gasoline supplies at a 48 mo low, distillate supplies at a 19 mo low; total inventories at a 79 mo low; DUC backlog at 5.9 months as completions slip…

gasoline supplies at a 48 month low, distillate supplies at a 19 month low; total inventories of oil and all oil products at a 79 month low; DUC backlog at 5.9 months as completions slip; record low DUCs in Appalachia, the Bakken, the Eagle Ford, and the Niobrara chalk..

US oil prices fell for the fourth straight week this week, and have now retraced almost a third of their two month rally to a seven year high on October 26th...after falling 0.6% to $80.79 a barrel last week on forecasts of lower demand and as Biden threatened OPEC, the contract price for US light sweet crude for December delivery opened lower and fell more than 1.5% in early trading on Monday, as traders were spooked by a surge in Covid-19 infections across Europe that had prompted several governments in the region to bring back quarantine restrictions, but recovered to settle 9 cents higher at $80.88 a barrel, even as Brent, the international benchmark crude, lost 12 cents,as traders questioned whether crude supplies would increase and whether demand would be pressured by the recent surge in prices or rising COVID-19 cases...oil prices then pushed higher in early trading on Tuesday after the International Energy Agency (IEA) failed to lower its 2021 global oil demand outlook, projecting that "bourgeoning gasoline and jet fuel consumption underpinned by the reopening of international air travel would offset renewed quarantine measures", but turned lower to settle down 12 cents at $80.76 a barrel. as prospects of tight inventories worldwide were offset by forecasts of a production increase in coming months and concerns over rising coronavirus cases in Europe...oil prices fell right out of the gate on Wednesday on fears the US and China would jointly release oil stores from the strategic reserves of the two countries, with losses deepening by late morning despite an EIA report showing U.S. commercial crude oil inventories had unexpectedly decreased and that gasoline supplies had dropped, and settled $2.40 lower at $78.36 a barrel after the IEA and OPEC both warned of impending oversupply, and as COVID-19 cases in Europe increased the downside risks to demand, and as a Biden request that the Federal Trade Commission investigate oil companies for price manipulation further soured sentiment...however, oil prices rallied early Thursday as prices below $80 lured bargain hunters back into the market and drove December crude 65 cents higher to $79.01 a barrel, as traders assessed the potential impact of a coordinated release from OECD petroleum oil reserves, with the Biden administration reportedly calling for a joint action among oil-consuming countries to lower energy prices ahead of the winter months....but oil prices plunged by 3% again early on Friday as Europe dealt with rising Covid cases by returning to lockdowns and other restrictions, which traders feared would weigh on oil demand, and then tumbled again after a brief midday rally sputtered to finish $2.91 lower at $76.10 a barrel, as trading in December crude expired at a 7 week low, with that contract falling 5.8% this week alone...

natural gas prices, on the other hand, moved higher for the 10th time in 14 weeks, as global prices hit new highs and forecasts turned colder....after falling 13.1% to $4.791 per mmBTU last week on falling prices in Europe and on forecasts for mild weather heading into winter, the contract price of natural gas for December delivery opened more than 2% higher on Monday on forecasts for colder weather and higher heating demand over the next two weeks than had been expected and continued rising to settle 22.6 cents higher at $5.017 per mmBTU on lower domestic output and on strong demand for exports...gas prices continued rising Tuesday, adding 16.0 cents to settle at $5.177 per mmBTU, on soaring prices in Europe and strong demand for LNG, after a German regulator suspended its certification of Russia’s recently completed Nord Stream 2 pipeline...but US natural gas prices gave up most of the week's gain on Wednesday, despite record gas prices in Asia and a 27% jump in European prices over the prior three days, falling 36.1 cents or 7% to $4.816 per mmBTU, on an ongoing increase in natural gas production and on forecasts for a decline in heating demand over the coming week...natural gas prices edged back up 8.6 cents to $4.902 about 2% on Thursday as LNG exports climbed to near record highs as the sixth liquefaction train at Cheniere's Sabine Pass export plant in Louisiana continued to ramp up, and then rose 16.3 cents more to $5.065 on Friday, lifted by ongoing robust levels of U.S. exports and expectations for stronger weather-driven demand, to finish 5.7% higher on the week...

The EIA's natural gas storage report for the week ending November 12th indicated that the amount of working natural gas held in underground storage in the US rose by 26 billion cubic feet to 3,644 billion cubic feet by the end of the week, which still left our gas supplies 310 billion cubic feet, or 7.8% below the 3,954 billion cubic feet that were in storage on November 12th of last year, and 81 billion cubic feet, or 2.2% below the five-year average of 3,725 billion cubic feet of natural gas that have been in storage as of the 12th of November in recent years...the 26 billion cubic foot increase in US natural gas in working storage this week was more than the average forecast for a 22 billion cubic foot addition from a S&P Global Platts survey of analysts, and it was close to the 28 billion cubic feet that were added to natural gas storage during the corresponding week of 2020, but it contrasts with the average withdrawal of 12 billion cubic feet of natural gas that have typically been pulled out natural gas storage during the same week over the past 5 years…    

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending November 12th showed that a big jump in our oil exports and a modest decrease in our oil prouduction meant we had to pull oll out out of our stored commercial crude supplies for the second time in eight weeks and for the twenty-second time in the past thirty-three weeks….our imports of crude oil rose by an average of 83,000 barrels per day to an average of 6,191,000 barrels per day, after falling by an average of 63,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 573,000 barrels per day to an average of 3,626,000 barrels per day during the week, which together meant that our effective trade in oil worked out to a net import average of 2,565,000 barrels of per day during the week ending November 12th, 490,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, production of crude oil from US wells was reportedly 100,000 barrels per day lower at 11,400,000 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 have totaled an average of 13,965,000 barrels per day during the cited reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,397,000 barrels of crude per day during the week ending November 12th, an average of 32,000 more barrels per day than the amount of oil they processed during the prior week, while over the same period the EIA’s surveys indicated that a net of 764,000 barrels of oil per day were being pulled out 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 668,000 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 plunked a (+668,000) 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 balance sheet 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 most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's 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 rose to an average of 6,181,000 barrels per day last week, which was 15.3% more than the 5,361,000 barrel per day average that we were importing over the same four-week period last year…the 764,000 barrel per day net decrease in our crude inventories came as 300,000 barrels per day were pulled out of our commercially available stocks of crude oil and 464,000 barrels per day of oil were pulled out of our Strategic Petroleum Reserve, apparently still part of an emergency loan of oil to Exxon in the wake of hurricane Ida….this week’s crude oil production was reported to be 100,000 barrels per day lower at 11,400,000 barrels per day as the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 11,000,000 barrels per day, while a 1,000 barrel per day increase in Alaska’s oil production to 443,000 barrels per day had no impact on the reported 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 13.0% below that of our pre-pandemic production peak, but 35.3% 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...

US oil refineries were operating at 87.9 of their capacity while using those 15,397,000 barrels of crude per day during the week ending November 12th, up from  86.7% of capacity the prior week, but still a little below normal utilization for mid-autumn refinery operations…the 15,397,000 barrels per day of oil that were refined this week were 11.4% more barrels than the 13,841,000 barrels of crude that were being processed daily during the pandemic impacted week ending November 13th of last year, but 6.3% less than the 16,435,000 barrels of crude that were being processed daily during the week ending November 15th, 2019, when US refineries were operating at what was then also a bit below normal 89.5% of capacity...

Despite the increase in the amount of oil being refined this week, the gasoline output from our refineries was somewhat lower, decreasing by 132,000 barrels per day to 9,922,000 barrels per day during the week ending November 12th, after our gasoline output had decreased by 122,000 barrels per day over the prior week.…this week’s gasoline production was still 9.4% more than the 9,064,000 barrels of gasoline that were being produced daily over the same week of last year, but 1.3% less than the gasoline production of 10,053,000 barrels per day during the week ending November 15th, 2019….similarly, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 26,000 barrels per day to 4,842,000 barrels per day, after our distillates output had increased by 35,000 barrels per day over the prior week…despite the week's decrease, our distillates output was 13.3% more than the 4,275,000 barrels of distillates that were being produced daily during the week ending November 13th, 2020, but 5.5% less than the 5,124,000 barrels of distillates that were being produced daily during the week ending November 15th, 2019..

With the decrease in our gasoline production, our supplies of gasoline in storage at the end of the week decreased for the ninth time in twelve weeks, and for the eighteenth time in thirty weeks, falling by 707,000 barrels to a 48 month low of 211,996,000 barrels during the week ending November 12th, after our gasoline inventories had decreased by 1.555,000 barrels over the prior week...our gasoline supplies decreased by less this week because the amount of gasoline supplied to US users fell by 18,000 barrels per day to 9,241,000 barrels per day, and because our imports of gasoline rose by 236,000 barrels per day to 823,000 barrels per day, while our exports of gasoline fell by 2,000 barrels per day to 831,000 barrels per day…after this week’s inventory decrease, our gasoline supplies were 7.0% lower than last November 13th's gasoline inventories of 227,967,000 barrels, and about 4% below the five year average of our gasoline supplies for this time of the year…

With the decrease in our distillates production, our supplies of distillate fuels decreased for the tenth time in twelve weeks and for the 22nd time in 32 weeks, falling by 824,000 barrels to a 19 month low of 123,685,000 barrels during the week ending November 5th, after our distillates supplies had decreased by 2,613,000 barrels during the prior week….our distillates supplies fell by less this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 70,000 barrels per day to 4,350,000 barrels per day, because our exports of distillates fell by 390,000 barrels per day to 849,000 barrels per day while our imports of distillates fell by 39,000 barrels per day to 239,000 barrels per day....but after twenty-two inventory decreases over the past thirty-two weeks, our distillate supplies at the end of the week were 14.2% below the 144,073,000 barrels of distillates that we had in storage on November 13th, 2020, and about 5% below the five year average of distillates stocks for this time of the year…

Meanwhile, with this week's big increase in our oil exports, our commercial supplies of crude oil in storage fell for the sixteenth time in the past twenty-five weeks and for the 32nd time in the past year, decreasing by 2,101,000 barrels over the week, from 435,104,000 barrels on November 5th to 433,003,000 barrels on November 12th, after our commercial crude supplies had increased by 1,002,000 barrels over the prior week…after this week’s decrease, our commercial crude oil inventories remained around 7% below the most recent five-year average of crude oil supplies for this time of year, but were still almost 27% above the average of our crude oil stocks as of the first weekend of November 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 for most of the year after that, our commercial crude oil supplies as of this November 12th were 11.5% less than the 489,475,000 barrels of oil we had in commercial storage on November 13th of 2020, and are now 3.9% less than the 450,380,000 barrels of oil that we had in storage on November 15th of 2019, and 3.1% less than the 446,908,000 barrels of oil we had in commercial storage on November 16th of 2018…

Finally, with our inventory of crude oil and our supplies of all products made from oil at multi year lows, we are continuing to track the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR....the EIA's data shows that total oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, fell by 12,121,000 barrels this week, from 1,842,133,000 barrels on November 5th to 1,830,012,000 barrels on November 12th, which is our lowest level of total US inventories since February 13th, 2015, and are therefore at a 79 month low...

This Week's Rig Count

The number of drilling rigs active in the US increased for the 52nd time out of the past 61 weeks during the week ending November 19th, but they remained 29.0% below the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US increased by seven to 563 rigs this past week, which was also 253 more rigs than the pandemic hit 310 rigs that were in use as of the November 13th report of 2020, but was also still 1,366 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global oil market in an attempt to put US shale out of business….

The number of rigs drilling for oil was up by 7 to 461 oil rigs this week, after they had increased by 4 oil rigs the prior week, and there are now 230 more oil rigs active now than were running a year ago, even as they still amount to just 28.7% of the high of 1609 rigs that were drilling for oil on October 10th, 2014….at the same time, the number of drilling rigs targeting natural gas bearing formations was unchanged at 102 natural gas rigs, which was still up by 26 natural gas rigs from the 76 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….last year's rig count also included 3 rigs that Baker Hughes had classified as "miscellaneous', while there are no such "miscellaneous' rigs deployed this week...

The Gulf of Mexico rig count was unchanged at fifteen rigs this week, but up from the 14 rigs that were deployed in the Gulf the week before Hurricane Ida approached, with thirteen of this week's Gulf rigs drilling for oil in Louisiana waters and two more drilling for oil in Alaminos Canyon, offshore from Texas....the Gulf rig count is now up by three rigs from the twelve rigs in the Gulf a year ago, when 11 Gulf rigs were drilling for oil offshore from Louisiana and one was deployed for oil in Texas waters…since there is now no drilling off our other coasts, nor was there a year ago, the Gulf rig count is equal to the national offshore totals..

In addition to those rigs offshore, we continue to have two water based rigs drilling inland; one is a directional rig targeting oil at a depth of over 15,000 feet, drilling from an inland body of water in Plaquemines Parish, Louisiana, near the mouth of the Mississippi, and the other is drilling for oil in the Galveston Bay area, and hence the inland waters rig count of two is up from one from a year ago..

The count of active horizontal drilling rigs was up by 7 to 508 horizontal rigs this week, which was 86.8% more than the 272 horizontal rigs that were in use in the US on November 20th of last year, but was just 37% of the record 1,374 horizontal rigs that were deployed on November 21st of 2014..…on the other hand, the directional rig count was unchanged at 35 directional rigs this week, and those were up by 15 from the 20 directional rigs that were operating during the same week a year ago….meanwhile, the vertical rig count was also unchanged at 22 vertical rigs this week, and those were up by 4 from the 18 vertical rigs that were in use on November 20th 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 November 19th, the second column shows the change in the number of working rigs between last week’s count (November 12th) and this week’s (November 19th) count, the third column shows last week’s November 12th 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 20th of November, 2020...

once again, this week's change was driven by the seven rig increase in Texas, so checking Texas first in the Rigs by State file at Baker Hughes, we find that four rigs were added in Texas Oil District 8, which is the core Permian Delaware, and that rig counts in the other Texas Permian districts were unchanged, thus indicating a overall four rig increase in the Texas Permian...since the national Permian rig count was up by six, that means that both of the rigs that were added in New Mexico were set up to drill in the western Permian Delaware...elsewhere in Texas, we find that two rigs were pulled out of Texas Oil District 1, but that a rig was added in Texas Oil District 2, and three more rigs were added in Texas Oil District 4...since all those districts include part of the Eagle Ford shale, some combination of the changes shown there account for the decrease of one oil rig and the increase of two natural gas rigs in that basin, which now has 37 oil rigs and 5 natural gas rigs deployed....meanwhile, yet another rig was added in Texas Oil District 6, which accounts for the natural gas rig increase in the Haynesville shale, since the rig count in the Haynesville in adjacent Louisiana was unchanged...elsewhere, there was an oil rig removed from the DJ Niobrara chalk, which had been drilling in either Colorado or Wyoming, but since the rig counts in both of those states were unchanged, that means that an oil rig was concurrently added in whichever state the Niobrara rig was pulled from, in a basin not covered by Baker Hughes...meanwhile, for natural gas rigs, which ended the week unchanged, we have the two rigs added in the Eagle Ford, another added in the Haynesville shale, also in Texas, and one more in West Virginia, in the Marcellus...at the same time, two natural gas rigs were pulled out of Ohio's Utica shale, another was pulled out of the Permian basin, which saw a 7 oil rig increase, and yet another natural gas rig was removed from an "other" basin that Baker Hughes doesn't track...

DUC well report for October

Monday saw the release of the EIA's Drilling Productivity Report for November, which includes the EIA's October data for drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions....that data showed a decrease in uncompleted wells nationally for the 17th month in a row, as both completions of drilled wells and drilling of new wells remained well below the pre-pandemic levels...for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 222 wells, falling from 5,326 DUC wells in September to 5,104 DUC wells in October, which was also 38.1% fewer DUCs than the 8,239 wells that had been drilled but remained uncompleted as of the end of October of a year ago...this month's DUC decrease occurred as 649 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during October, up from the 635 wells that were drilled in September, while 871 wells were completed and brought into production by fracking, down from the 879 completions seen in September, but up from the pandemic hit 609 completions seen in October of last year, but still down by 19.1% from the 1,076 completions of October 2019....at the October completion rate, the 5,104 drilled but uncompleted wells left at the end of the month represents a 5.9 month backlog of wells that have been drilled but are not yet fracked, down from the 6.1 month DUC well backlog of a month ago, a ratio that is now near that of the year prior to the pandemic, despite a completion rate that is still around a quarter below the pre-pandemic norm...

both oil producing regions and natural gas producing regions saw DUC well decreases in October, and none of the major basins reported a DUC well increase....the number of uncompleted wells remaining in the Permian basin of west Texas and New Mexico decreased by 107, from 1,812 DUC wells at the end of September to 1,705 DUCs at the end of October, as 295 new wells were drilled into the Permian during October, while 402 wells in the region were being fracked...at the same time, DUCs in the Eagle Ford shale of south Texas decreased by 35, from 833 DUC wells at the end of September to a record low of 798 DUCs at the end of October, as 62 wells were drilled in the Eagle Ford during October, while 97 already drilled Eagle Ford wells were completed....in addition, there was also a decrease of 29 DUC wells in the Bakken of North Dakota, where DUC wells fell from 541 at the end of September to a record low of 512 DUCs at the end of October, as 42 wells were drilled into the Bakken during September, while 71 of the drilled wells in the Bakken were being fracked....meanwhile, the number of uncompleted wells remaining in Oklahoma's Anadarko basin decreased by 13, falling from 812 at the end of September to 799 DUC wells at the end of October, as 43 wells were drilled into the Anadarko basin during October, while 56 Anadarko wells were completed....in addition, DUC wells in the Niobrara chalk of the Rockies' front range decreased by 87, falling from 375 at the end of September to a record low 368 DUC wells at the end of October, as 90 wells were drilled into the Niobrara chalk during August, while 97 Niobrara wells were being fracked....

among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 24 wells, from 557 DUCs at the end of September to a record low of 533 DUCs at the end of October, as 69 wells were drilled into the Marcellus and Utica shales during the month, while 93 of the already drilled wells in the region were fracked....meanwhile, the uncompleted well inventory in the natural gas producing Haynesville shale of the northern Louisiana-Texas border region was down by seven to 389 DUCs, as 48 wells were drilled into the Haynesville during October, while 55 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of October, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) decreased by a total of 191 wells to 4,182 wells, while the uncompleted well count in the natural gas basins (the Marcellus, the Utica, and the Haynesville) decreased by 31 wells to 922 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...

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Drinking water not impacted by migrating injection well waste: report - A study released by the Ohio Department of Natural Resources found that oil and gas production waste from an injection well in Washington County did not impact drinking water in the area. Brine from the Redbird #4 injection well in Dunham Township migrated out of its injection zone in 2019 and into several nearby oil and gas production wells, according to an earlier ODNR report. That brine did not [YET] affect the private drinking water wells tested, according to results from a follow-up report that was published earlier this summer.The ODNR’s Division of Oil and Gas commissioned an independent investigation to verify the brine had not migrated from the Berea Sandstone into shallower drinking water aquifers. The report, put together by Groundwater and Environmental Services, noted that no residents complained about water quality issues in the area.GES identified 596 parcels and 48 private water wells within a half mile radius of the impacted wells. Of those, 16 were reported as no longer present by landowners, four landowners declined sampling and landowners for 24 wells did not respond to requests for contact and sampling by GES.A total of nine wells were sampled and analyzed, including five that were not identified in the original survey.One sample had a chloride concentration above the EPA maximum level of 250 milligrams per liter along with measurable bromide. The report notes that “chloride does occur naturally in groundwater and concentrations can vary depending on the soil and/or bedrock matrix the groundwater moves through.” This sample came from a 60-foot deep well about 8,100 feet northeast of the injection well. Chloride can also come from a number of other sources, including sewage effluent, irrigation drainage, animal manure and fertilizer, the report said. GES concluded the elevated chloride in the sample was not caused by the brine from the Redbird #4 well.

Round One Of Court Battle Between ODA/Columbia Gas and the Renner/Bailey Trust - The opening arguments in legal the battle featuring Columbus Gas and the Ohio Department of Agriculture against the Arno Renner/Bailey Trust got underway Wednesday morning in the Union County Court of Common Pleas, with visiting Judge Mark S. O’Connor presiding over the civil proceedings. At issue is approximately one-half mile of is what is known as the Marysville Connector of the Northern Loop, a pipeline which Columbia Gas intends to build that will encircle and serve the Columbus-metro area, as well as Union County and surrounding areas. But the pipeline, as presented to the State of Ohio by Columbus Gas, will run for approximately one-half mile directly through the Arno Renner Trust, approximately 230 acres of land on two properties along Industrial Parkway in southeast Union County. Mr. Renner, before his death, asked for and received the Agricultural Easement Donation Program for the two properties from the Ohio Department of Agriculture (ODA) in 2003, with the clear stipulation that the two adjoining properties in question be “forever” protected by the state and the ODA from any kind of construction or improvements that would remove any of the its land out of agricultural use. The Northern Loop pipeline, if allowed to be constructed as it is currently planned, would effectively bisect the parcels through the Ag Easement and grant Columbus Gas an easement between the two properties for construction, repair and updates of the pipeline in direct violation of the agreement between the ODA and the Renner/Bailey Trust, of which Don Bailey, Mr. Renner’s nephew, is now trustee. Columbia Gas has filed a request with the court to nullify at least part of the Ag Easement agreement between the ODA and the Renner/Bailey Trust for the construction of the gas pipeline through the protected properties in question. Mr. Bailey has also filed motions with the court, first asking for a writ of mandamus which would require Dorothy Pelanda, in her position as the Director of the Ohio Department of Agriculture, to enforce the Ag Easement between the State of Ohio and the Renner/Bailey Trust as written by disallowing Columbus Gas to build the pipeline through the protected properties. Director Pelanda, a Union County resident, who as director of the ODA is also a member of the Ohio Power Siting Board (OPSB), has refused to honor the Ag Easement and voted to side with Columbia Gas to ignore agreement, both in her position as the director of the ODA and as member of the OPSB. The OPSB’s vote to allow the pipeline construction through the Renner/Bailey Trust was unanimous.

EnerVest Utica Shops 340K Acres of ORRI in Ohio Utica Shale | Marcellus Drilling News - EV Royalty Partners, an affiliate of EnerVest Ltd., has retained Oil & Gas Asset Clearinghouse for the sale of a Utica Shale overriding royalty interest (ORRI) package across multiple counties in Ohio. The package on offer includes portions of ORRI in some 340,894 acres. The acreage is actively leased and developed by Encino Energy, Ascent Resources, and Southwestern Energy. Bids are due by Dec. 2nd.EnerVest is a private equity firm that owns a lot of acreage and wells in the Marcellus/Utica region. EnerVest has long held over 1 million acres of leases in Ohio–most of it for conventional oil and gas wells. EnerVest tried to sell large chunks of its acreage for years, going back to 2012 (see EnerVest Puts 539,000 Utica Shale Acres on Auction Block). In 2017 EnerVest shopped 361,000 acres and 1,100 wells in the Appalachian region (see EnerVest Selling 1,100 Wells, 361K Acres in Appalachia). In June 2020 EnerVest used EnergyNet to auction off 58,000 Utica acres (see EnerVest Auctioning 58K Utica Leased Acres in Ohio & Pennsylvania). In September of this year, EnerVest auctioned a package of 146,053 acres of leases for non-operated and ORRI in the Utica Shale scattered across Ohio and Pennsylvania (seeEnerVest Shopping 146K Acres of Non-Op & ORRI Assets in OH-PA Utica).We don’t know how much (if any) of those assets EnerVest ended up selling, but we do know as of July 2019 the company still owned 1.1 million acres of leases in Ohio (see EnerVest Still Owns 7K Wells, 1.1 Million Acres in Ohio).Here is the latest auction of Utica Shale assets from EnerVest: Asset Overview:

• Assets include an aggregate 60.88% of a ~7.5% ORRI in ~340,894 acres
  • The remaining limited partner of EVRP has a tag right on the sale of the LP interests
• 0.723% average ORRI in 139 Utica wells
• 1,146 Mcfe/d (51% gas / 32% NGL / 17% oil)
  • Net PDP reserves: 4,086 MMcfe
• Primarily operated by Encino Energy, Ascent Resources and Eclipse Resources (Montage Resources, which was acquired by Southwestern Energy in 2020)

Verde Bio Holdings, Inc. Announces Bolt-on Acquisition in the Utica Shale of Eastern Ohio -- Verde Bio Holdings, Inc., a growing oil and gas Company, today announced that it continues to execute on its business plans of acquiring a portfolio of revenue producing properties by agreeing to the purchase of mineral and royalty interests held by a private seller for a purchase price of $175,000 in cash, subject to price adjustments pending due diligence. The interests to be acquired are located in Belmont County, Ohio, and are operated by Ascent Resources, which holds more than 335,000 net leasehold acres in the region, and has established itself as the premier operator in the southern Utica Shale. Ascent currently has four rigs running in the area and has recently filed an intent to drill another well on the interest being acquired. The bolt-on interests currently produce combined revenue of approximately $3,000 per month and Verde is entitled to the cash flow from production attributable to the acquisition beginning on or after November 1, 2021.The acquisition is expected to close on or before November 30, 2021. . Scott Cox, CEO of Verde, said, “We are currently very bullish on natural gas and this bolt-on acquisition adds to our existing portfolio of great assets in the Utica Shale. We are proud to have built a Company which is creative and flexible enough to take advantage of these deals as they come to market.” “Deals like this continue to highlight our business plan of acquiring minerals and royalties and building a diversified, revenue-producing portfolio. … Through our balanced approach of capital raising and acquisitions, we are building a dynamic Company with significant revenue and assets and look forward to continuing to build on this through future strategic acquisitions,” Mr. Cox concluded.

Biden Administration no longer supports Michigan Governor's wish to shutdown Line 5 Pipeline – The Oil and Gas pipeline from Michigan to Canada could still go away for good. The Biden Administration has announced it’s not supporting the closure for now, but the Michigan Governor is still pushing for it. Enbridge Energy’s Line 5 oil and gas pipeline has carried Canadian oil into Michigan for nearly 70 years, but that might go away for good. And not everyone is happy with this. “That is a big concern for the Ohio Oil and Gas association.” Mike Chadsey The Ohio Oil and Gas Association isn’t the only one defending the pipeline. So is the Biden Administration. Meanwhile, Michigan Governor Gretchen Whitmer still pushes for the line’s shutdown over environmental concerns. But Ohio Oil and Gas Association’s Mike Chadsey believes there are even bigger concerns on the horizon. “We are very fearful of the effects it’s gonna have on consumers. The US is the world’s largest producer of oil and natural gas. If you shutdown line-5, you’re talking about pipeline shortages in oil and natural gas.” - Ohio Oil and Gas Association He adds that could crank up propane prices. “Particularly, as the cold weather sets in… many residents use it for home heating, and a few bucks or more increase in propane costs would really hurt those customers.” Ohio Oil and Gas Association Mike Chadsey Meanwhile, others continue to fight for the pipeline: Enbridge has sued to keep it open. Canada has invoked clauses of the 1977 Treaty that deals with pipelines that cross the US-Canada border. But the future of the pipeline remains unclear. “It could be shutdown fairly quickly, which is where our concern is. And so, that’s what our message is ‘do not shut this pipeline down. Do not cause shortages, and do not raise prices to the folks that are out of Wheeling for price increases’.”Ohio Oil and Gas Association’s Mike Chadsey

The new steel? Hope and fear as a new plastics factory rises in Appalachia — Back in the 1970s, more than 60 percent of the workforce in Beaver County was tied to steel, and Aliquippa was the industry's beating heart. Its streets were lined with tidy houses and busy shops, and when the day shift ended, its bars were packed full of steelworkers with flush pockets. Today, just a 10-minute drive away, a new industry is rising from the banks of the Ohio River: Royal Dutch Shell's multibillion-dollar ethane "cracker," an industrial complex that heats ethane, a component of natural gas, and "cracks" it into ethylene, a building block for plastic. When it launches next year, the Pennsylvania Petrochemicals Complex will make 1.6 million metric tons a year of what many say the world needs less of: the plastic pellets that will become plastic products, from sports gear to shrink wrap.It will also be Appalachia's first ethane cracker. Far from the petrochemical manufacturing facilities that line the Gulf Coast, the region where coal and steel once reigned is perhaps an unlikely home for the cracker. But in recent years, states have offered more than $1 billion in economic incentives to lure plastic projects to a region where hydraulic fracturing — "fracking" — has produced an abundance of cheap natural gas. In 2012, Pennsylvania's leaders bet big on Shell by authorizing a tax credit worth about $1.65 billion for ethylene projects.The tax credit was a sign to industry that "the public sector was able to be a good partner," said Mark Thomas, the president of the Pittsburgh Regional Alliance, a nonprofit economic development group. Shell's cracker, he said, is a "long-term play" that many hope will spark more regional growth.Curtis Smith, a Shell spokesperson, wrote in a statement, "The economic multiplier associated with these employment and contracting opportunities will be apparent for decades."But others, including some residents and advocates, fear that amid the climate crisis and a global plastics glut, such projects aren't just risky investments, but also the wrong choice for a region still struggling to rebound from the toxic legacy of its industrial past."We've seen this for generations," said Rob Altenburg, the director of the Energy Center at PennFuture, an environmental advocacy group. "They come in, they take profits, the industry goes away, and it leaves Pennsylvania taxpayers holding the bag for not only the economic impacts of this, but also the public health impacts."We're doing the same thing with Shell, ignoring the carbon pollution that they're putting out and effectively giving them money to pollute," he added. Pennsylvania's tax credit for ethylene manufacturing projects was a "key factor" in Shell's decision to build the cracker, said Smith, the Shell spokesperson.Both states and the federal government regularly provide direct and indirect subsidies to fossil fuel and petrochemical companies through tax abatements, loans, training programs and other incentives. In the U.S., conservative estimates put direct subsidies to the fossil fuel industry at about $20 billion a year, with about 80 percent going to natural gas and crude oil. The package Pennsylvania gave to Shell, however, is the largest tax credit offered to a single company in the state's history. The 25-year tax break is worth about $66 million annually.

Poor Economics for Virgin Plastics: Petrochemicals Will Not Provide Sustainable Business Opportunities in Appalachia – Ohio River Valley Institute - The Appalachian petrochemical buildout is on shaky ground. Despite speculation that supply chain constraints, COVID-induced shortages of key products, and volatile energy prices could “re-shore” virgin plastics production in the Ohio Valley, a concurrence of factors casts a dark shadow over the financial outlook of regional petrochemical development. A new report from the Ohio River Valley Institute outlines the market forces likely to impede new petrochemical capacity in Appalachia:

1. Environmental concerns are curtailing demand for petrochemical products. Consumers’ and investors’ increased focus on the plastics pollution crisis is changing assumptions about demand growth for polyethylene (PE), the primary product of prospective Appalachian petrochemical plants.
2. Under pressure, major petrochemical producers have pledged to reduce carbon emissions, shifting cost assumptions and siting decisions. Technological innovations, such as carbon capture, use, and sequestration (CCUS) and advances in ‘green’ and ‘blue’ hydrogen, are an as yet unproven and still cost-prohibitive means of decarbonization for chemical facilities in the US.
3. The Appalachian feedstock pool is limited. A tighter US ethane market and producers’ ability to access export markets via expanded capacity at Marcus Hook will likely push regional ethane prices too high to allow new ethane cracker facilities to be competitive.
4. Market shifts in China and across Asia will undercut U.S. cost margins. Once the primary importer of U.S. ethylene, China is now leveraging tariffs and racing toward supply self-sufficiency. Accelerating overseas capacity additions and lower-than-expected Asian import demand could create a significant overhang of U.S. capacity.

Prospective investors have hesitated to fund major new projects because building out more ethylene production in Appalachia may result in stranded assets. And, even if such projects go forward, they are not likely to produce the economic benefits once predicted by industry supporters and hoped for by local communities. For these reasons, the region’s business leaders and policymakers would be wise to shift their focus from virgin plastics production to other strategies for economic development. Click here to view and download the full report.

How the Oil and Gas Industry Has Broken Climate Education - The phenomenon of fossil fuel companies plying schoolchildren with their messages is decades old. The American Petroleum Institute was making the case for marketing to children as early as the 1940s, according to archives reviewed by the Center for Public Integrity. A survey of 10,000 Americans had indicated the industry’s reputation could use some rehabilitation, and a “well-directed program of public education” could help. To that end, API teamed up with DuPont and by 1954 had trained 600 oil industry workers to give a show-and-tell program called “The Magic Barrel” to schoolchildren. In 1972, General Motors published a booklet to counteract what its pollsters said were children’s “negative” attitudes toward auto companies. The booklet featured cartoon characters “Charlie Carbon Monoxide” and “Harry Hydrocarbon” (a “harmless demon”) who helped dispel fears that air pollution could lead to serious health hazards. By the next June, the company had distributed 2.1 million copies of the booklet, including to 62,000 elementary-school principals. In the midst of the 1970s oil crisis, Exxon’s public affairs department partnered with Walt Disney Educational Media Co. on comic books about energy conservation. In one, Mickey Mouse and Goofy Explore Energy, the pair get in trouble when their car runs out of gas on a fishing trip. On their walk to the service station, they learn about supply and demand from a smiling nuclear symbol called “Enny, the spirit of energy!” Another comic book was included as an insert in a 1978 issue of the National Education Association’s journal, which reached 1 million teachers. Much more strident commentary on the crisis came from the petroleum company Amoco (later merged with BP). It produced a 26-minute film titled The Kingdom of Mocha, ostensibly to introduce students to economic concepts. In it, the primitive “Mochans,” led by a chief called “Big Daddy,” become dependent on an energy source—wood. When a war cuts off trade, Big Daddy responds by threatening to impose price controls or even to take over the wood industry, which viewers learn could prove calamitous. The parable—in addition to being flagrantly racist—executed a trenchant attack on 1970s-era U.S. energy policy. Amoco claimed that more than 20 million schoolchildren watched it. Today, fossil fuel–funded educational programs aimed at children are abundant. A nonexhaustive search found such programs in Alaska, Arizona, California, Colorado, Florida, Illinois, Kansas, Kentucky, Michigan, Montana, Nevada, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Utah, Virginia, West Virginia, Wisconsin, and, of course, Arkansas. Not all have Paige Millers traveling classroom to classroom. More common are free curricula, sponsored activities, and scholarships. Some promote safety: The Missouri-based utility Evergy, for instance, created an online game to teach students to recognize electrical dangers. Industry education programs in Kansas, Ohio, Illinois, and Oklahoma are actually supported and sanctioned by those states’ governments. The most sophisticated is the Oklahoma Energy Resources Board, a “privatized state agency” voluntarily funded by oil and gas companies. The OERB has produced a series of videos by “Professor Leo,” a goofy Bill Nye knockoff who educates students about the state’s oil and gas resources. Teachers can ask for “Petro Pros” to come speak to their classes, or tap into a library of glossy lesson plans ready-made for any age or subject.

Abandoned gas wells creating legacy of challenges, concerns - The state Department of Environmental Protection lists about 8,700 abandoned or orphaned natural gas wells on its database. That figure, however, is likely a tiny fraction of the true number of these potential hazards that exist statewide. Hundreds of thousands of wells have been drilled in Pennsylvania since 1859, when Edwin Drake launched the nation’s first commercial oil well outside Titusville. Many were built without oversight, until permitting requirements were enacted in 1955. Some have been abandoned by companies that did not cap them properly – if at all – before filing for bankruptcy protection or moving to another state. Emissions of methane, a noxious greenhouse gas, are proving to be a ongoing legacy of some of these sites. “There are a lot of challenges with legacy wells,” said Seth Pelepko, a DEP official, who was the featured speaker of a recent virtual webinar presented by Washington & Jefferson College’s Center for Energy Policy and Management. The manager of DEP’s Bureau of Oil and Gas Planning and Program Management spoke for more than an hour about the overwhelming prevalence of legacy wells statewide, the cost of properly plugging them and environmental issues they present. “Operators have placed wells in almost every conceivable place, which presents great challenges for us,” he said Plugging is not a cost-effective endeavor, to be sure. The price of sealing just one well is about $33,000, making DEP liable from $280 million to several billion. A state surcharge on drilling permits helps to fund this capping, and requires a bond, but more money is needed to remediate this issue. Pennsylvania, Pelepko pointed out, could benefit from grant money and an outlay from the federal infrastructure deal that is awaiting President Joe Biden’s signature, and includes funding for environmental matters.

$1 million settlement approved in 2018 pipeline failure in Beaver County -The Pennsylvania Public Utility Commission on Thursday approved a $1 million settlement related to a massive failure of the Revolution pipeline that occurred in September 2018 in Beaver County.On Sept. 10, 2018, a pipeline failure occurred near Ivy Lane in Center Township, releasing more than 3 million cubic feet of natural gas and destroying a single-family home on the street.No one was injured, and the home’s occupants evacuated before the subsequent fire reached their home.During heavy rain in the wake of Tropical Storm Gordon in the fall of 2018, a landslide occurred that caused a section of the pipe to separate.The settlement resolves an investigation conducted by the PUC’s Independent Bureau of Investigation and Enforcement, and comes on the heels of a review of comments from state lawmakers, advocates, local governments and others.The settlement includes:

• • A $1 million civil penalty, paid by pipeline owners Energy Transfer to the state within 30 days.
• • $975,000 in additional safety measures including added pipeline start-up procedures, in-line inspections prior to the start-up date for new sections of pipeline.
• • Multiple annual in-line inspections to verify the line’s integrity.
• • Immediate notice to the PUC of any slope failure that could affect pipeline integrity.
• • Implementation of a quality assurance program to oversee pipeline siting and construction practices.

Hearing Underway On Cleanup Of June 2019 Philadelphia Energy Solutions Refinery Explosion – CBS Philly -A public hearing is underway on the cleanup from a June 2019 refinery explosion in South Philadelphia. That hearing, involving members of the Pennsylvania state senate, is taking place at the University of The Sciences. Lawmakers and experts there are discussing remediation efforts at the site of the former Philadelphia Energy Solutions refinery. The major explosion injured multiple people. At the time, the complex produced 335,000 barrels of crude oil daily. The oil refining complex was the largest on the U.S. Eastern Seaboard. The site’s new owner, Hilco Redevelopment Partners, announced plans to turn the area into an employment hub generating 19-thousand jobs.

Philly suburb appeals ruling on gas pipeline records (AP) — A Philadelphia suburb is fighting a court order to release communications between municipal officials and the developer of a natural gas pipeline that was recently charged with environmental crimes related to the pipeline’s construction.Middletown Township has been refusing to produce the records for nearly a year, asserting they were exempt from disclosure under the state’s open records law. Energy Transfer, the owner of the multi-billion-dollar Mariner East pipeline system, also opposed their release.A Delaware County judge ruled last month that the records are public, and ordered the township to turn them over to the owners of a 124-unit apartment complex along the pipeline route. Middletown Township on Friday appealed the judge’s ruling to Commonwealth Court, days after a similar appeal by Energy Transfer. The township says the records contain sensitive and confidential information the township obtained from Energy Transfer during its investigation of sinkholes near the pipeline. The owners of Glen Riddle Station Apartments, who have been seeking the records, say pipeline construction has threatened the health and safety of the residents. The pipeline’s route splits the apartment complex in half.Energy Transfer was recently charged with 48 criminal counts related to Mariner East construction, most of them for illegally releasing industrial waste at 22 sites in 11 counties across the state. A grand jury report cites numerous spills of drilling fluid at the construction site at Glen Riddle.Energy Transfer subsidiary Sunoco Pipeline LP has been installing two new pipelines to take natural gas liquids from the Marcellus Shale gas field in western Pennsylvania to an export terminal near Philadelphia.

Sunoco Pipeline L.P. to enhance public safety in Mariner East Pipeline construction After a vote by The Pennsylvania Public Utility Commissions (PUC) on Nov. 18, Sunoco Pipeline L.P. must take action in protecting public safety in connection with the construction and operation of the Mariner East Pipelines.In a case involving complaints against Sunoco Pipeline L.P. from almost a dozen of individuals and organizations from southeastern Pa., the commission voted 3-0 to approve an initial decision that was issued by a PUC Administrative Law judge. Actions that Sunoco Pipeline must take to enhance public safety in the construction and operation of the Mariner East Pipeline includes:

• A comprehensive review of Sunoco’s public awareness program.
• A written plan to enhance Sunoco’s public awareness and emergency notification plans.
• Enhancements to public awareness safety materials for residents and emergency responders in Delaware and Chester Counties.
• Supplements to Sunoco’s emergency contact list for Delaware and Chester Counties, including police departments of municipalities and designees of school districts.
• Advance notification by Sunoco prior to proposed excavation on the pipeline system in all municipalities of Delaware and Chester Counties.
• Scheduling by Sunoco of public awareness/education meetings to be held in the West Chester Area School District, Twin Valley School District, Downingtown Area School District, and Rose Tree Media School District.
• Arrangements by Sunoco for meetings with the Chester County Commissioners, Delaware County Commissioners, and all municipalities’ supervisors therein, to establish emergency contact list information; assist with the establishment of emergency plans for first responders;
• Establishment of times and dates for follow-up meetings and periodic meeting schedules as mutually agreeable between municipalities, counties and Sunoco Pipeline.
• Additional training by Sunoco regarding emergency notification procedures, as reasonably requested by municipalities and school districts.
• A “depth of cover” and “distance between other underground pipelines/structures” survey regarding Mariner East 1 and the 12-inch workaround pipelines as long as they are purposed for carrying highly volatile liquids.
• Sunoco shall file a report with the Commission certifying whether Mariner East 1 and the 12-inch workaround pipelines that are transporting highly volatile liquids within Chester and Delaware Counties are buried so that they are below the level of cultivation and so the cover between top of pipe and ground level, road bed, river bottom or underwater natural bottom is in compliance with minimum regulatory requirements and the distance between pipeline exteriors and the exteriors of other underground pipelines/utility structures are at least twelve inches apart unless adequate corrosive control action can be shown – along with a corrective action plan for area areas requiring remediation – to be filed annually for three years.
• A $2,000 civil penalty, payable to “Commonwealth of Pennsylvania,” to be paid within 30 days of the date of entry for the Final Order in this case.
• Other issues that were raised in the complaints referred to the PUC’s ongoing rule relating to pipeline transport of petroleum products and hazardous liquids in intrastate commerce.

Well pad would be a disaster for Weirton -- Randi Pokladnik - Truck traffic, volatile organic air emissions and water contamination are just some of the dangerous issues associated with high-pressure hydraulic fracking. Considering the placement of a well pad in Weirton is asking for trouble. Fracking requires water, sand and chemicals. The U.S. EPA and Department of Energy said that an average of 7 million gallons of fluid are used for each well. If 1 percent are chemical additives, that means upward of more than 70,000 gallons of chemicals including biocides, surfactants, and anti-corrosive agents are required for each well and will be stored on site. Additionally, a study by Yale Public Health found that of these hundreds of chemicals, more than 80 percent have never been reviewed by the International Agency for Research on Cancer. Of the 119 that have been reviewed by IARC, 55 were found to be carcinogenic. Among the chemicals most frequently used in fracking, 24 are known to block the hormone receptors in humans, according to a 2017 study published in Science Direct. Fracking has contaminated water wells and a 2020 article in the Journal of Petroleum Technology stated “wellbore integrity cannot be taken for granted.” The XTO Energy well blowout in Belmont County in February 2018 was from a “failure of the gas well’s casing or internal lining.” This blowout released the equivalent of an entire year’s worth of methane by oil and gas industries in countries like France. The waste water left over after a well is fracked is known as produced water. In addition to brine, which is a result of the prehistoric conditions which formed the oil and gas reserves, the waste contains radioactive materials (Radium -226 and Radium-228) and any chemicals initially injected with the fluid. In 1978, the EPA exempted oil and gas wastes from exploration and production activities from the hazardous waste management program Subtitle C of the Resource Conservation and Recovery Act. This includes produced water, drilling fluids and drill cuttings. Yet, in 2002 the EPA admitted that just because the wastes were exempt this did not mean that wastes could not present a hazard to human health and the environment. The oil and gas industries also are exempt or excluded from certain sections of these federal environmental laws: Clean Air Act, Clean Water Act, Safe Drinking Water Act, National Environmental Policy Act and Emergency Planning and Community Right-to Know Act. Siting a well pad in the middle of a heavily populated area as proposed in Weirton would be a disaster. Weirton residents should not be the sacrifice community for the oil and gas industry.

New laws signed by Gov. Hochul will phase out dirty fuel oil and paving materials – Gov. Kathy Hochul signed two new laws that will phase out the use of grade-6 fuel oil and coal tar paving materials — two substances that contribute to air, soil and water pollution in New York.The first bill (S.2936-a/A.5029-a) was sponsored by Sen. Todd Kaminsky, D-Long Beach, and Assemblywoman Amy Paulin, D-Scarsdale. This bill phases out the use of grade 6 oil fuel for heating buildings in New York state, starting July 1, 2023. The second bill (S.4095-b/A.518-a), sponsored by Sen. James Sanders Jr., D-Queens, and Assemblywoman Linda Rosenthal, D-Manhattan, prohibits the use and sale of pavement materials that contain coal tar.“The harmful effects of climate change and pollution have only heightened the importance of protecting the well-being of New Yorkers and the preservation of our state’s environment,” Governor Hochul said. “This legislation takes important steps to ensure that New Yorkers have access to clean water and a breathable environment free of harmful pollutants.” Grade 6 oil refers to a highly viscous oil that’s left over from the production of crude oil. This grade of oil — used mostly in large commercial applications under burn permits that are grandfathered in — is cheap but also dirty and among the most harmful to the environment. It has been phased out in New York City completely, with 5,300 buildings using grade 6 oil fueltransitioning into a more environmentally-friendly fuel in 2016.When combusted, it creates soot: incompletely combusted hydrocarbon particles that contain polycyclic aromatic hydrocarbons, or PAHs, alongside other contaminants that contribute air pollution and harm respiratory health.PAHs are a class of chemicals that naturally occur in fuels such as gasoline, crude oil, and coal. When these materials, as well as garbage, wood or tobacco are combusted, they release PAHs that can bind into small particulates in the air. The contaminants that come from the combustion of oil fuel are both carcinogenic and harmful to people’s respiratory systems. Alongside PAHs, grade 6 oil fuel contains “heavy metals, nitric oxide, sulfur dioxide, nickel, and black carbon,” that contribute to soot’s makeup.According to the Governor’s Office and the bill sponsors, there are alternative energy sources for building heating that are not only less harmful to the environment but also cost less. Because of this, the use of grade 6 oil fuel will be prohibited starting July 1, 2023.“This legislation takes aim at one of the prime causes of climate change and extreme weather: air pollution,” said Paulin, the Assembly sponsor of the bill.” Fuel oil grade number 6 releases extremely harmful pollutants into our air. The second bill focuses on coal tar-based pavement sealants, materials used for paving roads that contain benzo(a)pyrene alongside other harmful PAHs that have been classified by the Environmental Protection Agency as carcinogenic, “particularly in children” as well as harmful to wildlife.

Providence Moves Closer to LPG Expansion Limits — “I care deeply about the whole issue of reducing fossil fuels … and my favorite thing about this meeting was that it was standing-room only,” Providence resident Marcia Taylor said. “The public is here to say no to fossil fuel expansion here in the city of Providence and in the state of Rhode Island.”Taylor wasn’t standing long — barely 15 minutes — before the City Council committee echoed public dissent.After hearing hours of public comment nearly two weeks ago, the Committee on Ordinances moved swiftly and unanimously on Nov. 15 to pass a resolution and ordinance that could significantly limit the expansion of liquid propane gas, also called liquefied petroleum gas, (LPG) storage in the Port of Providence. Both items will move to the City Council, seeking approval twice over before potentially being signed into law by Mayor Jorge Elorza Ordinance 32292 would amend Chapter 27 of the Providence Code of Ordinances to prohibit the bulk storage of LPG in all city districts. The city code currently prohibits the bulk storage of liquefied natural gas in all districts. Extending the ban to include the bulk storage of LPG would further protect the environment and the people of Providence, City Council member Pedro Espinal said.“We have already a lot of kids with asthma … and I think this is the best thing we can do together,” City Council member Carmen Castillo said.Resolution 32299 requests the state’s Energy Facility Siting Board (EFSB) commit to a full review of a LPG storage expansion proposed by Sea 3 Providence LLC, a subsidiary of New England propane provider Blackline Midstream LLC, operating out of the Port of Providence. In a petition last March, Sea 3 billed the expansion as an “insignificant modification to a major energy facility,” which therefore should not be subject to a full review by the EFSB.

State should have oversight over proposed Chickahominy Pipeline, regulator says - Virginia Mercury -- A state regulatory official on Monday said the State Corporation Commission should have oversight of Chickahominy Pipeline’s plan to build a natural gas pipeline through five central Virginia counties. “In my opinion, Chickahominy’s planned pipeline would be subject to the commission’s jurisdiction … because Chickahominy would be a ‘public utility’ under the plain language of the Utility Facilities Act,”wrote Hearing Examiner D. Mathias Roussy in a report to the commission. Roussy’s report is not binding but will act as a recommendation for the three-judge SCC to use in making their final decision on the case. In September, the pipeline developer, Chickahominy Pipeline, LLC — a company with ties to the planned Chickahominy Power Station in Charles City County — asked the SCC to rule that it didn’t need the commission’s approval to construct the pipeline along an 83-mile route across Louisa, Henrico, Hanover, New Kent and Charles City counties. During a hearing earlier this month, Chickahominy Pipeline argued that it doesn’t need SCC approvalbecause “while it will be transporting natural gas for heat, light or power, it will not be doing so for sale” and therefore should not legally be considered a public utility subject to commission regulation. Roussy rejected that argument and the company’s petition Monday, writing that “the gas that would flow on the pipeline would be sold to (Chickahominy Pipeline) through an arrangement between a natural gas supplier and (Chickahominy Pipeline). Therefore … I find that the natural gas that would be transmitted or distributed by the pipeline is for sale.” If the SCC accepts Roussy’s recommendation, Chickahominy Pipeline will need to seek a certificate of public convenience and necessity to construct the project. Virginia Natural Gas, however, has argued that the commission can’t issue the certificate to the company because doing so would unlawfully allow Chickahominy to provide gas service within the exclusive territory controlled by VNG.

SCC hearing examiner recommends commissioners reject gas pipeline request - A State Corporation Commission hearing examiner issued a report Monday recommending the commission’s three judges reject a request by a company to build a natural gas pipeline across five central Virginia counties without the regulatory oversight given to a utility.The developer of the proposed Chickahominy Pipeline asked the commission in September for permission to build the gas line without approval from the commission. The line would run through Louisa, Hanover, Henrico, New Kent and Charles City counties and serve a yet-to-be-built natural gas power plant in Charles City County.Environmental groups such as the Southern Poverty Law Center say the plant and pipeline aren’t necessary for Virginia’s electricity needs, and opposition to the pipeline has grown among property owners concerned about negative environmental effects.In October, SCC staff recommended the commission reject the company’s request, saying the company is attempting to “subvert” state law “and escape regulation by creating a shell corporation.”Hearing examiner D. Mathias Roussy Jr. said in his Monday report: “In my opinion, Chickahominy’s planned pipeline would be subject to the Commission’s jurisdiction under the Utility Facilities Act because Chickahominy would be a ‘public utility’ under the plain language of the Utility Facilities Act.”Parties in the case can issue comments on the report by Nov. 23.

Chancery Court to hear injunction request against BrightRidge - Chancellor John Rambo will hear a request from Washington County later this week asking for an injunction against BrightRidge regarding a zoning dispute involving a bitcoin mining operation in Limestone. Rambo, who declined to issue a restraining order against the public utility on Monday, cited Rule 65.03(1) and ordered a hearing on the matter in Washington County Chancery Court at 9 a.m. Wednesday. In his order, the chancellor wrote he is calling for the hearing “so that plaintiff has the opportunity to notify defendant’s counsel of the request for the restraining order.” Angela Charles, Washington County’s planning director, is listed as the plaintiff in a motion filed earlier Monday asking the court to issue an injunction against BrightRidge to prevent the energy authority from continuing operations on property it owns at 1444 Bailey Bridge Road that the county says are in violation of its zoning regulations. Washington County alleges a bitcoin mining operation at the site does not conform with a “public utilities” zoning use permitted for the property under the county’s land use regulations.Under the county’s zoning code, a public utility is defined as “a facility providing a pubic service which is owned or authorized by a municipal, county, state or federal government in the provision of such services as transportation, water supply, sewerage treatment, electricity, natural gas and telephone, telegraph and microwave transmission.” At the request of officials from BrightRidge, Washington County commissioners voted in February 2020 to rezone the tract from A-1 general agriculture district to A-3 agriculture/business district. The county says BrightRidge submitted a commercial zoning compliance permit in May 2020 for a “data center” on its newly rezoned property near its Phipps substation. That facility was described as consisting of “15 containers and their associated generators.” Washington County’s complaint in Chancery Court alleges county commissioners first became aware that BrightRidge was in violation of the permitted zoning use for its Limestone property when residents in the neighborhood appeared during the public comment segment of their monthly meeting to voice their concerns about noise coming from the bitcoin operation. Commissioners voted in September to ask their legal counsel to send a letter to officials at BrightRidge, informing them they have 30 days to discontinue the current use of their property.

Listen: US Midwest sees surging propane costs as Gulf Coast supply heads overseas – Podcast Length 20:09 - The latest US inflation data showed energy costs jumping 30% in the 12 months through October. The trend is expected to continue through the winter, as home-heating costs rise across the board. The US Energy Information Administration predicts propane will see the biggest price spike in percentage terms, with heating costs surging 46%, compared with 39% for heating oil, 29% for natural gas and 6% for electricity. Senior editor Meghan Gordon spoke with Andrew Neal, manager of global NGLs for S&P Global Platts Analytics, about some of the dynamics behind the higher prices. They talked about strong global demand for US propane exports, the Enbridge Line 5 pipeline controversy in Michigan, and calls by some in Washington to limit US energy exports in the face of high domestic prices. Stick around after the interview for Jeff Mower with the Market Minute, a look at near-term oil market drivers.

Ameren Illinois' unique natural gas storage — Nearly half of the natural gas Ameren Illinois customers will use this winter is already in the state, but you might be surprised at where it is stored. Eric Kozak with Ameren Illinois said the state "has some natural geologic formations that allow us to store gas in the ground." You don’t see them because they are deep under the farm fields of Illinois in a dozen locations across central and southern Illinois including the Freeburg storage facility just south of town. Other facilities in our area include Centralia and Hillsboro Illinois. "These are natural gas and oil fields where the gas was taken out and depleted, so we repurposed them," Kozak said. "We take gas from the pipeline and put it in the ground." The underground storage capacity in the Freeburg site could fill a container the size of Busch Stadium more than 80 times. It's a cost-effective way of insuring availability of natural gas during the coldest part of the year because Ameren Illinois buys the gas during the warm months when natural gas prices are typically cheaper and demand is lower. Forty to forty-five percent of all the natural gas used this winter by Ameren Illinois customers was stored before November. Kozak says these underground storage fields have "two big benefits, one is that we have the gas right here in Illinois now that we can use in the winter time and we buy is the summer when gas is cheaper."

Environmental group demands Spire halt 'false and defamatory' messaging about pipeline -An environmental organization is demanding Spire Missouri cease and desist its campaign warning customers of dire consequences this winter if the Spire STL pipeline is shut down. The Environmental Defense Fund, which challenged the pipeline’s permit to operate, wrote to Spire on Friday saying the company’s “false and defamatory” comments had inspired area residents to send profanity-laced threats to the nonprofit.The 65-mile Spire STL pipeline has been operational since 2019, transporting natural gas from Illinois into Missouri. But its certificate to operate was revoked by a federal appeals court that said regulators ignored evidence Spire was self-dealing following a challenge from the Environmental Defense Fund. It’s currently operating on a temporary certificate that expires Dec. 13. The Federal Energy Regulatory Commission is poised, EDF said, to give Spire STL an extension to avoid outages this winter. But Spire Missouri warned its St. Louis area customers in an email earlier this month that the pipeline was in jeopardy and forecast dire circumstances this winter, blaming a “New York-based environmental group.” EDF has members who own land the pipeline travels across. That messaging, according to a letter EDF sent Spire on Friday, has “mislead and inspired individuals to direct menacing and threatening messages to individuals as EDF.” EDF noted that FERC is prepared to consider an extension this week to allow the pipeline to keep operating. And it reminded Spire that the environmental group supports such an extension to keep St. Louis residents warm this winter. “Ignoring this reality, Spire has engaged in a public relations campaign designed to engender fear among citizens of the St. Louis region that they may not have heat in the winter because of EDF’s legal challenge,” the letter, signed by an attorney representing EDF says.If Spire doesn’t halt its “campaign of false and defamatory statements,” the letter says EDF will take “all appropriate actions, including potentially seeking redress through the legal system.”

'Build Back Better' Methane Fee Means Higher Costs For Heating Oil, Natural Gas --Environmental activists call it a “methane fee.” The energy industry calls it a “natural gas tax.” Either way, energy consumers are likely to feel the effects in their pocketbooks. The U.S. House of Representatives is expected to vote this week on its version of the budget reconciliation bill — also known as the “Build Back Better” bill — which includes increased fees on methane emissions. Methane is a byproduct of oil and natural gas production, and as a result, the fee would be an increase in the cost of production. Environmentalists say reducing methane is essential to the fight against climate change. At the COP26 meeting in Scotland last week, the United States announced it will participate in the Global Methane Pledge to cut methane emissions 30 percent by 2030. “Methane has more than 80 times the warming power of carbon dioxide over the first 20 years after it reaches the atmosphere,” says Environmental Defense Fund (EDF) on its website. “Even though CO2 has a longer-lasting effect, methane sets the pace for warming in the near term.” As National Geographic reports, “Whereas carbon dioxide persists for centuries, most methane converts to carbon dioxide or gets cycled out of the atmosphere within about a decade.” Meanwhile, two of the world’s biggest methane emitters — China nor Russia — refused to sign the Global Methane Pledge. And energy producers point to America’s surging costs to heat their homes this winter and the wider inflation problem as evidence that this is the wrong time to add costs to consumers’ utility bills. “This is nothing more than a tax on natural gas at a time when policymakers should be focused on solutions that support affordable, reliable energy while reducing emissions,” says API Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola. “We must continue to drive down methane emissions without adding new burdens on American families and businesses,” added Karen Harbert, President and CEO of the American Gas Association. “Our analysis indicates that the proposed tax could increase natural gas bills from 12 percent to 34 percent, depending on the variation of the proposal assessed.”

Lower 48 Plays to Continue Ratcheting Up Natural Gas, Oil Output in December, EIA Says -Led by growth out of the Haynesville Shale, natural gas production from seven key U.S. onshore regions is set to climb from November to December, according to updated projections from the Energy Information Administration (EIA). Total natural gas production from the Anadarko, Appalachia and Permian basins, as well as from the Bakken, Eagle Ford, Haynesville and Niobrara shales, will rise an estimated 226 MMcf/d month/month to reach 89.376 Bcf/d in December, the agency said in its latest monthly Drilling Productivity Report (DPR), published Monday. EIA expects the largest monthly increase from the Haynesville at an estimated 111 MMcf/d, with Permian natural gas production projected to climb 87 MMcf/d for the period. Natural gas production gains are also expected for the Appalachia (up 7 MMcf/d), Bakken (up 8 MMcf/d), Eagle Ford (up 31 MMcf/d) and Niobrara (up 12 MMcf/d) regions. The only one of the seven regions expected to see lower month/month gas output is the Anadarko, with production there projected to fall 30 MMcf/d from November to December, DPR data show. Driven largely by the Permian, total crude oil production from the seven shale plays will increase 85,000 b/d from November to December to just over 8.3 million b/d, according to EIA. The Permian will account for 67,000 b/d of the incremental crude output, with much smaller increases expected out of the Anadarko (up 2,000 b/d), Appalachia (up 2,000 b/d), Bakken (up 5,000 b/d), Eagle Ford (up 5,000 b/d) and Niobrara (up 4,000 b/d) regions. Operators across the seven regions depleted their drilling backlogs to the tune of 222 drilled but uncompleted wells (DUC) from September to October, dropping the overall DUC tally to 5,104. Permian DUC totals fell 107 units to 1,705 for October to lead across-the-board declines in the U.S. onshore. The Anadarko (down 13), Appalachia (down 24), Bakken (down 29), Eagle Ford (down 35), Haynesville (down seven) and Niobrara (down seven) regions also posted declining DUC totals for the September-October period, according to the latest DPR data. EIA’s DPR makes use of recent rig data along with drilling productivity estimates and estimated changes in production from existing wells to model changes in production from the seven regions.

Natural Gas Drilling Activity Steady in US as Growth Remains Oil-Focused - The U.S. natural gas rig count finished unchanged at 102 during the week ended Friday (Nov. 19) as the oil patch continued to set the pace for growth in domestic drilling activity, according to the latest numbers from Baker Hughes Co. (BKR). The overall U.S. rig count added seven units — all oil-directed — to reach 563 for the week, roughly 250 rigs higher than the 310 rigs running in the year-earlier period. Like the natural gas rig count, the Gulf of Mexico tally was also unchanged for the week, finishing at 15, according to the BKR numbers, which are partly based on data from Enverus.Seven horizontal rigs were added domestically, while directional and vertical rig totals were unchanged.The Canadian rig count slid one unit to 167 for the period, with a net decline of two natural gas-directed units offsetting the addition of one oil-directed rig. Broken down by major play, the Permian led the way with a net increase of six rigs, growing its total to 278, up from 156 in the year-ago period. The Utica Shale, meanwhile, saw a net decline of two rigs for the week.Elsewhere among plays, the Eagle Ford, Haynesville and Marcellus shales each added a rig, while one rig exited in the Denver Julesburg-Niobrara, according to BKR.In the state-by-state breakdown, Texas posted a net increase of seven rigs, while New Mexico added two to its total. One rig was added in West Virginia for the week, while Ohio posted a net decline of two rigs.The call on oil and gas rigs is expected to climb faster than Helmerich & Payne Inc . (H&P) can accommodate, CEO John Lindsay said during a recent conference call, adding that the oilfield services provider “will have to reactivate more long-idled rigs to satisfy demand.”

More Climate Finance, Less Coal Could Send U.S. Natural Gas Exports Skyrocketing - The eye-popping financial promises made Nov. 3 at the COP26 climate summit in Glasgow, Scotland, could shift global energy markets — and, it appears, with some unintended consequences. With energy needs still growing in nations like India and China, already-booming U.S. exports of liquefied natural gas could skyrocket to replace some of the coal-fired generating capacity that will be phased out, analysts predicted. Neither the Biden administration nor other leaders at COP26, nor investors, have thus far signaled that they want natural gas production curtailed. The global climate efforts could result in more drilling and fracking for natural gas in the U.S., boosting the industry and bringing new jobs and revenue. But it would also result in more carbon emissions from states like Texas and Pennsylvania — all to help other nations wean themselves off coal. "Asia continues to demand more LNG, the U.S. is happy to supply it, and to the maximum extent possible seems likely to continue doing so," said Kevin Book, managing director of ClearView Energy Partners. "And if you look at investors and their portfolios, it's hard for them to put tens of trillions of dollars to work without buying a little bit of gas." The Glasgow Financial Alliance for Net Zero announced Nov. 3 at the COP26 climate conference that it now has 450 private capital firms representing $130 trillion committed to financing the global energy transition. Philanthropies and development banks said the same day that they have lined up $10.5 billion to help emerging economies phase out coal. Samantha Gross, director for the Brookings Institution's Energy Security and Climate Initiative, agreed that many nations that today depend heavily on coal-fired power plants for their energy needs will need to rely on natural gas for some time as they seek to decarbonize their economies. That will benefit U.S. exports of LNG, Gross said. "Eventually," Gross added, "uncontrolled gas-fired power becomes problematic for power generation too, as it is also a fossil fuel, just a less carbon-intensive one." Burning natural gas to produce electricity generates about half the emissions of a coal plant. The extraction and processing of natural gas have additional environmental impacts. Natural gas production systems in the U.S. released nearly 195 million metric tons of greenhouse gas emissions in 2019, rising 4.5% from the previous year, according to the U.S. Environmental Protection Agency's latest greenhouse gas inventory. That is equivalent to driving 42 million passenger cars for a year. Methane emissions, which the Biden administration seeks to tackle with new rules proposed Nov. 2, made up the bulk of greenhouse gas emissions from the sector. Methane traps 84 times more heat in the atmosphere than carbon dioxide during a 20-year period, which is why it is considered key to slowing climate change.

US shale basin merger and acquisition activity surpasses seven-year high - Merger and acquisition activity among US oil and gas operators surpassed a seven-year high this month as companies consolidate acreage in prolific southern basins. 2021 has had an unprecedented level of merger and acquisition activity, which now stands at $53.9 billion year to date, marking the highest level of activity since 2014, according to S&P Global Platts Analytics. In all of 2014, the busiest year on record, merger and acquisition activity totaled $53.5 billion. In 2014, Henry Hub spot gas averaged $4.37/MMBtu, the highest annual average since 2010. Henry Hub spot gas year to date in 2021 has averaged $3.85/MMBtu, which is the strongest average since 2014. While it is no surprise the Permian Basin accounts for the bulk of all transactions at 60%, the Haynesville has had an unusually active year. The Haynesville has had $6.75 billion in activity, making up 13% of all deals year to date, making it the second most active basin. Southwestern Energy entered the Haynesville earlier this year, with the purchase of Indigo Natural Resources for $2.7 billion. However, their newest acquisition of GEP Haynesville for $1.85 billion, will make them the largest Haynesville operator in the country. The deal will comprise $1.33 billion in cash and the remaining $525 million will come from an estimated 99 million shares of common stock. The Haynesville provides close to access to rising areas of demand, such as LNG feedgas, exports to Mexico, industrial and gas-fired generation. “The transaction adds significant high-return locations to our development inventory while expanding access to premium Gulf Coast markets,”

U.S. natgas jump near 5% on colder forecast, rising global prices (Reuters) - U.S. natural gas futures jumped almost 5% on Monday on forecasts for colder weather and higher heating demand over the next two weeks than previously expected. In addition, U.S. prices gained support from a European gas where prices jumped 9% on cooler weather and after a monthly auction showed that Russian gas giant Gazprom PAO had not booked any additional gas transit capacity to Europe for December. In October, global gas prices hit record highs as utilities around the world scrambled for liquefied natural gas (LNG) cargoes to replenish low stockpiles in Europe and meet insatiable demand in Asia, where energy shortfalls have caused power blackouts in China. Following those global gas prices, U.S. futures climbed to a 12-year high in early October on expectations LNG demand would remain strong for months. But overseas prices were still trading about six times higher than U.S. futures because the United States has plenty of gas in storage and ample production. Analysts have said that European inventories were about 20% below normal for this time of year, compared with just 3% below normal in the United States. In what is starting out like another volatile week of trade, front-month gas futures rose 22.6 cents, or 4.7%, to settle at $5.017 per million British thermal units (mmBtu). On Friday, the contract dropped about 7% to its lowest close since Sept. 7. Data provider Refinitiv said output in the U.S. Lower 48 states averaged 96.1 billion cubic feet per day (bcfd) so far in November, up from 94.1 bcfd in October and a monthly record of 95.4 bcfd in November 2019. Refinitiv projected average U.S. gas demand, including exports, would jump from 105.1 bcfd this week to 112.0 bcfd next week as the weather turns colder and homes and businesses crank up their heaters. Those forecasts were higher than Refinitiv projected on Friday. U.S. exports to Canada averaged 3.0 bcfd so far in November, up from 2.1 bcfd in October, according to Refinitiv data. That compares with an all-time monthly high of 3.5 bcfd in December 2019. The amount of gas flowing to U.S. LNG export plants, meanwhile, averaged 11.1 bcfd so far in November, up from 10.5 bcfd in October as the sixth train at Cheniere Energy Inc's Sabine Pass plant in Louisiana started producing LNG in test mode. That compares with a monthly record of 11.5 bcfd in April. .

December Natural Gas Futures Sustain Rally as Global Supply Worries Intensify Natural gas futures on Tuesday rallied with vigor amid continued strength in U.S. exports of liquefied natural gas (LNG) and renewed concerns about European supplies that sent global gas prices higher. The December Nymex contract jumped 16.0 cents day/day and settled at $5.177/MMBtu. A day earlier, the prompt month posted a 22.6-cent gain. January advanced 16.6 cents to $5.270 on Tuesday. NGI’s Spot Gas National Avg. climbed 36.5 cents to $5.030, led higher by price surges in the West. Dutch Title Transfer Facility prices, already hovering near record levels most of the fall, climbed further Tuesday after a German regulator suspended its certification of Russia’s recently completed Nord Stream 2 pipeline. The pipeline would transport natural gas from Russia to Germany, and its commissioning is widely anticipated at a time when Europe is short on gas in storage and in need of Russian imports to ensure adequate supplies this winter. The regulatory inaction – tied to festering political tensions between Russia and Europe – means gas most likely will not flow to Germany via the new pipeline ahead of winter and could be on hold indefinitely, Rystad Energy analysts said. “The certification struggles that surfaced…for Nord Stream 2 are another reason to expect that the pipeline will not be starting commercial operations until about mid-2022, despite voices for more Russian gas to Europe amid the ongoing energy supply crunch that has caused gas prices to spike,” Rystad analyst Carlos Torres Diaz said Tuesday. Diaz said over the past week, Russian gas exports to Europe through Ukraine and Poland increased by 5%. “While these additional supplies are helping the European balance, the likelihood of seeing a substantial increase in supplies before Nord Stream 2 starts operations is limited,” he said. “Nord Stream 2 is the pipeline that can change the supply game in Europe and tip the scale, so delays in its utilization mean the current tight gas market conditions will persist through the winter.”

U.S. natgas futures drop 7% on rising output, lower demand forecast (Reuters) - U.S. natural gas futures dropped 7% on Wednesday as output continues to rise, expectations that last week's storage build was big and on forecasts for lower heating demand this week. U.S. futures declined despite record gas futures in Asia and a 27% jump in European prices over the past three days on worries Russian gas company Gazprom PAO will not deliver enough fuel to Europe for this winter after Germany's energy regulator suspended the approval process for Gazprom's Nord Stream 2 gas pipe from Russia to Germany. Global gas prices hit record highs as utilities around the world scramble for LNG cargoes to replenish extremely low stockpiles in Europe and meet insatiable demand in Asia, where energy shortfalls have caused power blackouts in China. Front-month gas futures fell 36.1 cents, or 7.0%, to settle at $4.816 per million British thermal units (mmBtu). After weeks of extremely volatile trade, the 7% drop on Wednesday was only the biggest daily percentage loss since Nov. 9. In spot news, next-day gas prices at the Northwest Sumas hub NG-PX-HUN-SNL at the Washington-British Columbia border jumped about 38% to their highest since late October after Enbridge Inc reduced flows on its Westcoast pipe in British Columbia due to flooding. That was the biggest daily percentage gain at Sumas since the February freeze left millions without power in Texas. Refinitiv projected average U.S. gas demand, including exports, would jump from 104.2 bcfd this week to 112.2 bcfd next week as the weather turns colder and homes and businesses crank up their heaters. The forecast for this week was lower than Refinitiv projected on Tuesday.

US working natural gas in underground storage increases by 26 Bcf: EIA | S&P Global Platts -- US natural gas working stocks increased by 26 Bcf for the week ended Nov. 12 in what was likely the final net injection of 2021. Storage inventories climbed to 3.644 Tcf, the US Energy Information Administration reported Nov. 18. The injection was more than an S&P Global Platts survey of analysts calling for a 22 Bcf addition. The injection was less than the 28 Bcf build reported during the corresponding week in 2020, but far outweighed the five-year average draw of 12 Bcf, according to EIA data. As a result, stocks were 310 Bcf, or 7.8%, below the year-ago level of 3.954 Tcf and 81 Bcf, or 2.2%, below the five-year average of 3.725 Tcf. The Henry Hub winter strip had just climbed 20 cents/MMBtu Nov. 16 on both colder domestic weather outlooks and a setback for Nord Stream 2, which has sent European gas prices on an upswing. The first driver of the Henry Hub upswing is a colder outlook for domestic weather, boosting expectations for near-term demand. In regions like the East, Midwest, and the South Central, Platts Analytics' 14-day temperature outlook fell by upwards of 2 degrees in the latter half of the outlook from the Nov. 12 forecast to the Nov. 16 forecast. Additionally, Germany suspended its approval process for Nord Stream 2, adding downside risk to European gas supplies this winter. This has boosted European gas pricing, with TTF and NBP day-ahead prices rising 18% and 10%, respectively. Stronger European gas pricing has likely contributed to the uplift seen in the Henry Hub winter strip, with risk to European gas supplies reinforcing the role of US exports in serving European gas demand this winter. Platts Analytics expects US LNG feedgas deliveries will average 12.3 Bcf/d for the balance of the winter, up from 10.4 Bcf/d last winter. An S&P Global Platts Analytics' supply and demand model forecast calls for 22 Bcf withdrawal for the week ending Nov. 19, which would be half the five-year average draw as the heating season gets off to a slow start, but global factors continue to provide support for US gas prices.

Natural Gas Prices Rally Again, with December Futures Finishing Strong Week on High Note -- Natural gas futures on Friday rallied for the fourth time in the week’s five trading sessions, lifted by ongoing robust levels of U.S. exports and expectations for stronger weather-driven demand in coming weeks. The December Nymex contract gained 16.3 cents day/day and settled at $5.065/MMBtu. January rose 15.0 cents to $5.145. NGI’s Spot Gas National Avg., however, shed 7.5 cents to $4.880 as temperatures climbed and prices dropped in the West. While forecasts have wobbled from day to day this month, Bespoke Weather Services said Friday the European model “showed a much more threatening look for potential cold toward the end of the run in early December.” The firm cautioned, however, that the European model “has been most guilty in recent weeks of hinting at bigger cold patterns that have not materialized” and volatility in both forecasts and natural gas prices likely lies ahead. “We need more consistency before being able to build a more confident case.” That noted, long-range outlooks do call for steadily colder weather across the northern United States in December. Additionally, mid-range forecasts point to freezing conditions over large swaths of Europe late this month and early into the next. This comes at a time when countries across the continent are low on gas in storage and paying a premium to import U.S. liquefied natural gas (LNG). LNG feed gas volumes hovered close to 2021 highs around 11 Bcf throughout the past week after reaching a near-record level of 12 Bcf earlier this month. NGI’s estimate showed feed gas volumes again eclipsing the 12 Bcf threshold early Friday. Elevated LNG levels are widely expected to continue through the winter, providing support for Henry Hub prices. EBW Analytics Group said amid the maintenance projects, LNG volumes have fluctuated this fall. Still, with work culminating at key locations in the Gulf of Mexico, the seven-day moving average as of Friday “illustrates a clear pattern of steadily increasing demand into early winter. Further demand gains are ahead” and “new daily demand records north of 12.25 Bcf/d are possible” in the coming week.

U.S. Natural Gas Producers Face Billions In Hedging Losses In 2022 - US gas producers are set to book billions of dollars in hedging losses next year because they hedged most of their 2022 production before the recent energy crunch caused gas prices to soar, a Rystad Energy analysis reveals. The analysis zooms in on a peer group of shale-gas-focused producers that accounts for 35% of unconventional gas production and about 53% of shale gas production in the US Land region this year. These 11 operators stand to lose more than $5 billion in 2022 if the average Henry Hub price strip remains at $4 per MMBtu – an amount that could double if Henry Hub prices average $5 per MMBtu. The reason behind the expected losses is that the operators had already hedged more than half of their 2022 production by the time they reported their second-quarter results, when prices were trading much lower than the currently inflated levels. By the end of September, as much as 64% of their projected production was hedged. To complete the picture and look beyond our research group, tight-oil-focused producers tend to hedge a lower share of their associated gas production than our peer group of public gas-focused producers. The hedging profiles of private shale gas-focused operators vary widely, but on average they behave in line with the researched peer group. Gas producers focused on cash flow from proved developed producing (PDP) resources in conventional fields tend to hedge only a limited share of their production. Still, some have a high percentage of fixed-price sales with deliveries to local markets. In terms of total volumes, the associated gas contracts of tight-oil-focused public producers would be about 50% lower than those of the shale-gas-focused peer group. Still, their typical hedging floor is somewhat higher based on their third-quarter earnings. For private operators, there is lower visibility, but significant Haynesville private names tend to hedge well in advance, indicating low hedging floors.

Shale Drilling Could Accelerate Soon - Much has been made of the fact that oil and gas prices have recovered to the point that U.S. shale is very profitable, and yet drilling has not picked up yet. The rigs active in the Marcellus and the Permian are still about half pre-pandemic levels. As the two primary sources of incremental gas and oil supply from U.S. shale, the direction of investment in those areas will be important in determining world oil and U.S. gas prices in the next year and beyond. Generally, the upstream sector has seen a significant decrease in investment after both the price drop in 2015 and the pandemic with its associated weak prices in 2020. This has caused serious concern about tight supplies in the medium-term future, rather as happened after the 1998 oil price collapse, which was partly responsible for the high prices in the 2000s. (The second Gulf War and Venezuelan political turmoil were also major factors.) Also, as Bloomberg’s Will Hares said, ““Oil companies are finding it increasingly difficult to raise financing amid rising ESG and sustainability concerns, while banks are under pressure from their own investors to reduce or eliminate fossil-fuel financing.” Cost of Capital Widens for Fossil-Fuel Producers: Green Insight - Bloomberg But U.S. shale is a somewhat different animal, partly because much of the operation is carried out by small, independent oil producers and partly because shale is higher cost than much of the world’s oil supply, but also because it has a short lead time. Production could ramp up much more quickly in U.S. shale fields than almost anywhere else in the world. So why hasn’t it? Most argue that the shale industry has been burned before by overinvesting, only to see prices collapse, and that always remains a possibility. But additionally, the financial sector has become much more wary about investing in shale after the collapse in prices for oil and natural gas, albeit at different times. This, combined with pressure for investors to focus on ESG targets, translates into less money for fossil fuels and more for renewables, which means companies don’t want to invest in petroleum development. Until they do. Capital discipline tends to be cyclical, as does spending and while companies (and investors) might be more focused on return to investment for their capital, it also seems likely that the current high prices will encourage more drilling. The first objection, from Pioneer Natural Resources PXD -0.2% CEO Scott Sheffield, that companies should avoid investments that would flood the market and collapse prices, tends to fall down in the face of the lack of control over producers, who will tend to seek profits—if they perceive them. The next, and possibly more interesting objection to higher investment, revolves around the returns on capital. Until recently, the returns on oil were anemic, while stocks provided stellar returns, as the figure below shows. (Annual change on the S&P 500 year on year from November 11th.) In six of the last ten years, the S&P 500 grew by more than 10%, making it a very attractive investment indeed. :

North Shreveport community members meet to discuss impact of fracking in populated areas - North Shreveport residents met at Southern University Thursday night to discuss potential implications of hydraulic fracking in populated areas. As technology has progressed, gas companies are able to drill on smaller pieces of land, which allows them to set up shop in more urban areas. People who live near drilling sites are often paid royalties for operations being conducted so close to their homes. It also helps bring tax revenue into the city and business that comes with more workers. But others are suspicious of the impact fracking has on the community. They worry about possible chemical leaks, pollution and noise. Gas companies say they have tried to mitigate the noise that comes with drilling at night. They also say that large precautions are taken to ensure that chemicals are handled safely. Still, some community member worry that one mistake could lead to disaster. State Representative Cedric Glover, D-Shreveport, held the community to make sure everyone is informed and empowered to make their own decisions on this issue.

Biden Admin Set to Proceed With Largest Offshore Oil & Gas Lease Sale in U.S History - In two days, the Biden administration will oversee the largest offshore oil and gas lease sale in U.S. history. The sale will make more than 80 million acres in the Gulf of Mexico available for drilling, HuffPost reported. That's an area larger than the state of New Mexico, and it would add 1.1 billion barrels of oil and 4.4 trillion cubic feet of natural gas to global production over the coming decades, despite the fact that scientists agree we must rapidly reduce greenhouse gas emissions in order to avoid the worst impacts of the climate crisis. While the administration says it was forced to go ahead with the sale by a court decision, environmental activists argue it could have done more to fight back. "You promised to address the climate crisis with the urgency it deserves, and in Glasgow, you assured the world that your plans to cut emissions are a fait accompli, not mere rhetoric," a coalition of 267 Indigenous and environmental groups wrote in a letter to President Joe Biden protesting the sale. "Selling more than 80 million acres in the Gulf of Mexico for oil and gas development just days after the international climate talks makes a mockery of those commitments."

Our Views: Joe Biden forced to back down to federal court, economic reality in Gulf oil leasing - Baton Rouge Advocate Editorial - While they’ve been dragged kicking into doing something so positive for the U.S. and Louisiana economy, officials of the Biden administration are resuming sales on leases for future oil and gas production in the Gulf of Mexico. The Department of the Interior sale Tuesday marks a resumption of the longtime sales, in which companies bid for rights to explore for oil and gas in millions of acres of Gulf waters. Winning bidders will be announced Wednesday. This is a welcome respite from one of new President Joe Biden’s most knee-jerk responses to a worldwide climate crisis: Stopping lease sales for future production of fossil fuels does not change the world economy’s need for energy. Just look at the big numbers atop gas stations to understand that. The lease sale also marks a win for one of Biden’s most persistent critics, Louisiana Attorney General Jeff Landry, who sued in federal court. A judge in Monroe, appointed by former President Donald Trump, overturned the ban. Biden said the lease sales were to be stopped only temporarily. We took that to mean that they were looking for evidence to make a ban, or long-term slowdown, permanent. We believe that any fair analysis of the energy markets will yield conclusions that the Biden administration experts already knew. As Jim Fitterling, chairman of Dow, told a Baton Rouge audience Thursday, the changing energy future of the world — a transition that is needed and significant — will still include oil and gas production and petrochemical manufacturing as far as the eye can see. Anything else, like throwing over lease sales? Political gestures. Those backfired, although today's lease sales don't directly influence today's prices at the gas pumps. But with gasoline prices so high, Biden's ban on leases was a politically unwise gesture.

U.S. holds historic oil and gas lease sale in Gulf of Mexico days after climate summit - The Biden administration on Wednesday is opening more than 80 million acres in the Gulf of Mexico to auction for oil and gas drilling, a record offshore lease sale that will lock in years of planet-warming greenhouse gas emissions. The lease sale is a major reversal of Biden's commitment to shut down new oil and natural gas leases on public lands and waters and comes just days after the president's pledge to slash emissions during the United Nations climate summit in Glasgow, Scotland. The lease sale has the potential to emit more than 516 million metric tons of greenhouse gas emissions into the atmosphere — the equivalent to annual emissions of 130 coal-fired power plants or 112 million cars, according to the Center of Biological Diversity. "This administration went to Scotland and told the world that America's climate leadership is back, and now it's about to hand over 80 million acres of public waters in the Gulf of Mexico to fossil fuel companies," House Natural Resources Committee Chairman Raúl Grijalva, D-Ariz., said in a statement. The president signed an executive order in January directing the Secretary of the Interior to halt new oil and natural gas leases on public lands and waters and to begin a thorough review of existing permits for fossil fuel development. But in June, a federal judge in Louisiana issued a preliminary injunction to block the administration's suspension and ordered that plans continue for lease sales that were delayed for the Gulf and Alaska waters. The U.S. Department of Justice is asking an appeals court to overturn the judge's order. Environmental advocacy groups condemned the administration for not taking stronger action to block the injunction and have sued the administration over its decision to hold the sale. Their lawsuit argues that Interior's environmental analysis in 2017 regarding the Gulf sale is flawed and neglects new data showing the increasing dangers from pipeline leaks. "The Biden administration is lighting the fuse on a massive carbon bomb in the Gulf of Mexico," said Kristen Monsell, oceans legal director at the Center for Biological Diversity. "It's hard to imagine a more dangerous, hypocritical action in the aftermath of the climate summit." "This will inevitably lead to more catastrophic oil spills, more toxic climate pollution, and more suffering for communities and wildlife along the Gulf Coast," Monsell said. Interior spokesperson Melissa Schwartz said the department is complying with the judge's injunction while the government appeals the decision, and said the agency is "conducting a more comprehensive analysis of greenhouse gas impacts from potential oil and gas lease sales than ever before." The Biden administration has approved 3,091 new drilling permits on public lands at a rate of 332 per month, a faster pace than the Trump administration's 300 permits per month. The permit approvals for fossil fuel production are at odds with Biden's aggressive climate agenda, including a pledge to cut U.S. greenhouse gas emissions in half by 2030 and reach net-zero emissions by 2050. "The dichotomy between holding a lease sale and committing to cut back U.S. carbon emissions is glaring," said Brettny Hardy, an Earthjustice attorney. "By selling these leases, the Biden administration is not solving the oil prices of today, but instead increasing the United States' climate heating emissions tomorrow."

US auctions off oil and gas drilling leases in Gulf of Mexico after climate talks -Just four days after landmark climate talks in Scotland in which Joe Biden vowed the US will “lead by example” in tackling dangerous global heating, the president’s own administration is providing a jarring contradiction – the largest ever sale of oil and gas drilling leases in the Gulf of Mexico.The US federal government is on Wednesday launching an auction of more than 80m acres of the gulf for fossil fuel extraction, a record sell-off that will lock in years, and potentially decades, of planet-heating emissions.The enormous size of the lease sale – covering an area that is twice as large as Florida – is a blunt repudiation of Biden’s previous promise to shut down new drilling on public lands and waters. It has stunned environmentalists who argue the auction punctures the US’s shaky credibility on the climate crisis and will make it harder to avert catastrophic impacts from soaring global heating.“Coming in the aftermath of the climate summit, this is just mind boggling. It’s hard to imagine a more hypocritical and dangerous thing for the administration to do,” said Kristen Monsell, senior attorney at the Center for Biological Diversity. “It’s incredibly reckless and we think unlawful too. It’s just immensely disappointing.”Even Biden’s Democratic allies have raised concerns.“This administration went to Scotland and told the world that America’s climate leadership is back, and now it’s about to hand over 80m acres of public waters in the Gulf of Mexico to fossil fuel companies,” said Raul Grijalva, chair of the House natural resources committee. “[The] lease sale is a step in the wrong direction, and the administration needs to do better.”There is no guarantee that all the leases will be taken up by oil and gas companies but the Department of the Interior, which oversees public lands and waters, has estimated there is as much as 1.12bn barrels of oil and 4.2tn cubic ft of gas available for extraction. A separate lease sale offered by the government in Alaska’s Cook Inlet will offer up another 192m barrels of oil and 301bn cubic ft of gas to drillers.Combined, these leases w ould result in nearly 600m tons of planet-heating gases if fully developed over the next four decades, which is more than the total annual emissions of the UK.3

Fossil Fuel Companies Pay $192 Million to Extract Fossil Fuels From the Gulf of Mexico -The Biden administration went through with the largest offshore oil and gas lease sale in U.S. history Wednesday. In the controversial sale, major fossil-fuel companies including ExxonMobil, Shell, Chevron and BP bid a total of $192 million for the rights to drill a stretch of the Gulf of Mexico that is about double the size of Florida, The AP reported. The amount offered is the second-highest total since bidding resumed in the Gulf of Mexico in 2017."It's basically a giveaway to industry of millions of acres of the Gulf of Mexico so they can lock in production for years, at a time when we need to be shifting away from fossil fuel development," Earthjustice attorney Brettny Hardy told The AP.The Biden administration has been widely criticized for allowing the sale to proceed even after President Joe Biden promised U.S. climate action during the COP26 talks in Glasgow."Coming in the aftermath of the climate summit, this is just mind boggling. It's hard to imagine a more hypocritical and dangerous thing for the administration to do," Center for Biological Diversity (CBD) senior attorney Kristen Monsell told The Guardian. "It's incredibly reckless and we think unlawful too. It's just immensely disappointing."Biden did try to honor his campaign promise to halt oil and gas drilling on public lands, but Republican attorneys general led by Louisiana mounted a legal challenge that paved the way for Wednesday's sale. The fear that Biden may limit drilling in the future may have increased interest in this sale, The AP noted, along with rising oil and gas prices."Prices are higher now than they've been since 2018," Rene Santos of S&P Global Platts told The AP. "The other thing is this fear that the Biden administration is here for another three years. They're certainly not going to accelerate the number of lease sales and they could potentially have fewer sales." In total, the administration sold 1.7 million acres of 80 million on offer, which amounts to almost all the available blocks in the Gulf, Reuters reported. Chevron bid the most at the sale, offering $47.1 million. The next highest spenders were Anadarko, owned by Occidental Petroleum Corp, BP, Royal Dutch Shell and ExxonMobil. Exxon bought the most tracts by acreage, gobbling up a third of what sold. However, the fact that the company acquired 94 shallow water blocks may mean it has an unconventional use planned for its purchase.

ExxonMobil bids big in Texas shallow waters during US Gulf Lease Sale 257 | S&P Global PlattsUS Gulf of Mexico Lease Sale 257 captured healthy, if measured, bid totals Nov. 17, with numerous multimillion-dollar offers made in deepwater, and ExxonMobil taking honors as the star of shallow-water with tracts it snagged at relatively low prices. The major's presence in shallow waters was the biggest surprise to come out of the sale as it bid for about 100 Continental Shelf blocks along the Texas coast. "It's a clear indication of the [company's intention to use the blocks for its] carbon capture and storage project," said Justin Rostant, principal analyst-Gulf of Mexico research for energy consultancy Wood Mackenzie. "I anticipate they'll use the area for direct capture of carbon and put it in the reservoirs of the blocks they acquire." ExxonMobil's CCS project is a Texas hub to capture and store CO2 emissions from heavy industries around the Houston Ship Channel. It would require $100 billion of investment and aims at capturing 50 million metric tons/year of CO2 by 2030 and twice that amount by 2040. ExxonMobil unveiled the project April 19. Rostant noted the Texas Gulf Coast has not been a prolific production area in recent decades and said ExxonMobil sold off its shallow-water producing fields years ago. ExxonMobil bid $158,400 each for the shallow blocks for an about $15.5 million total for all, a relative bargain considering many shallow-water tracts in Sale 257 fetched several hundred thousand dollars apiece. Sale sponsor US Bureau of Ocean Energy Management said in a post-sale news release in the future it will "use updated greenhouse gas emission models to take substitution impacts and foreign oil consumption into account, resulting in the most robust projections ever of the climate impacts of offshore lease sales." It will also analyze the "social cost of carbon to better understand the true impacts of fossil fuel leasing decisions." Sale 257 was expected to be bigger Analysts and even BOEM thought the auction would yield higher bid totals, if not more bids, than recent sales. The results didn't disappoint. The success of Sale 257 is "a combination of higher oil prices and also the fear that the Biden Administration could try to change the leasing process in the future" like fewer lease sales, less acreage offered, or tougher royalty/lease rental terms, said Rene Santos, manager of North American supply for S&P Global Platts Analytics. The auction generated nearly $192 million in high bids placed on 307 blocks. A total 316 bids were placed, signifying there was not a lot of competition for acreage. In terms of numbers of bids, "this is the highest total in seven years, since Sale 231 in 2014 which had 326 bids," BOEM regional Gulf spokesman John Filostrat said. "It's an indication that companies are still interested in the Gulf of Mexico." By contrast, Sale 256 in November 2020 captured $121 million, with 105 bids placed across 93 blocks. A total of 33 companies participated in Sale 257, compared with 23 a year ago.

Lower 48 Plays to Continue Ratcheting Up Natural Gas, Oil Output in December, EIA Says -- Led by growth out of the Haynesville Shale, natural gas production from seven key U.S. onshore regions is set to climb from November to December, according to updated projections from the Energy Information Administration (EIA). Total natural gas production from the Anadarko, Appalachia and Permian basins, as well as from the Bakken, Eagle Ford, Haynesville and Niobrara shales, will rise an estimated 226 MMcf/d month/month to reach 89.376 Bcf/d in December, the agency said in its latest monthly Drilling Productivity Report (DPR), published Monday. EIA expects the largest monthly increase from the Haynesville at an estimated 111 MMcf/d, with Permian natural gas production projected to climb 87 MMcf/d for the period. Natural gas production gains are also expected for the Appalachia (up 7 MMcf/d), Bakken (up 8 MMcf/d), Eagle Ford (up 31 MMcf/d) and Niobrara (up 12 MMcf/d) regions. The only one of the seven regions expected to see lower month/month gas output is the Anadarko, with production there projected to fall 30 MMcf/d from November to December, DPR data show. Driven largely by the Permian, total crude oil production from the seven shale plays will increase 85,000 b/d from November to December to just over 8.3 million b/d, according to EIA. The Permian will account for 67,000 b/d of the incremental crude output, with much smaller increases expected out of the Anadarko (up 2,000 b/d), Appalachia (up 2,000 b/d), Bakken (up 5,000 b/d), Eagle Ford (up 5,000 b/d) and Niobrara (up 4,000 b/d) regions. Operators across the seven regions depleted their drilling backlogs to the tune of 222 drilled but uncompleted wells (DUC) from September to October, dropping the overall DUC tally to 5,104. Permian DUC totals fell 107 units to 1,705 for October to lead across-the-board declines in the U.S. onshore. The Anadarko (down 13), Appalachia (down 24), Bakken (down 29), Eagle Ford (down 35), Haynesville (down seven) and Niobrara (down seven) regions also posted declining DUC totals for the September-October period, according to the latest DPR data.

Permian's Double E Pipeline enters service as West Texas gas output surges | S&P Global Platts - The startup of the Double E Pipeline this week promises to significantly expand downstream market access for Permian Basin producers, possibly fueling new production growth in New Mexico and West Texas. Extending some 135 miles from the Lane Processing plant to the Waha Hub in West Texas, the newbuild pipeline brings an incremental 1.35 Bcf/d in flow capacity to the core of the Delaware Basin. Double E will receive gas from at least seven processing facilities, including six in New Mexico and one in Texas, with its strategic location placing it within proximity of some 20 to 25 other processing plants. For capacity holders, the pipeline offers expanded access to West Texas' benchmark Waha Hub with interconnectivity to key downstream pipelines, including Kinder Morgan's Gulf Coast Express and Permian Highway Pipelines to East Texas as well as the Trans Pecos Pipeline to the Texas-Mexico border. The project, a 70-30 joint venture among Summit Midstream Partners and ExxonMobil subsidiary XTO Energy, already has a substantial majority of its throughput capacity underpinned by 10-year take-or-pay volume commitments — 750 MMcf/d of which is currently held by JV partner XTO Energy. The startup of the Double E Pipeline this month comes just as oil and gas prices in West Texas are surging, fueling renewed interest in exploration, drilling, and production in the Permian. In the past 12 weeks, benchmark WTI oil prices have climbed to over $80/b, up from just $68 to $69/b in late August. Over the same period, gas prices at Waha have jumped to an average of $4.70/MMBtu this month — up from late-summer levels in the mid- to upper $3s/MMBtu, S&P Global Platts data shows. After flattening out during the peak summer months, rig counts in Texas and New Mexico are again on the rise, reaching a 19-month high at 272 as of the week ended Nov. 10. Compared with year-ago levels, the Permian Basin rig count rose more than 65%, Enverus data shows. On recent third-quarter earnings calls, midstream companies, including Enterprise Products Partners, Plains All American, MPLX, Magellan Midstream, and NuStar Energy, reported rising crude and liquids volumes in the Permian Basin with a bullish outlook in Q4 and beyond. On its own quarterly earnings call, natural gas midstream giant Kinder Morgan also reported an uptick in transport volumes out of West Texas driven in part by high utilization on its Permian Highway Pipeline. In November, Permian gas production has averaged just over 13.7 Bcf/d — up 400 MMcf/d from last month and about 700 MMcf/d higher compared with November 2020. According to the most recent forecast from S&P Global Platts Analytics, total gas production from West Texas could surpass 14 Bcf/d by Q1 2022.

EOG's Permian, Eagle Ford Production Ready to Supply Gulf Coast Export Projects - Houston-based EOG Resources Inc., one of the Lower 48’s biggest oil and natural gas producers, is looking to give back to shareholders instead of boosting volumes, with discipline still the mantra going into 2022. The independent delivered better-than-expected natural gas, oil and liquids production during 3Q2021, along with sharply higher profits, CEO Ezra Yacob said during a conference call to discuss results. Yacob took the helm last month after working for the Minerals Division at the U.S. Geological Survey. “EOG has never been in better shape,” he told investors. “We extended our track record of reliable execution with better-than-expected production, capital expenditures, operating costs and product prices…. “Our high-return business model is sustainable for the long term, underpinned by a deep inventory of double premium drilling locations…We also remain optimistic about the potential of new exploration plays to improve the overall quality of our inventory.” Boosting production in light of higher commodity prices is not yet on the table, though. For EOG, there are no plans to grow “until the market clearly needs the barrels.” Growth is going to depend on “market fundamentals, not price,” in 2021 and beyond. EOG is looking for signs of low spare capacity and oil demand recovering to pre-pandemic levels. The plan for now is to maintain oil production at 440,000 b/d, which would be below third quarter results.

Exclusive: Exxon launches sale of shale gas properties in Texas (Reuters) - Exxon Mobil on Monday launched a sale of its oil and gas properties in the first major U.S. shale field, a spokesperson confirmed, as part of a portfolio reshuffling to focus on more lucrative assets. The top U.S. oil producer set a goal three years ago of raising $15 billion from asset sales, and put several U.S. and international assets on the market as energy prices have recovered from the pandemic-induced slump. It will open a data room on Thursday for its Barnett Shale holdings that include 2,700 wells across about 182,000 acres in North Texas, home of the first horizontally drilled shale wells. Exxon spokesperson Sarah Nordin confirmed the sale process. Production operations will continue normally during the marketing process, Nordin said. There has been no agreement reached on a sale and no buyer was identified, she said. The producing properties are valued at between $400 million and $500 million, according a person familiar with the matter. U.S. gas prices are up 75% year to date, settling at $5.01 per million British thermal units on Monday. Bids are due Dec. 21 and Exxon aims to close any sale in January. The properties' shale gas production has declined by half since 2016, to around 227 million cubic feet per day (mcfd) in the first half of this year, according to a marketing document seen by Reuters. The wells were among natural gas properties Exxon last year said it wanted to sell. It put about 5,000 natural gas wells in the Fayetteville Shale in Arkansas on the block in August. Exxon, which suffered a historic $22.4 billion loss in 2020, is selling assets in Asia, Africa and Europe as it as focuses on production ventures in Guyana, offshore Brazil and the Permian Basin.

Oil production at biggest U.S. shale field set to hit new record (Reuters) — Crude oil production from the Permian Basin, the largest U.S. oil field, is set to surpass its pre-pandemic record in December, a swift turnaround that has not been replicated in the country’s other oil regions. Oil output from the Permian, located in Texas and New Mexico, is forecast to reach a record 4.953 million barrels per day (bpd) in December, as output has come back with the surge in economic demand. The Permian is the primary driver of U.S. output, but its percentage of U.S. overall production is even more than at the end of 2019, when the United States was producing 13 million barrels a day. December’s forecast production will surpass the previous record of 4.913 million bpd set in March 2020, according to a monthly forecast from the U.S. Energy Information Administration. U.S. total oil output dropped by more than 2 million barrels a day in 2020 due to coronavirus-induced demand destruction. Production has returned gradually, with numerous other oil fields, such as the Bakken in North Dakota, still far from their peak production levels. “Permian Basin wells tend to be the most prolific wells compared to other basins, so if you have more limited capital, you would go there first,” said Andrew Lipow, president of consultancy Lipow and Associates in Houston. The Permian’s importance is augmented by its proximity to major pipeline hubs and connections to export centers, making it more advantaged than other basins. Overall shale production across seven major shale regions is forecast to rise by 85,000 bpd to 8.316 million bpd, with the bulk of the increase seen in the Permian, where output is expected to rise 67,000 bpd. Gas production from the seven shale regions is expected to rise 0.2 billion cubic feet per day to 89.4 bcf/d in September.

Top Texas oil and gas regulators face allegations of conflicts of interest, as they can profit from the industries they oversee | TPR – (public radio podcast 39: 24) - The Texas Railroad Commission is responsible for overseeing the state’s oil and natural gas development, coal and uranium mining and the natural gas utility services.A series of new reports alleges that commissioners’ close ties to and investments in the industry they are charged with regulating creates conflicts of interest, and the agency’s policies don’t do enough to prevent such “regulatory capture.”According to the third in a series of report from state-agency watchdog groups, “at least one commissioner owns direct stakes in oil and gas companies that the Railroad Commission regulates.”On Nov. 10, the three-member commission voted unanimously to advance the “securitization” of debt amassed when gas prices spiked during February’s winter storm. This means the $3.4 billion owed to natural gas companies will be passed along to Texas energy consumers, who could see an increase in their monthly bills for up to 30 years.Why was this decision made and how could it affect ratepayers? What changes have been implemented or proposed to prevent a repeat of the February fallout? Why are certain entities being allowed to file for exemptions from new infrastructure winterization requirements?How effective is the Railroad Commission at regulating oil and gas in Texas? Do the agency’s current policies allow its top regulators to prioritize industry interests and personal profit over the public good?What role have industry campaign contributions to commissioners played in their decision-making about those very industries? What reforms could be implemented to prevent conflicts of interest and ethical breaches in the future? Does the political will exist to do so?

US oil, gas rig count jumps 11 on week to 683; Permian sees double-digit growth - The US oil and gas rig count jumped 11 to 683 in the week ending Nov. 17, Enverus said, with the Permian Basin of West Texas/New Mexico posting an even larger increase in rig activity. The domestic oil rig count rose by 16 to 541 for the week ended Nov. 17, while the natural gas-directed count fell back five to 147. The Permian, the largest US producing basin at 4.78 million b/d of oil and a 13.4 Bcf/d of gas, according to S&P Global Platts Analytics, added 12 rigs for a total of 284, reaching its highest count since mid-April 2020. Also growing was the SCOOP-STACK in Oklahoma, which climbed three to 41 rigs. The rig count in the play is back to a pre-pandemic level last seen in the first week of March 2020. Most US basins had little to no rig count changes. The Bakken Shale of North Dakota/Montana ticked up one to 32 rigs, on par with its early-November 2021 figure. That single rig add restored the play’s rig count to its highest level since the week ended April 22, 2020. The count was unchanged in the Marcellus Shale (33 rigs), sited mostly in Pennsylvania/West Virginia; the DJ Basin (16 rigs), chiefly in Colorado; and the Utica Shale (12 rigs), mostly in Ohio. Two basins lost rigs. The Eagle Ford Shale in South Texas was down two to 53, while the Haynesville Shale of East Texas/Northwest Louisiana shed one rig for a total 51. Commodity prices fell for a second week, but remained relatively high. According to Platts Analytics, WTI averaged $80.48/b, down $1.02 for the week; WTI Midland averaged $80.79/b, down 98 cents; and Bakken Composite averaged $79.16/b, down $1.37. For natural gas, Henry Hub prices averaged $4.85/MMBtu, down 38 cents; and prices at Dominion South averaged $4.29/MMBtu, down 14 cents.

Biden to propose 20-year new drilling ban near sacred tribal site in New Mexico - The Biden administration on Monday announced that it will propose a 20-year ban on new mining and oil and gas drilling in the area surrounding Chaco Canyon — a New Mexico site with significance to Native American tribes. The Interior Department said Monday that it will propose making lands surrounding Chaco Canyon, which itself is already protected as a National Historical Park, ineligible for new oil and gas leasing or new mining claims. The move, which the administration described as creating a 10-mile buffer around the park, will not impact existing leases and claims. Instead, the Bureau of Land Management will seek to make sure that development that occurs through these allowances does so in manners that “avoid or minimize” impacts to protected areas. “Chaco Canyon is a sacred place that holds deep meaning for the Indigenous peoples whose ancestors lived, worked, and thrived in that high desert community,” Interior Secretary Deb Haaland said in a statement. A fact sheet previewing this event noted that area Pueblos and other tribes have expressed concerns about oil and gas development in particular threatening sacred and cultural sites over the course of the last decade.

In Response To Soaring Gas Prices, Biden Orders FTC To "Immediately" Probe "Illegal Conduct" By Oil & Gas Companies -Commenting on perhaps the most absurd moment of the Xi-Biden virtual summit, which as we learned last last night, was the US president begging China to release oil from its strategic petroleum reserve (ostensibly because due to opposition by Democrats in the US such as top House Democrat Steny Hoyer, Biden can't do that), Rabobank's Michael Every said that it was "an odd power dynamic when one is a massive energy exporter, and the other a massive energy importer."Alas, it does not appear that China will rush to comply with Biden's demands, and with gasoline soaring and becoming a major political headache for the Democrats ahead of the midterms...... Biden, or rather his handlers, are now scrambling to come up with ways to push gas prices lower.We got the latest lightbulb moment from the administration this morning, when moments ago Biden sent a letter to FTC Chair Lina Khan to call attention to "mounting evidence of anti-consumer behavior by oil and gas companies" alleging that he won't accept "hard-working Americans paying more for gas because of anti-competitive or potentially illegal conduct."It wasn't clear what if any evidence was "mounting."“I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal conduct,” Biden said, claiming that "gasoline prices at the pump remain high, even though oil and gas companies' costs are declining" and ordered asked the FTC to "consider illegal conduct" which is costing families at the pump, urging the FTC to "immediately" use "all tools" to examine price wrongdoing. No "proof" of any wrongdoing was provided either, although we are confident that Igor Danchenko is busy creating a dossier full of "evidence" to buttress Biden's case.The letter goes on to suggest that while "prices at the pump correspond to movements in the price of unfinished gasoline, which is the main ingredient in the gas people buy at the gas station. But in the last month, the price of unfinished gasoline is down more than 5 percent while gas prices at the pump are up 3 percent in the same period.

Schumer presses Biden to tap oil reserves to lower gas prices - Senate Majority Leader Charles Schumer (D-N.Y) urged the Biden administration on Sunday to make use of emergency petroleum reserves in an effort to lower gas prices ahead of the holiday season. "We're here today because we need immediate relief at the gas pump and the place to look is the Strategic Petroleum Reserve," Schumer said during a press conference in New York on Sunday, according to Reuters. "No industry is spared. But fuel gasoline is the worst of all," Schumer said of the ongoing supply chain disruptions. "Let's get the price of gas down right now. And this will do it."But analysts have said that making use of the reserves would provide only a short-term solution and wouldn't increase the country's production capabilities, Reuters reported.While Biden has not committed to tapping the U.S. Strategic Petroleum Reserve, which is located in caverns on the coasts of Texas and Louisiana, Energy Secretary Jennifer Granholm has said he's considering it. “That's one of the tools that he has, and he's certainly looking at that,” Granholm said last weekend on CNN. Granholm also said that she was hopeful gas prices would not reach an average of $4 per gallon soon, noting that the Organization of the Petroleum Exporting Countries was “controlling the agenda.”Last week, average gas prices in the U.S. fell to $3.41 per gallon, down one cent from the previous week but up more than $1 from the same time last year.

How A Biden SPR Release Will Send Oil Prices Even Higher In 2022 Bloomberg is out with a surprisingly objective article titled "Biden’s Remedy for High Gasoline Prices: Blame Oil Companies" which echoes what we said yesterday, yet which does not address the elephant in the room, namely that while Biden is (of course) scapegoating someone for his own failures, the solution remains just one: some form of SPR release or "volume exchange" (as JPM explained yesterday).There is just one problem: at this point an SPR release - which has been fully priced in - would send oil prices higher.As Goldman's commodity strategist Damien Courvalin explains, while such a release would provide a short-term fix to a structural deficit, "it is now fully priced-in" following the $6/bbl move lower in recent weeks, which are pricing in a release of more than 100 mb into OECD stocks, and - worst of all - would not help the slow global supply response that only higher oil prices can overcome. In fact, according to Courvalin, "if such a release is confirmed and manages to keep oil prices depressed in the context of low trading activity into year-end, it would create clear upside risks to our 2022 price forecast."Below we excerpt from Courvalin's note which we urge all those who write Biden's daily agenda and speeches to read before they commit another inflationary disaster.The White House consideration of an SPR release had already pushed Brent down by $4/bbl in recent weeks, with the potential participation of China likely behind the latest additional $2/bbl sell-off that occurred yesterday (November 17). On Goldman's pricing model, the $6/bbl move lower since late October is already pricing a release of well over 100 mb into DM stocks (assuming in fact that rising COVID cases have further exacerbated the recent move lower).

U.S. shale has a message for the Biden administration: Ask us to increase oil production, not OPEC - The chief executive of U.S. oil company Occidental Petroleum said that it would have been preferable if the Biden administration had asked shale producers closer to home to increase production and crude supplies, rather than the OPEC alliance that's led by Saudi Arabia.Asked whether President Joe Biden and his team were getting it wrong by asking OPEC to pump more when there are shale oil producers at home, CEO Vicki Hollub said that "if I were gonna make a call, it wouldn't be long distance, it would be a local call.""And I think that we could do it cheaply in the United States, as other countries can do," she told CNBC's Hadley Gamble at the Adipec energy industry forum in Abu Dhabi on Monday."I think first you, you stay home, you ask your friends, and you ask your neighbors to do it. And then if we can't do it, you call some other countries," she said.Hollub's comments come after a period of dramatic energy price rises in recent months that led to the White House calling on OPEC and its oil-producing allies, a group known as OPEC+, to boost production in an effort to combat climbing gasoline prices.The move came amid heightened worries that rising inflation could derail the economic recovery from Covid-19.The White House said that the oil producing group's July agreement to boost production by 400,000 barrels per day on a monthly basis beginning in August and stretching into 2022 is "simply not enough" during a "critical moment in the global recovery."U.S. Energy Secretary Jennifer Granholm repeated those words to CNBCearlier this month, saying that oil-producing nations needed to increase supply "at this moment so that people will not be hurt during the winter months."It was also put to Granholm that domestic oil production in the U.S. had abated over the last couple of years, even prior to the Covid pandemic, due to a lack of investment incentives."I don't know why at $80 a barrel those incentives are not there," she said."During Covid, it was down — they backed off because demand was not there because people were staying home, we know that. Now that things are back up, the production should be meeting that [demand], there has been rigs that have been added but not fully," she added.

Security for August State Capitol pipeline protest cost $1.6M - State officials spent nearly $1.6 million on security during a series of Enbridge Line 3 pipeline protests at the Minnesota State Capitol in August.A Department of Public Safety spokesman said the department spent $1.46 million on salaries, meals and lodging for State Capitol security personnel during the payroll period that included four days of demonstrations on the Capitol grounds.A spokesman for the Department of Administration added that it cost $99,738 to erect and later remove a new temporary security fence and concrete barriersaround the State Capitol building ahead of the August "Treaties Not Tar Sands" events.A blog called Healing Minnesota Stories first reported on the costs.Gov. Tim Walz and Lt. Gov. Peggy Flanagan defended the security measures at the time as part of the state's "obligation to protect public safety and public property" while ensuring people can exercise their First Amendment rights.Genna Mastellone, an organizer for the rally, called the police presence in August "excessive" and said "seeing the amount of money the state spent in total is shocking now.""Instead of meeting Indigenous climate leaders and activists with a willingness to discuss the harmful Line 3 tar sands pipeline, our state's leadership responded with a threatening show of force," Mastellone said.

North Dakota oil production ticks up in September to 1.113 million b/d | S&P Global Platts - North Dakota oil production grew in September, albeit by just 0.5% month on month, according to state Department of Mineral Resources data released Nov. 16.The state pumped 1.113 million b/d of crude, in August, Lynn Helms, the DMR's director of oil and gas, said during the state's monthly production press webinar."Oil prices are very, very strong," Helms said. He noted that September's North Dakota realized market price was just under $66/b, and on Nov. 16 it is close to $78/b.For natural gas, the state produced 3.015 Bcf/d in September, up 1.8% on the month, Helms said.And although North Dakota lost a rig on average in September to 27, down by one on the month, it gained two rigs in October moving to 29, according to DMR data.But on Nov. 16, 34 rigs were working in the state, the monthly DMR report said.Helms noted the US Energy Information Administration, which tracks rig productivity from drilling rigs in US basins, shows the Bakken has double the productivity of a rig in the New Mexico Permian, where wells have more water production.Also in the Bakken, when fracturing interference occurs while drilling an infill well, "it makes the wells better," while it's "the other direction in New Mexico," he said. On the permitting front, 69 drilling permits were issued in the state in September but only 37 in October, Helms said, a total "inadequate to sustain or grow our production" The low number may be a glitch in the switchover of the state's new electronic filing system, Helms said, adding that late last month and in the first half of November "a lot of permits were being approved."

North Dakota's Bakken Natural Gas, Oil Production Rises in September -Oil and natural gas production in North Dakota, home to the Bakken Shale, rose in September over August. Department of Mineral Resources (DMR) director Lynn Helms issued the monthly Director’s Cut on Tuesday, which provides information about all of the wells capable of producing, as well as permit activity. Natural gas production in September averaged 3.02 Bcf/d, according to DMR. This compares to 2.96 Bcf/d in the previous month. Gas capture also improved in September, when it hit 94%, compared to 92% in the previous month. North Dakota has set a gas capture goal to keep flaring/venting at 8% of production or less. Helms said the 94% figure was “good news,” but October was a “tough month with three weeks of downtime on the Northern Border Pipeline. So October could be a downer.” Helms added that “we’re back into that mode where natural gas production is growing much more than oil.” Oil production also rose month/month to 1.113 million b/d, from 1.017 million b/d in August. The Bakken and Three Forks formations made up 96% of the production figure. Dakota Light Sweet oil averaged $73.75/bbl, versus $60.94 in August. “Oil prices are very, very strong,” Helms said. The rig count, meanwhile, continues to rise from the hit it took last year. As of Tuesday, the North Dakota rig count stood at 34, compared to an average of 27 in September. Helms noted that the rig count is the best it has been since the pandemic hit in the state. Based on a preliminary estimate, 17,041 wells were producing in September, an all-time state high. Thirty-four wells also were completed in September, down by 13 month/month. Permits issued to drill fell in September to 69 from 79, Helms noted. In October, the state issued 37 permits to drill. Helms said the October figure is “inadequate” to grow and sustain production.

Bakken Shale natural gas flaring reaches historical low as production climbs --Natural gas flaring in North Dakota's Bakken Shale has reached a new record low, according to state data, and new infrastructure slated to enter service soon could push gas production in the play above pre-pandemic volumes. Flaring of associated natural gas produced in North Dakota's Bakken has fallen to 6%, according to the latest data released by the North Dakota Industrial Commission. Gross gas production in the state has now crossed 3 Bcf/d, only about 100 MMcf/d of the all-time high reached in November 2019. The state's oil production, however, is at 1.1 million b/d, which is 400,000 b/d below the all-time high, also reached in November 2019. The impending completion of WBI Energy Transmission's North Bakken Expansion natural gas pipeline project is likely to increase the Bakken's ability push more gas to Northern Border Pipeline for ultimate delivery downstream in the Midwest. While the project will increase access to prolific Williston Basin production, it could also reduce flaring. Once the expansion is completed, a milestone the company anticipates in December, the added takeaway could be put to the test as production spikes in the region. Construction is already well underway on the 92.5-mile, 250 MMcf/d project in the northwest corner of North Dakota after the Federal Energy Regulatory Commission approved the project June 1. According to WBI Energy Transmission's company website, facilities are expected to go into service sometime in December. The proposed route runs through McKenzie County, which produced over 1.44 Bcf/d in summer 2021, up from 1.18 Bcf/d the summer prior, according to S&P Global Platts Analytics. The WBI system plays a vital role for the Williston Basin in bringing much of the play's gas to market in the Midwest. This past summer, WBI carried 1.07 Bcf/d in total to other interconnecting pipelines, of which nearly 1 Bcf/d was put on Northern Border. Northern Border generally runs at or near capacity and is essentially the only outlet for Bakken gas. Bakken volumes typically price off AECO and compete for line space with Western Canadian supply heading east along Northern Border. At 1 Bcf/d this summer, WBI deliveries to Northern Border were up more than 140 MMcf/d from summer 2020 at an all-time high. WBI deliveries accounted for 56% of the Bakken supply pumped on Northern Border, according to Platts Analytics. This increase supported Bakken gas in gaining even more Northern Border space. Bakken averaged a summer record 74% share of the space on Northern Border, up two points from summer 2020. Considering WBI's expansion and its route, it is possible Bakken's share of Northern Border will increase by as much as the added 250 MMcf/d by summer 2022, as production returning from the coronavirus pandemic has been met with an inability to get to a processing plant.

Work on gas plant project to resume in McKenzie County -- Work is resuming in McKenzie County on a natural gas processing plant project delayed in 2020 by the coronavirus pandemic. Oneok announced this week that it will complete the project known as Demicks Lake III, an expansion of the company's processing facilities near Watford City. The company expects work at the site to wrap up during the first quarter of 2023. The new plant will have the capacity to handle 200 million cubic feet of gas per day. It will bring the company's total gas processing capacity across the Williston Basin to 1.9 billion cubic feet per day, which could accommodate about two-thirds of all gas produced in North Dakota. The project is expected to cost $140 million. An uptick in oil and gas activity in the Bakken and higher demand for gas and natural gas liquids were factors in Oneok's decision to resume the project, President Pierce Norton II said. The company also is restarting work on a natural gas liquids facility in Texas. Natural gas liquids refer to products such as ethane, propane and butane that are separated from raw gas. "Demicks Lake III will support producer development plans in the core of the Williston Basin while continuing our commitment to help customers reduce natural gas flaring," Norton said, referring to the wasteful burning off of excess gas.

North Dakota leaders to make plan for $150M pipeline grant fund - Pipeline developers are eyeing the $150 million pot of grant money North Dakota lawmakers set aside last week for expanding natural gas service, but it will be a few weeks before it’s clear how state leaders plan to proceed with distributing the funds. “There’s a tremendous amount of interest,” North Dakota Pipeline Director Justin Kringstad said. “We will have to come up with an appropriate method at the Industrial Commission to get that process ironed out.” The three-member Industrial Commission next meets Nov. 29, and Kringstad said he expects the panel chaired by Gov. Doug Burgum will offer guidance then as to the state’s application process, timeline and expectations for projects. It’s anticipated $10 million will go toward building a short pipeline that taps into a larger line running through western Minnesota to bring gas to an industrial site in Grand Forks. The remaining $140 million could go toward a pipeline transporting gas from western North Dakota’s Bakken oil fields to the eastern part of the state, a project that could cost an estimated $1 billion. The grant money stems from the allocation awarded to North Dakota under the American Rescue Plan Act, a federal stimulus program designed to help states emerge from the coronavirus pandemic.

Close to 20,000 gallons of oilfield contaminants spill in Bowman County - A mixture of about 6,300 gallons of crude oil and 12,600 gallons of produced water spilled Monday at a well site in southwest North Dakota, escaping the well pad and flowing about 1,500 feet through a nearby drainage path. — A substantial amount of mixed oil and produced water spilled at a wellsite in Bowman County on Monday, Nov. 15, escaping the well pad and flowing about 1,500 feet through a nearby drainage area. The contaminants flowed through the dry drainage path before spreading out into a flat and open space, according to an incident report filed to the North Dakota Department of Environmental Quality Monday. The oil well's operator, Denbury Onshore, has isolated the well and dug berms to stop further spread of the spill. The mixture, known as emulsion, contained about 6,300 gallons of crude oil and 12,600 gallons of produced water, according to the indecent report. The cause of the spill is under investigation. Cleanup is ongoing, and no waterways were impacted by the spill, according to the report. Bill Seuss, a spill investigator with the Department of Environmental Quality, said because of the remote location of the incident, respondents are bringing in equipment to build a temporary roadway to access the contaminated site.

Line 3 opponents plan flyover with thermal imaging of pipeline - Indigenous opponents of Line 3 are raising money to fly a drone with thermal imaging equipment along the oil pipeline's Minnesota route to see for themselves whether there are more drilling fluid spills or groundwater problems.Thermal imaging is a new direction for the Indigenous-led Line 3 opposition. It comes as state environmental regulators investigate whether construction crews damaged aquifers at two locations along the Line 3 route, in addition to the major aquifer breach in Clearwater County for which energy company Enbridge has been fined. The state's latest estimates are that the breach has spilled about 50 million gallons of groundwater, up from previous estimates of around 24 million gallons."I've ridden the whole line on horseback pretty much, but I never took that bird's eye view," said Winona LaDuke, co-founder of Honor the Earth. "I think it's going to show more damage than anybody knows. It's a crime that's underway."The flyover project will cost an estimated $52,000. The group said it wants to get underway very soon.Enbridge's controversial Line 3 replacement pipeline is complete now and transports Canadian tar sands crude oil across northern Minnesota to Superior, Wis. The company, which says it's doing what's required and cooperating with regulators, faces potential criminal charges for puncturing the Clearwater County aquifer.State regulators ordered the company to pay $3.3 million for that accident, which the Canadian company didn't report to the state for months, and to close up the free-flowing artesian well it created.The accident happened at a major pipeline junction called the Clearbrook Terminal near the town of Clearbrook, Minn. Enbridge has been moving in large equipment there to inject tons of grout into the ground to try to seal off the broken aquifer. The outflow endangers a nearby calcareous fen complex, a protected delicate wetland area fed by groundwater from the same aquifer.The matter was sent to the Clearwater County Attorney for potential criminal charges. But shortly after Enbridge missed a 30-day deadline in October to fix the rupture, the county forwarded the investigatory reports to the state Attorney General for potential prosecution. Enbridge had to pay an additional $40,000 for wasting more groundwater.The attorney general's office said it doesn't confirm or deny investigations.Counties often forward complex cases that outstrip local resources, but the move also could indicate Enbridge faces more serious charges.Attorney General Keith Ellison has indicated his willingness to take on oil companies. Last year he sued ExxonMobil, Koch Industries and the American Petroleum Institute, alleging they deliberately misled the public for decades about the effects of burning fossil fuels on climate change.Meanwhile, both the Minnesota Department of Natural Resources (DNR) and the Minneapolis Pollution Control Agency (MPCA) say they are investigating other potential violations during Line 3 construction. They said that air imaging will be part of monitoring the wetland restoration work through 2026.The MPCA is investigating the 28 drilling fluid spills it made public in August. Enforcement actions aren't expected until early 2022.The DNR, which controls groundwater, is still investigating whether Enbridge crews punctured aquifers at two other unidentified sites.LaDuke and others involved with the flyover project are not convinced. They fear both the Mississippi River and protected groundwater resources have been gravely harmed.Bemidji resident Ron Turney, a White Earth citizen who has documented Line 3 construction impacts with cameras and a drone, has published many images of the site on his Facebook page and the Indigenous Environmental Network website. He also aired them during a panel on Line 3 that was broadcast recently from the U.N. climate change summit in Glasgow, Scotland.His pictures show muddied and rust-colored water welling up on either side of the river, some of it with an oily sheen, held back from the Mississippi by sandbags. LaDuke described them "scary as heck."

Petition asks Walz, Ellison to drop Line 3 protest charges - (KFGO) – An online petition asking Gov. Tim Walz and Minnesota Attorney General Keith Ellison to drop all criminal charges against hundreds of demonstrators arrested in connection with the Line 3 pipeline protests in northern Minnesota has collected more than 14,000 signatures. Organizers say the charges are based on “brutal policing tactics,” the violation of treaty rights, and the project’s contribution to “catastrophic climate change.” “It’s entirely wrong that Enbridge, a foreign oil corporation, has committed egregious crimes against the water and people, yet it’s us who are being prosecuted” according to Honor the Earth Executive Director Winona LaDuke. “Every day that pipeline is in operation, Minnesotans are in danger. It must be shut down, and all charges against Water Protectors must be dropped. ” Over 1,000 people were arrested during the pipeline’s construction. Petition organizers say over 100 people were charged with “trumped-up felonies” including “bogus theft charges.”

An Urgent Call on Line 5 - by Doomberg – Doomberg One curious thing you notice as you drive around the Upper Peninsula (UP) of Michigan is just how many homes have giant propane tanks in their yards. Able to hold 400 gallons and usually painted white, these unsightly cylinders dot the landscape with surprising regularity. Indeed, more homes in Michigan use propane for heat than any other state in the country. This is especially pronounced in the Upper Peninsula (UP), where residential propane has a market penetration exceeding 25% in some counties. With 20 feet of snow a possibility, how one heats their home becomes a viscerally important thing. As it turns out, propane in Michigan is at the center of a titanic struggle between environmentalists and the fossil fuel industry, and the result of that struggle could substantially alter the course of our energy policy for decades to come. It is not an exaggeration to say the battle over Line 5 is the most important confrontation since the proposed Keystone Pipeline project – and most of you have probably never even heard of it. Line 5 is an oil pipeline that runs from Superior, Wisconsin to Sarnia, Ontario, passing through Michigan along the way. Constructed nearly 70 years ago by Bechtel, the pipeline is currently operated by Enbridge and has an excellent safety record. Day after day, it delivers 540,000 barrels of oil without incident – a mixture of synthetic crude, natural gas liquids, sweet crude, and light sour crude. To put this number into context, the US uses about 18 million barrels of oil a day in total. Half of Michigan’s and two-thirds of the UP’s propane needs are met by processing materials derived from Line 5. Line 5 is big and important. It is also extremely controversial. There are two main problems with Line 5. The first is that for a four-mile stretch it runs under the Straits of Mackinac, which connect Lake Michigan to Lake Huron. Should a catastrophic leak occur, the pipeline could contaminate priceless shorelines and potentially threaten the Great Lakes themselves, which hold some 20% of the total freshwater on earth. The second is that Enbridge had a significant (but unrelated) pipeline spill in Michigan back in 2010. Known as the Kalamazoo River oil spill, the incident resulted in significant local environmental damage. For a period of 17 hours, the company struggled to understand that a leak was even occurring, unwilling to believe what its own sensors were indicating. This slow response exacerbated the damage and crushed Enbridge’s credibility with local authorities. There’s a direct line from that incident to the major push by environmentalists to proactively shutter Line 5 today. Unlike opposition to the Keystone Pipeline, a project which was never completed, Line 5 is a preexisting critical artery of the North American energy infrastructure. This seems like an important precedent in the making. Here’s how RetireLine5.org frames the discussion: “Obviously, an oil spill in the Straits of Mackinac would be bad for our water and impact the 30 million people who depend on the Great Lakes for water. An oil spill could also devastate our economy. In less than 3 hours, a spill of 2,500,000 gallons (10% of what Line 5's daily capacity is), could reel a $6 billion blow to Michigan's economy. In addition to our drinking water and our economy, the 3,500 species which have habitats in the Great Lakes area would be impacted, too. It took Enbridge 17 hours to shut off the oil in Kalamazoo, so 3 hours to shut off Line 5 is a conservative estimate.

New angles emerge in controversy over Line 5 -- Crude oil continues to flow — for now — through Enbridge’s controversial pipeline that serves Toledo-area refineries, among others. But several officials agree that recent events in Washington and elsewhere have kickstarted more controversy, leaving both sides wondering what the long-term outlook is at a time in which climate change, access to clean water, and rising fuel prices have loomed large on the minds of many North Americans. The issue has become so touchy that even a hint of policy movement by the Biden Administration has a powder-keg effect, as one Toledo refinery official noted. Although White House Deputy Press Secretary Karine Jean-Pierre said at a Nov. 8 news conference that Mr. Biden has no plans to shut down the pipeline, the issue caught fire in the national media, with questions raised about what powers President Biden might have over Line 5. According to a whitehouse.gov transcript of that news conference, the Biden Administration’s upcoming talks with Canadian Prime Minister Justin Trudeau should not be interpreted as a sign of disagreement. In October, Canada took the unprecedented move of invoking dispute resolution provisions of the 1977 Transit Pipelines treaty, in large part because of the ongoing feud Mr. Trudeau has had with Michigan Gov. Gretchen Whitmer and Michigan Attorney General Dana Nessel over Line 5’s future. The latter two are fiercely determined to shut down the pipeline as a means of protecting the Great Lakes from a potentially catastrophic oil spill. Mr. Trudeau wants to keep the crude flowing, agreeing with others that the Enbridge plan to build a tunnel beneath the Straits of Mackinac offers sufficient protection. “We expect that both the U.S. and Canada will engage constructively in those negotiations,” Ms. Jean-Pierre said. “In addition to being one of the closest allies, Canada remains a key U.S. partner in energy trade, as well as efforts to address climate change and protect the environment.” She later added that an environmental impact statement the U.S. Army Corps of Engineers is doing on the potential impact of running two Line 5 replacement lines through such a tunnel “will help inform any additional action or position the U.S. will be taking on the replacement of Line 5.” Mr. Biden got drawn into the controversy because of Canada’s decision to invoke the treaty, which has never been done before. According to Reuters news service, Mr. Trudeau did that to help safeguard the pipeline and essentially force Mr. Biden into arbitration.At the same time, U.S. District Judge Janet Neff of the Western District of Michigan is being asked to rule on whether Ms. Whitmer had the authority to issue a cease-and-desist order last May.Enbridge has ignored the order, and the courts have allowed the pipeline to remain open pending the outcome of that case. Mr. Biden is in an awkward position because he supports high-paying union jobs but also wants to help America wean itself off fossil fuels to combat climate change,

Judge: Michigan's Line 5 shutdown case must stay in federal court - A federal judge has denied Michigan's request to move its lawsuit seeking the closure of Enbridge Energy's Line 5 pipeline back to state court, where it might have had better chances with a county judge. U.S. District Judge Janet Neff issued an order Tuesday denying the state's motion for remand, a decision that was a victory for Enbridge Energy and the government of Canada. Neff wrote that the case calls for the exercise of "substantial-federal-question jurisdiction" over the issues that the state's case covers. "...with Canada’s invocation of the dispute resolution provision in the 1977 Treaty, the federal issues in this case are under consideration at the highest levels of this country’s government," she wrote. "The federal issues are far from 'trivial' but raise vitally important questions that implicate the federal regulatory scheme for pipeline safety and international affairs." Enbridge said in a Tuesday statement Tuesday it was pleased with the decision and noted it had "asserted all along" the issue belonged before a federal judge. "This is both a federal and international law issue, and the federal court will now handle the case," company spokesman Ryan Duffy said. "Line 5 is vital, critical infrastructure which is operating safely and is in compliance with all applicable laws." Gov. Gretchen Whitmer's office said it was still committed "to getting the Line 5 dual pipelines out of the water as quickly as possible." "We have made our views here clear — Michigan’s sovereign rights and duties regarding the use of our own lands and the protection of our Great Lakes are matters that belong before the state courts of Michigan," Whitmer spokesman Bobby Leddy said. "We are still reviewing today’s ruling and order as we consider next steps." The National Wildlife Federation in a Tuesday statement said the ruling puts the Biden administration "squarely in the middle of the Line 5 debate."

Protesters call for shutdown of Enbridge's Line 5 as Biden tours GM plant — Protesters lined the street where President Joe Biden would pass on his way to tour the GM assembly plant, hoping he would hear their calls to shut down the controversial Enbridge oil pipelines. With slogans like "Enbridge kills" and "Let's not trash our home," dozens of organizers with the Oil & Water Don’t Mix coalition gathered on Edsel Ford Service Drive, across from the newly renamed General Motors Factory ZERO Detroit-Hamtramck Assembly Center, an electric vehicle plant that straddles both cities. Demonstrators were protesting Line 5, Enbridge Energy's 68-year-old pipeline in the Straits of Mackinac. Biden toured the plant Wednesday, touting his $1.2 trillion bipartisan Infrastructure bill and the importance of more spending to accelerate EV adoption. Protesters said they feared the damage a rupture in the decades-old pipelines would cause to residents' health, arguing it would pollute drinking and swimming water and damage the Great Lakes. "They put the pipe in in the '50s and it's been falling apart ever since then," said Wendy Case, 58, of West Bloomfield. "A line break ... would be devastating to both the Upper and Lower Peninsulas of Michigan, and just an environmental travesty." Enbridge spokesman Ryan Duffy said the pipeline in the Straits operates safely and said the company spends millions each year on upkeep. "There are millions of people and thousands of businesses on both sides of the border who are dependent on Line 5 to provide the fuel they need for heating, manufacturing, airplanes, roads and automobiles," said Duffy. "Line 5 is vital energy infrastructure on a daily basis to Michigan, other states in the region, and Canada’s two largest provinces." Gov. Gretchen Whitmer in November 2020 revoked Enbridge's easement in the Straits and ordered the pipelines shut down by May of this year. The Canadian company, backed by Canada's government, refused to comply without a court order. In October, the Canadian government formally invoked a 1977 treaty that officials said prevents the U.S. government or Michigan from disrupting the operation of the pipeline, pulling the Biden administration into the dispute over the pipeline's future. Biden and Canadian Prime Minister Justin Trudeau will meet Thursday at the White House, where the pipeline is expected to be discussed.

Line 5 tunnel wouldn’t be finished until 2028, documents indicate - — Construction on a proposed utility tunnel under the Straits of Mackinac to house a rebuilt section of the Enbridge Line 5 oil pipeline would not likely finish until 2028, according to documents posted online by the state of Michigan in response to a lawsuit.Enbridge contractors would not start building what it calls the Great Lakes Tunnel until the first quarter of 2024, according to the documents, which push back the launch of a huge utility project the company had previously estimated would be entirely finished that year.The information is included in draft bidding documents the Michigan Department of Transportation (MDOT) disclosed this weekend after being sued on Nov. 10 by the National Wildlife Federation. The group accused MDOT in the Court of Claims of shielding construction details after it denied public records requests for the information.A 2024 start could push completion into 2028 or beyond. Enbridge spokesperson Ryan Duffy said the tunnel is projected to take approximately four years to build. The new construction start date has yet to be approved by the Mackinac Straits Corridor Authority (MSCA), which is overseeing tunnel planning and potential construction.“Project permitting continues to be the driver of project timing, and those permitting timelines continue to be drawn out,” said Duffy, via email. “Once we receive all permits, we are committed to start construction within the timeframe stated in the Tunnel Project Agreement with the State of Michigan.”Enbridge opponents — who have repeatedly questioned Enbridge’s timeframe and $500 million cost estimation on the project, as well as its overall necessity — say the delay demonstrates that the tunnel is not a viable solution to the oil spill threat posed by the existing 68-year-old pipeline, which Gov. Gretchen Whitmer ordered to be shut down last year.“This draws out the timeline considerably from what Enbridge is using to influence key decision-makers,” said Beth Wallace, an NWF Great Lakes campaigns manager. The tunnel “is really not an alternative,” Wallace said. “It’s an Enbridge proposal that’s a decade in the making and we have an urgent threat that we have to deal with now.” Wallace said NWF sued after the state denied its Freedom of Information Act request for Enbridge’s draft request for proposals (RFP) documents that detail the project to solicit bids from contractors. Wallace said MDOT told her group this summer it didn’t technically have the documents because they were housed on a private Enbridge server. According to an Oct. 6 memo from an MPSC consulting engineer, the state gained access to the documents in May “through Enbridge’s virtual data room.” The state has spent the summer and fall reviewing the bidding documents. Presently, plans include boring a 21-foot diameter pre-cast concrete tunnel under the Straits of Mackinac west of the Mackinac Bridge, starting from the Lower Peninsula near Mackinaw City. Enbridge has spent the past few years designing the project, studying the rock strata under the lake, acquiring land on either side of the straits and seeking permits to begin construction. The tunnel would include space for the pipeline, maintenance vehicles and third-party utility lines. To date, Enbridge has applied for tunnel permits from the U.S. Army Corps of Engineers, the Michigan Public Service Commission (MPSC) and the Michigan Department of Environment, Great Lakes and Energy (EGLE).\

Proposed bill would stiffen penalties for anchor dragging in Straits of Mackinac -- A new state bill could heighten punishment for ships dragging anchor through the Straits of Mackinac, across the path of the underwater section of Line 5 pipeline. Michigan Rep. Rachel Hood, D-Grand Rapids, on Wednesday introduced legislation to criminalize ships deploying, dragging, or setting anchor and other gear through the straits – a misdemeanor charge with a possible one-year jail sentence – and establish up to a $10,000 fine. The bill also would create a maritime pilot approval process to decide which may navigate routes through the busy straits that connect Lakes Michigan and Huron.

Ignore the buzz, here's why Enbridge Line 5 won't likely close anytime soon - Anyone following recent national and international news about the Enbridge Line 5 pipeline could be forgiven for believing the pipeline might shutter any day now, with major implications for winter fuel prices. But a year since Governor Gretchen Whitmer ordered the pipeline shuttered over safety concerns, its future is no clearer today than it was then. Don’t expect that to change anytime soon. In reality, legal experts and even key Line 5 foes say, any decision about the pipeline’s fate is likely months or even years away. That means barring a dramatic change, Line 5 will keep pumping oil through the winter while judges, diplomats and regulators fight over how quickly the aging pipes must vacate the Straits, and whether Enbridge should build a tunnel to replace them. Michigan Radio’s Lester Graham and Bridge Michigan’s Kelly House set out to cut through recent political posturing and media speculation to provide some clarity on the dispute. Here’s what we found: Speculation has swirled about the pipeline’s fate since Politico reported earlier this month that the Biden administration is studying how a closure could affect regional fuel prices. That sparked a flurry of responses from politicians, including Republicans who panned Biden for what they saw as an indication that the administration might unilaterally order a shutdown. Until then, battles over the pipeline’s fate had played out exclusively at the state level. But Biden’s staff have since made clear that they’re merely following through on a study of the proposed Line 5 tunnel that the U.S. Army Corps of Engineers announced months ago. As for potential unilateral action to close the pipeline? “That is not something we are going to do,” said Karine Jean-Pierre, White House Deputy Press Secretary, during a press briefing last week. The statement came a month after the Canadian government invoked a 1977 treaty that, in part, bars the U.S. and Canada from stopping the flow of international pipelines like Line 5. Canada invoked the treaty in an effort to defend Enbridge, the country’s biggest oil company, from Whitmer’s quest to shut down the pipeline. That has forced the U.S. into forthcoming treaty talks, but Jean-Pierre told reporters that those talks “shouldn’t be viewed as anything more than that.” Biden officials have made it clear that they are not eager to wade into Whitmer’s legal dispute with Enbridge, which began a year ago after Whitmer ordered Enbridge to shutter the 68-year-old pipeline, calling it a “ticking time bomb” that poses an unacceptable risk of an oil spill in the Straits. Enbridge counter-sued, and ignored Whitmer’s May shutdown deadline. Six months later, the case has yet to begin in earnest. Only this week did U.S. District Court Judge Janet Neff decide which court should hear the dispute. Michigan had filed suit against Enbridge in state court, but Enbridge moved to remove it to federal court because, the company argued, pipeline regulation is fundamentally a federal concern. Neff sided with Enbridge, noting that the case raises major federal issues, both because Line 5 is now subject to a treaty dispute, and because it falls under the regulatory purview of the federal Pipeline and Hazardous Materials Safety Administration. In a pipeline debate that has been deeply partisan, there’s another important difference between the two venues: Michigan’s Western District federal court is packed with Republican appointees, while the state Supreme Court has a narrow majority of Democratic appointees. And, said Barry Rabe, a professor of public and environmental policy at the University of Michigan’s Ford School of Public Policy, federal courts tend to be more sympathetic to the authority of federal treaties. “I do tend to think that federal treaties, however obscure and minimally used to date, are very powerful policy tools and that federal courts are reluctant to give states authority to ignore or overturn treaties,” he said.

Canada's Montney Shale to Supply Low-Carbon Petrochemical Project in Alberta - A petrochemical plant recently announced, slated to be in service by 2026, could produce up to 200 metric tons/year of low-carbon blue ammonia and methanol using natural gas from the Montney Shale, officials said. Nova Calgary-based Northern Petrochemical Corp. (NPC), a private venture, is proposing to build the C$2.5 billion ($2 billion) project in the planned Greenview Industrial Gateway near Grande Prairie, 275 miles northwest of the Alberta capital in Edmonton. “This project will produce blue ammonia and methanol by utilizing the latest carbon capture and storage technologies to achieve a carbon-neutral process,” said NPC President Geoff Bury. Houston-based KBR Inc. was selected to provide engineering services and a license to use a new manufacturing process devised in partnership with UK petrochemical specialty firm Johnson Matthey. Blue ammonia is manufactured by synthesizing traditional ammonia using natural gas, with the emissions removed using carbon capture, utilization and storage. Alberta Premier Jason Kenney credited the project site selection to the province’s Alberta Petrochemical Incentive Program (APIP). To make Alberta competitive with the Gulf Coast, where most North American petrochemical projects are sited, APIP pays 12% of plant construction costs. The project could create up to 4,000 jobs during construction, which may begin in 2023. The project could employ 400 people full time. Kenney said the project “is about adding value to natural gas feedstock, in a net-zero emissions context, for products that are in massive demand around the world.” Production would serve markets overseas, initially traveling about 600 miles by rail to a British Columbia seaport for shipments to China, Japan and South Korea. Saudi Arabia Oil Co., better known as Aramco, completed a blue ammonia export pilot last September.. Aramco and Japan’s Institute of Energy Economics, in partnership with Saudi Basic Industries Corp., produced and shipped 40 tons of blue ammonia to Japan for use in zero-carbon power production. Among other companies working on blue ammonia is New Fortress Energy Inc. Earlier this year it formed a company dedicated to producing hydrogen and renewable fuels. A final investment decision on a blue ammonia production terminal is expected soon.

While oil prices are surging, Canadian crude is getting cheaper -Western Canadian heavy crude is getting cheaper again relative to the North American benchmark West Texas Intermediate (WTI), but it’s not for the usual pipeline-related reasons. The differential between Western Canadian Select (WCS), Canada’s primary heavy sour export crude blend, and WTI recently spiked to a pandemic-era high of US$21 per barrel after more than a year of tight spreads and relative stability. The WCS was trading at US$60.43 Thursday morning in contrast to the U.S. benchmark, which stood at US$80.79. However, WCS hasn’t only gotten cheaper in Alberta: it’s getting cheaper at the other end of the pipes — in Oklahoma and at the U.S. Gulf Coast as well — which reflects a broader quality-related headwind that we’re seeing across global crude differentials. This implied quality differential has widened from about US$4 per barrel to more than US$10 per barrel over recent months while the implied transportation differential has remained fairly steady at around US$7 per barrel. Volatile and crushing differentials have plagued the Western Canadian oil industry for much of the past decade. The relative value of WCS, like that of all crudes, is driven by a cocktail of factors related to the chemical make-up and geographic location of the barrel. Different grades of crude vary widely across multiple attributes, but the two main factors are the oil’s “gravity” or density (i.e., light, medium, or heavy) and its sulphur concentration (i.e., sweet or sour). Lighter barrels typically command a premium because they yield a higher proportion of more valuable petroleum products, like gasoline, with less expensive refining techniques. Sweet barrels are also typically preferred since many jurisdictions require that most of a crude’s sulphur content is removed before reaching consumers (because sulphur is nasty; see: acid rain, respiratory harm, etc.). WCS is an especially heavy, sour crude, which means that it will almost always be worth less than a light, sweet barrel like WTI. That relative value of WCS shifts over time alongside availability of and demand for different grades. All oil is priced at a specific location because transporting or storing crude is expensive and complicated. WCS is priced at an oil storage tank terminal in Hardisty, Alta. and WTI is priced nearly 2,200 kilometres away in Cushing, Okla., with the U.S. Gulf Coast refining hub another 800 kilometres further down the line (see map). This geographic reality, coupled with insufficient pipeline capacity, has been the traditional source of heartache for Western Canadian oil producers.

Trans Mountain pipeline shut down after severe rain, flooding in B.C - The Trans Mountain pipeline has been shut down temporarily due to widespread rains and flooding in British Columbia. Trans Mountain Corp. spokeswoman Ali Hounsell says the precautionary move was taken due to the flooding situation in the area of Hope, B.C. In addition, Hounsell says construction on the Trans Mountain expansion project has been temporarily halted in the Lower Mainland, Hope and Merritt regions due to prolonged rainstorms. The 1,500-kilometre Trans Mountain pipeline is Canada's only pipeline system carrying oil from Alberta to the West Coast. The pipeline has a capacity for 300,000 barrels per day. The Trans Mountain expansion project was approved by the federal government in 2019. The project will twin the existing pipeline, bringing its total capacity to 890,000 barrels per day. The Trans Mountain pipeline was purchased by the federal government in 2018. Trans Mountain Corp. is a federal Crown corporation, headquartered in Calgary.

Oil and gas will be in the global energy system 'for decades,' BP chief says - Oil giant BP is committed to tackling climate change, the company's CEO said, but he insisted that hydrocarbons such as oil and gas will have an ongoing role to play in the energy mix for years. "It may not be popular to say that oil and gas is going to be in the energy system for decades to come but that is the reality," BP's Chief Executive Bernard Looney told CNBC on Monday. "What I want us to do is to focus on the objective — and I wish we had less ideological positions and more focus on the objective — which in this case is to drive emissions down." He said that replacing coal with natural gas, thereby reducing carbon emissions, "has to be a good thing." "And then over time we will decarbonize that natural gas," he said, speaking to CNBC's Hadley Gamble at the ADIPEC energy industry forum in Abu Dhabi. BP's Looney highlighted that the International Energy Agency's "Net Zero" report in May noted that, in 2050, global oil supply "in the net zero pathway" would still amount to around 20 million barrels per day, "So any objective person ... is going to say that hydrocarbons have a role to play, the question then becomes: what do you do about that? And you try to produce those hydrocarbons in the best way possible," Looney added. Looney's comments come after the conclusion of the COP26 climate summit in Glasgow. Nearly 200 countries agreed to "phase down" coal use (rather than "phase out," with China and India insisting on the language change at the last minute), as well as to "phase out" fossil fuel subsidies and to improve financial support to low-income countries. 1

Shell Moves To UK, Drops 'Royal Dutch' In Share Structure Overhaul - Royal Dutch Shell is asking shareholders to approve a proposal to drop its dual share structure and ‘Royal Dutch’ from its name as it looks to move its tax residence to the UK from the Netherlands and make its share structure simpler for investors to value and understand.Shell’s board of directors will ask shareholders to vote on December 10, 2021 to establish a single line of shares to eliminate the complexity of Shell’s A/B share structure and align Shell’s tax residence with its country of incorporation in the UK, where it will hold Board and Executive Committee meetings, and locate its chief executive and chief financial officer, the company said on Monday.Shell has been incorporated in the UK with Dutch tax residence and a dual share structure since the 2005 unification of Koninklijke Nederlandsche Petroleum Maatschappij and The Shell Transport and Trading Company under a single parent company. At the time of unification, it was never meant for the current A/B share structure to be permanent, Shell said.A simpler share structure is expected to accelerate distributions by way of share buybacks, as there will be a larger single pool of ordinary shares that can be bought back. “The simplification will normalise our share structure under the tax and legal jurisdictions of a single country and make us more competitive. As a result, Shell will be better positioned to seize opportunities and play a leading role in the energy transition,” Shell’s Chair, Sir Andrew Mackenzie, said in a statement.Shell, which has carried the “Royal” designation for more than 130 years, expects it will no longer meet the conditions for using the designation following the proposed change. Subject to shareholder approval, the company will be named Shell plc.“We are unpleasantly surprised by this news. The government deeply regrets that Shell wants to move its head office to the United Kingdom,” Stef Blok, Dutch Minister for Economic Affairs and Climate Policy, said, as carried by Bloomberg.

Belarus leader floats idea of cutting gas to Europe in migrant standoff - (Reuters) - Belarusian leader Alexander Lukashenko on Thursday raised the possibility he could shut down the transit of natural gas to Europe via Belarus in retaliation against any new European Union sanctions imposed over his country's handling of migrants. The EU on Wednesday accused Belarus of mounting a "hybrid attack" on the bloc by encouraging thousands of migrants fleeing poverty and war-torn areas to try to cross into Poland, and is gearing up to impose new sanctions on Minsk. Lukashenko, backed by close ally Russia, has dismissed the allegations and blamed the 27-nation bloc and the West for fuelling the crisis at his country's border with EU states. On Thursday, he raised the possibility of cutting off the Yamal gas pipeline that carries Russian gas across Belarus en route to Poland and Germany. "We are heating Europe, they are still threatening us that they will close the border. And if we shut off natural gas there?," Lukashenko said in comments published by the state news agency Belta. "Therefore, I would recommend that the Polish leadership, Lithuanians and other headless people think before speaking," he was cited as saying. Europe's gas market, where prices have hit record highs in recent weeks, would be highly sensitive to any interruption in the flow of Russian gas via Belarus. The EU has paved the way for new sanctions against Belarus as early as next week.

Despite Threats, Russian Gas Flows To Germany Increase Through Belarus- Despite threats by Belarusian President Alexander Lukashenko last week that he could turn off the taps on the Yamal gas pipeline, German authorities report that flows have actually increased over the weekend, according to Reuters.. Lukashenko last week threatened to cut off the flow of gas along the Yamal pipeline in response to the EU threatening new sanctions against Belarus amid a migrant crisis on the Belarusian-Polish border. Russia's President Vladimir Putin, however, was quick to respond to the threat. Putin said Lukashenko had not consulted Moscow on the issue, and if he did, he risked a response from the Russian side. "I've recently spoken to (Lukashenko) twice, and he didn't mention this to me once. He didn't even hint," the Russian president said in a TV interview this weekend. "Of course, in theory, Lukashenko, as president of a transit country, could order our (gas) supplies to be cut to Europe. But this would mean a breach of our gas transit contract, and I hope this will not happen," Putin also said. "We provide heat to Europe, and they are threatening us with the border closure. What if we block natural gas transit?" Lukashenko said on Thursday, as quoted by Belarusian state news agency Belta.. The Belarusian statement has not been coordinated with Moscow in any way, Kremlin spokesman Dmitry Peskov told reporters on Friday. Belarus is an ally of Russia, but it is also a sovereign state, Peskov also said. "Russia remains a reliable energy supplier to Europe, regardless of the actions of Belarus," Peskov said, adding that "Russia's reliability as a supplier and partner in the current and future contracts cannot be called into question." The 2,000-km from Western Siberia to Germany has a capacity to transport close to 33 billion cu m of natural gas annually. It is one of the key gas arteries from Russia to Europe.

Europe’s first winter cold spell already straining natural gas supplies -- Europe is set to get its first cold spell of the winter season, putting the continent’s already scant energy supplies under pressure. Temperatures are set to drop starting next week, with parts of Italy forecast to experience weather as much as 2 degrees Celsius below normal. Southern France, Spain and Germany are also forecast to be colder-than-usual, according to The Weather Company. Centrica Plc, the U.K.’s top energy supplier, warned its 9 million customers to prepare for an icy blast that could last as long as six weeks. The region will be particularly sensitive to cold snaps in the coming months, with gas prices up for a second week after surging to records in October. Extra supplies promised by Russia have so far been negligible and Norwegian flows have been reduced because of heavy maintenance. “This is going to test the energy supplies across Europe,” said Tyler Roys, lead European forecaster at AccuWeather Inc. A high pressure system could also bring more northerly and colder air flows over central and southern Europe by the end of the month, said Carlo Cafaro, a senior research analyst and meteorologist at Marex. Benchmark gas prices are still almost four times higher than normal for this time of year sending electricity and European emission permits surging. Dutch month-ahead gas futures, the benchmark for Europe, rose 1.4% this week after climbing 14% last week. The cooler temperatures in the south will coincide with stormy weather over the Mediterranean with threats of flooding and mudslides, Roys said. This will bring big swings in wind generation, likely to drive price volatility even higher. November temperatures on the whole could end up being close to normal, but may still be cooler than the above-average levels for the past four years, according to Accuweather data. That could also impact gas storage levels as companies withdraw supplies to meet higher demand, already roaring back as economies recover from the pandemic.

European gas prices jump, rolling blackouts possible on new Nord Stream 2 delays -- European natural gas jumped to a three-week high on delays in starting up a controversial new pipeline from Russia. The German regulator said Tuesday it suspended the certification procedure for the Nord Stream 2 project because the operator of the pipeline decided to set up a German subsidiary, which will be the owner of the section of the pipeline in the country. The permitting process has been halted until assets and people are transferred to the new unit. Benchmark European gas prices surged as much as 12% after the announcement. While it’s not clear how the move changes the timing of the permissions, it adds to bullish developments in the energy-hungry market. Many in Europe expect Russia to significantly increase supplies only when the pipeline is approved. Adding to the current squeeze with the weather turning colder, gas flows from Norway, Europe’s second-biggest supplier after Russia, dropped by 10% on Tuesday due to an outage at the giant Troll field. China signaled it’s preparing for fuel shortages in some areas, meaning competition for LNG between Europe and Asia will remain intense. “We haven’t got enough gas at the moment quite frankly and we are not storing for the winter period,” said Jeremy Weir, chief executive officer of Trafigura Group said at a conference Tuesday. “There is a real concern potentially, if we have a cold winter, we could have rolling blackouts in Europe.” Fuel shipments from Gazprom PJSC have recovered after a slump at the start of this month but are still far below last year’s levels. The company signaled on Monday it has little appetite for increasing December gas volumes it transits through other territories into Europe. Dutch month-ahead gas was 9.7% higher at 87.69 euros a megawatt-hour as of 12:20 p.m. in Amsterdam. The U.K. equivalent gained 9.8% to 224.80 pence a therm. Prices have increased more than threefold this year as European inventories remain below normal after a prolonged winter last season. Besides lower Russian supplies, patchy domestic production and high Asian demand for liquefied natural gas have also contributed to the region’s energy crisis.

German agency suspends certification for Nord Stream 2 pipeline | News | DW - The controversial gas pipeline connecting Germany and Russia has been completed — but German officials have now blocked its certification process.Germany's network regulator suspended its ongoing process to certify the Nord Stream 2 pipeline after ruling that its operator within Germany does not comply with conditions set by German law. The decision could amount to another setback for the controversial pipeline that has been waiting to become operational for almost a year. Germany's Federal Network Agency said the operating company did not meet conditions to be an "independent transmissions operator," and it could be certified only "if that operator was organized in a legal form under German law." The suspension comes as the Switzerland-based company Nord Stream 2 AG plans to establish a subsidiary under German law, but only for the German section of the pipeline. This decision was taken instead of "transforming its existing legal form," the regulator said. The certification would stay suspended "until the main assets and human resources have been transferred to the subsidiary," the German officials added. Nord Stream 2 said it had been notified by the regulator and said, "We are not in the position to comment on the details of the procedure, its possible duration and impacts on the timing of the start of the pipeline operations." German Green party lawmaker Oliver Krischer welcomed the suspension by the regulator, saying that Gazprom had given the impression "of not taking German and European law seriously." The move will "significantly delay the launch of the pipeline, which is therefore unlikely to play a role this winter," he told Germany's Rheinische Post newspaper.

Germany Suspends Nord Stream 2 Certification - The Moscow Times - Germany’s energy regulator on Tuesday suspended the certification process for Russia’s Nord Stream 2 gas pipeline in the latest setback for the controversial project. The pipeline, which was completed earlier this year after months of delays and setbacks amid U.S. sanctions designed to thwart it, needs approval from German authorities before it can be put into use. The German regulator said it could not proceed with certification of the pipeline because Nord Stream 2 AG, the Gazprom-controlled company which owns the pipeline, is registered in Switzerland, not Germany. “Following a thorough examination of the documentation, the Bundesnetzagentur concluded that it would only be possible to certify an operator of the Nord Stream 2 pipeline if that operator was organised in a legal form under German law,” the regulator said in a statement Tuesday. Gazprom’s share price dropped 2% on the news, which comes as Europe faces a gas supply crunch, with Russia accused of withholding supplies in a bid to force approval for Nord Stream 2. Nord Stream 2 AG has agreed to set up a German subsidiary to govern the German part of the pipeline, the regulator said in its statement. “The certification procedure will remain suspended until the main assets and human resources have been transferred to the subsidiary.” Once that process is completed, the certification period will resume. Under German law, the regulator has four months to review documentation and make a decision on whether to approve the pipeline. It is the latest setback for Nord Stream 2, which has been beset with delays and hold-ups in recent years amid escalating tensions between Russia and the West.

Natural gas prices in Europe soar as Germany suspends approval for Nord Stream 2 pipeline - Natural gas prices in Europe soared again on Tuesday, November 16, 2021, as the German Federal Network Agency -- Bundesnetzagentur -- suspended the process of certifying the new Russian gas pipeline called Nord Stream 2.The pipeline was completed in September 2021 and is designed to bypass Ukraine and connect Russia directly to Germany. With about 40% of natural gas in EU coming from Russia, leading energy traders have warned of the risk of rolling blackouts in Europe in the event of a colder than average winter. In a statement issued today, Bundesnetzagentur said it would only be possible to certify an operator of the Nord Stream 2 pipeline if that operator was organized in a legal form under German law.¹"Nord Stream 2 AG, which is based in Zug, Switzerland, has decided not to transform its existing legal form but instead to found a subsidiary under German law solely to govern the German part of the pipeline," the agency said in a statement. "This subsidiary is to become the owner and operator of the German part of the pipeline. The subsidiary must then fulfil the requirements of an independent transmission operator as set out in the German Energy Industry Act (sections 4a, 4b, 10 to 10e EnWG)."The certification procedure will remain suspended until the main assets and human resources have been transferred to the subsidiary and the Bundesnetzagentur is able to check whether the documentation resubmitted by the subsidiary, as the new applicant, is complete."When these requirements have been fulfilled, the Bundesnetzagentur will be able to resume its examination in the remainder of the four-month period set out in law, produce a draft decision and deliver it to the European Commission for an opinion, as provided for in the EU legislation on the internal market."European gas futures prices gained 10%, piling on the pain for businesses and households already paying much higher bills.²Natural gas prices have rocketed this year in Europe³, where gas plays an essential role in power generation and home heating.With about 40% of natural gas in EU coming from Russia, leading energy traders have warned of the risk of rolling blackouts in Europe in the event of a colder than average winter.The decision comes at a time of rising tension between the European Union and Russia over Ukraine and a migrant crisis on the Belarus-Poland border.

Germany's Nord Stream 2 gatekeeper: the long road until gas flows (Reuters) - Germany's energy regulator said on Tuesday it had suspended the certification process for the Nord Stream 2 pipeline to carry Russian gas to Europe and said the Swiss-based consortium needed to form a company under German law to get an operating licence. Europe's most controversial energy project, which is led by Russian gas giant Gazprom GAZP.MM , has faced resistance from the United States and Ukraine amongst others. Surging gas prices in Europe caused by a jump in global demand as the economy recovers from COVID-19, has led some government officials and industry to demand more Russian supplies. Prior to Tuesday's decision, the German regulator last month asked the pipeline operator, Swiss-based Nord Stream 2 AG, for assurances it would not break competition rules. Germany's Federal Network Agency - which regulates the country's electricity, gas, telecommunications, post and railway sectors - has until early January to come up with a recommendation on whether it will certify the pipeline that runs from Russia to Germany under the Baltic Sea. While technical requirements have been met, the sticking point is whether Gazprom will comply with European unbundling rules that require pipeline owners to be different from suppliers of gas flowing in them to ensure fair competition. The Nord Stream 2 operator says the rules are aimed at torpedoing the pipeline and in October scored a partial victory when an adviser to the European Union's top court recommended that Gazprom could challenge. The project's identically-sized sister pipeline, Nord Stream 1, has been exempt from unbundling rules since opening in 2011 because it was treated as an interconnector rather than as direct supplier.Once a three-member independent ruling committee at the network agency has made its recommendation it goes to the European Commission, which has another two months to respond. If both bodies are in agreement that the pipeline fulfils all regulatory requirements then certification can be issued relatively quickly, but if they aren't the process could be further delayed.

EU Gas Prices Soar On NS2 Delays, Sudden Belarus Pipeline Closure - European natural gas prices continue to soar after Nord Stream 2 pipeline delays were seen earlier this week, and now a major crude pipeline from Russia into Europe has temporarily halted flows due to "unscheduled repairs." The newest market generated information pushing up European natgas prices to the highest levels in a month is due to a Belarus portion of the Druzhba oil pipeline system carrying Urals crude from Russia to Europe has temporarily halted flows to address "unscheduled repairs," the Russian energy export giant Transneft wrote in a statement. "Unscheduled repairs were started on one of the branches of the Druzhba oil pipeline, limiting the flow in the direction of Poland for approximately three days, while the planned target for the month is not being revised," Transneft spokesman Igor Demin said. Gomeltransneft, the operator of the Belarusian section, said maintenance began on Nov. 16. "Starting from yesterday, Gomeltransneft has started an unplanned maintenance at one of the lines of the Druzhba pipeline, having restricted [crude] pumping towards Adamowa Zastawa [in Poland] tentatively for three days, but the plan for the month is not revised," a Transneft spokesman said. Druzhba is one of the largest pipeline networks in the world that carries a mix of heavy sour oil of Urals and light oil of Western Siberia, where its network splits in two and pumps the crude into a northern section, Poland and Germany, and a southern area, Ukraine to Slovakia, the Czech Republic, and Hungary. The unscheduled repairs, restricting flows, come days after Belarusian leader Alexander Lukashenko threatened to cut the transit gas supply from Russia to Europe over a migrant crisis at the Belarus-Poland border. Compound that with the approval process for the Nord Stream 2 pipeline now delayed...As Katabella Roberts writes at The Epoch Times, Germany’s energy regulator the Bundesnetzagentur announced on Tuesday that it has suspended the certification process for a major new pipeline connecting the country and Russia, after ruling that its operator within Germany does not comply with conditions set by German law. “Nord Stream 2 AG, which is based in Zug (Switzerland), has decided not to transform its existing legal form but instead to found a subsidiary under German law solely to govern the German part of the pipeline. This subsidiary is to become the owner and operator of the German part of the pipeline. The subsidiary must then fulfil the requirements of an independent transmission operator as set out in the German Energy Industry Act,” the Bundesnetzagentur said in a statement.“Following a thorough examination of the documentation, the Bundesnetzagentur concluded that it would only be possible to certify an operator of the Nord Stream 2 pipeline if that operator was organised in a legal form under German law,” the German regulator said....and the Dutch month-ahead gas, the European benchmark, is up at least 33% this week. For a sense of the scale of Europe's gas price crisis, the following chart puts UK, US, and EU NatGas on par with WTI Crude (per barrel of oil equivalent BTUs), As is clear, there is a huge energy disparity between gas in Europe, providing more incentives for switching again (but not helped by Belarus now shutting its oil pipeline). The timing of the Druzhba maintenance and delay of the Nord Stream 2 certification process comes at the worst possible moment. Europe faces a massive energy crunch as natgas stockpiles are the lowest in a decade, just as Europe faces its first cold winter blast. Widespread below-average temperatures continue to plague parts of the continent, as the following chart of NW Europe Heating Degree Days shows.

What Would Happen If Brazil Privatized Its National Oil Company? - A massive surge in inflation is threatening Brazil’s post-pandemic economic recovery. Latin America’s largest economy was savaged by the coronavirus with Brazil suffering the third most COVID-19 cases and second-highest deaths globally. As a result, Brazil’s 2020 gross domestic product shrank by just over 4%. Since the economy began recovering inflation has surged to over 10%, on an annualized basis, causing the fiscal outlook for Latin America’s largest economy to deteriorate. This forced Brazil’s central bank to hike the benchmark Selic rate by 1.5% to 7.75%, the sixth increase this year. Brazil’s soaring inflation can be blamed on the surge in oil prices since the start of 2021 which has caused domestic fuel prices to spiral upwards. This is threatening Brazil’s crucial economic upswing and creating considerable hardship for Brazilians, sparking significant political pressure for embattled populist right-wing president Jair Bolsonaro. In response to the inflationary crisis, Bolsonaro floated the idea of privatizing Brazil’s national oil company Petrobras. As of September 2021, the national government in Brasilia, through a series of entities, owns a controlling 36.75% interest in Petrobras. The remaining 63.25% of the company is owned by retail and institutional investors with 19.77% being comprised of New York Stock Exchange American Depositary Receipts. Bolsonaro’s latest statements are in stark contrast to earlier statements during his administration where he opposed privatizing Petrobras because of its strategic value to Brazil and importance in driving the country’s epic offshore oil boom. The president also took a heavy-handed interventionist approach to managing Petrobras earlier this year when he dismissed the company’s experienced president Roberto Castello Branco in a spat over higher fuel prices. Bolsonaro replaced Branco with army general and former defense minister Joaquim Silva e Luna who, ironically, has refused to artificially control fuel prices despite being a Bolsonaro appointee. Lawmakers in Bolsonaro’s administration have indicated that the privatization of Petrobras could occur through a share sale, although such a move is not as simple as Brasilia has portrayed.

Joe Biden and Xi Jinping discuss tandem U.S.-China oil stockpile release --Oil fell as investors weighed the chances that the Biden administration may tap emergency reserves in a coordinated move with nations such as China, and a mixed report on U.S. stockpiles.President Joe Biden has been weighing the merits of releasing oil from the Strategic Petroleum Reserve to try to quell gasoline prices. A release by China was raised by the U.S. during this week’s virtual summit with President Xi Jinping, the South China Morning Post reported, citing an unidentified person. Beijing is open to the request but hasn’t committed to specific actions, it said.The Xi-Biden summit lasted 3 1/2 hours, and covered a host of issues including energy security. The U.S. request to China to release oil reserves was part of talks on economic cooperation, the South China Morning Post said. The matter was also discussed during an earlier phone conversation between Chinese Foreign Minister Wang Yi and U.S. Secretary of State Antony Blinken, it said.In the U.S., crude in the tanks at Cushing -- the delivery point in Oklahoma for WTI futures -- has sunk to a three-year low after dropping for the past five weeks, according to official data from the Energy Information Administration.The industry-funded American Petroleum Institute reported nationwide crude inventories rose 655,000 barrels last week, according to people familiar with the data. However, the report also showed a draw in oil at the hub at Cushing, as well as lower gasoline holdings. Official figures come later on Wednesday.After hitting a seven-year high last month crude has eased, and traders are trying to figure out the market’s likely trajectory into 2022. The International Energy Agency said this week while demand growth remains robust, supply is catching up. Meanwhile, the Organization of Petroleum Exporting Countries said a surplus may soon emerge as the rebound from the pandemic falters.WTI for December delivery dropped 0.6% to $80.30 a barrel on the New York Mercantile Exchange at 9:09 a.m. in Singapore. Brent for January settlement lost 0.5% to $82.06 a barrel on the ICE Futures Europe exchange.The oil market remains backwardated, a bullish pattern marked by near-term prices trading at a premium to longer-dated ones. Brent’s prompt spread was $1.01 a barrel in backwardation on Tuesday, little changed from the level on Monday.

Here's Why Biden Was Forced To Beg Xi To Release Oil From China's SPR -- As we have detailed in depth over the past few days (here,here, and here), the Biden administration is utterlydesperate to stop retail gasoline prices soaring as the president's approval rating plunges ever lower. So desperate that last night we reported that Biden had reportedly asked President Xi to release some of China's Strategic Petroleum Reserve (which we remarked and JPMorgan has confirmed was "highly unlikely" to happen).The decision to ask China to join a coordinated global SPR release seemed odd at the time of reporting... but now we may know why Biden was forced to do it. It turns out that the US SPR has seen drawdowns for 10 straight weeks, during which more than 15 million barrels of crude have been withdrawn. At 606 million barrels, SPR is at its lowest since 2003, and it seems more declines are on the horizon. As Bloomberg's Julian Lee points out, the withdrawal of 3.25 million barrels from the SPR is the biggest in more than a decade. Not since the coordinated release of emergency reserves in September 2011, following the Libyan uprising, have we had this much taken out of the storage caverns in a single week. It is clear that the much talked-about SPR draw is happening by stealth, despite U.S. House Majority Leader Steny Hoyer saying he is not in agreement with Senate Majority Leader Chuck Schumer's call for tapping the strategic oil reserve to lower gas prices, saying he believed the reserve was there to be used if there is a collapse in supply in times of emergency. "I'm not in agreement with that. I think that the Strategic Petroleum Reserve is not for a raise in prices, it's for a collapse in supply at times of emergency, i.e. a conflagration in the Middle East which essentially shuts off supply," Hoyer told reporters when asked if he agreed with Schumer's comments. Too late, Steny - it already happened! So what the hell is going on? 10 straight weeks of SPR drawdowns and prices for gas at the pump have risen over 7%.

Energy markets could see a 'series of crunches' as demand grows, oil expert Dan Yergin says There's a disconnect in the energy market, and it could lead to future supply shortages, Daniel Yergin, vice chairman of IHS Markit, told CNBC. International oil companies are under pressure to cut investments in traditional energy production at a time when demand for oil is growing — and that's leading to a "preemptive underinvestment" in supply, Yergin told CNBC's "Capital Connection" on Monday at the Abu Dhabi International Petroleum Exhibition and Conference. He called it a disconnect between the "realities of the dynamics of the market" and the policies that are being implemented. Oil producers are "clearly not investing enough" because investors want them to be more careful and exercise capital discipline, he added. On the other hand, "world demand is going to be back where it was in 2019 in the next few months, and … demand will continue to grow, so you will need investment," he said. In its monthly oil market report, OPEC said it sees global oil demand reaching 100.6 million barrels per day in 2022 — that's about 0.5 million bpd above pre-pandemic levels. The focus on shifting away from traditional fuels toward clean energy may also contribute to a supply shortage, Yergin said. Global demand for power is growing more quickly than renewable energy capacity, which means there isn't enough clean energy to meet the world's needs. We need to find a new balance between the United States and China. That's the single most important issue in international affairs today. "I think we should be conscious that one of the things we may see is a series of crunches," he said. U.S. crude futures are up 68% and international benchmark Brent crude gained 60% so far this year as demand jumped due to economies reopening and loosening pandemic restrictions.

IEA sees a potential reprieve for soaring oil prices as U.S. ramps up production— The International Energy Agency said on Tuesday that soaring oil prices could soon turn lower as the U.S. leads a rebound in global supply. Oil prices have soared above $80 a barrel over the last few weeks, hitting their highest level in seven years, as demand outstripped supply. The momentum behind the price rally has even tempted some forecasters topredict a return to $100-a-barrel oil, although not everyone shares this view."The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon," the IEA said in its closely watched monthly report."Contrary to hopes expressed in Glasgow at COP26 this is not because demand is declining, but rather due to rising oil supplies."Demand for oil is also strengthening because of robust gasoline consumption and increasing international travel as more countries re-open their borders, the influential energy agency said.Higher oil prices, weaker industrial activity and an alarming resurgence of Covid-19 infections in Europe, however, will likely temper price rises, the group added.International benchmark Brent crude futures traded at $82.58 a barrel on Tuesday morning in London, up around 0.6%, while U.S. West Texas Intermediate futures stood at $81.28, over 0.5% higher.The IEA kept its forecast for oil demand growth largely unchanged from last month at 5.5 million barrels per day for 2021 and 3.4 million barrels per day for 2022."As we head towards the end of the year, we are expecting continued strong growth in demand, but supply is finally on the rise," Toril Bosoni, oil market analyst at the International Energy Agency, told CNBC's "Street Signs Europe" on Tuesday."So, OPEC+ is continuing to unwind their cuts but we are also seeing higher supplies from other producers outside of the group and so we're seeing that the market is moving closer to balance."The IEA said it expected a rise of 1.5 million barrels per day in global oil output in the final three months of the year, with the U.S. alone accounting for 400,000 barrels of this growth.OPEC kingpin Saudi Arabia and non-OPEC leader Russia are each set to account for 330,000 barrels per day of the increase, in line with their OPEC+ targets. By December, Saudi Arabia and Russia are each set to pump over 10 million barrels per day for the first time since April last year, the IEA said. The energy agency revised its global oil supply forecast 330,000 barrels per day higher for the fourth quarter to reach 99.2 million barrels per day by year-end. That's up 6.4 million barrels per day year-on-year.The U.S. is forecast to account for 60% of non-OPEC+ supply gains next year, now forecast at 1.9 million barrels per day, although the country is not expected to return to pre-Covid levels until the end of 2022.The IEA said that while stronger oil prices had prompted some U.S. producers to ratchet up production, the same could not be said for OPEC+. The energy alliance decided to keep production policy steady in early November, raising output 400,000 bpd, defying pressure from major consumers for a higher increase to help cool the market. The oil producer group is set to meet again on Dec. 2.

China draws on crude oil inventories amid weak imports, strong processing: Russell (Reuters) - A rebound in China's crude oil processing in October coupled with a sharp drop in imports of the fuel means the world's biggest crude buyer is back to drawing down inventories. China's refineries used 58.4 million tonnes of crude in October, equivalent to about 13.75 million barrels per day (bpd), up from the 16-month low of 13.64 million bpd in September. But the total volume of crude available to refineries from both imports and domestic output was just 54.63 million tonnes, or about 12.86 million bpd. This means that refineries processed about 890,000 bpd more crude than what was available from imports and domestic production, meaning that they had to draw down on inventories. China doesn't disclose the volumes of crude flowing into or out of strategic and commercial stockpiles. But an estimate can be made by deducting the total amount of crude available from imports and domestic output from the amount of crude processed. In the past seven months, China's refineries have processed more crude than what was available on five occasions. However, strong stockpile builds in the first quarter of the 2021 mean that for the first 10 months overall, China has added about 150,000 bpd to its commercial or strategic storages. But even this modest build is well below what has been the pattern of the last several years, as China has consistently imported crude well beyond its consumption as it built up its strategic petroleum reserve (SPR).

Oil futures see gentle hedge fund selling: Kemp (Reuters) - Petroleum futures and options continued to see light profit-taking by hedge funds and other money managers last week, as oil prices drifted lower from the three-year highs set in late October. Portfolio managers sold the equivalent of 9 million barrels in the six most important contracts in the seven days to Nov. 9, according to records from ICE Futures Europe and the U.S. Commodity Futures Trading Commission. Funds have been net sellers in four of the last five weeks, reducing their combined position by a total of 77 million barrels (9%) to 794 million barrels (Link). But nearly all the adjustment has come from a reduction in previous bullish long positions (-70 million barrels) with only a small number of new bearish ones initiated (+7 million), consistent with profit-taking after a big rally. In the most recent week, hedge funds were sellers of Brent (-10 million), U.S. gasoline (-5 million) and U.S. diesel (-9 million), but bought NYMEX and ICE WTI (+12 million) and European gas oil (+4 million). WTI and gas oil have been the strongest elements of the complex in recent months, expected to benefit from continued production restraint by U.S. shale producers and the scarcity of natural gas stocks in Europe. The hedge fund community remains essentially bullish about the outlook for oil, with combined long positions outnumbering shorts by 6:1, in the 79th percentile for all weeks since 2013. But with prices already at multi-year highs and positions stretched, petroleum contracts are no longer attracting much fresh buying. Instead they are being sapped by persistent, gentle selling as managers lock in some profits.

IEA sees oil price rally slowing as crude output recovers --- The tightness in global oil markets that propelled prices to a seven-year high is starting to ease as production recovers in the U.S. and elsewhere, the International Energy Agency said. Demand growth remains robust, but supply is catching up and changes in oil stockpiles seen in October suggest “the tide might be turning,” according to the IEA’s monthly report. If the forecast proves to be correct, it would provide a significant relief for harried consumers who are suffering the consequences of price inflation. “The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon,” the Paris-based IEA said in its monthly report. “Production in the U.S. is ramping up in tandem with stronger oil prices.” Global oil output increased by 1.4 million barrels a day last month, and will add as much again over November and December as the Gulf of Mexico restores supplies halted by Hurricane Ida. American shale drillers are also taking advantage of higher prices to bolster drilling. Those extra barrels are coming onstream as the OPEC+ alliance continues to revive exports it halted during the pandemic, the agency said. Crude futures surged above $86 a barrel in London last month on the combination of recovering post-pandemic consumption and a shortfall of natural gas supplies that spurred extra demand for oil. Prices have since retreated to under $83 as the U.S. contemplates action to bring down fuel costs. President Joe Biden has been considering a release from the Strategic Petroleum Reserve after the Organization of Petroleum Exporting Countries and its partners rebuffed his calls to restore production more quickly. The alliance, led by Saudi Arabia and Russia, has argued that it should stick to its gradual approach because demand remains fragile. OPEC Secretary-General Mohammad Barkindo reiterated the group’s stand-point on Tuesday, saying that global oil markets are poised to return to surplus from next month.

Scale of oil’s swing to surplus is next year’s big market puzzle - The oil market is about to swing into a healthy supply surplus, if the world's big international energy forecasters are to be believed. The scale of that shift -- so critical to what the price of crude does next -- is heavily dependent on something that leading producer countries have collectively failed to do time and time again in recent months: pump as much as they're supposed to. The latest outlooks from the International Energy Agency, the Organization of Petroleum Exporting Countries and the U.S. Energy Information Administration all show the global oil deficit shrinking in the current quarter and flipping into surplus next year — provided that the OPEC+ producer group’s members all hit individual output targets under their supply deal. Those targets envisage the group’s combined production increasing by 400,000 barrels a day each month until at least April, when the baselines against which cuts are measured are revised for several of its members. OPEC+, as the group is known, refused earlier this month to heed customers’ requests for a bigger increase in December, arguing that the market is well supplied. The forecasts of all three agencies would appear to support that view, if the producers can pump as planned. But that ability is questionable. Of the three agencies, only the U.S. EIA forecasts OPEC production and it sees that running well below the target level as we move through 2022 (see chart below). In contrast, analysts at OPEC used target production levels in the forecasts they presented to ministers before the meeting earlier this month. Data for October suggest that the EIA may be closer to the mark than OPEC. The producer group published estimates of its members’ October output in its latest monthly report. They showed an increase of just 136,000 barrels a day from September, less than one-fifth of the jump assumed in the forecast presented to ministers in late October. The impact on oil balances next year is significant. Using the EIA’s demand and non-OPEC production forecasts and the OPEC+ output targets for OPEC members, global oil supply exceeds demand by 900,000 barrels a day in the first quarter of 2022 and the glut increases throughout the year. But if we substitute those targets with the EIA’s forecast of OPEC production, a very different picture emerges. The first-quarter supply surplus is virtually wiped out, with a small stock build in January offset by further draws in February and March. The subsequent builds in global inventories don’t exceed 1 million barrels a day, in contrast to the 3 million barrel-a-day increase seen in 4Q22 when using the OPEC targets (see chart above). Nonetheless, the three agencies still see market tightness easing as global supplies increase. Changes to oil demand from last month’s outlooks were modest, with the biggest upward revisions being made to the current quarter by the IEA and EIA, while OPEC has trimmed its expectations of oil use over this and the next two quarters. Those higher fourth-quarter demand projections were offset by similar increases in non-OPEC supply from the IEA and EIA. For 2022, the IEA and EIA both increased their forecasts of non-OPEC production, while OPEC cut its forecast for the first half of the year and increased it for the second half. The net result of the tweaks to demand and non-OPEC supply forecasts is that all three agencies now see the world’s need for OPEC crude in 2022 lower than they did a month ago.

Oil Futures Plummet as Europe Returns to COVID Lockdowns -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange fell more than 1.5% in early trade Monday, sending the international crude benchmark below $81 per barrel (bbl), as investors monitor an uptrend in COVID-19 infections across European Union and Russia, that have prompted several governments in the region to bring back quarantine restrictions in their effort to slow the viral spread ahead of the winter months. Europe once again became the epicenter of a COVID-19 outbreak, with new cases in Germany, Netherlands and Russia climbing to their highest levels since the early days of the pandemic. The World Health Organization estimates coronavirus deaths rose by 10% in Europe in the past week, with low vaccination rates in central and eastern European countries seen as a main driver behind the surge. Russia -- with barely a third of the population vaccinated -- has seen a steady two-month uptrend in new COVID-19 infections and now leads the world in total coronavirus deaths for the first time since the start of the pandemic. Faced with dire heath crisis, many governments in the region have once again resorted to unpopular quarantine measures but this time only for those who rejected the vaccine. Austrian Chancellor Alexander Schellenberg announced a targeted lockdown starting Monday for all those who are 12 and older who have not been inoculated -- meaning around 30% of the country's population must stay at home except for a few limited reasons. The new rules will be reinforced by police officers carrying out spot checks on those who are out. The Netherlands' government announced similar measures on Friday, while also limiting hours of operation for restaurants and bars. In Germany, where cases on Sunday surged to a new record of more than 50,000, the country's health minister, Jens Spahn, said the public health officials must do "everything necessary" to break the latest wave of the disease, Deutsche Welle reported. "The situation is serious, and I recommend that everyone takes it as such," he added. The latest COVID-19 wave will likely bolster the view that the lingering impact of the pandemic will curb oil demand. Organization of the Petroleum Exporting Countries last week said it expects global oil demand to average 99.49 million barrels per day (bpd) in the fourth quarter, down 330,000 bpd from their forecast in October. Domestically, consumer sentiment unexpectedly collapsed in early November as Americans grew increasingly worried about rising inflation along with the COVID-19 pandemic. Consumers see price increases accelerating to 4.9% over the next year, the highest since 2008. That waning confidence has some economists saying the spike in prices could dent supercharged consumer spending that's fueled this year's economic recovery.

Oil settles mixed on questions over crude supply, demand, strong dollar (Reuters) -Oil prices settled mixed on Monday as investors wondered whether crude supplies will increase and whether demand will be pressured by the recent surge in energy costs, the strong dollar and rising COVID-19 cases. Brent futures settled down 12 cents, or 0.2%, to $82.05 a barrel while U.S. West Texas Intermediate (WTI) crude rose 8 cents, or 0.1%, to $80.88. In early trading, the oil market factored in speculation that President Joe Biden's administration could fight high prices by releasing crude oil from the U.S. Strategic Petroleum Reserve, but skepticism about that approach caused U.S. crude to edge higher, Weighing on oil prices, the U.S. dollar hit a 16-month high against a basket of currencies as investors worried about the global economy. A stronger dollar makes oil more expensive for buyers using other currencies. U.S. shale production in December is expected to reach prepandemic levels of 8.68 million barrels a day, according to Rystad Energy. Meanwhile there are indications demand may be slowing due to heightened coronavirus cases and inflation. The Organization of the Petroleum Exporting Countries (OPEC) last week cut its world oil demand forecast for the fourth quarter by 330,000 bpd from last month's forecast, as high energy prices hampered economic recovery from the COVID-19 pandemic. "The market now seems to be less concerned about the current supply tightness, expecting it to be short-lived," "Traders are instead refocusing on the return of two bearish factors – the possibility of more oil supply sources and more COVID-19 cases." UAE Energy Minister Suhail al-Mazrouei said all indications point to an oil supply surplus in the first quarter of 2022. "There's little chance of OPEC+ raising output faster, especially if ... the group expects the market to return to surplus in the first quarter of 2022," Europe has again become the epicenter of the COVID-19 pandemic, prompting some governments to consider re-imposing lockdowns, while China is battling the spread of its biggest outbreak caused by the Delta variant.

Oil Futures Up as IEA Leaves 2021 Demand Outlook Unchanged -- Nearby delivery oil futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange pushed higher in early trade Tuesday after International Energy Agency made no adjustments to its 2021 global oil demand outlook, projecting that bourgeoning gasoline and jet fuel consumption underpinned by the reopening of international air travel would offset renewed quarantine measures in the Northern Hemisphere and weakness in Asia's industrial production. In its November Oil Market Report released this morning, IEA projected worldwide oil consumption would rise by 5.5 million barrels per day (bpd) this year -- unchanged from the previous' month forecast, despite concerns over expected demand weakness stemming from COVID-19 flare-ups across Europe. In 2022, the Paris-based agency estimates demand growth of 3.4 million bpd. "Global oil demand is strengthening due to robust gasoline consumption and increasing international travel as more countries re-open their borders. However, new COVID-19 waves in Europe, weaker industrial activity and higher oil prices will temper gains," said IEA. This week, a number of European countries resorted to targeted lockdowns in their attempt to slow the spread of the virus ahead of the winter months. Netherlands, Austria, and Russia have announced "stay-at-home" orders for the unvaccinated and limited hours of operations for contact sensitive businesses. In contrast to the IEA outlook, Organization of the Petroleum Exporting Countries downgraded their global demand expectations for the fourth quarter by 330,000 bpd, projecting annualized growth of 96.7 million bpd. The cartel noted that there is no shortage of supplies on the global oil market amid rapidly weakening consumption in China and India. At the annual energy conference at Abu Dhabi, Saudi oil minister Prince Abdul-Aziz bin Salman rejected calls for additional supplies from the kingdom, adding that "the issue is not lack of crude-oil, but it is a case for availability of gas, liquefied natural gas, coal and the electricity." On Nov. 4, OPEC and Russia-led non-OPEC oil producers agreed to increase production quotas by 400,000 bpd for December, consistent with their July agreement, while shrugging off intense lobbying from the United States and other consuming countries for more volume of crude oil output. In outside markets, U.S. Dollar Index ripped higher against a basket of foreign currencies as investors await the release of key economic data domestically, with expectations for October retail sales and industrial production to show a marked improvement from the prior month.

Oil bounces back on tight inventories, demand worries limit gains -- Oil prices settled mixed on Tuesday, as prospects of tight inventories worldwide were offset by forecasts of a production increase in coming months and concerns over rising coronavirus cases in Europe. Brent crude rose 38 cents, or 0.5%, to $82.43 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 12 cents, or 0.2%, to $80.76 a barrel. "The oil market will remain tight in the short term, which should lend support to prices," Oil output from Texas' Permian basin was forecast to reach a record 4.953 million barrels per day (bpd) in December. U.S. crude stocks were expected to have risen for a fourth straight week, with analysts in a Reuters poll forecasting a build of about 1.4 million barrels last week. The first of two weekly supply reports, from industry group the American Petroleum Institute, is due later Tuesday. However, the International Energy Agency (IEA) said the oil market rally may ease as high prices could provide a strong incentive to boost production, particularly in the United States. The IEA expects average Brent prices to be around $71.50 per barrel in 2021 and $79.40 in 2022, while Rosneft said it may reach $120 in the second half of 2022, according to the TASS news agency. Secretary General Mohammad Barkindo of the Organization of the Petroleum Exporting Countries expects an oil surplus as early as December and the market to remain oversupplied next year. OPEC last week cut its world oil demand forecast for the fourth quarter by 330,000 bpd from last month's forecast, as high energy prices hampered economic recovery from the COVID-19 pandemic. Worries about demand destruction also weighed as Europe has again become the epicentre of the COVID-19 pandemic, prompting some governments to consider reimposing lockdowns, while China is battling the spread of its biggest outbreak caused by the Delta variant. The Biden administration has been considering tapping U.S. emergency stockpiles to cool rising oil prices. However, the acting head of U.S. Energy Information Administration said a release of oil from the U.S. Strategic Petroleum Reserve (SPR) would likely have only a short-lived impact on oil markets.

WTI Holds Losses Despite Surprise Crude Draw - Despite dismissals over outcomes, oil prices remain under pressure from ongoing talk of SPR releases (US and/or China)from a desperate President Biden battling record gas prices at the pump. WTI wasn't helped by Fed's Bullard's hawkish comments either and this morning's hawkish tilt to short-term interest-rates suggests his perspective may be being taken seriously by an increasingly anxious-about0inflation market. “The actual contribution to the supply is so limited,” Hans van Cleef, senior energy economist at ABN Amro said of a possible release from reserves.“For now we are rangebound, while waiting for new triggers.”Last night's small crude build and large drop in stocks at Cushing reported by API will be key to watch in the official data. API

• Crude +655k (+1.2mm exp)
• Cushing -2.792mm
• Gasoline -491k
• Distillates +107k

DOE

• Crude -2.101mm (+1.2mm exp, -178k whisper)
• Cushing +216k - first build in 6 weeks
• Gasoline -707k
• Distillates -824k

According to the official data, crude stocks dropped 2.1mm barrels last week (very different from API and expectations). Cushing stocks are getting ever closer to their low-operational-limits (around 20mm barrels) and last week's tiny 216k barrel build does nothing to change that...

Oil Futures Deepen Losses Despite US Crude, Product Draws - Crude and refined products futures on the New York Mercantile Exchange accelerated losses in late morning trade Wednesday, sending the front-month West Texas Intermediate below $79 per barrel (bbl) despite government data from the Energy Information Administration showing U.S. commercial crude oil inventories unexpectedly decreased in the week-ended Nov. 12 and gasoline supplies dropped above consensus, while domestic refiners ramped up run rates underpinned by strengthening fuel demand. Inventory data released midmorning indicated nationwide crude oil supplies declined 2.1 million bbl from the previous week to 433 million bbl and are now about 7% below the five-year average. The crude draw was bullish against market expectations for a 500,000 bbl build and earlier estimates from the American Petroleum Institute showing inventories increased by 655,000 bbl from the prior week. This was realized as domestic refiners increased run rates for the fourth consecutive week through Nov. 12, up 1.2% to 87.9% of capacity, compared with analyst expectations for a 0.7% increase. Domestic crude oil production decreased 100,000 barrels per day (bpd) to 11.4 million bpd, according to EIA. Oil stored at Cushing, Oklahoma, the delivery point for West Texas Intermediate futures, rose 216,000 bbl from the previous week to 26.6 million bbl. Additionally, gasoline stockpiles declined by 707,000 bbl from the previous week to 212 million bbl compared with analyst expectations for inventories to have decreased by 600,000 bbl. Demand for motor gasoline remained steady near 9.241 million bbl, slipping only marginally from the prior week, while remaining more than 100,000 bpd above the five-year average. If gasoline demand follows pre-COVID seasonality, it would trend lower through the fourth quarter before a final surge amid the Christmas holiday. Distillate stocks fell 824,000 bbl to 123.7 million bbl and are now about 5% below the five-year average. Analysts estimated a 1.2 million bbl decline from the previous week. Distillate demand extended higher for the second consecutive week to 4.350 million bpd, gaining 70,000 bpd -- directionally in line with a 0.2% increase seen in DTN Refined Fuels Demand data. Total U.S. diesel demand was up 4.5% relative to the same week in 2019, weakening on a relative seasonal basis after being up 7.1% compared to 2019 levels, according to DTN data. Total products supplied over the last four-week period averaged 20.2 million bpd, up 3.9% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.3 million bpd, up 10.1% from the same period last year. Near 11:45 a.m. ET, NYMEX December West Texas Intermediate futures slumped $1.85 to trade at $78.88 bbl, NYMEX December RBOB futures declined 5.37 cents to $2.2960 gallon, and the front-month ULSD contract accelerated losses to $2.3819 gallon, down 4.87 cents on the session so far.

Oil drops on oversupply warnings, rising COVID-19 cases --Oil prices fell on Wednesday after the International Energy Agency and the Organization of the Petroleum Exporting Countries warned of impending oversupply and as COVID-19 cases in Europe increased the downside risks to demand recovery. The market pared some of those losses after an unexpected decline in U.S. crude oil stockpiles. Brent crude futures dropped $2.6%, or $2.15, to settle at $80.28 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled 3%, or $2.40, lower at $78.36 per barrel. U.S. crude oil inventories fell by 2.1 million barrels last week, latest government data showed, running against analyst expectations for a build of 1.4 million barrels. The IEA on Tuesday warned that while the "oil market remains tight by all measures, ... a reprieve from the price rally could be on the horizon ... due to rising oil supplies." New waves of COVID-19 cases in Europe which drove some governments to reimpose restrictions also weighed on prices. The agency said high price levels will see U.S. oil production rising again in 2022, accounting for about 60% of its forecast of 1.9 million barrels per day for non-OPEC supply growth. Latest weekly data showed U.S. output dipped to 11.4 million bpd, though these figures are rounded off and volatile. The high cost of fuel prices is a growing concern for the Biden administration, which on Wednesday asked the Federal Trade Commission to investigate the growing gap between the cost of unfinished gas and what consumers are paying at the pump. The United States has considered an emergency release of oil from the U.S. Strategic Petroleum Reserve, though the SPR is generally used during natural disasters or supply disruptions usually caused by wars. In the most recent week, the United States released more than 3 million barrels from the SPR, the second consecutive release of this size. These sales from the SPR are part of previously approved sales by Congress, and are not considered emergency releases. However, analysts have said the administration could consider speeding up such approved sales rather than resort to an emergency declaration. "With the mechanism for this sale already in place, with broad discretion from the legislation on timing, and without the risk of alienating IEA allies, accelerating this 18 mb of mandated sales may be the easiest of the options the White House has," said J.P. Morgan analysts in a Wednesday note. On Tuesday, OPEC Secretary General Mohammad Barkindo said the group sees signs of an oil supply surplus building from next month adding that its members and allies will have to be "very, very cautious".

Oil prices fall to six-week low on prospect of strategic crude releases - Oil tumbled to the lowest in nearly six weeks as investors considered the prospect of a release of crude supplies from strategic reserves.Futures in New York closed down 3% on Wednesday with both benchmarks dropping below their 50-day moving averages. President Joe Biden and his Chinese counterpart Xi Jinping discussed the merits of releasing oil from their reserves in a virtual summit Monday but didn’t make a decision, according to officials familiar with the discussions. In a letter on Wednesday, President Biden urged the Federal Trade Commission to probe possible illegal conduct in U.S. gasoline markets.“Energy markets are waiting to see what, if any, coordinated efforts with the U.S. and China happen before placing bullish bets,” .Crude has drifted in a range of about $7 for the last six weeks, and traders are trying to figure out the market’s likely trajectory into 2022. The International Energy Agency said this week that while demand growth remains robust, supply is catching up. Meanwhile, the Organization of Petroleum Exporting Countries said a surplus may soon emerge as the rebound from the pandemic falters.“When the trajectory of the oil market’s supply tightness is being challenged by both the IEA and OPEC, it’s difficult for the trading mood to not turn bearish,” said Louise Dickson, a senior oil markets analyst at Rystad Energy.Japan, another major consumer that has voiced concern about high prices, is unlikely to release oil from its reserves due to a law that only allows it to release stocks in the event of supply disruptions, a government official said.The U.S. Energy Information Administration earlier reported domestic crude inventories fell 2.1 million barrels last week and gasoline stockpiles slid 707,000 barrels. Yet, supplies at the nation’s biggest storage hub at Cushing, Oklahoma, edged higher.

Oil climbs after touching six-week lows as China eyes reserves-- Oil prices rose slightly on Thursday after dropping to six-week lows as investors wondered about how much crude major economies would release from their strategic reserves and how much that would ease global crude demand pressures. Prices fell to six-week lows early in the session as China said it was moving to tap reserves. On Wednesday, Reuters news reported that the United States was asking large consuming nations to consider a stockpile release to lower prices. Washington’s bid to cool markets, asking China to join a coordinated action for the first time, comes as high gasoline prices and other inflationary pressures have sparked a political backlash. Global benchmark Brent crude settled up 96 cents, or 1.2 percent, at $81.24 a barrel. The session low of $79.28 was the lowest since October 7. US West Texas Intermediate crude futures closed 65 cents, or 0.8 percent, higher at $79.01 a barrel. It also fell during the session to the lowest since early last month at $77.08. A release, even if only from the US and China, will likely drive prices lower at least temporarily. In October, prices hit seven-year highs as the market focused on the swift rebound in demand as more people received COVID-19 vaccinations and lockdowns were lifted. Prices rallied as demand rose and the Organization of the Petroleum Exporting Countries and its allies, called OPEC+, decided to raise output only slowly. The International Energy Agency and OPEC have said more supply will be available in the coming months, but Washington has pressed for a speedier pace. The proposed release of reserves represents an unprecedented challenge to OPEC, because it involves top importer China. China’s state reserve bureau said it was working on a release of crude reserves although it declined to comment on the US request. A Japanese industry ministry official said that the US had requested Tokyo’s cooperation in dealing with higher oil prices, but that Japan by law cannot use reserve releases to lower prices. A South Korean official said the country was reviewing the US request for Seoul to release some oil reserves, but added it could only release crude in case of a supply imbalance.

NYMEX WTI Reverses off 6-Week Low as Traders Assess SPR Sale -- New York Mercantile Exchange oil futures and Brent crude traded on the Intercontinental Exchange settled Thursday's session higher, with the West Texas Intermediate December contact reversing off a six-week low $77.08 per barrel (bbl) on the spot continuation chart. The gains came as investors assessed the potential impact of a coordinated release from OECD petroleum oil reserves, with the Biden administration reportedly calling for a joint action among oil-consuming countries to lower energy prices ahead of the winter months. At settlement, NYMEX WTI futures for December delivery added $0.65 to $79.01 per bbl after trading at a six-week low $77.08 per bbl earlier in the session and the January contract narrowed its discount to $0.60 per bbl. ICE January Brent crude advanced $0.96 to $81.24 per bbl settlement. Both benchmarks fell as much as 3% on Wednesday. NYMEX RBOB December futures gained 1.4 cents to $2.2943 gallon and front-month NYMEX ULSD added 1.96 cents to $2.3840 gallon settlement. Media airwaves on Thursday were hit with reports that the White House has asked some of the world's largest oil-consuming nations, including China, India and Japan, to tap into their petroleum reserves to relieve pressure on prices in the winter months. Earlier this month, the Biden administration was reportedly considering the idea of a unilateral release of U.S. Strategic Petroleum Reserves, a move that would likely have only a limited impact on the market. Considering the short-lived impact on prices today, even a coordinated sale of OECD stockpiles would do little to change the market's sentiment. The oil complex only briefly came under selling pressure from reports that China is now carrying out a second public auction of state crude oil reserves although no specific details on the size of that sale were released. China rolled out its first release from reserves in September, which was equal to roughly 7.38 million bbl. Analysts estimate the second SPR release will likely match the sale from two months ago. Energy Aspects estimates China's state oil reserves hold about 220 million bbl of crude oil, equivalent to 15 days of demand. The International Energy Agency forecasted this week that the tide in the oil markets is already turning towards oversupply, with producers like the U.S., Saudi Arabia and Russia rapidly increasing output. "World oil supply is set to rise 1.5 million barrels per day (bpd) over November and December, with the U.S. providing 400,000 bpd of the gain," said IEA in its latest Monthly Oil Market Report. "Saudi Arabia and Russia combined would account for 330,000 bpd in line with OPEC+ targets. Total oil supply had already leapt 1.4 million bpd month-on-month in October after the U.S. rebounded from Hurricane Ida." The American Petroleum Institute today in its latest Monthly Statistical Report said domestic crude oil production rebounded to 11.4 million bpd in October following September shutdowns in the wake of Hurricane Ida.

Oil Prices Tank On Renewed COVID Panic - Oil prices plunged by 3% early on Friday as Europe contends with rising COVID cases and is returning lockdowns and other restrictions, which the market fears would weigh on economies and oil demand. As of 9:09 a.m. EST on Friday, WTI Crude prices had slumped by 3.05% at $76.60, the lowest level since early October. Brent Crude had dipped below $80 a barrel, and traded down 2.72% at $79.17, also the lowest in more than a month. Prices sank after Austria announced on Friday it would impose a full lockdown starting on Monday. Germany, its neighbor to the north and the largest economy in Europe, faces a “dramatic” fourth wave, German Chancellor Angela Merkel said earlier this week. On Thursday, Germany’s 16 states agreed to introduce new restrictions depending on the hospitalization rate per 100,000 residents. If those rates exceed three people hospitalized with COVID per 100,000 inhabitants, free movement for leisure activities will be allowed only for those who are vaccinated or who have recovered from COVID. In Munich, the mayor scrapped the iconic Christmas market in the city, while a full lockdown in Germany is not entirely off the table. A full lockdown in Europe’s largest economy would slow the economic recovery. In Ireland, the government also announced restrictions this week, with pubs and nightclubs under curfew to close by midnight and people asked to work from home whenever possible. COVID cases are also on the rise in the United States, where the Upper Midwest has registered the biggest jump in cases in what doctors describe as an “unprecedented” situation. Apart from fears of an economic and oil demand slowdown amid rising COVID cases in developed countries, the oil market continues to watch apprehensively the possibility of releases from strategic petroleum reserves not only from the United States but also from major consumers in Asia, including China, India, Japan, and South Korea.

Oil dives 3% to below $80/bbl on resurgent pandemic in Europe (Reuters) - Oil prices fell about 3% to below $80 a barrel on Friday as surging COVID-19 cases in Europe threatened to slow the economic recovery while investors also weighed a potential release of crude reserves by major economies to cool prices. Brent futures for January fell $2.35, or 2.9%, to settle at $78.89 a barrel. U.S. West Texas Intermediate (WTI) crude for December fell $2.91, or 3.6%, to $76.10 on its last day as the front-month. WTI for January, which will soon be the U.S. front-month, was down about $2.65, or 3.4%, to $75.78. Both benchmarks declined for the fourth consecutive week, for the first time since March 2020. "The worry is that we will get some sort of coordinated release during the Thanksgiving Holiday next week, when volumes are typically low and dramatic moves have occurred." Austria became the first country in western Europe to reimpose a full coronavirus lockdown this autumn to tackle a new wave of COVID-19 infections across the region. Germany, Europe's largest economy, warned it may also have to move to a full lockdown. Brent has surged almost 60% this year as economies have bounced back from the pandemic and as the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, have only raised output gradually. "The (oil) market still remains fundamentally in a good position but lockdowns are now an obvious risk... if other countries follow Austria's lead," Governments from some of the world's biggest economies were looking into releasing oil from strategic petroleum reserves (SPR) following a request from the United States, first reported by Reuters, for a coordinated move to cool prices. The White House on Friday pressed the OPEC producer group again to maintain adequate global supply, days after U.S. discussions with some of the world's biggest economies over potentially releasing oil from strategic reserves to quell high energy prices. Speculation about a U.S. SPR release already pushed oil prices down about $4 a barrel in recent weeks and additional supplies of up to 100 million barrels are already priced in, Goldman Sachs oil analysts said in a note. As a result, it said any release "would only provide a short-term fix to a structural deficit." OPEC+ has stuck to its policy of gradual oil output increases even as prices surged, saying it expects supply to outpace demand in the first months of 2022.

Oil Down 11% From 2021 Highs as Covid Returns, Consumers Fight Back - - There were always fears that they could return and they have, to flip the long-running oil rally. Covid lockdowns not reported for months are back in the news amid Europe’s rush to contain rampaging cases of the virus, hammering the oil market harder this week than anytime over the past three months, with crude prices down as much as 11% from the year’s highs. Few could have anticipated this, when just weeks ago OPEC+ smugly turned down pleas from the United States and other consuming countries to put out more barrels to cool prices that had soared to seven-year highs from a continued production squeeze by the alliance despite demand for energy soaring from the worst of the pandemic. To be sure, OPEC+ — comprising the Saudi-led 13-member OPEC bloc and 10 other oil producing countries steered by Russia — could double down on cuts after this to prevent the market from collapsing further. Yet, there’s nothing like the combination of soaring demand and tight production to send oil prices higher. And that demand looks questionable in the near term if more countries go into lockdown, as such a situation could slow a return to work and recovery in aviation, which determine the consumption of gasoline, diesel and jet fuel. Covid aside, there’s also another damper for oil bulls — the threat by the United States, China and a number of consuming countries to coordinate the release of their crude reserves to strike back against OPEC+ production cuts that have created runaway oil inflation in their economies. Again, what the consumers can do to fight the alliance is minimal. But it is just one more worry that oil traders don’t need, evidenced by the 4% price plunge in the first three days of this week, even before Friday’s slump triggered by news of Austria going into lockdown and Germany considering “Unless the cold weather comes a little quicker to facilitate heating needs from energy products, expect crude to trade between $70 to $75, with the possibility of the lowers $60s too if Covid cases worsen.” The front-month January contract in West Texas Intermediate, the U.S. crude benchmark, settled down $2.91, or 3.2%, at 75.94 per barrel. For the week, it fell 5.8%, bringing its combined losses over the past four weeks to 9.3%, after an 18% rally over nine straight weeks. Just in mid-October, WTI traded at a seven-year high of $85.41. Despite the slump of the past week, the U.S. crude benchmark remains up 57% on the year. The January contract for London-traded Brent, the global benchmark for oil, settled down $2.35, or 2.9%, at $78.89 per barrel. For the week, Brent fell 4%, bringing its combined losses over the past four weeks to 8%, after an 18% rally over seven weeks in a row. Just in mid-October, Brent traded at a seven-year high of $86.70. Despite the slump of the past week, the global crude benchmark remains up 52% for the year.

OPEC+ Pumped Less Oil Than Agreed In October - The OPEC+ group’s compliance rate with the oil production cuts rose to 116 percent in October from 115 percent in September, as the alliance, especially the OPEC members in the pact, failed to pump to their collective quota, Reutersreported on Friday, quoting internal data it had seen.The ten OPEC members bound by the pact complied with their total share of the cuts at a massive 121 percent in October, up from a 115 percent compliance rate in September. The non-OPEC oil producers in the OPEC+ agreement saw their compliance fall to 106 percent last month, down from 114 percent in the previous month, according to the data seen by Reuters.The monthly OPEC report already showed last week that the cartel’s ten members in the OPEC+ agreement continued to struggle with reaching their collective ceiling.OPEC’s crude oil production rose by 217,000 barrels per day (bpd) to 27.453 million bpd in October, but still fell short of the cartel’s share of the 400,000-bpd total output hike of the OPEC+ group.Under the OPEC+ deal, the ten OPEC members bound by the OPEC+ pact should be raising their combined production by 254,000 bpd each month.Yet, estimates from secondary sources in OPEC’s Monthly Oil Market Report (MOMR) published last week continued to show what analysts, tanker-tracking firms, and previous OPEC monthly reports showed: the cartel has been undershooting its collective production quota—mostly because of a lack of capacity at some members to pump crude to their respective quotas.African OPEC members Nigeria, Gabon, and Equatorial Guinea not only fell short of their quotas, but they also saw their respective output drop in October compared to September. The leader of the non-OPEC group in the pact, Russia, saw its crude oil and condensate production rise in October for a second consecutive month, to stand at 10.843 million bpd last month, according to Bloomberg estimates based on data from the Russian energy ministry. The data does not discriminate between crude oil and condensate production, so the market and analysts assess crude output by estimating condensate production levels. Russia’s condensate production—estimated at around 800,000 bpd-900,000—is not part of the OPEC+ production cuts, so it’s not easy to assess how much crude oil Russia is really pumping.

OPEC member calls for calm after U.S. pressure to pump more oil - The United Arab Emirates' energy minister on Wednesday defended OPEC and its allies' decision to not increase oil supply to the market, despite U.S. pressure to pump more."I would encourage people to calm, trust us," Suhail al-Mazrouei told CNBC'sHadley Gamble from the Adipec energy forum in Abu Dhabi.Al-Mazrouei said he has received calls from different countries' ministers asking him to take action, but added that OPEC intends to "follow the facts."He pointed to EIA predictions that suggest an oil surplus in the first quarter of next year."In 2022, we expect that growth in production from OPEC+, U.S. tight oil, and other non-OPEC countries will outpace slowing growth in global oil consumption and contribute to Brent prices declining from current levels to an annual average of $72/b," the EIA's November report said."It's going to soften in the first quarter, and we will start to see build up in the inventories in 2022," said al-Mazrouei on Wednesday."That's what the experts said, and we agree with them, in OPEC," he said.If the current plan by OPEC+ to increase production by 400,000 barrels per day each month will already lead to a surplus, the alliance should not change that plan and increase production even further, he added.Not everyone agrees, however.Helima Croft of RBC Capital Markets said that, in practice, OPEC+ is not increasing production as planned because "a number of countries are unable to reach their targets, in part because of lack of investment." "The question is, are we going to still be short barrels when it comes to the first quarter, if it's a cold winter especially, and there's greater demand for oil because of switching needs," Croft, who is managing director and global head of commodity strategy, told CNBC on Tuesday. Both U.S. crude and Brent crude futures have risen more than 60% so far this year after demand increased when pandemic restrictions were loosened.

UAE Sees OPEC+ Sticking To Oil Output Plan With Surplus Looming In Q1 --Despite the calls to boost supply to tame high prices, OPEC+ is likely to continue easing the cuts with the gradual pace it set in July as it expects the oil market to tip into a surplus as soon as the first quarter of 2022, according to the energy minister of one of OPEC’s heavyweights, the United Arab Emirates (UAE).“All of the data are showing us in the first quarter we will have a surplus of supply compared to demand,” despite the current deficit on the market, the UAE’s Energy Minister Suhail al-Mazrouei told Reuters on Monday on the sidelines of the ADIPEC energy forum in Abu Dhabi.OPEC+ and OPEC don’t want stagnation in global economic growth, al-Mazrouei said, a week after major oil consumers such as the U.S. and Japan said that the OPEC+ alliance’s snub of calls for more supply could hurt the economic recovery from the pandemic.“But at the same time we cannot just pump more when there is no technical requirement for it. We are a technical organisation, we are not going to do political decisions,” al-Mazrouei told Reuters.In a separate interview with Bloomberg, the UAE’s energy minister said, “That should be enough,” referring to the monthly increase of 400,000 barrels per day (bpd) in the collective production of the OPEC+ group.OPEC’s de facto leader and the world’s largest oil exporter, Saudi Arabia, also signaled—through its Energy Minister, Prince Abdulaziz bin Salman—that the pace of the easing of the cuts should be enough as a surplus is coming early next year.Two other Gulf oil producers, OPEC’s Kuwait and Oman—part of the wider OPEC+ group—do not see a reason for the alliance to jump the gun and respond to the calls from consumers, either.

COP26 is a 'wake-up call' and the industry needs to face reality, says OPEC's Barkindo -The secretary general of oil producer group OPEC has said the COP26 climate summit in Glasgow was "definitely a wake-up call."Speaking to CNBC at the ADIPEC energy industry forum in Abu Dhabi, Mohammad Barkindo was asked if the deal eventually reached in Glasgow — which included a late compromise on language related to coal — was a success."I wouldn't call it a failure," Barkindo told Dan Murphy. "I think the U.K. presidency did an extremely good job in bringing back Paris on track in Glasgow.""It's not a mean achievement to rebuild the consensus of Paris in Glasgow if you follow the fractures we saw after the withdrawal of the United States," he added.The Paris Agreement, adopted in 2015, aims to "limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels."The task is huge, and the United Nations has noted that 1.5 degrees Celsius is considered to be "the upper limit" when it comes to avoiding the worst consequences from climate change.The COP26 deal sought to build on this and prevent the worst effects of climate change, although it faced stumbling blocks related to the phasing out of coal, fossil fuel subsidies and financial support to low-income countries.India and China, both among the world's biggest burners of coal, insisted on a last-minute change of fossil fuel language in the pact — from a "phase out" of coal to a "phase down." After initial objections, opposing countries ultimately conceded.For his part, Barkindo was broadly positive about the outcome. "I think John Kerry and his team together with [Alok] Sharma, the president of COP26, did a marvelous job in rebuilding that consensus that was fractured after Paris," he said. "Because without that consensus, it would have been impossible to get the Glasgow climate pact."

Japan PM confirms oil reserves may be released to curb prices (Reuters) - Japan is considering releasing oil from its reserves for the first time to curb surging oil prices, Kyodo news agency reported on Saturday, as Prime Minister Fumio Kishida signalled his readiness to counter oil price hikes following a request from the United States. However, Japan may struggle to justify such a move, as under its own laws the country can release reserves only at a time of supply constraints or natural disasters, but not to lower prices. The U.S. administration of President Joe Biden, who faces falling approval ratings and higher gasoline prices, has pressed some of the world's biggest economies to consider releasing oil from their strategic reserves to quell high energy prices. The requests include asking China for the first time to consider releasing stocks of crude. "We're proceeding with consideration as to what we can do legally on the premise that Japan will coordinate with the United States and other countries concerned," Kishida told reporters. "We want to draw a conclusion after thoroughly considering the situation each country faces and what Japan can do." Japan has tapped its reserves in the past to deal with the fallout of the Gulf War in the early 1990s and the deadly earthquake and tsunami in 2011. Chief Cabinet Secretary Hirokazu Matsuno said on Thursday that Tokyo was closely watching the impact of rising oil prices on the world's third-biggest economy. "While urging oil-producing nations to ramp up oil output, we will strive to stabilise energy markets by coordinating with major consumer nations and international organisations such as IEA (the International Energy Agency)," Matsuno said. Resource-poor Japan gets the vast majority of its oil from the Middle East. Recent surging oil prices and a weakening yen are driving up the cost of imports, dealing a double blow to a trade-dependent nation.

Iran Could Produce Billions Of Barrels From 4 Little-Known Oilfields -Ahead of the new iteration of the ‘Joint Comprehensive Plan of Action’ (JCPOA) that Iran expects to have in place before 20 March 2022, the country is looking to increase crude oil output not just from its major fields in West Karoun and shared fields with Iraq and others, but also from lesser known fields that nonetheless have billions of barrels of oil reserves, largely untapped. There are additional benefits to developing these fields: first, virtually all of their output has a guaranteed buyer in China, in line with the 25-year Iran-China deal; and, second, news relating to these lesser known fields is less likely to reach the Iranian public, which reacted very negatively when news of the scope of the Iran-China deal was made public. Such a site is Arvand, which is expected by the Arvandan Oil and Gas Production Company to see crude oil production reach 1.4 million barrels per day (bpd) by 2025. Located around 50 kilometres (km) south of Abadan in Khuzestan Province, Arvand is estimated to contain around one billion barrels of oil in place in three major layers – although all with an API gravity of between 39 and 43 - plus about 14 billion cubic metres of dry gas and 55 million barrels of gas condensate. Although there have been issues over which of the three countries – Iran, Iraq, or Kuwait - that contain parts of the reservoir has ownership over which parts of it, Tehran now believes that the matter has been largely settled, OilPrice.com understands from sources close to the Petroleum Ministry. “The section that was under dispute by Iran, Iraq, and Kuwait, is estimated to have reserves of 6 billion barrels, with at least 18 per cent of that deemed recoverable,” said one of the sources last week. Another such site is Doroud, estimated to contain 7.6 billion barrels of oil in place, from which only around 1.6 billion barrels have been recovered so far, given its shutdown over the course of the 1980-1988 Iran-Iraq War. After this, the first big development effort came in 1997 when 42 wells were drilled in the field, comprised of 19 offshore and 23 onshore. Two years later, Iran signed an agreement with French energy supermajor Total (now TotalEnergies) for the development of Doroud but its plan to inject gas into the field in a specifically sequenced schedule did not happen and the project was halted. According to Iran’s Petroleum Ministry, a correctly sequenced programme of enhanced oil recovery (EOR) techniques across the site would mean another 1 billion barrels at least of oil being recovered quickly and, according to oil industry sources in Iran, the long-term figure could be another 2 billion barrels.

‘Infuriating’ Report Reveals ‘Breathtaking Cover-Up’ of US Airstrike That Killed Syrian Civilians -- Advocacy groups, human rights defenders, fellow reporters, and other readers of The New York Times were outraged Saturday after journalists Dave Philipps and Eric Schmitt published their investigation into a deadly 2019 U.S. airstrike in Syria and all that followed.“This NYT report on the cover-up of U.S. war crimes in Syria should make your blood boil,” Medea Benjamin, co-founder of the anti-war group CodePink, tweeted Sunday. “The U.S. wantonly kills civilians, covers it up, and then tells other countries how ‘democracy’ works. Infuriating.”Evan Hill, a journalist on the Times‘ visual investigations team, said that “this is a long, complicated story, but it’s one that touches on nearly every problem with the global U.S. air war. At every attempt, the military tried to cover it up.”The Times began by detailing the scene over two years ago, when the U.S. military was using a drone near the Syrian town of Baghuz to search for Islamic State of Iraq and Syria militants, and encountered women and children along a river bank:Without warning, an American F-15E attack jet streaked across the drone’s high-definition field of vision and dropped a 500-pound bomb on the crowd, swallowing it in a shuddering blast. As the smoke cleared, a few people stumbled away in search of cover. Then a jet tracking them dropped one 2,000-pound bomb, then another, killing most of the survivors.It was March 18, 2019. At the U.S. military’s busy Combined Air Operations Center at Al Udeid Air Base in Qatar, uniformed personnel watching the live drone footage looked on in stunned disbelief, according to one officer who was there.“Who dropped that?” a confused analyst typed on a secure chat system being used by those monitoring the drone, two people who reviewed the chat log recalled. Another responded, “We just dropped on 50 women and children.”An initial battle damage assessment quickly found that the number of dead was actually about 70. After the strike, civilian observers “found piles of dead women and children,” reported Philipps and Schmitt, who spent months investigating one of the largest civilian casualty incidents of the war against ISIS, relying on confidential documents, descriptions of classified reports, and interviews.A legal officer flagged the strike as a possible war crime that required an investigation. But at nearly every step, the military made moves that concealed the catastrophic strike,” the pair explained. “The death toll was downplayed. Reports were delayed, sanitized, and classified. United States-led coalition forces bulldozed the blast site. And top leaders were not notified.”