, prohibits municipalities from banning customers from using natural gas or propane. The change passed even though no Ohio city currently has such a ban and current law allows customers to choose their energy source. Still, proponents of the change say cutting natural gas out of the mix would dramatically increase the price of energy for Ohioans."This would be an incredible problem for people across the Buckeye State if we don't get out in front of this," said Sen. Rob McColley, R-Napoleon.Natural gas is a fossil fuel that is formed beneath the earth's surface that when burned emits carbon dioxide emissions.For proponents of natural gas bans in California and elsewhere, the restrictions are about curbing climate change. But Rep. Jason Stephens, R-Kitts Hill, pitched his bill to ban those bans as a way to ensure customer choice. “Here in Ohio, we want to promote a fair market for all Ohioans, consumers, to have energy options that work best for them – this legislation helps make that a reality,” said Stephens. Opponents say the change eliminates local control and gives natural gas an advantage not offered to renewable energy resources. Meanwhile, lawmakers passed Senate Bill 52, which would add another hurdle for wind and solar projects in the state.
City learns of injection well leak while investigating dump site - Coshocton Tribune The Ohio Department of Natural Resources is overseeing remediation and repairs following a recent leak from a pipe at the SOS D-2 injection well off Southgate Parkway in Cambridge."On June 24, the operator of the SOS D-2 injection well in Cambridge reported a small release from the pipeline that transfers fluid from a storage tank to the injection well," said Adam Schroeder, a public information officer for ODNR's Division of Oil & Gas Resources Management.The release was contained by the operator, identified on the ODNR website as Silcor Oilfield Services Inc. of Brookfield."Division staff is overseeing remediation of the affected area and repair of the line," added Schroeder after being contacted by The Daily Jeffersonian on Thursday.Cambridge officials were not advised of the leak until Wednesday after city water department employees discovered what they believed to be an illegal dump site behind a business near the location of the injection well."You would like to think that you would be contacted by the emergency agencies such as the (Ohio) Environmental Protection Agency or the Ohio Department of Natural Resources, but they are pretty independent groups," said Mayor Tom Orr Friday."It is a little disheartening."Orr said city officials checked the reservoir and water systems, and found no evidence of contamination."Everything within the city has checked okay, but we are watching it," said Orr. "We have rallied up since we learned what happened."The mayor did say a few fish were found dead near the site of the leak."All eyes are on it now," Orr said. The leak was reportedly the result of a weak spot in a weld in the line.
Oil and Gas Permit Interest Resumes in Columbiana County - – EAP Ohio LLC, a division of Encino Acquisition Partners, Houston, has submitted permit applications to drill four new horizontal wells in Washington Township in Columbiana County, according to data from the Ohio Department of Natural Resources. According to ODNR, the company plans to drill four new horizontal wells at its Sevek-18 pad. The permit applications are pending before the agency. Meanwhile, Houston-based Hilcorp Energy Co. was awarded a permit to drill deeper and build out a horizontal leg at its 10H well at the Tarka pad in Fairfield Township in Columbiana County, according to ODNR. Since January, ODNR has awarded 14 permits to the two oil and gas companies, which target the natural-gas rich Utica-Point Pleasant shale formation. So far this year, EAP has been awarded two permits to drill wells in Washington Township, while Hilcorp has been awarded 12 permits for new horizontal wells in Fairfield Township, according to ODNR. Natural gas production across the Utica-Point Pleasant and the Marcellus shale formation in Appalachia is expected to be lower in June compared to May, according to the U.S. Energy Information Administration’s latest drilling productivity report. According to EIA, natural gas production across Appalachia is projected to decline in June by 52 million cubic feet per day. Oil production, however, is expected to increase by 1,000 barrels per day, EIA reported.
Shell generates electricity to the grid from its Beaver County plant for first time - Another milestone has been reached in the construction of the nearly $10 billion petrochemical plant that Shell Pennsylvania Chemicals is building in Beaver County.Shell said Thursday afternoon that the plant’s 250-megawatt natural gas cogeneration facility created electricity from each of its three units recently and brought power to the PJM Interconnection regional electrical grid for the first time.The company has been building the Potter Township plant, which will create plastic for commercial and industrial use from Marcellus and Utica Shale ethane, since 2016. But the work recently has been more about connecting the various pieces that go into the plant itself, with a commissioning set for next year. Shell said that the plant was about 80% complete.The natural gas and steam cogeneration plant will power the site, but it’s large enough that it will also generate power that will flow to the regional grid. About 80 megawatts will be going to the grid daily, enough to power about 52,000 homes. Next up is the commissioning of the plant’s ethane cracker and polyethylene production unit.
Two Years After a Huge Refinery Fire in Philadelphia, a New Day Has Come for its Long-Suffering Neighbors - Dorthia Pebbles inhaled harmful pollutants and smelled noxious odors from the Philadelphia Energy Solutions Refinery for years when she would leave her rowhome on Hoffman Street to walk to the corner store. After losing family members to cancer, she and her neighbors who lived across the street from the massive South Philadelphia refinery, once the largest on the East Coast, couldn’t help but conclude that its emissions were giving them asthma and threatening their health in even more serious ways. But no one from the refinery or the city ever gave them any information, or seemed to care. Then one night in June 2019, the refinery exploded, creating a whole new set of hazards and issues for the neighbors to wrestle with. “The most recent explosion woke us up out of our sleep,” said Pebbles. “But hearing that it will not be a refinery anymore is good. A lot of people ended up with cancer from the neighborhood.” Two years after the explosion, Pebbles and other nearby residents said in interviews that relations with the site’s new owner, Hilco Redevelopment Partners, which bought the 1,300-acre property in bankruptcy court last year, have improved and led to talks involving cleanup of the site and jobs. Philly Thrive, a non-profit that organized neighborhood opposition to the refinery well before the explosion, is part of a coalition of community groups negotiating a community benefits agreement with Hilco built upon transparency and community reinvestment. And Kenyatta Johnson, a local City Council member, has devised an economic opportunity plan with Hilco that requires 50 percent minority participation at all levels of the redevelopment, involving everyone from workers to executives.Alexa Ross, Philly Thrive’s campaign coordinator, said the group’s recent activities around the refinery site have involved “mobilizing and educating residents about the contamination of the refinery land because there is a lot of misinformation or misunderstanding about the specifics of the toxins left over from the refinery’s pollution.” With a massive cleanup effort underway to remove asbestos lining from pipes and remediate soil fouled by petroleum spills, underground beneze pools and contaminated groundwater, the site could become a test case for the Biden administration’s goal of ensuring that 40 percent of government spending on infrastructure and clean energy go to benefit so-called environmental justice communities.
PA's UGI Still Trying to Buy WV's Mountaineer Gas Company - Back in January MDN told you that UGI Corporation, one of Pennsylvania’s largest natural gas utility companies, wants to buy Mountaineer Gas Company, one of West Virginia’s largest natural gas utility companies, for $540 million (see PA’s UGI Corp. Deal to Buy WV’s Mountaineer Gas Company). UGI serves 700,000 customers across PA (and one county in Maryland). Mountaineer serves 215,000 customers across WV. Both companies are big buyers of Marcellus/Utica shale gas. The deal was supposed to be done and dusted no later than June of this year. But here we are in July and the deal is still not done. The holdup appears to be West Virginia regulators, who will hold a public comment hearing on July 20 for the proposed sale. This sale has a tie-in with the recent PennEast Pipeline Supreme Court decision (see PennEast Pipe Decision Makes Pipeline Under Potomac River Likely). Mountaineer built a new pipeline system that delivers Marcellus/Utica natural gas to a new industrial facility in Berkeley County, WV, and provides gas to other local businesses and residents in the Tri-State area. The Mountaineer system planned to connect to a tiny 3.4-mile pipeline under the Potomac River that connects to M-U gas supplies flowing through the Columbia Gas Transmission pipeline. The State of Maryland has blocked the pipeline under the Potomac (which must cross state-owned land on one bank of the river) using the same legal argument the Supreme Court just rejected in the case of PennEast v. New Jersey. PennEast’s victory in the case means it is now much more likely the Potomac pipeline (which would be Columbia’s 13th pipeline under the river) will happen. Gas company executives are asking West Virginia utility regulators to approve the sale of a West Virginia natural gas company to a Pennsylvania gas supply corporation.The Public Service Commission of West Virginia will hold a public comment hearing on July 20 on the proposed sale of Mountaineer Gas to UGI Corporation.Mountaineer Gas serves roughly 215,000 customers and operates natural gas operations in 50 West Virginia counties, including Morgan County and neighboring Berkeley County.The company in recent years built a 23-mile natural gas distribution line from north-eastern Morgan County along U.S. 522 to connect to existing natural gas lines in Berkeley County near Martinsburg.There are plans to connect the Morgan County end of that Mountaineer Gas line to a natural gas transmission supply from Pennsylvania.Plans for construction of that connector line from Fulton County, Pa. to Morgan County include a section that would bore under the Potomac River near Hancock, Md. Those plans have state and federal regulatory approval, but are blocked by a right-of-way issue with the State of Maryland under the Western Maryland Rail Trail.
EQT Shifting More Focus to West Virginia, With No Plans to Drill in Ohio This Year - EQT Corp. is planning more drilling and completion activity this year in West Virginia, where it will focus on lowering well costs in a state that’s home to a large chunk of its assets. “I think when you step back and look at the assets that we have, about 40% of our leasehold is in West Virginia,” said CEO Toby Rice during a call on Thursday to discuss year-end financial results. “So, it makes sense for us to start shifting some of our development to that area.” Rice said longer laterals will help drive down well costs in West Virginia, where horizontals are planned to average 15,100 feet this year compared to 11,630 feet in Pennsylvania, which is where the bulk of the nation’s largest natural gas producer’s operations are located. The company assumes that the cost of Marcellus Shale wells in West Virginia will average $775 per lateral foot in 2021, compared to a cost of $675 per lateral foot for Marcellus wells in Pennsylvania. Rice also said the company would build a 45-mile mixed-use water system in West Virginia that’s expected to drive additional operational efficiencies and cut more costs there. Overall, EQT plans to turn 17 Marcellus wells to sales in West Virginia this year and 76 in Pennsylvania. While it also plans to turn five Utica wells to sales in Ohio, the company has no plans to drill wells there as it’s been working in recent years to divest core assets in the Buckeye State. EQT said it would spend between $1.10-1.20 billion this year to keep year/year production flat at 1.620-1.700 Bcfe to pro-forma 2020 levels. The company reported 2020 capital expenditures of $1.079 billion. Fourth quarter production came in at 401 Bcfe, compared to year-ago volumes of 373 Bcfe. The year/year gain was mainly driven by the company’s $735 million acquisition of Chevron Corp.’s Appalachian assets in Pennsylvania and West Virginia, which accounted for 12 Bcfe of 4Q2020 sales volumes. Full-year production came in at 1.498 Tcfe, down from 1.508 Tcfe in 2019 due to production curtailments and asset divestitures. The company also reported $325 million of positive free cash flow (FCF) and expects to generate up to $600 million of FCF this year. EQT reported fourth quarter net income of $64 million (23 cents/share) compared to a net loss of nearly $1.2 billion ( minus $4.61) in the year-ago period, when it reported higher impairments. The company reported a full-year net loss of $967 million (minus $3.71), compared to a net loss of more than $1.2 billion (minus $4.79) in 2019. Average realized prices fell to $2.37 in 2020 compared to $2.69 in 2019.
Evolution Well Services Extends Scope of Operations to West Virginia -- Evolution Well Services (EWS) announces its continued commercialization within the Marcellus and Utica Shale basins into the mountain state of West Virginia. "Evolution is excited to bring our industry-leading electric frac operations to West Virginia, and we also look forward to partnering with the local communities that enable our success each day", says Mike Bateman, Vice President of Operations. With the first completed well in 2016, EWS continues adding to its industry-leading 30,000+ fully electric frac stages. With innovation as the foundation for Evolution's operations, the company looks to continue revolutionizing how the hydraulic fracturing industry operates. Through its natural gas fueled mobile turbine and 100% electric frac technology, Evolution is creating a more sustainable environmental footprint for E&P's across the country. Coupled with Evolution's roughly 50% smaller physical footprint, the technology is an ideal solution for the challenging terrain in West Virgina. According to Steven Anderson, Chief Executive Officer, "Evolution is committed to leveraging our innovative technology to lower the industry's greenhouse gas intensity in a cost-effective, safe, and reliable manner." Evolution Well Services is the largest and most experienced provider of electric hydraulic fracturing services. With a decade of innovation, their patented technology continues to revolutionize the hydraulic fracturing industry with increased reliability and lower carbon operations.
Air Board pushes decision on Lambert compressor station permit to September following complaints - The State Air Pollution Control Board has deferred consideration of a permit for a controversial compressor station in Pittsylvania County to September following complaints about the scheduling of a midday, midweek meeting in Richmond to consider the issue.“This provides the board with additional time to ensure a thorough review and full consideration of the information submitted into the public record on this permit application,” said Department of Environmental Quality Director David Paylor in an agency release. The proposed compressor station would be part of an offshoot of the Mountain Valley Pipeline known as the Southgate extension. That pipeline is expected to run about 75 miles from Pittsylvania south into North Carolina. North Carolina’s Department of Environmental Quality has twice denied a necessary water permit for the project, citing numerous erosion and sediment issues with the main line of the Mountain Valley Pipeline and doubts about its completion. The required air permit for the Pittsylvania compressor station has been hotly contested, with the air board receiving hundreds of comments on the proposal. But despite discussion among the board in April about scheduling consideration of the permit in the evening or on a weekend to increase public accessibility, the deliberations were scheduled for a Wednesday afternoon in Richmond. DEQ also said that with the lifting of the COVID-19 emergency, the meeting would be in-person only, and the agency did not have the resources to run a hybrid in-person and virtual meeting. Several groups protested the decision. In one letter, the Pittsylvania County branch of the NAACP urged the air board to either add a virtual component to the meeting or hold it closer to the proposed site of the compressor station. “Our members and others from Southern Virginia are facing a 300-mile, 6-hour round trip, and a 1- or 2-night stay in order to attend the meeting. Given the current set-up, we can only speak — and listen — if we make the trip,” the group wrote. DEQ said Friday that Mountain Valley Pipeline had agreed to an extension of the timeline for a decision on the permit, which is outlined in statute. “This doesn’t address the need for hybrid options, but as serious concerns were raised by the public during the comment period, including that environmental justice issues were not properly addressed and community engagement was lacking, additional time for the board to review comments from the public is very welcome,” said Appalachian Voices field coordinator Jessica Sims.
EPA wants more from Equitrans on big pipeline project - The U.S. Environmental Protection Agency told the U.S. Army Corps of Engineers in a May letter that plans for a Pittsburgh company’s big pipeline construction may not be enough to comply with the Clean Water Act and that it shouldn’t grant a key permit until changes are made. The EPA’s comments in a May 27 interagency letter, which until now hadn’t been made public, is the latest challenge to the building of the 303-mile Mountain Valley Pipeline that will take Marcellus and Utica Shale natural gas from West Virginia to Virginia. It will connect with another pipeline in southwestern Pennsylvania and is a $6 billion project of Pittsburgh-based MVP and Equitrans Midstream Corp. (NYSE: ETRN). The pipeline is over budget and at least three years behind schedule due to litigation and challenges made by opponents of the pipeline. “The direct, secondary and cumulative impacts from the discharges associated with this project to these watersheds may result in significant degradation of the waters of the United States and reduce the ability for remaining aquatic resources to maintain hydrological, geochemical and biological functions,” wrote EPA Wetlands Branch Chief Jeffrey D. Lapp to the U.S. Army Corps of Engineers. The Army Corps is weighing a permit for water crossings that remain on the route. While work is continuing elsewhere on the route, the crossings of water and the Jefferson National Forest are key to finishing the pipeline. Lapp recommended that the pipeline permits not be approved until Equitrans modified its application, including employing different water crossing methods as well as having a restoration plan to restore the temporary impacts of pipeline construction. It said that some of the waterbodies may have long-term impacts to some of the creatures living there, including endangered species like the Roanoke logperch and the Candy darter. The letter notes 200 parts of the Upper Roanoke River watershed and 100 in the New River drainage areas where impacts can occur. The letter was obtained by Appalachian Mountain Advocates in a Freedom of Information Act request this week and was confirmed by the Army Corps. “They have received a comment letter from the USEPA and they are currently evaluating it,” said an Army Corps spokesman. “The letter has been provided to MVP for their response.” Neither EPA nor Equitrans responded to a request for comment. In May, Equitrans extended the time line for operation from the end of 2021 to summer 2022, citing regulatory challenges. David Sligh, conservation director of Wild Virginia, said the EPA wanted to see a review of what the construction would do to the watersheds. “It is now time for the Corps and the state regulators in both Virginia and West Virginia to step up and do their jobs,” Sligh said. “We are confident that proper analyses by these agencies will prove that MVP cannot go forward with this ill-conceived plan in a way that protects our waters and our communities.”
EPA recommends that Army Corps of Engineers not grant Mountain Valley Pipeline stream crossing permit - The U.S. Environmental Protection Agency has recommended that the Army Corps of Engineers not grant Mountain Valley Pipeline a critical permit to cross several hundred streams in Virginia and West Virginia. “EPA has identified a number of substantial concerns with the project as currently proposed, including whether all feasible avoidance and minimization measures have been undertaken, deficient characterization of the aquatic resources to be impacted, insufficient assessment of secondary and cumulative impacts and potential for significant degradation, and the proposed mitigation,” EPA Wetlands Branch Chief Jeffrey Lapp wrote in a May 27 letter. The letter was released in response to a Freedom of Information Act request by environmental law firm Appalachian Mountain Advocates. Roy Seneca, a regional spokesperson for the agency, said in an email Thursday that “EPA’s recommendation in the letter still stands.” Among areas of concern highlighted by the EPA are the Upper Roanoke watershed, which will experience 200 of the project’s proposed 719 stream impacts, and the Middle New watershed, which will see nearly 100 impacts. Numerous Southwest Virginia counties and cities, including Montgomery, Floyd and Roanoke, fall within these watersheds. “While many of the discharges of fill associated with the proposed construction activity may be considered temporary, the impacts from those discharges may have lasting effects, particularly due to the sensitivity of the aquatic resources and the repetitive nature of impacts to some of the tributaries,” EPA wrote. Natalie Cox, a spokesperson for Mountain Valley Pipeline, said in an email that the company has “continued to work closely with all federal and state agencies to address MVP’s permit applications.” “These efforts remain ongoing, and we are committed to meeting or exceeding all applicable compliance requirements related to environmental protection,” she wrote. Mountain Valley has struggled throughout its development to obtain and keep required environmental permits, causing its price tag to balloon to nearly $6.2 billion and its projected completion date to be repeatedly pushed back. This May the company said it expected to complete the project by summer 2022, due to extensions sought by Virginia and West Virginia regulators to review the stream-crossing permits. On June 28, the Army Corps of Engineers gave Virginia regulators until Dec. 31 to review the project’s state water quality certification.
Outdoor enthusiasts concerned about C&O Canal prospects following court ruling on pipeline — A recent federal court ruling could impact residents’ recreational use of the scenic C&O Canal. The U.S. Supreme court voted 5 to 4 last week, giving the okay for the 116-mile Penn-East natural gas pipeline’s construction. This pipeline will extend from southern Pennsylvania through western Maryland and into West Virginia. Environmental critics say the court decision will harm canoeing along the canal and the rail trail for bicycle enthusiasts on the Maryland side of the Potomac. “The rail trail and the canal is the lifeblood of Hancock at the moment. We just don’t want anything to mess that up. Hancock seems to be growing and we want to keep it that way,” said Jimmy Barnhart, owner of C&O Bicycles in Hancock. The Sierra Club says it will challenge a right-of-way permit for the pipeline, which must be issued by the National Park Service.
Biden Administration Backs South Portland's Authority To Block Oil Pipeline -The administration of President Joe Biden has submitted a legal filing that supports South Portland's local authority to prohibit the loading of crude oil onto tankers in its harbor.The city created a Clear Skies Ordinance in 2014 to block oil companies from building a tar sands export terminal.The Portland Pipe Line Corporation has challenged the ordinance, saying it's preempted by federal law. But in a filing submitted to the US First Circuit Court of Appeals on Monday, the federal government disagreed with that argument. The National Wildlife Federation, which has joined efforts to shut down a pipeline in Michigan, is praising the Biden Administration's position in South Portland's case. A staff attorney says it affirms that "states have the right to protect public health and natural resources by determining where an oil pipeline can be located."
Company exploring new gas pipeline in five central and eastern Va. counties - A company that appears to be affiliated with efforts to build a large natural gas plant in Charles City County is exploring the possibility of constructing a gas pipeline through five central and eastern Virginia counties, according to letters sent to residents. In the letters, Chickahominy Pipeline, LLC, requests landowners’ permission to enter their property to conduct surveys and other appraisals to determine the feasibility of building a 24-inch gas pipeline along an unspecified route through Charles City, Hanover, Henrico, Louisa and New Kent counties. “At this time, we will only be walking to determine the proposed route select (sic), the most visible route that will limit the impact to the property,” reads a letter to Hanover County property owners dated July 2. The pipeline company registered with the State Corporation Commission this January and lists the same address and registered agent as Chickahominy Power, LLC, a subsidiary of developer Balico, LLC, which is planning the proposed 1.6-gigawatt gas plant in Charles City County. Balico did not respond to an email about pipeline plans. What path the project might follow is not clear. Pipelines owned by Transco and Columbia Gas cross through Louisa County, and both Columbia and Virginia Natural Gas operate lines throughout the southeastern portion of the state. Chickahominy Power’s 2018 application to the State Corporation Commission for permission to construct and operate the facility noted that a 16-inch gas pipeline owned by Virginia Natural Gas crossed the proposed plant site. “Acquisition of natural gas production and arrangements for delivery to the facility will be provided by an independent fuel manager,” the application read. “The fuel gas supply system for the facility will receive pipeline quality natural gas from the gas supplier’s pipeline interface location, situated on site. … There are no incremental interstate natural gas pipelines currently related to the facility.”
Settlement reached in massive Colonial Pipeline gasoline spill in Huntersville – — Colonial Pipeline and federal regulators have reached a settlement in the massive gasoline spill in Huntersville, and it means Colonial will not go to court -- at least for now. Two teenagers riding an ATV on the Oehler Nature Preserve along Huntersville-Concord Road last August found the largest gas leak in North Carolina history. At last estimate, 1.2 million gallons of gasoline spilled from the Colonial Pipeline, but Colonial didn’t know about it until the teen’s report. According to a settlement between the company and the federal Pipeline and Hazardous Materials Safety Administration, the pipeline’s leak detection system never caught it -- and it wasn’t the first time, according to the settlement. The system also missed other spills in Virginia, Georgia and Alabama. While there’s no financial punishment for the leak in this settlement, Colonial agreed to evaluate and then improve that detection system as crews continue to clean-up the site.
Coast Guard: 'Large' oil leak during Georgia ship demolition (AP) — A large amount of oil has escaped a barrier after it was released while crews were dismantling an overturned cargo ship along the Georgia coast, the Coast Guard said Thursday. Coast Guard Petty Officer 2nd Class Michael Himes said it was hard to estimate how much oil leaked, but it has affected marsh grass along the shoreline. Crews noticed the leak around 8 a.m. while cutting away a fifth section of the Golden Ray, which capsized in September 2019 with about 4,200 automobiles in its cargo decks. Roughly half the ship remains partially submerged off St. Simons Island, about 70 miles (112 kilometers) south of Savannah. Himes said changing currents can push oil past the barrier surrounding the ship. “This is an unfortunate consequence of removing a wreck in this kind of environment,” Himes said. Demolition crews began working in November to remove the ship by cutting it into eight giant chunks and placing them on barges. Officials had hoped to have the work finished by last January, but numerous problems have caused delays. Most of the fuel onboard the ship was siphoned from its tanks long before demolition began, but Himes said officials knew there was the potential for additional leaks. Crews in June also cleaned up oil from the ship that escaped the environmental protection barrier. This leak appears worse, said Fletcher Sams, with the environmental group, Altamaha Riverkeeper. “We are seeing sheen everywhere,” he said. “It’s a lot of fuel.”
Swimmers Warned About Oil After Georgia Ship Spill —Health officials warned swimmers and fishers to be on the lookout for oil sheens off two Georgia islands after oil spilled from an overturned cargo ship while crews were dismantling it. The Coastal Health District issued the alert Thursday for the waters off Jekyll and St. Simons islands hours after a large amount of oil from the nearby Golden Ray escaped a barrier around the ship. The oil leaked while crews were cutting away a fifth section of the ship, which capsized in September 2019 with about 4,200 automobiles in its cargo decks. Roughly half the ship remains partially submerged off St. Simons Island, about 70 miles (112 kilometers) south of Savannah. Crews used absorbent boom and oil skimmers to capture spilled fuel. Officials have said it’s hard to estimate how much fuel spilled. The health district said swimmers and fishers should avoid areas with visible oil sheens, and swimmers should get out of the water if they see one. It recommended washing with soap and water in case of contact with oil or a tar ball. Demolition crews began working in November to remove the Golden Ray by cutting it into eight giant chunks and placing them on barges. Officials had hoped to have the work finished by last January, but numerous problems have caused delays. Most of the fuel onboard the ship was siphoned from its tanks long before demolition began, but officials have said they knew there was the potential for additional leaks. Crews in June also cleaned up oil from the ship that escaped the environmental protection barrier.
‘A victory for us’: Southwest Memphis residents elated as developers drop Byhalia Pipeline project - MLK50: Justice Through Journalism -- At first, it was just a few Black residents – most elderly – in one of Memphis’ poorer neighborhoods, up against a behemoth pipeline company. Then some younger activists showed up. They organized rallies, wrangled support from elected officials, filed and fought lawsuits. National media and celebrities took notice. And then late Friday afternoon came the news: Developers of the Byhalia Connection Pipeline – what proponents insisted would create hundreds of jobs and what opponents called the embodiment of environmental racism and a threat to the water supply – would no longer pursue the project.The explanation given was “lower US oil production resulting from the COVID-19 pandemic,” but at least one environmental activist gave the credit to pipeline opponents, including the grassroots Memphis Community Against the Pipeline organization“Byhalia Pipeline canceled!” tweeted former Vice President Al Gore. “Congrats to @MemphisCAP_org& the community of SW Memphis who made their voices heard to stop this reckless, racist ripoff! No more oil in our soil!” At a hastily called gathering Friday evening at Alonzo Weaver Park in Southwest Memphis — where MCAP held most of its rallies — MCAP founder Justin J. Pearson stood with his hands stretched to the sky, thanking God.“This is where what we view as power, met people-power, in a community they thought was powerless,” Pearson said. “It’s time to make sure we’ll never have to fight this fight again. And when we pass those laws, it will be an even bigger celebration.”
Plains All American abandons Byhalia pipeline. How Memphis reacted. --The company planning to build the Byhalia Connection pipeline on Friday announced that it is abandoning the project, bringing a sudden end to one of the biggest environmental controversies in recent Memphis history. The project, which would have put a crude oil pipeline through mostly Black South Memphis neighborhoods, sparked a complex legal and public relations battle that was fought in multiple venues, from the Memphis City Council to the court of national public opinion. Local opponents and celebrities such as Al Gore, Danny Glover and Jane Fonda voiced opposition — the former vice president visited Memphis and called the project "a reckless, racist rip-off.” Opponents also raised concerns about oil spills and threats to the area's drinking water, which is drawn from wells deep underground from the Memphis Sand aquifer. The companies Plains All American Pipeline and Valero Energy Corp. had formed a joint venture , Byhalia Connection LLC, to build the pipeline. The pipeline was to have started at the Valero refinery in South Memphis on West Mallory Avenue, traveled south across the Mississippi state line, and swung to the east before terminating in Marshall County, Mississippi. It was to connect two existing crude oil pipelines. Company representatives had argued for months that the pipeline could operate safely. But the opposition was organized, and in May, the company had told City Council representatives that it was putting the project on pause. Sarah Houston is an executive with the environmental group Protect Our Aquifer. She said her first reaction to Friday's news was that it was incredible. "We don't know if they'll come back or not, but right now it feels like a Fourth of July birthday present." Kathy Robinson, co-founder of Memphis Community Against the Pipeline, said she was shocked that the fight did not last as long as expected. "I anticipated this to last as long as the Keystone XL Pipeline, if I'm honest," Robinson said. A fight over construction of the 1,200-mile Keystone XL Pipeline had lasted for years and ended in June. "But I'm happy when I reflect on my family history and future. There will be one less industry in southwest Memphis today. There will not be a new entity poisoning us more, not today." Justin Pearson, another environmental activist and a key leader in the pipeline fight, spoke about the decision on Facebook Live. "We've shown them that we aren't the path of least resistance. We are the path of resilience." The statement released by the company didn't mention the opposition.
U.S. natgas slips off 30-month peak on milder weather outlook (Reuters) - U.S. natural gas futures retreated from a 30-month high on Tuesday as forecasts pointed to milder weather and lower demand over the next two weeks than previously expected. Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange fell 6.3 cents to settle 1.7% lower at $3.637 per million British thermal units (mmBtu) at 3:18 p.m. EDT. The session high of $3.822 was its highest since late 2018. "Forecasts show a broader area of normal-to-below normal temperatures, especially in the gas consuming areas, weighing on the market," But "the hottest weather is ahead of us across the country with the southeast not far above normal temperatures, so we could see higher natural gas prices later in the summer," he added. The front-month also remained in overbought territory with a relative strength index (RSI) over 70 for a eighth day in a row, further adding pressure to prices. Data provider Refinitiv said gas output in the Lower 48 U.S. states fell to an average of 90.4 billion cubic feet per day (bcfd) so far in July due mostly to pipeline problems in West Virginia. That compares with an average of 92.2 bcfd in June and an all-time high of 95.4 bcfd in November 2019. Refinitiv projected average gas demand, including exports, would slip from 93.3 bcfd in the prior week to 89.3 bcfd this week as milder weather cuts air conditioning use, before rising to 93 bcfd in the following week. The amount of gas flowing to U.S. liquefied natural gas (LNG) export plants averaged 11 bcfd so far in July, up from 10.1 bcfd in June but still below the record 11.5 bcfd in April. With European and Asian gas both trading over $12 per mmBtu, analysts said LNG exports from the United States would remain high. The Title Transfer Facility (TTF) in the Netherlands, the European gas benchmark, was near its highest since October 2008. U.S. pipeline exports to Mexico averaged 6.3 bcfd so far in July, down from a record 6.7 bcfd in June.
Paltry Storage Build Fuels Rebound for August Natural Gas Futures; Spot Prices Sail Higher -- Natural gas futures bounced back on Thursday, bolstered by an anemic increase in inventories that pointed to a tight supply/demand balance and ignited concerns about adequate storage levels. The August Nymex contract spiked 9.2 cents day/day and settled at $3.688/MMBtu. September jumped 9.3 cents to $3.667. NGI’s Spot Gas National Avg. advanced 10.5 cents to $3.525, led higher by strong demand in the West. Prior to Thursday, the prompt month had declined each of the two previous sessions along with a retreat in global commodities. The August contract held in negative territory early Thursday as well, but it soared after the U.S. Energy Information Administration (EIA) reported a 16 Bcf injection into storage for the week ended July 2. The EIA print came in below the low end of estimates reported in major polls. A Bloomberg survey produced a range of predictions from 19 Bcf to 47 Bcf, with a median of 27 Bcf. Results of a Reuters survey spanned 22 Bcf to 64 Bcf, with a median build of 29 Bcf. NGI’s model predicted a 28 Bcf increase. [Interested in NGI’s Weekly NatGas Storage figure? Sign up to receive our machine learning estimate of the EIA storage injection/withdrawal figure every Wednesday. Click to learn more about this free resource.] “Make no mistake about it, this number is quite strong, reflective of the tightest supply/demand balances we have seen yet this warm season,” Bespoke Weather Services said. “…We need more material gains in production in order to get back on a trajectory that promotes sufficient storage levels as we head toward and then into the upcoming winter season.” A year earlier, EIA recorded a 57 Bcf injection and the five-year average is 63 Bcf. Record heat scorched the Pacific Northwest during the covered week. Lofty temperatures peppered the East Coast and swaths of the nation’s midsection, too. Additionally, after summer maintenance projects wrapped up, liquefied natural gas (LNG) levels bounced back. LNG feed gas demand topped 11 Bcf on several days last week, approaching record levels after hovering below 10 Bcf through most of June. Production levels also declined in the Northeast and South Central regions last week.
East Coast gas storage risk fuels rally in Northeast winter forwards markets --A widening gas storage deficit in the Eastern US is raising alarm in the Northeast downstream market area, where winter 2021-22 forwards prices are up sharply since the start of injection season. Not registered? Receive daily email alerts, subscriber notes & personalize your experience. Register Now On July 8, prior-week storage data released by the US Energy Information Administration showed the smallest build to East Coast inventories since the transitional storage period in late April. In the week ending July 2, the East Coast gas industry injected just 8 Bcf to inventory, widening the region's storage deficit to the five-year average by 15 Bcf, or 36%. At 521 Bcf, East Region storage is now 57 Bcf below the five-year average and 133 Bcf below its corresponding year-ago level, EIA data shows. As the East Coast storage deficit continues to grow, forwards markets have already begun bracing for higher winter gas prices at key downstream locations along the Upper Atlantic Seaboard. At Boston-area hub Algonquin city-gates, the January 2022 forward gas contract settled as high as $12.85/MMBtu earlier this month -- up from the mid-$7s/MMBtu as recently as April. At Transco Zone 6 New York, the January contract has settled as high as $7.65/MMBtu recently, rising from the low-$6s/MMBtu in early April, S&P Global Platts' M2MS forwards data shows. Trailing inventory levels and rising winter gas prices in the Eastern US come as the region's supply balance faces pressure this summer amid strong power burn demand and relatively flat production. From June 1 to date, Northeast gas-fired power burn has averaged a record 9.4 Bcf/d, outpacing last summer's prior-record average over that period by about 100 MMcf/d. The new highs for power burn demand come despite significantly stronger gas prices this year, compared with 2020. Last month, population-weighted temperatures in the Northeast climbed into the 80s Fahrenheit on two separate occasions, making for the hottest June monthly average temperature in over a decade. Short-term forecasts show 80-degree temperatures returning to the Northeast in H2 July, bringing with them the possibility for another record demand month, S&P Global Plats Analytics data shows. According to a recent monthly forecast from the National Weather Service, the Northeast -- and New England especially -- face an elevated 40% to 50% risk for above-average temperatures in July.
Energy Transfer's Gulf Run pipeline to export fracked gas from Louisiana set to begin construction -- In June, the Federal Energy Regulatory Commission (FERC) narrowly approved the construction of a new 42” diameter gas pipeline that will connect shale wells in Louisiana, Pennsylvania, Texas, and Ohio to a liquefied natural gas (LNG) terminal on the Gulf Coast, carrying over a billion cubic feet of fracked gas to be transported overseas every day. The FERC decision was split, with two of the five commissioners dissenting, writing that the Commission had failed to adequately examine the climate-changing pollution linked to the fossil fuel pipeline. That dissent in Gulf Run takes on new relevance as the term of FERC Commissioner Neil Chatterjee, appointed by Donald Trump in 2017, ended on Wednesday. President Joe Biden is expected to soon announce a nominee as Chatterjee’s replacement — a decision rumored to be between Willie Phillips, who, according to Politico Morning Energy, previously worked for Jeff Sessions and interned in George W. Bush’s Office of General Counsel, and Maria Duaime Robinson, a former official with Advanced Energy Economy, which advocates for solar, wind, hydroelectric and nuclear energy. The Gulf Run pipeline, one small piece of the shale industry’s strategy to revive itself despite the growing climate crisis, offers a view of the crossroads faced by the Biden administration. The project highlights federal regulators’ continued business-as-usual approach to fossil fuel infrastructure projects with decades-long expected lifespans and regulators’ failures to curb greenhouse gas emissions.On the other hand, shifts within FERC could provide federal regulators with the opportunity to begin encouraging an energy transition, with energy experts at the International Energy Agency calling for an end to all new fossil fuel investments, citing the urgency of the climate crisis — a plan made all the more feasible by the rise of low-cost renewable energy options. Once built, the 134-mile Gulf Run pipeline will carry 1.1 billion cubic feet (bcf) of gas each day to the Golden Pass LNG terminal, a project by ExxonMobil and Qatar Petroleumaiming to export up to 2.5 bcf per day by 2026. That’s enough gas each day to supply roughly 12.5 million U.S. homes. But the Gulf Run pipeline is able to transport even more than that, with a total capacity of up to 1.7 bcf per day. The pipeline’s backers plan to have it up and running by 2022 (though Golden Pass won’t begin exporting LNG until 2025).Energy Transfer — the builder of the Dakota Access, Mariner East, and Bayou Bridge pipelines — announced in February that it was acquiring Enable Midstream, the company behind Gulf Run. Gulf Run’s relatively modest price tag — estimated at $540 million by its builders or over $1.1 billion by FERC — belies the volume of gas it can carry, which is greater than the canceled Atlantic Coast pipeline, which clocked in at 1.5 bcf per day and wound up embroiled in legal challenges that reached the Supreme Court.Gulf Run’s relatively low construction cost, compared to other pipelines capable of carrying a similar amount of gas, is in part because the project, according to Enable’s CEO Ron Sailor, “makes significant use of existing assets” — only part of the pipeline will be newly built, with the rest consisting of repurposed existing pipes and compressor stations that will be modified to allow gas to flow in two directions. The company also noted that it acquired pipe for the new construction at “favorable pricing relative to market.”
The U.S. Gas Industry Is Headed for Hard Times - New Republic -One way or another, U.S. liquefied natural gas is on course for a reckoning. One batch of bad news for the industry came in May, when the International Energy Agency reported that in a scenario for meeting current climate targets, “many of the liquefied natural gas (LNG) liquefaction facilities currently under construction or at the planning stage” are “not needed.” This week, a new report from the agency found that even the slowdown in gas demand projected to begin next year “may still be too high to match a net-zero emissions path.”Yet in May, American LNG exports climbed to record highs. LNG production here is currently on track to reach its highest-ever levels this year amid economic recoveries at home and abroad, according to the independent energy consultancy Rystad Energy. Shell noted earlier this year that it expects LNG demand to nearly double by 2040, with Asia accounting for 75 percent of demand growth. But times could be changing. Last week, the Department of Energy announced it would review a proposed LNG export facility in Alaska’s North Slope, being built by state-owned Alaska Gasline Development Corp. The DOE’s supplemental environmental impact statement will analyze both the project’s local environmental harms and the life-cycle greenhouse gas emissions of the LNG it would export, most of which is destined for Asia. The review is being carried out as a result of two executive orders issued by the Biden administration in January, directing federal agencies to review and strengthen regulations to combat the climate crisis. Prompted by a request from the Sierra Club, this action from the department could set an important precedent for the U.S. reviewing the climate impacts of its fossil fuel exports, whose burning tends not to be reflected in domestic greenhouse gas accounting. U.S. gas is in a tricky economic situation as it is. As exports have surged, the short-run marginal costs for exporting to one of its key target markets—Asia—have risen by 65 percent since this time last year, amid rising transportation and oil prices. Given how costly American LNG is relative to LNG from other providers like Qatar, it could struggle in Asia, in particular, over the next several years, regardless of what new climate rules stick. Other projects have already been canceled. In March, Annova LNG announced that it was abandoning its proposed export facility in South Texas’s Brownsville Ship Channel, citing “changes in the Global LNG market.” “Without pressure from the administration on emerging markets to guarantee purchases of U.S. gas, exporters might have to navigate the competitive market environment at their own risk,” Sam Reynolds and Melissa Brown of International Energy Economics and Financial Analysis, or IEEFA, wrote in a recent report. While the DOE review of the Alaska LNG megaproject may signal a change, state support for fossil fuels is continuing on other fronts. Founded in 2018, the U.S. government’s multi-agency Asia Enhancing Development Through Energy, or EDGE, aims to “grow sustainable and secure energy markets throughout the Indo-Pacific,” and “[expand] the downstream regional market for natural gas and LNG imports.” The program is actively supporting gas development in the Philippines, where the Gas Policy Development Project—a collaboration between that country’s Department of Energy and the University of the Philippines Statistical Center Research Foundation—is reportedly still receiving State Department funds.
US Natural Gas Rig Count Up Two as GOM Activity Rises - The U.S. natural gas rig count rose two units to finish at 101 during the week ended Friday, a week that also saw a notable uptick in drilling activity in the Gulf of Mexico (GOM), according to updated data from oilfield services provider Baker Hughes Co. (BKR). Weekly US Oil & Gas Drilling Summary Drilling gains in the United States for the week were split evenly between natural gas-directed rigs and oil-directed units, which also increased by two. The combined U.S. rig count finished at 479 as of Friday compared with 258 at this time last year, according to the BKR numbers, which are based in part on data from Enverus. The GOM saw a three-rig increase for the week to reach 17 rigs overall, improving on its count of 12 from a year earlier. Two rigs were added on land in the United States, while one rig departed from inland waters. Horizontal units increased by four; one directional unit was added, while one vertical rig departed for the week. The Canadian rig count, meanwhile, climbed one unit week/week to reach 137, up from 26 in the year-ago period. Changes there included the addition of one oil-directed rig and one gas-directed, partially offset by a decline of one miscellaneous unit. Broken down by major play, there were no significant net changes week/week. The Utica Shale saw a one-rig increase, bringing its total to 10, versus 8 a year ago, according to BKR. Broken down by state, Texas saw a net increase of two rigs for the period, while Louisiana, Ohio, West Virginia and Wyoming each added one rig to their respective totals. Colorado and Pennsylvania each posted net decline of one rig for the week.
Fracking Dumps Millions of Gallons of Toxic Chemicals Into Gulf of Mexico - A fracking boom in the Gulf of Mexico poses a major risk to human health and wildlife, a new report from the Center for Biological Diversity (CBD) has found. The report, published Wednesday, calculated that oil and gas companies had dumped at least 66.3 million gallons of fracking fluids into the vulnerable waters of the Gulf between 2010 and 2020 with government approval. "Offshore fracking threatens Gulf communities and wildlife far more than our government has acknowledged. To protect life and our climate, we should ban these extreme extraction techniques," CBD oceans program director Miyoko Sakashita said in a press release. "A decade into the offshore fracking boom, officials still haven't properly studied its public health impacts. The failure to curb this major source of pollution is astounding and unacceptable." CBD compiled its figures based on scientific studies and federal reports obtained via a Freedom of Information Act request. The figures reveal both the extent of industrial pollution and the fact that the federal government has allowed it. There has been a fracking boom in the Gulf of Mexico in the past decade, and the waters off Alabama, Mississippi, Louisiana, and Texas account for around 98 percent of all the offshore oil and gas produced in the U.S. Since 2010, the federal government has approved at least 3,039 incidences of fracking and at least 760 incidences of acidizing in the area.When fracking occurs, water and chemicals are blasted into the seafloor to release oil and gas. Acidizing, on the other hand, involves using hydrofluoric and hydrochloric acid to carve channels in the rock for the fossil fuels to flow out."The federal government allows oil companies to dump produced wastewater, including fracking and acidizing chemicals, into the Gulf without limit," the report authors wrote.There is evidence that the chemicals involved in fracking can harm human and animal health. They have been shown to kill marine life in laboratory settings at concentrations equal to the ones measured near fracking platforms. Chemicals involved in fracking can also cause reproductive harm, cancer and death.Further, fracking contributes to the climate crisis and threatens the economy of the Gulf. Tourism and fishing, which are both put at risk by offshore fracking, create more than 10 times the jobs that the fossil fuel industry provides. Fracking isn't the only way that fossil fuels harm the Gulf and its ecosystems, of course. The 2010 Deepwater Horizon oil spill continues to harm human and animal health ten years after the fact, as National Geographic reported in 2020. And an Oceana report also published that year warned that another such disaster could easily occur in the same waters. "Offshore drilling is still as dirty and dangerous as it was 10 years ago," Oceana campaign director Diane Hoskins said at the time. "If anything, another disaster is more likely today as the oil industry drills deeper and farther offshore."
Giant fire erupts in Gulf after pipeline leak -Fire officials spent more than five hours Friday putting out a fire that erupted in the Gulf of Mexico that officials with Mexico's state-owned oil company said was due to a pipeline leak.Videos of the blaze west of Mexico’s Yucatan Peninsula went viral on social media, with users calling the massive circular blaze erupting from within the water an “eye of fire.” The flames could be seen a short distance away from an oil platform atPetróleos Mexicanos's (Pemex) Ku Maloob Zaap oil field, which Reuters reported is the company’s most important oil center.In some footage from the incident, several boats could be seen surrounding the blaze attempting to douse the flames. Reuters reported that company workers used nitrogen to control the fire. Pemex said in a press release that the fire began around 5:15 a.m. local time following a gas leak in its 12-inch submarine pipeline off the platform located just up the southern rim of the Gulf.The company said emergency officials responded to the incident “immediately,” activating security protocols and receiving help from fire fighting vessels from nearby Santa Cruz Island, Campeche Bay and Bourbon Alienor.Pemex added that it was able to close the valves of the pipeline, with the fire extinguished by about 10:45 a.m. The Mexican oil company, which said it was investigating what exactly caused the fire, said there were no injuries reported, and it was able to continue production at the facility.A Pemex incident report that was shared with Reuters stated that "The turbomachinery of Ku Maloob Zaap's active production facilities were affected by an electrical storm and heavy rains," though it was not immediately clear if this led to the oil leak.
Burst pipeline causes bubbling, steaming "eye of fire" to emerge in the Gulf of Mexico - CBS News -It seems like something that could only appear in a movie, but on Friday, it was reality: The ocean was on fire. A gas leak west of Mexico's Yucatan Peninsula broke out of an underwater pipeline, causing bright flames to appear to boil up to the Gulf of Mexico's surface and create what many described as an "eye of fire."Gas started leaking from the pipeline in the Campeche Sound at roughly 5:15 a.m. on Friday, according to a statement from the company that owns the pipeline, Petróleos Mexicanos, otherwise known as Pemex.Pemex, a state-owned petroleum company, said in its statement that the incident was dealt with immediately after security protocols were activated, and firefighting vessels were sent to deal with the incident.Normal operating conditions resumed around 10:45 a.m. on Friday, Pemex said, after interconnection valves were closed and the fire was extinguished. The company reported no injuries or evacuees, and said that it will investigate what happened.Angel Carrizales, executive director of Mexico's security, energy and environment agency, wrote on Twitter that the pipeline did not generate a spill.Journalist Manuel Lopez San Martin posted the now-viral videos on Twitter, which show four ships appearing to spray water at the massive circle of flames. The fire, according to Martin, was just 400 meters from an oil platform. Pemex has a history of major industrial accidents. According to its website, the company operates 81 drilling rigs, including 11 that are offshore. In April, one of Pemex's wells in Sota la Marina in Tamaulipas, Mexica, developed a leak, according to a statement on the company's website. The company said it would build a dam to prevent the flow of water and clay and that the leak did not pose any risk because the area was unpopulated. In February, a fire broke out at the Tula-Salamanca pipeline in San Juan del Rio, but later controlled and extinguished the blaze, the company said in a statement. In January 2019, a Pemex-owned fuel pipeline in Tlauhuelilpan, Hidalgo exploded, killing dozens of people who were gathered around an illegal pipe drain to get fuel. Following the incident, Pemex said the pipeline had been breached 10 times over three months. It was estimated that 10,000 barrels of gasoline were going through the pipeline with 20 kilograms of pressure when it ruptured.
Intense lightening storm ignited gas pipeline leak in Gulf of Mexico - Mexico's state-owned oil company said Monday that a bizarre chain of events, including a lightening storm and a simultaneous gas pipeline leak, set off a strange subaquatic fireball seen last week in the Gulf of Mexico. Petroleos Mexicanos said an intense storm of rain and lightening on July 2 forced the company to shut off pumping stations serving the offshore rig near where the fire occurred. Simultaneously, the leak in an underwater pipeline allowed natural gas to build up on the ocean floor and once it rose to the surface, it was probably ignited by a lightening bolt, the company said. Pemex sent fire control boats to pump more water over the flames and no one was injured in the incident in the offshore Ku-Maloob-Zaap field. It said no crude oil was spilled. Pemex said it was repairing the pumps and investigating the cause of the gas leak. The accident unleashed a subaquatic fireball that appeared to boil the waters of the Gulf of Mexico, and drew a hail of criticism from environmentalists. Greenpeace Mexico said the fire, which took five hours to extinguish, "demonstrates the serious risks that Mexico's fossil fuel model poses for the environment and people's safety." President Andrs Manuel Lpez Obrador has bet heavily on drilling more wells and buying or building oil refineries. He touts oil as "the best business in the world." Climate activist Greta Thunberg reposted a video clip of the fireball on her Twitter account. "Meanwhile, the people in power call themselves climate leaders' as they open up new oilfields, pipelines and coal power plants granting new oil licenses exploring future oil drilling sites," Thunberg wrote. "This is the world they are leaving for us.”
Patterson-UTI to Expand USA Drilling Fleet 11% - Onshore U.S. drilling specialist Patterson-UTI Energy, Inc. revealed Tuesday that it will add 16 super-spec drilling rigs to its 150-rig domestic fleet. Patterson-UTI will add the land rigs via its pending $295 million acquisition of Pioneer Energy Services Corp., which it announced Tuesday. “As a leading provider of contract drilling services in the United States, we are proud to announce this transaction,” Patterson-UTI CEO Andy Hendricks remarked in a written statement emailed to Rigzone. “Pioneer’s high-quality fleet of 17 drilling rigs in the United States, of which 16 are super-spec, will be a valuable addition to our business. Additionally, many of these rigs are capable of substituting cleaner-burning natural gas for diesel, a technology that is becoming increasingly important to operators for reduced emissions.” According to Patterson-UTI, the acquisition deal will retire all of Pioneer’s debt. Moreover, it stated the agreement calls for issuing up to 26,275,000 shares of Patterson-UTI common stock plus a $30 million cash payment. In addition to growing Patterson-UTI’s U.S. super-spec rig fleet to 166 units, nearly one-half of which will be able to run on alternative power sources, the transaction will expand the firm’s geographic footprint internationally with the addition of eight pad-capable rigs in Colombia, Patterson-UTI noted. Hendricks pointed out that Pioneer has worked in Colombia for 14 years with an experienced operations team and well-established infrastructure.Pioneer Energy Services’ holdings also include a 123-service-rig well service business in the Gulf Coast region that Patterson-UTI expects to divest following the transaction.
State Oil Conservation Division can issue fines for spills | The NM Political Report - Soon the state’s Oil Conservation Division will have the ability to issue civil fines when oil and natural gas industry spills occur. The Oil Conservation Commission approved a final order to amend the state’s release rule during a meeting on Thursday. This unanimous vote came approximately one month after it was discussed and approved during a two-day hearing. The rule change will be printed in the New Mexico Register in August prior to taking effect. The change comes as a result of a petition filed in March by WildEarth Guardians and the New Mexico Energy, Minerals and Natural Resources Division, which oversees the OCD, seeking amendments to the release rule. Currently, spills are permissible and the OCD is only able to penalize the operators if they fail to report a spill. Those spills include oil, gas, produced water, oil field waste and other contaminants. The rule change will give the OCD increased authority to take enforcement actions, such as levying civil penalties, against operators when spills occur and will prohibit both major and minor spills. “The vote today will give EMNRD’s Oil Conservation Division another tool to uphold our statutory authority to protect human health and the environment,” EMNRD Cabinet Secretary Sarah Cottrell Propst said in a press release. “Multiple stakeholders came together to finalize this common-sense change that will benefit New Mexicans, another example of this administration’s commitment to collaboration and problem-solving.”
New Mexico oil oversight agency, with restored authority, plugs orphaned wells, issues fines -The agency that regulates the state’s oil and gas industry is issuing citations and plugging abandoned wells at a faster rate since regaining enforcement power in 2020. The Oil Conservation Division reported filing 23 complaints against operators — imposing $263,000 in penalties — while plugging 49 orphaned wells, the most in one year since at least 2016. The fines are the first the agency has meted out in more than a decade. The agency credits the increased oversight with state lawmakers restoring its authority to issue administrative penalties, a power the New Mexico Supreme Court in 2009 ruled the agency did not have under the Oil and Gas Act’s previous language. “In the past two years the OCD has reinforced its commitment to compliance that has only accelerated in the past fiscal year,” Adrienne Sandoval, the agency’s director, said in a statement. “Our continued work to modernize the division and work efficiently is paying off.” Before, the agency worked with noncompliant operators to get them in line, including through agreed-upon orders that set schedules for reaching compliance, Wendy Mason, the agency’s acting spokeswoman, wrote in an email. If that effort failed, the agency could hold a hearing to seek administrative sanctions, such as requiring a well to be plugged or canceling authorization to transport oil, Mason wrote.
New Mexico Oilfield Jobs Not Projected to Rebound - New Mexico’s oil and gas industry has rebounded to pre-pandemic levels in key categories, delivering record amounts of petroleum to markets, money to state coffers and helping add record amounts of carbon dioxide to the atmosphere. But what haven’t rebounded are the state’s oilfield jobs, which are expected to remain 25% or more below pre-pandemic levels for at least the next five years. According to recent projections from the Bureau of Business and Economic Research (BBER) at the University of New Mexico, oil and gas jobs in New Mexico will return to only 74% of their pre-pandemic levels in the near future. For years, state officials and industry boosters have pointed to oilfield revenues and oilfield jobs as the two main reasons for supporting an industry that also fuels the state’s climate emergency. Now, one of those key reasons is likely dissipating. “Basically, the production of oil is becoming more efficient,” says BBER acting director Michael O’Donnell. The state is hitting “maximum levels of production” he says, “and yet employment is low.” The BBER employment calculations rely upon a close reading of past employment, industry news and interviews with industry leaders, O’Donnell says. And there’s no question that the industry is pumping oil and gas from the ground at record rates, with fewer people. Democratic state Sen. Carrie Hamblen is worried about what happens to workers displaced by the shifting industry. “We have to put an infrastructure in place where the folks who are working in those jobs can get job training and make either equal to or more than what they’re making today so that they can support their families.”
New Mexico groups join call for end to federal oil and gas 'subsidies' -New Mexico environmental groups joined a national call to end federal oil and gas subsidies, arguing President Joe Biden promised to do so when running for office last year but the federal government since failed to act. A coalition led by the National Resources Defense Council Action Fund, and including New Mexico groups the Center for Civic Policy, Climate Advocates Voces Unidas (CAVU), New Energy Economy and New Mexico Climate Justice penned a letter to leaders in Congress calling for cuts to federal support of the fossil fuel industry and eliminating all tax subsidies. Biden did include a call to remove the subsidies in his Fiscal Year 2020 budget proposal, proposing about $121 billion in cuts over the next decade, per the letter. “It is past time to remove the burden of dirty energy support from the public and instead turn the efforts of the government to supporting clean energy and the jobs it generates,” the letter read. “Action now will help us protect the climate, promote a more equitable, clean energy economy for America, and strengthen international leadership.” The groups pointed to impacts of pollution from fossil fuel production like climate change, contending the problems worsened in recent years and should result in removing $15 billion in “federal giveaways” to the industry. They demanded the government support emerging renewable energy sectors, and pointed to reforms needed for tax credits, research funding, well clean up and public land leasing. “These subsidies have persisted despite numerous calls for their elimination, including the international commitments of our government and strong recent calls from President Joe Biden, as expressed repeatedly over the last two years and most recently in his FY2022 budget proposal,” read the letter.
Water protectors protesting at Willow River warn Line 3 'is a catastrophic threat' - - The Indigenous-led fight against Line 3 continued Tuesday as water protectors descended on the area of Willow River where Canadian energy giant Enbridge is working to install a “climate-wrecking” tar sands pipeline to replace one that was built in the 1960s.Water protectors attached themselves to drilling equipment and built blockades on access roads in an effort to halt construction in Minnesota on Tuesday, according to a statement from organizers.Pipeline opponents also joined Indigenous leaders Winona LaDuke, executive director of Honor the Earth, and Tania Aubid to stand in the river in prayer.“We the people are here in the river because the rivers belong to the fish, they belong to the animals, and they belong to the people—and they don’t belong to Enbridge,” LaDuke said in a video from the river shared on social media.Speaking from the river, which is part of the Mississippi watershed, Aubid said: “Minnesota, you will be held accountable along with the federal and Canadian governments for the genocide of Mother Earth.”“We cannot allow them to take these rivers,” Taysha Martineau, a water protector of the Fond du Lac Tribe who has helped build Camp Migizi, said about Tuesday’s direct action. “Enbridge was given a cease-and-desist notice in order to protect the ceremonial lodge,” Martineau explained. “The state of Minnesota has refused to abide by that order and so action was taken. Abide by the order or we will continue to use people power to shut it down.”An unnamed water protector locked down in Minnesota declared that “Line 3 is a catastrophic threat to the land, the water, the people, wild rice, and the climate.”“This pipeline violates the treaty rights of the Anishinaabe and is not being built with Indigenous consent,” the water protector noted, before taking aim at the company behind it:Enbridge has a long history of spills, many of which occur in the first 10 years of a pipeline operating. They do not care about the land, the people, or their workers. They only care about the money, so we are putting pressure on their pocketbooks by slowing the progress of Line 3 until we stop it altogether. Polluted water, land, and rapid climate change are threats to us all, and Line 3 will cause unpredictable levels of damage if it becomes active. “Actions like this one are a fight for all of our survival,” the activist added, “and should be seen as nothing less.”
Activist Jessica Reznicek sentenced in Dakota Access pipeline sabotage - Iowa climate activist sentenced to eight years in federal prison for Dakota Access pipeline sabotage - One of two central Iowa women responsible for millions of dollars in damage to the Dakota Access pipeline was sentenced in federal court Wednesday to eight years in prison. Climate activists Jessica Reznicek, 39, and Ruby Montoya, 31, were indicted on nine federal charges each in September 2019, including charges for damaging an energy facility, use of fire in the commission of a felony, and malicious use of fire. Reznicek and Montoya both pleaded guilty to a single count of damaging an energy facility. The remaining charges were dismissed. In July 2017 the women claimed credit for a series of acts of sabotage, including burning pipeline construction equipment at a Buena Vista County worksite in November 2016 and using oxyacetylene cutting torches or gasoline-soaked rags to damage other pipeline sites around the state between March and May 2017. At the time of their admission, they were affiliated with the Des Moines Catholic Workers' social justice movement. In court Wednesday, Reznicek said she committed the acts against the pipeline because she was concerned it would spill and further contaminate drinking water in Iowa."The toxins we enter into our waterways here in Iowa enter into the Mississippi (River) which enters into the Gulf (of Mexico)," Reznicek said during sentencing Wednesday. "Going to this extreme was out of character for me." Montoya will be sentenced July 30. The Des Moines Catholic Worker community was founded in 1976 in response to the Gospel call for compassionate action like that characterized by the Sermon on the Mount. Catholic Workers are not all Catholics and they are not controlled by the bishop of the Des Moines Roman Catholic Diocese. The Catholic Workers also have no financial ties to the diocese.
As clock ticks for proposed oil refinery near North Dakota national park, opponents doubt project's future — Even with a second extension granted by North Dakota environmental regulators, time may be running thin for a proposed and financially troubled oil refinery near Theodore Roosevelt National Park, and opponents of the project are skeptical it can draw the needed investment to go forward with construction. Three years since Houston-based Meridian Energy Group acquired a requisite air quality permit from the North Dakota Department of Environmental Quality, the company still hasn't started construction at the site of its Davis Refinery three miles from North Dakota's only national park. The company previously received an 18-month extension on the permit after the project stalled during litigation with environmental groups. That deadline expired on June 12, but state regulators granted the project an additional 90 days to commence construction or risk losing the permit. And though Meridian Energy has been dogged by both environmental and financial litigation in the last few years, the company's top executive insists the Davis Refinery is moving full steam ahead. "We are in a very, very strong position in terms of financing this project," said CEO William Prentice, who added that he's confident construction will be underway "well before" the new mid-September deadline. Environmental groups have continued to vigorously oppose the refinery, but some also said the company's track record of delays, financial lawsuits and unpaid bills leave them doubtful that the project can draw the big investments it needs to start building.
Dakota Access not the only pipeline in legal jeopardy -Dakota Access is not the only Bakken pipeline whose fate is in question. Marathon’s Tesoro High Plains crude oil system in Montana and North Dakota is also embroiled in a legal quagmire, putting its fate in doubt. The underground crude oil system is important because it collectively carries about one-third of the Bakken’s crude oil to market. Marathon had shut the line partially down after an order from the Bureau of Indian Affairs, amid claims that the pipeline has been trespassing on Native American land for seven years. Marathon was also fined $187 million in damages in connection with that decision, which the Trump administration Larter reduced to $4 million. The Biden administration, however, reviewed the decisions and vacated all of them, amid due process concerns. They sent the matter back to the regional director, with instructions to provide a full and fair opportunity for all parties to be heard — basically, square one. Marathon, meanwhile, filed suit against the government, accusing it of violating the Administrative Procedure Act for vacating the orders without any of the required notice, as well as violating Fifth Amendment due process rights. In the suit, filed in the U.S. District Court for North Dakota, Marathon says it has already fully paid back-rent and past-use payments, as dictated by the BIA. The total tab was $4 million, including $2.2 million for back rent and unauthorized use and $1.7 million in interest. The pipeline system in question was built in the 1950s and its right of way was issued by the BIA in 1953. The right of way was renewed and reissued every 20 years thereafter, up to June 2013. Attempts to negotiate a new right of way for the line fell apart amid disputes about the true market-value of the leases. The line was previously owned by Tesoro, which changed its name to Andeavor, the latter of which was purchased by Marathon purchased in 2018. Andeavor had sought to renew the leases for the line prior to its sale, but after negotiations fell apart the individual landowners, who control 66 of the 90 acres in question, filed suit.
North Dakota Sues Federal Government Over Canceled Oil and Gas Leasing - (Reuters) - North Dakota is suing the U.S. government on claims the Department of the Interior and the Bureau of Land Management illegally canceled oil and gas lease auctions in the state. The complaint, filed late Wednesday with the United States District Court for the District of North Dakota Western Division, said March and June auctions nixed by the federal agencies cost the state $80 million in lost revenues. “I have taken this action to protect North Dakota's economy, the jobs of our hard-working citizens, and North Dakota's rights to control its own natural resources,” North Dakota Attorney General Wayne Stenehjem said in a statement. North Dakota is the second-biggest crude oil producing U.S. state, with the bulk of its tax revenues produced by oil and gas activity. The amount of lost revenue caused by canceled leases could grow to into billions of dollars in the coming months, the state argued. The Bureau of Land Management and Department of the Interior were not immediately available for comment. The lawsuit follows a ruling by a federal judge in Louisiana last month blocking the Biden administration's pause on oil and gas leasing on public lands and waters. The order granted a preliminary injunction to Louisiana and 12 other states that sued Democratic President Joe Biden and the Interior Department over the leasing freeze, a key element of the White House's effort to address climate change.
Shale Rushes to Lock In Oil Rally --- As soon as OPEC+ negotiations fell apart on Monday, stoking fears of a supply squeeze and sending oil prices soaring, U.S. shale executives began hitting the phones. They weren’t ordering their crews to drill for more oil. They weren’t game-planning a miraculous comeback in American crude production. They were securing hedges -- locking in prices for the oil they plan to produce next year and protecting themselves against a potential market slump, people familiar with the trades said, asking not to be named because the information isn’t public. The hedges are just about the only thing that’s certain about shale’s response to the OPEC+ crisis thus far. The cartel’s failure to reach a deal in several meetings since last week has raised the question of whether America’s oil drillers will stage a comeback and take advantage of the moment to steal market share. Some, on the other hand, fear the group’s rift could trigger a price war that would flood the market with crude. It most certainly represents the biggest test yet of shale’s newfound resolve to act with discipline and focus on investor returns as opposed to obsessing over growth. Whether the industry will manage to stay its course or put hundreds of sidelined drill rigs back to work is a matter of great debate. Shirin Lakhani, a senior oil analyst at Rapidan Energy Group, said publicly traded shale producers are “still more focused on capital discipline, increasing shareholder returns, and maintaining positive free cash flow.” Meanwhile, energy analyst Paul Sankey described the industry as “spending alcoholics standing in a fully stocked bar right now.” The head of Patterson-UTI Energy Inc., the second-largest owner of drilling rigs in the shale patch, said in an interview Tuesday that he believes shale drillers are capable of doing both -- raising output in response to high oil prices and keeping their promise of spending discipline to investors. What’s clear for the time being is that U.S. producers have yet to show any meaningful signs of returning to growth in the shale patches from Texas to North Dakota. And it could very well be that the industry waits out the OPEC+ storm, sees how it all plays out and gauges investor sentiment before deciding on its next move.But investors’ mindset could actually be what shifts, he said: “With oil trading at $73 a barrel, they’re going to be saying, ‘Why don’t you drill a little bit more? Let’s produce a little bit more.’” Until that happens, they’re hedging: Open interest on New York oil futures, which indicates the total number of contracts held by the market at the end of a trading day, has risen strongly in the past week, mostly in tandem with gains in U.S. oil prices. Some of it stems from shale drillers taking out new positions as a means to hedge or protect their spending budgets in case prices weaken in the months to come.
A quest for Alaska oil sparks a fight over tribal sovereignty — Up to 2 million birds arrive each year to nest in the shallow ponds and spruce forests of the Yukon Flats National Wildlife Refuge, some of North America’s most productive waterfowl breeding grounds. Along with salmon, moose and other wildlife, they provide food for the human residents of the region, where a half-gallon of milk can cost $7.99. “It’s not only our subsistence,” said Rochelle Adams, a member of the Gwichyaa Zhee Gwich’in Tribal Government of Fort Yukon, who is from the villages of Fort Yukon and Beaver. “It’s our connection to the lands and waters. It’s a part of our identity, because our people have lived here since our creation.” This summer, drilling rigs will join the wildlife in the Yukon Flats, as Hilcorp Alaska, a private company with a reputation for regulatory violations, explores for oil and gas. Hilcorp is operating under a 2019 agreement with Doyon Ltd., an Alaska Native regional corporation, which owns 1.6 million acres of mineral rights bordering the Yukon Flats National Wildlife Refuge. The companies’ plans have raised concerns among local tribes and exposed the complicated dynamics between for-profit Alaska Native corporations and sovereign tribal governments. Soon after Doyon announced its deal with Hilcorp, the Gwichyaa Zhee Gwich’in Tribal Government passed a resolution opposing oil and gas development in the Yukon Flats, citing worries about environmental degradation, threats to traditional ways of life and infringements on tribal sovereignty. Last fall, the board of the Tanana Chiefs Conference, which represents 42 tribal governments in Alaska’s Interior, alsoopposed the project. “What we get to consume here is the most unadulterated food on the planet,” said Dacho Alexander, a Gwichyaa Zhee Tribal Government council member and former chief. “Our water is clean. Our environment is clean. There’s just simply no dollar amount that you could put on those places.” To Alexander, Doyon’s push to explore for fossil fuels illustrates a “major disconnect” between Alaska Native regional corporations and tribal governments. Unlike federally recognized tribes, which are sovereign nations, Alaska Native corporations are for-profit companies owned by Alaska Native shareholders, who receive annual dividends of a few hundred to a few thousand dollars. They were created under the 1971 federal Alaska Native Claims Settlement Act to give tribal members economic autonomy, primarily through ownership of natural resources. Today, Doyon is the largest private landowner in Alaska, with more than 20,000 shareholders.
Canada's gas storage injection activity remains low as spreads promote exports --Despite an ever-growing natural gas storage deficit, price spreads continue to compel Canadian producers and marketers to export volumes to the US rather than inject into regional storage fields, increasing the likelihood of a very tight market when demand escalates this winter. This summer's injection pace has been considerably slower than what is needed to fill Canadian storage fields back to historic norms. Injections have averaged 800 MMcf/d summer-to-date which is less than half of last summer's average, according to S&P Global Platts Analytics. The weaker injections are in line with what was averaged during the constraint-driven summers of 2017, 2018 and 2019. The low injection rate has continued all season despite summer starting with a storage inventory well below historical norms. It has likely been driven by poor economics to inject. The cash-to-winter spread has averaged 12 cents/MMBtu this summer, well below last summer's 50 cents/MMBtu average spread. However, record heat and an outage in the US Northeast recently drove these economics into more extreme territory. Prices across most of North America have strengthened over the past month causing cash-to-winter strip spreads to narrow. This has resulted in an already bleak injection environment in Western Canada. It has the potential to tighten AECO further this winter. Henry Hub prices were up 85 cents on July 7 from their May average. AECO hub shot up with it as production faltered amid a blistering heat wave and strong demand. The cash-to-winter strip inverted during this time, with the July 1 AECO cash price reaching 41 cents higher than the winter strip price as West Canada reported net withdrawals from storage at this time. Prices have normalized the past few days as record heat subsides and an outage in the US Northeast that cut production by several Bcf/d has ended. But even with prices normalizing, the futures market shows injections could be even weaker the rest of this summer than the market was already expecting, according to Platts Analytics. The average AECO balance-of-summer 2021 futures spread to the winter strip is now trending at its tightest level of the summer. These recent shifts in the forward curves could lead to even weaker injections than Platts Analytics was anticipating this summer. Canada could enter this winter even further below historic norms than what was previously expected, should futures play out at their current prices.
Company behind Keystone XL seeks $15B in damages from US - The company behind the now-abandoned Keystone XL pipeline hopes to obtain more than $15 billion from the U.S. government, alleging damages from President Biden’s revocation of its permit for the project. TC Energy announced in a Friday press release that it had filed a notice of intent with the State Department’s Office of the Legal Adviser to “initiate a legacy North American Free Trade Agreement (NAFTA) claim under the United States-Mexico-Canada Agreement.” The company, which announced last month that it was officially scrapping the pipeline project after Biden revoked a key permit on his first day in the Oval Office, said that it is seeking compensation for losses "suffered as a result of the U.S. Government’s breach of its NAFTA obligations." The Hill has reached out to the State Department for comment. The permit, which was approved by former President Trump in the first months of his presidency, had authorized the construction of a 1,200-mile pipeline that would have carried oil from Canada to the U.S. The project was widely condemned by environmental and indigenous groups, which argued that it would have had detrimental environmental consequences, including further fueling climate change. Biden said his announcement pulling the order that the pipeline "disserves" the U.S. national interest, adding that "leaving the Keystone XL pipeline permit in place would not be consistent with my Administration's economic and climate imperatives." Lawsuit accuses Hawaii dolphin tour company of violating coronavirus... After Biden revoked the permit in January, TC Energy said the move would force it to “immediately” lay off 1,000 workers. It was not clear if any of those jobs were held by Americans. "I believe this will send a concerning signal to infrastructure developers that resonates far beyond our project and will stifle innovation for a practical transition towards sustainable energy," Keystone XL President Richard Prior said.
B.C. Supreme Court drops bombshell on B.C. natural gas industry -The B.C. Supreme Court has found the B.C. government infringed the Blueberry River First Nation’s treaty rights by allowing decades of industrial development in their traditional territory.The ruling will likely have significant impacts for industries in that region, notably the natural gas industry, as the court says the province may no longer authorize activities that would continue to add to the cumulative impacts that breach Treaty 8.Blueberry River First Nation (BRFN) territory is in the Fort St. John area, which is in the heartland of B.C.’s natural gas industry.“The province is no longer permitted to authorize industrial development in a way and scale that continues to infringe our rights without our input or taking into account the cumulative effects on our treaty rights,” the First Nation said in a released statement Wednesday, after the ruling came down June 29.The BRFN is one of the few First Nations in B.C. that signed an historical treaty – in this case, Treaty 8.The treaty guaranteed signatories access to their traditional ways of life – hunting, fishing and trapping. But decades of development – forestry, road-building, hydro-electric dams, transmission lines and natural gas extraction – gradually reduced the First Nations’ access to these traditional resources and practices.The cumulative impacts of all that activity constituted a breach of treaty rights, the First Nation argued, and BC Supreme Court Justice Emily Burke has upheld that claim.
Oil Sands Carbon Cuts Come with $60B Bill --- It will cost about C$75 billion ($60 billion) to zero out greenhouse gases from oil sands operations by 2050, with a good deal of the costs borne by taxpayers and many loose ends yet to be tied up, according to two of the industry’s top CEOs. To achieve the goal announced last month, about half of the emission cuts would need to come from capturing carbon at oil sands sites and sequestering it deep underground, which may require as much as two-thirds government capital like in Norway, Mark Little, chief executive office of Suncor Energy Inc., said in an interview. It’s still unclear how and when most of the projects will be implemented, or which agreements will be needed, but it’s clear the industry doesn’t want to do it alone. “We haven’t been able to find any jurisdiction in the world where carbon capture has been implemented, where the national government or the state governments are not very significant partners in that investment,” Alexander Pourbaix, CEO of Cenovus Energy Inc., said in the same interview “I don’t think any of us would ever be in a position to go at this on our own. It’s just too significant an undertaking.” The initiative follows mounting pressure from large, climate-minded investors, many of which have ditched their oil sands holdings. Sitting atop the world’s third-largest crude reserves, the Canadian industry uses carbon-intensive extraction methods that have made it a target of environmentalists. Also at stake are jobs and tax revenues from an industry that represents about 10% of the Canadian economy. “We have one Achilles heel: It’s greenhouse gas emissions,” Little said. “We can bury our heads in the sand and become a victim, or we can actually deal with it.”
Mexico, state-owned oil company slammed after gas leak causes subaquatic fireball in Gulf - Environmentalists criticized Mexico's state-owned oil company Saturday after a gas leak at an underwater pipeline unleashed a subaquatic fireball that appeared to boil the waters of the Gulf of Mexico. Greenpeace Mexico said the accident Friday appeared to have been caused by the failure of an underwater valve and that it illustrates the dangers of Mexico's policy of promoting fossil fuels. President Andres Manuel Lopez Obrador has bet heavily on drilling more wells and buying or building oil refineries. He touts oil as "the best business in the world." Greenpeace wrote in a statement that the fire, which took five hours to extinguish, "demonstrates the serious risks that Mexico's fossil fuel model poses for the environment and people's safety." Climate activist Greta Thunberg reposted a video clip of the massive fireball on her Twitter account. "Meanwhile the people in power call themselves 'climate leaders' as they open up new oilfields, pipelines and coal power plants - granting new oil licenses exploring future oil drilling sites," Thunberg wrote. "This is the world they are leaving for us." Mexico's state-owned oil company said Friday that an undersea gas pipeline ruptured near a drilling platform in the Gulf. Petroleos Mexicanos dispatched fire control boats to pump more water over the flames. Pemex, as the company is known, said nobody was injured in the incident in the offshore Ku-Maloob-Zaap field. The leak near dawn Friday occurred about 137 metres from a drilling platform. The company said it had brought the gas leak under control about five hours later. It was unclear how much environmental damage the gas leak and oceanic fireball had caused.
Mexican oil giant says no environmental damage from raging Gulf fire - Just days after video of a massive ocean surface blaze near a Pemex oil platform in the Gulf of Mexico went viral, Mexico’s national oil company has declared that environmental damage was avoided due to quick action by its workers. The July 2 blaze, caught on video apparently from a nearby helicopter, showed bright orange flames jumping out of the water as the fire raged a short distance from the oil platform. Pemex has previously said it took more than five hours to fully extinguish the fire.“There was no oil spill and the immediate action taken to control the surface fire avoided environmental damage,” the company said in a statement on Monday. The statement added that the blaze was sparked by an electric storm that ignited a leak of gas from a busted underwater pipeline. The fire ignited a storm of criticism over the weekend, including social media posts from climate activist Greta Thunberg and New York Mayor Bill de Blasio, among many others. The fire took place at the top producing offshore oil field operated by Pemex, which has a long track record of major industrial accidents at its facilities. Gusatvo Alanis, a board member with Mexico’s environmental law center CEMDA, told Reuters he thinks it is much too soon to conclude that the fire caused no environmental damage.
Pemex Comments on Fire - Petróleos Mexicanos has revealed that immediate actions to control a fire that occurred at the Ku asset avoided environmental damage. No oil spill occurred at the site, according to a translated statement on the company’s website, which outlined that the fire was completely extinguished after around five hours. In the statement, Pemex outlined that an electrical storm with heavy rain occurred in the platform area of the Ku asset on July 2, which it said caused pneumatic pump gas turbocompression equipment to go out of operation. At the same time, a leak was detected in the pneumatic pumping pipeline that feeds the wells of the Ku-C platform, according to Pemex, which noted that the gas outside the pipe migrated from the seabed to the surface and, due to the electric shocks and heavy rains, a fire broke out on the sea surface. The fire was extinguished by closing the submarine valve and injecting Nitrogen into the gas pipeline, Pemex noted. The company said it has started with a definitive repair program for the affected pneumatic pumping line and revealed that it is carrying out analysis to identify the root cause of the gas leak in the pipeline. Bloomberg reported the fire on July 2. The article referenced a video posted on social media, which showed three ships trying to put out a fire in the sea, but noted that a Pemex representative didn’t respond to a request for comment or confirm the footage. Pemex describes itself as the largest and most important company in Mexico. It is a sustainable, socially responsible company, with strict standards of safety, health at work, and environmental protection, its website states. The company, which traces its roots back to the 1930s, is involved in the entire production chain, from exploration, production, industrial transformation, logistics, and marketing, its site shows.
Romanian Black Sea refinery blast kills one, injures five - A blast and fire on Friday at Romania's biggest crude oil refinery killed one person and injured five others, authorities and the company which runs the Petromidia plant on the Black Sea said. Video footage from a nearby beach in the coastal resort of Mamaia showed black smoke rising from the area next to the refinery and some tourists reported hearing a loud bang. Rompetrol Rafinare, part of KMG International Group, said the explosion was inside the diesel hydrotreating unit, and that processes had been halted safely. At 1615 GMT it said the fire had been completely put out, the incident "was neutralized successfully" and Rompetrol would continue to provide fuels for its stations in Romania and the Black Sea region. "Five of our colleagues are in medical care at Constanta County Hospital, and we are sorry to inform you that a person has been identified as deceased," its statement added. The company declined to comment on the likely financial damage but said an assessment of the impact on technological processes will be performed to provide a clear picture and predictability in terms of restarting the refinery facilities. Petromidia is based on the shores of the Black Sea in Navodari, 20 km (12.5 miles) north of the country's biggest port, Constanta. It said it processed a total of 1.26 million tonnes of raw materials in the first quarter of this year, a similar level to a year before, and had been running at 84% capacity. Read more at https://www.todayonline.com/world/romanian-black-sea-refinery-blast-kills-one-injures-five
Blast rocks Caspian Sea area near Azerbaijani gas field (AP) — A strong explosion shook the Caspian Sea area where Azerbaijan has extensive offshore oil and gas fields. A column of fire rose from the area, but the state oil company said none of its platforms were damaged. The state oil company SOCAR said the blaze late Sunday may have come from a mud volcano. The Caspian Sea has a high concentration of such volcanoes, which spew both mud and flammable gas. SOCAR spokesman Ibrahim Ahmadov told the Interfax-Azerbaijan news agency on Monday that the company staff found a mud volcano ablaze on the uninhabited island of Dashly, about 30 kilometers (20 miles) off the coast of Azerbaijan between the towns of Alat and Neftchala. Azerbaijan’s Emergency Ministry said that the volcano continued to burn on Monday morning, but the fire “doesn’t pose a threat either to the sea oil and gas infrastructure and other objects, or to people’s lives.”
Australia dragged before UN over historic oil spill - Australia has been forced to appear in front of the United Nations Human Rights Council after 13 Indonesian regencies lodged serious allegations of human rights violations against the Commonwealth government. The UN proceedings are a separate case to a A$300 million civil lawsuit (class action) won last year against field operator PTTEP in Australia's Federal Court. These complaints were lodged to the UN's special rapporteurs on human rights. These officials then make a claim against a country before the UN Human Rights Council. In August 2009 a well at the Montara oil field then operated by Thailand's PTTEP blew out causing crude, condensate, gas, and mud to spew into the Timor Sea, offshore northern Western Australia. This continued for three months as four attempts to plug the well were unsuccessful, with 1500 barrels of oil equivalent per day pumped into the surrounding waters. A fire caused by the blowout also damaged the platform, eventually causing collapse. The complaints to the UN allege that Australia violated "the human rights of the affected communities and indigenous peoples in East Nusa Tenggara" by firstly allowing the oil spill to occur and then failing to mitigate the environmental and economic damage caused. In documents obtained by Energy News, the communities said their right to a healthy environment, life, health, bodily integrity, water, and food were infringed upon by Australia's lack of preparedness and subsequent action following the spill. "The handling of the spill allegedly disregarded and continues to disregard the human rights of those affected," the United Nations special rapporteurs, led by officer-in-charge Special Procedures Branch Office of the High Commissioner for Human Rights, Karim Ghezraoui, told the UN Human Rights Council.
Cargo ship spills oil after collision with dredger off Manila - A cargo vessel collided with a dredger in the waters of the South Harbor Anchorage area in Manila, the Philippines, in the early morning hours of 8 July 2021. The ships in question are the Philippine-flagged vessel MV Palawan Pearl and Cyprus-flagged utility vessel BKM 104, the Philippine Coast Guard (PCG) said. The incident caused the 345 GT Palawan Pearl, which carried 3,000 litres of diesel in its oil storage tank, to tilt and take on water. The ship also has a drum of diesel oil, 60 litres of engine oil, and 60 litres of bilge oil. The ill-fated vessel is located outside the breakwater of Baseco Beach, approximately 100 meters from Baseco Beach shoreline. The Philippine Coast Guard deployed patrol boat BRP Panglao and other assets to conduct close monitoring and provide necessary assistance to the cargo vessel. “At this time, the cargo vessel MV Palawan Pearl remains half submerged where the spread of ‘oil sheen’ is observed around it,” the PCG said, adding that containment boom was placed around the distressed ship. Based on the PCG’s initial assessment, Palawan Pearl traveled from Commander’s Wharf to Baseco Compound to El Nido, Palawan. Meanwhile, the BKM 104 was sailing in Manila Bay Anchorage area to Bulacan when the incident happened. The 375 GT BKM 104 is a foreign utility vessel contracted to perform dredging and other land development activity required for the construction of New Manila Airport. According to the skipper of Palawan Pearl, while sailing at a speed of 7 knots at three kilometers from the Pasig River, they noticed BKM 104 approximately 100 metres away from their port side (left) and traveling at the speed of 10 knots. Palawan Pearl allegedly tried to avoid BKM 104, but the latter crashed twice into the left side of the cargo vessel and almost sank it.
Nigeria records 4,919 oil spills in 6 years — Minister - Dr Mohammad Abubakar, Minister of Environment, on Monday, disclosed that Nigeria recorded 4,919 oil spills between 2015 to March 2021 and lost 4.5 trillion barrels of oil to theft in four years. Abubakar disclosed this at a Town Hall meeting in Abuja, organised by the Ministry of Information and Culture, on protecting oil and gas infrastructure. “According to the National Oil Spill Detection Agency (NOSDRA) data, the total number of oil spills recorded from 2015 to March 2021 is 4,919, the number of oil spills cost by collation is 308. “The operational maintenance is 106, while sabotage is 3,628 and yet to be determined 70, giving the total number of oil spills on the environment to 235,206 barrels of oil. This is very colossal to the environment. “Nigeria also lost approximately 4.75 trillion on oil activities in the four years between 2015 and 2018, as estimated by the Nigeria Natural Resources Charter. “Several statistics have emphasised Nigeria as the most notorious country in the world for oil spills, loosing roughly 400,000 barrels per day.
Eni Announces Significant Oil Find -Eni has announced a significant oil discovery on the Eban exploration prospect in CTP Block 4, offshore Ghana. Eban - 1X, which is the second well drilled in CTP Block 4, following the Akoma discovery, proved a single light oil column of approximately 262 feet in a thick sandstone reservoir interval of Cenomanian age, with hydrocarbons encountered down to 12,956 feet, Eni revealed. Production testing data at the well is said to show deliverability potential estimated at 5,000 barrels of oil per day, which is similar to the wells already in production at the nearby Sankofa Field, Eni highlighted. Due to its proximity to existing infrastructures, the new discovery can be fast tracked to production with a subsea tie-in to the John Agyekum Kufuor FPSO, Eni revealed. Preliminary estimates now place the potential of the Eban - Akoma complex between 500 and 700 million barrels of oil equivalent in place, according to Eni, which said the estimated hydrocarbon in place between the Sankofa field and the Eban - Akoma complex is now in excess of 1.1 billion barrels of oil equivalent. Further oil in place upside could also be confirmed with an additional appraisal well, Eni pointed out. CTP Block 4 is operated by Eni, which holds a 42.469 percent stake, on behalf of partners Vitol, which holds a 33.975 percent interest, GNPC, which holds a ten percent share, Woodfields, which holds a 9.556 percent interest, and GNPC Explorco, which holds the remaining four percent stake. Eni has been present in Ghana since 2009 and currently has a gross production of about 80,000 barrels of oil equivalent per day from the country.
BP says all other global energy crises pale in comparison to the year of Covid. These stats show why— Oil and gas giant BP on Thursday published its benchmark Statistical Review of World Energy, describing 2020 "as a year like no other" due to the impact of the coronavirus pandemic on global energy.Over the past seven decades, BP said it had borne witness to some of the most dramatic episodes in the history of the global energy system, including the Suez Canal crisis in 1956, the oil embargo of 1973, the Iranian Revolution in 1979 and the Fukushima disaster in 2011."All moments of great turmoil in global energy," Spencer Dale, chief economist at BP, said in the report. "But all pale in comparison to the events of last year."To date, more than 185 million Covid-19 cases have been reported worldwide, with over 4 million deaths, according to data compiled by Johns Hopkins University. The actual tally of Covid-19 infections and fatalities is believed to be far higher — and continues to rise.The pandemic also led to massive economic loss, with global GDP estimatedto have slipped by around 3.3% last year. That represents the largest peacetime recession since the Great Depression.For global energy, the Covid pandemic has had a dramatic impact. Here are some of the highlights from the report:BP said the coronavirus crisis last year resulted in primary energy and carbon emissions falling at their fastest rates since World War II. The relentless expansion of renewable energy, however, was found to be "relatively unscathed," with solar power recording its fastest ever increase.To be sure, the oil and gas company said world energy demand was estimated to have contracted by 4.5% and global carbon emissions from energy use by 6.3%."These falls are huge by historical standards — the largest falls in both energy demand and carbon emissions since World War II. Indeed, the fall of over 2 Gt of CO2 means that carbon emissions last year were back to levels last seen in 2011," Dale said."It's also striking that the carbon intensity of the energy mix — the average carbon emitted per unit of energy used — fell by 1.8%, also one of the largest ever falls in post-war history," he added.
Oil prices hover above $75 as OPEC+ struggles to reach a deal. Here's why it matters -- Energy prices are hovering above the $75 level after OPEC and its allies could not reach a key deal on their oil output policy last week, amid rising tensions between Saudi Arabia and the UAE. Crude prices are seeing some volatility after an initial spike, but retreated slightly on Monday. Brent futures slipped 0.11% to $76.09 per barrel, while U.S. crude futures dipped 0.13% to $75.06 per barrel. The energy alliance, often referred to as OPEC+, will meet again on Monday after failing to reach a deal twice last week. Without a deal, oil prices could surge and threaten to derail a frail economic recovery. If talks fall through, there could also be a price war — though analysts do not think the latter scenario is likely. The United Arab Emirates blocked a deal to increase oil output and extend the expiry of the group's broader production supply agreement to the end of next year, according to Reuters. The UAE said the extension should be conditional on revising the so-called baseline, which determines how much a country is allowed to pump. Both Brent and U.S crude shot up more than 2% to above $75 per barrel on Thursday, reaching highs not seen since 2018. The deal first fell through on Thursday, and a second meeting on Friday failed to see any breakthrough as well. Oil prices have surged more than 45% in the first six months of 2021, with demand rising as global economies reopened. The UAE — a long-time ally of OPEC's leader Saudi Arabia — objected to the deal twice last week, according to Reuters. The deal includes an agreement to increase oil output gradually, while at the same time, extending the duration of broader cuts that the group agreed to in 2021. Last year, to cope with lower demand as the Covid crisis hit and people travel less, OPEC+ agreed to curb output by almost 10 million barrels per day from May 2020 to the end of April 2022. At last week's meeting, OPEC kingpin and non-OPEC leader Russia also proposed extending the duration of cuts until the end of 2022, according to Reuters. Top producers Saudi Arabia and Russia had reached a preliminary agreement, which would in principle increase supply by 400,000 barrels per day from August to December 2021 in order to meet rising demand, Reuters reported, citing unnamed sources.
UAE 'unconditionally' supports OPEC+ supply increase, but says no to a bad deal -The United Arab Emirates has pushed back on OPEC+ leaders Saudi Arabia and Russia, claiming its "sovereign right" to negotiate fairer terms for an oil production increase. "For us, it wasn't a good deal," UAE Minister of Energy and Infrastructure Suhail Al Mazrouei told CNBC's Hadley Gamble, referring to OPEC+ production cuts which were based on a "level of production that goes back to 2018." "We knew that the UAE position in that agreement was the worst in terms of comparing our current capacity with the level of production" he said Sunday. "But an agreement is an agreement." Asked if the UAE would be willing to walk away, the minister said "we cannot extend the agreement or make a new agreement under the same conditions. We have the sovereign right to negotiate that." The comments come after the United Arab Emirates blocked some aspects of an OPEC+ proposal to increase output on Friday, seeking better terms for itself. "Let's increase the production, and talk about the extension and the agreement and the conditions associated with it at a later meeting," he said, adding that the UAE unconditionally supports a supply increase. "We are meeting on Monday, and I think we are all in agreement that we need to do something regarding the increase in production," Al Mazrouei said. "The issue is putting a condition on that increase, which is the extension of the agreement," he added. The high-stakes standoff comes as oil prices surge above $75 dollars a barrel for the first time in two years. Failure to reach a deal on Monday could risk the market recovery, and even unravel the fragile OPEC+ alliance if the deadlock is left unresolved. "We have plenty of time to meet and discuss the terms of the extension with justification that can involve independent bodies to review it" he said. "I'm still hopeful that by Monday we will segregate the two decisions," he added. The UAE threatened to leave OPEC late last year, and an exit would almost certainly trigger a repeat of the OPEC+ price war that pushed oil prices to -$40 in April last year. "It's not wise nor a target for anyone to raise prices to a level that the world economy cannot handle," he said. "We think we need to do it and we need to do it for August" Al Mazrouei added. At the core of the current proposal is a plan to increase production by 2 million barrels per day (mb/d) between August and December in 400,000 barrels per day monthly installments. OPEC+ also plans to extend its production cut agreement from April 2022 to December 2022. "Now we think that linking the extension of the agreement for a reference that goes back to 2018, and for a period that starts from 2022, is just not realistic, because this is four years" Al Mazrouei said. "That is totally unfair." The UAE has spent billions investing in its oil production capacity, seeking to ramp up output. With Iran also set to return to the oil market in the coming months, the UAE sees good scope to review the terms.
OPEC+ crisis talks reportedly postponed as Saudi Arabia and the UAE remain at loggerheads over oil output — A meeting between oil producer group OPEC and its partners, which was aiming to broker a deal on crude output after the groupunexpectedly failed to reach an agreement last week, has reportedly been postponed. The energy alliance, often referred to as OPEC+, on Friday voted on a proposal to increase oil production by roughly 2 million barrels per day between August and the end of the year in 400,000 barrels per day monthly installments. It also proposed to extend the remaining output cuts to the end of 2022. The United Arab Emirates rejected these plans, however, blocking an agreement for the second consecutive day to leave oil markets in limbo over the weekend. OPEC+ was set to reconvene for crisis talks via videoconference at 2 p.m. London time Monday. However, after a two-hour delay, Reuters, citing two sources, said that the meeting had been postponed with no new date set. Bloomberg also reported that it meant OPEC+ would continue with production quotas at current levels. "For us, it wasn't a good deal," UAE Minister of Energy and Infrastructure Suhail Al Mazrouei told CNBC's Hadley Gamble on Sunday. He added that while the UAE was willing to support a short-term increase in oil supply, it wants better terms through 2022. Saudi Arabia's Energy Minister Abdulaziz bin Salman called for "compromise and rationality" in order to reach a deal on Monday, Reuters reported. OPEC+, which is dominated by Middle East crude producers, agreed to implement massive crude production cuts in 2020 in an effort to support oil prices when the coronavirus pandemic coincided with a historic fuel demand shock. Led by Saudi Arabia, a close ally of the UAE, OPEC+ has since initiated monthly meetings in a bid to navigate production policy. It has resulted in a rare public stand-off between the UAE and its long-time regional ally Saudi Arabia, OPEC's de facto leader. The dispute comes as energy market participants anxiously await policy direction that is likely to shape crude markets into next year. "UAE remains steadfast in its refusal to give ground, insisting that using the October 2018 production benchmark is fundamentally unfair. Hence, the prospect of a no-deal outcome — as well as a UAE OPEC exit — has risen materially even if it has not yet fully entered into firm base-case territory," "Of course, in practice, the monthly meeting structure means that decisions can be reversed quickly and that no condition is permanent. On the flip side, if the talks end in utter discord, there is a risk of a return to an every-man-for-himself production scenario that could cause a reversal of this year's oil price rally."
Biden Team Spoke to Saudis, UAE About OPEC Talks, Oil Prices - Biden administration officials are “encouraged” by ongoing OPEC talks and have spoken with officials in Saudi Arabia and the United Arab Emirates in hopes of reaching an agreement to stem the rise in crude prices, White House Press Secretary Jen Psaki said.“We’re not a party to these talks but over the weekend and into this week, we’ve had a number of high-level conversations with officials in Saudi Arabia, the UAE and other relevant partners,” Psaki said Tuesday during a briefing at the White House. She declined to specify which U.S. officials were involved but signaled that she didn’t expect President Joe Biden to personally make calls.The U.S. hopes talks will lead to an agreement that “will promote access to affordable and reliable energy,” she said. The impact of talks on gas prices in the U.S. is of interest to the administration, she said. Saudi Deputy Defense Minister Khalid bin Salman, who’s visiting Washington, met with top Defense Department officials on Tuesday, Pentagon spokesman John Kirby said, without providing details on the talks. Khalid will take part in meetings at the State Department on Wednesday.“The president wants Americans to have access to affordable and reliable energy, including at the pump. And so that’s why our team is constantly monitoring gas prices and directly communicating with OPEC parties to get to a deal and allow proposed production increases to move forward,” Psaki said.Crude prices have soared and fluctuated as Saudi Arabia and the UAE spar over a production increase. A stall in talks raises the prospect that either nation could dump their quotas and raise supply. Existing OPEC+ production limits remain in place.
Why Biden may want to take a page from Trump's OPEC playbook – CNN - Americans despise high gasoline prices. And fairly or not, they tend to pin the blame on whomever is in the White House. That's why Monday's failure by OPEC and its allies to reach a deal that would add badly needed oil barrels to the market is a major problem for President Joe Biden. Oil and gasoline prices are already at seven-year highs. They'll go even higher until OPEC+ gets its act together. "We will see a nasty spike in crude oil and pump prices if they don't increase production," said Robert McNally, president of consulting firm Rapidan Energy. No president wants an oil-price spike. But the timing is particularly problematic because it could amplify inflation fears and hit Americans in the wallet just as consumer spending drives the economic recovery from Covid. US crude prices hit $76.98 a barrel Tuesday, a level unseen since November 2014, before retreating to around $73.50. Gasoline prices, which move with a lag to crude, ticked up to a national average of $3.13 a gallon on Tuesday, according to AAA. That's up from just $2.18 a year ago when the pandemic was still roaring. 'Playing catch-up' Alarm bells are undoubtedly ringing in the Biden White House. A spokesperson told CNN on Monday that the administration is "closely monitoring" the OPEC+ negotiations and officials are urging a "compromise solution" that will clear the way for the group to boost output. Until now, the Biden administration has taken a hands-off approach with OPEC, in stark contrast with former President Trump, who famously was obsessed with tracking financial markets and repeatedly blasted OPEC for failing to pump enough oil. Some analysts claim the Biden Team appeared to be caught flat-footed by the drama OPEC. "They are playing catch-up," said Helima Croft, global head of commodity strategy at RBC Capital Markets. "The early warning system for the Biden administration was not commensurate with that of the Trump administration. They may not have realized how potentially consequential that OPEC meeting was."
OPEC+ Deal Fails, Leaving Oil Market Tighter as Prices Surge OPEC+ abandoned its meeting without a deal, tipping the cartel into crisis and leaving the oil market facing tight supplies and rising prices. Several days of tense talks failed to resolve a bitter dispute between Saudi Arabia and the United Arab Emirates, delegates said, asking not to be named because the information wasn’t public. The group didn’t agree on a date for its next meeting, according to a statement from OPEC Secretary-General Mohammad Barkindo. The most immediate effect of the breakdown is that, unless an agreement can be salvaged, the Organization of Petroleum Exporting Countries and its allies won’t increase production for August. That will deprive the global economy of vital extra supplies as demand recovers rapidly from the coronavirus pandemic. However, the situation is fluid and the group could reactivate talks at any moment. With prices up about 50% this year and climbing toward $80 a barrel, the producers’ group may feel extra pressure from consuming countries concerned about rising inflation. “Oil prices will pop if no deal means current production levels continue,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. “But that’s also not tenable because a price spike actually undermines the interests of the UAE, Russia and Saudi Arabia.” The failure of OPEC+ to reach a deal pushed crude higher. Brent crude jumped 1.3% to $77.12 a barrel as of 5:42 p.m. in London, the highest since 2018. The outcome is a significant failure for the producers’ group. Relations have soured between two core OPEC members to such an extent that no compromise was possible. It damages the group’s self-image as a responsible steward of the oil market, raising the specter of the destructive internal price war that caused unprecedented price swings last year. OPEC+ has already been reviving some of the crude supplies it halted last year in the initial stages of the pandemic. The 23-nation coalition decided to add about 2 million barrels a day to the market from May to July, and the question before ministers on Monday was whether to keep going in the coming months. The cartel’s own data show that once-bloated oil inventories are back down to average levels as the recovery in fuel consumption continues. Demand in the second half will be 5 million barrels a day higher than in the first six months of the year, Barkindo said last week.
Breakdown of oil output talks threatens OPEC+ unity, may trigger weaker oil prices, says strategist - The collapse of talks between OPEC and its allies highlights the risks of the group's unity breaking down and renews concerns about a possible oversupply of oil, a commodity strategist told CNBC. The energy alliance, referred to as OPEC+, was set to resume talks Monday, but discussions have been called off indefinitely. That comes after the group twice failed to reach a key deal on their oil output policy last week. The group had sought to increase supply by 400,000 barrels per day from August to December 2021 and proposed extending the duration of cuts until the end of 2022. Last year, to cope with lower demand as Covid hit, OPEC+ agreed to curb output by almost 10 million barrels per day from May 2020 to the end of April 2022. The United Arab Emirates had indicated that, while it was supportive of the proposal to increase supply, it objected to the terms of the extension, which it said should be conditional on increasing its so-called baseline, which determines how much oil a country is allowed to pump. "I certainly think there are some risks that the market may be really sort of discounting at the moment and that is a breakdown of that unity," Daniel Hynes, senior commodity strategist at ANZ, told CNBC on Tuesday. "That has been I think by far the biggest advantage of this alliance over the past 18 months … the picture that it presents to the market around a coordinated and very compliant agreement which hasn't really seen any producers expand outside of that," he added. But now the risks are rising from that conflict surrounding the baseline number, which production cuts or increases are measured against. The UAE now wants that baseline to be increased so it can produce more. It has argued that it was not alone, as Azerbaijan, Kuwait, Kazakhstan and Nigeria also requested and got new baselines approved since the deal started last year, Reuters reported, citing an OPEC+ source. Hynes said that the UAE now wanting that "side agreement" to increase their output is representing "a risk now to that unity, to that front." "I think that brings risks to oversupply in particular over the medium term," he said. Hynes doesn't rule out weaker prices ahead, but said he doesn't think there will be a price war. "I think that would obviously be at risk if we started to see producers really push their own agenda and in a sense, go outside of that supply agreement," he told CNBC. "But you know it's all about perception and I think if the market does perceive that they won't adhere to those current quotas, then clearly, they're going to assume the worst and that would see weak oil prices ultimately," he added.
The end of OPEC? How Saudi Arabia and UAE infighting threatens the future of the oil alliance — Oil producer group OPEC has been plunged into crisis, with bitter infighting between Saudi Arabia and the United Arab Emirates raising questions about the future of the energy alliance. OPEC and non-OPEC partners, a group of some of the world's most powerful oil producers, abruptly abandoned plans to reconvene on Monday after last week's meetings unexpectedly failed to broker a deal on oil production policy. The group did not set a new date to resume talks. It means no agreement has been reached on a possible increase in crude production beyond the end of July, leaving oil markets in a state of limbo just as global fuel demand recovers from the ongoing coronavirus pandemic. "OPEC+ has been thrown its most serious crisis since last year's ill-fated price war between Saudi Arabia and Russia," Helima Croft, head of global commodity strategy at RBC Capital Markets, said in a research note. "Back-channel talks reportedly are continuing, but questions about UAE's commitment to remaining in OPEC will likely grow in the coming days." The UAE-Saudi dispute appeared to be about more than oil policy, Croft said, with Abu Dhabi "seemingly intent on stepping outside Saudi Arabia's shadow and charting its own course in global affairs." OPEC+, which is dominated by Middle East crude producers, agreed to implement massive crude production cuts in 2020 in an effort to support oil prices when the coronavirus pandemic coincided with a historic fuel demand shock. Led by Saudi Arabia, a close ally of the UAE, OPEC+ has met monthly to decide on production policy. The disarray comes after OPEC+ on Friday voted on a proposal to increase oil production by roughly 2 million barrels per day between August and the end of the year in 400,000 barrels per day monthly installments. It also proposed to extend the remaining output cuts to the end of 2022. The plans were rejected by the UAE, however, which wants a higher baseline to its quota to allow for more domestic production. "No agreement was reached and as we stand now the OPEC+ alliance, if it is still the right word to describe the group, will produce at the July level for the rest of the year," . "The [non-] outcome of the meeting re-writes the supply-demand landscape for the near and potentially for the distant future," he added. The rare public stand-off between the UAE and Saudi Arabia saw energy ministers from both countries engaging in a media blitz over the weekend to outline their respective positions. "For us, it wasn't a good deal," UAE Minister of Energy and Infrastructure Suhail Al Mazrouei told CNBC's Hadley Gamble on Sunday. He added that while the country was willing to support a short-term increase in oil supply, it wants better terms through 2022.
Refiners to Pay More for Saudi Crude -- Saudi Arabia raised oil prices for buyers from Asia to the U.S. for August after OPEC+ talks broke down just as the market was clamoring for more supply. The Saudis, along with Russia, sought over the past week to rally other members around a plan to unwind production cuts incrementally and to extend their accord through to the end of next year. The proposal collapsed when the United Arab Emirates balked at keeping in place what it says is an unfair production baseline for its quota for longer. In its main market of Asia, Saudi Aramco increased the official selling price, or OSP, for Arab Light crude by 80 cents a barrel to $2.70 above the regional benchmark. That’s the biggest month-on-month increase since January, and suggests the oil giant won’t raise supply next month even as it sees the market tightening. “With domestic demand peaking around August, there will be less crude available for exports unless they draw down from the inventories,” said Giovanni Staunovo, a commodities analyst at UBS Group AG. “As the market was looking for a slightly smaller OSP increase for Asia, Asian refineries can’t expect additional volumes from Saudi Arabia.” The kingdom sends more than 60% of its crude exports to Asia, with China, Japan, South Korea and India being the biggest buyers. Last month, it shipped 5.7 million barrels a day globally, according to preliminary data compiled by Bloomberg. Buyers in the U.S. will see smaller increases next month, with prices rising between 20 cents and 40 cents a barrel. Aramco is also raising rates for Northwest Europe by 80 cents a barrel and for the Mediterranean region by 60-80 cents. Oil futures and physical markets have strengthened with widespread virus vaccinations supporting demand. The breakdown in OPEC+ talks means current production limits will remain in place for August, likely leading to a deeper supply deficit. Crude could rise to as high as $90 a barrel without higher output, Fereidun Fesharaki, chairman of industry consultant FGE, said in a Bloomberg Television interview. He said a compromise between the feuding OPEC nations was likely. Aramco had been expected to increase the price of Arab Light by 50 cents a barrel to $2.40 more than the benchmark, according to a survey of nine traders and refiners in Asia prior to the meeting’s collapse. The company also hiked pricing for most of its other grades for sale to Asia by 80 cents, with Arab Super Light crude rising by $1 a barrel. The increase brings pricing for Arab Light to the highest since March 2020, when it sold for a premium of $2.90 a barrel. That was the last month before a brief price war caused crude to plunge as producers including Saudi Arabia discounted barrels and flooded the market just as the coronavirus was slashing demand.
US oil prices at six-year high after OPEC fails to reach deal - US oil prices jumped to six-year highs Tuesday after OPEC failed to reach a deal on oil production — raising concerns that output could fail to keep up with surging demand. Futures for West Texas Intermediate, the main US oil benchmark, advanced 1.3 percent, or about $1, to $76.16 per barrel. At one point, WTI crude reached $76.98, the highest price since November 2014. Brent crude, the global energy benchmark, traded roughly flat at about $77.04 per barrel, the highest price since late 2018. The surging prices came after talks that began last week between OPEC and its oil-producing allies, known as OPEC+, fell apart. The group’s meeting sought to establish production policy for August and the remainder of the year. But a Saudi Arabia-backed plan to raise output and let the price stabilize failed to win agreement, with the United Arab Emirates, a key OPEC member, refusing to sign off. Discussions were set to resume on Monday but got called off in a sign of simmering tensions and stalling talks. Analysts, including Warren Patterson, head of commodities strategy at ING Groep, say that a production hike is necessary as demand for oil continues to rise to pre-pandemic levels. Without a new production plan, prices are likely to continue to rise, at least in the short term. Americans are already feeling the crunch at the pump, with national average gas prices over $3 per gallon at a seven-year high. Companies involved in the energy industry saw shares rise Tuesday morning in premarket trading. Occidental Petroleum stock rose about 1.6 percent in the premarket and shares of oil-field-services firm Schlumberger rose about 1.3 percent. The US has pushed OPEC to reach a deal that would see output rise and tame the price. “Administration officials have been engaged with relevant capitals to urge a compromise solution that will allow proposed production increases to move forward,” a White House spokesperson said Monday. A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas.
OPEC discord could unleash a new level of volatility in oil market - Disagreement within OPEC could trigger a more a volatile period for oil, with prices jumping on lack of new supply or sinking suddenly if member countries decide to release crude independently. Oil prices initially surged to a six-year high on news that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, ended their meeting Monday with no action and no new meeting date. A proposed plan by OPEC, Russia and other allies to bring 400,000 barrels a day back to the market was disrupted by the United Arab Emirates' objection to other aspects of the deal. West Texas Intermediate crude futures for August traded as high as $76.98 Tuesday before falling back to settle down 2.4% at $74.53 per barrel. Many analysts had expected oil to rise on the discord among members of OPEC, and say prices could still climb despite the sell-off. "It's going to get worse before it gets better. I still think $85 to $90 per barrel should be the upper end," said John Kilduff, partner with Again Capital. "You'll see more oil produced. They're not going to go crazy, but they're not going to live within the current structures. Russia will lead the charge." "It could become a free for all," he said. Some analysts had already expected oil spikes into the $100 per barrel range over the course of the next year. The feuding between Saudi Arabia and the United Arab Emirates opens a new fissure in OPEC, which now means oil could also tank if members decide to open the spigots. "Realistically, I don't think anybody wants to go this way. I suspect cooler heads or rational thinking will prevail," said Bart Melek, global head of commodity strategy at TD Securities. Melek said there are some wild cards for OPEC that could affect prices. A major one is whether the U.S. and Iran strike a deal on Iran's nuclear programming, allowing it to return more than 1 million barrels a day back to the market. Another risk is whether the variants of the Covid virus could affect the economy's recovery and crimp demand for travel. OPEC and its partners were able to agree to return 400,000 barrels a day to the market starting in August. But the UAE sought to also have its production baseline increased from 3.1 million barrels a day to 3.8 million barrels, and that was the sticking point with Saudi Arabia. After three days of meetings, there was also a deadlock over whether the deal would include an extension of the the plan to the end of 2022, which was opposed by the UAE. Without an agreement, 5.8 million barrels a day, cut from production last year, will remain off the market even as demand rises. "I think OPEC event risk is back. We had pretty smooth sailing this year, and now this was not priced at all," said Helima Croft, global head of commodity strategy at RBC Capital Markets. "Once people start focusing on 5.8 million barrels off the market, I think they might get nervous. How they come back will be important." The market will be affected much differently based on whether the oil trickles back or the producing countries flood the market with supply.
Oil prices could 'very easily' top $100 a barrel, says ex-U.S. energy secretary Oil prices could "very easily" hit $100 a barrel in the aftermath of the failed OPEC+ talks, former U.S. Energy Secretary Dan Brouillette told CNBC on Tuesday. "You could very easily see oil hitting $100 a barrel — potentially even higher," he told CNBC's Hadley Gamble. On the flip side, it's "equally possible" that prices could collapse too. "If there isn't any agreement on production, and countries tend to go off and do their own thing, or do their own production, you could have a collapse of oil prices," said Brouillette, who was U.S. energy secretary from 2019 to 2021. OPEC and its allies, referred to collectively as OPEC+, twice failed to reach a deal on oil output last week. On Monday, another attempt to resume talks broke down, and discussions were put off indefinitely. The energy alliance, which includes Russia, had sought to increase supply by 400,000 barrels per day from August to December 2021 and proposed extending the duration of cuts until the end of 2022. Last year, to cope with lower demand due to the pandemic, OPEC+ agreed to curb output by almost 10 million barrels per day from May 2020 to the end of April 2022. The United Arab Emirates had indicated that, while it was supportive of the proposal to increase supply, it objected to the terms of the extension. Prices soared to three-year highs following the collapse of those talks on Monday. On Tuesday during Asia trading, they surged even higher. U.S. crude pushed past $76 per barrel and international benchmark Brent was higher than $77 per barrel. Oil prices topping $100 would destroy demand, warned oil expert Dan Yergin, who said that it would not be in the interest of countries. "I think countries recognize that $100 barrel oil would not be in (their) interest," Yergin, the vice chairman of IHS Markit, told CNBC's Street Signs Asia on Tuesday. "You would see governments pour more incentives into electric cars, and see the impact on demand." 'Striking' that UAE and Saudi are on divergent paths OPEC+ is led by Saudi Arabia, a close ally of the UAE. But the breakdown of those talks, and UAE's objection to the terms, reflect a rare public disagreement between the allies. The discord between Saudi Arabia and the UAE has been "striking," Brouillette and Yergin both said. "I find it striking that the UAE has stepped away from Saudi Arabia, a longtime ally within OPEC and OPEC+," Brouillette said.
Oil touches six-year high after OPEC fails to get deal, then turns negative --Oil jumped to its highest level in six years after talks between OPEC and its oil-producing allies were postponed indefinitely, with the group failing to reach an agreement on production policy for August and beyond. On Tuesday, U.S. oil benchmark West Texas Intermediate crude futures traded as high as $76.98, a price not seen since November 2014. But those gains quickly faded, and the contract for August delivery drifted lower during the session and ultimately settled down 2.38%, or $1.79, at $73.37 per barrel. Brent crude hit its highest level since late 2018 before also reversing gains, and finished the session $2.63, or 3.4%, lower at $74.53 per barrel. Discussions began last week between OPEC and its allies, known as OPEC+, as the energy alliance sought to establish output policy for the remainder of the year. The group on Friday voted on a proposal that would have returned 400,000 barrels per day to the market each month from August through December, resulting in an additional 2 million barrels per day by the end of the year. Members also proposed extending the output cuts through the end of 2022. The United Arab Emirates rejected these proposals, however, and talks stretched from Thursday to Friday as the group tried to reach a consensus. Initially, discussions were set to resume on Monday but were ultimately called off. "The date of the next meeting will be decided in due course," OPEC Secretary General Mohammad Barkindo said in a statement. OPEC+ took historic measures in April 2020 and removed nearly 10 million barrels per day of production in an effort to support prices as demand for petroleum-products plummeted. Since then, the group has been slowly returning barrels to the market, while meeting on a near monthly basis to discuss output policy. "For us, it wasn't a good deal," UAE Minister of Energy and Infrastructure Suhail Al Mazrouei told CNBC on Sunday. He added that the country would support a short-term increase in supply, but wants better terms if the policy is to be extended through 2022. Oil's blistering rally this year — WTI has gained 57% during 2021 — meant that ahead of last week's meeting many Wall Street analysts expected the group to boost production in an effort to curb the spike in prices. "With no increase in production, the forthcoming growth in demand should see global energy markets tighten up at an even faster pace than anticipated," analysts at TD Securities wrote in a note to clients. "This impasse will lead to a temporary and significantly larger-than-anticipated deficit, which should fuel even higher prices for the time being. The summer breakout in oil prices is set to gather steam at a fast clip," the firm added.
Opec meeting: Oil drops sharply after OPEC cancels meeting - Oil prices tumbled on Tuesday in a volatile session after OPEC producers canceled a meeting when major players were unable to come to an agreement to increase supply. Brent crude settled down $2.63 a barrel, or 3.4%, to $74.53, after hitting a session peak of $77.84, its highest since October 2018. U.S. West Texas Intermediate (WTI) crude futures settled down $1.79, or 2.4%, to $73.37 after touching $76.98, highest since November 2014. On Monday, ministers from OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, abandoned talks after negotiations failed to close divisions between Saudi Arabia, the largest OPEC producer, and United Arab Emirates. Initially, oil rallied on news of the breakdown in talks, but prices retreated as traders focused on the possibility that the strife will cause some national producers to open the taps and start exporting more barrels. "The market is concerned that the UAE will step in and unilaterally add barrels and other people in OPEC will follow suit," said Bob Yawger, director of energy futures at Mizuho. The United Arab Emirates said it would go along with output increases but rejected a separate proposal to extend curbs to the end of 2022 from an existing April deadline. Some OPEC+ sources said they still believed the group would resume discussions this month and agree to pump more from August, though others said current curbs might remain in place. The White House said Tuesday it was closely monitoring talks by OPEC+ and was "encouraged" after conversations with officials in Saudi Arabia and the United Arab Emirates. No date for further talks has been announced. Analysts expect U.S. producers to start adding supply due to higher prices after months of subdued activity. U.S. production is currently around 11 million bpd, so output has room to increase before nearing the U.S. record of nearly 13 million bpd reached in 2019. Goldman Sachs said the collapse of the talks had introduced uncertainty into OPEC's production path. The bank said it still saw Brent reaching $80 per barrel early next year. On Monday, Iraqi Oil Minister Ihsan Abdul Jabbar said his country did not want to see oil prices soaring above current levels and that he hoped that within 10 days a date would be set for a new OPEC+ meeting.
Oil prices stay volatile amid ongoing OPEC+ clash over output - Oil prices remained volatile in New York as traders assessed the ongoing impasse among OPEC+ nations over plans to boost output. West Texas Intermediate futures have been whipsawed as a dispute between Saudi Arabia and the United Arab Emirates stymies OPEC+ plans to revive halted supplies. The grade hit a six-year high early Tuesday before easing back. White House Press Secretary Jen Psaki said U.S. officials have been speaking to both sides, and OPEC+ delegates say consultations continue to seek a compromise. “Uncertainty seems to prevail after the surprising outcome of the petro-nations’ latest meeting and its inability to agree on the future of their supply deal,” Refiners have reaffirmed their appetite for barrels, with at least five Asian oil processors planning to seek their full contractual volumes from Saudi Arabia, even as the kingdom jacked up prices for August. Companies have been unable to source cheaper alternatives. Oil has soared in 2021 as the rollout of coronavirus vaccines permits major economies to reopen, spurring a revival in global consumption. The Organization of Petroleum Exporting Countries and its allies have returned some of the production they took offline at the height of the pandemic, but they’re struggling to agree on a way forward. Without a new deal, they’re set to keep supply steady in August, further tightening the market. Saudi Aramco increased the official selling price for Arab Light by 80 cents a barrel to $2.70 above the regional benchmark for Asia. That’s the biggest month-on-month gain since January, and suggests the oil giant won’t boost supply next month. WTI for August delivery traded up 0.6% at $73.81 a barrel on the New York Mercantile Exchange at 1:42 p.m. London time.It fell 2.4% on Tuesday as a stronger dollar spurred a sell-off across commodities. Brent for September settlement also rose 0.6% to trade at $74.97 a barrel on the ICE Futures Europe exchange.
Oil falls in volatile trade as investors seek Opec clarity - Oil prices fell more than US$1 a barrel on Wednesday in another seesaw trading session, as investors feared what this week's collapse in Opec+ talks meant for worldwide production. Crude markets have been volatile over the last two days following the breakdown of discussions between major oil producers Saudi Arabia and United Arab Emirates (UAE). Brent crude settled at US$73.43 a barrel, falling US$1.10 or 1.5 per cent. US West Texas Intermediate settled at US$72.20 a barrel, shedding US$1.17 or 1.6 per cent. Both benchmarks rallied more than US$1 a barrel earlier in the session, similar to Tuesday's action. The Organization of the Petroleum Exporting Countries and its allies, including Russia, known as Opec+, have restrained supply for more than a year since demand crashed during the coronavirus pandemic. The group is maintaining nearly six million barrels per day of output cuts and was expected to add to supply, but three days of meetings failed to close divisions between the Saudis and the Emiratis. For now, the existing agreement that keeps supply restrained remains in force. But the breakdown also could lead producers, eager to capitalise on the rebound in demand, to start supplying more oil previously predicted. "Some people are fearing a production war, but I think most people think that's unlikely," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "It is possible the UAE could leave Opec and just do it's own thing, and if that happens, then it would be a question of competition for market share." Russia is now leading efforts to close divisions between the Saudis and UAE to help strike a deal to raise oil output in coming months, three Opec+ sources said. Saudi Energy Minister Prince Abdulaziz bin Salman dampened concerns of a price war in an interview with CNBC on Tuesday. Prices could find some support from falling US crude oil inventories
The Real Reason OPEC Talks Broke Down - Major cracks appear to be forming in the OPEC+ alliance. After several years of unprecedented cooperation between OPEC members and non-OPEC producers, the growing regional economic and power conflict between Saudi Arabia and Abu Dhabi is threatening the arrangement.While much of the analysis of the recent OPEC+ disagreement has focused on why the UAE refused to commit to the new export plan, there are other factors that have been largely overlooked. A closer look at the ongoing investments by the UAE in its upstream and downstream industry is one such example. Abu Dhabi’s national oil company ADNOC has put in place a production capacity increase that calls for a total reassessment of the underlying OPEC production baselines, which were agreed in 2018. At present Abu Dhabi is allowed to produce around 3.2 million bpd, based on the 2018 baseline, but has a capacity now of more than 3.8-4 million bpd. Looking at ongoing new projects and planned investments, production of more than 4 million bpd is possible in the coming years.The aggressive investment strategy of ADNOC means that the UAE is plenty of incentives to increase production. An extended and controlled OPEC+ export quota system would not only impact the UAE’s revenue streams but could even turn some of its multi-billion dollar investments into stranded assets in the long term.Recently, Crown Prince Mohammed bin Zayed has been pushing an independent geopolitical and economic strategy for the UAE. After years of cooperating with Saudi Arabia on everything from OPEC policy to regional geopolitical crises, the two powers are now beginning to diverge. Former cooperation on issues such as the Yemen war and the Qatar blockade has weakened drastically.At the same time, Mohammed bin Salman has been aggressively pushing Saudi Arabia’s regional power. Saudi Arabia’s Vision 2030, the Kingdom’s economic diversification plan, has driven the crown prince to take aim on other GCC countries as he attempts to force international investors and companies to set up shop in Saudi Arabia rather than Dubai or Doha. This transformation in the relationship between Saudi Arabia and the UAE certainly played a part in the recent OPEC+ conflict.Riyadh is also targeting the logistics industry, an industry that the UAE has long dominated, establishing itself as a regional hub for logistics and connecting EU-Asian commodity and trade flows. In the last couple of months, Saudi Arabia has become increasingly aggressive in this space. While there has no been a direct conflict in this area, it is generally assumed that there is not enough space in the region for two supra-regional maritime logistic hubs. MBZ and Dubai are clearly unimpressed with Saudi Arabia’s attempts to muscle in on the industry.Another area of discord between the two nations is the UAE’s increased cooperation with Israel. UAE-Israel cooperation in logistics, technology, defense, and agriculture, is a possible threat to Saudi Arabia’s Vision 2030 projects. By bringing Israeli tech and know-how to Abu Dhabi and Dubai, the UAE projects will compete with the Saudi Giga-Projects, such as NEOM, for international investment. In response to these moves by the UEA, Riyadh has blocked technology and products exports by the UAE that are linked to Israel.
The OPEC+ spat is likely to be resolved 'sooner rather than later,' energy analyst says - OPEC and its allies left the oil market hanging on Monday when they indefinitely postponed talks to resolve a disagreement over production curbs. Crude prices first surged to six-year highs, then retreated, and uncertainty continues to hang over future OPEC+ policy. But at least one energy analyst expects a breakthrough to come soon. "I think it's highly likely [that] it's going to resolve itself," said Stephen Schork, a principal advisor at energy analysis company The Schork Group. OPEC is the strongest it has been in years, and they would not want to "upset the applecart," he told "Street Signs Asia" on Thursday. The energy alliance met last week to discuss output policy, but the UAE unexpectedly blocked proposals to increase supply and extend the remaining production cuts to the end of 2022, instead of April 2022 as previously agreed. Suhail Al Mazrouei, UAE's energy minister, told CNBC on Sunday that it "wasn't a good deal" because the output cuts were measured against a baseline of 2018 production levels. The country has increased its production capacity, but cannot pump more oil while the OPEC agreement remains in place. It wants this baseline to be revised. Russia is reportedly attempting to negotiate a resolution. Neil Beveridge, a senior oil analyst at Bernstein, said OPEC policy has been focused on controlling supply to manage prices. But the UAE sees that peak oil demand is "staring OPEC in the face" and is considering chasing market share instead of high energy prices, he told "Capital Connection" on Thursday, and that's why it wants to be given a higher quota. Observers say two scenarios are possible if OPEC doesn't reach a new deal. The first is that of a price collapse. Beveridge noted that OPEC is sitting on nearly 6 million barrels of spare capacity now. If countries decide to increase supply and go for market share, the downside could be "significant," he said. "We can see oil prices certainly drop back below $50 again … pretty quickly, if that [happens]," he said.
WTI Rebounds Above $72 After Gasoline Demand Hits Record High - Oil prices are down for the 3rd straight day as 'Delta'-variant (demand) fears combine with OPEC+ cartel collapse fears as the Saudis and UAE continue their game of chicken (and see prices fall in the face of their hopes). “Obviously, the standoff between the UAE and OPEC continues, and we don’t know whether that’s going to be bullish or bearish,” After API's report, expectations remain for a seventh straight weekly draw in crude stocks, so all eyes will be on any cracks in the recovery narrative in the official inventory/production/demand data. API:
- Crude -7.983mm (-3.9mm exp)
- Cushing +152k
- Gasoline -2.736mm
- Distillates +1.086mm
DOE
- Crude -6.867mm (-3.9mm exp)
- Cushing -614k
- Gasoline -6.075mm
- Distillates +1.616mm
Official data confirmed API with a 7th straight week of crude inventory drawdowns, but gasoline stocks tumbled far more than expected... As of right now, the moving average for gasoline demand topped 10 million b/d - a new record high... US crude production has remained notably disciplined as prices and rig counts have risen, but this last week saw it begin to accelerate (up 200k b/d last week to 11.3mm b/d) -the highest since May 2020...
Oil rises after big draw in inventories - Oil prices rose on Thursday, rebounding from early losses after the US government data showed a much bigger drop than expected in crude and gasoline inventories. Still, Brent prices remained $5 a barrel below Monday’s close, as traders were worried global crude supplies might swell following the collapse of negotiations between the Organisation of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+. Brent crude oil futures rose 29 cents to $73.72 a barrel and US West Texas Intermediate futures rose 26 cents to $72.46 a barrel. Early in the session, both contracts fell to their lowest in about three weeks. US crude inventories fell by 6.9 million barrels last week to 445.5 million barrels, Energy Information Administration data showed. Analysts had expected a four million-barrel drop. Gasoline stocks fell by 6.1 million barrels in the week to 235.5 million barrels, the EIA said. Analysts had forecast a 2.2 million-barrel drop.
Oil Prices Snap Losing Streak | Rigzone -- Oil rose after a U.S. government report showed rapidly declining inventories and record-high fuel demand in the midst of the peak summer driving season. Futures advanced 1% in New York on Thursday. Domestic crude and gasoline supplies tumbled last week and a gauge of fuel demand jumped to 10 million barrels a day during the week leading up to the July 4th holiday, according to the Energy Information Administration. “Clearly in the U.S., we’re seeing a strong recovery in demand,” said Quinn Kiley, a portfolio manager at Tortoise, a firm that markets roughly $8 billion in energy-related assets. “It’s a bullish setup.” Oil prices rose 11% last month before volatile trading this week in the wake of the OPEC+ impasse. Global supplies have tightened amid strong recoveries in economies such as the U.S. and China, leading to calls for the alliance to increase supply in the coming months. In the U.S., crude supplies fell by nearly 7 million barrels last week and gasoline inventories tumbled by the most since March, according to the EIA report. The country’s crude production has remained “lackluster” despite improved prices, which suggests the crude curve will stay in backwardation, said a new research report by Goldman Sachs Group Inc. “The market did what it should do,” said Andrew Lebow, senior partner at Commodity Research Group. “It rallied to bullish news.” At the same time, OPEC+ members are also stalled over the question of how to increase supply in August and subsequent months. United Arab Emirates has blocked the agreement in a bid to raise its production quota. The ongoing stalemate has limited crude’s rally for now, said Kiley. “That’s still the overarching concern in broader markets,” he said. West Texas Intermediate crude for August delivery rose 74 cents to settle at $72.94 a barrel in New York. Brent for September settlement added 69 cents to end the session at $74.12 a barrel. Meanwhile, the spread of the delta variant is also leading to concerns. The World Health Organization urged caution on the pace of reopenings worldwide, with many regions seeing infections spreading. Countries such as Japan, Indonesia and Thailand have renewed restrictions on mobility to curb the spread.
Oil prices rise over $1 as U.S. inventories decline -Oil prices rose for a second day on Friday as data showed a draw in U.S. inventories but were heading for a weekly loss amid uncertainty over global supplies after an OPEC+ impasse. Brent crude oil futures settled 1.93%, or $1.43, higher at $75.55 per barrel. U.S. West Texas Intermediate futures settled 2.22%, or $1.62, higher at $74.56 per barrel. Prices on both sides of the Atlantic were on track for around a 1% weekly drop, dragged down by the collapse of output talks between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+. U.S. crude and gasoline stocks fell and gasoline demand reached its highest since 2019, the U.S. Energy Information Administration said on Thursday, signalling increasing strength in the economy. "A bullish EIA stock report helped the oil market rebound into the black," said Stephen Brennock of oil broker PVM. "Clearly, U.S. oil markets are tight. However ... the only way to prevent further losses is for the threat of an OPEC+ price war to be contained," he added. Gains in oil prices were capped by worries that members of the OPEC+ group could be tempted to abandon output limits that they have followed during the COVID-19 pandemic, with talks breaking down because of an impasse between major producers Saudi Arabia and the United Arab Emirates. The two Gulf OPEC allies are at odds over a proposed deal that would have brought more oil to the market. Russia was trying to mediate in an effort to strike a deal to raise output, OPEC+ sources said on Wednesday. The United States had high level conversations with officials in Saudi Arabia and the UAE, the White House said on Tuesday. "Price wars are almost always quite short-lived – no one wins in the long term," consultancy Rystad Energy said in a note. "It is in the interest of the (OPEC+) group to provide some leniency to the UAE and other supply hawks to produce a bit more within the framework of the deal." The global spread of the Delta coronavirus variant and worries it could stall a worldwide economic recovery also weighed on oil prices.
Oil Prices Post Gains in Friday Trading | Rigzone -- Oil fell this week for the first time since May after days of volatile trading in the wake of OPEC+’s stalemate over a production increase in the near term. Futures in New York declined 0.8% this week, although the U.S. crude benchmark closed higher on Friday amid a broader market rebound. Prices whipsawed this week amid ambiguity over the future of the OPEC+ alliance and swings in the U.S. dollar. A stronger dollar makes commodities priced in the currency less attractive to investors. “Nobody really knows how the supply growth is going to project from here,” said Peter McNally, global head of industrials, materials and energy at Third Bridge. “The world needs more oil and was expecting more oil, so while there’s this uncertainty around supply, demand keeps growing.” Oil accelerated to a six-year high earlier this week after OPEC+ failed to ratify a production increase, spurring concerns of a supply shortfall. Fuel consumption is rising in countries such as the U.S., India and China during the summer driving season. Americans have hit the road with gusto, leading to rapidly draining inventories and U.S. refineries running close to full-bore to keep up with demand. “We’re now in the middle of what appears to be an extremely robust summer and the U.S. seeing very large stock draws, fundamentally, that we anticipate will continue to support the market,” said Michael Tran, an analyst at RBC Capital Markets. At the same time, the OPEC+ alliance and U.S. shale producers have practiced discipline toward returning supply that was shelved during the pandemic. The global oil market will remain in “deep deficit” of more than 3 million barrels per day through the third quarter of the year, according to Citigroup analysts. OPEC+ countries will need to add more oil to the market at a higher level “sooner or later,” said the report. West Texas Intermediate crude for August delivery added $1.62 to settle at $74.56 a barrel in New York, the biggest gain in a week. Brent for September settlement rose $1.43 to end the session at $75.55 a barrel on the ICE Futures Europe exchange. Before talks broke down earlier this week, Saudi Arabia proposed that the coalition gradually revive 5.8 million barrels of daily capacity in monthly installments of 400,000 barrels through to the end of next year. But the United Arab Emirates blocked an agreement, saying it will only support an extension of the pact if there are revisions to its own quota, which the country contends is outdated. If no agreement is reached, the existing one states that output will remain steady next month. The unresolved deadlock also threatens to unravel the alliance altogether and spark a fresh price war.
Fiery explosion erupts on ship at major global port in Dubai (AP) — A fiery explosion erupted on a container ship anchored in Dubai at one of the world’s largest ports late Wednesday, authorities said, sending tremors across the commercial hub of the United Arab Emirates. There were no immediate reports of casualties, and it was unclear what triggered the blast. The blaze sent up giant orange flames from a vessel at the Jebel Ali Port, the busiest in the Middle East. Jebel Ali sits on the eastern side of the Arabian Peninsula and is also the busiest port of call for American warships outside the U.S. The combustion unleashed a shock wave through the city of Dubai, causing walls and windows to shake in neighborhoods as far as 25 kilometers (15 miles) away from the port. Residents filmed from their high-rises as a fiery ball illuminated the night sky. The blast was powerful enough to be seen from space by satellite. Some 2 1/2 hours after the blast, Dubai’s civil defense teams said they had brought the fire under control and started the “cooling process.” Authorities posted footage on social media of firefighters dousing giant shipping containers. The glow of the blaze remained visible in the background as civil defense crews worked to contain the fire. The extent of damage to the sprawling port and surrounding cargo was not immediately clear. Footage shared on social media of the aftermath showed charred containers, ashes and littered debris. The sheer force and visibility of the explosion suggested the presence of a combustible substance. Dubai authorities told the Saudi-owned Al-Arabiya TV that the crew had evacuated in time and that the fire appeared to have started in one of the containers holding flammable material, without elaborating. Seeking to downplay the explosion, Mona al-Marri, director general of the Dubai Media Office, told Al-Arabiya the incident “could happen anywhere in the world” and that authorities were investigating the cause. The Jebel Ali Port at the northern end of Dubai is the largest man-made deep-water harbor in the world and serves cargo from the Indian subcontinent, Africa and Asia. The port is not only a critical global cargo hub, but a lifeline for Dubai and surrounding emirates, serving as the point of entry for essential imports. Dubai authorities did not identify the stricken ship beyond saying it was a small vessel with a capacity of 130 containers. Ship tracker MarineTraffic showed a fleet of small support vessels surrounding a docked container ship called the Ocean Trader flagged in Comoros. Footage from the scene rebroadcast by the UAE’s state-run WAM news agency showed firefighters hosing down a vessel bearing paint and logo that corresponds to the Ocean Trader, operated by the Dubai-based Inzu Ship Charter. Operated by the Dubai-based DP World, Jebel Ali Port boasts a handling capacity of over 22 million containers and sprawling terminals that can berth some of the world’s largest ships. Port officials said they were “taking all necessary measures to ensure that the normal movement of vessels continues without any disruption."
Why Does Israel Confuse Peace with Surrender? -Israel confuses peace with surrender. Its operational military doctrine, concerned with the army’s methods of combat, emphasises the imperative to bring hostilities as early as possible into enemy territory and, if necessary, to strike preemptively.Israel’s strategic doctrine, which comprises the broad policies used to secure national objectives, seeks to preserve the state, within increasingly expansive borders, which also means the continued colonisation of Palestinian land. Both are about staying on the offensive.Israel has used disproportionate force against civilians for decades. This is explained by the fact that it has been relatively successful in minimising the human and financial cost of war for itself. Yet history is full of tragedies caused by overestimating the power of offensive doctrines.In its recent military campaign in Gaza, Israel’s ground and air forces reportedly conducted a total 1,500 strikes in 11 days, injuring 1,900 Palestinians and killing at least 254.This must be understood in the context of Israel’s strategy, which from the outset has included deliberate attacks on civilians, their economies, institutions, and infrastructure.In May 2009, Amnesty International released its country report for Israel and the occupied territories, which found that during a previous campaign, that year’s Operation Cast Lead, “Israeli forces repeatedly breached the laws of war, including by carrying out direct attacks on civilians and civilian buildings and attacks targeting Palestinian militants that caused a disproportionate toll among civilians.”Statements by Israeli officials reveal that the disproportionate destruction and violence against civilians was a deliberate policy. In October 2008, Gabi Siboni, Director of the Military and Strategic Affairs Program at Tel Aviv University’s Institute for National Security Studies (INSS), published a policy paper entitled “Disproportionate Force: Israel’s Concept of Response in Light of the Second Lebanon War.” It stated: With an outbreak of hostilities, the IDF will need to act immediately, decisively, and with force that is disproportionate to the enemy’s actions and the threat it poses. Such a response aims at inflicting damage and meting out punishment to an extent that will demand long and expensive reconstruction processes. Israel again will not be able to limit its response to actions whose severity is seemingly proportionate to an isolated incident. Rather, it will have to respond disproportionately in order to make it abundantly clear that the State of Israel will accept no attempt to disrupt the calm currently prevailing along its borders. For Israeli leaders, the periodic use of force is essential to communicate Israel’s capacity and resolve. As part of the Israeli security paradigm, when the state feels that deterrence against a particular actor is evaporating, it launches “deterrence operations” where concern for collateral damage to civilians tends to disappear.
June Deadliest Month in Afghanistan in Two Decades - Afghan authorities claim that the Afghan National Security and Defense Forces (ANDSF) have killed over 6,000 Taliban fighters in approximately one month, and the Taliban has said that the group has also inflicted major casualties on government forces. During this period the government also evacuated 120 districts following offensives by the Taliban. In the latest development, the Taliban has captured the center of Tagab district in the northern province of Kapisa. Numbers gathered by TOLOnews show that 638 military personnel and civilians were also killed in Taliban attacks during this period and 1,060 others were wounded. “The main reason for the collapse of the districts is poor leadership at the leadership level of the security and defense forces,” said MP Khan Agha Rezayee. Based on the figures, although the number of targeted attacks and explosions decreased during this period, the level of casualties among the security personnel and civilians continued to rise. The majority of casualties were reported in Baghlan, Faryab, Badakhshan, Ghazni, Takhar, Balkh, Ghor, Herat, Farah, Kunduz, Badghis and Sar-e-Pul provinces. “The lines (personnel) of the war changed, people were serving in the provinces as security commanders who weren’t familiar with the war because the government had sent the war commanders home,” said MP Ibdallullah Mohammadi. “There was no preparation to confront such a big war, we weren’t prepared for guerrilla warfare,” said MP Arif Rahmani. Meanwhile, Afghanistan’s Ministry of Defense (MoD) said that the Afghan security forces have increased airstrikes on Taliban positions in Nangarhar, Herat, Balkh, Jawzjan, Helmand, Takhar, Badakhshan, Kunduz, Baghlan and Kapisa provinces in a move to recapture the districts lost to the Taliban. “258 Taliban fighters were killed and 100 more were wounded in the operations conducted by the security and defense forces in the past 24 hours,” said Fawad Aman, deputy spokesman for the Ministry of Defense.
Taliban overtake districts in northern Afghanistan - Several of Afghanistan’s northern districts were taken by the Taliban overnight Saturday as U.S. forces continued withdraw from the region. Tajikistan’s State Committee for National Security said Sunday that more than 300 Afghan military personnel had crossed into Tajikistan while fleeing Taliban fighters advancing in Afghanistan's northeast Badakhshan province, according to The Associated Press. Mohib-ul Rahman, a Badakhshan council member, told the AP that the Taliban’s recent gains in the area have largely resulted from low morale among outnumbered Afghan troops. “Unfortunately, the majority of the districts were left to the Taliban without any fight,” he added, saying that eight out of 10 districts in the last three days fell to Taliban control without much resistance. According to the AP, the Taliban have now taken control of about a third of the 421 total districts and district centers in the country. Afghanistan’s Interior Ministry said Sunday that the Taliban gains were temporary, though the AP noted that no plans were released on how local forces were going to make an attempt to take back the districts. Taliban spokesman Zabihullah Mujahid confirmed to the AP that no fighting occurred in the recent territorial gains. The advances are just the latest made by Taliban fighters, who have been taking control of districts since the Biden administration began removing troops in April as part of the president’s goal to remove all U.S. forces from Afghanistan by Sept. 11, the 20th anniversary of the terrorist attacks that sparked America’s longest war. While many praised President Biden’s decision to take U.S. soldiers out of the country, he also received bipartisan criticism from lawmakers who expressed fears that the Taliban would quickly seize on the diminished American presence in the region. The Pentagon declined to comment when contacted by The Hill on this weekend’s territorial gains. U.S. officials on Friday announced that American troops had vacated the Bagram Airfield in Afghanistan, formerly the U.S. and NATO’s biggest military facility.
Tajikistan mobilizes 20,000 reservists to bolster border with Afghanistan - Tajikistan President Emomali Rahmon has mobilized 20,000 military reservists to help bolster the border with Afghanistan, Reuters reported on Monday. This comes as more than 1,000 members of the Afghan security force members have fled to the country due to advances by the Taliban. The organization has taken over six districts in the northern province of Badakhshan, which borders Tajikistan and China, which led to 1,037 Afghan service members moving across the border in Tajikistan, its border guard service told Reuters. Rahmon has called multiple world leaders including Russian President Vladamir Putin and Afghan President Ashraf Ghani to discuss the situation, according to Reuters. According to a statement by Russia, Putin told Rahmon he will support Tajikistan if needed to stabilize its border. "Special attention was paid to the escalation of the situation in Afghanistan's northern areas adjacent to Tajikistan," Rahmon’s office said in a statement, according to the news agency. Rahmon also called Uzbekistan President Shavkat Mirziyoyev and Kazakhstan President Kassym-Jomart Tokayev for assistance and held a council meeting, his office told Reuters. A senior Afghan official told the news agency that hundreds of troops have been crossing the border, saying that the Taliban has cut off most of the border. The news comes as U.S. troops vacated the Bagram Airfield last week, as part of the country's withdrawal from the country after 20 years. The Taliban said on Monday that they are accelerating peace talks with the Afghan government since the U.S. withdrawal.
Bagram Airfield looted as US forces leave Afghan base ---American forces left Afghanistan’s Bagram Airfield over the weekend without notifying the new commander from the Kabul government — giving looters precious time to swipe anything that was not bolted down, shocking photos show. The US announced Friday that it had vacated Bagram as part of a final withdrawal the Pentagon says will be completed by the end of August. It is Afghanistan’s largest airfield and was the hub of America’s 20-year campaign to remove the Taliban from government, track down Osama bin Laden and his al Qaeda cohorts, and keep the country’s fragile elected government in place amid a Taliban resurgence. However, they apparently forgot to tell the Afghans, cutting the electricity within 20 minutes of their departure and plunging the base into darkness. That acted as a “go” signal for teams of looters who smashed through the north gate and ransacked barracks and storage tents before security forces who had been patrolling the perimeter managed to evict them. “We (heard) some rumor that the Americans had left Bagram … and finally by 7 o’clock in the morning, we understood that it was confirmed that they had already left Bagram,” said new base commander Gen. Mir Asadullah Kohistani. “In one night, they [the Americans] lost all the good will of 20 years by leaving the way they did, in the night, without telling the Afghan soldiers who were outside patrolling the area,” one Afghan soldier, who identified himself only as Naematullah, told the Associated Press.“At first we thought maybe they were Taliban,” another soldier, a 10-year veteran named Abdul Raouf, said of the looters. Raouf went on to claim American forces called from the international airport in Kabul — an hour’s drive south of Bagram — to inform their Afghan counterparts that they had left the base.
Taliban celebrate seizure of US weapons from Afghan troops -Taliban fighters can be seen in recently released videos celebrating the seizure of US Humvees, tanks and assault weapons from Afghan security forces as the Biden administration begins its troop withdrawal before the Sept. 11 deadline.The Taliban have been capturing key districts in the northern part of the war-torn country — including Kandahar and Badakhshan — with little or no resistance from Afghan national forces since the US announced the timetable for the departure in April.They are extending their control of Afghanistan from their southern strongholds by filling the void left by the departing US forces. More than a thousand Afghan soldiers fled across the border to Tajikistan after clashing with the Taliban in Badakhshan and surrendered their weapons. The Taliban are touting the capture of the US weapons as a propaganda ploy in videos released on social media, heralding their return to power after being defeated by American troops in 2001 for harboring al Qaeda and its leader Osama bin Laden and allowing the terror group to plan its 9/11 attack. The speed of the US pullout is marked by the hasty abandonment of Bagram Airfield — the hub of US military operations during the 20-year war — over the weekend without giving the Afghan government a heads up, a sudden departure that allowed looters to overrun the facility and help themselves to the numerous items left behind by the Americans. A Taliban commander told Sky News that his fighters had taken a cache of weapons from Afghan security personnel that included 70 sniper rifles, 900 guns, 30 Humvees, 20 pickup trucks and 15 armored vehicles.The report also said the Taliban had a shipping container full of satellite phones, grenades and mortars, with many having labels saying: “Property of the USA Government.” Army Gen. Austin Scott Miller, who is overseeing the withdrawal of troops from Afghanistan, said the Taliban’s advances should be a cause for worry. “We should be concerned. The loss of terrain and the rapidity of that loss of terrain has — has to be concerning, one, because it’s a — war is physical, but it’s also got a psychological or moral component to it. And hope actually matters. And morale actually matters,” he said in an interview with ABC News’ “This Week” that aired Sunday.“And so, as you watch the Taliban moving across the country, what you don’t want to have happen is that the people lose hope and they believe they now have a foregone conclusion presented to them,” he said.Miller said he fears that Afghanistan will fall into civil war once US troops are gone, noting that the Taliban are rapidly taking ground in the north.“You look at the security situation, it’s not good. The Afghans recognize it’s not good. The Taliban are on the move. We’re starting to create conditions here that won’t look good for Afghanistan in the future if there’s a push for a military takeover,” he said.
Taliban spokesman says peace talks will be 'accelerated in the coming days' - The Taliban on Monday said it is accelerating peace talks with the Afghan government, with written peace plans possibly coming as soon as next month."The peace talks and process will be accelerated in the coming days ... and they are expected to enter an important stage, naturally it will be about peace plans," Zabihullah Mujahid, Taliban spokesperson, told Reuters."Possibly it will take a month to reach that stage when both sides will share their written peace plan," Mujahid added. "Although we [Taliban] have the upper hand on the battlefield, we are very serious about talks and dialogue."Najia Anwari, a spokesperson for Afghanistan's Ministry for Peace Affairs, said it was "difficult to anticipate that the Taliban will provide us with their written document of a peace plan in a month, but let's be positive." "We hope they present [it] so as to understand what they want," Anwari said. The latest signals from the Taliban come as it continues to seize control of territories in light of U.S. and NATO forces withdrawing from Afghanistan. More than a thousand members of Afghanistan's security forces have fled across the border to neighboring Tajikistan. In June, the Taliban said it was committed to peace talks, with its co-founder Mullah Abdul Ghani Baradar saying the organization was still pursuing a "genuine Islamic system." "A genuine Islamic system is the best means for solution of all issues of the Afghans," Baradar said. "Our very participation in the negotiations and its support on our part indicates openly that we believe in resolving issues through [mutual] understanding."
China ramping up Afghanistan involvement amid US withdrawal -China appears to be preparing to ramp up its involvement in Afghanistan as US troops complete their final withdrawal — with Beijing eyeing the war-torn nation for investment and influence opportunities.Beijing has been vocal, especially in recent weeks, in slamming the United States for pushing forward with its troop withdrawal, citing the deteriorating situation on the ground. Still, it had not made any public commitments regarding a response.Kabul authorities, the Daily Beast reported Sunday, have become much more deeply engaged with Chinese leaders as the two work toward a deal to invest in Afghanistan’s infrastructure through China’s international “Belt and Road Initiative.”The trillion-dollar program has funded multiple projects — generally focusing on hard infrastructure like airports, roads and seaports — throughout Asia, Africa, and the Middle East.It has been used by the Chinese Communist Party to grow its influence by providing infrastructure loans to poorer countries in return for control over local resources.Citing a source close of the Afghan government, the outlet reported that the deal would extend the $62 billion China-Pakistan Economic Corridor, a flagship project of the Beijing-led initiative. “There is a discussion on a Peshawar-Kabul motorway between the authorities in Kabul and Beijing,” the source said, “Linking Kabul with Peshawar by road means Afghanistan’s formal joining of CPEC.”The US troop withdrawal from Afghanistan remains in motion, a process on which President Biden placed a Sept. 11 deadline.Biden announced that deadline in April, offering US troops an additional four months from former President Donald Trump’s order to withdraw all troops from the nation by May 1.
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