oil prices finished lower for a second week following a record nine straight weeks of higher prices, as domestic crude oil inventories grew much more than was expected for a second consecutive week...after slipping 0.2% to $83.57 a barrel last week on increasing domestic supplies and on prospects for Iranian crude exports, the contract price for US light sweet crude for December delivery opened lower on Monday as China's release of gasoline and diesel reserves eased concerns over tight global supply, while traders cashed out ahead of a November 4 OPEC+ meeting that could change their production targets, but reversed and moved higher following reports that OPEC and Russia-led partners intend to wave through the expected increase of 400,000 barrels per day (bpd) next month, despite calls for the group to more aggressively increase output, and settled with a modest gain of 48 cents at $84.05 a barrel amid rising stockpiles at Cushing, Oklahoma, the delivery point for benchmark U.S. crude futures, signaling that the crude supply drain might be slowing...oil prices moved lower early Tuesday amid a strengthening U.S. Dollar Index and rising treasury yields, as traders awaited a Fed meeting where officials were widely expected to detail how they'd taper off monthly bond and MBS purchases, and settled down 14 cents, or 0.2%, at $83.91 per barrel, as traders also backed off while awaiting weekly U.S. inventory data and the looming OPEC+ meeting.... oil prices then plummeted in early morning trade on Wednesday after the American Petroleum Institute reported a much larger-than-expected build in domestic crude oil inventories for the second consecutive week, while sentiment turned cautious ahead of the likely decision from the Federal Open Market Committee to reduce the pace of bond-buying stimulus, and then accelerated their slide in mid-morning trade after data from the EIA detailed a larger-than-expected build in domestic crude oil inventories and a surprise increase in distillate supplies, as oil finished $3.05 lower at $80.86 a barrel, the largest drop since July 19th....however, oil prices moved higher again early Thursday after OPEC resisted calls from the U.S., Japan, and India for greater output, and agreed only maintain their current pace of supply increases, and were up over $2 before reversing after a report that Saudi Arabia's oil output would soon surpass 10 million barrels per day for the first time since the outset of the pandemic, and finished $2.05 lower at $78.81 a barrel, as the prospect of Iranian oil returning also weighed on prices...but oil prices reversed again and opened 58 cents higher on Friday as OPEC and Russia-led partners agreed to keep supplies tight next month and then jumped over 3% after an upbeat U.S. employment report showing accelerating jobs creation was released, and settled $2.46 or 3.1% higher at $81.27 a barrel on the day but still ended down 2.8% for the week...
meanwhile, US natural gas prices finished higher for the second time in five weeks on a jump in global gas prices and LNG demand....after falling 0.8% to $5.426 per mmBTU last week on increasingly cooler forecasts, the contract price of natural gas for November delivery opened nearly 2% lower on Monday and tumbled to settle down 24.0 cents, or 4.4%, at $5.186 per mmBTU, on rising gas output, lower demand forecasts than previously projected and on growing expectations the US will have more than enough gas in storage for the winter heating season....but the 3 day losing streak was snapped on Tuesday, as LNG demand remained strong and bargain hunters moved in and pushed gas prices 35.6 cents or almost 7% higher to $5.542 per mmBTU, as short sellers also took some profits after the contract price had dropped about 16% during the prior three sessions...the rebound continued into Wednesday as prices rose another 12.8 cents to $5.670 per mmBTU after European prices jumped about 11% after a Russian pipeline reversed and removed gas from Germany, where supplies were already extremely low...December gas prices then rose for a third day on Thursday on slowing output growth and on forecasts for more heating demand over the next two weeks than was previously expected, despite an expected, larger than normal inventory increase for the eighth week in a row, and a 5% drop in European prices after Russian gas flows to Germany resumed, with US prices settling 4.6 cents higher at $5.716 per mmBTU...but prices finally fell 20.0 cents or "nearly four percent" on Friday as weather forecasts continue to kick sustained cold weather down the road, setting up an adequate supply trajectory through the coming winter season...despite that drop, however, natural gas prices still ended 1.7% higher on the week...
The EIA's natural gas storage report for the week ending October 29th indicated that the amount of working natural gas held in underground storage in the US rose by 63 billion cubic feet to 3,611 billion cubic feet by the end of the week, which still left our gas supplies 313 billion cubic feet, or 8.0% below the 3,924 billion cubic feet that were in storage on October 29th of last year, and 101 billion cubic feet, or 2.7% below the five-year average of 3,712 billion cubic feet of natural gas that have been in storage as of the 29th of October in recent years...the 63 billion cubic foot increase in US natural gas in working storage this week was less than the average forecast for a 70 billion cubic foot addition from a S&P Global Platts survey of analysts, but in line with market expectations, and it was still the 8th consecutive above normal injection into storage ahead of winter, well more than the average addition of 38 billion cubic feet of natural gas that have typically been injected into natural gas storage during the same week over the past 5 years, and far more than the 27 billion cubic feet that were added to natural gas storage during the corresponding week of 2020…
The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending October 29th indicated that after a modest increase in our oil production and only minor changes to our oil imports, our oil exports, and our refining, we had surplus oil to add to our stored commercial crude supplies for the fifth time in six weeks and for the for the tenth time in the past thirty-one weeks….our imports of crude oil fell by an average of 83,000 barrels per day to an average of 6,254,000 barrels per day, after rising by an average of 430,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 138,000 barrels per day to an average of 2,787,000 barrels per day during the week, which together meant that our effective trade in oil worked out to a net import average of 3,247,000 barrels of per day during the week ending October 29th, 221,000 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 200,000 barrels per day higher at 11,500,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have totaled an average of 14,747,000 barrels per day during the cited reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,023,000 barrels of crude per day during the week ending October 29th, 25,000 fewer 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 235,000 barrels of oil per day were being added to 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 and from oilfield production was 511,000 barrels per day less than what was added to storage plus what our oil refineries reported they used during the week…to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+511,000) 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 (like Wednesday's $3.05 a barrel drop), and hence decisions to drill or complete 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 fell to an average of 6,061,000 barrels per day last week, which was still 14.9% more than the 5,274,000 barrel per day average that we were importing over the same four-week period last year…the 235,000 barrel per day net increase in our crude inventories came as 470,000 barrels per day were added to our commercially available stocks of crude oil, which in turn was partly offset by a 235,000 barrels per day withdrawal of oil that had been stored in our Strategic Petroleum Reserve, 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 200,000 barrels per day higher at 11,500,000 barrels per day as the EIA's rounded estimate of the output from wells in the lower 48 states was 200,000 barrels per day higher at 11,100,000 barrels per day, while an 8,000 barrel per day decrease in Alaska’s oil production to 434,000 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 12.2% below that of our pre-pandemic production peak, but 36.4% 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 86.3% of their capacity while using those 15,023,000 barrels of crude per day during the week ending October 29th, up from 85.1% of capacity the prior week, but below normal utilization for autumn refinery operations…the 15,023,000 barrels per day of oil that were refined this week were 10.9% more barrels than the 13,552,000 barrels of crude that were being processed daily during the pandemic impacted week ending October 30th of last year, but 4.7% less than the 15,761,000 barrels of crude that were being processed daily during the week ending November 1st, 2019, when US refineries were operating at what was then also a below normal 86.0% of capacity...
Despite the modest decrease in the amount of oil being refined this week, the gasoline output from our refineries was somewhat higher, increasing by 104,000 barrels per day to 10,176,000 barrels per day during the week ending October 29th, after our gasoline output had increased by 12,000 barrels per day over the prior week.…this week’s gasoline production was also 10.7% more than the 9,072,000 barrels of gasoline that were being produced daily over the same week of last year, and 1.4% more than the gasoline production of 10,036,000 barrels per day during the week ending November 1st, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 252,000 barrels per day to 4,833,000 barrels per day, after our distillates output had increased by 164,000 barrels per day over the prior week…after this week’s increase, our distillates output was 13.1% more than the 4,275,000 barrels of distillates that were being produced daily during the week ending October 30th, 2020, and only 0.9% less than the 4,875,000 barrels of distillates that were being produced daily during the week ending November 1st, 2019..
Despite the increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the seventh time in ten weeks, and for the sixteenth time in twenty-eight weeks, falling by 1,488,000 barrels to a 47 month low of 214,258,000 barrels during the week ending October 29th, after our gasoline inventories had decreased by 1.993,000 barrels over the prior week...our gasoline supplies decreased again this week because the amount of gasoline supplied to US users rose by 181,000 barrels per day to 504,000 barrels per day, even as our imports of gasoline rose by 174,000 barrels per day to 667,000 barrels per day, while our exports of gasoline fell by 53,000 barrels per day to 760,000 barrels per day…after this week’s inventory decrease, our gasoline supplies were 9.4% lower than last October 30th's gasoline inventories of 227,665,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year…
With the big increase in our distillates production, our supplies of distillate fuels increased for the second time in ten weeks and for the 10th time in 30 weeks, rising by 2,160,000 barrels to 127,122,000 barrels during the week ending October 29th, after our distillates supplies had decreased by 432,000 barrels during the prior week….our distillates supplies also rose this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 183,000 barrels per day to 3,686,000 barrels per day, while our imports of distillates fell by 135,000 barrels per day to 190,000 barrels per day, and while our exports of distillates fell by 71,000 barrels per day to 1,028,000 barrels per day...but after twenty inventory decreases over the past thirty weeks, our distillate supplies at the end of the week were 17.8% below the 154,644,000 barrels of distillates that we had in storage on October 30th, 2020, and about 5% below the five year average of distillates stocks for this time of the year…
Meanwhile, after this week's increase in our oil production, our commercial supplies of crude oil in storage rose for the seventh time in the past twenty-three weeks and for the 19th time in the past year, increasing by 3,290,000 barrels over the week, from 430,812,000 barrels on October 22nd to 434,102,000 barrels on October 29th, after our commercial crude supplies had increased by 4,268,000 barrels over the prior week…after this week’s increase, our commercial crude oil inventories remained about 6% below the most recent five-year average of crude oil supplies for this time of year, but were still more than 28% above the average of our crude oil stocks as of the last weekend of October 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 October 29th were 10.4% less than the 484,429,000 barrels of oil we had in commercial storage on October 30th of 2020, and are now 2.8% less than the 446,782,000 barrels of oil that we had in storage on November 1st of 2019, but are still 0.5% more than the 431,787,000 barrels of oil we had in commercial storage on November 2nd of 2018…
Finally, with our inventory of crude oil and our supplies of all products made from oil still near 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 1,016,000 barrels this week, from 1,847,479,000 barrels on October 22nd to 1,846,463,000 barrels on October 29th, but they are still 4,836,000 barrels higher than the six year low of five weeks earlier...
This Week's Rig Count
The number of drilling rigs active in the US increased for the 50th time out of the past 59 weeks during the week ending November 5th, but they remained 31.4% below the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US increased by six to 550 rigs this past week, which was also 250 more rigs than the pandemic hit 300 rigs that were in use as of the November 6th report of 2020, but was also still 1,379 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 6 to 450 oil rigs this week, after they had increased by 1 oil rig the prior week, and there are now 224 more oil rigs active now than were running a year ago, even as they still amount to just 28% 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 100 natural gas rigs, which was still up by 29 natural gas rigs from the 71 natural gas rigs that were drilling during the same week a year ago, but still only 6.2% 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 thirteen rigs this week, which is still short of the 14 rigs deployed in the Gulf the week before Hurricane Ida approached, with twelve of this week's Gulf rigs drilling for oil in Louisiana waters and another drilling for oil in Alaminos Canyon, offshore from Texas....the Gulf rig count is still more than that of 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 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 nine to 492 horizontal rigs this week, which was nearly double the 259 horizontal rigs that were in use in the US on November 6th of last year, but was just 35.8% of the record 1,374 horizontal rigs that were deployed on November 21st of 2014..…at the same time, the directional rig count was up by 1 to 33 directional rigs this week, and those are up by 14 from the 19 directional rigs that were operating during the same week a year ago….on the other hand, the vertical rig count was down by 4 to 25 vertical rigs this week, but those were still up by 3 from the 22 vertical rigs that were in use on November 6th 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 5th, the second column shows the change in the number of working rigs between last week’s count (October 29th) and this week’s (November 5th) count, the third column shows last week’s October 29th 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 6th of November, 2020...
there was a bit more activity this week than in recent reports; checking first the Rigs by State file at Baker Hughes we find that three rigs were added in Texas Oil District 8, which is the core Permian Delaware, and another rig was added in Texas Oil District 8A, which would be the northern counties of the Permian Midland, thus indicating a overall 4 rig increase in the Texas Permian... since the national Permian rig count was only up by three, that means that the rig that was removed in New Mexico had been drilling in the western Permian Delaware...elsewhere in Texas, a rig was added in Texas Oil District 3 which could have been in the Eagle Ford, while a rig was pulled out of Texas Oil District 6, which was a natural gas rig that had been drilling in the Haynesville shale...the Haynesville shale count was unchanged, however, because a natural gas rig was concurrently added in that basin in northwestern Louisiana...elsewhere, the rig added in Oklahoma was an oil rig in the Arkoma Woodford, while the rig added in Pennsylvania was a natural gas rig in the Marcellus...the natural gas rig count remained unchanged nationally, however, because a natural gas rig was pulled out of the Eagle Ford, while an oil rig was added in that basin at the same time...to determine exactly where in the Eagle Ford that change took place, one would have to check the individual well records for Texas in the North America Rotary Rig Count Pivot Table (xls); with 250 rig active in Texas last week and 254 rigs running in Texas this week, that would be no easy chore...
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Gulfport 3Q: Gas Production Won't Increase This Winter Gulfport Energy, the third-largest driller in the Ohio Utica Shale (by the number of wells drilled), emerged from bankruptcy in May with a new board and new top management. The company issued its third quarter update yesterday. Unfortunately, the company got hosed on hedges, losing $622 million during 3Q21 on hedges which resulted in an overall loss of $463 million for the quarter. The company produced 973 MMcf/d (million cubic feet per day) during 3Q21, down slightly from an average 992 MMcf/d a year ago. That production is across both shale plays where Gulfport drills: the Ohio Utica and Oklahoma SCOOP.Operationally, Gulfport spud two gross operated wells in the Utica in 3Q21 with a planned average lateral length of approximately 15,920 feet. In addition, Gulfport turned to sales two gross operated wells in the Utica with an average lateral length of approximately 13,700 feet.Gulfport’s net daily production for the third quarter of 2021 of 973.3 MMcfe per day breaks down as 699.0 MMcfe per day in the Utica and 273.8 MMcfe per day in the SCOOP. For 3Q, Gulfport’s net daily production mix was approximately 89% natural gas, 8% natural gas liquids, and 3% oil.Interim CEO Timothy Cutt had this to say in his opening/prepared comments on yesterday’s conference call with analysts: As you saw from our earnings release, we made steady progress on numerous fronts during the quarter. We put a new credit facility in place that increases our liquidity by 160 million and accelerates our ability to return capital to shareholders, as demonstrated by the announced $100 million share repurchase program. The six-well Angelo pad was completed in the Utica, which is currently flowing at a rate of 200 million cubic feet per day. Finally, the company fully resolved its largest post-bankruptcy litigation exposure with TC Energy and announced the Settlement Agreement relating to its own standing litigation with Stingray Pressure Pumping in September...Production average 973 million cubic feet of gas equivalent per day during the quarter, slightly above expectations, driven by strong reservoir performance from both the Utica and the SCOOP development programs. We anticipate an increase in total production during the fourth quarter, driven by strong contribution from the Angelo pad. (press conference transcript and embedded financial documents included)
Big Marcellus Shale producer diversifies with acquisition in Louisiana - Southwestern Energy, a big Marcellus and Utica shale gas producer, announced its third acquisition in less than a year and a half in a deal that will expand its operations outside of Appalachia. Southwestern will pay $1.85 billion, much of it in cash, to acquire GEP Haynesville LLC, the third-largest producer in that Louisiana shale basin and much of it adjacent to its newly acquired acreage in its June acquisition of Indigo Natural Resources for $2.7 billion. The GEP deal, along with its Indigo acreage, will catapult Southwestern to become the largest natural gas producer in the Haynesville. But the three-state footprint of Southwestern in Appalachia will still remain the company's largest share, both in acreage and production. Southwestern produces 3 billion cubic feet a day of gas from the Marcellus and Utica shales, compared to what will be 1.7 billion cubic feet all told in the Haynesville when the GEP acquisition is complete. Southwestern also has much more acreage in Appalachia, with 789,000 here compared to what will be 269,000 when the transaction is complete. In a conference call Thursday with analysts about the GEP acquisition and Southwestern's third-quarter financials, CEO William Way said the company's focus on the financial side of the business is allowing it to continue to capture the benefits of scale in gas production. Since August 2020, Southwestern acquired Montage Resources for $193 million as well as the two Haynesville deals worth $4.55 billion. The first deal beefed up its presence in the Marcellus and Utica; the latter two gave Southwestern a second natural gas basin. Now it's all wrapped up in a natural gas driller that was the earliest to move on responsibly sourced natural gas with early deals in 2017 in Appalachia and has recently stepped up its investment. Responsible natural gas is measured for methane emissions and best practices and then certified by a third-party, in this case Denver-based Project Canary. Southwestern, headquartered in Spring, Texas, reported it passed 4 trillion cubic feet of responsible natural gas production, all from Pennsylvania, achieving a milestone in what has become a new hallmark among natural gas producers. Way said Appalachia continues to be a great value driver for Southwestern.
Marcellus Shale gas producers say they welcome tighter methane limits - Natural gas producers and their trade associations mostly welcomed tighter regulations on the emissions of methane that were proposed Tuesday by the U.S. Environmental Protection Agency.The proposed regulations by the Biden administration would put in tougher limits to methane leaks from oil and gas production in the United States, both new wells and pipelines as well as existing wells and infrastructure. Methane is a major greenhouse gas that impacts climate change, as well as being the main product that is being sold as natural gas in the Marcellus and Utica shale and elsewhere. A final rule would be sometime away. But Marcellus and Utica Shale gas producers would fare better than many other oil and gas producers in the United States. Producers here rarely flare gas as they do in other basins, and producers from EQT Corp, Range Resources Corp. and others have either set net zero emissions goals or have them in the works. And many producers have spent time and money to sharply cut greenhouse gas emissions and in the midst of doing even more. Many of the big producers publicly supported the Biden administration's plans to reimpose methane limits that had been loosened during the last year of the Trump administration in 2020. “Reducing methane emissions is a foundational component of our mission given its importance in addressing global climate change. That is why EQT supported the reinstitution of the methane rules and why we have set an aggressive target of reducing our methane emissions by approximately 65% by 2025," EQT said in a statement. "While today’s announcement of proposed rules targeting methane reduction in the U.S. oil and natural gas industry is an important step, it is not the final solution. We also need to place an equal amount of scrutiny on the remaining 70% of domestic methane emissions, as well as global emissions." Marcellus Shale Coalition President David Callahan also promoted the strides Marcellus Shale producers have made in reducing emissions. “Pennsylvania’s modern natural gas operators have a long-standing commitment to advancing best-in-class environmental performance, which has resulted in the lowest methane intensity of producing basins and has made Appalachia one of the world’s most environmentally responsible producing regions," Callahan said. "As methane is the very product Pennsylvania gas producers sell, it makes economic and environmental sense to ensure methane is safely and efficiently transported to market. We look forward to working through the regulatory process to arrive at a workable, predictable regulatory approach."A methane tax has long been under consideration by Congressional Democrats seeking to pass and pay for the infrastructure bill. The industry has spoken out aggressively against the tax, but have been generally supported of methane reductions.According to S&P Global Platts Analytics, marginally-producing wells will only have to do a one-time survey to make sure there are no active leaks. It will not likely to add a lot of costs to producers, S&P said.
Court hears arguments in latest legal attack on Mountain Valley Pipeline - Environmental groups waged their latest attack Friday on the Mountain Valley Pipeline, asking a federal appeals court to again strike down key permits issued to the embattled project.After listening to oral arguments by attorneys from both sides, a three-judge panel of the 4th U.S. Circuit Court of Appeals is expected to issue written opinions by the end of the year.At issue are two key decisions by federal agencies: One to allow the natural gas pipeline to pass through 3.5 miles of the Jefferson National Forest, and the other a finding that the massive infrastructure would not jeopardize endangered species of fish and bats in its path.Challenges from the groups, led by Appalachian Voices and Wild Virginia, already have caused delays to a project that is running nearly three years behind schedule.Questions about the pipeline’s environmental impacts — and whether they were adequately addressed by the government — previously led to suspensions of the U.S. Forest Service’s decision to let the pipeline pass through federal woodlands, the U.S. Fish and Wildlife Service’s opinion on endangered species, and the U.S. Army Corps of Engineers’ approval for the pipeline to cross streams and wetlands.Permits were reissued for the first two areas and are now facing a second challenge.A third set of approvals to cross water bodies was stayed last year by the 4th Circuit, prompting Mountain Valley to pursue a different process that has yet to lead to new permits being granted.One of the arguments made Friday by Sierra Club attorney Elly Benson, who represented the environmental groups, was that the Fish and Wildlife Service did not properly consider climate change in its analysis of endangered species, which include the Roanoke logperch and the candy darter.Benson noted that when Mountain Valley violated erosion and sediment control regulations hundreds of times, the company repeatedly blamed the infractions on record rainfalls since construction began in 2018. “That’s exactly the kind of impact that a climate analysis would help take into account,” she told the three appellate judges — all of whom were involved in earlier 4th Circuit rulings that went against the pipeline.
Environmental concerns dominate Army Corps public comment hearing on key permit for Mountain Valley Pipeline --Opponents of the Mountain Valley Pipeline comprised the vast majority of commenters during a public hearing on a key application for the project.The U.S. Army Corps of Engineers held the virtual public comment hearing Monday evening to collect West Virginia input on an application from Mountain Valley Pipeline LLC, the joint venture that owns the pipeline, for a permit that would allow for discharging dredged and fill material into streams and wetlands.Those speaking out against the pipeline, which would transport natural gas 303 miles from Wetzel County to Southern Virginia, pointed to the project’s past water quality violations and concerns expressed by federal environmental regulators about its potential water-crossing effects.A minority of gas and oil industry and labor union representatives defended the pipeline and urged issuance of the permit, arguing that the project is a job creator and potential energy provider too valuable to be halted for good.Canonsburg, Pennsylvania-based Mountain Valley Pipeline LLC proposed a 125-foot-wide temporary right-of-way to construct the pipeline and a 50-foot-wide permanent right-of-way to maintain and operate the pipeline once in service. The project would result in the permanent discharge of dredged and fill material into more than 1,100 linear feet of streams in West Virginia.The U.S. Environmental Protection Agency has defined fill material as including rock, soil, clay, construction debris and materials used to create any structure in waters of the United States, a broad term that includes all interstate waters or waters that could be used by interstate travelers.Suzanne Vance of Weston, on whose farm road Mountain Valley has a temporary road easement at Second Big Run in Lewis County, said the area is unsafe for boring — a trenchless construction method that Federal Energy Regulatory Commission staff said in August would trigger fewer environmental effects than open-cut crossings.“All I see MVP doing is cleaning up slips and washouts,” Vance said.Dave Bassage, New River Gorge program coordinator for the New River Conservancy, a tri-state group aiming to protect the New River watershed, said requirements for the proposed permit need to be more stringent. The group’s main concerns, Bassage said, are sedimentation in the Greenbrier and New rivers, as well as the potential release of construction fluids and hazardous materials that could harm aquatic ecosystems.The West Virginia Department of Environmental Protection proposed a consent order earlier this year requiring Mountain Valley to pay a $303,000 fine for violating permits by failing to control erosion and sediment-laden water. That penalty followed a $266,000 fine from the same regulators in 2019 for similar erosion and water contamination issues. The Virginia Department of Environmental Quality fined Mountain Valley $2.15 million that same year for water quality violations. The EPA recommended in May that the Corps of Engineers not issue the permit for the Mountain Valley Pipeline until it makes less-environmentally damaging changes to the project. “[The] EPA is concerned that the applicant has not yet demonstrated that the discharges from the project, as proposed, will not cause or contribute to water quality standards exceedances or significant degradation of receiving waters,” agency wetlands branch chief Jeffrey Lapp wrote to Corps Huntington District regulatory branch chief Michael Hatten in the letter.
Mountain Valley Pipeline nears completion, but hurdles remain - As work on the Mountain Valley Pipeline winds down for another winter season, all but about 20 miles of the 303-mile-long natural gas conduit is finished, according to the lead partner of the project. In perhaps the most bitterly fought environmental battle in Southwest Virginia’s recent history, Mountain Valley has faced multiple court fights that delayed its completion by more than three years and nearly doubled its cost to $6.2 billion. But as it nears the end of its fourth year of construction, all that remains is about 20 miles of stream and wetland crossings and a passage through the Jefferson National Forest, Mountain Valley still lacks state and federal permits to cross water bodies for the final phase of construction — and opponents show no signs of giving up. Of 2,292 comments made to the Department of Environmental Quality, 90% opposed granting a state permit for the remaining stream crossings in Virginia, according to Wild Virginia, one of many environmental groups opposed to the project. Mountain Valley has identified 144 crossings that involve temporarily damming a stream and digging a trench along the bottom for the buried pipe. Another 92 crossings will be done by boring under the water body, which is covered by a separate permitting process that does not require state approval. DEQ held two public hearings in September and accepted written comments through Oct. 27. A decision by the State Water Control Board is expected in December. Wild Virginia obtained the public comments — which include most but not all of the written statements — from DEQ through an open-records request, it said in a news release last week. . “We do not presume that Board members will agree with our opinions or those of any other party” Jacqueline Goodrum, conservation policy associate for the group, said in a statement. “However, one fact seems clear to us. Opponents of MVP provided a huge body of evidence, backed by legal analysis, scientific reports, and data, indicating that MVP has not proven its case.” There must be a showing that digging trenches through water bodies will not violate the federal Clean Water Act. Approval by the state board is required before the U.S. Army Corps of Engineers can give a final go-ahead. In 2017, the water board granted certification to Mountain Valley after finding a “reasonable assurance” that streams and wetlands would not be harmed. But after a blanket permit later issued by the Army Corps was challenged in court by environmental groups, Mountain Valley restarted the process by seeking individual stream crossing approvals. The company has run into repeated problems controlling muddy runoff from its construction sites, and opponents contend that information not known to the water board four years ago should lead it to deny the certification this time. “MVP has caused much destruction and pain to local residents and water users so far and these proposals would be a major blow to our precious resources and our communities,” David Sligh, conservation director of Wild Virginia, said. “Further damage must not be allowed.”
At issue in Chickahominy Pipeline hearing: Just what is a public utility? - Exactly what makes a company a public utility was the debate Wednesday as regulators weighed whether or not the state needs to give approval for the construction of a gas pipeline across five Central Virginia counties. Chickahominy Pipeline “is not a public utility because while it will be transporting natural gas for heat, light or power, it will not be doing so for sale,” argued attorney Eric Page of Eckert Seamans on behalf of the company. Rather, he said, Chickahominy Pipeline will simply be transporting natural gas between a third-party supplier and its purchaser, Chickahominy Power, LLC, a company that has been seeking for several years to build a natural gas plant in Charles City County. “There is no mercantile relationship between Chickahominy (Pipeline) and CPLLC with regard to the natural gas,” continued Page, using an abbreviation for the company developing the power station. “Chickahominy is not selling natural gas to CPLLC. Rather, the third-party supplier is selling gas to CPLLC.” Both Chickahominy Power and Chickahominy Pipeline are affiliated with Balico, LLC, and the pipeline has specifically been proposed to transport natural gas to the facility. The plans have provoked controversy in both Charles City County, where the large plant would be constructed and operated by a private owner to sell electricity into the regional grid, and across four other counties the pipeline would cross. A map of the project shows that it would stretch roughly 83 miles, from the Transco interstate pipeline in Louisa County through Hanover, Henrico and New Kent counties before reaching Charles City. Shortly after residents in the five counties began receiving letters this July about the proposed conduit, Chickahominy Pipeline asked the State Corporation Commission to rule that it doesn’t need regulatory approval to construct the infrastructure because it isn’t providing “non-utility gas service” and isn’t a public utility — two conditions that would trigger regulatory oversight. During Wednesday’s hearing on that question, regulatory staff and attorneys with the Southern Environmental Law Center representing environmental and grassroots opposition groups all insisted that Chickahominy Pipeline is by law a public utility. “Chickahominy Pipeline is proposing something that is unheard of in the commonwealth before, and that is a gas pipeline, a large-scale gas pipeline, unregulated by either this commission or the Federal Energy Regulatory Commission,” said Southern Environmental Law Center attorney Greg Buppert.
Expert says natural gas program 'has been a complete fleecing of utility ratepayers' - – A natural gas program designed to save taxpayers hundreds of thousands of dollars each year has yet to materialize in Connecticut, and is instead leaving homeowners and businesses who converted to it facing an expensive winter. Former Gov. Daniel P. Malloy's Comprehensive Energy Strategy included a large-scale natural gas expansion, in part to bolster the economy and in part to reduce high energy prices. By 2020, 300,000 homes were to be connected to natural gas. "At a high-level, the program assumed that the economics of converting from fuel oil to natural gas would drive a substantial number of conversions, with some additional assistance through this program," Taren O'Connor, director of Legislation, Regulations and Communications at Connecticut Public Utilities Regulatory Authority, told The Center Square. "However, the relative prices of fuel oil and natural gas through the life of this program have proven more price competitive, leading to fewer conversions than projected through the CES and at the outset of the program." Chris Herb, president of the Connecticut Energy Marketers Association, told The Center Square the plan was built on a faulty premise that natural gas prices would remain low for decades. "The plan was supposed to convert 300,000 customers and build 900 miles of new pipelines which is funded by a 30% surcharge on gas customers," Herb said. "When you calculate the cost to convert to natural gas (between $7,000 and $11,000), include the 30% conversion surcharge, and increasing cost of gas, this has been a complete fleecing of utility ratepayers. At the end of the day, DEEP was wrong when it came to the economics and on the environmental benefits of natural gas." With natural gas prices currently soaring, those homes and businesses that have made the switch are looking at a costly winter season. "Gas rates rose from September across the board for all three utilities, due to increased international commodity prices," Herb said. "PURA officials warn of more increases heading into the winter, so I think it is safe to say that natural gas customers can expect a much more expensive heating season than they have seen in years." "DEEP and the legislature cannot control global commodity prices, and they made a bet with ratepayers' money that the low prices that were present in 2013 would remain like that for a very long time and they were dead wrong," Herb said. "Consumers trusted DEEP and they ended being misled into making a bad decision to switch to gas that ended up costing them more in the long run."
Safety bills mix with calls for natural gas transition - – Natural gas holds an important and debated place in the state’s energy mix, and lawmakers on a key committee heard testimony Tuesday from an array of advocates calling on the Legislature to “triage and transition” — that is, to manage a transition away from gas but also to maintain the safety and reliability of existing natural gas infrastructure during that transition. The Joint Committee on Telecommunications, Utilities and Energy focused its hearing Tuesday on natural gas matters, but most of the testimony was in support of a bill (H 3298/S 2148) from Rep. Lori Ehrlich and Sen. Cynthia Creem that would require gas companies to begin shifting away from gas and towards renewable thermal energy. Lawmakers also heard about a series of gas safety bills, like H 3354 from Lawrence Rep. Frank Moran and S 2166 from Sen. Jamie Eldridge. Advocates and lawmakers repeatedly pointed Tuesday to the climate law that Gov. Charlie Baker signed in March, which commits Massachusetts to achieve net-zero carbon emissions by 2050 and requires interim emissions reduction goals between now and the middle of the century. “Reaching that goal is going to require us to move buildings onto electric heat and off of gas, which will raise questions about the infrastructure that we have in place to deliver gas,” Sen. Michael Barrett, the Senate co-chair of the TUE Committee, said. “And at the same time, of course, we’re concerned about leaks from that infrastructure and somehow have to balance our weariness about continued investment with the necessity of maintaining public safety. Each year, at least so far, about 14,000 new leaks are detected in this infrastructure. And we’ve been running hard to stay in place, plugging leaks but finding new ones.” Ehrlich, who previously told the committee that she got the nickname “The Mother Grizzly of Marblehead” during her years as a public health and environmental advocate, pointed out that heating and cooling of interior spaces accounts for about 27 percent of total carbon emissions statewide. She said her bill would lay out an “actionable plan to take that down considerably” through a shift from gas to renewable thermal energy.
Department of Environmental Quality takes Colonial Pipeline to court over oil spill - The North Carolina Department of Environmental Quality filed a complaint and motion for injunctive relief against Colonial Pipeline Tuesday.The DEQ filed the complaint and motion in Mecklenburg County Superior Couty saying Colonial needs to meet its obligations as the “responsible party in the state’s largest gasoline spill.”The DEQ says it outlined in the complaint that Colonial has not provided the agency with the essential information needed to rectify the damage done to the site.“Colonial owes it to the people of North Carolina to cooperate with DEQ and be forthcoming with the information required by our statutes, starting with an accurate estimate of how much fuel was released into the environment. DEQ is committed to holding Colonial accountable and we now seek a court order directing Colonial to comply with their obligations to clean up and restore the communities impacted by the release.”NC DEQ Secretary Elizabeth BiserThe Colonial Pipeline spill was discovered in Aug. 2020 in the Oehler Nature Preserve in Mecklenburg County and the DEQ says Colonial has recovered more than 1.23 million gallons of petroleum product to date.However, the DEQ claims Colonial has not given it an updated volume estimate of the release, not defined the depth of contamination in soil and groundwater at the site and has not fully investigated the extent of per- and polyfluoralkyl contamination (PFAS) at the site.More on the complaint and motion for injunctive relief can be found here.
DEQ files Action Against Colonial Pipeline for Largest Gasoline Spill in State’s History | NC DEQ – The North Carolina Department of Environmental Quality (DEQ) today filed a Complaint and Motion for Injunctive Relief in Mecklenburg County Superior Court to force Colonial Pipeline to meet their obligations as the responsible party in the state’s largest gasoline spill. As outlined in the complaint, Colonial has failed to provide DEQ with essential information required for the appropriate remediation at the site. The release was discovered in August of 2020 in the Oehler Nature Preserve in Huntersville. To date, Colonial has recovered more than 1.23 million gallons of petroleum product from the site, but has failed to provide DEQ with an updated volume estimate of the release. Despite requirements to do so, Colonial has not satisfactorily defined the vertical extent (depth) of petroleum contamination in soil and groundwater at the site and has not fully investigated the extent of per- and polyfluoroalkyl (PFAS) contamination at the site related to the response activities. The complaint seeks a judicial action requiring Colonial Pipeline to take the following actions:
- Remove, treat or control any source of petroleum, PFAS or other contaminants that have the potential to contaminate groundwater;
- Provide DEQ with a current, revised estimate of the volume of petroleum released;
- Submit a comprehensive conceptual site model for both the petroleum release and the PFAS contamination;
- Complete site assessment activities, and submit and receive DEQ approval for a corrective action plan and proposed schedule for implementation;
- Conduct monthly sampling of nearby surface water for petroleum, pH, conductivity, dissolved oxygen, Volatile Organic Compounds, total lead and PFAS at locations determined by DEQ; and
- Provide evaluations of Colonial’s leak detection system statewide, provide locations of all pipeline Type-A collar repairs within North Carolina and remove or replace them with approved alternatives if necessary. Colonial has cited corrosion related to a Type-A sleeve repair as the cause of the Huntersville release.
Why do local environmentalists object to City Council’s proposed anti-pipeline ordinance? - Byhalia Pipeline opponents’ fight for legislation to prohibit such developments will extend at least two more weeks while the Memphis City Council addresses community concerns about last-minute changes to a proposed ordinance. The council on Tuesday delayed a final vote on two pipeline-regulating measures after Memphis’ anti-pipeline coalition asked for time to read changes meant to address what they saw as loopholes in the original language in the ordinance that applied only to the city. One ordinance is a setback measure adopted by the Shelby County Board of Commissioners last month that would require 1,500 feet between an oil pipeline and residential areas. The other, which could replace the setback ordinance for the city, is broader and would give the council final say over various projects, including oil pipelines that would cross city property, including streets. Spire STL Pipeline getting support after concerns over shutdown — The Public Utilities Commission of Missouri sent a letter to federal regulators urging them to grant Spire an immediate extension to operate the STL Pipeline, which they say is necessary to provide adequate natural gas supply to the entire region. When a winter storm knocked out power across Texas, Ray McCarty saw firsthand look at how it impacted businesses in the Show-Me State. “We had plants in southern Missouri that were shut down because they couldn’t get enough gas to the plants,” said Ray McCarty, President of the Associated Industries of Missouri. Now, McCarty is concerned it could happen all over again with the looming closure of the 65-mile Spire STL Pipeline. “We can’t imagine what the impact would be shutting that thing down when we’re going into the winter heating season,” said McCarty. “I think we’re officially in that now. We just see that as being potentially dangerous not just for the homeowners out there but think of where everyone works.”The council agreed to push their decision on the ordinances to Nov. 16 at the request of pipeline opponents, including Memphis Community Against the Pipeline, Protect Our Aquifer and The Climate Reality Project: Memphis and Mid-South Regional Chapter. Group members requested a delay so they’d have time to read the amended right-of-way ordinance, which was not made public before the meeting. The advocates took issue with oil pipelines being included in the definition of public utilities and an earlier exemption they say would have allowed for the construction of a new pipeline despite the regulation. The exemption was removed while other language was added regarding the public utility definition. The amendments were meant to patch what the coalition flagged as loopholes that could be exploited by fossil fuel companies. Now with time to review the measures, the council that was unanimous on stopping the Byhalia Connection Pipeline is wrestling with how best to regulate future projects.
Rep. Carlos Gonzalez looks to meet with Eversource, calling proposed Springfield gas pipeline a ‘potential hazard’ - -Massachusetts Rep. Carlos Gonzalez has requested a meeting with Eversource to speak on the proposed multi-million-dollar pipeline Eversource gas has proposed for Springfield and the potential hazards it could cause. “I am concerned for the potential hazard the proposal may have on the residents of Springfield. My priority should be moving to a less hazardous and greener production of energy,” Rep. Gonzalez said. The representative is also the co-chairman of the Joint Committee on Public Safety and Homeland Security. The committee is tasked with, in part, “all matters concerning laws relating to shipping or otherwise transporting energy sources.” Eversource is asking for roughly $33 million to install a secondary natural gas pipeline in Springfield and Longmeadow that will be funded, if approved, by ratepayers. “Just step back and look at the safety record for natural gas,” said William Akley, president of the Gas Business at Eversource on Oct. 26. “It is by far one of the safest means of energy available.” A spokesperson said that Gonzalez is not only interested in discussing the proposed pipeline with Eversource, but also the disruptions that have occurred throughout the city of Springfield and across the state. There has been growing opposition to the pipeline from residents in Springfield and Longmeadow stating health and safety concerns in addition to questions regarding who will pay the project’s multi-million dollar price tag. “It certainly not as safe as renewable energy,” said Verne McArthur, Springfield Climate Justice Coalition member. “We had an explosion here in Springfield, I think 8 or 10 years ago when it was Columbia gas. They blew up Lawrence. There was just a fire in Marshfield, which burned for 9 hours because of Eversource’s confusion over the location of the shutoff valves.”
Regulators approve $370M natural gas storage project despite concerns of fossil fuel investment - Rejecting concerns about continued investment in fossil fuel infrastructure, Wisconsin utility regulators have approved plans for a $370 million natural gas storage project in southeastern Wisconsin designed to provide fuel when demand spikes. We Energies and Wisconsin Gas say the dual facilities in Jefferson and Walworth counties are needed to improve reliability and resilience in light of anticipated growth in demand. They estimate the cost will be at least $224 million less than the alternatives. The Public Service Commission approved the projects despite opposition from some local residents and the Sierra Club, which argued the utilities’ growth projections are overblown and “irreconcilable” with state and national carbon reduction commitments. The group argued it would be more cost-effective to reduce demand.Compliance with the Paris climate agreement — an effort to stave off the most catastrophic impacts of climate change — will require a reduction in gas use, and the groups note that Gov. Tony Evers’ climate task force recommended against building any new fossil fuel infrastructure. Commissioners largely rejected those arguments, taking a narrower view of their mandate of ensuring safe, reliable and affordable energy service.
Propane Heating Costs Hit Highest Level Since 2011 as Winter Approaches - Propane heating costs in the U.S. rocketed to $2.59 per gallon this month, the highest level in a decade, as winter quickly approaches, the federal government said Friday.The average cost of propane during the first four weeks of the current winter season, which begins in October, was 49% higher than last year, according to an Energy Information Administration (EIA) report. The agency noted that the low propane supply is a major reason for the increased prices.“U.S. propane and propylene inventories are starting this winter season lower than in recent years; weekly U.S. inventories are averaging 28% lower than the same time last year and 21% lower than their recent five-year (2015–2020) average,” the report stated. The price paid for heating has historically peaked between January and February, the EIA data showed. Heating costs are generally lower in October when demand is down and it is still warm in many parts of the country. The surge in costs could greatly affect certain states — including Iowa, Wisconsin, Maine and Minnesota — where more than 10% of all homes are heated using propane during the winter months. Overall, however, roughly 5% of all U.S. households rely on propane for heat. Still, heating oil and natural gas prices are expected to rise 43% and 30% respectively, an Oct. 13 EIA report concluded. “Not only are we seeing inflation in, you know, groceries and gasoline, but we’re going to see it in home heating as well,” Republican Oklahoma Rep. Stephanie Bice said this week during a roundtable on rising energy costs hosted by House Minority Leader Kevin McCarthy. “And this continuation of what I would consider to be sort of an assault on the industry is going to have a rippling effect,” she continued. “And we need to be mindful about looking at how we address this long term.” Republican lawmakers have roundly criticized the Biden administration for its energy policies targeting fossil fuel pipelines and drilling permits nationwide. Since January, President Joe Biden has committed to cutting emissions 50% by 2030, having a completely carbon-free electric grid by 2035 and achieving net-zero emissions by 2050.
Xcel unveils goal of carbon-neutral natural gas by 2050 -Xcel Energy is aiming for "net-zero" carbon emissions from its natural gas system by 2050, an ambitious goal but one with steep challenges. The company joined just a handful of U.S. gas utilities Monday by announcing plans to extricate carbon in Minnesota and other states — including by replacing some gas with hydrogen, a cleaner alternative. "It is really an evolution from the company's perspective," said Bob Frenzel, Xcel's CEO. "This is just the next big sector of the economy where we can provide leadership in reducing emissions." Minneapolis-based Xcel, Minnesota's second-largest gas utility and largest electricity provider, was one of the first U.S. companies to set goals for 100% carbon-free power by 2050. Meeting that electricity goal will be difficult enough for Xcel; the gas-greening project is likely to be even more so. Fossil-fuel-generated electricity can be more easily — and affordably — replaced by renewable power than natural gas can be for heating. Cleaner substitutes for natural gas are now quite expensive or are criticized for not being environmentally beneficial enough. "Xcel Energy's announcement that it will set goals to reach net-zero greenhouse gas emissions from its gas business is commendable, but it is just a start,"Joe Dammel, gas decarbonization director at St. Paul clean energy advocacy group Fresh Energy, said in a statement. "In order tomeetour climate goals, the gas system must decarbonize by midcentury,which is why it's crucial we focus now on what the future of gas will look like and make the right investments." Net-zero generally refers to the notion that increases in carbon emission from an industrial process are balanced by an equivalent amount of carbon reductions. "We are going to limit the amount of greenhouse gas emissions (from gas) as much as possible," Frenzel said. He added, "We are not going to do anything that jeopardizes the reliability of the system or affordability of the product."
Enterprise's Natural Gas Volumes Hit Record, with Another Haynesville Acadian Expansion Set - Enterprise Products Partners LP once again is seeking to expand its Acadian natural gas system in Louisiana amid increased activity among its producer customers in the Haynesville Shale. Enterprise is working to add 400 MMcf/d of capacity to the Acadian Gas Pipeline System, a 1,300 mile-long conduit linking Louisiana and Gulf of Mexico gas to local distribution companies, electric utility plants and industrial customers primarily in the Baton Rouge/New Orleans/Mississippi River corridor area. The network’s Acadian Haynesville Extension, which would boost capacity to 2.1 Bcf/d from 1.8 Bcf/d, and the 1.1 Bcf/d Gillis Lateral are expected to be completed by the end of the year. Co-CEO Jim Teague said the Acadian pipeline system is strategically located to move growing Haynesville and Cotton Valley gas supplies to “growing and higher-valued” industrial and liquefied natural gas markets. The CEO did not name names, but Haynesville pure-play Comstock Resources Inc. is a major shipper on the Haynesville extension and on Wednesday announced plans to accelerate drilling in the play, with average output of 1.42-1.45 Bcfe/d, nearly 100% weighted to natural gas. At the same time, Enterprise is seeing “new opportunities arise” from potential customers in the Cotton Valley, a tight gas play in northeast Texas and northwest Louisiana, just above the Haynesville/Bossier formation. Enterprise’s Acadian Gas System and the 357-mile Haynesville Gathering System fetched a combined $10 million increase in gross operating margin during the quarter. This was primarily because of higher capacity reservation fees and higher transportation volumes, which increased by an aggregate 543 billion Btu/d.
Louisiana has bet big on liquefied natural gas. Is it a good bet? -- The construction site on the horizon, a giant tangle of cranes and storage tanks on the edge of the Gulf in Cameron Parish, is a monument to Louisiana’s embrace of the liquefied natural gas industry, which now exports around the world from here. LNG has been touted as an important bridge fuel that burns far cleaner than coal, helping wean developing nations away from the dirtiest sources of electricity as the world gradually moves toward renewable energy.But LNG is also an important source of greenhouse gas emissions, and some question if the trade-off in pollution and major tax breaks amounts to a good investment for the state. The industry will surely factor into discussions as world leaders gather for a climate summit this week in Scotland, a meeting that Gov. John Bel Edwards will also attend. At the same time, Lake Charles will host a major LNG industry conference from Tuesday through Thursday.With two huge LNG export facilities up and running, both in Cameron Parish, Louisiana now has the highest output capacity in the country, with more on the way. Cameron Parish Port Director Clair Hebert Marceaux has frequently described the industry in these terms: If the parish were a country, it would be the world’s third-largest LNG exporter after Qatar and Australia.Edwards, who will leave office in two years, has convened a task force to come up with a plan to reduce emissions of climate-altering greenhouse gases in a state that relies heavily on the petrochemical and energy industries, which are major sources of pollution. But he nonetheless says oil and gas, including LNG, will continue to play a role. He has promoted the state’s plans for carbon capture and storage technology, which is controversial among environmental activists. “I believe that LNG has a tremendous role to play,” Edwards said Thursday on a visit to the Lake Charles area before his departure to Scotland. “Every time anywhere in the world a coal-powered plant is converted or decommissioned in lieu of a gas-powered plant, natural gas, then that helps the environment.”
Amid major industry expansion, fears over climate change, LNG leaders gather in Lake Charles - – Southwest Louisiana has quietly become the nation’s largest exporter of liquefied natural gas – much to environmentalists’ dismay – and industry leaders gathered in this city Wednesday to discuss how best to move ahead at a time of deep concern over climate change. The need for the industry to reduce greenhouse gas emissions was a key theme at a conference that brought together state and local officials along with executives from companies involved in LNG production. The previous day, environmental activists gathered near the conference venue to draw attention to the dangers they say the industry poses.The conference came as this week’s global climate summit continued in Scotland. Gov. John Bel Edwards, who has touted the benefits of LNG as a transitional fuel, was among those attending the summit in Glasgow aimed at turning the tide on global warming, which particularly threatens Louisiana through rising sea levels and more intense hurricanes. The state and LNG companies tout the fact that natural gas burns far cleaner than coal, which they say make it a viable alternative for electricity production as countries move gradually toward renewable energy. Liquefying it through a supercooling process – which in itself requires large amounts of electricity – makes it easy to transport. LNG companies have flocked to southwest Louisiana due to a combination of natural gas supply, pipeline infrastructure and deep-water access for shipping. They have also received big tax breaks through the state’s Industrial Tax Exemption Program. The state has embraced the industry because of the multi-billion-dollar investments and jobs it brings, as Lt. Gov. Billy Nungesser made clear at the conference. Two export terminals are operating out of Cameron Parish in the state’s southwest, with expansions planned, and at least five others have been approved but are not yet up and running statewide. Another three have been proposed but not yet approved. “I was in the oil and gas industry before I retired, so I understand the importance of having elected officials to stand up for you and whatever your needs are,” Nungesser said in his speech. “So use me and my office to help you in any of your endeavors to make sure your project moves forward quickly.”
U.S. natgas drops over 4% on rising output, lower demand next week -(Reuters) - U.S. natural gas futures fell over 4% to a one-week low on Monday on rising output, lower demand next week than previously projected and growing expectations the United States will have more than enough gas in storage for the winter heating season. That price decline occurred despite forecasts for colder weather and more heating demand this week than previously expected and a 5% jump in gas prices in Europe that should keep U.S. liquefied natural gas (LNG) exports strong. Since the summer, global gas prices have soared to record highs as utilities scramble for LNG cargoes to refill low stockpiles in Europe and meet rising demand in Asia, where energy shortfalls have caused power blackouts in China. U.S. futures also climbed, reaching a 12-year high in early October, on expectations LNG demand will remain strong for months to come. Price gains in the United States, however, were restrained compared with overseas markets because the United States has more than enough gas in storage for winter and ample production to meet domestic and export demand. Prices in Europe and Asia were about five times higher than in the United States. U.S. stockpiles were currently about 3% below the five-year average for this time of year. In Europe, analysts said stockpiles were about 15% below normal. After dropping over 6% in each of the prior two sessions, front-month gas futures fell 24.0 cents, or 4.4%, on Monday to settle at $5.186 per million British thermal units (mmBtu), their lowest close since Oct. 21. After the close, the front-month fell over 5% on Monday. As the amount of gas in U.S. stockpiles keeps rising, speculators have cut their net long positions on the New York Mercantile and Intercontinental Exchanges over the past four weeks to their lowest since June 2020, according to data from the Commodity Futures Trading Commission (CFTC). Data provider Refinitiv said output in the U.S. Lower 48 states averaged 94.1 billion cubic feet per day (bcfd) in October, up from 92.7 bcfd in September. That compares with a monthly record of 95.4 bcfd in November 2019. Output hit 96.2 bcfd on Oct. 29, its highest level in a day since hitting a record of 96.6 bcfd in November 2019. Refinitiv projected average U.S. gas demand, including exports, would rise from 96.4 bcfd this week to 100.4 bcfd next week as more homes and businesses crank up their heaters. The forecast for this week was higher than Refinitiv projected on Friday, while its outlook for next week was lower. The amount of gas flowing to U.S. LNG export plants has averaged 10.5 bcfd so far in October, up from 10.4 bcfd in September. Feedgas to LNG export plants hit 11.8 bcfd on Oct. 29, its highest level in a day since May.
Despite Improving Supply Picture, Cold Snaps Boost Most November Natural Gas Bidweek Prices Beyond $6.00 -- Natural gas prices mounted hefty gains for November bidweek trading amid uncertainty over the potential for colder weather in the coming weeks. Strong export demand fueled by an urgent need to restock global inventories ahead of winter also aided the rally for U.S. markets. NGI’s November 2021 Bidweek National Avg. surged 63.5 cents month/month to $6.130/MMBtu. This compares with the November Nymex futures settlement of $6.202 and NGI’s November 2020 National Average of $2.745. The November 2021 Bidweek trading took place Oct. 25-27, reflecting NGI’s decision in May to move to a three-day bidweek trading period.Despite the multi-year highs set along the Nymex futures strip in recent days, the December contract has failed to sustain the momentum since taking over the prompt-month position. December futures plunged 77.2 cents between last Thursday and Friday, and then opened Monday’s session down another 10-plus cents amid an increasingly bearish November weather outlook.After trending slightly warmer at the end of last week, weather models remained on that track through the weekend and into Monday. Bespoke Weather Services said the warmup forecast for the middle third of November could be brief, as is this week’s cold front. However, the gas market is at a time of year when weather becomes a dominant force in price action.Indeed, the December Nymex futures contract settled Monday at $5.186, off 24.0 cents from Friday’s close. Against that backdrop, and with chilly weather in the Midwest and East over the next several days, Chicago Citygate November bidweek prices jumped 59.0 cents month/month to average $6.290. OGT was up 51.5 cents to $6.085.Gains were even steeper farther east, where Texas Eastern M-3, Delivery led Appalachia higher. November bidweek prices averaged $5.880, up $1.20 on the month.
Natural Gas Futures, Cash Prices Rebound Amid New Expectations for Weather-Driven Demand - Natural gas futures on Tuesday gained ground for the first time in four sessions as overseas supply shortages converged with forecasts for colder weather and stronger domestic demand by mid-November. The December Nymex contract gained 35.6 cents day/day and settled at $5.542/MMBtu. January rose 33.5 cents to $5.640. NGI’s Spot Gas National Avg. gained 29.0 cents to $5.310, led higher by prices in the Northeast, where winter cold and snow are expected this week, as well as gains in Texas. While temperatures were seasonally comfortable over much of the Lower 48 Tuesday and expected to remain so for much of the week, updated forecasts called for more widespread chills near the middle of November. This was enough to offset continued strong production estimates – near 94 Bcf on Tuesday, close to 2021 highs – and shift traders’ focus to the onset of winter demand. Bespoke Weather Services said its latest outlook for the first half of November still showed gas-weighted degree days below historic averages – the source of downward pressure on futures Monday and late last week. “However, we see changes around the middle of the month in the projected pattern that suggest there is risk to move back colder down the road, as a new eastern U.S. trough arrives on the scene underneath a redeveloping block in the north Atlantic,” Bespoke said. “While we have discussed the possibility of colder variability later in the month, the pattern seems to be evolving faster…This kind of variability keeps the pattern rather neutral, overall, but we view today’s changes, specifically, as bullish.” If winter chills arrive by the middle of the month, the firm added, “prices can continue to advance higher.”
UPDATE 1-U.S. natgas jumps near 7% on profit taking, strong LNG demand (Reuters) - U.S. natural gas futures jumped almost 7% on Tuesday as short sellers took some profits after the contract dropped about 16% during the prior three sessions and as higher global prices keep demand for U.S. liquefied natural gas (LNG) exports strong. That price increase came despite rising output and forecasts for milder weather and lower heating demand next week than previously expected. In October, global gas prices soared to record highs as utilities scrambled for LNG cargoes to refill low stockpiles in Europe and meet rising demand in Asia, where energy shortfalls have caused power blackouts in China. Price gains in the United States, however, were restrained compared with overseas markets because the United States has more than enough gas in storage for winter and ample production to meet domestic and export demand. Prices in Europe and Asia were about four times higher than in the United States. U.S. stockpiles were currently about 3% below the five-year average for this time of year. In Europe, analysts said stockpiles were about 15% below normal. Front-month gas futures rose 35.6 cents, or 6.9%, to settle at $5.542 per million British thermal units (mmBtu). On Monday, the contract closed at its lowest since Oct. 21. The Biden administration unveiled plans to slash emissions of the greenhouse gas methane across the United States, starting with oil and gas wells, pipelines and other infrastructure as part of its broader climate change strategy. Data provider Refinitiv said output in the U.S. Lower 48 states averaged 94.9 billion cubic feet per day (bcfd) so far in November, up from 94.1 bcfd in October. That compares with a monthly record of 95.4 bcfd in November 2019.
U.S. natgas futures rise 2% on soaring global prices — - U.S. natural gas futures rose about 2% on Wednesday after soaring 7% in the prior session on forecasts for higher heating demand this week and expectations a jump in global gas prices will keep demand for U.S. liquefied natural gas (LNG) exports strong. That price increase came despite near record U.S. output and forecasts for milder weather and lower heating demand next week than previously expected. Analysts expect U.S. gas inventories will top 3.6 trillion cubic feet (tcf) by the start of the winter heating season in November, which they said would be a comfortable level even though it falls shy of the five-year average of 3.7 tcf. U.S. stockpiles were currently about 3% below the five-year average for this time of year. In Europe, analysts said stockpiles were about 15% below normal. Front-month gas futures rose 12.8 cents, or 2.3%, to settle at $5.670 per million British thermal units (mmBtu). Data provider Refinitiv said output in the U.S. Lower 48 states averaged 95.6 billion cubic feet per day (bcfd) so far in November, up from 94.1 bcfd in October. That compares with a monthly record of 95.4 bcfd in November 2019. Refinitiv projected average U.S. gas demand, including exports, would drop from 97.8 bcfd this week to 94.4 bcfd next week as the weather turns milder. The forecast for this week was higher and next week was lower than Refinitiv projected on Tuesday. The amount of gas flowing to U.S. LNG export plants averaged 10.9 bcfd so far in November, up from 10.5 bcfd in October. That compares with a monthly record of 11.5 bcfd in April. Feedgas to Freeport LNG's plant in Texas fell to 0.6 bcfd, its lowest since September when Hurricane Nicholas cut power to the facility and knocked it off line. Gas flowing to Cheniere Energy Inc's Sabine Pass in Louisiana, meanwhile, rose to 4.2 bcfd, its highest since April, prompting some traders to guess that the new Train 6 was producing its first LNG. With gas prices near $25 per mmBtu in Europe TRNLTTFMc1 and $31 in Asia JKMc1, versus around $6 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States can produce.
December Natural Gas Futures See-Saw After EIA Prints in-Line Storage Injection -The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 63 Bcf natural gas into storage for the week ended Oct. 29. The result was on par with market expectations and elicited a muted response from futures traders. Ahead of the EIA report, the December contract was up 7.2 cents at $5.742/MMBtu. The prompt month jumped to $5.796 when the EIA data was released at 10:30 ET. However, it descended back to $5.665 after 30 minutes of post-announcement trading, down a half-cent. Temperatures during the storage report week were warmer than normal – and generally comfortable — minimizing demand and enabling utilities to stow away more gas for use in the coming winter, NatGasWeather said. Prior to the EIA report, a Reuters survey showed injection estimates ranging from 47 Bcf to 71 Bcf, with a median build of 64 Bcf. A Wall Street Journal survey landed at an average build expectation of 64 Bcf, with estimates ranging from increases of 47 Bcf to 74 Bcf. Estimates submitted to Bloomberg produced a median 66 Bcf injection estimate, with a range of 57 Bcf to 74 Bcf. NGI’s model predicted a 68 Bcf injection. EIA recorded a 27 Bcf injection for the year-earlier period, while the five-year average is a build of 38 Bcf. The print marked the eighth straight week that EIA’s reported build narrowed the current inventory deficit versus the five-year average. Working gas in storage was 3,611 Bcf, according to EIA estimates. Stocks were 313 Bcf less than in the comparable week last year but just 101 Bcf below the five-year average of 3,712 Bcf.
Natural Gas Forward Prices Soften on Lack of Cold, but Strong Export Demand to Continue - A steep sell-off early in the Oct. 28-Nov. 3 period because of generally unsupportive weather sent natural gas forward prices tumbling by double digits. December forward prices plunged an average 17.0 cents, while the balance of winter (December-March) slid 16.0 cents, according to NGI’s Forward Look. Summer (April-October) prices also softened, but losses were smaller and averaged only 8.0 cents as storage inventories in the United States have improved dramatically over the past two months. At the same time, weather forecasts continue to kick sustained cold weather down the road, setting up an adequate supply trajectory through the winter season that would lessen the urgency in restocking next summer. Despite the lack of widespread cold in the Lower 48, forecasts do show at least some bouts of chilly weather over the next month. NatGasWeather said a weather system is expected to linger over the Midwest and East through Saturday, resulting in crisp overnight temperatures in the 20s to 30s. [Want to know how global LNG demand impacts North American fundamentals? To find out, subscribe to LNG Insight.] The cold snap did little to prevent forward prices from weakening across the curve. Forward Look data showed Chicago Citygate December prices sliding 9.0 cents from Oct. 28-Nov. 3 to reach $6.001. However, basis improved by 2.0 cents during that period as benchmark Henry Hub posted slightly more pronounced declines. Chicago’s balance-of-winter strip also was down 9.0 cents to $6.06, while summer prices averaged 7.0 cents lower at $3.880, according to Forward Look. On the East Coast, Transco Zone 6 December forward prices slid 14.0 cents from Oct. 28-Nov. 3 to reach $7.652, and the balance of winter tumbled 24.0 cents to $9.00. The summer strip was down 7.0 cents to $3.350. Upstream in Appalachia, Eastern Gas South December fell 10.0 cents to $5.129, as did the balance of winter, which landed at $5.090, Forward Look data showed. Summer prices averaged $3.190, off 7.0 cents for the period. Beyond this week, weather forecasts showed mild/warm high pressure strengthening and expanding over the eastern two-thirds of the country beginning Sunday and continuing through the coming week. Highs were seen reaching the mid-50s, easing national demand to “very light levels,” according to NatGasWeather. There’s still expected to be a relatively chilly weather system exiting the West late in the next several days, the forecaster said. The system would initially track across the Midwest, then into the East the weekend of Nov. 14-16. Weather data has been bouncing between cooler and warmer trends, but demand should track closer to normal either way. Warmer weather is likely to follow, though, keeping storage withdrawals to a minimum for much of November.
The Oil Omen? First Large US Shale Driller Pledges Flat Output In 2022 -In the release of its third-quarter results, Diamondback said it planned to pump some 221,000 to 225,000 barrels of crude daily. For full 2021, Diamondback said production would come in at between 222,000 to 223,000 bpd. “As we move into 2022, we are still seeing excess oil supply and varying demand recovery profiles across the globe. As such, we remain committed to capital discipline and our plan to return excess Free Cash Flow to our stockholders,” said the company’s chief executive, Travis Stice, echoing a widely shared attitude in the shale oil and gas industry. “Therefore, we are committing to maintaining our fourth quarter 2021 Permian oil volumes throughout next year and we believe this can be accomplished by spending the amount of capital implied by our fourth quarter 2021 guidance run-rate,” Stice also said, noting this approach would allow the company to return more cash to shareholders, pay down more debt, and maximize free cash flow. Most large shale drillers are adopting the same approach in order to keep their shareholders happy after years of burning cash to boost production to a maximum. While this new approach of restraint is welcomed by shareholders, the general public—and drivers specifically—have no reason for joy. The strict capital discipline of large shale players means that U.S. oil production will be slow to grow, and this means retail fuel prices will remain elevated for an extended period. Diamondback reported adjusted profits of $536 million for the third quarter, which translated into earnings per share of $2.94, exceeding analyst expectations for EPS of $2.77. The company also announced an 11-percent increase in its annual dividend thanks to the robust financial results.
Continental Resources to buy Texas land from Pioneer for $3.25 bln (Reuters) - U.S. oil and gas producer Continental Resources Inc is nearing a deal to acquire the Delaware Basin assets of peer Pioneer Natural Resources for more than $3 billion, people familiar with the matter said on Wednesday.Continental would add to its existing operations in the Bakken of North Dakota and Oklahoma's SCOOP/STACK shale formations through the acquisition, which could be announced by the companies when they report quarterly earnings later on Wednesday, the sources said.Reuters reported in September that Pioneer was seeking to sell the assets in a bid to streamline its business and reduce debt after two big acquisitions this year.
Uptick in Permian Activity Lifts Latest Tally of U.S. Drilling - - An uptick in oil-directed drilling activity focused in the Permian Basin helped lift the U.S. rig count six units higher to 550 for the week ended Friday (Nov. 5), according to updated numbers from oilfield services provider Baker Hughes Co. (BKR). The net increase in domestic drilling resulted entirely from the onshore oil patch. Natural gas-directed rigs held steady at 100 in the United States, while the Gulf of Mexico count was also unchanged at 13, according to the BKR numbers, which are based partly on data from Enverus. The combined U.S. count finished the week exactly 250 units higher than the 300 rigs running at this time a year ago. Horizontal units increased by nine domestically, while directional rigs increased by one. Partially offsetting was a four-rig decline in vertical units. The Canadian rig count declined six rigs for the week, falling to 160, versus 86 in the year-earlier period. Net declines there included three oil-directed rigs and three natural gas-directed. Broken down by major basin, the Permian saw its drilling tally rise three units to 271 for the week, up from 147 in the year-ago period. The Arkoma Woodford and Marcellus Shale each added a rig week/week, while one rig exited the Mississippian Lime during the period, according to BKR. Among states, Texas unsurprisingly led with a four-rig increase, mirroring the gain in the Permian. New Mexico, which also partly underlies the Permian, dropped one unit from its total for the week.
US oil, gas rig count climbs 15 to 674 as oil drilling activity accelerates: Enverus - The US oil and gas rig count climbed 15 to 674 in the week ended Nov. 3, energy analytics and software company Enverus said, as drilling activity in most oil-focused basins tested fresh pandemic highs. The number of rigs chasing primarily oil moved 16 higher to 528, marking the largest one-week increase since March and pushing the number of active oil rigs to the highest since April 2020.The number of rigs chasing mostly gas declined by 1 to 146. The Denver-Julesburg play saw the biggest weekly jump, with operators adding three rigs for a total 16. The increase saw the basin rig count break out of its recent range and put it at the highest level since the week ended June 16. The Eagle Ford rig count climbed two for a total 60, and Bakken operators added a single rig for a total 32. Rig counts in both plays were each the highest since April 2020. In the SCOOP-STACK, the rig count climbed one to 39, the highest since the week ended March 11, 2020. Notably, the number of rigs active in the Permian Basin was steady at 271, holding just below the basin’s recent peak of 272 seen in early October. Despite an overall decline in gas-focused activity, rig counts in the nation’s top gas-focused plays were flat or higher on the week. The Haynesville basin rig count climbed one to 51, suggesting the rig count decline seen there in late summer may have bottomed. Rig counts in the Marcellus and Utica shale plays were steady on the week at 33 and 13, respectively. Projected 2022 US rig count increases of 20%-25% may not be enough to accommodate demand based on upstream producer statements about their drilling needs for next year, CEO Andy Hendricks of US land driller “The market for the most capable rigs in the US is officially tight,” Hendricks said. “We’re sold out of [the newest, most capable Patterson-trademarked] rigs in the Permian. We’ve seen leading edge day rates move up in the last month and I expect that trend to continue.” Patterson has a total of 46 premiere rigs in the Permian, of which 41 are currently working, and four of the remaining five rigs are already committed to return to work. “We are effectively are sold out of these rigs in the Permian basin,” Hendricks said.
Biden unveils new rules to curb methane, a potent greenhouse gas, from oil and gas operations - More than 100 countries have signed the Global Methane Pledge, which requires a 30 percent cut in methane emissions by 2030, one of the Biden administration’s priorities for the COP26 climate summit in Glasgow, Scotland. The pledge’s signatories now represent nearly half of human-caused methane emissions. On Tuesday, the Biden administration also unveiled a sweeping set of domestic policies to cut emissions of methane from oil and gas operations across the United States. The proposals, announced at the U.N. climate summit, represent one of the president’s most consequential efforts to combat climate change. Proposed rules from the Environmental Protection Agency would establish standards for old wells, impose more frequent and stringent leak monitoring, and require the capture of natural gas that is found alongside oil and is often released into the atmosphere. They mark the first time the federal government has moved to comprehensively tackle the seepage of methane from U.S. oil and gas infrastructure. President Biden told delegates in Glasgow that cutting methane emissions is essential to keeping global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above levels in the late 1800s before widespread industrialization. He said he hoped the world would surpass the pledges made. “Together we’re committed to collectively reduce our methane by 30 percent by 2030,” Biden said. “And I think we could probably go beyond that.” Methane, the main component of natural gas, is the world’s second-largest contributor to climate change among greenhouse gases. Although it dissipates more quickly than carbon dioxide, it is 80 times as powerful during the first 20 years after it is released into the atmosphere.
Methane Rules Would Cost U.S. Producers Over $1 Billion a Year - U.S. oil and natural gas producers would have to spend a negligible fraction of profits to comply with tougher methane rules proposed by the Biden administration. The measures would cost up to $1.2 billion annually, the U.S. Environmental Protection Agency announced Tuesday, and would be spread out over hundreds of thousand of wells. That’s a sliver of the more than $70 billion in projected earnings for the 10 largest American drillers alone this year.
EPA rule would force Texas oil and gas producers to cut methane emissions | The Texas Tribune --The Environmental Protection Agency proposed tighter controls Tuesday on the oil and gas industry’s emissions of methane, one of the most potent greenhouse gases that causes climate change.As world leaders meet in Scotland this week to seek international agreements to slow and mitigate the effects of climate change, federal regulators released a draft of a new rule to require oil and gas companies to monitor and reduce emissions of methane, a gas that is released during the drilling of oil wells and can be leaked from oil and gas equipment.“It is now abundantly clear that America is back and leading by example in confronting the climate crisis with bold ambition,” EPA Administrator Michael Regan said in a statement. “With this historic action, EPA is addressing existing sources from the oil and natural gas industry nationwide, in addition to updating rules for new sources, to ensure robust and lasting cuts in pollution across the country.”The rule, if approved, could require companies to use specialized equipment to identify the colorless gas on a quarterly basis and repair leaks, as well as impose tighter restrictions on controlling emissions from both new and old wells. The EPA estimates the rule could reduce methane emissions by 41 million tons by 2035. The agency intends to issue a final rule before the end of 2022.Texas will play a key role in the nation’s efforts to reduce methane emissions. The state produces the largest share of the nation’s oil, a major contributor to global methane emissions. But state leaders have protested calls to shift the energy industry — a key pillar of the state’s economy — away from its reliance on producing the greenhouse gas-emitting fossil fuels.
BP Looks Dirtier Than Exxon in New Data From Giant U.S. Oil Field - BP Plc aspires to be the oil industry’s climate champion. Last year, the London-based company became the first of the world’s supermajors to embrace an eventual phase-out of all greenhouse gas emissions.But a Bloomberg News analysis of new data collected from the Permian Basin, the largest U.S. oil field, shows that BP’s operations are among the dirtiest of dozens of companies operating there. The same analysis shows Exxon Mobil Corp., which has resisted a net-zero target, is among the cleanest.The findings are based on research by the nonprofit Environmental Defense Fund that offers an unprecedented chance to compare major companies’ performances across tens of thousands of wells in the oil-rich region of West Texas and New Mexico. They’re far from comprehensive, though, covering only a portion of a single basin over a few days. Both companies operate in dozens of countries around the world.Methane is the chief component of natural gas, often produced in such large quantities in the Permian that pipelines can’t handle the volume. Instead, it spills unburned into the air, where its climate-warming power ismore than 80 times greater than carbon dioxide’s over a 20-year period. Last year, researchers found that oil and gas activity in the basin was responsible for about 2.7 million metric tons of methane a year, or more than those of all but eight countries in the world.The environmental group hired Carbon Mapper, a nonprofit affiliated with NASA’s Jet Propulsion Laboratory, to fly over a 3,200-square-mile area with an infrared spectrometer that can detect the otherwise invisible gas. Over 11 days in July and August, Carbon Mapper spotted more than 900 methane plumes pouring from tanks, compressors and pipelines. Later, EDF scientists identified the companies that owned the equipment and made the findings available online.
Oklahoma oil industry members call Biden emissions plan 'unnecessary red tape'— Oklahomans are reacting to the potential plan to monitor methane emissions in the oil and gas industry with some calling it unnecessary and others call it a first step to progress.President Biden announced a proposal Tuesday to monitor and eliminate methane leaks from new and existing wells and pipelines. The plan is an extension of an existing U.S. Environmental Protection Agency rule that only regulated new equipment. The proposal also establishes monitoring of compressor stations and gas-fired pneumatic controllers, additional sources of methane leaks.The EPA predicts the plan would eliminate 41 million tons of methane emissions between 2023 to 2035.Brook Simmons, President of the Petroleum Alliance of Oklahoma, said the Biden administration and Democrats are attacking the oil and gas industry with the proposal."The oil and natural gas industry is 100% being targeted by the left and by the advisor and administration for extinction," said Simmons. "They want to get rid of the US oil and natural gas industry and offshore that production."He said every time there is "duplicative or unnecessary red tape" there is a hindrance to investment, expansion, and employment."We don't have enough natural gas and oil to meet demand and we are going to need every barrel of oil," he said. "Otherwise, low income and working Oklahoma families are going to pay."Oklahoma has already put forward efforts to reduce emissions and clean up "orphaned wells" in the state. According to the EPA, Oklahoma has reduced CO2 emissions by 30% since 2005.Companies in the state have also made an effort to limit their footprint. The Public Service Company of Oklahoma has already lowered emissions over the past decade and made promises to the EPA to shut down its last coal-burning unit in Oklahoma by 2026.Simmons said this proposal would hinder efforts in the state.
North Dakota Republicans blast Biden's methane proposal; Dakota Resource Council lauds plan --North Dakota Republican officials on Tuesday denounced the Biden administration's wide-ranging plan to reduce methane emissions, saying it will harm the energy industry and drive up home heating costs for consumers. Democratic President Joe Biden announced his methane reduction plan at a United Nations climate summit in Glasgow, Scotland. Biden pledged to work with the European Union and dozens of other nations to reduce overall methane emissions worldwide by 30% by 2030. The centerpiece of U.S. actions is a long-awaited rule by the Environmental Protection Agency to target reductions from existing oil and gas wells nationwide, rather than focus only on new wells as previous regulations have done, The Associated Press reported. EPA Administrator Michael Regan said the new rule would be stricter than a 2016 standard set under President Barack Obama, which was rolled back during Republican President Donald Trump's administration but reinstated by Congress last summer. Gov. Doug Burgum said he thinks the way to address methane emissions "is through innovation, not redundant and burdensome regulations that will only drive energy production overseas where it is produced less cleanly and efficiently.” Burgum also touts innovation as a way to make North Dakota carbon neutral by the end of the decade -- a goal he announced last spring. Carbon neutrality involves striking a balance between CO2 released from within the state and the amount of emissions contained or offset in some way. Burgum envisions meeting the goal while maintaining robust oil and coal industries in North Dakota. The governor did not mention methane in announcing the goal. On Tuesday, he said, "The Biden administration should be allowing industry to reinvest in existing and future infrastructure to protect the environment and human health while also reducing regulatory costs.” North Dakota's all-Republican congressional delegation also blasted the methane proposal. Sen. John Hoeven, a member of the Senate Energy and Natural Resources Committee, touted recent gains in North Dakota in the capture of natural gas in the oil fields, leading to reduced wasteful flaring. "We can replicate that success across the nation by providing regulatory relief and empowering the energy industry to invest in gas-gathering lines, transmission pipelines and the facilities needed to capture and make good use of methane," Hoeven said. Sen. Kevin Cramer, a member of the Senate Environment and Public Works Committee, called Biden's plan "another harmful strike at America's energy producers" and also touted innovation as a better means. Rep. Kelly Armstrong, who serves on the House Energy and Commerce Committee, said the federal plan "will stifle innovation in states like North Dakota."
North Dakota budget writers finish coronavirus spending plan (AP) — The North Dakota Legislature’s budget writers agreed Thursday to spend nearly all of the $1.1 billion in federal coronavirus aid available to the state on initiatives ranging from infrastructure improvements and energy projects to workforce development and childcare programs.House and Senate appropriations committees finished work on the spending plan, after a marathon day Wednesday during which budget writers from both houses failed to reach a consensus on some items, including the Senate’s proposals for a $25 million upgrade for an administrative building at Minot State University and a $30 million addition to a revolving loan fund for hospitals. The biggest ticket item approved by both committees — and pushed by Republican Gov. Doug Burgum — was $150 million for natural gas infrastructure in the state’s oil patch. The $1.1 billion in federal coronavirus funds the state received in June represents the single-largest deposit into the state treasury in history.
North Dakota regulators grant temporary approval to pipeline lacking permit -North Dakota regulators have granted temporary approval to a short natural gas pipeline in McKenzie County operating since 2014 without a state permit. It’s unclear why the 2.6-mile Caliber Midstream pipeline did not have a permit from the North Dakota Public Service Commission. PSC Chair Julie Fedorchak said she was unsure of the reason, and the company did not immediately respond to a Tribune request for comment. The pipeline connects Caliber’s Hay Butte Plant, a natural gas processing facility, with the nearby Northern Border Pipeline. Northern Border is a major export pipeline taking gas produced in the Bakken and Canada to markets in the middle of the United States. Caliber is planning changes to the 2.6-mile pipeline and wants to allow gas to flow either direction, including from Northern Border to a trucking facility next to its processing plant. Compressed natural gas fueling takes place at the trucking facility, and gas delivered there is used as a fuel in fracking operations, Caliber said in its application for temporary approval from the PSC. The company plans to soon file a comprehensive siting application with the commission to secure a formal permit for the pipeline.
After Trump, an agency key to Biden’s climate agenda tries to rebuild. The Bureau of Land Management, whose headquarters was shifted out West, remains hobbled as it seeks to curb oil and gas drilling. Air-quality specialist Theresa Alexander had spent nearly three decades working for the federal government in the nation’s capital when Trump appointees in the Bureau of Land Management forced her to choose: Move your life to Colorado or lose your job. As she thought about abandoning her home in suburban Maryland that she shared with her son, his wife and her five grandchildren, she developed a pain in her gut so intense she worried she had cancer. So Alexander turned in her badge, cleaned out her desk and joined the exodus last year of Interior Department staffers leaving their jobs managing America’s public lands.Among the 287 BLM headquarters employees who quit or retired — nearly 90 percent of those ordered to move out West — were wildlife biologists, foresters, fisheries experts and other scientists and specialists who would have played key roles in President Biden’s ambitious agenda to fight climate change and conserve 30 percent of U.S. lands and waters by 2030.Alexander worked on policies that assessed greenhouse gas emissions from oil and mining projects. She and her colleagues were also responsible for ensuring compliance with the Clean Air Act on public lands. Several members of her team quit, along with others who protected endangered species and wildlife habitat or set long-term policy.“We were pawns in a political game,” she said.Two years after President Donald Trump decided to move the bureau’s headquarters to Grand Junction, a small city in the mountains of Colorado with no direct flight links with D.C., Biden plans to bring it back. But the agency remains severely depleted, according to interviews with more than 20 current and former Interior Department employees, hobbling the Biden administration’s work. As it plans a multiyear shift from fossil fuels to renewable energy on public lands, employees — several of whom spoke on the condition of anonymity to avoid retaliation — say the exodus of senior leaders has drained the agency of experienced scientists and regulators. Replacements have struggled to get up to speed. Divisions that once coordinated across cubicles in the same D.C. office are now more isolated from one another after headquarters positions were scattered across about a dozen cities in the West.
Colorado drilling company behind leaks, spills will pay a fraction of the massive fine it initially faced - Front Range oil and gas company KP Kauffman has agreed to a comprehensive clean-up of spills and release from wells, tanks, and flowlines at 74 sites under a “global” remediation plan and to pay a $795,000 fine – just about a fifth of what state regulators initially sought. The compliance agreement was approved by the Colorado Oil and Gas Conservation Commission Friday, after weeks of negotiation between the company and the commission staff. The plan calls for the company, also known as KPK, to undertake a comprehensive inspection of its flow line system, remediate sites, and improve staff training. It has five years to complete the plan and pay the fine. The company must keep $150,000 in an account dedicated to spills and site remediation and replenish the account monthly. State Assistant Attorney General Caitlin Stafford, who represented the commission, called settlement “a detailed and comprehensive action plan” that is “tough but fair.” John Jacus, the attorney for KPK, said the agreement gives the company “enough flexibility to meet their obligations.” The commission staff had brought a sweeping enforcement action against KPK, as a chronic polluter, in a 70-page litany of 20 alleged operating violations at seven sites, including improperly storing wastes and falling to report and clean-up spills.
Less than half of proposed Wyoming oil and gas leases recommended for upcoming sale – Of the 459 Wyoming parcels being considered for the upcoming federal oil and gas lease sale, just 195 are eligible to be sold, officials said Monday.The lease sale is scheduled for the first quarter of 2022. It will be held more than a year after President Joe Biden’s Jan. 27 executive order suspended new oil and gas leasing on federal lands, and more than six months after a U.S. district judge ordered the Bureau of Land Management (BLM) to resume quarterly lease sales.All of the 459 potential leases were originally proposed for the canceled March and June sales. The agency published the full list on Aug. 31, and took public comment from Sept. 1–Oct. 1.After reviewing public comment and completing an environmental assessment for the state’s nominated lands, the agency deferred 264 Wyoming parcels from the sale, largely due to concerns about disturbing priority sage grouse habitat.In a separate announcement Friday, the BLM also cited “insufficient environmental analysis” as a reason for deferring some parcels.The BLM already conducts environmental assessments for proposed leases to determine impacts that drilling could have on air and water quality, wildlife habitat and surrounding communities. But federal courts have blocked several recent oil and gas lease sales, citing inadequate review of their impacts on climate change.On Friday, the agency said that it would begin evaluating greenhouse gas emissions as part of its oil and gas leasing program, starting with the upcoming sale. In addition to considering the social cost of carbon as part of its environmental analysis, it created a lease sale emissions tool and issued its first annual report on the greenhouse gas emissions of the federal mineral leasing programs.
Biden admin to require new climate analysis before oil leasing - The Biden administration today said it will consider the contribution to greenhouse gas emissions made by oil and gas produced on public lands before selling federal drilling rights. It also released a report calculating the annual emissions impact and climate trends from development of the coal, oil and natural gas on the federal mineral estate. The report estimates that federally developed fossil fuels in fiscal 2020 were responsible for more than 900 metric megatons of carbon dioxide equivalent emissions. The federal oil program has been politically divisive for the climate-focused White House. Last summer, a federal judge ordered the administration to restart national oil and gas lease auctions that President Biden had paused shortly after taking office to review their climate impacts (Energywire, Aug. 25). In response, the administration announced plans to potentially hold several oil and gas sales, the first in the Gulf of Mexico, but also offshore from Alaska and across several states that hold federal oil and natural gas deposits, like Wyoming, Colorado and New Mexico. Before it advances onshore sales, the administration will issue state-level draft environmental assessments that include an analysis of the national emissions impacts from producing, and combusting, oil and gas, Interior announced today. The administration’s full climate assessment, the most rigorous consideration of climate ahead of federal lease sales to date, will be in addition to the wildlife, environmental and social impacts already considered. “The BLM is committed to responsible development on public lands, including ensuring that our environmental reviews consider the climate impacts of energy development on lands and communities,” said Tracy Stone-Manning, the recently confirmed director of the Bureau of Land Management, the primary agency overseeing onshore oil and gas management. The report released today links roughly 800 metric megatons of carbon dioxide equivalent emissions to fossil fuel resources developed from federal lands over the next 12 months. That estimate includes not just the direct emissions from the oil patch, such as gas leakage from infrastructure, but the downstream combustion of those fuels in power plants, home heating and transportation.
After California oil spill, environmentalists plan to sue U.S — A month after a Southern California offshore oil spill, environmental advocates said Tuesday that they plan to sue the federal government over the failure to review and update plans for platforms off the coast. The Center for Biological Diversity said it sent notice to the Secretary of the Interior of its intent to sue, a requirement for lawsuits against the federal government. The group contends the government approved plans for a cluster of oil platforms in the 1980s and that they are still running though they were expected to wind down production in 2007. The notice came a month after a pipeline owned by Houston-based Amplify Energy leaked at least about 25,000 gallons of crude oil into the ocean off the coast of Orange County. Blobs of oil washed ashore, oiling birds and shuttering the famed shoreline of Huntington Beach for a week. Environmentalists braced for the worst but the damage has been less than initially feared. Much of the oil broke up at sea and local officials put up booms to keep the crude out of sensitive wetlands. Under federal law, the government is required to review oil development and production plans for leases in federal waters and revise them as needed in response to changing conditions or activities, though that rarely happens, said Miyoko Sakashita, oceans director at the Center for Biological Diversity. “It is not lawful for them to just continue on with these really old development and production plans,” Sakashita said. She added: “It’s particularly notable in this instance where we’ve now had this oil spill. The infrastructure is aging and things need to be done differently.” John Romero, a spokesperson for the Interior Department’s Bureau of Ocean Energy Management, does not comment on pending litigation. The leaky pipeline near Huntington Beach ferried crude oil from the offshore platforms questioned by the Center for Biological Diversity to the coast. The cause of the spill is under investigation, but federal officials have said the pipeline was likely initially damaged by a ship’s anchor.
Environmentalists file lawsuit against US govt for oil spill in California -- An Arizona-based environment group filed a notice to U.S. Department of the Interior and the Bureau of Ocean Energy Management (BOEM), showing its intent to sue the federal government for its miscoundct in office causing the oil spill incident in southern California in October. In the 11-page notice letter, the Center for Biological Diversity (CBD) accuses the Secretary of the Interior and BOEM of violations of the Outer Continental Shelf Lands Act (OCSLA), Xinhua news agency reported. The BOEM illegally allows Platform Elly and other offshore oil production in the Beta oilfield to operate under outdated drilling plans written in the 1970s and '80s instead of reviewing and requiring revision of the plans as the age of the infrastructure and other changes had been over forty years old, the letter said. "The oil industry is drilling and spilling off California's coast under plans written when Carter and Reagan were in the White House and floppy disks were high tech," said Kristen Monsell, Legal Director of the center's oceans program. "These incredibly outdated documents highlight the federal government's reckless, contemptible refusal to protect our beaches, wildlife and communities from offshore drilling pollution. Retro is not a good look for those ominous oil platforms, which should be shut down entirely," she added in a statement. The group's notice came a month after the Houston-based Amplify Energy pipeline leaked at least 25,000 gallons of crude oil into the ocean off the coast of southern California, closing miles of beaches and fisheries, killing and injuring birds and other wildlife. The notice letter is a prerequisite to filing a lawsuit under the 60-day notice requirement of the citizen suit provision of OCSLA, the CBD said, noting that since the BOEM did not take action to remedy the violations detailed in this letter, the center hereby provided notice of its intent to seek a judicial remedy.
As Canada invokes 1977 Treaty, tribal citizens point to older treaties affected by Line 5 ⋆ Enbridge strongly refutes the concept that they have turned local Minnesota police into a private security force, or that they had any control at all over how the account was spent. "The escrow account was created by the state of Minnesota through the Public Utility Commission," Enbridge Chief Communications Officer Mike Fernandez told ABC News. "All we were asked to do was contribute money to that escrow account. We make no judgments about how that money is spent. It was a condition of us actually getting the permit in order to operate.""The judgments are all made by professionals in the state of Minnesota that have law enforcement backgrounds, and they are the ones that make judgments on the specific payments," Fernandez said.The thousand-mile-long Line 3 pipeline transports Canadian tar sands oil -- a high-emissions fossil fuel often described as the world's dirtiest oil -- through indigenous lands and waters, including the vulnerable headwaters of the Mississippi River.The project has been the target of multiple court battles and a years-long massive civil disobedience campaign led by indigenous women in Minnesota. Opposition to the controversial project has resulted in nearly 900 arrests, including dozens around the U.S. Capitol earlier this month.
Pipeline firm deposited millions into state fund to pay local police to 'patrol' and 'protect' controversial Line 3 project - Enbridge -- a private Canadian energy corporation -- has paid more than $2.9 million for Minnesota law enforcement and public safety organization expenses related to the company's controversial Line 3 oil pipeline through a state-managed escrow account, according to documents obtained by ABC News through public records requests. The majority of the Enbridge money went toward more than $2 million in law enforcement wages for services such as conducting proactive patrols along the pipeline route and "protecting the construction workers and equipment," according to the records. The account also reimbursed law enforcement hundreds of thousands of dollars for training, protective gear, transportation, hotel rooms, and meals while policing the pipeline, according to the records. "If a state is openly in a financial relationship with a private actor, through an escrow account, where they are paying the police to protect their project, that should concern all of the public," Northern Minnesota-based tribal attorney and prominent Line 3 opponent Tara Houska told ABC News. Enbridge strongly refutes the concept that they have turned local Minnesota police into a private security force, or that they had any control at all over how the account was spent. "The judgments are all made by professionals in the state of Minnesota that have law enforcement backgrounds, and they are the ones that make judgments on the specific payments," The thousand-mile-long Line 3 pipeline transports Canadian tar sands oil -- a high-emissions fossil fuel often described as the world's dirtiest oil -- through indigenous lands and waters, including the vulnerable headwaters of the Mississippi River. The project has been the target of multiple court battles and a years-long massive civil disobedience campaign led by indigenous women in Minnesota. Opposition to the controversial project has resulted in nearly 900 arrests, including dozens around the U.S. Capitol earlier this month.
Husky Energy facing federal charges related to 2018 oil spill - Husky Energy is facing even more charges stemming from the November 2018 SeaRose FPSO oil spill — this time at the federal level. In a statement issued Thursday afternoon, Environment and Climate Change Canada said it laid three charges including two under the Fisheries Act and one under the Migratory Birds Convention Act. The charges are in addition to three charges laid by the Canada–Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) in October, based on its own, parallel investigation into the same incident. Environment and Climate Change Canada enforces the pollution prevention provisions of the Fisheries Act and is responsible for enforcement of the Migratory Birds Convention Act, 1994, which is federal legislation for the protection and conservation of migratory birds and their nests. According to the department, the mandatory minimum fine, if a corporation other than a small revenue corporation is convicted of the stated charges, is $100,000 each when prosecuted by summary conviction procedure. The 250,000-litre spill is the largest in the history of Newfoundland and Labrador's offshore industry. The leak came from a flowline to the SeaRose FPSO, a floating production, storage and offloading vessel located about 350 kilometres off the coast of St. John's on the White Rose Oil Field at the time.
Oil patch execs fear Trudeau's 'reckless' energy emissions cap - The federal government must work co-operatively with industry as it looks to draft an emissions cap for the oil and gas sector, Alberta business leaders said Monday, or risk far-reaching consequences for the Canadian economy. In an interview Monday, Grant Fagerheim, chief executive of Calgary-based oil company Whitecap Resources Inc., warned of the dangers posed by a federal government that he believes is setting ambitious climate targets that it doesn't know how to achieve. “Setting out virtue-signaling commitments with no real firm targets is dangerous, and it's reckless because at the end of the day, this is about the things that we can't live without - food, heat, clothing and transportation.'' At COP26, the UN climate conference in Scotland on Monday, Prime Minister Justin Trudeau formally committed to a cap on greenhouse gas emissions produced by Canada's oil and gas industry. Such a cap had been promised in the Liberals' recent election platform, with plans to force emissions down until they hit net zero in 2050. A lack of regulations for the sector has long been a sore spot between environmental groups and Ottawa. Newly named Environment Minister Steven Guilbeault along with Natural Resources Minister Jonathan Wilkinson sent a letter to the government's net-zero advisory body Monday asking for its help to develop policy to support the new plan. But Fagerheim said the oil and gas industry is fearful that politicians have “massively overestimated'' the pace and scale at which the global economy can move away from fossil fuels. He said the government must sit down to talk with industry leaders about what is realistic. While the industry has made huge strides in recent years on reducing emissions intensity (actual emissions from Canada's oil and gas sector have actually increased over time due to increased production), Fagerheim said hobbling the industry with unachievable targets will result in higher prices for Canadian consumers. He added it will also mean fewer profits for energy companies to funnel into emission-reduction technologies and renewables projects.
AltaGas Sees Responsibly Sourced LNG as Potential Montney Growth Engine - Canada’s AltaGas Ltd. in its third quarter results said the potential engines of growth for the company include plants in the Montney Shale of British Columbia (BC). The company touted its plants in the Montney region of northern BC, which is the supply source for liquefied natural gas export facilities under construction or on the drawing board..“As evidenced by the current global energy shortage and cascading negative effects that are taking place across the world, we continue to believe in the role, benefits and reliability that responsibly sourced natural gas will provide, ” said President Randy Crawford.During 3Q2021, the company reported a record 105,000 b/d of propane and butane exports from its Prince Rupert, BC, and Ferndale, WA, operations. Overseas sales of natural gas liquids from the Pacific coast terminals fueled sharply improved financial results.The U.S. Energy Information Administration reported recently that propane prices in East Asia have more than doubled year/year. Canada’s 2020 propane exports surged, and the Canada Energy Regulator has predicted more growth this year. Calgary-based AltaGas said that it shipped roughly equal NGL volumes overseas from its Canadian and U.S. terminals during the reporting period, filling a total of 18 very large gas carriers.
The Problem With Calling Fracked Gas 'Responsibly Sourced' – The fracked natural gas industry has never been the most responsible or efficient consumer of resources. Drillers are using ever-increasing amounts of water and sand in order to produce the same volume of gas, with a corresponding rise in the levels of solid and liquid waste created. Nevertheless, the industry has begun a new wave of branding around “Responsibly Sourced Natural Gas,” or RSG. But what does RSG really mean? We argue that right now it’s an inadequate and ill-defined measurement of the overall ecological and social burden imposed by fracking. Instead, we suggest a new ratio for more accurately calculating fracked gas’s full impacts so that the fossil fuel industry can’t use RSG standards as a thin green veil for continuing its polluting practices. What Is RSG? RSG is a new term used in the natural gas industry to describe voluntary reporting initiatives, centered largely around emissions of the powerful climate pollutant methane, but which may also include other criteria such as air quality, water stewardship, land impacts, and “community interests.” Think of RSG as attempting to create an oil and gas equivalent of fair-trade labels for clothing or green building standards for architecture. RSG programs are intended in large part to boost investor confidence by way of “strategic storytelling,” as one industry consulting firm put it. Proponents of such voluntary standards are trying to simultaneously compete in the domestic and global energy market, increase profit margins, and attract environmental, social, and governance (ESG) investors, a hot trend in the investing world right now. But the definition of “responsibly sourced” is inconsistent across the 20 such initiatives that are currently available. Only two of these require the use of third-party auditors to verify the operators’ reporting via independent on-site measurements. That’s unlike many other sectors, such as in organic agriculture. Quantifying methane emissions is central to most of the RSG programs, but none of them require full public disclosure of the methane levels that are actually released. That practice mirrors the secretive nature of the fracked oil and gas industry, which also does not publicly disclose the full list of chemicals used during the fracking process. The various “responsibly sourced” certification programs need more transparency, standardization, and punitive measures for companies that play fast and loose with the concepts and requirements underlying all manner of RSG schemes. The latter would involve significant monetary penalties or expulsion from RSG programs when a gas well fails to comply with the environmental standards. Those changes would go a long way toward defining what exactly constitutes RSG, how it is calculated, and whether it is a meaningful measure of environmental impacts. There are benefits to the natural gas industry reducing methane emissions — most notably for the rapidly destabilizing climate — but it represents low-hanging fruit for the industry to clean up its practices. Given the scale of the climate crisis, we need a much more serious commitment on the part of policymakers and energy companies to phase out fracked oil and gas production entirely and in the interim to significantly lessen its resource demands and waste production.
House Democrats subpoena oil companies over climate disinformation - The Washington Post - The House Committee on Oversight and Reform issued subpoenas Tuesday for documents from some of the world’s biggest oil and gas companies to build its case that Big Oil has for decades misled the public about climate change. The committee is seeking records from ExxonMobil, Chevron, BP and Dutch Royal Shell concerning what Democratic lawmakers describe as a concerted effort by the petroleum industry to sow doubt about the scientific reality of global warming, according to a memo released by the panel.Two lobbying groups funded by fossil fuel firms, the American Petroleum Institute and U.S. Chamber of Commerce, were also given subpoenas.The requests were sent as many top U.S. officials, including President Biden and many of his Cabinet members, attended a major climate summit in Scotland in an attempt to push other nations to drastically cut their greenhouse gas emissions.Rep. Carolyn B. Maloney (D-N.Y.), chair of the committee, said the six entities failed to produce a “substantial portion” of the documents requested from them ahead of a historic hearing Thursday, at which top executives appeared before the House panel for questioning about climate change. “So I see no choice but continue our committee’s investigation until we see the truth,” Maloney said at the end of the hearing, noting one of the groups simply printed out and sent in 1,500 pages from its own website. She concluded the hearing by announcing that subpoenas would be sent shortly.
Even as Biden Pushes Clean Energy, He Seeks More Oil Production - — President Biden told a global climate summit on Monday that “we only have a brief window before us” to reduce the emissions from burning oil, gas and coal that pose an “existential threat” to humanity. But only days earlier, he was urging the world’s largest oil producers to pump more of the fossil fuels that are warming the planet. The incongruity was on center stage both at the global climate summit currently taking place in Scotland, and in Rome this past weekend during a gathering of leaders from the 20 largest economies. The president’s comments highlighted the political and economic realities facing politicians as they grapple with climate change. And they underscored the complexity of moving away from the fossil fuels that have underpinned global economic activity since the Industrial Age. “On the surface, it seems like an irony,” Mr. Biden said at a news conference Sunday. “But the truth of the matter is — you’ve all known; everyone knows — that the idea we’re going to be able to move to renewable energy overnight,” he said, was “just not rational.” Mr. Biden’s words have drawn fire from energy experts and climate activists, who say the world cannot afford to ramp up oil and natural gas production if it wants to avert catastrophic levels of warming. Environmental groups are intensely watching to see how the president intends to meet his ambitious goal of halving the nation’s emissions, compared to 2005 levels, by the end of this decade. A recent International Energy Agency report found that countries must immediately stop new oil, gas and coal development if they hope to keep the average global temperature from increasing 1.5 Celsius above preindustrial levels, the threshold beyond which scientists say the Earth faces irreversible damage. The planet has already warmed 1.1 degrees Celsius. “We are in a climate crisis. There is no room for the left hand and the right hand to be doing different things,” said Jennifer Morgan, executive director at Greenpeace International. “It’s not credible to say you’re fighting for 1.5 degrees while you’re calling for increased oil production.” With gasoline prices rising above $3.30 a gallon nationwide, Mr. Biden over the weekend urged major energy producing countries with spare capacity to boost production, part of a larger effort to pressure OPEC countries and Russia to increase the supply of oil. He was joined by Emmanuel Macron of France, whose country hosted the 2015 meeting in Paris where 200 countries agreed to collectively tackle global warming.M
Biden: OPEC And Russia Must Pump More Oil To Help America's Working Class --The refusal of OPEC+ to increase crude oil production is affecting America's working class, President Biden said at a news conference following the G20 meeting in Rome. "I do think that the idea that Russia and Saudi Arabia and other major producers are not going to pump more oil so people can have gasoline to get to and from work, for example, is not, is not, right," Biden said as quoted by Russian TASS. "It [OPEC+'s decision to keep a lid on output increases] has profound impact on working class families just to get back and forth to work," the U.S. President added, as quoted by NPR. The comments made by the U.S. President were later the same day echoed more bluntly by Energy Secretary Jennifer Granholm, who directly blamed the OPEC cartel for keeping prices high. "Gas prices, of course, are based on a global oil market. That oil market is controlled by a cartel. That cartel is Opec," Granholm told NBC's Meet the Press. "So that cartel has more say about what is going on." At the same time, Granholm noted that the oil industry could not "flip a switch" for production as it recovers from the effects of the pandemic and this, too, contributed to higher prices resulting from the tight supply. Even if factors influencing gas prices at the pump in the United States may be outside the country, the effects of price movements are already costing Biden approval among voters. According to NPR, his rating is well below 50 percent, with 70 percent of Americans believing the country is not going in the right direction. Also at the news conference, the U.S. President said he was confident the country could meet his administration's goal of emission cuts, which is 50 percent from 2005 by 2030. Yet, the president acknowledged that the renewable shift cannot happen overnight. "On the surface, it seems like an irony," Biden said, referring to his call on OPEC+ to add more oil production while heading for COP26 to discuss the reduction of global emissions. "But the truth of the matter is ... everyone knows that idea that we're going to be able to move to renewable energy overnight ... it's just not rational."
Even as Biden Pushes Clean Energy, He Seeks More Oil Production - The New York Times — President Biden told a global climate summit on Monday that “we only have a brief window before us” to reduce the emissions from burning oil, gas and coal that pose an “existential threat” to humanity. But only days earlier, he was urging the world’s largest oil producers to pump more of the fossil fuels that are warming the planet.The incongruity was on center stage both at the global climate summit currently taking place in Scotland, and in Rome this past weekend during a gathering of leaders from the 20 largest economies. The president’s comments highlighted the political and economic realities facing politicians as they grapple with climate change. And they underscored the complexity of moving away from the fossil fuels that have underpinned global economic activity since the Industrial Age.“On the surface, it seems like an irony,” Mr. Biden said at a news conference Sunday. “But the truth of the matter is — you’ve all known; everyone knows — that the idea we’re going to be able to move to renewable energy overnight,” he said, was “just not rational.”Mr. Biden’s words have drawn fire from energy experts and climate activists, who say the world cannot afford to ramp up oil and natural gas production if it wants to avert catastrophic levels of warming. Environmental groups are intensely watching to see how the president intends to meet his ambitious goal of halving the nation’s emissions, compared to 2005 levels, by the end of this decade.A recent International Energy Agency report found that countries must immediately stop new oil, gas and coal development if they hope to keep the average global temperature from increasing 1.5 Celsius above preindustrial levels, the threshold beyond which scientists say the Earth faces irreversible damage. The planet has already warmed 1.1 degrees Celsius.“We are in a climate crisis. There is no room for the left hand and the right hand to be doing different things,” said Jennifer Morgan, executive director at Greenpeace International. “It’s not credible to say you’re fighting for 1.5 degrees while you’re calling for increased oil production.” With gasoline prices rising above $3.30 a gallon nationwide, Mr. Biden over the weekend urged major energy producing countries with spare capacity to boost production, part of a larger effort to pressure OPEC countries and Russia to increase the supply of oil. He was joined by Emmanuel Macron of France, whose country hosted the 2015 meeting in Paris where 200 countries agreed to collectively tackle global warming. At the conclusion Sunday of a Group of 20 summit that ended with lofty rhetoric on climate but fewer concrete actions than activists had hoped, Mr. Biden addressed the irony head on. The transition to lower-emission sources of energy would take years, and in the meantime, it was important to ensure that people can afford to drive their cars and heat their homes, he said at a news conference.
Sorry, President Biden, This Is Not OPEC’s Fault Just ahead of OPEC’s next virtual meeting, President Joe Biden cast blame at Russia and OPEC for the current state of high oil prices. He said "If you take a look at gas prices and you take a look at oil prices that's a consequence of thus far the refusal of Russia or the OPEC nations to pump more oil." Javier Blas, Chief Energy Correspondent at Bloomberg News, posted video of Biden’s statement on Twitter. Let’s be clear on a couple of things. First, a fundamental reason oil prices have surged over the last year is that U.S. oil production declined by 3 million barrels per day (BPD) during the pandemic. That decline was exacerbated by a price war between Russia and Saudi Arabia just ahead of the pandemic, but then the pandemic crushed demand (and oil prices). In response to the collapse in prices, last summer U.S. oil production fell by 3 million BPD — the largest short-term decline ever recorded. Demand started to come back in summer, and by fall demand was recovering faster than supply in the U.S. Our crude oil imports began to climb, and along with that so did the price of crude oil and oil products. One could make the alternative argument that rising gas prices are from the refusal of U.S. producers to increase production. However, it’s more complex than that. During the pandemic, some producers went out of business. Some low-production stripper wells were certainly shut down. That’s production that won’t come back easily. (And some of those factors also impact production from Russia and OPEC). But here’s the thing. Whether you think it was the right thing to do, the reality is that passing legislation that is hostile to the U.S. oil and gas industry makes it even more difficult for domestic production to bounce back. So, instead of asking Russia and OPEC to pump more oil, we could look internally to what we could do in the U.S. to pump more oil. I highlighted the risks of President Biden’s energy policies earlier in the year, because this is the sort of situation that can arise (not that this is the primary cause of this crisis, but it could be the cause of a future crisis). OPEC and Russia have some spare capacity, but they may be reluctant to use it to help Americans out with lower fuel prices. The International Energy Agency (IEA) recently estimated that OPEC+ spare capacity (primarily OPEC plus Russia) was 9 million BPD in the first quarter of 2021, but it sees that potentially falling below 4 million barrels BPD by the fourth quarter of 2022 It is certainly in Russia’s and OPEC’s self-interest to keep prices high. They are under no obligation to boost output to give us relief in the U.S. We can pressure them and dangle incentives, but this situation didn’t arise from their refusal to pump more oil. Nevertheless, they could probably do so if they wanted and give us some relief. Think of it like a doctor responding to a distress call on an airplane. They didn’t cause the problem, but they may be in a position to assist.
OPEC+ members shun Biden's calls to boost oil output -OPEC+ headed for a clash with the U.S. as more members rejected President Joe Biden’s call for the group to raise oil production faster and help reduce gasoline prices. On Monday, Kuwait said the cartel should stick with its plan to increase output gradually because oil markets were well-balanced. That followed similar statements from other key members in recent days, including Iraq, Algeria, Angola and Nigeria. The Organization of Petroleum Exporting Countries and its allies – led by Saudi Arabia and Russia – meet on Thursday with pressure from oil consumers mounting as prices climb toward $85 a barrel. American gasoline is at a seven-year high of $3.70 a gallon. The U.S., India, Japan and other importers are waging a campaign to force the group to ease last year’s pandemic-triggered supply curbs more quickly. “The idea that Russia and Saudi Arabia and other major producers are not going to pump more oil so people can have gasoline to get to and from work, for example, is not right,” Biden said Sunday. While Biden declined to say how he would react if OPEC+ doesn’t change tack, analysts have speculated the U.S. might sell some of its strategic petroleum reserves. OPEC+’s plan of boosting daily production by 400,000 barrels each month “is working well and there is no need to deviate from it,” Angola’s oil minister, Diamantino Pedro Azevedo, said Sunday. Many members, including Saudi Arabia, have argued they shouldn’t pump crude any faster because the pandemic is still sapping demand. Some are already struggling to reach their higher output quotas after last year’s deep cuts, and say bringing production back more rapidly would make their task even more difficult. “We are not yet out of the woods,” Saudi Energy Minister Abdulaziz bin Salman told Bloomberg Television on Oct. 23. “We don’t take things for granted, we still have Covid.” OPEC+ has said that increasing crude exports would do little to bring down power prices, which have soared in parts of Europe and Asia due to shortages of natural gas and coal. Still, OPEC+ has often surprised the market with sudden changes of policy. And while Riyadh and Moscow have both praised the group’s strategy, neither has directly addressed Biden’s comments in public, giving themselves room for maneuver.
U.S. energy secretary has a message for OPEC: Boost oil supply so people don't get hurt this winter— U.S. Energy Secretary Jennifer Granholm has called on oil-producing nations to immediately increase crude supplies to mitigate the surging cost of living. On Thursday, oil cartel OPEC and its allies agreed to continue with their current output plan, deciding against loosening the taps despite U.S. pressure to help cool the market. Oil prices have recently hit their highest levels since 2014, and crude-importing countries are feeling the pain. It's boosted gasoline prices and has added to surging inflation rates around the globe, with consumers already paying more due to supply bottlenecks in the economy. Asked by CNBC about the U.S.'s relationship with Saudi Arabia, the de-facto leader of OPEC, after the output decision, Granholm said: "In some places, we have strong relationships and in some places we wish our allies would move a little faster." "The message is we need to increase supply at this moment so that people will not be hurt during the winter months," she told CNBC's Steve Sedgwick on Friday at the COP26 climate summit in Glasgow, Scotland. President Joe Biden has squarely blamed the reluctance of OPEC and its allies, known as OPEC+, to pump more oil for the sharp rise in energy prices in the U.S. and around the world. "The idea that Russia and Saudi Arabia and other major producers are not going to pump more oil so people can have gasoline to get to and from work, for example, is not right," Biden said Sunday at the G-20 meeting in Rome. OPEC+ decided to rollover its August plan to gradually increase oil production by 400,000 barrels per day each month. Ministers attending the meeting on Thursday said the group was maintaining market balance and remaining wary of potential changes in demand. Several of the ministers also pointed to the skyrocketing prices of other commodities such as gas and coal to argue that oil markets are lucky to have OPEC+ regulating supply. International oil benchmark Brent crude was trading at $80.80 per barrel at 7:30 a.m. ET on Friday, up 27 cents from the previous day. 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.
U.S., U.K. lead pledge to end overseas oil and gas financing, but with big caveats - — The United States, the U.K. and some 20 other countries and financial institutions pledged on Thursday to stop public financing for most overseas oil and gas projects by next year, though the agreement included wide latitude for participants to set their own exemptions and many of the world's leading backers of those projects declined to sign on. The announcement from the COP26 climate summit is part of the effort to keep countries on track to reduce global emissions sharply enough to meet the Paris agreement's stretch goal of limiting planetary warming to 1.5 degrees Celsius from the beginning of the industrial era. It was hailed by many environmentalists as a critical step toward weaning the international economy off fossil fuels. The pledge is limited to ending financing of "unabated" oil and gas projects, and would allow those that include carbon capture and sequestration technology. And it is largely in line with President Joe Biden's January executive order, which called for changes in how the world's No. 2 greenhouse gas polluter handles public financing for oil and gas projects. A senior Biden administration official told POLITICO the measure includes exemptions, and that the Biden administration had not settled on how it would instruct its finance aid organizations like the U.S. Export-Import Bank, the International Development Finance Corp. and Millennium Challenge Corp. to implement it. How tight any carve-outs are for oil and gas is potentially significant for Ex-Im, which approved $5 billion in fossil fuel finance the last two years, environmental group Friends of the Earth said in a statement.
BP posts $3.3 billion third-quarter profit, beating estimates as oil prices surge -Oil and gas giant BP beat third-quarter earnings expectations on Tuesday, fueled by surging energy prices. The British energy major posted an underlying replacement cost profit, a proxy for net profit, of $3.3 billion for the third quarter, above analyst estimates of $3.1 billion, according to Refinitiv. The figure compares to $2.8 billion of net profit in the previous quarter and $100 million for the same period in 2020, when oil prices collapsed as a result of the coronavirus pandemic. This year, international benchmark Brent crude prices have up around 60% to date. "Rising commodity prices certainly helped, but I am most pleased that quarter by quarter, we're doing what we said we would - delivering significant cash to strengthen our finances, grow distributions to shareholders and invest in our strategic transformation," CEO Bernard Looney said in the company's earnings report. However, the company reported a headline loss of $2.5 billion for the third quarter as a result of "significant adverse fair value accounting effects." These saw the company take a $6.1 billion hit which it attributed to the "exceptional" rise in forward gas prices towards the end of the quarter. Looney told CNBC on Tuesday that the discrepancy between the headline and underlying figures was a "simple timing effect" under IFRS reporting rules, which mean BP is "accounting for hedge and not accounting for the value of the portfolio." He confirmed that this did not mean the hedges had gone wrong, just that the company was "accounting on one side of the equation and not on the other side, as required by IFRS, and this will unwind over time." Net debt fell to just under $32 billion from $32.7 billion in the second quarter, making a sixth consecutive quarter of reductions. BP maintained its dividend at 5.46 cents per share payable in the fourth quarter, following an increase of 4% through 2025 announced in the second quarter. It said it was planning a further $1.25 billion share buyback prior to the company's fourth-quarter earnings report..
Gazprom Says EU Demand Met in Full After Mallnow Flows Reversed - Gazprom PJSC said it’s meeting European demand in full after German data showed natural-gas flows through a key transit route reversed direction. Shipments from the Yamal-Europe pipeline toward Germany’s Mallnow station went to zero early Saturday, according to data from the grid operator Gascade. Instead, it reported so-called reverse flows, with gas going eastward through the station from Germany toward Poland. “Fluctuations in demand for Russian gas depend on the actual needs of buyers,” Gazprom press service said in a statement when asked about the flows. Gascade didn’t respond to a Bloomberg request for comment outside normal business hours Russian gas shipments through Mallnow have been far below capacity for more than two months, with some European Union officials accusing the country of withholding supply to pressure the region into accelerating approvals for its controversial new pipeline, Nord Stream 2. Gazprom has repeatedly said that it meets all contractual obligations and is ready to increase deliveries whenever possible. Poland not only receives its gas from Russia directly, but also via a so-called virtual reverse, which can become a physical one -- reported by Gascade -- depending on requested volumes. It’s not unheard of for weekend flows to drop, given lower demand from industrial users. With the end of the month approaching, some monthly requests may have already been met.
EU Gas Surges on Disturbance to Russian Shipments - Europe faces a tightening squeeze on natural gas supplies after Russian flows through transit routes fell and Algeria stopped some shipments to Spain. The market was roiled in early trading, with benchmark gas futures surging as much as 15% before paring gains, as Russian gas started flowing eastward from Germany to Poland, while pipeline damage in Bulgaria also impacted shipments from Gazprom PJSC to some parts of Europe. Spain was also receiving less gas after a 25-year transit deal to ship Algerian volumes via Morocco expired. European gas futures have broken record after record this year, as Russia capped flows to the region just as cargoes of liquefied natural gas were diverted to Asia. Soaring energy costs helped send euro-zone inflation to a 13-year high in October, fueling concerns about an economic slowdown. President Vladimir Putin has promised more gas supplies to Europe, but that has yet to materialize. “Gas prices are currently all about signals and especially those being sent from Russia,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. The market is “in flux and still very worried.” Dutch front-month gas closed up 1.2% at 65.62 euros a megawatt-hour after surging as high as 74.35 euros earlier with some traders off for holidays. The equivalent U.K. contract added 0.9% to 167.47 pence a therm after jumping as much as 14%. Russian gas shipments entering Germany’s Mallnow compressor station dropped to zero on Saturday, according to data from grid operator Gascade. The Yamal-Europe pipeline was instead sending volumes eastward from Germany to Poland, and those flows increased further on Monday. Flows through Yamal-Europe, one of several routes used to deliver Russian fuel to the region, were already expected to be capped this month after Gazprom booked only 35% of the monthly capacity offered at Mallnow. The reverse shipments, however, left traders scratching their heads after Putin signaled a potential increase in supplies from Nov. 8, when Russian storage sites will be full.
A Russian Pipeline Changes Direction, and Energy Politics Come to the Fore - — Natural gas, already in short supply in Europe this fall, began moving away from Germany on Saturday and back toward the east in an unusual reversal in a major Russian pipeline, Russian media reported.In themselves, the Russian reports were no cause for alarm, and the giant Russian energy firm, Gazprom, said Saturday that it is filling all European orders. One Russian news media report even suggested the flow reversal was a short-term problem caused by balmy weather in Germany over the weekend.But the reversal is playing out against a backdrop of a politically charged explosion in gas prices in Europe and accusations that the Kremlin is restricting gas supplies for political purposes. One such purpose is to prod the E.U. into approving a new pipeline, Nordstream 2, that would bring gas from Russia directly to Germany, bypassing Eastern Europe.More broadly, analysts say, the Kremlin may be sending a message about renewable energy, illustrating that too quick a pivot away from natural gas will leave the Continent vulnerable to fickle wind and solar supplies.Analysts say Russia has for weeks now been slow to supply fuel to make up for shortfalls, often by limiting deliveries to its own storage facilities. The reversal of the direction of flow on the major Yamal-Europe pipeline was seen as a potential new wrinkle. The pipeline connects Russia to Germany and crosses Belarus and Poland. It accounts for about 20 percent of Russia’s overland supply capacity to the European Union, suggesting a significant shortfall if its operations were halted.
Algeria stops gas exports to Spain via Morocco - (Xinhua) -- Algerian President Abdelmadjid Tebboune decided on Sunday to stop natural gas exports to Spain through Morocco, the official APS news agency reported. The presidency announced in a statement that Tebboune ordered the state-owned energy company Sonatrach to stop commercial relationship with Morocco and not to renew the gas pipeline contract with Morocco, which ends at midnight of Oct. 31, 2021. The statement stressed that the president made the decision due to Morocco's "hostile" practices towards Algeria that affect national unity. Algeria has used the Gaz-Maghreb-Europe (GME) pipeline through Morocco to transfer natural gas to Spain. Algerian Minister of Energy and Mines Mohamed Arkab affirmed on Oct. 11 that his country will remain "the faithful and guaranteed" gas supplier to Europe. He said the Medgaz gas pipeline, linking Algeria and Spain by sea, guarantees an annual supply of 8 billion cubic meters of gas, noting that the pipeline capacity is due to increase to 10.6 billion cubic meters by December. Algeria, producing 1.2 million oil barrels per day and 130 billion cubic meters of natural gas annually, is Africa's biggest natural gas exporter. It has been using pipelines and tankers to provide natural gas to European countries. Algeria cut diplomatic relations with Morocco in August, citing what it described as the latter's "hostile" policies. Morocco later expressed regret over Algeria's "completely unjustified" decision to sever diplomatic ties between the two countries.
Draunibota Bay oil spill under investigation -- An investigation is in progress to determine the cause of an oil spill in Suva’s Draunibota Bay. Environment Ministry permanent secretary Joshua Wycliffe said the spill which occurred earlier this month was of concern. “It could be anything from the derelict vessel to a boat that went past, so there is an investigation being conducted,” Mr Wycliffe said. “In our opinion, it could be from a derelict vessel so the department has engaged in extensive discussions with MSAF (Maritime Safety Authority of Fiji) and Fiji Ports. “We have worked out ourselves as to who is responsible for doing what. We have come up with a plan of action and this is as far as the mitigation is concerned.” Mr Wycliffe said they also hoped to engage with communities in taking ownership, and on how similar crises could be avoided and better handled in the future. Traditional owners of Drunibota Bay and the Suva Harbour, yavusa Navakavu expressed grave concerns at the recent spillage. They said it affected the marine environment and their fishing grounds. Mr Wycliffe said any oil spill whether minor or major was a great concern for the Environment Ministry and when there was a breach in environmental conditions, their inspectors would go and inspect. He said they would work with agencies and communities to be able to rectify results.
Leaking Gas pipeline in Ikeja Isolated –NNPC - The Nigerian National Petroleum Corporation (NNPC) Ltd has said the gas pipeline reported to have been leaking in the early hours of yesterday Ikeja, Lagos State, has been isolated and the general area cordoned off. While allaying public fear especially amongst residents around the An ifowoshe area, the NNPC in a statement made available to journalists yesterday by its Group General Manager, Group Public Affairs Division, Garba Muhammad, said the incident was caused by road construction and rehabilitation activities going on in the area.’ The statement partly reads: “Preliminary findings indicate that at about 8.40am, Wednesday, 3rd November 2021, a pipeline gas leakage was reported around Anifowoshe, Ikeja Underbridge, Lagos State. “The pipeline is a 6-inch gas pipeline supplying gas to Mainland Power Ltd, near Lagos State University Teaching Hospital, Ikeja. “The NNPC immediately moved in by engaging Gaslink Ltd, its franchise partner operating the pipeline, mobilized to the location, cordoned off the area and successfully isolated the gas pipeline at Oba Akran Valve pit.
Fuel tanker blast in Sierra Leone capital kills at least 91, says morgue - (Reuters) - Ninety-one people were killed in the capital of Sierra Leone on Friday when a fuel tanker exploded following a collision, the central morgue and local authorities said. The government has not yet confirmed the death toll, but the manager of the central state morgue in Freetown said it had received 91 bodies following the explosion. Victims included people who had flocked to collect fuel leaking from the ruptured vehicle, Yvonne Aki-Sawyerr, mayor of the port city, said in a post on Facebook. "We've got so many casualties, burnt corpses," said Brima Bureh Sesay, head of the National Disaster Management Agency, in a video from the scene shared online. "It's a terrible, terrible accident." Images shared widely online showed several badly burned victims lying on the streets as fire blazed through shops and houses nearby. Reuters was not able immediately to verify the images. Aki-Sawyerr called the videos and photos "harrowing". The mayor said that the extent of the damage was not yet clear, adding that police and her deputy were at the scene to assist disaster management officials. "My profound sympathies with families who have lost loved ones and those who have been maimed as a result," President Julius Maada Bio tweeted. "My Government will do everything to support affected families." (Reporting by Umaru Fofana in Freetown and Bhargav Acharya in Bengaluru; Writig by Bhargav Acharya and Alessandra Prentice Editing by Clarence Fernandez and Frances Kerry)
OPEC+ members likely to hold firm on slow oil output, despite international pressure - Oil prices have hit their highest levels since 2014, and crude importing countries are feeling the pain. But despite diplomatic pressure, OPEC and its allies are unlikely to decide to open up the taps during the oil cartel's meeting on Thursday. That likely means continued high energy prices through the end of this year and potentially into 2022, analysts say. "For now, we still expect to see OPEC+ members remain in favor of keeping oil markets tight, taking advantage of the elevated prices to improve fiscal accounts," Edward Bell, senior director of market economics at Dubai-based bank Emirates NBD, wrote in a note Wednesday. President Joe Biden squarely blamed the reluctance of OPEC+ to pump more oil for the sharp rise in energy prices in the U.S. and around the world. "The idea that Russia and Saudi Arabia and other major producers are not going to pump more oil so people can have gasoline to get to and from work, for example, is not right," Biden said Sunday at the G-20 meeting in Rome, Italy. Japan and India have also joined the U.S. in trying to pressure OPEC to increase its output limits and help reduce energy prices. So far, however, the group's policy from August to gradually increase oil production by 400,000 barrels per day each month is perfectly fine by the OPEC members and its allies, which include Russia. The program "is working well and there is no need to deviate from it," Angola's oil minister Diamantino Pedro Azevedo said Sunday. Kuwait also said Monday that the organization should hold to its current plan because oil markets were "well-balanced," and fellow OPEC members Iraq, Nigeria and Algeria all issued similar statements.
Oil drops on China fuel reserves release - Oil prices dropped on Monday as China's release of gasoline and diesel reserves eased concerns over tight global supply, while investors cashed in ahead of a November 4 meeting of major crude producers that could increase future production targets. Brent crude futures dropped 46 cents, or 0.6 per cent, to $83.26 a barrel by 0746 GMT, after gaining 6 cents on Friday. US West Texas Intermediate (WTI) crude futures slid 64 cents, or 0.8 per cent, to $82.93, having risen 76 cents on Friday. The drops came after China said in a rare official statement that it had released reserves of the two fuels to increase market supply and support price stability in some regions. "Behind the selling was China's release of fuels reserves, which reflected Beijing's intention to stabilise oil prices, just like coal prices," said Chiyoki Chen, chief analyst at Sunward Trading. "Also, investors took profits ahead of an OPEC+ meeting," Chen said. All eyes are on the November 4 meeting of the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies, together called OPEC+, with analysts expecting them to stick to a plan to add 400,000 barrels per day of supply in December. Money managers cut their net long US crude futures and options positions in the week to October 26, the US Commodity Futures Trading Commission (CFTC) said on Friday. Oil prices rallied to multi-year highs last week, helped by the decision by OPEC+ to maintain its planned output increase rather than raising it on global supply concerns. US President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery as part of a broad effort to pressure OPEC+ to increase oil supply. But Iraq's state oil marketing company, SOMO, said on Saturday Iraq sees no need to take any decision to increase its production capabilities beyond what has already been planned for OPEC countries. Kuwait supports the plan to increase global oil supply which has been already agreed by OPEC+, the Gulf nation's oil minister Mohammad Abdulatif al-Fares said on Monday, according to state news agency KUNA. "Investors will likely resume buying after confirming the OPEC+ decision on Thursday," said Hiroyuki Kikukawa, general manager of research at Nissan Securities. A Reuters poll showed that oil prices are expected to hold near $80 as the year ends, as tight supplies and higher gas bills encourage a switch to crude for use as a power generation fuel. ‘
Oil Futures Post Modest Gain | Rigzone - Oil pared gains amid rising stockpiles at the biggest U.S. storage hub, signaling a crude supply drain may be slowing. Futures in New York closed 0.6% higher on Monday. Inventories at Cushing, Oklahoma, the delivery point for benchmark U.S. crude futures, rose by about 852,000 barrels in the period Oct. 26-Oct. 29, according to traders citing data from Wood Mackenzie. Any reversal in the trend of supply declines at Cushing, “should at least quell the panic on inventories,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. Crude has soared this year as economies recover from the pandemic and amid an energy squeeze marked by shortages of gas and coal. Bank of America even said it expects Brent crude to hit to hit $120 a barrel by the end of June. Meanwhile, the Organization of Petroleum Exporting Countries and its allies will meet virtually on Thursday to discuss output policy. The group have loosened supply curbs only gradually, and top exporter Saudi Arabia has maintained a cautious stance. U.S. President Joe Biden criticized Saudi Arabia and Russia for an inadequate response to the energy crunch while speaking after a Group of 20 summit on Sunday. However, OPEC+ has remained steadfast in resisting the pressure, with Kuwait becoming the latest country to say the group should stick with its plan to increase output only gradually. Analysts believe the cartel will stay the course, in fear of making the same mistakes of overproduction they have in the past. The winter is coming and the group doesn’t know if lockdowns in the future will derail demand, Amrita Sen, chief oil analyst at Energy Aspects Ltd., said in a Bloomberg Television interview. “They don’t want to preempt anything.” Prices: West Texas Intermediate for December delivery rose 48 cents to settle at $84.05 a barrel in New York Brent for January settlement gained 99 cents to settle at $84.71 a barrel Inventories at Cushing have been draining as oil prices for immediate delivery are well above those for delivery in the future, making storing oil unprofitable. Stockpiles are currently sitting at the lowest since late 2018. .
Oil, Equity Futures Lower Early as FOMC Meeting Begins - Nearby delivery-month oil futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange followed equities lower in early morning trade Tuesday, sending the front-month West Texas Intermediate crude contract below $84 per barrel (bbl) amid a strengthening U.S. Dollar Index and rising treasury yields as investors look to the start of Tuesday's Federal Open Market Committee meeting where central bank officials are widely expected to detail the tapering process of $120 billion in monthly bond and mortgage-backed securities purchases. The FOMC will likely announce steps or pace of its planned reduction of $120 billion a month asset purchases, including $80 billion in monthly Treasury purchases and $40 billion in government-backed mortgage securities, that would be scaled to zero by mid-2022. By that time, analysts believe the Federal Reserve will introduce its first interest rate increase after holding rates near zero since the pandemic recession struck early last year. Goldman Sachs this week moved forward its forecast for the first lift-off in interest rates to July 2022 from the third quarter 2023. The Fed's decision this week comes against the backdrop of rising inflation that is now running well above central bank's long held target of 2%, rising by a decade-high 5.4% in the twelve months ending in September. The energy index, a sub-component of Consumer Price Index, rose by a staggering 24.8% from a year earlier, with the gasoline index spiking 42.1% and the index for natural gas rising 20.6%.Healthy demand from consumers joined with effects of shuttered factories and tight labor markets have all contributed to the escalating price pressures. On Monday, data from the Institute of Supply Management showed the industrial sector in the U.S. continued to lose momentum in October, with factory output remaining constrained by supply-chain bottlenecks. On Thursday, Organization of the Petroleum Exporting Countries and thirteen producers led by Russia gather for a policy meeting, where the alliance is expected to announce production increase of 400,000 barrels per day (bpd) production for December, in line with their current agreement. Ahead of the ministerial meeting, the OPEC+ technical panel revised lower their expectations for global oil market tightness in the fourth quarter, with the global supply deficit now seen at just 300,000 bpd in the three months ending in December. That's much smaller than the 1.1 million bpd shortfall projected earlier this month. Near 7:45 a.m. ET, NYMEX West Texas Intermediate futures for December delivery declined $0.76 to trade at $83.28 bbl, and the January ICE Brent contract fell to $84.21 bbl, down $0.52 from Monday's settlement. NYMEX RBOB December futures softened 1.46 cents to $2.3950 gallon and NYMEX ULSD December futures moved down by 2.04 cents to $2.4824 gallon.
Oil Barely Changed Ahead of U.S. Inventory Data, Looming OPEC Meeting - Crude prices settled barely changed on Tuesday as market participants awaited weekly U.S. inventory data ahead of a looming global oil producers meeting.U.S. West Texas Intermediate crude settled down 14 cents, or 0.2%, at $83.91 per barrel.London-traded Brent, the global benchmark for oil, finished the session up 1 cent at $84.72The mundane price action came ahead of a weekly snapshot on U.S. crude, gasoline and distillate stockpiles due from the American Petroleum Institute. The API numbers, released each Tuesday after market settlement at 4:30 PM ET (20:30 GMT), are a precursor to official weekly inventory data due each Wednesday from the EIA, or U.S. Energy Information Administration.Analysts tracked by Investing.com have forecast that U.S. crude inventories rose by 2.23 million barrels for the week ended Oct 29, adding to the previous week’s gain of 4.27 million.Gasoline inventories likely dropped by 1.33 million barrels, on top of the decline of almost 2.0 million in the previous week, forecasts showed.Stockpiles of distillates, which include diesel and heating oil, are expected to have risen by 1.44 million barrels, after the previous week’s drop of 432,000.Crude prices were also little changed on expectations that Thursday’s meeting of the 13-member Organization of the Petroleum Exporting Countries and their 10 allies — collectively known as OPEC+ — will reject consuming countries’ demands for more oil to keep a lid on a market that has nearly doubled in value over the past year. OPEC+ agreed earlier this year to raise production by 400,000 barrels per day. That was before a spike in demand had raised market requirements by at least a million barrels daily, say energy market experts.
Oil Futures Tumble on Large Crude Build, Fed's Taper Call - Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange plummeted in early morning trade Wednesday after the American Petroleum Institute reported a much larger-than-expected build in domestic crude oil inventories for the second consecutive week through Oct. 29, easing concerns over a tightening oil market while sentiment turned cautious ahead of the likely decision from the Federal Open Market Committee to reduce the pace of bond-buying stimulus, with focus on comments about inflation and slowing economic growth. The U.S. Federal Reserve is largely expected to announce Wednesday afternoon the reduction of its $120 billion in monthly purchases of bond and mortgage-backed securities, the process also known as "tapering," that was designed to ensure free flow of the credit in the economy stricken by the pandemic. The consensus calls for the central bank to reduce its monthly purchases of Treasuries by $10 billion and mortgage-backed securities by $5 billion. Just minutes ago, the ADP Employment report for October detailed the addition of 571,000 jobs in October versus calls for 400,000. On Friday, the U.S. Department of Labor will release official data. Also on the economic calendar Wednesday is the ISM Services index, due out 10:00 a.m. ET, respectively.The oil complex came under heavy selling pressure early Wednesday after API reported Tuesday afternoon that domestic crude oil stockpiles spiked 3.594 million barrels (bbl) last week, more than twice calls for a 1.5 million bbl build. The data also showed stocks at the Cushing, Oklahoma hub declined 882,000 bbl, a marked slowdown from API's reported 3.73 million bbl drop the previous week, suggesting the pace of Cushing drawdowns has begun to ease. Meanwhile, gasoline stockpiles decreased 552,000 bbl in the reviewed week, missing estimates for a draw of 1.3 million bbl. API data show distillate inventories, including kerosene and fuel oil, gained 573,000 bbl compared to an estimated 1.2 million bbl drop.DTN Refined Fuels data show gasoline demand in the U.S. decreased 1.3% last week, with total gasoline consumption down 2.5% compared to the same week in 2019. Diesel consumption slipped 1.6%, while remaining 4.4% higher relative to the same week in 2019. Diesel demand is just few weeks away from its fourth quarter seasonal peak.Near 8:30 a.m. ET, NYMEX West Texas Intermediate futures for December delivery dropped $1.83 to $82.10 bbl, and the ICE January Brent contract declined $1.61 from Tuesday's settlement of $84.72 bbl. NYMEX RBOB December futures plummeted 5.50 cents or 2.5% to $2.3941 gallon and NYMEX ULSD December futures traded 4.37 cents lower at $2.4641 gallon.
WTI Extends Losses After Crude Build, Production Ramp Oil prices have plunged overnight after a bigger than expected crude build reported by API and further pressure from The White House on OPEC+ to start spewing more deadly, poisonous, existentially-threatening fossil fuels into the world to bring down gas prices for Americans.Despite the pressure from the U.S. and other importers, the cartel is expected to stick to a plan to raise output by a modest 400,000 barrels a day at its meeting.“OPEC+ staying the course is largely baked in, but the market will watch out for surprises,” said Vandana Hari, founder of energy consultancy Vanda Insights.Oil is likely weaker today ahead of The Fed's anticipated policy-tightening today.“There’s unease before the FOMC as the taper and future rate hikes may hurt growth,” said Ole Hansen, head of commodities research at Saxo Bank A/S.“Commodities like crude oil have been the go-to markets for investors seeking to hedge against inflation, and if central banks like the Fed turn hawkish, that appetite may fade somewhat.”But for the next leg one way or the other, algos will be watching crude stocks very closely...API
- Crude +3.594mm (+2.25mm exp)
- Cushing -882k
- Gasoline -552k
- Distillates +573k
DOE
- Crude +3.29mm (+2.25mm exp)
- Cushing -916k
- Gasoline -1.49mm
- Distillates +2.16mm
After a bigger than expected crude build reported by API (and a continued drawdown at Cushing), the official data confirmed a 5th weekly crude build in the last 6 weeks. Distillate stocks unexpectedly built too...
Oil Futures Deepen Losses as Crude Stocks, Output Rise -- Nearby delivery month crude and refined products futures on the New York Mercantile Exchange accelerated losses in mid-morning trade Wednesday after data from the Energy Information Administration detailed a larger-than-expected build in domestic crude oil inventories and a surprise increase in distillate supplies during the final week of October, while demand for middle of the barrel fuels reversed lower despite what should have been a seasonal uptick in the fourth quarter.Further weighing on the oil complex, U.S. crude production rebounded 200,000 barrels per day (bpd) from the previous week to 11.5 million bpd, the highest since May 2020 when the coronavirus pandemic shut-in a large chunk of domestic production. Domestic crude oil inventories, meanwhile, spiked 3.3 million barrels (bbl) to 434.1 million bbl, compared with calls for crude stockpiles to rise 1.5 million bbl. Oil stored at the Cushing, Oklahoma hub, the delivery point for West Texas Intermediate, fell by 916,000 bbl, a marked slowdown from EIA's reported 3.9 million bbl drop the previous week, suggesting the pace of Cushing drawdowns has begun to ease. The larger-than-expected crude build was realized even as domestic refiners increased run rates for the second time in three weeks, up 1.2% to 86.3%. This is above expectations for a 0.6% increase.Gasoline inventories, meanwhile, declined 1.5 million bbl from the previous week to 214.3 million bbl, slightly above calls for a 1.3 million drop. Demand for motor gasoline rose 181,000 barrels per day (bpd) to 9.504 million bpd. Distillate stocks unexpectedly surged 2.2 million bbl to 127.1 million bbl and are now about 5% below the five-year average. Analysts expected a 1.2 million bbl decline.Demand for distillates weakened for a second week in a row through Oct. 29, falling by 183,000 bpd to 3.686 million bpd. DTN refined fuels data show diesel consumption slipped 1.6% in the reviewed week, while remaining 4.4% higher relative to the same week in 2019. Diesel demand is just few weeks away from its fourth quarter seasonal peak.Total products supplied over the last four-week period averaged 20.4 million bpd, up by 7.9% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.4 million bpd, up by 11.6% from the same period last year. Distillate fuel product supplied averaged 3.9 million bpd over the past four weeks, virtually the same as the same period last year. Jet fuel product supplied was up 44.5% compared with the same four-week period last year. Near 11:30 a.m. ET, NYMEX December WTI slumped $2.87 to trade at $81.09 bbl, and NYMEX December RBOB futures slid 9.54 cents to $2.3550 gallon, and the front-month ULSD contract accelerated losses to $2.4402 a gallon, down 6.79 cents on a session so far.
Oil Falters 3.6% on Rising US Inventory | Rigzone - Oil futures took a beating Wednesday as U.S. inventory was reported at the highest levels since August and Iran announced imminent nuclear deal talks. Oil fell by the most since in nearly two months after a report showed American crude inventories rising and Iran said nuclear talks are set to resume this month. Futures in New York fell 3.6% on Wednesday and extended losses after the market’s close following Iran’s announcement that talks would resume on Nov. 29. A nuclear deal is seen as the first step toward potentially lifting U.S. sanctions on Iranian oil. Meanwhile, U.S. oil supplies rose to the highest since August, according to a government report. OPEC+ meets virtually Thursday to review output plans. The U.S. has called on the group to raise supplies faster to quell high domestic gasoline prices. But it’s questionable as to whether the group will comply, given rising stockpiles and this week’s cooling crude prices. “It’s doubtful that OPEC will want to pull the trigger on increasing supply just because the U.S. is uncomfortable with gasoline prices politically,” said Bart Melek, head of commodity strategy at TD Securities. Crude prices, alongside other commodities, have soared this year as economies recover from the pandemic, boosting consumption. Despite the pressure from the U.S. and other importers, the cartel is expected to stick to a plan to raise output by a modest 400,000 barrels a day. Azerbaijan on Wednesday joined a roster of OPEC+ nations that have said a modest increase would be enough. U.S. President Joe Biden blamed OPEC and its allies for inflationary pressure, while Secretary of State Antony Blinken urged his counterpart in the United Arab Emirates to increase production. Speculation increased that if OPEC+ doesn’t accelerate the pace at which it’s adding production, the U.S. -- possibly in coordination with other countries-- may release crude from strategic reserves. Prices: West Texas Intermediate crude for December delivery fell $3.05 to settle at $80.86 a barrel in New York. Brent for January settlement dropped $2.73 to $81.99 a barrel. The Energy Information Administration data on Wednesday showed U.S. crude inventories rose for a second week to 3.29 million barrels. Additionally, production rose by 200,000 barrels a day to the highest since before Hurricane Ida hit U.S. Gulf of Mexico production at the end of August. However, gasoline inventories fell to the lowest since November 2017 with demand outpacing where it stood from 2015 to 2018 at this time of year.
OPEC+ agrees to stick to oil production plan, defying U.S. pressure - OPEC and its oil-producing allies have agreed to continue with their current output plan, deciding against loosening the taps in the face of multiyear highs in crude prices and U.S. pressure to help cool the market. The group, known as OPEC+, will rollover its August program to gradually increase oil production by 400,000 barrels per day each month. Russian Energy Minister Alexander Novak told a news conference Thursday: "The decision was made previously to increase production by 400,000 (barrels per day) every month, and I underscore every month, until the end of 2022. Today the decision was reiterated to maintain current parameters which were decided on earlier." International oil benchmark Brent crude was trading at $81.68 per barrel at 1:20 p.m. ET on Thursday, down 34 cents from the previous day. Asked why the group was not boosting its production levels despite complaints and requests from oil consumers like the U.S., India and Japan, Novak replied that OPEC and its allies were maintaining market balance and remaining wary of potential changes in demand. "From August until now, we have added 2 million barrels of additional production to the market," Novak said. "So as planned, we are giving the market more and more volume, as it is recovering, at the same time we also see there is a seasonal drop in demand in the fourth and first quarters of the year, and also there are some signs such as a decrease in oil product demand in the EU in October, which we have observed." The minister continued that this "basically underscores the fact that global oil demand is still under pressure from the delta Covid variant, and due to the preservation of various limitations and Covid measures in some countries." Oil prices have recently hit their highest levels since 2014, and crude-importing countries are feeling the pain. President Joe Biden squarely blamed the reluctance of OPEC+ to pump more oil for the sharp rise in energy prices in the U.S. and around the world. "The idea that Russia and Saudi Arabia and other major producers are not going to pump more oil so people can have gasoline to get to and from work, for example, is not right," Biden said Sunday at the G-20 meeting in Rome. The United Arab Emirates' Energy Minister Suhail Al Mazrouei stressed the focus on supply and demand when answering reporters questions about consuming nations' frustration at the current oil prices. "I would like to reiterate the importance of the consuming nations to us as producers. They are our partners, we work with them to move to a smooth recovery after the pandemic," Al Mazrouei said. "So it is really crucial for us a group of producers to do the right measures, addressing the concerns that we have received from many of the countries," he said, adding that he expects a surplus in supply by the first quarter of next year. The UAE minister said that the 400,000 barrel per day resolution will "take us smoothly through to that position, and we are expecting that the ... rebalancing will be happening in the first and second quarter." Several of the OPEC ministers at the press conference pointed to the skyrocketing prices of other commodities such as gas and coal to argue that oil markets are lucky to have OPEC+ regulating supply. "You look at the gas market, you look at the coal, the lack of having a governor of the market makes it so difficult for the consuming nations when it comes to a huge increase in the commodity prices," Al Mazrouei said. "We haven't seen that happening to oil in the same magnitude because of this group."
Oil Plummets Again As OPEC Rejects U.S. Pressure To Boost Output - As widely predicted, the Organization of the Petroleum Exporting Countries (OPEC) on Thursday resisted the U.S., Japan, and India calling for greater output and agreed only maintain its current pace of supply increases – and as a result, crude prices dropped to their lowest in a month. OPEC approved a 400,000 barrel per day (bpd) production hike for December, which critics insist is too little to sustain the global economic recovery and virtually guarantees that the U.S. will tap its Strategic Petroleum Reserves to bring some level of normality to prices at the American pump. John Kilduff, founding partner at Again Capital, remarked, "It's being considered an emergency, or a crisis at this point; I would expect the aggressive action on the consumer side." West Texas Intermediate on Thursday fell $2.05 to settle at $78.81 per barrel, while Brent dropped $1.45 to settle at $80.54 per barrel. Rebecca Babin, senior energy trader at CIBC Private Wealth Management, said of crude trading patterns, "What's starting to get priced in is the fact that the Biden administration painted themselves a little bit in a corner where they have to do something in response to OPEC not doing anything," and she added that releasing 60 million barrels from the SPR would mean "You're now looking at maybe $3 a downside." Edward Bell, senior director of market economics at Emirates NBD, also noted that the SPR is only tapped for emergency cases like natural disasters or war; regardless, "we remain of the view that oil prices will stay high until the end of 2021 and likely bleed into the early parts of next year." Alexander Novak, deputy prime minister of Russia, defended OPEC's stance in a press conference after the meeting by observing a decrease in European fuel consumption in October, which he said "underscores the fact that global oil demand is still under pressure from the delta Covid-19 variant." Prince Abdulaziz bin Salmon, energy minister for Saudi Arabia, added, "Oil is not the problem, the problem is the energy complex is going through havoc and hell" – a reference to the surging cost of natural gas over which OPEC has no control. Taking a slightly different tack, Scott Sheffield, CEO of Pioneer Natural Resources, told Bloomberg television that U.S. president Joe Biden should "back off" from domestic anti-oil policies if he wants to rein in crude prices: "The president is realizing all the efforts when he came into office of stopping offshore leasing, stopping drilling on federal leases offshore, New Mexico, both in the Bakken and the Powder River, have been starting to backfire some. "He's got to back off his rhetoric on federal leases going forward.
Oil Prices Sink, Reversing Gains as Saudi TV Reports Looming Output Rise (Reuters) -Oil prices sank on Thursday, reversing earlier gains in a volatile session after a report that Saudi Arabia's oil output will soon surpass 10 million barrels per day for the first time since the outset of the COVID-19 pandemic. The report, from Saudi-owned Al Arabiya TV, came after the nation, along with other Organization of the Petroleum Exporting Countries and its allies, agreed to stick to previously agreed upon production increases. Brent crude fell $1.45, or 1.8%, to settle at $80.54 a barrel. Earlier, Brent rose to $84.49 a barrel. U.S. West Texas Intermediate crude fell $2.05, or 2.5%, to settle at $78.81 a barrel, well off the session high of $83.42. Since Tuesday's close, Brent and WTI have fallen by about 5% and 6%, respectively. The Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, agreed to stick to plans to raise oil output by 400,000 barrels per day (bpd) on a monthly basis, sources said, despite calls from the United States for extra supply to cool rising prices. Saudi Arabia has already dismissed calls for speedier oil supply increases from OPEC+. But the Al Arabiya TV report said the Saudis will reach 10 million bpd in December. Oil stocks will see "tremendous" builds at the end of 2021 and early 2022 because of slowing consumption, Saudi Energy Minister Prince Abdulaziz bin Salman said on Thursday. Oil prices, which had previously been up by more than $2 per barrel, began paring gains as OPEC+ met. "A large (speculative) position was loading up" before OPEC, said Bob Yawger, director of energy futures at Mizuho. Yawger said traders then were inclined to sell and take profits rather than risk that the market could slip further as the White House calls for increased output. "They preferred to book profit than look to get burned by any Biden counterpunch," The White House on Thursday criticized a decision by top oil producers to keep oil output steady, saying OPEC and its allies appeared "unwilling" to use their power to help the global economic recovery. Top producers Saudi Arabia and Russia are confident higher oil prices will not elicit a fast response from the U.S. shale industry, OPEC+ sources said. U.S. companies have pledged to preserve capital and prioritize investor returns. Still, several large oil companies plan to increase output or shale spending next year.
Oil price recovers after OPEC rejects Biden's push for more supplies - Oil prices showed signs of recovery on Friday, with Brent Crude rising to $81.25 after sharply falling two per cent from $84 a barrel on Thursday. WTI Crude also increased by over nearly $1 from Thursday, having declined 2.5 per cent in the previous session. The returns to growth follow OPEC+ producers rebuffing calls from US president Joe Biden to further raise supplies to cool rising prices. Instead, the organisation maintained its strategy for a gradual return of output halted by the coronavirus pandemic. The OPEC+ group of major producers agreed on Thursday stick to its plans to raise oil output by 400,000 barrels per day from December. Oil prices recently touched seven-year highs, but fell earlier this week on a U.S. stocks build-up and signs that high prices could encourage more supply elsewhere. Brent Crude is on track for a nearly four per cent decline this week, the second straight week it has fallen. Nevertheless, prices remain very high in contrast to the pandemic, with rising wholesale energy costs wreaking havoc with the UK energy sector and raising petrol costs to record levels.
Oil Futures Rebound on OPEC+ Deal, Upbeat US Jobs Report --- After a two-session selloff, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange rallied Friday, with front-month West Texas Intermediate rebounding from Thursday's $78.25-per-barrel (bbl) four-week low on the spot continuous chart. The gains followed an agreement by the Organization of the Petroleum Exporting Countries and Russia-led partners to keep supplies tight next month, while an upbeat U.S. employment report, showing accelerated jobs growth in October, fueled additional buying interest. On the session, NYMEX WTI for December delivery rallied $2.46 to settle at $81.27 per bbl after trading as low as $78.96 per bbl earlier in the session, and the ICE January Brent contract surged $2.20 to $82.74 per bbl. Although advancing sharply on the session, both crude benchmarks still posted week-on-week losses of about 2.5%. NYMEX RBOB December futures advanced 2.83 cents to $2.3209 per gallon, and front-month NYMEX ULSD futures gained 4.9 cents to $2.4556 per gallon. U.S. economy added 531,000 new jobs last month -- the biggest gain in three months, the Labor Department said Friday morning, with leisure and hospitality industries driving those gains. Nationwide, job growth was also stronger in August and September than previously estimated, with new data boosting employment over the two-month period by 235,000 jobs. The unemployment rate fell 0.2% last month to 4.6%, but the labor participation rate remained unchanged at 61.6%, remaining within a narrow range of 61.4% and 61.7% since June 2020. Friday's employment report also emboldened Federal Reserve narrative of "required progress" in the labor market to withdraw unprecedent stimulus measures that were put in place at the start of the pandemic. This week, Federal Open Market Committee announced tapering of $120 billion a month in bond-buying stimulus that was designed to ensure free flow of credit in the pandemic-stricken economy. The Fed has said it would keep interest rates near zero until inflation is projected to moderately exceed its 2% target and until hiring conditions are consistent with maximum employment. Wednesday's inventory report from the U.S. Energy Information Administration was mostly bearish, triggering a two-day selloff across the oil complex. EIA data showed domestic crude oil inventories increased 3.3 million bbl last week, while domestic crude oil production spiked to the highest level since May 2020 at 11.5 million barrels per day (bpd). The number of oil-directed rigs in the United States increased six to 450 as of Friday, the highest number of active rigs since early April 2020, Baker Hughes reported Friday afternoon. There are 224 more rigs drilling for oil now than during the comparable week a year ago. Against this backdrop, OPEC+ agreed this week on a measured production increase of 400,000 bpd next month, maintaining its July agreement in which OPEC+ members would return production cut in the depths of the global pandemic 400,000 bpd monthly until all output cut -- 9.7 million bpd -- in April 2020 is returned. At a news conference following the announcement, Saudi oil minister Prince Abdul-Aziz Bin Salman said, "We believe that gradually increasing oil output is the best course of action. Projected 500,000 bpd in additional fuel demand from gas to oil switch has already occurred. Q1 2022 will also see massive stock builds." Russian Energy Minister Alexander Novak reiterated this position, adding, "From August until now, we have added 2 million barrels of additional production to the market. So, as planned, we are giving the market more and more volume, as it is recovering, at the same time we also see there is a seasonal drop in demand in the fourth and first quarters of the year, and also there are some signs such as a decrease in oil product demand in the EU in October, which we have observed."
Oil Spiked Friday but Down on the Week - Oil pared its weekly loss as Saudi Arabia cranked up prices for its global crude exports and the U.S. demurred on a potential release of oil from the strategic reserve. Crude in New York shaved its weekly loss to 2.8%, rising sharply late in the session Friday after Saudi Arabia raised the official selling price of all the nation’s crudes to buyers around the globe. The Kingdom boosted its prices just days after refusing to concede to U.S. pressure to pump more oil. With the cartel unanimously agreeing to stick to its plans, attention now turns to whether U.S. President Joe Biden will respond. “The key focus for the market right now remains the U.S.’s response to the OPEC+ meeting yesterday,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. The increase in Saudi Aramco prices suggests Saudi Arabia sees demand still improving, particularly in Asia where a resurgence in coronavirus cases seeded doubt about the recovery’s strength, she added. Oil has rallied to multiyear highs this year as major economies including the U.S. and China recover from the pandemic, with BP Plc estimating global demand has rebounded above the pre-virus level of 100 million barrels a day. A global energy crunch due to coal and natural gas shortages has exacerbated the tightness in the oil market and increased inflationary pressures in the U.S., promting the Biden administration to seek ways to lower fuel costs. Earlier Friday, U.S. Energy Secretary Jennifer Granholm said that the Administration is looking at a potential release from the Strategic Petroleum Reserve. Japan said it is in close contact with the U.S. and the IEA as pressure from consumers grows. West Texas Intermediate for December delivery rose $2.46 to settle at $81.27 a barrel in New York. Brent for January settlement added $2.20 to settle at $82.74 a barrel. For months, President Joe Biden has led calls for OPEC+ to add more barrels to tame high oil prices. The U.S. was seeking an increase of as much as double the amount that was agreed and has been among key consumers that previously raised the prospect of tapping their own strategic reserves if the alliance didn’t cooperate.
Saudi Aramco posts 160% rise in third quarter profit, chairman calls for 'stable' energy transition — Saudi Arabia's oil giant Aramco has posted a 158% increase in third quarter net income to $30.4 billion, as the world's largest oil companies continue to benefit from the reopening of the global economy and soaring oil and gas prices. The result beat expectations, with analysts expecting a median net income of $29.1 billion for the quarter. Aramco reported net income of $11.8 billion in the third quarter of 2020. "Our exceptional third quarter performance was a result of increased economic activity in key markets and a rebound in energy demand," Aramco President and CEO Amin Nasser said on Sunday. "Some headwinds still exist for the global economy, partly due to supply chain bottlenecks, but we are optimistic that energy demand will remain healthy for the foreseeable future," Nasser added. Aramco said the increase in net income was the result of higher crude oil prices and volumes sold, and stronger refining and chemicals margins in the quarter, as the company benefits from rebounding global energy demand and increased economic activity in key markets. WTI crude oil has soared above $85 in recent weeks, a level not seen since 2014, as the market shifts focus from demand recovery to supply scarcity. Natural gas prices are up around 130% this year, meaning the full extent of the global energy crisis is more likely to be felt in the fourth quarter results. Aramco declared a significant dividend of $18.8 billion to be paid in the fourth quarter. The payout can be covered by a jump in free cash flow to $28.7 billion in the third quarter, up from $12.4 billion for the same period in 2020. Gearing, a measure of the company's debt position, also improved to 17.2% from 23% due to higher oil prices and stronger cash flows. Aramco also said it would "invest for the future" with capital expenditure of $7.6 billion in the third quarter, representing a 19% increase, compared with the same period in 2020.
US flies B-1 bomber over Persian Gulf: “All options on the table” against Iran - The Pentagon announced Sunday that the US Air Force conducted another flyover of the Persian Gulf by a B-1B strategic bomber. The resumption of these threatening operations, which were steadily ratcheted up in the waning days of the Trump administration, came amid warnings of “military options” by the Biden administration over Iran’s nuclear program. In a statement on Twitter, the US Air Force’s Central Command, responsible for American military operations in the Middle East, said that the flight of the B-1B Lancer Bomber over the strategic Strait of Hormuz Saturday sent “a clear message of reassurance” to Washington’s allies in the region. The bomber was accompanied by fighter jets dispatched by regimes of the US-led anti-Iran axis, including Israel, the reactionary monarchies of Saudi Arabia and Bahrain, and the Egyptian military dictatorship of Gen. Abdel-Fattah al-Sisi. This air squadron also flew over the Suez Canal, the Red Sea and its strategic Bab el-Mandeb Strait. The menacing military maneuver came amid expectations that talks on the moribund Iran nuclear deal will resume in Vienna at the end of this month between Tehran and the six major powers that are also signatories to the agreement: the US, China, Russia, the UK, France and Germany. Signed in 2015, the so-called JCPOA (Joint Comprehensive Plan of Action), which traded tight restrictions on Tehran’s nuclear program for the lifting of economic sanctions, was unilaterally blown up by the Trump administration, which imposed a “maximum pressure” sanctions regime that targeted both Iran and any country or company that dared to trade with it. It did so as Iran continued to abide by the terms of the agreement, even though Washington never provided significant sanctions relief. The Biden administration has maintained the draconian sanctions in place, while the Western European powers have mounted no challenge to what amounts to a financial and trade blockade tantamount to a state of war against Iran. The sanctions have deprived Iranians of imported food and medicine, condemning many to hunger and an early death.
Iran Says IRGC Foiled US Navy Attempt To Steal Its Oil Tanker Near Persian Gulf -A bizarre and dangerous encounter between US naval and Iranian forces in the Sea of Oman near the Strait of Hormuz has been revealed this week, which Iran state TV says took place "recently". Iran is alleging that a US warship "attempted to seal Iran's oil" in the Sea of Oman, but it was an attack which elite Islamic Revolutionary Guard Corps (IRGC) forces thwarted, according to the account by Tehran. The US side has not recognized the Iranian narrative of events. "Iran's state TV said US forces used helicopters and warships to try to block an Iranian oil tanker in the Sea of Oman," Reuters describes of footage aired by Iranian broadcasters. "Iran's English-Language Press TV said the tanker was back in Iran's territorial waters." PressTV is calling the incident an "abortive act of piracy" - however, the US Navy's Bahrain-based Fifth Fleet has not confirmed or provided any information related to the alleged encounter, only saying its aware of the reports. The detailed description of what allegedly happened is being presented Wednesday by PressTV in the following: Reacting promptly, however, members of the IRGC’s Navy carried out a heliborne operation on the stolen ship’s deck, gained control of the vessel, and directed it back toward Iran’s territorial waters. US forces then proceeded to chase the tanker using several helicopters and warships, but their attempt at taking over the vessel for a second time was thwarted again by Iranian naval forces. The tanker is currently in Iranian territorial waters and under the protection of IRGC’s Navy. If accurate, the US side would certainly possess video of the encounter, but it's only the Iranian side that's currently advancing the claims of a wild helicopter chase, including releasing clips showing IRGC fast boats through state channels...
The Taliban banned foreign currencies as Afghanistan nears financial collapse with billions frozen overseas The Taliban banned the use of foreign currencies in Afghanistan, which is on the brink of financial collapse after the group ousted the previous government.The Taliban said, according to the BBC: "The economic situation and national interests in the country require that all Afghans use Afghani currency in their every trade."While the country uses the Afghani currency, the US dollar is also widely used.The United Nations has warned that millions of people could starve in Afghanistan, citing the Taliban takeover as a factor in the crisis.Since the Taliban took power in August, it has been prevented from accessing financial assets held overseas.The US in August froze nearly $9.5 billion in assets that belong to Afghanistan's central bank. Most of that money is held by the Federal Reserve Bank of New York.The UN said in September that the assets should be unfrozen to avoid "a severe economic downturn."An October report from The Times of London said that Taliban officials asked the US to unfreeze the assets in a face-to-face meeting, but did not make any headway."The issue has not reached any conclusion. There are deadlocks on the issues from both sides," an unnamed Taliban official told the newspaper.The International Monetary Fund said Afghanistan can't access its resources anymore, and The World Bank announced it would no longer give funding to projects in the country.Some parents in Afghanistan are selling their children out of desperation for money, according to multiple reports.
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