oil prices ended slightly higher this week as oil traders apparently judged that Hurricane Ida's damage to oil production was greater than the storm's damage to refining and to fuel demand...after rising more than 10% last week as Chinese virus cases fell to zero, a quarter of Mexico's oil production was knocked out, domestic gasoline demand rose to pre pandemic levels, and the approaching hurricane disrupted US Gulf operations, the contract for US light sweet crude for October delivery opened 0.8% higher on Monday after Hurricane Ida came ashore at Port Fourchon, Louisiana, where supertanker trade and offshore drilling is staged, but turned negative and fell to a 1% deficit after the storm was downgraded and traders thought it might pass without major issues, before rallying again to finish 47 cents higher at $69.21 a barrel, rallying as Gulf Coast platforms, refineries and pipelines grappled with uncertainty on restart timelines after Ida wreaked havoc on the region....but the rally faltered Tuesday, as reports indicated that refineries west of New Orleans had regained power, and that the Colonial Pipeline to the east coast was to have resumed operations overnight, and then moved lower amid calls from the US for OPEC to pump more crude, and settled down 71 cents at $68.50 a barrel, thus ending 7.4% lower for the month of August, the largest monthly loss since last October...oil prices drifted lower early Wednesday after data from the American Petroleum Institute showed a surprise build in US gasoline inventories during the final full week of August, and as traders positioned ahead of Wednesday's OPEC meeting, but then popped after the EIA reported a greater than expected draw from crude inventories to settle 9 cents higher at $68.59 a barrel...oil prices opened 30 cents lower on Thursday after OPEC added their scheduled 400,000 barrels per day of production to global markets, but shifted higher in morning trading, lifting front-month oil futures above $69 per barrel after a stronger-than-expected reading on U.S. unemployment claims raised optimism that August's jobs report scheduled Friday might show an accelerated pace of recovery in the labor market. then rallied to above $70 a barrel before settling at a one-month high of $69.99 a barrel, bolstered by a rapidly weakening U.S. Dollar Index amid reports offshore producers in the Gulf were unable to restart operations due to logistical constraints....nearby month oil contracts continued to trade above $70 early Friday, as traders evaluated the effect of prolonged supply disruptions offshore on the market's near-term supply-demand disposition, as over 90% of the regional oil production was still shut-in, but turned lower after the labor department reported August's job increase was only one-third of what had been expected and tumbled to close down 70 cents at $69.29 a barrel for the day, but still managed to salvage an 0.8% gain for the week, as the impact of Hurricane Ida continued to snarl U.S. oil production...
meanwhile, natural gas prices rose to yet another 32 month high on another low inventoriy build as hurricane Ida disrupted both production and exports...after September natural gas contract prices rose 13.5% to expire at $4.370 per mmBTU last week, following an unexpectedly small increase in supplies, the contract price of natural gas for October delivery became the quoted front month price for this week and fell 8.3 cents to $4.305 per mmBTU on monday on projections for lower temperatures in the immediate term, and as Ida weakened to a tropical storm after making landfall on the Gulf Coast.,..but natural gas prices rebounded from an early 2% plunge on Tuesday to close 7.2 cents higher at $4.377 per mmBTU, the highest close since 2018, as the near-term prospects of another small storage injection stole the limelight from Hurricane Ida’s toll on demand...natural gas prices then soared over 7% to $4.615 per mmBTU on Wednesday as traders anticipated Thursday's inventory report would likely indicate a low addition to supplies, while a dent to production in the Gulf after Ida further elevated prices...natural gas prices continued climbing on Thursday, reaching a November 2018 high, after the natural gas storage report came in lower than market expectations, before settling with a 2.6 cent gain at $4.641 per mmBTU...natural gas prices rose again on Friday, capping a second straight week of big gains with a 7.1 cent increase to $4.712 per mmBTU, as significant output remained offline in the aftermath of Hurricane Ida, exacerbating supply concerns in an already tight market. that left natural gas prices 7.8% higher on the week, while the October contract, which had closed at $4.388 per mmBTU last week, finished with a 7.4% gain...
the EIA's natural gas storage report for the week ending August 27th indicated that the amount of working natural gas held in underground storage in the US rose by 20 billion cubic feet to 2,871 billion cubic feet by the end of the week, which left our gas supplies 579 billion cubic feet, or 16.8% below the 3,450 billion cubic feet that were in storage on August 27th of last year, and 222 billion cubic feet, or 7.2% below the five-year average of 3,093 billion cubic feet of natural gas that have been in storage as of the 27th of August in recent years...the 20 billion cubic foot increase in US natural gas in working storage this week was lower than the median forecast for a 25 billion cubic foot addition forecast in a Reuters poll of analysts, and less than half of the average addition of 53 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 less than the 36 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 August 27th indicated that with only modest changes in our oilfield production, our refinery throughput, our oil imports and our oil exports, we needed to withdraw oil from our stored commercial crude supplies for the thirteenth time in fifteen weeks, and for the 29th time in the past forty-one weeks….our imports of crude oil rose by an average of 183,000 barrels per day to an average of 6,340,000 barrels per day, after falling by an average of 193,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 228,000 barrels per day to an average of 3,040,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,300,000 barrels of per day during the week ending August 27th, 45,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, the production of crude oil from US wells was reportedly 100,000 barrels per day higher at 11,500,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to total an average of 14,800,000 barrels per day during the cited reporting week…
meanwhile, US oil refineries reported they were processing an average of 15,938,000 barrels of crude per day during the week ending August 27th, 133,000 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 average of 1,024,000 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 114,000 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 (+114,000) 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 omission of that magnitude in this week’s oil supply & demand figures that we have just transcribed…however, since last week’s EIA fudge factor was at (+901,000) barrels per day, that means there was a 787,000 barrel per day balance sheet difference in the crude oil fudge figure from a week ago, thus meaning the week over week supply and demand changes indicated by this report are useless...nonetheless, 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 reasonably 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 6,311,000 barrels per day last week, which was 13.9% more than the 5,542,000 barrel per day average that we were importing over the same four-week period last year…the 1,024,000 barrel per day net increase in our crude inventories was all added to our commercially available stocks of crude oil, while the quantity of oil stored in our Strategic Petroleum Reserve remained unchanged….this week’s crude oil production was reported to be 100,000 barrels per day higher at 11,500,000 barrels per day because the EIA"s rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 11,100,000 barrels per day, while a 19,000 barrel per day decrease in Alaska’s oil production to 404,000 barrels per day had no impact on the rounded national production 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 12.2% below that of our pre-pandemic production peak, but 36.5% 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 91.3% of their capacity while using those 15,938,000 barrels of crude per day during the week ending August 27th, down from 92.4% of capacity the prior week, and somewhat below normal utilization for summertime refinery operations…while the 15,938,000 barrels per day of oil that were refined this week were 14.9% more barrels than the 13,868,000 barrels of crude that were being processed daily during the pandemic impacted week ending August 28th of last year, they were still 8.3% below the 17,381,000 barrels of crude that were being processed daily during the week ending August 30th, 2019, when US refineries were operating at what was then a near normal 98.4% of capacity…
with this week’s decrease in the amount of oil being refined, the gasoline output from our refineries was also lower, decreasing by 364,000 barrels per day to 9,885,000 barrels per day during the week ending August 27th, after our gasoline output had increased by 249,000 barrels per day over the prior week.…while this week’s gasoline production was 3.9% higher than the 9,534,000 barrels of gasoline that were being produced daily over the same week of last year, it was 3.8% lower than the gasoline production of 10,272,000 barrels per day during the week ending August 30th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 178,000 barrels per day to 4,810,000 barrels per day, after our distillates output had increased by 140,000 barrels per day over the prior week…after this week’s decrease, our distillates output was just 0.6% more than the 4,779,000 barrels of distillates that were being produced daily during the week ending August 28th, 2020, and 6.7% below the 5,154,000 barrels of distillates that were being produced daily during the week ending August 30th, 2019..
even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the thirteenth time in twenty-two weeks, and for the 27th time in forty-two weeks, rising by 1,290,000 to 227,214,000 barrels during the week ending August 27th, after our gasoline inventories had decreased by 2,241,000 barrels over the prior week...our gasoline supplies increased this week even though the amount of gasoline supplied to US users edged up by 6,000 barrels per day to 9,578,000 barrels per day because our exports of gasoline fell by 445,000 barrels per day to 466,000 barrels per day and because our imports of gasoline rose by 64,000 barrels per day to 138,000 barrels per day…even after this week’s inventory increase, our gasoline supplies were still 3.3% lower than last August 28th's gasoline inventories of 234,859,000 barrels, and about 2% below the five year average of our gasoline supplies for this time of the year…
meanwhile, with the decrease in our distillates production, our supplies of distillate fuels also decreased for the thirteenth time in twenty-one weeks and for the 17th time in 37 weeks, falling by 1,732,000 barrels to 136,727,000 barrels during the week ending August 27th, after our distillates supplies had increased by 645,000 barrels during the prior week….our distillates supplies fell week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 286,000 barrels per day to 4,390,000 barrels per day, while our imports of distillates rose by 76,000 barrels per day to 288,000 barrels per day and while our exports of distillates fell by 47,000 barrels per day to 1,032,000 barrels per day…after thirteen inventory decreases over the past twenty-one weeks, our distillate supplies at the end of the week were 23.0% below the 177,520,000 barrels of distillates that we had in storage on August 28th, 2020, and about 9% below the five year average of distillates stocks for this time of the year…
finally, with our oil imports and oil production increases offsetting our our oil exports increase, our commercial supplies of crude oil in storage fell for the 18th time in the past twenty-eight weeks and for the 35th time in the past year, decreasing by 7,169,000 barrels over the week, from 432,564,000 barrels on August 20th to a 23 month low of 425,395,000 barrels on August 27th, after our commercial crude supplies had decreased by 2,980,000 barrels the prior week…after this week’s decrease, our commercial crude oil inventories were about 6% below the most recent five-year average of crude oil supplies for this time of year, but were still 29% above the average of our crude oil stocks after the third week of August 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 and remained elevated thereafter, our commercial crude oil supplies as of this August 27th were still 14.6% less than the 498,401,000 barrels of oil we had in commercial storage on August 28th of 2020, but still 0.6% more than the 422,980,000 barrels of oil that we had in storage on August 30th of 2019, and 6.0% more than the 401,490,000 barrels of oil we had in commercial storage on August 31st of 2018…
This Week's Rig Count
Due to the hurricane induced shutdown of drilling activity in the Gulf of Mexico, the number of drilling rigs active in the US decreased for just the 6th time out of the past 50 weeks during the week ending September 3rd, but they were still down by 37.3% from the pre-pandemic rig count.... Baker Hughes reported that the total count of rotary rigs running in the US decreased by eleven to 497 rigs this past week, which was still 241 more rigs the pandemic hit 256 rigs that were in use as of the September 4th report of 2020, but was still 1,432 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 down by 16 to 394 oil rigs this week, after rising by 5 oil rigs the prior week, but there are still 213 more oil rigs than were running a year ago, while they're less than a quarter 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 rose by 5 to 102 natural gas rigs, which was also up by 30 natural gas rigs from the 72 natural gas rigs that were drilling during the same week a year ago, but still only 6.4% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….in addition to oil and gas rigs, a horizontal rig that Baker Hughes classifies as "miscellaneous' is still drilling in Kern county California, while a year ago there were three such "miscellaneous' rigs reported to be active...
All 14 of the rigs that had been drilling in the Gulf of Mexico were shut down this week, so the Gulf count was down by 15 rigs from a year ago, when 12 Gulf rigs were drilling for oil offshore from Louisiana and three were deployed for oil in Texas waters….however, we now have 2 rigs drilling for natural gas off the shore of the Kenai peninsula in Alaska, with a vertical rig now added to the directional rig that was there last week, and hence the total national offshore rig count of 2 rigs is down by 13 rigs from 15 offshore rigs a year ago, when there was no drilling off other coasts... In addition to those rigs offshore, all three rigs that had been drilling through inland bodies of water in Louisiana were also shut down this week. and since there are none of those running in other states, that's also down from the one “inland waters” rig that was running a year ago…
The count of active horizontal drilling rigs was up by 4 to 463 horizontal rigs this week, which was more than double the 222 horizontal rigs that were in use in the US on September 4th of last year, but was just over a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014…..in addition, the vertical rig count was up by 2 to 23 vertical rigs this week, and those were also up by 7 from the 16 vertical rigs that were operating during the same week a year ago….on the other hand, the directional rig count was down by 17 to 11 directional rigs this week, and those were also down by 9 from the 20 directional rigs that were in use on September 4th 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 September 3rd, the second column shows the change in the number of working rigs between last week’s count (August 27th) and this week’s (September 3rd,) count, the third column shows last week’s August 27th 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 4th of September, 2020...
despite the shutdown of 14 oil rigs in the state's offshore waters and three inland waters rigs elsewhere in the state, the Louisiana rig count was only down by 14 because three rigs targeting natural gas were added in the Haynesville shale in the northwest quarter of the state at the same time...the Rigs by State file at Baker Hughes will also show us details on the changes in the Permian basin, where we find that one rig was added in Texas Oil District 8, which is the core Permian Delaware, that another rig was added in Texas Oil District 8A, which encompasses the northern part of the Permian Midland, but that two rigs were pulled out of Texas Oil District 7C, which includes the southern counties of the Permian Midland....thus, since the Texas Permian rig count was unchanged while national Permian rig count was up by one, that means that the rig that was added in New Mexico must have been set up to drill in the far west reaches of the Permian Delaware in that state...elsewhere in Texas, we find that a rig was pulled out of Texas Oil District 10, which would account for the oil rig loss in the Granite Wash, while a rig was added in Texas Oil District 6, which could have been targeting the Haynesville shale if one of the northern Louisiana rigs weren't, although we've yet to see that happen previously....meanwhile, that the Oklahoma rig count was up by one despite the loss of an oil rig in the Cana Woodford means that two rigs began operating elsewhere in the state in a basin or basins not tracked by Baker Hughes, while the Alaska count is up by one due to the addition of the offshore natural gas rig, which we believe to be in the Cook Inlet...that rig, the three Haynesville shale rig additions, and one of the rig additions in basins not tracked seperately by Baker Hughes account for this week's natural gas rig increase, while all other rig changes we've noted today were targeting oil...
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Cleanup of Brine Spill Underway Near Barnesville A fracking waste spill occurred Friday along Ohio 800 north of Barnesville with cleanup happening Monday. “At 5 p.m. Friday the well operator on duty reported a mechanical failure resulting in a release of fluid from the containment area,” Bryan Force of Force Environmental Solutions wrote in a text message Monday. “The ODNR and EPA were contacted immediately. Cleanup started today (Monday) and will be completed by the end of the day Tuesday. Corrective action was taken to prevent a mechanical failure from happening again.” According to the Ohio Department of Natural Resources, on Friday a brine release of 400-500 gallons was reported at the Buckeye UIC Barnesville No. 1 injection well. The incident occurred when the transfer line failed. The brine was released onto the offloading area and flowed into an offsite ditch. The Division of Oil and Gas Resources Management visited the site, which was stabilized late Friday night. Roorbach said the impact to wildlife was very minor, though area residents told The Times Leader that fish on a nearby stream had been killed.As part of the cleanup operation, a contractor struck and damaged a waterline. “The area was marked by all utility companies prior to excavating but a service line was missed resulting in a loss of water service until the water company could fix it,” Force said via text. “We apologize for any inconvenience this caused any local residents.” One village official was at the scene. “That’s outside of our jurisdiction,” Barnesville Village Administrator Roger Deal said, adding the contractor doing excavation and cleanup work asked for some assistance Saturday and Monday. “They called me down there to locate the waterline for them. … There was definitely a cleanup going on. … They called and said they were digging and needed to know where our waterline was. … Hopefully there’ll be no contaminated soil.
Cleanup continues following last week’s oil leak - Progress continues on the cleanup of an oil leak reported last week on Veto Lake. Officials from the Ohio Department of Natural Resources and the Ohio EPA responded after crude oil was found in and around the lake, which covers 160 acres just east of Ohio 339. Stephanie O’Grady, media and outreach specialist from the ODNR, said Wednesday the Division of Oil and Gas Resources Management has executed a contract to control the leak and secure the wellhead using a self-contained system that collects any additional release of fluids. The fluids will then be disposed of lawfully, she said.“The secure well has been placed into the Orphan Well Program and the program will follow established protocols to plug the well,” O’Grady said.She noted the well is on state-owned land and based on information about the area provided to the ODNR, the division’s survey section will attempt to locate additional unregistered wells.“If additional wells are identified they will be referred to the Orphan Well Program, and processed and scored accordingly,” she explained.Bob Lane, 76, of Marietta, owns oil and gas wells in the area and said as far as he’s concerned, the leak stems from an oil and gas well under the lake.“The well was built in the 1930s and the lake in the early 1950s,” he said. “In the process, the well was under the backwaters of the lake.”He said there are fears the crude oil will get into residents’ drinking water, which will make it completely undrinkable.“It will make C-8 look like a stepchild,” he said.The chemical C-8 was used by DuPont in the production of Teflon and other products that has caused health issues as a result of being released into local waters.
Ohio plans to discontinue use of controversial road deicer - The Columbus Dispatch -The Ohio Department of Transportation plans to stop purchasing a deicer made from processed brine drawn from oil and gas wells.The department made the call after the Ohio-made deicer product, AquaSalina, became the subject of House Bill 282. The bill would allow the product to be sold to the general public and remove a requirement that users pay a $50 fee to the Ohio Department of Natural Resources and report where every gallon gets spread.ODOT did not cite the bill or environmental concerns for its decision to stop buying the product. "We only need additives when pavement temperatures get extremely cold, which is fortunately the exception, not the rule," said ODOT spokesman Matt Bruning. "Also, there are a lot more approved products on the market these days, so we have more options to choose from."Even prior to the bill's introduction, environmentalists called for the discontinued use of the product, citing radioactive test results.Ohio Department of Natural Resources, which oversee the oil and gas industry in Ohio, tested the product in 2017. It found in one instance that AquaSalina contained 9,602 picocuries per liter of combined amounts of radium-226 and radium-228, far beyond the Ohio legal limit of 0.005 picocuries of radium per liter of oil and gas waste allowed in landfills. However, state laws allow brine produced from vertical, or conventional (as opposed to fracking) wells to be spread as a deicer without a cap on radiation levels because the state says it is a naturally occurring byproduct. AquaSalina brine comes from conventional wells. Radium-226 and radium-228, both found in brine waste from conventional and unconventional wells, are known carcinogens and can lead to bone, liver, and breast cancer in humans if levels are high enough, according to the U.S. Centers for Disease Control and Prevention.
Utica Green Conference to Focus on ESG Initiatives - The Utica Green Conference will take place on Tuesday, Oct. 12, at the recently renovated Nash Family Event and Conference Center at the Pro Football Hall of Fame campus in Canton, Ohio. The conference will educate and prepare companies for the changes coming to the oil and gas industry. Is your company aware of the sustainability changes coming to the oil and gas industry in Utica Shale? Is your company discussing these changes? Is your company adapting to the sustainability changes coming? Does your company know what ESG (Environmental, Social and Governance) guidelines will do to your business?The Utica Green Conference will uniquely showcase the industry’s continued sustainability-focused progress and results. Produced by Shale Directories and the Canton Regional Chamber of Commerce, the event will highlight the industry’s ESG initiatives, the critical role of U.S. natural gas in the context of the broader energy transition, as well as insights about where the industry has been, where it is now and where it is going, to make the Utica Shale even more sustainable. The conference will feature speakers from Encino Energy, which is a presenting event sponsor. Barbco Inc. is the Luncheon Sponsor for this groundbreaking event at which more than 300 attendees are expected. In addition, Barbco CEO Tony Barbera will join an all-star industry panel to discuss industry issues pertaining to the green future of America.This fall event seeks to create a platform to facilitate the exchange of ideas, drawing from energy company representatives, sector experts, regulators, public officials and the public at large on the industry’s ongoing ESG actions and related topics. The Utica Green Conference is an important and topical conference for the energy sector and its stakeholders.
PTTGC Looking for New Partner to Construct an ETHANE CRACKER COMPLEX in Belmont County OHIO— Houses continue to come crashing down — and more property is being acquired — in the Dilles Bottom area in anticipation of a future ethane cracker plant being built. Dan Williamson, Columbus-based spokesman for PTT Global Chemical America, said the developer still plans to eventually move forward with its proposed petrochemical manufacturing project. He added that the demolition of three homes in that area during the past week is a continuation of the lengthy site preparation process. “That was a pretty full neighborhood five years ago,” Williamson said of the chosen location that includes the property where the former FirstEnergy R.E. Burger coal-fired power plant once stood. “One of the first things we did in 2016 or so was to have a series of meetings with residents to explain this would be a substantial complex — that it would disrupt their lives.” When offered the opportunity to sell their properties to the company, Williamson said, the majority of nearby residents did so. Ever since then, Thailand-based PTTGCA has been working to gradually demolish homes that have become vacant. He explained that when houses are vacated, they immediately begin to become unsafe. Not only do the structures deteriorate, but empty homes can attract trespassers and even animals. The three homes razed during recent days bring the total number of demolitions at the site to 14. Williamson said this “closes the book” on tearing down homes PTTGCA already has purchased. Still, more demolition work may lie in the future. Williamson said the company is now working with area residents to acquire two more properties. Activity at the proposed plant site has slowed somewhat in recent years, a result of the COVID-19 pandemic and the withdrawal of PTTGCA’s investment partner, Daelim Chemical USA of South Korea. This slowdown has led to speculation that the project is “dead” or that it will only move forward under another developer. Williamson, though, said this is not the case. “Actions speak louder than words,” Williamson said, noting that PTTGCA continues to invest money and resources to buy property and develop the site. “That is not something they would do unless they intended to go forward.” Williamson stressed, however, that no final investment decision has been made and that PTTGCA continues to search for a new investment partner. He said he has no timeline for when an official announcement might be made. Launched in April 2015, the project has been in the works for more than six years. In addition to property acquisition and site preparation, the effort has included obtaining air and water pollution permits, securing grant funding and ensuring the availability of necessary ethane storage capacity, infrastructure and a freight transportation network. PTTGC is Thailand’s largest petrochemical producer, according to the Bangkok Post. Its American subsidiary, PTTGCA, is exploring the Belmont County project. It holds a more than 500-acre site along the Ohio River south of Shadyside in Belmont County and has invested millions in property acquisition and site preparation. If it is built, the plant would use six natural gas-fired furnaces to “crack,” or break apart, ethane molecules. The resulting ethylene or polyethylene could be used as a component of plastics, textiles and household or industrial chemicals. Ethane is a natural gas liquid that is abundant in the local natural gas stream. Plans are evolving for construction of an ethane storage facility in northern Monroe County, in salt caverns located about 8 miles from the PTTGCA site at Dilles Bottom. Opponents of the project have questioned its viability in the current economy, as well as its potential negative impact on the local environment and on residents’ health. Those groups, including the Concerned Ohio River Residents, tout “a cleaner, more sustainable and financially viable alternative” industry and a more diversified economy not tied to fossil fuels as the best path forward for the region.
Oil leaking in Swiftwater Creek continues to be a problem (WOLF) — Over a week later-- and residents in Monroe County are still struggling with a large oil spill in Swiftwater Creek with another two oil dumps occurring this past Tuesday.The Pennsylvania Department of Environmental Protection says the leaks came from an elementary school in the Pocono School District while excavation work was being done.Residents have provided photos of the creek turning red and smelling of a strong odor."A lot of residents are scared and concerned right now. The first time it wasn't as bad. The second and third time it literally turned the stream red. Any home owner who smells anything in their well with their water is asked to call Cindy from DEP. She is the geologist handling this. The DEP has assigned a specific geologist to handle this because it is so serious," Pocono Township EMA Coordinator, Jerrod Belvin said.The DEP, Pocono Township, and local organizations have been doing what they can to help, but now it's up to the Pocono School district to finish remediation. The Pocono School District has hired an environmental contractor to help with the clean up.
Chester County, PA Leaders Continue to Sow Fear of ME2 Pipeline - Chester County, PA commissioners are, once again, attempting to instill irrational fear into county residents over the construction and operation of the Mariner East 2 (ME2) pipeline. ME2 runs hundreds of miles across the state, from eastern Ohio all the way to the Marcus Hook refinery near Philadelphia. The pipeline runs through Chester on its way to Marcus Hook. Chester commissioners are preparing to pay big bucks to hire a consultant to help the county draw up emergency plans for the pipeline in case it blows up or leaks. It’s a scare tactic. “The sky is falling!” Delaware Business Now published the following article about Chester County’s attempt to amplify the fears of a pipeline break on Mariner East: At the request of Chester County commissioners, the Chester County Department of Emergency Services has prepared a Request for Proposal (RFP) to specialist contractors for the development of a natural gas liquids pipeline hazard-specific addition to the Chester County Emergency Operations Plan.The RFP also calls for the development of tools to better prepare the public for a potential emergency arising from either the Energy Transfer Mariner East Pipeline or the Enterprise Products TEPPCO Pipeline.The pipeline hazard-specific section will also be developed and added to the emergency operations plans of the 12 Chester County municipalities in which the Energy Transfer and TEPPCO pipelines traverse.The pipelines do not come close to the Delaware line in Chester County but are near the border at the pipeline’s final destination in Marcus Hook, PA.“Chester County’s Emergency Services leadership and staff, along with the thousands of police, fire, and emergency medical service personnel throughout the county, have comprehensive emergency operations plans that allow them to respond to disasters, be they natural or man-made quickly,” said Chester County Commissioners’ Chair Marian Moskowitz.Chester County Commissioner Josh Maxwell said, “Sunoco, a private sector company, has created a serious threat to our community, therefore we believe plans like this one being developed should become a requirement of the pipeline industry, and especially for Mariner East and TEPPCO. (1)
Opinion | Don’t Let the Fossil Fuel Industry Pivot to Toxic Plastics and Chemicals - The New York Times - As the United States comes to grips with the climate crisis, fossil fuels will slowly recede from being primary sources of energy. That’s the good news. But the bad news is that the petrochemical industry is counting on greatly increasing the production of plastics and toxic chemicals made from fossil fuels to profit from its reserves of oil and gas.That transition is why the challenges of climate, plastic pollution and chemical toxicity — which at first might each seem like distinct problems — are actually interrelated and require a systems approach to resolve. The danger is that if we focus on only a single metric, like greenhouse gas emissions, we may unintentionally encourage the shift from fuel to plastics and chemicals that are also unsafe and unsustainable.Already, according to a 2018 report from the International Energy Agency, petrochemicals, which are made from petroleum and natural gas, “are rapidly becoming the largest driver of global oil demand.”Petrochemicals are ubiquitous in everyday products, and many of them are poisoning us and our children. Stain repellents, flame retardants, phthalates and other toxics are contributing to cancer, falling sperm counts, obesity and a host of neurological, reproductive and immune problems, research has shown.Epidemiological studies over the past decade have found, moreover, that exposure in utero and in childhood to chemicals used as flame retardants, called polybrominated diphenyl ethers, or PBDEs, has been linked to significant declines in IQ. These chemicals, widely used since the 1970s in the United States, were largely phased out in recent years. But they have persisted in the environment. And the push to phase out PBDEs led to “regrettable substitutions,” as the authors of one study put it, replacing one type of phased-out toxic flame retardant with another one that is also harmful.And plastics, of course, are inundating the planet. Global chemical production is predicted to double by 2030, according to the United Nations. Plastic production could jump three- to fourfold by 2050, according to a World Economic Forumreport in 2016. By that year, the ocean is expected to contain, by weight, more plastic than fish.
Appalachian shale gas production hits record high this year - Farm and Dairy - The Appalachian Basin saw record shale natural gas production in the first half of 2021. The Energy Information Administration reported Sept. 1 that production in the Marcellus and Utica shales averaged 31.9 billion cubic feet per day during the first half of the year. That’s the highest average for a six-month period since production began in 2008. The Marcellus and Utica shales in Pennsylvania, Ohio and West Virginia account for about 34% of all U.S. dry natural gas production.This record production was due in part to growth in pipeline capacity, especially in the Midwest, the EIA said. From 2008 to 2020, total pipeline takeaway capacity from the northeast increased from 4.5 bcf/d to 24.5 bcf/d.
Shale natural gas production in the Appalachian Basin sets records in first half of 2021 -Dry natural gas production from shale formations in the Appalachian Basin that spans Pennsylvania, West Virginia, and Ohio has been growing since 2008, and monthly production has recently set new record highs. Production in the region reached 32.5 billion cubic feet per day (Bcf/d) in December 2020, and it averaged 31.9 Bcf/d during the first half of 2021, the highest average for a six-month period since production began in 2008. The Appalachian Basin contains two shale formations, Marcellus and Utica, which accounted for 34% of all U.S. dry natural gas production in the first half of 2021. On its own, the Appalachian Basin would have been the third-largest natural gas producer in the world the first half of 2021, behind Russia and the rest of the United States.Record-high dry natural gas production in the first half of 2021 was made possible by growth in pipeline takeaway capacity that allows natural gas produced in the Appalachian Basin to reach other demand markets, especially in the Midwest. From 2008 to 2020, total pipeline takeaway capacity from the Northeast increased from 4.5 Bcf/d to 24.5 Bcf/d, alleviating some congestion and supporting higher wholesale natural gas prices in the region. Most of the increase in takeaway capacity happened between 2014 and 2020, when pipeline capacity increased by 16.5 Bcf/d, much of which was directed to the Midwest. Pipeline takeaway capacity from Appalachia to Canada and to the Southeast has also increased. Recent expansions of pipeline capacity in the Southeast are supporting growth in exports of U.S. liquefied natural gas. Although natural gas pipeline capacity out of the Northeast has grown every year since 2014, the rate of increase has slowed and recently has not kept pace with growth in regional production. The Mountain Valley Pipeline is the largest natural gas pipeline currently being constructed in the region and is targeted to enter service in 2022. The pipeline will move natural gas from northwestern West Virginia to southern Virginia, extending the Equitrans transmission system to the Transcontinental Gas Pipeline Company’s Zone 5 compressor station 165 near Gretna, Virginia. It is designed to move 2.0 Bcf/d of natural gas and is intended to further alleviate pipeline congestion. Pipelines tend to be most full in the region during the late summer when consumption of natural gas within the region is typically at its lowest.
DEQ taking public comments on Mountain Valley Pipeline stream crossings - For those fighting the Mountain Valley Pipeline, scattered stretches of water, wetlands and national forest may soon be all that’s left to defend. Construction crews working through the summer have completed large sections of the 303-mile natural gas pipeline that starts in northern West Virginia, passes through the New River and Roanoke valleys, and connects with another pipeline near the North Carolina line. On Saturday, the Virginia Department of Environmental Quality began taking public comments on a draft permit that would allow Mountain Valley to dig trenches for the buried pipe through streams and wetlands, impacting surface water in 428 locations. This proposal is an abdication of DEQ’s duty to protect Virginians and our precious resources,” read a statement from Appalachian Voices, Sierra Club, the Protect Our Water, Heritage, Rights coalition and Wild Virginia, four organizations that have long opposed the project. Mountain Valley has failed to present, and DEQ did not consider, the full impact on streams and wetlands, opponents say. “We are confident that a full description of the likely impacts from the remaining work MVP proposes is being withheld for one simple reason — it is abundantly clear that MVP cannot plow through these water bodies without causing unacceptable damages and violating state and federal laws,” said David Sligh, conservation director of Wild Virginia.. Mountain Valley must purchase mitigation credits to compensate for impacts to streams and wetlands. Approval by Virginia regulators is not the only hurdle MVP must clear before it can start work in streams and wetlands. In an environmental assessment released earlier this month, FERC found that the boring method would cause fewer impacts than open-cut crossings, which the two states are considering. That process entails temporarily damming a stream, digging a trench along the exposed bottom, burying the 42-inch diameter pipe and then restoring the water flow over the pipeline. Mountain Valley evaluated each stream crossing to determine if boring was possible, according to DEQ. In those where the length of the crossing, depth of the stream, surrounding slopes and other factors eliminated the option of boring, the open-cut method will be used. When construction began in 2018, Mountain Valley’s plans called for crossing nearly 1,000 streams and wetlands. About half of those were completed before the company ran into legal problems with its initial Nationwide Permit 12 two years ago. In Virginia, Mountain Valley has identified 236 remaining stream crossings, 92 of which would entail using the boring method, according to DEQ. Boring is planned for the Roanoke River along the Montgomery-Roanoke county line. The north fork of the river in Montgomery County has already been crossed via the open-cut method. In asking the state water board to stop Mountain Valley from completing the crossings, Sligh cited the company’s “deplorable record of violating environmental rules since it began work.” Muddy water has often flowed unchecked from construction areas when it rains, and DEQ found more than 300 violations of erosion and sediment control regulations.
3 Mountain Valley Pipeline protesters convicted, fined for Poor Mountain blockade - By their own admissions, three Mountain Valley Pipeline antagonists blocked a construction access road atop Poor Mountain by chaining themselves to a junked car fortified with concrete and steel.But they pleaded not guilty Monday, saying their civil disobedience came only after government agencies ignored their concerns about the natural gas pipeline’s ruinous impact on the environment and, ultimately, the earth.“We have tried over and over, time and time again, to go through the legal routes ... to make our voices heard,” Bridget Kelley-Dearing testified in a Roanoke County courtroom. “I feel like this is the last option I have left.”In convicting Kelley-Dearing and two others of obstructing the free passage of Honeysuckle Road, substitute General District Judge John Molumphy III said the case was not about the wisdom of building a pipeline, but how they chose to oppose it.Impeding pipeline construction was clearly their goal, he said, “and you accomplished that marvelously.”After hearing nearly three hours of testimony, the judge imposed $1,000 fines on Kelley-Dearing of Lexington, Deborah Kushner of Staunton and Alan Moore of Blacksburg.As dawn broke June 30 on Poor Mountain, pipeline workers found a 1999 Ford Crown Victoria parked sideways across a narrow gravel road that runs along a row of television and communication towers.Someone had flattened the tires, poured concrete into the car’s trunk and passenger area, and encased it with rebar. “Old Hills & Old Folks Resist,” was painted on the side of the car.Kushner, 66, was perched in a rocking chair positioned on the trunk; Kelley-Dearing, 64, was sitting in a lawn chair on the ground next to her; and Moore, 57, was inside the car. All three had their arms inserted into pipes that secured them to anchors of concrete, steel and rebar. Using grinders, rotary hammers and other hand tools, Roanoke County police worked until nightfall to extract them.
UGI Corporation Completes Acquisition of Mountaineer Gas - UGI Corporation has completed the previously announced acquisition of Mountaintop Energy Holdings LLC, owner of Mountaineer Gas Company (“Mountaineer”), the largest gas local distribution company in West Virginia, for an enterprise value of $540 million. With all closing conditions now satisfied, including final regulatory approval from the West Virginia Public Service Commission, Mountaineer becomes the newest wholly-owned subsidiary of UGI. UGI also announced that C. David Lokant has been named president of Mountaineer, effective immediately. Mr. Lokant will assume responsibility for all aspects of Mountaineer’s operations. Mr. Lokant previously served as Chief Operating Officer and Senior Vice President for Mountaineer. He joined Mountaineer when West Virginia Power Gas assets were purchased from UtiliCorp in 2000. Mr. Lokant has more than 30 years of industry experience and has held a variety of positions throughout his career in operations, regulatory relations, customer service, accounting, and engineering. Mountaineer serves nearly 215,000 customers across 50 of West Virginia’s 55 counties. The customer base is approximately 90% residential, with the remaining 10% comprised of commercial and industrial customers. Mountaineer is fully regulated, and its system has nearly 6,000 miles of distribution, transmission, and gathering pipelines.
Natural Gas Prices Are Soaring Despite U.S. Production Records - The benchmark U.S. natural gas price has nearly doubled over the past year. The front-month Henry Hub contract jumped from $2.406 per million British thermal units (MMBtu) at the beginning of September 2020 to as much as $4.606/MMBtu early on September 2, 2021. Prices have rallied despite the fact that the biggest gas-producing basin, Appalachia, saw in the first half of 2021 its highest average output since natural gas production in the Marcellus and Utica shale formations started in 2008. U.S. natural gas production in the other shale basins is not recovering from the pandemic-induced slump last year as fast as in Appalachia. In the Permian, fewer oil-directed rigs are pumping less associated gas. Overall American dry natural gas production is rising. But it's not increasing so quickly as to offset surging U.S. gas exports via pipelines and liquefied natural gas (LNG) cargoes, which have been setting all-time high records this year. Scorching summer heat waves and low natural gas inventories have also driven natural gas prices higher over the past few months. Moreover, major gas producers in Appalachia are holding off on splurging on budgets to boost production too much, expecting stronger price signals in the futures curve a year and two from now. The Appalachian Basin, which accounted for a third of all U.S. natural gas production in H1, saw its production average 31.9 billion cubic feet per day (Bcf/d) during the first half of 2021—the highest average output for a six-month period since production began in 2008, the EIA said this week. If the Appalachian Basin were a country, it would have been the world's third-largest natural gas producer in the first half of 2021, behind Russia and the rest of the United States. However, the rise in gas output in Pennsylvania, West Virginia, and Ohio has not been weighing on the benchmark U.S. prices because gas inventories are running below average and will enter the winter heating season at below-average volumes, following major above-average withdrawals this year, especially during and after the Texas winter storm in the middle of February. Then, there is the trend of record-breaking U.S. LNG exports amid soaring demand and the highest spot LNG prices in Asia in years. Higher natural gas prices this year primarily reflect two factors: soaring LNG exports and rising domestic natural gas consumption for sectors other than electric power, the EIA said in its August Short-Term Energy Outlook (STEO). The average price for the front-month contracts in July was $3.82/MMBtu, the highest July average since 2014, as per EIA estimates, as cooling demand—especially in the Pacific and Mountain regions—jumped and the number of cooling degree days in July was 9 percent higher than the 10-year average. At the same time, U.S. natural gas exports (pipeline and LNG) also increased, from 17.8 Bcf/d in June to 18.2 Bcf/d in July, while natural gas production declined slightly from 92.7 Bcf/d in June to 92.5 Bcf/d in July. The Henry Hub price rallied 17.9 percent from June to July, registering the largest month-on-month percentage change for June to July since 2012, when the price jumped by 20.3 percent.
Brooklyn Residents File Civil Rights Complaint Seeking to Pause Gas Pipeline - Opponents of a gas pipeline snaking its way through Brooklyn are formally alleging its location, approval and operation discriminate against communities of color along its route, in violation of federal and state environmental and civil rights laws. Lawyers on behalf of Brownsville Green Justice and the Ocean Hill-Brownsville Coalition of Young Professionals, Mi Casa Resiste and the Indigenous Kinship Collective on Monday filed a petition to the U.S. Department of Justice, Environmental Protection Agency, Department of Energy and Department of Transportation requesting an investigation into the pipeline’s siting and approval. Meanwhile, they demand, federal authorities should stop the flow of gas, which is extracted through fracking. It’s the latest effort to halt the project, which has been a focus of contention for over a year. National Grid’s Metropolitan Reliability Project, also known as the North Brooklyn Pipeline, is slated to run nearly seven miles, from Brownsville to Greenpoint. Four phases between Brownsville and East Williamsburg are complete and operational, but the final section, connecting the pipeline via Williamsburg to National Grid’s Greenpoint storage and production facility, needs further review and approval. The state Department of Public Service (DPS) and Department of Environmental Conservation (DEC) improperly approved the pipeline, complain the petitioners. The groups are asking the federal agencies to “step in where they [state agencies] have failed,” said Britney Wilson, a lawyer and director at the New York Law School’s Civil Rights and Disability Justice Clinic, at an event at the Brownsville Playground Monday. She is also a resident of the neighborhood. The letter alleges National Grid misled the public about the nature of the infrastructure project and did not adequately inform or hear from the communities along the route. Nor did the company pressure-test its pipes or submit the necessary data and maintenance plans prior to the pipeline’s operation, the letter claims.
Willard Beach reopens for swimming after oil spill - A small but popular beach tucked in a quiet South Portland neighborhood is back open for swimming Saturday after abruptly shutting down due to an oil spill. The beach was expected to remain closed through Monday, August 30, however, the Maine Dept. of Environmental Protection said, "Although several petroleum hydrocarbons were detected at all sample locations, their concentrations were well below the guideline values. They also added that the contaminated water “should not pose a risk to human health.” The contamination happened after an oil spill ended up in South Portland's drainage system and then emptied into the water at Willard Beach, according to Officials with U.S. Coast Guard, Maine Department of Environmental Protection, and the City of South Portland. Once the oil spill was detected, the team quickly began the cleaning effort. Officials said they will continue to monitor the water by taking samples and testing them for the next several weeks to make sure that anyone who encounters the water will be safe. The City of Portland said they will also update the public until this matter is completely resolved.
Crews respond to large diesel fuel spill at gas station in Liberty -Local fire officials and state environmental crews responded Friday morning to Circle K gas station in Liberty, where they worked to clean up about 50 gallons of leaked diesel fuel. The state Department of Environmental Protection was at the site, where the diesel was discharged during a fuel delivery to an above-ground storage tank, according to David Madore, DEP’s deputy commissioner. “The tank was overfilled and spilled out the vent line,” Madore said in response to an email seeking comment. “Gaftek was already on-scene during routine inspections of the tank and was able to assist the delivery driver immediately with the distribution of sorbents. Most of the discharge spilled to the tank pad but some escaped to the surrounding ground.” Sorbents are materials used to absorb oil from the spill. Gaftek Inc. is a petroleum services company that serves the Northeast and has an office in Bangor. A marsh near the spill site showed no signs of oily contamination, according to Madore. “Efforts are currently underway to collect the used sorbents and use sorbents mineral to better remediate the tank pad,” he said. “Efforts to excavate will be made later today but will likely move into tomorrow.”
Opposition grows to proposed natural gas pipeline -- Environmental and consumer advocacy organizations have come out against a proposed natural gas pipeline project that would link potential gas-fired electric units to a natural gas network. The Sierra Club and the Citizens Action Coalition have come out in opposition to the proposed construction of a 24-mile Texas Gas Transmission LLC pipeline connecting Robards, Kentucky to two possible new gas-fired electric generating units at CenterPoint Energy’s A.B. Brown Generating Station in Posey County. CenterPoint Energy has not received approval from the Indiana Utility Regulatory Commission, the agency that approves energy projects in the state, and the possibility exists that construction of the new units could be denied, making the Texas Gas Transmission project a pipeline to nowhere. Texas Gas Transmission also wants the Federal Energy Regulatory Commission, the agency in charge of reviewing and approving interstate energy projects, to approve the project without having to complete an environmental impact statement. The Sierra Club has submitted comments to FERC, saying that the proposed pipeline would cause additional environmental impacts to parts of Indiana and Kentucky that are already bearing a disproportionate share of pollution. “[T]he Commission must perform a careful study via an [environmental impact statement] to assure that the full damage of this unneeded pipeline project is understood before the Commission acts on the application. Further, it is critical that the commission carefully scrutinize the representations made by Texas Gas given the company’s obvious financial interest in a continued build out of gas infrastructure, an interest that is in opposition to the public’s interest in a habitable climate,” the Sierra Club said in its comments.
Biden administration to resume drilling auctions in setback to climate agenda (Reuters) - The Biden administration on Tuesday unveiled more than 16,500 acres (6,700 hectares) it plans to auction to oil and gas drillers early next year as it seeks to comply with a U.S. federal court order directing the government to resume its leasing program. While the acreage offered is tiny compared to auctions under previous administrations, the move represents a setback for President Joe Biden's plans to fight climate change, which included a campaign vow to end new oil and gas leasing on federal lands and waters. Biden had paused drilling auctions after taking office in January pending an analysis of their impacts on the environment and value to taxpayers. In June, however, a federal judge in Louisiana ordered a resumption of auctions, saying the government was required by law to offer acreage to the oil and gas industry. The U.S. Interior Department said it was evaluating land parcels in states including Alabama, Mississippi, Montana, New Mexico, North Dakota and Oklahoma, according to documents posted on a government website. The amount of acreage being considered is a fraction of what the Interior Department's U.S. Bureau of Land Management routinely offered under previous presidential administrations. In 2020 alone, then-President Donald Trump's Interior Department offered more than 800,000 acres (324,000 hectares) at drilling auctions despite having to cancel several sales because of the coronavirus pandemic. Interior Department officials did not immediately respond to a request for additional comment. The administration is seeking public comment on the land parcels for 30 days as part of a review that will determine which ones are put up for auction. The drilling rights will be sold in lease sales in February and March of next year. The government said last week it would take steps to restart the federal oil and gas leasing program. The announcement was in response to a motion by the state of Louisiana and others that sought to compel Interior to restart drilling auctions. Interior was expected to unveil details for an offshore auction in the Gulf of Mexico later on Tuesday.
DOI Moving Forward with GOM Lease Sale 257 - The Department of the Interior (DOI) has determined to move forward with the process for Gulf of Mexico (GOM) Lease Sale (LS) 257, the DOI’s Bureau of Ocean Energy Management (BOEM) has revealed. This record of decision (ROD) identified BOEM’s selected alternative for proposed LS 257, which allows for a proposed GOM regionwide lease sale encompassing the Western Planning Area (WPA); Central Planning Area (CPA); and a small portion of the Eastern Planning Area (EPA) not under congressional moratorium. BOEM expects a final notice of sale for LS 257 to publish in September, with a lease sale to follow in the fall of this year. On August 24, the DOI revealed that it would submit a record of decision (ROD) for LS 257 in the GOM to the Federal Register by the end of August. This followed an appeal by the United States on the preliminary injunction entered by the district court in Louisiana v. Biden, which enjoined the DOI from implementing a pause in new federal oil and gas leasing. The federal onshore and offshore oil and gas leasing program will continue as required by the district court while the government’s appeal is pending, according to the DOI. Commenting on the latest leasing development, National Ocean Industries Association (NOIA) President Erik Milito said, “the resumption of the offshore lease schedule and of Lease Sale 257 is welcome news”. “As Louisianans and Gulf Coast residents recover from Hurricane Ida, the resumption of offshore lease sales adds certainty to their jobs and livelihoods,” he added. “There is no shortage of reasons why Gulf of Mexico energy development supports many of the top priorities of the Biden Administration. U.S. Gulf of Mexico production enables low carbon barrels of oil, supports more than 345,000 jobs, many of which are accessible, high-paying and cannot be easily substituted, and generates vital government revenues for conservation and recreation programs, including ones in economically distressed urban areas. Furthermore, Gulf of Mexico leasing can help avert inflationary risks and proactively ensure affordable energy for all walks of life, especially low-income communities,” Milito went on to say.
Lawsuit challenges Biden plan to sell oil and gas leases in Gulf of Mexico - Outrage and at least one lawsuit has followed the Joe Biden administration’s announcement this week that it would open tens of millions of acres in the Gulf of Mexico for oil and gas exploration in an effort to comply with a court order. Earthjustice, a non-profit public interest organization, has filed a lawsuit on behalf of four environmental groups in Washington DC federal court challenging the move. They alleged that the environmental analysis behind the auction is flawed and violated federal law. Brettny Hardy, attorney for Earthjustice, described the decision as the Biden administration folding to the oil industry, despite the worsening climate emergency. “Our planet cannot handle more stress from oil and gas production and yet the Biden administration is plowing ahead with a lease sale that will have impacts for decades into the future,” she said in a statement. The lawsuit was filed on behalf of Healthy Gulf, Sierra Club, Friends of the Earth and the Center for Biological Diversity. Other conservationists and environmental groups have highlighted the particularly distressing nature of this announcement coming in the midst of Louisiana and neighboring states getting pummeled by Hurricane Ida, and the fact that it directly conflicts with Biden’s campaign vow to put an end to new federal oil and gas leasing. In a tweet on Wednesday, the Ocean Conservancy, a non-profit environmental group, posed the question, “How does this align w/ Biden administration commitment to take ‘bold steps’ to combat the #ClimateCrisis?” while the Center for Biological Diversity, a non-profit conservation organization, launched a petition “urging Biden to keep his climate promise on public lands and oceans”. The announcement by the Biden administration came after a months-long legal seesaw initially sparked by the president signing an executive order in January pausing new oil and gas leasing on federal lands and waters, pending an analysis on their impact. In response, more than a dozen states sued the Biden administration. In June, a federal judge in Louisiana ordered the government to resume auctions, stating that the law requires it to offer acreage to the oil and gas industry, according to Reuters. In the Record of Decision, a sale document published online, the US interior department explained that the majority of a 92m-acre area in the Gulf of Mexico would be available for lease. The result of such a sale could be production of as much as 1.1bn barrels of oil and 4.4tn cubic feet of natural gas. The document referenced the Intergovernmental Panel on Climate Change’s report produced by hundreds of the world’s top scientists and released earlier this month, which stated that climate change is caused by human activities and that it is affecting every part of the planet already. But, the sale document said, the “report does not present sufficient cause to supplement” an environmental analysis conducted by the Trump administration of the lease sale.
Freeport LNG takes one of three trains offline for maintenance: spokeswoman -One of Freeport LNG's three liquefaction trains was shut for maintenance Aug. 31, temporarily cutting feedgas demand at the Texas facility to the lowest level in 2 ½ months. The work was expected to last three days, spokeswoman Heather Browne said in an e-mail responding to questions. She declined to specify which train was shut down or whether the maintenance was planned or unplanned, although she said it was unrelated to an Aug. 27 trip that, according to a state air emissions notice, took Train 1 offline for about five hours. Based on nominations for the morning cycle, feedgas deliveries to the terminal south of Houston fell to 1.5 Bcf/d Aug. 31, from about 2 Bcf/d the previous day, S&P Global Platts Analytics data show. The most recent level was the lowest since June 14. Freeport LNG is the only liquefaction terminal in the US and one of only a few in the world that uses exclusively electric motors instead of natural gas turbines to drive the liquefaction compressors. The earlier shutdown of Train 1 was because of a trip of the variable frequency drive on the low pressure mixed refrigerant compressor, according to a Texas Commission on Environmental Quality notice. That resulted in unavoidable venting from Train 1 to the liquefaction flare. "After resolution of the cause of the trip, the plant operators managed the restart of the compressor and the Liquefaction Train 1 as efficiently as possible to minimize flaring," the notice said.
Colonial Pipeline temporarily halts gas delivery as Hurricane Ida hits --As Hurricane Ida hits the Gulf Coast, a critical fuel artery for the Southeast U.S. has halted operations along two lines from Houston to Greensboro, North Carolina. The Colonial Pipeline said it had temporarily shut down those operations until it's safe to resume. Fuel supplies still exist at terminals along the Southeast, and lines stretching from North Carolina to New Jersey are still in full operation. “We know that millions of Americans, along with our customers and other businesses, benefit from our system for critical fuel supplies at times like these," Wes Dunbar, vice president of operations for Colonial Pipeline, said in a statement. "As part of our weather preparedness and response plans, we have procedures in place to ensure the safety, protection and integrity of our pipeline and our assets – including proactively shutting down our lines when necessary." The Colonial Pipeline plans to perform safety evaluations and assess any impact made by the storms before reopening Lines 1 and 2, which stretch along the Southeast. In May, the pipeline went down for days after a ransomware attack, creating gas shortages as hordes of motorists rushed to the pump throughout the Southeast. Experts do not expect a similar outcome this time. Patrick De Haan, head of petroleum analysis for fuel-savings app GasBuddy, told USA TODAY that the Colonial Pipeline would likely come back online later today.
Producers shut in 95% of US Gulf oil volumes; refiners close plants as Hurricane Ida makes landfall | S&P Global Platts - Power outages in Louisiana and beyond were spreading Aug. 29 after Category 4 Hurricane Ida made a Louisiana landfall, after roughly 95% of the US Gulf's oil and gas production was shut in and many Louisiana refineries and petrochemical plants were closed in advance of the major storm. Ida was upgraded to a Category 4 hurricane with maximum sustained winds of 150 mph on Aug. 29, according to the US National Hurricane Center, before making landfall south of New Orleans near Port Fourchon just before noon CT as one of the most powerful storms to ever hit the US Gulf Coast. By 4 pm CT, Ida remained at Category 4 strength, but the sustained winds were down to 130 mph. The US Bureau of Safety and Environmental Enforcement said Aug. 29 that 95.65% of the US Gulf's crude oil, or 1.741 million b/d, already was shut in, as well as 93.75% of the region's approximately 2.2 Bcf/d of natural gas production, or about 2.091 Bcf/d. An estimated 288 offshore platforms were evacuated -- 51.4% of the US Gulf's total. Close to 4.4 million b/d of operating refinery capacity is in the path of Ida as well, primarily in Louisiana, and at least half of that at-risk capacity came offline ahead of Ida as Phillips 66, Shell, ExxonMobil, Valero and others closed refining units. Ida's wind speed will play a major role in how hard it strikes at the heart of USGC refining centers, according to S&P Global Platts Analytics. The greatest impacts are expected in the eastern Louisiana refining and petrochemical hubs from Baton Rouge to New Orleans and potentially to Mississippi. If the hurricane comes in with 120 mph winds or stronger, it could be "a major factor" in disrupting refining and petrochemical operations, Platts Analytics said. Ida would become a Category 5 hurricane if its winds hit 157 mph. "Hurricane Ida is expected to come ashore along the same path as other storms, which did extensive damage to USGC refining and petrochemical facilities. Many plants have been hardened against hurricanes, but disruptions in operations are still very likely due to flooding, power outages and personnel dislocations," Platts Analytics said. Colonial Pipeline -- the primary fuel artery from Houston to the South and East Coast -- said Aug. 29 it temporarily shut down its Lines 1 and 2 systems from Houston to Greensboro, North Carolina. Colonial said the rest of the network from North Carolina to New Jersey is operating normally. Colonial said the closure is precautionary and should resume full service after Ida passes and the system is evaluated. As of 3:30 pm CT Aug. 29, more than 410,000 customers were without power in Louisiana, led by 401,452 Entergy customers and 12,869 Cleco customers. Another 1,817 Entergy Mississippi customers were without power. A hurricane typically causes power demand destruction, as it severs transmission and distribution lines to loads. With weaker demand, lower prices would be expected, but much of the nation's natural gas flows through Louisiana, and Ida could disrupt that infrastructure and increase pressure on gas prices. Historically, offshore production has returned to pre-storm levels 10-14 days after initial declines, placing the week of Sept. 6 as a likely time for production to fully rebound, according to Platts Analytics. The reduced supply levels helped trigger spikes in crude oil, natural gas and refined products prices on Aug. 27 at the end of weekly trading, including gasoline and jet fuel prices. Most producers had shut in production and evacuated all crews from the US Gulf prior to Aug. 29.
Almost 600 Louisiana sites with toxic chemicals lie in Hurricane Ida's path - About two thirds of Louisiana industrial sites with toxic chemicals lie in the path of Hurricane Ida, a storm with the potential to batter or flood refineries, storage tanks and other infrastructure that can release oil and other harmful liquids and gases into communities and the environment. A Times-Picayune | New Orleans Advocate analysis of industrial data and Ida’s predicted route through the state indicates 590 sites that produce or store toxic chemicals are in harm’s way. Almost 380 of them are within 50 miles of the coast, putting them at particular risk from storm surge, strong winds and heavy rain, according to the analysis of sites listed in the U.S. Environmental Protection Agency’s Toxics Release Inventory.“That number of facilities at risk is something communities need to be aware of and make personal decisions about getting out of the area in case those facilities accidentally release or have incidents,” said Wilma Subra, a scientist with Louisiana Environmental Action Network, on Saturday. There were 540 oil spills after Katrina. Oil companies have yet to be held accountable for any of them.“We always have incidents during hurricanes,” she added. “And this one is of more concern [than last year’s storms] because it has such a big area of impact.”Ida is expected to strengthen into an “extremely dangerous” Category 4 storm and strike Louisiana on Sunday with gusts of up to 160 mph, according to weather forecasters. Storm surge warnings cover much of the Louisiana coast, from the Rockefeller Wildlife Refuge near Lake Arthur to the Mississippi-Alabama line.Hanadi Rifai, a hurricane resilience researcher at the University of Houston, said federal and state regulations do little to address the growing risk that storms and floods pose for industrial sites. “Every chemical plant has to submit to the EPA a big risk document, but they don't yet consider a severe storm or hurricane,” she said.That's particularly concerning because climate change has been ramping up rainfall and hurricane intensity, and the trend is likely to increase well into the century, according to National Oceanic and Atmospheric Administration scientists.
Factbox: Tropical Storm Ida cuts US Gulf Coast oil production, refining operations | S&P Global Platts -Roughly 75% of Louisiana refining capacity and nearly 95% of offshore US Gulf of Mexico oil production remained offline Aug. 30 as a result of Tropical Storm Ida, which caused widespread power outages after making landfall as a major Category 4 hurricane the prior day. According to estimates from S&P Global Platts Analytics, about 2.2 million b/d of refining capacity was offline, with the majority of plants without power from outside supplier Entergy. As of about 1 pm CT Aug. 30, almost 1.2 million electric customers lacked service in Louisiana, Mississippi and Florida, according to various utilities plus PowerOutage.us. Hurricane Ida cuts power to almost 1.2 million customers Entergy had almost 874,000 customers offline in Louisiana and Mississippi. The bulk of US Gulf of Mexico oil and gas output remained down Aug. 30 as E&P operators began inspecting platforms or made arrangements for flyover visuals. According to the US Bureau of Safety and Environmental Enforcement, 1.72 million b/d of crude output and 2 Bcf/d of natural gas output was down, 94.5% and 93.5% of total US GOM production, respectively. The return of offshore production could face delays as Port Fourchon, Louisiana took a near-direct hit from Ida. The port is a key hub of supplies and equipment, and a transportation point of entry and exit to and from the Gulf. Port Fourchon also is the home of the Louisiana Offshore Oil Port's onshore facilities, which includes a booster station and Clovelly Dome Storage Terminal. LOOP, the only deepwater port in the US capable of loading VLCCs with crude, had suspended deliveries ahead of Ida, and could not be reached for comment Aug. 30. Colonial Pipeline -- the primary fuel artery from Houston to the South and East Coast - closed ahead of Ida and said it would restart late Aug. 30 following a damage assessment. The Colonial Pipeline outage boosted NYMEX RBOB gasoline futures, with the front-month crack spread to ICE Brent ending at $17.25/b Aug. 30, up from $16.32/b the prior day. Crude futures were little moved, however, reflecting some confidence that the Gulf of Mexico offshore output would soon return. PRICES:
- **Crude and refined product futures settled higher Aug. 30 as the market assessed the impacts of Hurricane Ida on US Gulf Coast energy infrastructure.
- **NYMEX September RBOB settled up 3.85 cents at $2.3127/gal and September ULSD climbed 3.11 cents to settle at $2.1403/gal.
- **NYMEX October WTI settled 47 cents higher at $69.21/b and ICE October Brent rallied 71 cents to settle at $73.41/b.
- **Spot US Gulf Coast ULSD was assessed by S&P Global Platts at a five-month high of October ULSD futures minus 4.17 cents/gal, up 38 points.
- **Spot offline Colonial Pipeline CBOB gasoline prices rose 3 cents to close at parity to NYMEX September RBOB as the pipeline temporarily shut as a precaution. CBOB prices climbed as high as September plus 1.10 cents/gal to start the day before losing steam.
- **In New York Harbor, barge and Buckeye Pipeline RBOB gained 1.8 cents to September RBOB plus 80 points/gal, likely suggesting short-term concerns about Gulf Coast supply.
- **VLCC freight rates were rangebound Aug. 30 despite suspended operations at LOOP, as flows have been slow, with only six VLCCs leaving the terminal laden to Northeast Asia so far in 2021.
- **Freight for the Aframax 70,000 mt US Gulf Coast-UK Continent benchmark route climbed 12.5% to Worldscale 90, or $15.34/mt, as weather delays in the Gulf of Mexico spurred on an already bullish freight market.
- **Medium range clean tanker freight rates might decline this week as reduced exports due to closed refining capacity in Louisiana and Mississippi could lead to excessive tonnage in the Gulf of Mexico.
- **Due in part to US LNG export uncertainties, spot LNG prices in the Asia-Pacific region rose further Aug. 30; the Platts JKM for October was assessed at $18.675/MMBtu.
- **Benchmark gas prices at the Henry Hub dipped 14 cents on Aug. 30 to end trading around $4.21/MMBtu preliminary settlement data from S&P Global Platts showed.
- **Henry Hub prompt-month futures lost about 7 cents to settle at $4.31/MMBtu; the winter contracts saw similar losses with the December, January and February calendar months ending the session around $4.45, $4.50 and $4.40/MMBtu, respectively, data from CME Group showed.
Factbox: Louisiana petrochemical producers begin damage assessments post-Ida | S&P Global Platts - Petrochemical producers with operations along the Mississippi River began damage assessments Aug. 30 in the wake of Hurricane Ida's assault, according to sources familiar with company operations. "When the dust has settled in the next couple of days, we'll know exactly what kind of damage there is, and when it is feasible to come back to operation," a source said. Another source said it was still early in the storm's aftermath, but even if production units were spared significant damage, the region could face lengthy power outages that hinder restarts. Westlake Chemical spokesperson Erika Soechting said Aug. 30 that the company was assessing storm impacts on its polyvinyl chloride complexes in Plaquemine and Geismar, Louisiana, which could take several days to complete. "Restoration of operations will also be dependent on availability of utilities and other feedstocks," she said. When Hurricane Laura battered Lake Charles in August 2020, petrochemical plants were largely spared notable damage, but remained shut for up to six weeks as Entergy, the main power provider in the region, rebuilt major electricity transmission lines destroyed by the storm. A similar lack of power in petrochemical centers from Baton Rouge to New Orleans "could be the big issue" in Ida's wake as well, a source said. Ida came ashore near Port Fourchon Aug 29 as a Category 4 storm with 150 mph winds, just 7 mph shy of Category 5 status. The storm strengthened rapidly before landfall, and held hurricane strength as it moved slowly inland. Sixteen hours after landfall Ida was downgraded to a tropical storm as it moved into Mississippi, according to the National Weather service. The storm knocked out power for more than 1 million customers, including the entire city of New Orleans, according to Entergy, the main power provider in the region. Entergy said 207 major transmission lines were out in its service area, which includes Baton Rouge, New Orleans and cities along the river in between. "Where weather permitted, our crews were out at first light today assessing damage where it was safe to do so," the company said. "This will help us get a better idea of what we're dealing with. It would be premature to speculate at this time when power will be restored given the extent of the damage." Here is a rundown of the fallout of Ida's Aug. 29 assault:
- **ExxonMobil chemical complex: 1 million mt/year cracker; 400,000 mt/year HDPE; 400,000 mt/year LDPE; 900,000 mt/year LLDPE; 410,000 mt/year polypropylene
- **Formosa Plastics USA: 513,000 mt/year PVC; 653,000 mt/year vinyl chloride monomer
- **Dow Chemical: 1 million mt/year and 500,000 mt/year crackers; 750,000 mt/year HDPE; 184,000 mt/year and 350,000 mt/year LDPE; 544,000 mt/year LLDPE
- **Shintech: 500,000 mt/year cracker; 600,000 mt/year PVC; 1.77 million mt/year VCM; 2 million mt/year ethylene dichloride; 1.16 million mt/year chlorine; 1.28 million mt/year caustic soda
- **Westlake Chemical: 861,826 mt/year PVC; 725,747 mt/year VCM; 1.15 million mt/year EDC; 426,376 mt/year chlorine; 453,592 mt/year caustic soda
- **Olin: 850,000 mt/year chlorine; 934,066 mt/year caustic soda
- **Shintech: 900,000 mt/year PVC
- **Westlake Chemical: 520,000 mt/year PVC; 625,000 mt/year EDC; 317,514 mt/year chlorine; 349,266 mt/year caustic soda
- **NOVA Chemicals: 977,000 mt/year cracker
- **OxyChem: 315,000 mt/year EDC; 353,000 mt/year chlorine; 387,912 mt/year caustic soda
- **Methanex: Two methanol units, each 1 million mt/year
- **OxyChem: 613,000 mt/year EDC; 353,000 mt/year chlorine; 387,912 mt/year caustic soda
- **Dow Chemical: 750,000 mt/year HDPE; 800,000 mt/year LLDPE
- **OxyChem: 680,000 mt/year chlorine; 747,252 mt/year caustic soda
- **Shell Chemical: 625,000 mt/year and 930,000 mt/year crackers
- **Olin: 250,000 mt/year chlorine; 274,725 mt/year caustic soda
- **Pinnacle Polymers: 430,000 mt/year PP
- **CosMar: Two styrene units, each 579,000 mt/year
-
FORCE MAJEURE: **Pinnacle Polymers: Declared Aug. 30 for all products due to impacts of the storm.
Already tight U.S. East Coast gasoline supplies face hurricane squeeze (Reuters) - Tight supplies of gasoline on the U.S. East Coast are being pressured by refinery outages from Hurricane Ida and the shutdown of a major pipeline that supplies fuel to the Southeast. At least nine refineries in Louisiana that account for 13% of U.S. processing capacity on Monday had reduced or halted production, according to the U.S. Department of Energy. Those plants process 2.3 million barrels per day of crude oil into gasoline and other fuels. U.S. retail gasoline prices could rise between 5 and 15 cents a gallon, estimated Patrick DeHaan, petroleum analyst at fuel tracker GasBuddy. How much prices increase depends on how quickly refiners and the Colonial Pipeline, the largest fuel pipeline in the United States, can restore operations. Colonial on Sunday halted fuel transport from Houston to Greensboro, North Carolina. The pipeline company said on Monday it expects to resume full service once the company assesses the impact of Hurricane Ida on operations. It is releasing fuel from storage terminals along the supply route to the Southeast. Traders are monitoring Ida's effect on East Coast fuel markets. Gasoline stocks are 15% lower than the five-year average. "No amount of barrels of fuel the U.S. can import can fill the gap of the Colonial pipeline," one fuel trader said. Refiners said they have cut processing in part due to the power utility losses. Utilities across Louisiana and Mississippi cut power to nearly 1.2 million homes and businesses, according to tracking service PowerOutage.com. "There are not a lot of cargoes destined for New York Harbor right now," DeHaan said. The East Coast has been drawing down inventories all summer after demand for products in Europe began to rise, limiting imports. Market participants said there is not enough summer grade gasoline in the East Coast because it cannot be used after Sept. 15, disincentivizing imports
Oil, gasoline prices rise as Ida kicks hurricane season into a higher gear -- Hurricane Ida temporarily shut down a critical swath of U.S. oil production and refining operations, and that should keep crude and retail gasoline prices at already elevated levels. Now a tropical storm, Ida swept across the Gulf of Mexico production area before slamming into the Louisiana coast Sunday as a Category 4 storm, bringing torrents of rain, high winds and high tides. More than 1 million Louisiana utility customers were without power early Monday. The energy industry was working Monday to assess when it could restore refining operations across Louisiana and oil and gas production in the Gulf of Mexico, which were taken offline as a precautionary measure. Oil prices were slightly higher Monday after jumping 10% last week. However, West Texas Intermediate futures — which traded at about $69 per barrel — are still down over 6.5% for the month. Nearly all Gulf of Mexico oil production was shut in, accounting for about 15% of the U.S. total. The shut in operations in the Gulf of Mexico should resume to normal if no damage is found. The hit to supplies from the hurricane comes as OPEC+ meets this week. OPEC+ is widely expected to restore the 400,000 barrels a day of production it had previously committed to return to the market. Crude inventories are at the lowest level since January 2020. Crude supply has fallen for three straight weeks, while fuel demand has reached its highest level since March 2020, according to data released last week by the Energy Information Administration. Price impact for Labor Day Gasoline supplies could also be impacted temporarily by Ida, with refineries shut down across the region. The Colonial Pipeline — a key artery transporting gasoline from Houston, across the South and up to the Northeast — was partially shut down. The company said it expected the pipeline to resume service later Monday, pending restart protocols, according to Reuters. Terminals continued to distribute gasoline. "The consumer should not expect gasoline prices are going to go down this week," Analysts expect gasoline prices to rise 5 cents to 10 cents per gallon by the Labor Day weekend for some consumers, particularly in the southern and eastern U.S. The average national price for unleaded gasoline was $3.15 per gallon Monday, down a penny from a week ago, according to AAA. The price is the highest for a Labor Day weekend in seven years and up sharply from the $2.23 per gallon price at this time last year.
U.S. loans Exxon refinery oil from emergency reserve in Ida's wake - U.S. Energy Secretary Jennifer Granholm on Thursday authorized the country's emergency oil reserve to loan 1.5 million barrels of crude to an Exxon Mobil refinery in Louisiana to relieve fuel disruptions in Hurricane Ida's wake. Earlier, President Joe Biden directed Granholm to use all tools, including the Strategic Petroleum Reserve (SPR), to keep gasoline flowing in the storm's aftermath. "It's important to know that the region hit by it (Ida) is a key center of our nation's oil production and refining infrastructure...that's why we're not waiting to assess the full impact of the storm," Biden said. The loan to the Baton Rouge refinery is aimed to "alleviate any logistical issues of moving crude oil within areas affected by Hurricane Ida to ensure the region has access to fuel as quickly as possible," the Energy Department said. Several refineries including Baton Rouge remained cut off from crude and products supplies from the south via ship and barge after portions of the Mississippi River were closed by several sunken vessels. The Energy Department said it encourages refiners to prioritize refined products for the affected region. The SPR has four major storage facilities, two in Texas and two in Louisiana, to deliver crude to nearby refineries for fuel production. It was developed in the 1970s after the Arab oil embargo spiked gasoline prices, but has been tapped recently after unusual fuel disruptions like hurricanes.
Louisiana refineries, chemical plants flaring at full blast; 15 air monitors knocked out -Oil refineries and petrochemical plants have been flaring at full blast in Louisiana's "chemical corridor" along the Mississippi River since Hurricane Ida, and the 15 of the state Department of Environmental Quality's air monitoring stations are out of service. The department has set up mobile trailers containing equipment to sniff out chemicals in the air and take samples from the ground and water near two of the disabled monitoring stations: At the Shell Norco petrochemical complex in St. Charles Parish, where numerous flares have been pumping out a mix of black smoke and steam since Ida hit Sunday.The other monitoring stations that are down are at Carville, New Orleans City Park, Dutchtown, French Settlement, Garyville, along Interstate 610 in New Orleans, in the Irish Channel in New Orleans, Kenner, Madisonville, Marrero, Meraux, St. Rose and Thibodaux. "They are powered by electricity," which is still down in most of those areas, agency spokesperson Greg Langley said Thursday. Flaring can result of a mix of issues at a particular plant, said Brian Johnston, administrator of air permits for the agency. "A flare is essentially a safety device," he said. "It's typically designed to burn off large volumes of hydrocarbon gases as a plant starts up or shuts down, or if there's a malfunction or upsets. It's designed to safely combust the gas." Some of the plants have their on electric co-generation units that provide them with the electricity to continue operating even after a hurricane such Ida knocks out commercial power. Others are entirely dependent on the electric grid - and run into trouble when electricity is not available.
After Ida, Toxic Smoke From Shell’s Norco Plant in Louisiana Creates Apocalyptic Landscape – DeSmog (photo essay) For over a century, the Shell Norco Manufacturing Complex has dominated Norco, Louisiana’s skyline as it refines up to 10.1 million gallons of oil a day and produces up to 3.33 billion pounds of ethylene a year. Shell’s Norco refinery was one of multiple Louisiana oil refineries that shut down on Friday, August 27 as Hurricane Ida gained strength crossing the Gulf of Mexico’s unusually warm waters. Ida made landfall on Sunday, August 29 as a Category 4 hurricane — and remained a hurricane for 16 hours after its official landfall, maintaining strengthas it passed over the swampy southern Louisiana coastline.After Ida passed, black smoke darkened the skies over Norco, rising from bright red flares.Refinery flares can add to air pollution in the wake of natural disasters. “Some of the area’s refineries started shutting down operations leading up to Harvey, including ExxonMobil, Petrobras, Shell, and Chevron Phillips Chemical,” DeSmog reported in 2017. “This process adds to air pollution because it leads to flaring off excess toxic gases, together with natural gas and oxygen, to keep the chemicals from building up to dangerous pressures.”Black carbon released by flares can be a powerful — if short-lived — greenhouse gas in its own right.“This is bad,” Peter Anderson, who was born and raised in Norco, told DeSmog. “I have never seen this many flares.” He told me that he worked at Shell years ago and was the first computer foreman on the catalytic cracker, key equipment in an oil refinery. His sentiment was shared with everyone I met on the streets of Norco. It’s a sentiment I share.I could see the black smoke coming from Norco when I got on the Lake Pontchartrain Causeway, a nearly 24-mile bridge that crosses the lake connecting Mandeville to Metairie. I have been able to see flares from mid-way across the bridge before, but never from that far away. Norco, Louisiana, sits on the east bank of the Mississippi River, about 25 miles west of New Orleans, in a region known as the “Petrochemical Corridor” to some and to others, including the United Nations, as “Cancer Alley.” The town’s very name stems from a Shell affiliate that was known over a century ago as the New Orleans Refining Company, or NORCO.I’ve spent time in Norco before, photographing the town’s Christmas parades in the shadow of the industrial complex and under plumes from the plant’s stacks. The plumes I captured before are white and gray in color, very different from the black smoke visible after Ida.In 2018, the U.S. Environmental Protection Agency reached a settlement with Shell over allegations that flaring at the site violated the Clean Air Act and state law. Shell agreed to pay a $350,000 civil penalty as part of the settlement and to take a series of steps to reduce the amount of waste gas it flared and the pollutants released during flaring.A security guard who said he worked for Shell spotted me taking pictures of the flares and asked what I was doing. I told him I was reporting on Ida, and that the flares are part of the story since I had never seen them so bad. He concurred.He took out his cell phone and took a few pictures of the billowing black smoke pouring from the flares before driving off. Riley Guillory, another Norco resident, told me that the flares turned the sky an eerie orange color after Ida hit.
Aerial Photos Show A Miles-Long Black Slick In Water Near A Gulf Oil Rig After Ida (AP) — Photos show what appears to be a miles-long oil slick near an offshore rig in the Gulf of Mexico after Hurricane Ida, according to aerial survey imagery released Wednesday by the National Oceanic and Atmospheric Administration and reviewed by The Associated Press. The government imagery, along with additional photos taken by the AP from a helicopter Tuesday, also show Louisiana port facilities, oil refineries and shipyards in the storm's path where the telltale rainbow sheen typical of oil and fuel spills is visible in the water of bays and bayous. Both state and federal regulators said Wednesday that they had been unable to reach the stricken area, citing challenging conditions in the disaster zone. The NOAA photos show a black slick floating in the Gulf near a large rig with the name Enterprise Offshore Drilling painted on its helipad. The company, based in Houston, did not respond to requests for comment by phone or email Wednesday. Aerial photos taken by NOAA on Tuesday also show significant flooding to the massive Phillips 66 Alliance Refinery along the bank of the Mississippi River, just south of New Orleans. In some sections of the refinery, rainbow sheen is visible on the water leading toward the river. Asked about reports of levee failures near the refinery Monday, Phillips 66 spokesman Bernardo Fallas said there was "some water" in the facility and stressed that operations were shut down in advance of the storm. After the AP sent Phillips 66 photos Wednesday showing extensive flooding at its refinery and what appeared to be petroleum in the water, Fallas conceded by email that the company could confirm it had "discovered a sheen of unknown origin in some flooded areas of Alliance Refinery." "At this time, the sheen appears to be secured and contained within refinery grounds," Fallas said Wednesday evening. Fallas did not respond when asked whether the leak was reported after the AP sent the company photos four hours earlier. Phillips listed the Alliance Refinery for sale last week, before the storm hit, citing poor market conditions.All told, seven Louisiana refineries remained shuttered Wednesday. Combined, they account for about 9% of all U.S. refining capacity, according to the U.S. Energy Department. Some refineries on the Mississippi River reported damage to their docks from barges that broke loose during the storm.
Oil spill reported in Port Arthur - A rail-yard near Motiva Enterprises’ complex in southwest Port Arthur has spilled at least 1,000 gallons of crude oil. Port Arthur Terminal, owned by Pasadena-based USD Group, first reported the leak from a rail car around 7:30 p.m. Monday, though engineer estimates suggest the leak could have started in the early morning hours. In a report to the Texas Commission on Environmental Quality filed Monday night, the company estimated that the event could have lasted around 44 hours, which allowed oil to leak into a wastewater pond. USD Group reported that “product recovery operations” were still continuing at the time of the report. A representative with TCEQ said the Beaumont regional office was informed of the spill Tuesday and conducted an on-site investigation. “Compliance documentation will be submitted to the TCEQ for review once the remediation is completed,” the representative wrote in an email to the Enterprise. The terminal site started operating earlier this year after the company announced in December that it would move ahead with the 320-acre facility. The terminal was designed to have three units that could hold 120 train cars each and three storage tanks, with capabilities to mix products to pipeline grade for transport. The facility has long been a part of USD Group’s plans to bring Canadian crude to the Gulf Coast and was highlighted in its partnership with Gibson Energy to create a facility in Alberta, Canada. When the company announced its Canadian project, it also disclosed an agreement with ConocoPhillips Canada to process 50,000 barrels per day of inlet bitumen blend that will be shipped to the Port Arthur terminal.
Feds responding to reports of oil, chemical spills after Ida — Federal and state agencies say they are responding to reports of oil and chemical spills resulting from Hurricane Ida following the publication of aerial photos by The Associated Press. Environmental Protection Agency spokesman Nick Conger said Thursday that a special aircraft carrying photographic and chemical detection equipment was dispatched from Texas to Louisiana to fly over the area hard hit by the Category 4 storm, including a Phillips 66 refinery along the Mississippi River where the AP first reported an apparent oil spill on Wednesday. Coast Guard spokesman Petty Officer 3rd Class Gabriel Wisdom said Thursday that its aircraft has also flown over the refinery, as well as to the Gulf of Mexico. The AP published photos of a miles-long brownish-black slick in the waters south of Port Fourchon, Louisiana. The AP first reported the possible spills Wednesday after reviewing aerial images of the disaster zone taken by the National Oceanic and Atmospheric Administration. Ida made landfall Sunday, its eyewall carving through Louisiana with 150 mph winds and a storm surge so powerful it temporarily reversed the flow of the mighty Mississippi. The NOAA photos showed a black and brown slick floating near a large rig with the name Enterprise Offshore Drilling painted on its helipad. The company, based in Houston, said Thursday that its Enterprise 205 rig was safely secured and evacuated prior to the storm’s arrival and that it did not suffer any damage. “Enterprise personnel arrived back at the facility on September 1 and confirmed the integrity of all systems and that no environmental discharges occurred from our facility,” the company said in a statement. Sandy Day, spokesperson for the U.S. Bureau of Safety and Environmental Enforcement, which regulates oil rigs, confirmed it had received a report Wednesday about which the oil spill the AP had published photos. But the location was inside state waters, rather than the federal jurisdiction farther offshore. Patrick Courreges, spokesman for the Louisiana Department of Natural Resources, said his agency had no way to physically investigate the spill. “It’s going to be awhile for us before we can make our way out there,” Courreges said Thursday. ”We don’t have planes, helicopters or Gulf-seaworthy boats.” Aerial photos taken by an NOAA aircraft Tuesday also showed significant flooding to the massive Phillips 66 Alliance Refinery in Belle Chasse, Louisiana. In some sections of the refinery, a rainbow sheen and black streaks were visible on the water leading toward the river. In statements issued Monday and Tuesday, Phillips 66 said “some water” was inside the refinery, but did not respond to questions about environmental hazards. Only after the AP sent the company photos Wednesday showing extensive flooding and what appeared to be petroleum in the water, the company confirmed it had “discovered a sheen of unknown origin in some flooded areas of Alliance Refinery.” “At this time, the sheen appears to be secured and contained within refinery grounds,” Phillips 66 spokesman Bernardo Fallas said Wednesday evening, three days after the hurricane blew through. “Clean-up crews are on site. The incident was reported to the appropriate regulatory agencies upon discovery.” Though Fallas characterized the spill as a “sheen of unknown origin,” the report Phillips 66 made to Louisiana regulators Wednesday called it “heavy oil in floodwater,” according to a state call log provided to the AP. The log also contained a call from an oyster harvester concerned that water contamination from the refinery was fouling environmentally sensitive beds downriver.
Surveillance aircraft sent to possible oil spill reported in wake of Ida (Reuters) - The U.S. Environmental Protection Agency said on Thursday it has dispatched a surveillance aircraft to an area in Louisiana hard hit by Hurricane Ida that includes a refinery where an apparent oil spill has been reported. The aircraft dispatched from Texas will gather data on the Phillips 66 refinery and other priority sites, an EPA spokesman told Reuters. "EPA's ASPECT aircraft – the Agency's airborne real-time chemical and radiological detection, infrared and photographic imagery platform – has been activated to support the state of Louisiana," the spokesman said. Phillips 66 said earlier that flooding had occurred at its Alliance Refinery and a sheen of unknown origin in some flooded areas of the refinery had been discovered. "At this time, the sheen appears to be secured and contained within refinery grounds. Clean-up crews are on site. The incident was reported to the appropriate regulatory agencies upon discovery", the company said. "A full post-storm assessment remains underway at the refinery. An investigation into the cause/origin of the sheen will be conducted. The refinery remains shut down", it added. The Associated Press has also reported a possible spill near an offshore rig in the Gulf of Mexico after a review of aerial images of the disaster zone taken by the National Oceanic and Atmospheric Administration. The photographs appeared to show a miles-long brownish-black slick in the waters south of Port Fourchon, Louisiana. The rig had Enterprise Offshore Drilling marked on its helipad. Enterprise Offshore Drilling said in a statement on its website that its rig had not suffered any damage or failure and that "no environmental discharges had occurred from our facility". The U.S. Coast Guard told the AP it also had an aircraft fly over the refinery as well as to the Gulf of Mexico. The Coast Guard did not immediately respond to a request for comment late on Thursday. Ida, one of the most powerful hurricanes ever to strike the U.S. Gulf Coast, made landfall on Sunday in Louisiana, destroying entire communities. The Louisiana Oil Spill Coordinator's Office said that state regulators were still in the very early stages of responding to the environmental hazards brought by Ida.
Reports of environmental problems caused by Hurricane Ida begin to trickle in - Information about potential environmental threats caused byHurricane Ida have been slow in coming, but initial reports to theCoast Guard's National Response Center and the state Department of Environmental Quality confirm there were releases of crude oil, fuel oils and a variety of chemicals in numerous locations in southeastern Louisiana on the day before and the day of the storm. The information that's available is not complete or comprehensive, consisting of initial call-in or emailed reports by company officials or others to the two agencies. They include releases of different chemicals by refineries and chemical plants when flares were extinguished by Ida's winds, as well as the possible release of sewage and wastewater in numerous locations in Jefferson Parish when power was lost, knocking out 95% of the parish pump stations that move waste through underground pipes. On Sunday, the Coast Guard reported several incidents involving ships:
- A vessel slipped from its moorings at Golden Meadow and was adrift with a tug boat connected to it. Neither were leaking oil.
- A stray vessel struck another vessel in its berth at Danos Shipyard in Morgan City, and a sheen was noticed in the water nearby.
- In Port Fourchon, where Ida made landfall at 11:55 a.m., a floating dry dock at Bollinger Fourchon broke free and breached the hull of another vessel, possibly breaching a tank aboard the vessel and resulting in the discharge of some fuel oil. The breach occurred above the water line of the hit vessel.
It also reported a number of releases at refineries, petrochemical plants and pipelines:
- ETC Texas Pipelines reported the release of two barrels of condensate onto the ground near the intersection of La. 151 and Virgil Road in Minden, La., the result of a corroded pipe.
- Koch Nitrogen in Hahnville reported the release of 58 pounds of ammonia through a flare during a power outage caused by Ida. The release was halted, and plant officials said they were working to restore power at the plant. No information about the amount of nitrogen released was available
- CF Industries in Donaldsonville reported that the pilots on the flares of two storage tanks were extinguished, while control valves were partially open, allowing the release of ammonia. “Conditions from Hurricane Ida are ongoing and a crew is unable to secure the release,” the company reported. The amount of ammonia released was unknown.
- Phillips 66 Pipeline LLC reported two leaks on two separate pipelines, RV 26 and RV 32, due to conditions during Ida, resulting in the release of propylene and isobutane into the atmosphere. “It is unknown if there is waterway impact at this time,” the company reported. The releases were near Paradis and Louisiana 3127 in St. Charles Parish.
- Mosaic Fertilizer reported ammonia vapor released inside its St. James facility after a flare blew out during Ida.
- Shintech Louisiana, in Plaquemine, reported the release of an unknown amount of ethylene dichloride from a storage tank into the air “due to power consistency/Hurricane Ida.”
The DEQ list includes the Phillips 66 Pipeline, Mosaic and Shintech reports, and many other reports of incidents at refineries, chemical plants, pipelines, vessels and other government and business sites, including one made by the Entergy Waterford 3 nuclear power plant. The information reported by DEQ was less detailed than that made public by the Coast Guard.
- Jefferson Parish Sewer Deptartment reported wastewater and rainwater were released due to loss of power that caused 95% of the lift stations that move waste through pipes to fail. The releases were in various locations throughout the parish.
- Waterford 3 in Hahnville reported an unusual event due to the loss of power running to the station from offsite. There was no release of radiation or other materials resulting from that power loss.
- Chalmette Refining reported the release of sulphur dioxide from a flare due to loss of power.
- The Dow-Union Carbide plant in Hahnville reported flaring of products and byproducts due to loss of power.
- ExxonMobil in Baton Rouge reported releases of nitrogen oxide, nitrate, sulphur dioxide and hydrogen sulfide due to an upset caused by Ida.
- Hudson Marine/Orion Reederei reported that a vessel ran aground at Magnolia Landing in St. James Parish. No release was reported.
- Energy Transfer Partners/Lone Star NGL in Geismar reported a loss of power that caused its flare to produce black smoke. What was actually released was unknown
- Marquette Transportation on the Mississippi River near LaPlace reported fuel coming from the cargo vessel Golden L.
- Kirby Inland Marine on the river in St. Charles Parish, reported the release of pygas in a discharge from a tank of the barge M/V Kirby 28046.
- Cornerstone Chemical reported the release of sulphur dioxide and sulphur trioxide. “Molten sulfur tank may have been struck by lightning or other ignition source,” the report said.
- Phillips 66 Alliance Refinery in Belle Chasse reported a release of mainly stormwater after the refinery was flooded when a levee was overtopped. Officials hope to open floodgates to reduce water within the leveed area to lessen the flooding impact.
- The Valero St. Charles refinery in Norco reported damage to a gasoline tank and a release of gasoline.
- Entergy’s Little Gypsy Plant in Montz reported an unknown amount of asbestos blown off the ground.
- ECM Maritime/Hokoku Marine reported that one of its vessels in the Mississippi River ran aground in St. Charles Parish, and there was potential for release of fuel oil.
- Marathon Pipeline’s St. James Tank Farm reported crude oil discharged onto an aboveground storage tank and then onto the ground and into surface water.
- Hudson Marine reported that tugs broke free from the Bonnet Carre Anchorage at Norco and struck a vessel. There is the potential for a release.
- Tennessee Gas Pipeline reported that a nipple on a pipeline near Golden Meadow was damaged, releasing natural gas.
- Gallagher Marine/Safety Sailing Ship Management reported that the bulk cargo ship L/T Ocean Star was aground in the Mississippi River in St. Charles Parish and there was potential for the release of oil.
- The Coast Guard reported that there was an unidentified barge sunk in the Mississippi River in St. Charles Parish, posing the threat of a release of an unknown amount of oil.
- Clean Gulf reported oil sheen in the Gulf of Mexico a few miles off Port Fourchon from an unknown source.
- Shell Pipeline reported damage to piping at a pipeline booster facility near Golden Meadow that was leaking crude oil.
Port Fourchon, LOOP enter recovery mode after sustaining damages, timeline unclear - Port Fourchon and the associated Louisiana Offshore Oil Port entered into a recovery mode Aug. 31 after sustaining damages from Hurricane Ida and a timeline for restoring operations remains unclear, but there is optimism that most of the facilities "stood up well" to the major Category 4 hurricane, said a spokesperson for the Greater Lafourche Port Commission. The statuses of Port Fourchon and LOOP will play key roles in both the resumption of offshore oil and gas production and of crude oil exports because of their key roles in maritime traffic. The port is a hub of supplies and equipment, and a transportation point of entry and exit to and from the Gulf, while LOOP is the nation's only deepwater terminal capable of offloading VLCCs. Ida aimed directly at Port Fourchon when it made its Louisiana landfall Aug. 29 as one of the strongest storms to ever hit the US Gulf Coast. "While damaged, we are hopeful in the fact that a lot of key infrastructure remains and looks to have stood up well to the onslaught of this historic hurricane," said port commission spokesperson Thad Angelloz in an emailed statement. "Obviously, removing obstructions and sunken vessels in the waterways that flow in out of the port is key to bringing offshore transportation back on line," he added. "However, providing the necessary waterway access in and out of the port can hopefully be achieved with certain restrictions in the nearer term with fuller access maybe taking a bit longer." LOOP's onshore facilities are at Port Fourchon, while the marine terminal is about 18 nautical miles offshore. About 95% of US Gulf oil and gas production was shut in ahead of Ida, as well as more than 2 million b/d of onshore crude oil refining capacity. More than 1 million electricity customers remained without power on Aug. 31, including nearly all of the New Orleans area. Angelloz said port teams have completed initial visual assessments of the damage, including aerially, and currently are focused on clearing debris from roadways to ensure safe travel. "Giving a timeframe on power restoration and a timeframe on how long certain tenants and users will need to repair facilities is challenging," he said. "I will say that the essential team members that work for the myriad of businesses that work out of the port are anxious to get in there, access things and get to back to work." The port commission is working closely with the National Oceanic and Atmospheric Administration's Coast Survey office, the US Coast Guard, electricity provider Entergy, the local water district and other partners to safely open the port back up to commerce, he said. An additional statement Aug. 31 from LOOP said that facility assessments are still being conducted. The port commission said the Ted Gisclair Floodgate in Larose and the Leon Theriot Lock in Golden Meadow remain closed to all marine traffic. The main Louisiana Highway 1 access point into the area also was closed Aug. 31 from debris and high water. After roadways are cleared for passage, the port commission said it will notify tenants when limited port access is given to return and assess damages. This will be a phased-in approach with tenant assessment teams being allowed into the port first.
Helipad damages hampering restoration of offshore US Gulf oil and gas production - Heliport and marine terminal damages from Hurricane Ida are hampering crew transportation and the aerial assessments of deepwater US Gulf platforms, slowing the process to return the oil and gas production shut ahead of the Category 4 storm's landfall. While a weaker storm may see producers begin to return oil and gas flows a day or two after it passes, the downtime after Ida, which made landfall Aug. 29 packing winds of 150 mph, will drag on longer because of the devastating wind strengths and the extensive damages to terminals and heliports used to access the offshore facilities. However, three days after Ida's landfall, a surprising amount of production that had been offline for the better part of a week has now been restored in the US Gulf, according to the US' Bureau of Safety and Environmental Enforcement in its daily update. On Sept. 1, 1.455 million b/d of oil in the US Gulf remained shut-in, or about 80%. That compares with nearly 94% the day before. Also, 1.87 Bcf/d of natural gas remained shut-in, or 83%, compared with 94.5% the day before. Some 249 platforms, or a little more than 44% of the US Gulf's total, were offline Sept. 1, compared to 278 the day before. Late Aug. 31, Shell said it plans to establish what it called a "temporary crew-change heliport," since the primary crew-change heliport in Houma, Louisiana suffered "significant damage" during the storm. Houma, including the Port of Terrebonne and the Houma Navigation Canal, was one of the hardest hit areas by the storm. The company's Perdido production hub in the far southwest Gulf near Mexican territorial waters, and the Stones field which produces into the Turritella floating production storage and offloading vessel, are Shell's only US Gulf assets online, it said. Shell said it completed one damage assessment flyover thus far- the Mars, Olympus and Ursa platforms are all intact and on location - and had another one planned soon to check the rest of its facilities. Also Sept. 1, Chevron said it has conducted overflights to assess its offshore facilities in the Gulf of Mexico, which "appear to be undamaged." Chevron continues to conduct post-storm assessments at our other onshore facilities. Also, Fourchon terminal and Empire terminal and their related pipeline systems remain shut-in, the company said. BHP and Hess said they continue to separately assess their facilities.
Port Fourchon Sees Weeks for Ida Recovery - -- Port Fourchon, America’s biggest base supporting the U.S. Gulf of Mexico offshore oil industry, appears to have largely withstood a powerful punch left by Hurricane Ida after the Category 4 storm tore through the Louisiana community. “While damaged, we are hopeful in the fact that a lot of key infrastructure remains and looks to have stood up well to the onslaught of this historic hurricane,” Thad Angelloz, a spokesman for the Greater Lafourche Port Commission, said Tuesday in an email. It’s a slightly more upbeat outlook after the port’s top official said in an interview that aired earlier in the day on National Public Radio that recovery would take weeks. “How many weeks is a good question,” Chett Chiasson, executive director of the Greater Lafourche Port Commission, said in the radio interview. “We have a long road ahead of us and there’s a lot of damage for us to assess and try to recover from.” Damage to the port, which services about 90% of output from U.S. Gulf deepwater oil and natural gas wells, is extensive and widespread, Chiasson said. Louisiana Highway 1 will need to be cleared of debris for heavy equipment to travel south to the port, while navigable waters around the port will have to be surveyed for safe travel, he said. “Right now the main thing is clearing the roadways to provide for safe travel down to the Port,” Angelloz said. “We internally as a team have reached the Port and begun looking first hand at the things we can.” In addition to power and water being out in the area, the workers themselves are also busy assessing their own home damage, Chiasson said. “You have some facilities that are in pretty good shape -- maybe just some cosmetic damages and others that are completely destroyed.” More than 250 companies working in the U.S. Gulf use Port Fourchon as a base of operations. It’s a key transit point for multiple crude pipelines that receive barrels produced from the Gulf of Mexico. From Fourchon, pipes head to hubs in Clovelly and St. James, which host large storage facilities and terminals.
Mars spot crude prices jump on shortage as offshore output slowly returns from Ida -Spot Mars crude prices jumped Sept. 3 on a lack of available US Gulf Coast crude, as offshore producers restored small volumes of production that were taken offline prior to Hurricane Ida's strike on Louisiana earlier in the week. October barrels of Mars were heard bid at a 25 cents/b premium to cash Cushing WTI, and offered as high as a $3/b premium. Mars was assessed by S&P Global Platts at a 30 cents/b premium to WTI. That was up from an assessment of minus 5 cents/b Sept. 2, and a $1.40/b discount on Aug. 27, prior to Ida's landing. Traders remain uncertain about when crude production will return in the Gulf of Mexico, as well as the status of Louisiana refineries that were damaged by flooding or shut due to power outages. With a limited number of Louisiana refineries operating and more than 90% of Gulf of Mexico oil production shut-in, there continued to be general talk among traders that "there is not enough crude oil for refiners." Shell's announcement on Sept. 2 that its integral US Gulf West Delta 143 facility was damaged seemed to stoke even more uncertainty about the return of production and crude oil availability. The WD-143 facilities serve as the transfer station for all production from Shell's assets in the Mars corridor in the Mississippi Canyon area of the Gulf of Mexico to onshore crude terminals. "It's been gapping in the past week," one crude broker said about Mars values. "With that Shell damage [it's] very, very dicey." The US Department of Energy has so far authorized the release of crude from the Strategic Petroleum Reserve to just one refinery, ExxonMobil's Baton Rouge plant. Other companies may have requested SPR crude, although the DOE could not be reached for comment Sept. 3. Crude imports are expected to rise next week into the USGC to 9.34 million barrels from 4.31 million barrels this week, according to Kpler data, although all of that crude is heading to Texas ports, not Louisiana. By around noon Sept 3, US Gulf producers had restored about 4,000 b/d of crude in the previous 24 hours, and 45,000 Mcf/d of natural gas, according to the US Bureau of Safety and Environmental Enforcement. According to BSEE, 1.699 million b/d of oil, or 93.3% of the Gulf's total, remained down, as well as 1.9 Bcf/d of natural gas output, 89% of pre-storm output, In addition, 133 platforms were still down, or about 24% of the US Gulf's total, compared with 177 platforms the prior day. Producers usually fly over their US Gulf platforms within a day or two of a hurricane's passage through the area, but Ida damaged helipads and other south Louisiana transportation infrastructure and logistics, delaying inspections and the return of crews. Ida landed a direct hit Aug. 29 at Port Fourchon, Louisiana, a key hub that serves as a point of transportation to and from offshore facilities and receives over 90% of the US Gulf crude and gas output. From there, the hub distributes the volumes to various storage facilities and terminals via a network of pipelines.
Ida Slashes Natural Gas Futures, Cash as Demand Destruction Outweighs Production Losses - Though still early for a full assessment of former Hurricane Ida, natural gas futures traders on Monday focused squarely on the destruction of natural gas demand brought about by the catastrophic Category 4 storm. The October Nymex gas futures contract, on its first day in the prompt position, settled at $4.305, off 8.3 cents from Friday’s record levels. Spot gas prices also weakened as Ida, which had been downgraded to a tropical depression by late Monday, dumped rain and ushered in cooler weather for much of the eastern United States. NGI’s Spot Gas National Avg. slipped a half-cent to $4.280. With no shortage of images of Ida’s wrath circulating over the internet and on television, futures traders had plenty to digest after she crashed ashore Louisiana midday Sunday. On the supply front, the Bureau of Safety and Environmental Enforcement (BSEE) said 2.090 Bcf/d, or 93.75%, of the natural gas produced pre-Ida in the Gulf of Mexico (GOM), was shut-in. Around 1.74 million b/d (95.65%) of the oil produced offshore also had been shut-in, the Department of Interior agency reported. The GOM supplies around 5% of the nation’s gas supply and 17% of the oil. Meanwhile, Wood Mackenzie noted that several pipelines issued notices regarding shut-ins/evacuations. These include the Destin, Garden Banks, High Point, Kinetica, Mississippi Canyon, Nautilus, Sea Robin and Stingray pipeline systems. However, none had provided an update on when operations may resume. As for demand, the picture was even murkier. Ida knocked out power to all eight of Entergy Corp.’s transmission lines, which deliver power into the New Orleans area, leaving more than one million people without electricity. The utility also reported outages in Mississippi and Arkansas.Liquefied natural gas (LNG) facilities may have been spared the brunt of Ida’s impact, but feed gas volumes took a hit nevertheless. Early NGI datashowed gas flowing to U.S. terminals tumbling to around 10.2 Bcf on Monday, down from around 10.85 Bcf on Sunday.Cameron LNG spokesperson Anya McInnis told NGI that Ida did not affect operations at the facility. Similarly, Cheniere Energy Inc. spokesperson Jenna Palfrey said Sabine Pass did not sustain damage during the storm. Full operations, including shipping, had returned to normal by Monday.However, shut-ins were widespread at local refineries and petrochemical complexes. Several energy companies, including Royal Dutch Shell plc’s U.S. unit and Phillips 66, said they were working Monday to assess impacts on infrastructure in and along the GOM.
U.S. natgas closes at highest since 2018, marks monthly gain (Reuters) - U.S. natural gas futures rose on Tuesday, ending at their best level since December 2018 and recording their fifth consecutive month of gains, in response to lowered production forecasts as traders monitored Hurricane Ida's impact on demand. "The production numbers are still very low, and at these levels, it is hard for prices to fall much, and they have plenty of room to go up," said John Abeln, an analyst at Refinitiv. U.S. production is forecast to dip to 89.4 billion cubic feet per day (bcfd) this week from 92.5 bcfd last week. Front-month gas futures for October delivery rose 7.2 cents, or 1.7% to settle at $4.377 per million British thermal units, their highest close since December 2018, despite falling as much as 2% earlier in the session on cautiousness over Ida's impact to demand. The contract was up about 12% for the month. In August, "production numbers were higher, but demand numbers were up even higher. High international gas prices should continue to support that," said Robert DiDona of Energy Ventures Analysis. Data provider Refinitiv said total U.S. production has averaged 91.7 bcfd so far in August, versus 91.6 bcfd in July. That compares with an all-time monthly high of 95.4 bcfd in November 2019. With European and Asian gas both trading over $16 per mmBtu, compared with just over $4 for the U.S. fuel, analysts have said buyers around the world would keep purchasing all the liquefied natural gas (LNG) the United States can produce. With a cooler season around the corner, Refinitiv projected average U.S. gas demand, including exports, would slide from 94.3 bcfd last week to 92.2 bcfd this week, as power generators burn less of the fuel with air conditioning demand easing.
Natural Gas Futures Soar Again on Expectations for Paltry Storage Result, Prolonged Production Cuts in Ida’s Wake - Natural gas futures jumped higher Wednesday, building on the prior day’s gains, as traders absorbed news of the production disruption imposed by Hurricane Ida and fixated on the specter of inadequate inventories ahead of winter.The October Nymex contract surged 23.8 cents day/day and settled at $4.615/MMBtu, a high for the year. A day earlier, the prompt month gained 7.2 cents. November also gained 23.8 cents on Wednesday and closed at $4.663.Spot gas prices advanced as well, led higher by gains in the nation’s midsection. NGI’s Spot Gas National Avg. rose 16.0 cents to $4.355.Ida left in its wake more than one million utility customers without power – more than half still lacked power Wednesday — and the vast majority of Gulf of Mexico (GOM) production offline. Oil and gas drillers on Wednesday worked to restore production in the GOM, days after Ida crashed ashore in Louisiana as a Category 4 hurricane on Sunday. As of midday Wednesday, however, the Bureau of Safety and Environmental Enforcement said operator reports indicated that around 83% of gas production in theGOM remained shut in. Nearly 80% of GOM oil output was shuttered.Bespoke Weather Services noted that natural gas production estimates Wednesday hovered under 90 Bcf, more than 2 Bcf off pre-Ida levels, and the timing of a full return of the lost output remained dubious. This followed a summer riddled with scorching heat and robust cooling demand across much of the Lower 48 that left underground stocks depleted relative to historic averages. Prior to Ida, Bespoke had consistently warned that inventories were running precariously light and that production would need to rise to around 93 Bcf/d to offset the threat. Ida amplified the concern, the firm said.
U.S. natgas climbs to highest since Nov 2018 on small storage build (Reuters) - U.S. natural gas futures climbed over 2% to a fresh, near-three-year high on Thursday on a lower-than-expected storage build last week as warm weather lifted demand for fuel to power cooling. Front-month gas futures for October delivery rose 2.6 cents, or 0.6%, to settle at $4.641 per million British thermal units. Prices climbed over 2% to $4.727 per mmBtu after the storage report, their highest level since late November 2018. "The storage injection number came in lower than market expectations, causing an upward shift in the front-month price," The U.S. Energy Information Administration (EIA) said utilities added just 20 billion cubic feet (bcf) of gas into storage during the week ended Aug. 27. That was lower than the 25-bcf build analysts forecast in a Reuters poll and compared with an increase of 36 bcf in the same week last year and a five-year (2016-2020) average increase of 53 bcf. Last week's injection lifted stockpiles to 2.871 trillion cubic feet (tcf), or 7.2% below the five-year average of 3.093 tcf for the same week. "We currently predict that the net injections over most of September will be smaller than their corresponding five-year averages," Temperatures last week were higher than usual for this time of year with 95 cooling degree days (CDDs) compared with a 30-year average of 78 CDDs for the period. CDDs, used to estimate demand to cool homes and businesses, measure the number of degrees a day's average temperature is above 65 degrees Fahrenheit (18 degrees Celsius). "The market is spooked, even though it is far from Halloween yet, by the low storage level, plus we are having some late-summer heat," "The recent Hurricane Ida has also reminded the market of what a strong storm can do to supply. In addition, the LNG demand is strong and will perhaps be stronger." Earlier this week, prices climbed after Ida knocked out most of the supply from the Gulf of Mexico. "It is a season of tight supply - the shoulder month's weaker demand is overshadowed by supply concerns," Data provider Refinitiv said total U.S. production has averaged 88.4 billion cubic feet per day (bcfd) so far in September, down from 92.0 bcfd in August. The all-time monthly high is 95.4 bcfd set in November 201
U.S. natgas jumps as energy firms struggle to restart post-Ida (Reuters) - U.S. natural gas futures rose on Friday, ending a second straight week of gains, as significant output remained offline in the aftermath of Hurricane Ida, exacerbating supply concerns in an already tight market. Front-month gas futures for October delivery rose 7.1 cents, or 1.5%, to settle at $4.712 per million British thermal units. Prices hit a more than two-year peak on Thursday. U.S. Gulf Coast energy companies have advanced efforts to restart facilities, but larger hurdles remain for producers and refiners. "We normally expect a quick recovery in production from hurricanes and this time it doesn't look like that's going to happen, so that's raising concerns about adequate storage going into winter," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "Near-term, a test of $5 in the front end of the curve is not out of the question." A weekly report released on Thursday showing a storage injection of just 20 billion cubic feet (bcf) during the week ended Aug. 27 also supported prices. Data provider Refinitiv said total U.S. production has averaged 88.6 billion cubic feet per day (bcfd) so far in September, down from 92.0 bcfd in August. Output is also expected to slip further, to 88 bcfd next week. U.S. pipeline exports to Mexico rose to an average 6.3 bcfd so far this month, from 6.2 bcfd in August, but were slightly lower than June's monthly record of 6.7 bcfd. With European and Asian gas both trading over $18 per mmBtu, compared with just under $5 for the U.S. fuel, analysts have said buyers around the world would keep purchasing all the liquefied natural gas the United States can produce. But Price Group's Flynn noted that the closure of several key ports in Louisiana due to Ida could temporarily slow LNG exports.
Weekly Natural Gas Prices Advance Despite Ida's Impacts - Weekly natural gas cash prices climbed higher as summer heat lingered across much of the Lower 48, offsetting bouts of regionally cooler air and heavy rains ushered in by Hurricane Ida. NGI’s Weekly Spot Gas National Avg. for the Aug. 31-Sept. 3 period jumped 26.0 cents to $4.365, led higher by gains across the Midwest and Texas.Ida crashed into Louisiana Aug. 29, delivering widespread wind damage and flooding rains that knocked out power for hundreds of thousands of customers. It also pushed offline natural gas production in the Gulf of Mexico (GOM), though the idled output was offset in part by cooler air early in the week.Ida weakened as it moved up the East Coast, but it still packed a powerful punch, drenching major markets with record rains. New York City and Philadelphia both endured traffic-paralyzing floods.This impacted prices along the East Coast at points during the week – weekly prices were down at several Northeast hubs — but heat elsewhere supported weekly prices overall. Persistent summer conditions bolstered prices across California, the Southwest and the nation’s midsection.As the trading week closed, Chicago Citygate was up 40.5 cents to $4.405, while OGT gained 53.0 cents to $4.390 and Waha was ahead 55.0 cents to $4.335.Amid production cuts in Hurricane Ida’s wake and festering storage worries, meanwhile, the October Nymex contract rallied throughout the week and settled at $4.712/MMBtu on Friday, up 8% from the prior week’s finish. Forecasters anticipated cooler temperatures in the Midwest and East during the week ahead. But by the middle of the month, much of the country could again see summer-like conditions, fueling cooling demand, Bespoke Weather Services said. This is “rather typical of a La Niña base state at this time of the year,” the forecaster said. “Obviously, absolute temperatures will not be where they were in the middle of summer, but demand is demand, and it does look to run above normal levels especially as we move into the middle third of the month, as upper level ridging returns to the eastern U.S.”
Missouri activist pressures utilities to map gas leaks - Methane, a potent greenhouse gas that was recently spotlighted by the International Panel on Climate Change, was leaking from a pipeline down the street from Robin Ganahl’s Kansas City home a year ago. A neighbor living close to the leak had been reporting it to the gas company for months, said Ganahl, an activist with the local chapter of Mothers Out Front, a national organization aimed at minimizing climate chaos. “They could smell it inside their house sometimes.” The gas company eventually sealed the leak after Ganahl sought intervention from her state representative, but the episode caused her to wonder how much natural gas might be seeping from broken pipes throughout Kansas City and across the state of Missouri. Climate scientists and activists have been targeting methane in recent months as a major cause of global heating — and as one of the most promising and immediate avenues for quickly reining in emissions. For 20 years after its initial release, methane retains heat at about 80 times the rate of carbon dioxide. According to the recent IPCC report, a determined effort could reduce methane pollution from fossil fuels, waste and agriculture by 45% by 2030, shaving about .3 degrees Celsius from the expected global temperature increase. Ganahl asked regulators to require the state’s gas companies to pinpoint active leaks on a map and to make that information publicly accessible. Her hope: that when gas customers have a sense of the scope of the leak problem, they will pressure the utilities to seal gas leaks more quickly. Missouri gives wide latitude to gas companies regarding repairs. Only Class 1 leaks, those posing “an immediate hazard to a building and/or the general public,” require “immediate corrective action.” Class 2 leaks, defined as those “requiring action as soon as possible,” generally require repair within 45 days, although some can be recategorized as Class 3, giving the company five years to make a repair, or Class 4 — meaning repair is not required.
Oxygen Shortage Forces Texas Refinery to Shut Part of Key Unit - A refinery on the Texas Gulf Coast shut part of a key process unit due to a lack of oxygen supply amid a resurgence of the coronavirus pandemic, with authorities citing increased medical demand for the gas. Citgo Petroleum Corp. is shutting down a section of a sulfur recovery unit known as a B-train for four days due to the loss of third-party oxygen supply “resulting from increased medical field demand,” according to a state environmental filing. Oxygen is used to boost the ability to recover the sulfur.
Huge ExxonMobil/Sabic Ethane Cracker Coming Online at Corpus Christi, Texas - ExxonMobil and Sabic’s joint-venture petrochemical complex near Corpus Christi, Texas, is undergoing commissioning ahead of its fourth-quarter startup, the plant’s manager said August 26th. “We’ll be up with everything by the end of the year,” the plant manager, Paul Fritsch, said during a tour of the facility. Built on a former cotton field, and surrounded by cotton fields and sunflowers, the new complex features a 1.8 million mt/year ethane-fed cracker, the world’s second-largest, and the world’s largest monoethylene glycol unit at 1.1 million mt/year. The complex also has two linear low density polyethylene units, each with capacity of 650,000 mt/year. The companies announced in October that the joint venture would come online in Q4 2021, earlier than 2022 as originally planned. The JV brought on-site utilities online first, to ensure adequate flows of water, steam, nitrogen and other inputs to the downstream products. “We’ve been working on that for most of the year,” Fritsch said. “As we start up in the fourth quarter we’ll have more hustle and bustle.” The complex has all laboratory facilities on site to test raw materials and PE and MEG produced to ensure output meets necessary specifications, which was finishing its commissioning process. Huge screens with intricate data glowed in the dimly lit control room, and a simulation laboratory takes engineers through scenario after scenario of what would happen to the production units or utilities in potential events, from heavy rain to minor pressure changes in valves to sudden power outages. The complex was built with modules, which were transported to the site from September 2019 through June 2020, the companies said. The module plan allowed the companies to continue the work with fewer contractors on site than projects that build units on site from the ground up, so construction was not suspended or slowed at the height of COVID-19 restrictions in 2020. Fritsch said the project had 4,000 contractors on site at its height, and maintained COVID-19 safety protocols. A similar project without modules could have twice that number of contractors or more. Fritsch also said the project has provided medical oversight, including administration of 2,800 vaccinations so far to workers and contractors who want them. Other major petrochemical projects temporarily slowed or suspended work to implement COVID-19 safety protocols, such as Shell’s new petrochemical complex under construction in Pennsylvania and LyondellBasell’s new propylene oxide/tertiary butyl alcohol unit in Texas. The ExxonMobil-Sabic project is part of 9.77 million mt/year of new US PE capacity under construction or planned to start up in 2021 and beyond. As of 2020, the US had 23.4 million mt/year of PE capacity, according to S&P Global Platts Analytics.
Opinion | Don’t Let the Fossil Fuel Industry Pivot to Toxic Plastics and Chemicals - The New York Times - As the United States comes to grips with the climate crisis, fossil fuels will slowly recede from being primary sources of energy. That’s the good news. But the bad news is that the petrochemical industry is counting on greatly increasing the production of plastics and toxic chemicals made from fossil fuels to profit from its reserves of oil and gas.That transition is why the challenges of climate, plastic pollution and chemical toxicity — which at first might each seem like distinct problems — are actually interrelated and require a systems approach to resolve. The danger is that if we focus on only a single metric, like greenhouse gas emissions, we may unintentionally encourage the shift from fuel to plastics and chemicals that are also unsafe and unsustainable.Already, according to a 2018 report from the International Energy Agency, petrochemicals, which are made from petroleum and natural gas, “are rapidly becoming the largest driver of global oil demand.”Petrochemicals are ubiquitous in everyday products, and many of them are poisoning us and our children. Stain repellents, flame retardants, phthalates and other toxics are contributing to cancer, falling sperm counts, obesity and a host of neurological, reproductive and immune problems, research has shown.Epidemiological studies over the past decade have found, moreover, that exposure in utero and in childhood to chemicals used as flame retardants, called polybrominated diphenyl ethers, or PBDEs, has been linked to significant declines in IQ. These chemicals, widely used since the 1970s in the United States, were largely phased out in recent years. But they have persisted in the environment. And the push to phase out PBDEs led to “regrettable substitutions,” as the authors of one study put it, replacing one type of phased-out toxic flame retardant with another one that is also harmful.And plastics, of course, are inundating the planet. Global chemical production is predicted to double by 2030, according to the United Nations. Plastic production could jump three- to fourfold by 2050, according to a World Economic Forumreport in 2016. By that year, the ocean is expected to contain, by weight, more plastic than fish.
Environmentalists call on Canada to support the shutdown of Line 5 - Environmental groups are demanding Canada stop opposing the shutdown of Enbridge Energy’s Line 5. The group Oil and Water Don’t Mix and its supporters are calling on the government of Canada to go along with Governor Gretchen Whitmer’s order to shut down the pipeline. “It is past time for Canadian officials to join their neighbors in Michigan and act to protect the Great Lakes in our climate instead of advancing Enbridge's fossil fuel agenda,” said Christy McGillivray with the Michigan Chapter of the Sierra Club. Government officials in Canada officials have said Line 5 is important to the country’s energy needs. Whitmer ordered Enbridge Energy to shutdown Line 5 in May, an order which has been ignored by the Canadian pipeline company while it challenges it in U.S. federal court. Environmentalists believe the 68-year-old oil and natural gas liquids pipeline which sits on the bottom of the Straits of Mackinac, which connects Lakes Michigan and Huron, is a threat to the environment of the lakes and the economy of Michigan communities on the lakes. The group Oil and Water Don't Mix sent Canadian Prime Minister Justin Trudeau some water from the Straits as a reminder that Canada shares responsibility for safeguarding the lakes. “Today, we call on Canada's prime minister, Justin Trudeau, to work with Michigan's governor and the Biden administration on a decommissioning plan for Line 5,” said Jamie Simmons with Michigan Climate Action Network, one of the speakers at a protest in Detroit. The government of Canada has not responded to a request for comment.
MN troopers arrest 69 protesting Line 3 pipeline after some chained themselves to the fence outside the Gov’s mansion – Minnesota State Troopers on Saturday arrested 69 people protesting Enbridge Energy’s Line 3 replacement pipeline project in front of the Governor’s Residence in St. Paul.The group moved their protest to the residence on Summit Avenue after being told to remove rally structures from the Capitol grounds Friday after their event permit expired Thursday evening. Four people were arrested there.The demonstrators, who are part of a series of events called Treaties over Tar Sands, are calling for Gov. Tim Walz and President Joe Biden to pull permits and shut down the replacement pipeline project. Line 3 carries oil from Canada and passes through North Dakota and northern Minnesota on its way to Superior, Wis. The 337-mile segment in Minnesota is the last phase in replacing the deteriorating pipeline.Indigenous and environmental activists say the project violates Native American treaty rights and will aggravate climate change and risk contamination from spills.The group included people from the Line 3 pipeline resistance group Camp Migizi demanding that Walz take action to stop the Line 3 tar sands pipeline.Taysha Martineau, the camp’s founder and one of the Anishinaabe women leading the resistance to Line 3, chained herself through the bars of Governor Walz’s front gate.In a press release Sunday about her actions, Taysha Martineau said, “I’m here locked to the fence demanding that Governor Tim Walz speak to us. We’re calling on Governor Walz to pull the permits for Line 3 and demanding a federal Environmental Impact Statement for the project. Water protectors marched 256 miles from the headwaters of the Mississippi River to speak with this gentleman. He has not come to listen to their voices and so we came here. We’re here demanding that they hear us.” The group was asked to leave multiple times by Minnesota State Patrol officers, who cited that the gathering was illegal. Several buses were brought in to remove protesters from the street. “Those people chose to stay rather than follow the lawful order which led to some of them being arrested.” In a press release Sunday the group said they were threatened with pepper spray, less than lethal munitions, and a Long Range Acoustic Device (LRAD) before arrest.
Minnesota court deals yet another setback to pipeline foes (AP) — The Minnesota Court of Appeals on Monday affirmed a decision by state pollution regulators to issue a water quality certification for Enbridge Energy’s Line 3 crude oil pipeline, the latest setback for opponents who are trying to stop the project as it nears completion. The appeals court ruled that the Minnesota Pollution Control Agency’s approval was “supported by substantial evidence in the record.” Under the federal Clean Water Act, the MPCA was required to certify whether the project met state and federal clean water standards. The MPCA concluded in November 2020 that it did. That certification cleared the way for the U.S. Army Corps of Engineers to issue the remaining federal permit for the pipeline replacement less than two weeks later. Two tribal governments and three environmental groups challenged the MPCA’s decision on several grounds, asserting that the state agency failed to consider alternative routes and improperly determined that the project would comply with state water quality and wetlands standards. The MPCA and Enbridge argued that the appeal was moot because the Army Corps of Engineers had already approved the final permit. The appeals court said the challenge was not moot because it wasn’t the court’s role to predict how the Corps might react to a reversal of the MPCA’s decision, but it found that the state agency had met its legal requirements. The tribal and environmental groups fighting the project argue that the Canadian tar sands oil the replacement will carry from Alberta to Enbridge’s terminal in Superior, Wisconsin, will worsen climate change and risk spills into waters where Native Americans harvest wild rice. Line 3 was built in the 1960s and runs at half its original capacity because it’s subject to corrosion and cracking. Enbridge says it needs to replace the current pipeline to ensure reliable oil deliveries. Enbridge said in a statement that the ruling was confirmation “that wetlands and waterbodies are being appropriately protected’ during construction, which it said is “nearly complete” in Minnesota. The Canadian, North Dakota and Wisconsin segments are already finished. The Calgary, Alberta, company plans to put the new line into service in the fourth quarter. “Replacing existing Line 3 is about safety and maintenance,” the company said. “Upgrading an aging line with new pipe made of thicker steel with technologically advanced coatings will better protect Minnesota’s environment for generations to come.” Line 3 opponents have staged ongoing protests along the construction route across northern Minnesota this summer, and outside the state Capitol and the official governor’s residence in St. Paul last week, demanding that President Joe Biden step in and reverse the Corps’ decision to grant the federal permit. The opponents are fighting that permit in federal court, in one of the few remaining legal challenges available to them. The Minnesota Supreme Court last week declined to hear a challenge to the decision by the state’s independent Public Utilities Commission that let construction proceed.
Omar, McCollum join state DFLers asking Biden to stop Line 3 - U.S. Rep. Ilhan Omar, fellow congressional Democrats and scores of Minnesota state lawmakers on Monday called for "urgent intervention" from President Joe Biden on Enbridge's nearly completed Line 3 oil pipeline project.The 63 elected officials — mostly DFL state legislators — signed a letter to Biden on Monday that continued an ongoing chorus of demands for government action on the $3 billion-plus project."In recent weeks, we have seen concerning violations of treaty rights by public agencies and private actors, ongoing violence against Indigenous women, and environmental impacts that will have long-lasting impacts on hunting, fishing, and wild rice gathering as we grapple with the climate crisis," the lawmakers wrote.The letter, which was also signed by fellow Minnesota Democrat U.S. Rep. Betty McCollum, asks that the U.S. Interior Department "uphold the rights guaranteed to Indigenous people under federal treaties and fulfill Tribal requests for a government-to-government meeting concerning Line 3."Calgary-based Enbridge received its final permits late last year after a six-year battle through Minnesota's regulatory process. The new 340-mile pipeline is 90% complete across northern Minnesota and will transport oil from Canada to Superior, Wis. It will replace the original Line 3 pipeline, which is corroding and can operate only at limited capacity. Enbridge says its new pipeline will improve safety and boost the company's earnings by restoring the full flow of oil.Opponents had hoped the Biden administration would quash Line 3 by intervening in a federal lawsuit against the Army Corps of Engineers, which in November granted a critical water and wetlands construction permit for the project.Two Minnesota regulators granted environmental permits for Enbridge’s Line 3 oil pipeline across northern Minnesota, critical approvals needed for construction to begin soon on the controversial $2.6 billion project, on Thursday, Nov. 12, 2020. Environmental groups and Ojibwe tribes say the permit contains deficiencies and should be rescinded by the U.S. District Court in Washington, D.C. The Army Corps strongly defended its decision to grant the permit in a key court filing in late June. The letter sent to Biden on Monday cited climate concerns, pointing to severe drought conditions across much of Minnesota and to recent wildfires. The lawmakers took issue with a recent Minnesota Department of Natural Resources decision to let Enbridge remove 4.5 billion gallons of water from seasonal wetlands during construction of the line.
As Line 3 nears completion, pipeline battles are far from over - MPR -- Over a thousand people filled the grounds of the Minnesota State Capitol in St. Paul last week and vowed to continue their fight against Line 3.They erected tipis and held ceremonial dances and prayers. They listened to speeches by activists including Nancy Beaulieu, a founder of the RISE Coalition, which stands for Resilient Indigenous Sisters Engaging, who told the crowd that the crude oil pipeline endangers Indigenous treaty rights."We're going to continue to show up, and we're going to continue to assert our rights,” Beaulieu said. “We, as native people, have an inherent right to hunt, fish, gather and occupy."At the same time, in northern Minnesota, more than 3,000 workers continued the final stages of construction on the 340-mile stretch of pipeline. Enbridge says the new Line 3 is on track to be operating by the fourth quarter of this year.This month, the Minnesota Supreme Court and the state court of appeals delivered opinions upholding state regulators' approval of the project.But even as legal options dwindle, opponents plan to continue contesting Line 3 through protests and in court — even after oil begins flowing from Canada’s Alberta province."We will absolutely continue not only in the legal fight but also in the calls to the Biden administration to exert the power that they still have,” said Moneen Nasmith, a senior attorney for Earthjustice, one of the environmental groups opposing the project. Opponents are pressuring President Joe Biden’s administrationto cancel the federal water permit for the project issued by the U.S. Army Corps of Engineers. Their legal appeal of that permit is still pending.There's also an unusual lawsuit filed in tribal court by the White Earth Nation against the Minnesota Department of Natural Resources on behalf of wild rice. The DNR has asked a federal court to block the suit. That case is unlikely to be resolved before major work on the pipeline wraps up. But it's part of a wider movement by Native American tribes pushing back on pipelines and other projects they view as an environmental risk and a violation of treaty rights."I think that tribes are going to be enacting their own laws,” said Joe Plumer, an attorney for the Red Lake Nation in northwestern Minnesota, which opposed Line 3. “Tribes are going to take the bull by the horns and call state actors in their official capacities into the tribal court — not for any money damages, but for injunctive relief to stop what they've been permitting."
Advocates hope White Earth wild rice case will boost 'rights of nature' - Dale Greene grew up in north-central Minnesota, surrounded by wild rice, called manoomin in the Ojibwe language. The Leech Lake Band of Ojibwe member says wild rice is an important part of Anishinaabe history and culture. "One of the things that I think is really important in understanding manoomin, and its importance to us today, is understanding that there's a creation story," said Greene.The story recounts how Ojibwe people migrated to Minnesota from the East Coast to fulfill a prophecy that they would find food growing on the water. That food was manoomin, or the “good berry,” and it sustained generations of Ojibwe."It's the the reason that we're still here. It's much more than just a plant,” said Greene.In 2018, the White Earth Band of Ojibwe formally recognized the rights of wild rice, setting the stage for the current lawsuitagainst the DNR.The suit in tribal court against the Minnesota Department of Natural Resources contends a water use permit for the Enbridge Energy Line 3 pipeline puts wild rice at risk.The White Earth case is thought to be the first to be brought before a tribal court. The DNR responded by challenging the tribal court’s jurisdiction in a federal court filing. There’s a hearing in that case Wednesday.The DNR said it is “committed to ensuring the complaints are addressed in the appropriate legal venue” but would not comment on the specifics of the case.The 1855 Treaty Authority, consisting of several Ojibwe Bands, also recognized the rights of wild rice. Greene is a member of the Treaty Authority Board. He’s also listed as an expert witness in the White Earth lawsuit.It’s logical to give rights to plants, animals and the natural world, said Greene, because the Ojibwe world view holds that everything in nature is a spiritual being, and there is an acknowledged relationship with humans. "I sometimes call it a covenant,” he said. “They're providing life to us. It just makes perfect sense that it's a living, providing, spiritual being, in the form of water or food."
Enbridge to start moving oil-sands crude in new pipeline - - Enbridge Inc. is getting ready to ship crude from the oil sands in the first new cross-border oil-sands conduit built between Canada and the U.S. in years. The company is offering 620,000 barrels a day of capacity in its Line 3 oil pipeline in October, according to a notice it sent to shippers. The Line 3 project will replace and older Line 3 that can ship about 390,000 barrels a day. The project is scheduled to go into operation in the fourth quarter, according to an email from Enbridge. “The capacity provided to shippers is still an estimate as there are numerous factors including linefill, system outages for construction and tie in work that need to be completed,” Jesse Semko, Enbridge spokesman, said in the email. The start of Line 3 is expected to bring relief to Canada’s oil-sands producers, who have struggled for years with a shortage of export pipelines as projects face increasing scrutiny from courts and regulators. U.S. President Joe Biden, on his first day in office, rescinded a permit for TC Energy Corp.’s Keystone XL project that would have helped increase shipments of Canadian crude to the U.S. Gulf Coast. The expected start of the pipeline comes after Enbridge spent years fighting regulatory and court battles to build the 760,000-barrel-a-day pipeline, which replaces the older conduit between Alberta and Wisconsin. The project has been fiercely opposed by some environmental and indigenous groups, who have staged protests this summer along the construction route. Heavy Western Canadian Select crude’s discount to the West Texas Intermediate benchmark for Oct. narrowed 40 cents to US$12.05 a barrel at 10:23 a.m. Calgary time and, for September, narrowed 35 cents to US$13.40/bbl, according to NE2 Group data. Enbridge will offer 350,000 barrels a day of light oil capacity and 270,000 barrels a day of heavy oil capacity in October, according to a copy of the shipper notice seen by Bloomberg.
Three-train crash spilled estimated 1,200 gallons of diesel fuel near Mississippi River in St. Paul — A three-train crash by the freight yards near Warner and Childs Road in St. Paul on Wednesday, Aug. 25, spilled approximately 1,200 gallons of diesel fuel, leading Canadian Pacific Railway workers to dig protective trenches and deploy containment booms on the Mississippi River. The booms were placed as a precaution, and crews did not observe any fuel on the waterway, said Canadian Pacific spokesman Andy Cummings in an email. The fuel spilled from the lead Canadian Pacific locomotive involved in the crash, which took place around 5 p.m. Wednesday. Workers remain on site recovering spilled fuel. St. Paul City Council Member Jane Prince said Friday she had been in touch with officials at the Wakan Tipi/Lower Phalen Creek Project, who saw crews digging trenches to stop the diesel flowing west from the crash site toward the river. Rick Schute, director of Emergency Management for St. Paul, informed Prince and the deputy mayor by email Thursday that he had received word from the state duty officer indicating the crash location was within 1,000 feet of the river. “No sheen has been spotted, however booms are being placed at the outfalls and a trench is being dug to catch any runoff between the spill and the river,” Schute wrote. St. Paul Fire Chief Butch Inks issued notice Wednesday that the fire department was standing by if needed to provide Hazmat, EMS and fire protection. The incident occurred between Warner Road and the Bruce Vento Nature Sanctuary when a Canadian Pacific train, a Burlington Northern Santa Fe train and a Union Pacific train all collided. Two Canadian Pacific locomotives, a Union Pacific locomotive and a BNSF lumber car all derailed. The National Transportation Safety Board indicated this week they had sent investigators to the scene. No one was hurt and no hazardous materials were involved, officials said at the time. That’s been little consolation to some East Side residents. “Think what might have happened if the trains were mile-long unit trains carrying oil, chemicals or ethanol and leaking material ignited when struck by the locomotive,” said former City Council member Tom Dimond, in an email to state officials and neighborhood advocates on Friday. The crash came after a diesel fuel spill near Battle Creek, in Pig’s Eye Regional Park, on July 13. In that incident, a Canadian Pacific train struck a braking mechanism attached to the track, causing a rupture that spilled 1,000 gallons of fuel. The spill was contained on site.
Company Begins to Remove Keystone XL Infrastructure, Permits from SD -TC Energy is starting to pull out of South Dakota after it cancelled its Keystone XL Pipeline project in June. That decision was made once President Joe Biden removed the permit it needed to cross into the U.S. from Canada. The company hasn’t installed any Keystone XL pipe in South Dakota but it owns seven pump stations, three which are nearly complete, according to a recent filing with the Public Utilities Commission. TC Energy leases 10 pipe yards, seven contractor yards and at least two work camps. One of those pipe yards, near Philip, has hundreds of pipes on site. TC Energy also has a road bond and construction permit from the PUC that says it must reclaim the land and road it uses. “They’ll have to restore it back to as good or better quality than it was before they came,” said PUC Staff Attorney Kristen Edwards.
- TC Energy provided details of its plan in an August 14 document filed in Montana federal court:
- TC Energy has transferred or is in the processes of transferring ownership of its unbuilt pump station sites to the original landowners.
- It’s in the process of transferring ownership of its constructed pump stations sites to a company that specializes in demolition and salvage. The company will then dispose of the pump station infrastructure.
- TC Energy has terminated its leases for pipe yards, workforce camps and contractor yards that aren’t holding any pipes.
- It’s negotiating with a pipe broker company to acquire the pipes and leases of pipe yards, workforce camps and contractor yards with pipes. This company would sell the pipes and restore the land.
- TC Energy has asked local, state and federal agencies to cancel various permits.
It will cost $84 million to decommission the pipeline on federal land alone, TC Energy estimated in 2019.
Timeline extended for Dakota Access Pipeline environmental impact study - The official word from the U.S. Army Corps of Engineers on the fate of the Dakota Access Pipeline is expected to come in September 2022, six months later than anticipated.The Corps indicated its new timeline for publishing the final version of an environmental review of the pipeline in an update posted to its website this month, saying the extension is to give entities it's working with such as Native American tribes more time to offer input.The agency is overseeing a study known as an Environmental Impact Statement that will be used to determine whether it reissues a permit for the line's Missouri River crossing. A judge revoked the permit last year after ordering the study, but the Corps has allowed Dakota Access to continue transporting oil. The Standing Rock Sioux Tribe wants the agency to shut down the pipeline in the meantime, but the Corps so far has declined to do so.The river crossing lies just upstream of the Standing Rock Reservation, and tribal members are concerned about a potential oil spill. Standing Rock and the Cheyenne River Sioux Tribe are involved in the Corps' study, and earlier this year they asked the agency for more time to offer input and review tens of thousands of comments members of the public have made about the pipeline since the review began last September.The Corps originally said the review would take 13 months, but it indicated in late 2020 that it would take longer given operator Energy Transfer's plans to expand the line's capacity. Earlier this year, an attorney for the agency said it aimed to wrap up the study in March 2022.It's not unusual for Environmental Impact Statements to take a few years to complete, according to a recent federal review of the documents. Such studies are a means to comply with federal law when an agency proposes a major action that could significantly affect the environment -- in this case, the Corps potentially granting another permit for the line to carry oil under the Missouri River. The pipeline has undergone other shorter environmental reviews, which courts have deemed insufficient.
Oil and gas pipeline industry tries to reinvent itself with carbon capture plans - The U.S. oil and gas pipeline industry is looking for new opportunities to lay steel in the ground with pipes that carry the carbon dioxide produced when fossil fuels are burnt. The midstream energy sector has clashed with climate campaigners who oppose pipeline projects as infrastructure that locks in greenhouse gas emissions. Wall Street is pushing the industry to show how it will adapt to demands for a lower-carbon world. In response, pipeline operators are pointing to their potential as a link in carbon capture and storage (CCS) systems, in which CO2 emissions are trapped in underground reservoirs where they can be kept out of the atmosphere. Pipelines would move CO2 from industrial flues to the reservoirs. “It’s hard to see how climate objectives are met without pretty widespread carbon capture and sequestration,” Steven Kean, chief executive of Kinder Morgan, one of the largest U.S. pipeline companies, recently told analysts. “We think we’ve got the expertise on the pipeline side of it.” The U.S. already has about 5,150 miles (8,300 km) of CO2 pipelines. The network is tiny compared with the national web of oil and gas pipes, but it is the largest in the world. They are mostly clustered around the Permian Basin oilfields of west Texas, where CO2 is injected into wells to squeeze out stubborn crude oil deposits. Revenue derives from selling the gas and claiming a federal tax credit worth US$35 for each tonne of carbon put underground. But future growth hinges on far more widespread deployment. Pipes would funnel CO2 exhaust from emitters such as power plants, cement factories and oil and biofuel refineries to underground sites in some cases hundreds of miles away. François Poirier, chief executive of pipeline company TC Energy, recently told analysts that a “fundamental aspect” of the CCS industry was “the ability to store and transport a molecule, which is, of course, our core business.” TC Energy is best known as developer of the now-cancelled Keystone XL crude oil pipeline, a target of environmentalists. The business opportunity is potentially immense. A July report from the Biden administration’s Council on Environmental Quality said that a CCS industry large enough to help meet the country’s goal of “net zero” emissions by 2050 could require 68,000 miles of new CO2 pipelines at a cost of as much as US$230 billion. That is roughly comparable to U.S. liquid fuel pipeline mileage built since 2000, a boom time for the oil industry. CO2 pipelines require thicker walls than typical oil and gas pipes to move condensed, liquefied gas under heavy pressure, limiting prospects for cheaply converting existing infrastructure. “The capital is going to be large, and obviously existing infrastructure players like ourselves are going to be involved,” Al Monaco, chief executive of Enbridge, a Canadian pipeline company with extensive U.S. assets, told analysts last month.
Corps extends timeline for Dakota Access pipeline's court-ordered environmental study by 6 months - The U.S. Army Corps of Engineers has decided to extend its timeframe for completing a court-ordered environmental study on the Dakota Access pipeline, according to information posted on the federal agency’s Dakota Access project page. According to court records, the Corps had been asked by tribes to extend the schedule by six months, and the federal agency said then it was considering granting the request. The decision will put publication of the Dakota Access pipeline’s final EIS somewhere around September of next year. The outcome of the study will be a deciding factor in whether the U.S. Army Corps of Engineers reissues the easement for the Lake Oahe crossing, which was revoked last year. Judge James Boasberg ruled that due to its controversial nature, NEPA required the Corps to complete the longer Environmental Impact Statement instead of the shorter Environmental Assessment when evaluating the pipeline’s easement to cross 90 feet below Lake Oahe. Boasberg had then ordered the pipeline to shut down and empty of oil while the study proceeded, but an appeals court decided the injunction should have taken into account several additional factors, including economic harm. They sent it back to the lower court for that analysis. During that hearing, the Corps told the courts that the pipeline could continue to operate while the study is conducted and Boasberg ultimately ruled that the tribes had failed to demonstrate they would suffer actual, irreparable harm if the pipeline kept operating. Boasberg dismissed the case in June without prejudice. Dakota Access has meanwhile already begun moving even more barrels of oil, with minimum volume commitments for the pipeline’s expansion project beginning on Aug. 1. The pipeline now has the ability to move 750,000 barrels per day, officials said during the company’s most recent earnings call. The full expansion for the Dakota Access pipeline is 1.1 million barrels of oil per day. The U.S. Army Corps of Engineers has said the court-ordered EIS will also evaluate the company’s expansion. The 1,176-mile Dakota Access pipeline began operating in 2017 with a capacity of up to 570,000 barrels of oil per day — about half of the state’s production. The oil is taken to the Gulf Coast by way of the Energy Transfer Crude Oil Pipeline, with which it connects in Patoka, Illinois. The pipeline has attracted protesters from around the world and has faced numerous lawsuits filed by the Standing Rock Sioux and Cheyenne River Sioux tribes, who have said they fear an oil spill from the pipeline could affect their water supply.
US oil, gas rig count ticks up 2 on week to 623; biggest change in Bakken - S&P Global - The US oil and gas rig count grew by two week on week to 623, Enverus said Sept. 2, with the biggest change in the Williston Basin. The Williston, essentially the Bakken Shale of North Dakota/Montana, gained four rigs for a total of 28, putting the oil-prone play to its highest rig level in 16 months. The basin last recorded a rig count of 28 for the week ended April 29, 2020, although that occurred as the rig count was swiftly dropping owing to tanking crude oil prices from the then-emerging pandemic. The Bakken began 2020 at 54 rigs. After beginning 2020 at a relatively high level, the Bakken rig count largely stayed put until low oil demand from the pandemic caused crude prices to plunge and activity to rapidly follow suit. Activity levels in the basin hadn't changed much in the last two months. Its rig count had bounced around in the 20s since June, and before that lingered in the teens since the start of 2021. Lynn Helms, director of North Dakota's Oil and Gas division, called the Bakken a "sleeping giant" as drillers maintain capital discipline and do not react to rising crude prices. "The pandemic put the industry to sleep, and it's struggling somewhat to wake up," Helms said during his monthly production update in mid-August. At that time, the state had 10 active completion crews, which he expected to increase to 15 by year's end. During the week ended Sept. 1, prices for Bakken oil, as for WTI, were up as Hurricane Ida knocked out the lion's share of the US Gulf of Mexico's 1.8 million b/d of production. According to S&P Global Platts, Bakken Composite prices averaged $67.85/b for the week, up $3.07, while WTI averaged $68.49/b, up $2.91, and WTI Midland averaged $68.90/b, up $2.92. For natural gas, prices at Henry Hub averaged $4.26/MMBtu, up 33 cents, while at Dominion South averaged $3.78/MMBtu, up 16 cents. The second-biggest change for the week just past came from the Permian Basin. The West Texas/New Mexico basin posted the second-largest change, shedding three rigs to leave a total of 260. The Permian is the largest producing region in the US with 4.65 million b/d of oil output and 12.5 Bcf/d of natural gas. The Eagle Ford Shale in South Texas gained two rigs for a total 43, while the SCOOP-STACK play of Oklahoma was up by one for a total 29. The Utica Shale, mostly sited in Ohio, lost a rig leaving 12 and breaking a four-week streak of unchanged rig activity. The Marcellus Shale (32 rigs) largely in Pennsylvania, the Haynesville Shale (52 rigs) in East Texas/Northwest Louisiana and the DJ Basin (13 rigs) of Colorado were all unchanged on week. In August, the domestic rig count averaged 616, up 4% from July. Both the July and June rig counts were also up 4% month on month.
Feds to resume work on possible Cook Inlet lease sale - Alaska Public Media --The federal government said it will continue taking steps toward a potential oil and gas lease sale in Cook Inlet after a Louisiana district court judge ordered the Biden administration to resume its lease programs there and in the Gulf of Mexico.The U.S. Department of the Interior has been at odds with several Republican states over the federal leasing program since Biden halted the two auctions and promised to review the program earlier this year. It was part of a larger executive order aimed at fighting climate change.The state of Alaska and 12 other states then sued the Biden administration in March, arguing the decision was bad for economic development and that the federal government bypassed the public process when they hit pause on the sales. The area of the proposed Cook Inlet lease sale, covering just over 1 million acres, is outlined in yellow. Blocks outlined in green were purchased by Hilcorp Alaska in the last sale. (Bureau of Ocean Energy Management)This June, U.S. District Court Judge Terry Doughty of Louisiana sided with the states.The Interior Department said it appealed that order last week. But while the appeal is pending, the department said it will continue with the lease sale processes in the inlet and the gulf.At the time of Biden’s executive order in January, the federal government was gearing up to sell leases for one million acres in Cook Inlet, from the southern end of Kalgin Island down to Augustine Island - The Bureau of Ocean Energy Management had already released an environmental impact statement on their plans for that sale. Now, the agency will issue a revised statement with a new public comment period, a spokesperson for the Interior Department said. The department said in a news release that it’s expecting the assessment to come out this fall. It also said it “continues to review the programs’ noted shortcomings, including completing a report.” The department can still decide to cancel a lease sale after an environmental impact statement is filed. The Bureau of Ocean Energy Management canceled lease sales in 2006, 2008 and 2010 in Cook Inlet due to lack of industry interest. A date has not yet been set for a potential sale in Cook Inlet.
Sunken ship near Kodiak continues to leak oil – KINY (KINY) - Fuel and oil from a decades-old shipwreck has started to spill in Kodiak The sunken fishing vessel, the F/V St. Patrick has begun leaking oil in Women's Bay, on Kodiak. The spill was discovered by members of the public who saw the oil sheen and reported it to the Alaska Department of Environmental Conservation on August 3rd. On August 10th, a dive team discovered that the leak was coming from several holes in the vessel where the heads of rivets had corroded away. The same dive team installed wooden plugs into the pinholes left by the eroded rivets, but the leaking has not been fully contained. Dive crews are de-fueling the vessel by drilling into the hull using specialized equipment and sucking up any oil the divers come across. The volume of fuel, oil, and lubricant stored during the St. Patrick's normal operation is unknown. Wildlife observations by the Kodiak National Wildlife Refuge are on-going. As of August 26th there have been no impacts on wildlife or shoreline reported. Women's Bay is critical habitat for multiple species listed under the endangered species act.
Democrat in US House proposes repeal of Arctic refuge oil lease (Reuters) – A Democratic lawmaker in the U.S. House of Representatives on Tuesday proposed infrastructure legislation that would end oil and gas leases at an Alaska wildlife sanctuary while charging billions of dollars more in fees and royalties for offshore drilling elsewhere. The office of the president of House Natural Resources, Raul Grijalva, published a law that repeals the Arctic National Wildlife Refuge (ANWR) oil and gas program. All leases issued would be canceled and payments returned to tenants within 30 days of enactment. The committee is due to debate the measures on Thursday. It is one of many expert groups drafting legislation that would be part of the $ 3.5 trillion bill to expand social services, tackle climate change and reform immigration policies. American. The Grijalva measure plans to raise billions of dollars by increasing royalty rates for oil and gas producers in certain offshore areas and imposing new royalties on owners of offshore oil and gas pipelines. It imposes royalties on methane consumed or lost through ventilation, flaring or leaks during drilling operations on public lands. The law prohibits the secretary of the Home Office from selling oil and gas concessions in certain areas of the outer continental shelf and in the Atlantic and Pacific regions. Democrats hope to pass broader infrastructure legislation in a party line vote because it will certainly be criticized by Republicans. Moderate Democrats in the House of fossil fuel-dependent states could block some of the measures. In the Senate, Democrats hope to pass the legislation as part of a so-called reconciliation in which they only need a simple majority in the 100-member chamber instead of the 60 votes needed to pass most bills. of law. As Senate Democrats united in supporting the initial framework paving the way for reconciliation legislation, moderate Senators Joe Manchin and Kyrsten Sinema protested the overall prize. Former President Donald Trump’s administration opened the Arctic National Wildlife Refuge (ANWR) to drilling leases, but President Joe Biden’s administration suspended all nine leases pending an environmental review. The ANWR is coveted by environmentalists as one of the last pristine places on the planet.
“We Will No Longer Sell Crude Abroad”: Mexican President AMLO -- This is good news for Mexico’s long-beleaguered state-owned oil company, Pemex, but not such good news for the US’ refinery industry.Last Thursday, Mexican President Andrés Manuel López Obrador made another public statement that won’t have gone down well in Washington’s corridors of power — or for that matter Texas, Louisiana, California or any other US state with a big refinery. Lopéz Obrador — commonly referred to as AMLO — said that Mexico will stop selling crude oil abroad and will only extract the oil that it needs to produce the gasoline the country requires. It is all part of the president’s quest for energy self-sufficiency.AMLO also claimed that Mexico’s long-suffering state-owned oil company Petróleos Mexicanos (Pemex) is finally putting its decades-long crisis behind it “Pemex is recovering from a crisis inherited from many years of neglect, because the goal of the previous neoliberal governments was for Pemex to go bankrupt in order to privatize oil… to ruin Pemex and the Federal Electricity Commission (CFE ). Fortunately, the people of Mexico said enough was enough. The change has occurred and we have dedicated ourselves to strengthening Pemex and the CFE … and we have already pulled Pemex out of the hole it was in.” That s somewhat debatable. It’s true that in July this year Pemex’s average daily crude outputr eached 1.772 million barrels — its highest level since September 2018. It’s also true that in 2020 Pemex finally put an end to an unbroken 15-year rough patch of sliding production. It reported an average daily output of 1,705 million barrels. But the margin was tiny, just 4,000 barrels per day. And according to a Bloomberg report, admittedly featuring lots of unnamed sources, Pemex has apparently taken to inflating its numbers by measuring crude production at a warmer temperature than government regulators:In April, Mexico’s lower house of congress passed AMLO’s proposal to tighten state control over the country’s fuel market. The bill now just needs to clear the senate, where the ruling Morena party and its allies have a majority. If approved, the initiative would overturn large parts of the country’s hydrocarbon law. Most importantly, it would expand government control over fuel distribution, imports and marketing. It would allow authorities to suspend permits based on national or energy security, as well as let Pemex take over facilities whose permits have been suspended. In May, AMLO announced that Royal Dutch Shell had agreed to sell its controlling interest in the Deer Park refinery in Houston, Texas to its partner Pemex for $596 million, making Pemex the sole owner of the refinery. This should significantly reinforce Pemex’s refining capabilities, reducing its dependence on US imports.
Russian Oil Giant Rosneft Seeks Approval To Export Natural Gas - State-controlled Rosneft, the largest oil producer in Russia, has asked Russian President Vladimir Putin to be allowed to export natural gas with giant Gazprom acting as an export agent, Russian newspaper Kommersant reports, citing a letter which Rosneft’s boss has sent to Putin.Gazprom is the sole exporter of natural gas in Russia.Rosneft’s chief executive office Igor Sechin wrote a letter to Putin dated August 13, asking the Russian oil producer to be allowed to export 10 billion cubic meters of gas to Europe per year, Kommersant says.Rosneft proposes to sign an agreement with Gazprom, in which the gas monopoly will act as the export agent for the gas Rosneft plans to ship to Europe, according to Sechin’s letter seen by Kommersant. Such an agreement would not affect Gazprom’s monopoly in Russian exports, Sechin notes in the letter. Rosneft’s key argument for being allowed to export natural gas is that increased exports will raise the budget revenues for Russia at a time when gas prices in Europe are hitting records due to high demand and insufficient supply, including from Gazprom.Additional revenues could bring Russia as much as US$502 million (37 billion Russian rubles) annually, Sechin’s letter says, as per Kommersant.Rosneft did not indicate in the letter which pipeline route the company would use if it was allowed to export gas. However, gas exports from Rosneft could help lift the EU restrictions on Nord Stream 1 and Nord Stream 2 pipelines, according to the letter.Back in 2017, Rosneft and its 20 percent shareholder BP agreed to cooperate in the gas business, including with delivering gas to Europe.Meanwhile, a German court ruled last week that the Nord Stream 2 gas pipeline from Russia to Germany would have to obey European Union regulations that separate owners of the pipelines from suppliers of gas, dealing a blow to Russian gas giant Gazprom who had sought to have EU rules waived for the controversial pipeline.
Nigeria: New oil law fuels tensions in the Niger Delta | Africanews - After more than 20 years of waiting, Nwale Nchimaonwi's hopes were soon dashed when Nigeria finally passed the law that was supposed to regulate the oil sector and better distribute the wealth derived from oil in Africa's largest producer. The farmer and activist's discontent is rooted in the environmental pollution, poverty and sense of neglect that plague his region, the Niger Delta, whose hydrocarbon-rich subsoil provides the country with most of its dollar revenues. Many residents have lost their agricultural and fishing livelihoods due to successive oil spills. Enacted in mid-August, the law has not lived up to its promise to redress the injustices suffered by local communities, according to them: it requires oil companies to pay them 3% of operating costs. This is far less than the 10% claimed as "fair compensation". "How can 3% clean up the leaks, provide drinking water, roads, hospitals and jobs in the oil communities?" said Nwale Nchimaonwi, one of the leaders of the Movement for the Survival of the Ogoni People (Mosop), in front of his house in Ejamah-Ebubu. The Niger Delta has been the scene of serious unrest for years, with armed groups piercing pipelines to plunder crude oil, causing ecological disasters, and increasing kidnappings for ransom. Production in Nigeria, a member of the Opec cartel, had fallen considerably until an amnesty in 2009 restored some semblance of calm. But tensions resurfaced in 2016 with new attacks on oil facilities, as local communities, sued foreign oil companies for compensation. The Ogoni community of Ebubu recently won $111 million (97.3 million euros) in compensation from Shell for a 1970 spill that polluted more than 225 hectares of farmland and fish-bearing waters. The company, which denies any responsibility, claims that the spills occurred during the 1967-1970 Nigerian civil war. For Ogoni community leader Emere Emmanuel Olako Oluji, the money could provide for the needs of the community and "put smiles on people's faces," even if the damage remains extensive. In Ejamah alone, one of the four villages in Ebubu, 57 oil wells were once operated by Shell, before the Anglo-Dutch giant was forced to withdraw in 1993 due to security unrest. Although oil production has ceased, the pipelines operated by Shell to transport crude to the region still run through the land, mangroves and waterways of Ogoniland. The national oil company NNPC recently reclaimed the oil wells following a court ruling, but Ogoni leaders are opposed to resuming production. According to industry data, between 1976 and 1991, more than two million barrels of oil polluted Ogoniland in 2,976 separate spills. "Look at this spill," laments Mosop's Nwale Nchimaonwi, pointing to a wide swath of dry, blackened land left to rot. "Saro-Wiwa died fighting for justice for his people," he adds, referring to writer, environmental activist and Mosop founder Ken Saro-Wiwa, who was hanged with eight other Ogoni activists in 1995. Mr. Nchimaonwi warns against the risk of social explosion, especially among the youth, increasingly frustrated by the lack of opportunities: "Nigeria is sitting on a powder keg".
Syrian oil spill spreads into Mediterranean, may reach Cyprus | The Times of Israel— Cypriot authorities said Monday that they were monitoring an oil spill from a power plant on Syria’s Mediterranean coast, as a Syrian official said Damascus was probing its cause. A fuel oil leak at the Baniyas power plant was first reported last week, and Syrian state media said the leak was an accident. Cypriot authorities said the slick was expected to reach the north of the divided island on Tuesday. The size of the leak ranges from two to four tons of fuel, Syria’s electricity minister told the pro-government Al-Watan newspaper on Monday, adding that a committee had been formed to investigate the cause. Initial satellite imagery showed an oil sheen 36 kilometers (22 miles) long but newer imagery shows that the spill is larger than anticipated and is reaching deeper into the Mediterranean. Cyprus said satellite imagery from the European Maritime Safety Agency showed the existence of a “possible oil spill” between the island and Syria. In this satellite photo from Planet Labs Inc., an oil spill is seen stretching off the coast near Baniyas, Syria, August 24, 2021. (Planet Labs Inc. via AP) Modeling and meteorological data showed it is expected to “affect the Cape of Apostolos Andreas (at the northern tip of Cyprus) in the next 24 hours,” the fisheries department said in a statement. Steps had been taken to inform authorities in the north of the island, the department said, adding that “the Republic of Cyprus is ready to respond and provide assistance if requested.”
Syria oil spill does not currently pose a risk to Israel - The Jerusalem Post - A large oil spill off the coast of northern Syria does not currently pose a threat to Israel, but the Environmental Protection Ministry is continuing to monitor the situation in case that changes, the ministry announced on Monday.Last week, a crack in a fuel tank at the Baniyas Thermal Station led to large quantities of fuel being poured into the sea. The tank was filled with 15,000 tons of fuel, according to the Syrian state news agency SANA.Mahmoud Ramadan, director-general of the General Establishment for Electricity Generation, told SANA that the incident was not caused by an act of sabotage.As of Sunday, cleanup efforts were continuing at a number of locations along the Syrian coast. Satellite imagery from Planet satellite imagery showed a miles-long oil slick extending off the coast of Syria and spreading into the Mediterranean Sea.As of Sunday, Israel's Environmental Protection Ministry reported that the oil slick was being carried northward by coastal streams. Yoav Ratner, the coordinator of the National Marine Oil Spill Contingency Plan, is in constant contact with the Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea (REMPEC) in Malta in order to monitor the incident and track if it poses a threat to Israel's coast. Israel has also offered its aid to REMPEC.
Cyprus prepares for Mediterranean oil spill from Syrian power plant - Turkish Cypriot authorities have taken emergency action to stop an oil slick blamed on a faulty power plant in Syria from wreaking environmental havoc along some of the island’s finest unspoilt coastline. Officials in the war-partitioned country’s breakaway north erected what local media described as a 400 metre barrier off the Karpas peninsula to prevent the slick reaching its pristine shores. Turkey said it would also dispatch two ships to collect the spill while the island’s Greek Cypriot government requested an oil recovery vessel from the European Maritime Safety Agency. Environmental officials in Turkish-occupied northern Cyprus – internationally recognised only by Ankara – said that 20,000 tonnes of fuel oil had spilled from the Syrian plant. “It is a complete disaster for the marine ecosystem,” the head of the north’s chamber of environmental engineers, Cemaliye Özverel Ekinci, told the local TAK news agency. “This problem is not just a problem that concerns Northern Cyprus,” Ekinci said. “We should act together with the south.” Syria’s electricity minister had told the pro-government Al-Watan newspaper on Monday that the size of the leak ranged from two to four tonnes of fuel. He added that a committee had been formed to investigate the cause. The head of the north’s deep diving centre, Erol Adalier, said the oil slick was approaching the island’s north-eastern Karpaz peninsula – a wild region of sandy beaches and verdant hills. He added that the oil had reached to within 20 miles of the coast on Tuesday morning and was drawing nearer by the hour. Local officials said Turkey had sent teams to assess the situation and prepare a response. “Even if it passes us tangentially, it will affect Turkey,” the north’s tourism and environment minister Fikri Ataoğlu said. Cyprus has been divided since 1974. The Republic of Cyprus government in the south, an EU member, said on Tuesday it had not located any sign of the oil spill in the areas under its control and that it had conveyed its readiness to help authorities in the north in tackling any pollution. “Unfortunately … we have not received any information or any response from the authorities of the illegal regime, and so we remain alert,” environment minister Costas Kadis told Cyprus News Agency. The Turkish-occupied northern Cyprus government relies almost exclusively on financial and other assistance from Ankara.
Syrian oil spill moving towards Cyprus appears to partially dissolve - A large oil slick that had been working its way across the Mediterranean towards Cyprus, following a spill in Syria, appears to have partially dissolved although its next move will depend on currents. The spill, likened in size to New York City, had threatened the island’s Karpas peninsula, a strip of pristine beaches and verdant hills in the Turkish-controlled north, after seeping into the sea from a power plant in Syria nine days ago. On Wednesday authorities in Cyprus and Turkey remained on alert as officials continued to monitor the situation amid fears the leak would wreck fragile ecosystems. “It seems that small parts have detached,” the Greek Cypriot agriculture minister, Costas Kadis, was quoted as saying by local media. “That was the image we got from satellite images we received from the European Maritime Safety Agency (EMSA). We want to make sure of the extent.” A police helicopter and a fisheries department vessel were both in the area, he said. An EU member state, Cyprus has been partitioned since 1974 when a coup aimed at union with Greece prompted Turkey to invade and seize its northern third. As concerns mounted earlier in the week, Turkish Cypriot officials erected what local media described as a 400-metre barrier off the Karpas peninsula to prevent the slick reaching its shores. Crews were reportedly cleaning parts of the spill that had broken off, with the Turkish Cypriot infrastructure minister saying clumps of oil had become stuck to the seabed, which could be environmentally catastrophic. In the island’s south, the Greek Cypriot government requested an oil recovery vessel from the EMSA, which was also on standby. By Wednesday, Kadis, the Greek Cypriot agriculture minister, said the main oil slick was headed towards Turkey and Syria. But Turkish officials confirmed the spill had yet to reach the country’s shores. “Currently there is no pollution that has spread to Turkey or northern Cypriot coasts,” said Ankara’s transport minister, Adil Karaismailoğlu. In the event of an emergency, two ships had been deployed to the island equipped with oil absorbent pads and containment tanks, he said. According to the official Syrian Arab News Agency, the spill was attributed to a faulty tank at a thermal power station in the city of Baniyas on Syria’s Mediterranean coast. Local media reported the slick had floated along the country’s coast, sullying several stretches of water.
No Surprises: After Blitz-Meeting, OPEC+ Sticks With Agreed Production Increase -Unlike July, this time there were no surprises in today's OPEC+ meeting where ministers agreed to continue with the planned 400kb/d production increase Bloomberg reported, citing delegates. In a stark reversal from recent (endless) meetings, the panel’s online talks lasted less than an hour, one of the quickest meetings in recent memory and a stark contrast to the drawn-out negotiations seen at the cartel’s previous meeting in July. As previewed this morning, with crude prices mostly recovered from their mid-August slump and the supply outlook relatively tight for the rest of the year - Goldman still expects oil will hit mid-$80s before year end - the group had little reason to change the established schedule of gradual monthly supply hikes. Below is the communique of the now concluded OPEC+ meeting, re-confirming the plan for 400,000 b/d monthly hikes. The next meeting is now scheduled for Oct 4. After the historic demand plunge in 2020 which sent WTI briefly negative, OPEC+ has been in the process of rolling back the unprecedented output cuts implemented at the depths of the Covid-19 crisis last year with about 45% of idle supply already revived; in July the group laid out a plan for gradually returning the remainder through to September 2022. There have been some questions about that schedule when oil markets wobbled over the summer as the resurgent pandemic threatened demand in China and the U.S. But fuel use proved resilient and OPEC-watchers had widely expected the group to stick with its plan.
Oil, gasoline prices rise as Ida kicks hurricane season into a higher gear - Hurricane Ida temporarily shut down a critical swath of U.S. oil production and refining operations, and that should keep crude and retail gasoline prices at already elevated levels.Now a tropical storm, Ida swept across the Gulf of Mexico production area before slamming into the Louisiana coast Sunday as a Category 4 storm, bringing torrents of rain, high winds and high tides. More than 1 million Louisiana utility customers were without power early Monday.The energy industry was working Monday to assess when it could restore refining operations across Louisiana and oil and gas production in the Gulf of Mexico, which were taken offline as a precautionary measure.Oil prices were slightly higher Monday after jumping 10% last week. However, West Texas Intermediate futures — which traded at about $69 per barrel — are still down over 6.5% for the month. Nearly all Gulf of Mexico oil production was shut in, accounting for about 15% of the U.S. total."The reaction is mixed because we avoided the worst-case scenario," Again Capital John Kilduff said. "But supplies are tight, and that could impact prices, especially since we are moving into the peak period for storms, and weather worries are going to persist around the market for the next several weeks. As for supply, the cupboard was kind of bare going into this."The shut in operations in the Gulf of Mexico should resume to normal if no damage is found. The hit to supplies from the hurricane comes as OPEC+ meets this week.OPEC+ is widely expected to restore the 400,000 barrels a day of production it had previously committed to return to the market. The Biden administration had asked Saudi Arabia and OPEC for more supply to be restored.But the cartel and its associates, like Russia, are expected to restore only the planned amount of oil to the market. "They're not coming to rescue us from $70 oil," Kilduff said. Crude inventories are at the lowest level since January 2020. Crude supply has fallen for three straight weeks, while fuel demand has reached its highest level since March 2020, according to data released last week by the Energy Information Administration.
Oil settles up as U.S. producers, refiners assess storm damage --Oil rose on Monday, lifted as U.S. Gulf Coast platforms, refineries and pipelines grappled with uncertainty on restart timelines after Hurricane Ida wreaked havoc on the region. Gains were capped as OPEC+ looked set to go ahead with a planned oil output increase. Global benchmark Brent settled at $73.41 a barrel, up 71 cents or 0.98%. Brent touched a session high of $73.69, the highest since Aug. 2. U.S. crude futures rose 47 cents, or 0.68% to $69.21 a barrel. Within 12 hours of coming ashore, Ida had weakened into a Category 1 hurricane, and has since dropped to tropical storm status. Hundreds of oil production platforms were evacuated ahead of the storm and nearly all offshore Gulf oil production, or 1.74 million barrels per day, was suspended. After heavy winds and rains, nearly 1.2 million homes and businesses in Louisiana and Mississippi were without power on Monday and the storm’s move inland shifted the oil market’s focus to when refiners can restart. [REF/OUT] Oil and gas pipeline operators checked for damage. [L1N2Q11PQ] Power utilities warned that customers in the hardest-hit areas could face extended outages. [L4N2Q13SA] Exxon Mobil Corp said it was shutting the 520,000 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery units until utilities resume providing power and feedstocks are available. [L1N2Q11H6] “We’re in wait-and see mode on how badly the refiners will be impacted by the power outages,” said John Kilduff, a partner at Again Capital Management in New York. “There’s going to be an accounting to be done later this week as damage is assessed – I would give it some time to breathe, like a fine wine,” he said. U.S. gasoline was up more than 1.5%, lending support to crude. Power outages added to refinery closures on the Gulf coast and traders weighed the possibility of prolonged disruptions. “It’s still early days,” said Vivek Dhar, analyst at Commonwealth Bank of Australia. “Oil products, like gasoline and diesel, are likely to see prices rise more acutely from refinery outages especially if there are difficulties in bringing refineries and pipelines back online.” Brent has rallied 40% this year, supported by supply cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and some demand recovery from last year’s pandemic-induced collapse. OPEC+ meets on Wednesday to discuss a scheduled 400,000 bpd increase in its oil output, in what would be a further easing of the record output cuts made last year. OPEC delegates say they expect the increase to go ahead, although Kuwait’s oil minister said on Sunday it could be reconsidered.
Oil Futures End Higher on Ida Shutdowns, OPEC-Plus in Focus (DTN) -- After trading in a wide range on the session, oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled Monday's session higher, with the September RBOB contact gaining 1.5%. Traders sought out damage assessments from oil producers and refiners in the Gulf Coast region following Sunday's Louisiana landfall of a powerful Category 4 Hurricane Ida, with DTN confirming about 2.2 million barrels per day (bpd) of refining capacity in the region being taken offline. The disruptions come ahead of looming expirations by the September RBOB and ULSD contracts and October Brent contract Tuesday afternoon. NYMEX September RBOB futures settled up 3.85 cents at $2.3127 per gallon after nearing July's $2.3695 high overnight, with the October contract widening its discount to 15.89 cents per gallon against the expiring contract. September ULSD futures settled at $2.1403 gallon, up 3.11 cents on the session, with the next-month delivery October contact finishing at a 25-point discount. NYMEX October West Texas Intermediate futures settled $0.47 higher at $69.21 per barrel (bbl), while ICE October Brent settled at $73.41 per bbl, up $0.71 on the session, and ending at a $1.18 premium to November delivery. According to DTN estimates, 2.2 million bpd of Louisiana refinery capacity was shut down as of Monday afternoon, including Marathon's 578,000-bpd refinery in Garyville, ExxonMobil's 520,000-bpd facility in Baton Rouge and Valero's St. 340,000-bpd refinery complex in St. Charles among others. A total of the seven largest refineries in the region confirmed closure or reduced operations in the aftermath of Hurricane Ida. ExxonMobil said Monday it was shutting down all units at its 520,000-bpd Baton Rouge refinery after running at reduced rates "to stabilize operations," which includes securing feedstock. The company said Hurricane Ida did not cause "any significant damage" to the refinery. It remains unclear as to when refineries will be able to bring shuttered capacity online with about 2,000 miles of transmission lines feeding the city of New Orleans remaining out of service, according to Ent energy. "The catastrophic damage of the storm that hung over west of here caused a lot of damage to the transmission lines that feed New Orleans," Additionally, Colonial Pipeline told shippers it "temporarily" shut Lines 1 and 2 on its system after Hurricane Ida made landfall Sunday, with the two main lines running parallel from Houston to Greensboro, North Carolina. Line 1 on the Colonial system is a 1.4 million-bpd mainline carrying gasoline, and Line 2 is a 1.2 million-bpd distillate line. Both pipelines pass through Baton Rouge, where there are storage terminals. In shutting the pipelines, Colonial told shippers fuel supply is available throughout the southeast through the numerous terminals along the pipeline route. Ida has also taken offline about 94.6% or 1,721,809 bpd of Gulf of Mexico oil production, just slightly lower than 95.65% a day ago. Based on data from offshore operator reports, personnel have been evacuated from a total of 288 production platforms, 51.43% of the 560 manned platforms in the GOM, up from 279 the day prior. Production platforms are the structures located offshore from which oil and gas are produced.
Oil prices edge lower as US pushes OPEC to pump more crude (Reuters) -Oil slipped on Tuesday as OPEC and its allies geared up for a meeting on Wednesday amid calls from the United States to pump more crude, though Brent still traded well above $70 a barrel. Prices were also under pressure from concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries. Crude was also weighed down by manufacturing data from China, where factory activity in August expanded at a slower pace than in the previous month. Brent crude futures for October, due to expire on Tuesday, fell 50 cents, or 0.7%, to $72.91 a barrel by 1330 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 58 cents, or 0.8%, at $68.63. Both benchmarks were on track for their first monthly loss since March but were still not far from their July highs, when Brent rose to its strongest since 2018 and U.S. crude since 2014. In August U.S. President Joe Biden's administration urged the Organization of the Petroleum Exporting Countries (OPEC) to boost oil output to tackle rising gasoline prices. Prior to the U.S. call, OPEC and its allies, together known as OPEC+, had agreed to add 400,000 barrels per day (bpd) to their supply each month until the end of December. Sources told Reuters the Wednesday meeting is likely to leave the plan unchanged despite pressure from the United States to pump more. "It looks like sticking to the plan from the last meeting," an OPEC+ source told Reuters. OANDA analyst Craig Erlam also expects no changes to the OPEC policy. "It would be a surprise if they do anything at the moment, despite pressure from the White House, given current price levels, demand and (the) uncertain outlook," he said. OPEC's own data showed the market will face a deficit until the end of 2021 but then flip into a surplus in 2022. Hurricane Ida, which made landfall in the United States on Sunday as a Category 4 hurricane, knocked out at least 94% of offshore Gulf of Mexico oil and gas production and caused "catastrophic" damage to Louisiana's grid. On the supply side, about 1.72 million bpd of oil production and 2.01 million cubic feet per day of natural gas output remained offline on the U.S. side of the Gulf of Mexico after evacuations at 288 platforms.
August is Oil's Worst Month in 10 as Prices Drop 7% –- Oil ended August on a down note, falling 7% for its worst month in 10, as demand concerns reared their head again after Hurricane Ida forced the closure of U.S. refineries. Expectations that a Wednesday meeting of oil producing nations in the OPEC+ alliance would go ahead with a plan to raise output in September also weighed on prices in Tuesday’s session of oil — although the production increase was unlikely to be as much as the Biden administration expected, in order to dampen inflation. London-traded Brent, the global benchmark, settled at $72.99 per barrel, down 42 cents, or 0.6%, on the day. For the month, Brent was down 4.4%, for its sharpest monthly drop since May and its worst loss since October. New York-traded West Texas Intermediate crude, the benchmark for U.S. oil, settled at $68.50 per barrel, down 71 cents, or 1% on the day. For August, WTI fell 7.4%, also marking its largest drop since May and its worst month since October. “It's worth noting that WTI prices rebounded more than 12% in the week to yesterday and came within a whisker of $70 before pulling back, so there's probably an element of profit-taking to the move, particularly when you consider that some of the gains were attributed to Tropical Storm Ida last week and operations are already being restored,” said Craig Erlam, analyst at OANDA. Ida pummeled Louisiana as a category 4 hurricane, forcing over 1.74 million bpd, or 95% of Gulf of Mexico crude and natural gas platforms to shut-in. It also shut the largest privately-owned U.S. crude terminal and nearly half of the country’s refining capacity. Industry officials initially estimated that it could take weeks for supplies to normalize. But shortly after its landfall, Ida weakened into a tropical storm, prompting analysts to adjust their expectations. Some even worry now whether there could be a drop in demand for air travel. Wednesday’s impending meeting of the 23-nation OPEC+ — which groups the 13 members of the Saudi-led Organization of the Petroleum Exporting Countries with 10 allies steered by Russia — was also weighing on the market, said Erlam. “Traders (are) looking for any indication that the group is going to alter the pace of tapering cuts. It would be a surprise if they do anything at the moment, despite pressure from the White House, given current price levels, demand and uncertain outlook,” he added. The Biden administration called on OPEC+ three weeks ago to boost oil production in an effort to dampen gasoline prices, amid concerns that rising inflation could derail the economic recovery from Covid. Federal Trade Commission Chair Lina Khan said in a memo to the White House said the agency plans to ramp up enforcement of anticompetitive practices to ensure that large U.S. firms don’t resort to “collusive practices” to push up gasoline prices which were already at 7-year highs averaging $3.15 per gallon.
Oil Pops After Greater Than Expected Crude Inventory Draw -- Oil prices staged a modest bounce following yesterday's sharp drop, following the latest DOE Crude Inventory data, which showed a bigger than expected Crude and Distillate draw offset by a larger than expected Gasoline build while Cushing also increased. DOE:
- Crude -7.17MM, Exp. -2.5MM
- Gasoline +1.29MM, -1.6MM
- Distillates -1.732MM, -550K
- Cushing +836K
- Production 11.5MM, +100kb/d
The 7.2MM draw was substantially greater than the data disclosed yesterday by API:
- Crude -4.045MM
- Gasoline +2.711MM
- Distillate -1.961MM
- Cushing +2.128MM
Visually: More importantly, US crude production remains controlled for now even as rig counts and prices rise. WTI popped modestly on the bigger than expected draw only to reverse most of the gain. It is worth noting that anyone looking for the impact of Hurricane Ida - which came on shore on Saturday - in the data will have to wait until next week's DOE report, which will capture any resulting dislocations.The latest data comes as the OPEC+ virtual meeting is taking place in the background, although it does not appear there will be any major surprises there: as Bloomberg notes, the JMMC has recommended sticking to the supply-hike plan which means another 400K b/d in output will soon be added to the total amid hopes that the current Delta variant slowdown fades away soon enough.
Oil Futures Turn Mixed Ahead of OPEC+ Meeting, Stock Data -- New York Mercantile Exchange oil futures and Brent crude on the Intercontinental Exchange moved mixed in early trade Wednesday, with the October RBOB contract now the front-month on retreat after preliminary data from the American Petroleum Institute showed a surprise build occurred in nationwide gasoline inventories during the final full week of August as traders assess demand implications as the driving season nears an end while refinery shutdowns across Louisiana hindered by ongoing power outages could prompt product drawdowns, with reports of damage at the state's largest refinery. Louisiana largest refinery, Marathon's 578,000 barrles per day (bpd) complex in Garyville, Louisiana, reported minor damages to its operational units and is running off generators as it conducts repairs, according to a company statement. "Due to a power outage in the area, we are using generators to power aspects of our operations that enable us to progress with repairs and assessments, and we continue working on a timeline for resuming operations," said Marathon. PBF's 190,000 bpd Chalmette facility and Shell's 230,000 bpd Norco facility were also confirmed without power amid ongoing repairs to critical transmission lines feeding greater New Orleans area and Baton Rouge. DTN previously reported that power outages will likely lead to widespread delays in restarting refinery units across affected areas. As such, prosects of weaker crude demand from Louisiana refineries will weigh on oil prices early September, exacerbated by the end of the summer driving season. Limiting losses for crude futures, U.S. commercial crude oil inventories declined by a larger-than-expected 4.045 million barrels (bbl) in the week ended Aug. 27 compared with estimates for a 2.8 million bbl draw. Gasoline stockpiles posted a build of 2.711 million bbl versus expected 1.5 million bbl draw, while distillate inventories dropped 1.961 million bbl in the reviewed week compared with estimates for stocks to have remained unchanged. DTN Refined Fuels Demand data showed gains in diesel demand far outpaced those for gasoline, with distillate use surging nationally by 2.6% compared with a 0.4% increase for gasoline. Diesel demand was up 3.6% relative to the same week in 2019 last week, strengthening compared to seasonal norms after being up just 1% compared to 2019 levels in the prior week. Separately, Organization of the Petroleum Exporting Countries and Russia-led partners, a group known at OPEC+, are set to stick to their current output agreement when they meet virtually Wednesday. Previously, OPEC+ agreed to raise collective output by 400,000 bpd each month until December 2022. OPEC+ Joint Technical Committee revised higher their demand forecast for both this year and next year, and now estimate global oil demand to grow by 4.2 million bpd in 2022, nearly 1 million bpd higher than previously projected.
Oil Rises on Economic Recovery Hopes, Weaker Dollar - (Reuters) -Oil prices rose more than $1 a barrel on Thursday, rebounding on optimism about global economic growth despite the coronavirus pandemic, and after U.S. crude inventories fell more than anticipated. Brent crude ended up $1.44, or 2%, at $73.03 a barrel. West Texas Intermediate (WTI) crude settled up $1.40, or 2%, to $69.99 a barrel. The rally briefly pushed U.S. crude futures above the 50-day moving average for the first time in a month, a signal of bullishness for investors. In addition, later-dated crude contracts rallied more than the front-month, another sign that market participants expect demand to rise as supply declines. In the United States, crude inventories dropped by 7.2 million barrels last week, the Energy Information Administration said on Wednesday. [EIA/S] "There are good reasons for this rally - we have 1.5 mln barrels still offline in the Gulf, yesterday's crude number was down 7.2 million barrels and storage was at its lowest level since September 2019," said Robert Yawger, director of energy futures at Mizuho. The number of Americans filing new claims for jobless benefits fell last week, while layoffs in August dropped to their lowest level in more than 24 years, suggesting the labor market was charging ahead despite new COVID-19 infections. Optimistic about the global economic recovery, the Organization of the Petroleum Exporting Countries and allied producers including Russia, together known as OPEC+, raised its demand forecast for 2022. On Wednesday, the group agreed to continue a policy of phasing out record production reductions by adding 400,000 barrels per day (bpd). It did not take up entreaties from the United States to accelerate removal of those supply curbs. Hurricane Ida, meanwhile, has shut about 80% of the Gulf of Mexico's oil and gas output. Oil refineries in Louisiana could take weeks to restart, which will sap crude demand, but that could be offset by slow ramp-up of production offshore due to damage to key support facilities. "Crude oil processing will probably take considerably longer to recover from the outages than crude oil production, which suggests that crude oil stocks will increase in the coming weeks," said Commerzbank analyst Carsten Fritsch. India's gasoline demand is set to hit a record this fiscal year as more people hit the road after easing of COVID-19 curbs.
WTI Settles at 1-Month High as USD Weakens - -- Bolstered by a rapidly weakening U.S. Dollar Index, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled Thursday's session sharply higher amid reports offshore producers in the Gulf of Mexico are unable to restart operations due to logistical constraints to deliver supplies to mainland terminals. Government data reports over 90% of the regional crude production remains offline following Hurricane Ida. The U.S. Bureau of Safety and Environmental Enforcement reported on Thursday approximately 93.55% or 1,702,566 barrels per day (bpd) of oil production in the Gulf of Mexico remains offline, an increase from 79.96% reported day prior. While unconfirmed, the data might suggest offshore operators continue to face logistical constraints in delivering supplies to onshore terminals, with significant damage reported to the Louisiana staging areas that act as critical arteries for offshore industry. Bank of America Global Research highlighted the closure of Port Fourchon -- a major energy hub that serves over 250 companies in the Gulf and stands as the onshore link between offshore pipelines and various crude terminals in St. James and Clovelly. "While the impacts are ultimately transitory, the output is that the return of Gulf of Mexico production coming off record shut-ins stands to be more sluggish and a function of capacity to build up temporary staging and reroute logistics," said the analysts in a note to clients. Offshore federal Gulf of Mexico crude oil production currently accounts for 16% of total U.S. crude oil production. Roughly 70% of offshore oil and gas production is located west of New Orleans. Separately, U.S. Secretary of Energy Jennifer Granholm instructed the Strategic Petroleum Reserve to conduct an exchange with ExxonMobil Baton Rouge for 1.5 million barrels (bbl) of crude oil to alleviate any logistical issues of moving crude oil within areas affected by Hurricane Ida to ensure the region has access to fuel as quickly as possible to aid the recovery. The government said, "The U.S. Department of Energy encourages refiners to prioritize refined products for the affected region, and remains committed to supporting those efforts through options such as the SPR." On the economic data front, upbeat reading on U.S. unemployment claims for the final week of August and stronger-than-expected gains in factory orders sent stocks on Wall Street sharply higher, with Dow Jones Industrials gaining more than 130 points. The U.S. Dollar Index, meanwhile, eroded further against a basket of foreign currencies to finish the session at a four-week low 92.228. The number of Americans filing first-time unemployment claims dropped to a pandemic-era low of 340,000 during the last full week of August, down 14,000 from the previous week's revised level, the Labor Department said on Thursday. Unemployment claims have been trending lower after briefly exceeding 400,000 in mid-July. The data offers further evidence that a resurgent Delta COVID variant and slowed consumer spending doesn't necessarily translate into increased layoffs. Factory orders for manufactured goods came above market consensus at 0.4% increase, down from 1.5% jump in the prior month, according to the data U.S. Census Bureau.
WTI Tops $70 as Ida Continues to Disrupt the Supply Chain - -- Nearby delivery month oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange edged higher in early trade Friday, with the U.S. crude benchmark above $70 per barrel (bbl) for the first time in over a month as traders evaluate the effect of prolonged supply disruptions in the offshore Gulf of Mexico on the market's near-term supply-demand disposition, with government data reporting over 90% of the reginal oil production still shut-in following Hurricane Ida. Investors also await the release of the U.S. Department of Labor's nonfarm employment report for August that could determine the path of Federal Reserve monetary policy in the coming weeks. The Federal Reserve is currently buying $120 billion a month in bond and mortgage-backed securities to shore up growth and guarantee the free flow of credit. Economists expect Friday's payroll report will show U.S. employers added 725,000 new jobs last month -- a modest deceleration from July, but the third straight month of robust gains after the pace of hiring cooled in the winter and spring. The U.S. unemployment rate is seen to have fallen to 5.2% from 5.4% in July. Anything around this level should support the narrative of a recovering labor market. However, a miss on employment figures could spark fears of stagflation, as rising inflation joined with the aggressive spread of the Delta variant of COVID-19 could have kept employment gains in check. In oil markets, traders are keenly monitoring headlines around ongoing supply disruptions in the offshore U.S. Gulf of Mexico, with government data reporting over 90% or 1.7 million barrels per day (bpd) of the regional crude production remains offline following Hurricane Ida. Shell Offshore Inc. said late Thursday it found damage at the company's West Delta-143 offshore facilities in the Gulf of Mexico during a flyover, with the timeline to repair the facility remain uncertain."The WD-143 facilities serve as the transfer station for all production from our assets in the Mars corridor in the Mississippi Canyon area of the Gulf of Mexico to onshore crude terminals," said Shell. "All of our other offshore assets remain shut in and remain fully evacuated at this time."An early assessment by Shell found approximately 80% of the company's operated production in the Gulf of Mexico remains offline.This might suggest that offshore operators continue to face acute challenges to deliver their supplies to onshore pipeline and crude terminals as many of those facilities sustained damages during Hurricane Ida's landfall. Bank of America Global Research highlighted the closure of Port Fourchon -- a major energy hub that serves over 250 companies in the Gulf and stands as the onshore link between offshore pipelines and various crude terminals in St. James and Clovelly. "While the impacts are ultimately transitory, the output is that the return of Gulf of Mexico production coming off record shut-ins stands to be more sluggish and a function of capacity to build up temporary staging and reroute logistics," said the analysts in a note to clients.
Oil slips as weak U.S. jobs report gives 'reality check' - -(Reuters) -Oil prices fell on Friday after a weaker than expected U.S. jobs report indicated a patchy economic recovery that could mean slower fuel demand during a resurgent pandemic. Losses were capped by concerns that U.S. supply would remain limited in the wake of Hurricane Ida, which cut production from the U.S. Gulf of Mexico. Brent crude futures settled lower by 42 cents, or 0.58%, at $72.61 a barrel. U.S. West Texas Intermediate (WTI) crude futures were down 70 cents or 1%, at $69.29. Both benchmark oil contracts were largely steady for the week, with U.S. crude up 0.80%. “Prices slipped on the employment report, which was clearly impacted by the Delta variant,” “This was a reality check that the coronavirus is still impacting demand,” he added. Non-farm payrolls missed expectations with an increase of 235,000 jobs amid a softening in demand for services and persistent worker shortages as COVID-19 infections soared. Economists polled by Reuters had forecast non-farm payrolls would increase by 728,000 jobs. Meanwhile oil and gas production in the U.S. Gulf of Mexico remained largely halted in the aftermath of Hurricane Ida, with 1.7 million barrels, or 93%, of daily crude output suspended, according to offshore regulator the Bureau of Safety and Environmental Enforcement. “I would expect production to come back online in the course of the next week, versus refineries coming back online over the next two weeks,” said Bob Yawger, director of energy futures at Mizuho in New York. The lag in refinery restarts could cause an uptick in crude supplies, weighing on the market. Some analysts see room for further price gains after the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, stuck to a plan to add 400,000 barrels per day (bpd) to the market over the next few months. The United States welcomed the move and pledged to press the exporter club to do more to support economic recovery by unleashing production.
Oil Finishes Higher on the Week | Rigzone -- Oil in New York posted its second weekly gain as the impact of Hurricane Ida continues to snarl U.S. oil production, though prices edged lower Friday following a weak U.S. jobs report. West Texas Intermediate futures capped a gain 0.8% for the week despite shedding 1% Friday. The deceleration in hiring reflects growing fears of the delta variant of Covid-19 and complicates a potential decision by the Federal Reserve to begin scaling back stimulus. Traders exiting positions ahead of the long weekend in the U.S. and Canada also exerted some downward pressure on prices Friday afternoon. “At this point, Ida storm has been quite supportive for oil due to the production disruptions. But as the region recovers and shuttered capacity slowly returns, Ida will be less and less of a supporting factor,” said Bart Melek, head of commodity strategy at TD Securities. Longer term, it will be all about OPEC+, and the delta-variant coronavirus impact on demand, he added. Oil climbed this week as the market appears set to remain in deficit even as the Organization of Petroleum Exporting Countries and its allies push ahead with reviving supply. OPEC+ has said crude stockpiles in developed countries are falling and an economic recovery is accelerating. There have been signs of revival in Asia, where Covid-19 infections had surged. China’s independent refiners are buying more crude and gasoline consumption in India is improving. The return of Iranian supply, meanwhile, looks even further away. “Oil prices continue to trade at relatively elevated levels despite OPEC+ reaffirming plans to normalize output and Covid-19 demand woes still present,” said Jens Pedersen, senior analyst at Danske Bank. Exxon Mobil Corp. is tapping the U.S. Strategic Petroleum Reserve with more than 90% of the Gulf of Mexico’s oil production still shut as of Friday afternoon, while Louisiana’s refineries are still reeling from the impact of the storm. Prices: WTI for October delivery settled 70 cents lower at $69.29 a barrel at in New York. Brent for November settlement fell 42 cents to $72.61; a decline of 0.1% for the week. Options markets have also mirrored the positive sentiment in crude. The premium of bearish put options for global Brent benchmark over bullish calls fell to its narrowest since mid-June this week. That’s a sign that traders aren’t paying as much to protect against falling prices.
Taliban Holds Huge Victory Parade Showing Off US Military Hardware -The day after a defiant Joe Biden deemed his Afghanistan exit a "success" - the Taliban did a little celebrating of their own, holding a 'victory' parade in the streets of Kandahar featuring the Taliban army's new 'toys'. "The Taliban Wednesday paraded some of the military hardware they captured during their takeover of Afghanistan," AFP wrote in confirming the spectacle that mocked the whole US debacle of a twenty year occupation that ended in handing over billions of dollars in military equipment.The parade even included a helicopter flying over a long line of Humvees decked out with the white and black Taliban flags. An AFP journalist observed that "a long line of green Humvees and armored fighting vehicles drove in single file along a highway outside Kandahar -- the spiritual birthplace of the militant movement -- many with white-and-black Taliban flags attached to aerials...". And more: At least one Black Hawk helicopter has been seen flying over Kandahar in recent days, suggesting someone from the former Afghan army was at the controls as the Taliban lack pilots. Starting weeks ago as Taliban militants began capturing base after base and easily steamrolled major cities across the country with little resistance, it became clear they were putting their newly acquired expensive American and NATO equipment to use, given they began taking cities in the south while riding in on Humvees and armored battle vehicles. They've also positively invited journalists to document their treasure, losing no moment to show the cameras what the Americans left behind, in a constant insult to injury message to Washington and the West. During his speech on Tuesday, President Biden hailed the US exit and evacuation efforts an "extraordinary success". He said, "No nation has ever done anything like it in all of history; only the United States had the capacity and the will and ability to do it." In a deeply ironic, twisted, and tragic sense... this statement is true, just not at all in the way the president thinks.
Afghans queue for hours as Taliban imposes $200 weekly withdrawal limit - Huge lines are forming outside banks in Afghanistan after the Taliban imposed a strict $200 weekly withdrawal limit on citizens as the country faces an economic crisis. A day after US troops withdrew from the country, Afghans were spotted lining up for hours outside banks in Kabul.Banks that closed as soon as the Taliban seized Kabul have since been ordered to reopen in a bid to get Afghanistan’s economy moving.But the Taliban are enforcing weekly withdrawal limits and thousands are facing hours of waiting in line just to get their cash.One line outside an Afghan National Bank in Kabul saw thousands lining up, five and six alongside each other, trying to withdraw their money.While many Afghans fear life under the Taliban, some say they’re more worried about the potential economic collapse.Many Afghans, particularly civil servants, say they haven’t been paid in months and others say their salaries have been cut by as much as 75 percent under the new Taliban rule.The local currency has been losing value and inflation has been rising since the Taliban overran the country on Aug. 15.“Everything is expensive now, prices are going up every day,” Kabul resident Zelgai, who said tomatoes that cost 50 afghanis the day before were now selling for 80, told Reuters. A man named Noorullah, who has run a hardware store for 11 years, told the Associated Press he hasn’t had a single customer since the Taliban arrived. “The banks are closed. All the people who have money are running away from this country,” he said. “No one is bringing money here.”
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