oil tops $100 for first time since July 2014; SPR at a 19 year low; total oil + products supplies at a 7 3/4 year low

US oil price tops $100 for first time since July 2014; SPR at a new 19 year low; total oil + products supplies, including SPR, at a 7 3/4 year low; distillate supplies at 26 month low; natural gas drilling at a 26 month high

oil prices increased for the ninth time in ten weeks this week and hit a new 7 1/2 year high after the Russian police action in eastern Ukraine turned into a full scale invasion...after falling 2.2% to $91.07 a barrel last week as oil traders were disheartened by the possibility of a nuclear peace deal with Iran, the contract price for US light sweet crude for March delivery jumped more than 3% to as high as $96 a barrel in off-exchange trading Monday, as Russia moved troops into two breakaway regions of eastern Ukraine, and Putin announced he would recognize their independence....hence, oil prices opened higher and rallied more than 3% to a 7-1/2 year high shortly after NYMEX opened on Tuesday, reflecting concerns that Russia is a major exporter of oil to the US, and also supplies more than a third of Europe's natural gas, much of it via Russian pipelines through Ukraine, before they pulled back to settle $1.28 higher at $92.35 a barrel, after analysts determined new sanctions announced by the US and the EU would have just a limited impact on the Russian economy...at the same time, the benchmark contract for US crude for April delivery settled $1.70 higher at $91.91 a barrel, as trading in the March oil contract expired...with the price for April oil now being quoted by the media, oil prices drifted lower early Wednesday as traders weighed the impact of US-Iran talks, after it became clear the first wave of U.S. and European sanctions on Russia would not disrupt oil supplies, and later steadied below the 2014 highs with a 19 cent gain to $92.09 a barrel, as sanctions imposed by the US, the EU, Britain, Australia, Canada and Japan were focused on Russian banks and elites, and not on energy...however, oil prices opened higher and shot to above $100 a barrel on Thursday, with European oil prices topping $105, after Russia launched an all-out invasion of Ukraine by land, air and sea, but pulled back later after weekly inventory data released by the EIA showed a second consecutive build in domestic crude oil inventories to settle just 71 cents higher at $92.81 a barrel amid signs that the United States and European allies would not consider sanctioning Russia's oil and gas exports, in order to ensure adequate supplies on the global market, but would instead go after its financial, military and industrial sectors.....after rising sharply early in the Friday session on concern over the potential for global supply disruptions from sanctions on major crude exporter Russia, oil prices turned lower as oil traders were forced to grapple with a fluid market environment, and settled down $1.22 at $91.59 a barrel after the US, the EU, and the UK signaled they have prepared a third package of sanctions against Russia, including on Russian President Vladimir Putin...but even given the impact of the invasion, oil prices only finished 0.6% higher on the week, while the April contract for US crude, which had ended the prior week priced at $90.21, settled with a 1.5% gain...

natural gas prices also finished higher, despite a midweek switch to the lower priced April contract, on raging European gas prices and another spate of natural gas well freeze-offs... after rising 12.4% to $4.431 per mmBTU last week on forecasts for cold weather to persist into early March.  the contract price of natural gas for March delivery opened more than 3% higher on Tuesday on forecasts for higher heating demand over the next two weeks, and on a 10% jump in European gas futures that could keep U.S. LNG exports near record highs, before settling 6.7 cents higher at $4.498 per mmBTU....gas prices then rose 12.5 cents or nearly 3% to $4.623 per mmBTU on Wednesday, as sub-freezing temperatures descended into the Lower 48 and resulted in a precipitous decline in production due to gas well freeze-offs, but pulled back and fell 5.5 cents to $4.568 per mmBTU on Thursday​, despite a 60% jump in a key European natural gas benchmark, as trading in the US March natural gas contract expired with the end of winter weather in clear view and March forecasts far from threatening....with natural gas quotes now referencing the contract price of natural gas for April delivery, which had closed Thursday priced at $4.641 per mmBTU, natural gas fell 17.1 cents to $4.470 per mmBTU on Friday, weighed down by forecasts for lower demand over the next week and a sharp drop in European gas prices...natural gas still managed to end the week 0.9% higher, while the April contract, which had ​ended the prior week priced at $4.377 per mmBTU, finished with a 2.1% gain...

The EIA's natural gas storage report for the week ending February 18th indicated that the amount of working natural gas held in underground storage in the US fell by 129 billion cubic feet to 1,782 billion cubic feet by the end of the week, which left our gas supplies 209 billion cubic feet, or 10.5% below the 1,991 billion cubic feet that were in storage on February 18th of last year, and 214 billion cubic feet, or 10.7% below the five-year average of 1,996 billion cubic feet of natural gas that have been in storage as of the 18th of February over the most recent five years....the 129 billion cubic foot withdrawal from US natural gas working storage for the cited week was in line with the average forecast for a 128 billion cubic foot withdrawal expected by an S&P Global Platts survey of analysts, but it was dwarfed by the 324 billion cubic feet that were pulled from natural gas storage during "winter storm Uri" during the corresponding week of 2021, and was also much less than the average withdrawal of 166 billion cubic feet of natural gas that have typically been pulled out natural gas storage during the same week over the past 5 years…      

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending February 18th indicated that after a big jump in our oil imports, we had oil left to add to our stored commercial crude supplies for the fourth time in 13 weeks and for the 14th time in the past thirty-nine weeks…our imports of crude oil rose by an average of 1,038,000 barrels per day to an average of 6,828,000 barrels per day, after falling by an average of 599,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 415,000 barrels per day to an average of 2,686,000 barrels per day during the week, which together meant that our effective trade in oil worked out to a net import average of 4,142,000 barrels of per day during the week ending February 18th, 623,000 more 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 unchanged at 11,600,000 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 15,742,000 barrels per day during the cited reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,246,000 barrels of crude per day during the week ending February 18th, an average of 344,000 more barrels per day than the amount of oil than our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net of 296,000 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 200,000 barrels per day more 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 inserted a (-200,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a balance sheet fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been a error or omission of that magnitude in this week’s oil supply & demand figures that we have just transcribed....however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….

This week's 296,000 barrel per day increase in our overall crude oil inventories came as 645,000 barrels per day were being added to our commercially available stocks of crude oil, while 349,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve, part of the Biden' administration plan to release 50 million barrels from the SPR to incentivize US gasoline consumption....including other withdrawals from the Strategic Petroleum Reserve under similar recent programs, a total of 73,765,000 barrels have been removed from the Strategic Petroleum Reserve over the past 19 months, and as a result the 582,384,000 barrels of oil now left in our Strategic Petroleum Reserve is now the lowest since September 6th, 2002, or at yet another new 19 year low, as repeated tapping of our emergency supplies for non-emergencies has already drained those supplies considerably over the past dozen years...based on an estimated prepandemic consumption level of around 18 million barrels per day, the US would have roughly 30 1/2 days of oil supply left in the Strategic Petroleum Reserve when the initial Biden program is complete, not counting what else might yet be withdrawn in the wake of the Ukraine situation...

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 6,523,000 barrels per day last week, which was 14.1% more than the 5,715,000 barrel per day average that we were importing over the same four-week period last year….this week’s crude oil production was reported to be unchanged at 11,600,000 barrels per day as the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 11,100,000 barrels per day, while Alaska’s oil production was 3,000 barrels per day lower at 458,000 barrels per day but had no impact on the rounded national production total...US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 11.5% below that of our pre-pandemic production peak, but 37.6% above the interim low of 8,428,000 barrels per day that US oil production had fallen to during the last week of June of 2016...

US oil refineries were operating at 87.4% of their capacity while using those 15,246,000 barrels of crude per day during the week ending February 18th, up  from a utilization rate of 85.3% the prior week, but still lower than the historical utilization rate for mid February refinery operations…the 15,246,000 barrels per day of oil that were refined this week were 24.6% more barrels than the 12,230,000 barrels of crude that were being processed daily during the winter storm Uri impacted week ending February 19th of 2021, but 4.8% less than the 16,210,000 barrels of crude that were being processed daily during the week ending February 21st, 2020, when US refineries were operating at what was then also a lower than normal 87.9% of capacity...

With the big increase in oil being refined this week, gasoline output from our refineries was also much higher, increasing by 440,000 barrels per day to 9,270,000 barrels per day during the week ending February 18th, after our gasoline output had decreased by 560,000 barrels per day over the prior week.…this week’s gasoline production was 19.8% more than the 7,736,000 barrels of gasoline that were being produced daily over the same week of last year, but 5.4% less than the gasoline production of 9,797,000 barrels per day during the week ending February 21st, 2020....at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 238,000 barrels per day to 4,693,000 barrels per day, after our distillates output had decreased by 244,000 barrels per day over the prior week…with that increase, our distillates output was 23.0% more than the 3,621,000 barrels of distillates that were being produced daily during the week ending February 19th of 2021, but 8.1% less than the 4,846,000 barrels of distillates that were being produced daily during the week ending February 21st, 2020...

Even with the big decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the fifth time in the past 13 weeks, decreasing by 582,000 barrels to  246,479,000 barrels during the week ending February 18th, after our gasoline inventories had decreased by 1,332,000 barrels over the prior week....our gasoline supplies decreased again this week because the amount of gasoline supplied to US users increased by 83,000 barrels per day to 8,657,000 barrels per day, and because our imports of gasoline fell by 139,000 barrels per day to 416,000 barrels per day, and because our  exports of gasoline rose by 246,000 barrels per day to 685,000 barrels per day…after this week's decrease, our gasoline supplies were 4.1% lower than last February 19th's gasoline inventories of 257,096,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year…

Meanwhile, even with this week's sizable increase in our distillates production, our supplies of distillate fuels decreased for the eighteenth time in twenty-five weeks, falling by 584,000 barrels to a twenty six month low of 119,678,000 barrels during the week ending February 11th, after our distillates supplies had decreased by 1,552,000 barrels during the prior week….our distillates supplies fell again this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 82,000 barrels per day to 4,233,000 barrels per day, because our exports of distillates rose by 166,000 barrels per day to 960,000 barrels per day while our imports of distillates fell by 21,000 barrels per day to 416,000 barrels per day....after thirty-two inventory decreases over the past forty-six weeks, our distillate supplies at the end of the week were 21.6% below the 152,715,000 barrels of distillates that we had in storage on February 19th of 2021, and about 19% below the five year average of distillates inventories for this time of the year…

Meanwhile, after the jump in our oil imports, our commercial supplies of crude oil in storage rose for the 11th time in 29 weeks and for the 19th time in the past year, increasing by 4,514,000 barrels over the week, from 411,508,000 barrels on February 11th to 416,022,000 barrels on February 18th, the biggest jump in commercial crude since October 10th, after our commercial crude supplies had increased by 1,121,000 barrels over the prior week…with this week’s increase, our commercial crude oil inventories increased to about 9% below the most recent five-year average of crude oil supplies for this time of year, and rose to almost 30% above the average of our crude oil stocks as of third weekend of February 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 spring 2020 and remained elevated for most of a year after that, our commercial crude oil supplies as of this February 18th were still 10.2% less than the 463,042,000 barrels of oil we had in commercial storage on February 19th of 2021, and also 6.1% less than the 443,335,000 barrels of oil that we had in storage on February 21st of 2020, and also 6.6% less than the 445,865,000 barrels of oil we had in commercial storage on February 22nd of 2019…

Finally, with our inventory of crude oil and our supplies of all products made from oil all 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 the total of our oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and thus including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, fell by 4,273,000 barrels this week, from 1,745,787,000 barrels on February 11th to 1,741,514,000 barrels on February 18th...that left our total supplies of oil & its products now at the lowest since April 25th, 2014, or at a new seven and a half year low, despite this week's big increase in commercial crude inventories.;..

This Week's Rig Count

The number of drilling rigs running in the US increased for the 64th time over the past 75 weeks during the week ending February 25th, but were still 18.0% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US increased by five to 650 rigs this past week, which was also 248 more rigs than the pandemic hit 402 rigs that were in use as of the February 26th report of 2021, but was still 1,279 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 market with oil in an attempt to put US shale out of business….

The number of rigs drilling for oil was up by 2 to 520 oil rigs during this week, after oil rigs had increased by 4 during the prior week, and there are now 213 more oil rigs active than were running a year ago, even as they still amount to just 32.3% of the shale era 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 increased by 3 rigs to 127 natural gas rigs, which was the most natural gas rigs since December 13th, 2019, also up by 35 natural gas rigs from the 92 natural gas rigs that were drilling during the same week a year ago, but still only 7.9% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008…in addition, Baker Hughes continues to list a rig drilling vertically for a well intended to store CO2 emissions in Mercer county, North Dakota, as 'miscellaneous', which thus matches the 'miscellaneous' rig count of one of a year ago

The offshore rig count in the Gulf of Mexico was unchanged at twelve rigs this week, with eleven of th​ose Gulf rigs still drilling for oil in Louisiana waters, and another rig drilling for oil in Alaminos Canyon, offshore from Texas....that's down by 5 from the 17 offshore rigs that were active in the Gulf a year ago, when 15 Gulf rigs were drilling for oil offshore from Louisiana and two were deployed for oil in Texas waters…since there is not any drilling off our other coasts at this time, nor was there a year ago, those Gulf of Mexico rig counts are equal to the national offshore totals for both years....

In addition to those rigs offshore, we now have 3 water based rigs drilling inland; one is a horizontal rig targeting oil at a depth of between 5000 and 10,000 feet, drilling from an inland body of water in Plaquemines Parish, Louisiana, near the mouth of the Mississippi, another is a directional rig drilling for oil at a depth of over 15,000 feet in the Galveston Bay area, while the third inland waters rig is a directional rig targeting oil at a depth of between 10,000 and 15,000 feet in St. Mary Parish, Louisiana... During the same week a year ago, there were no inland waters rigs deployed..

The count of active horizontal drilling rigs was up by 4 to 593 horizontal rigs this week, which was also 234 more rigs than the 359 horizontal rigs that were in use in the US on February 26th of last year, but still 56.8% less than the record 1,374 horizontal rigs that were drilling on November 21st of 2014....at the same time, the vertical rig count was up by 1 rig to 26 vertical rigs this week, which was also up by 1 from the 25 vertical rigs that were operating during the same week a year ago…meanwhile, the directional rig count was unchanged at 31 directional rigs this week, and those were still up by 13 from the 18 directional rigs that were in use on February 26th of 2021….

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 February 25th, the second column shows the change in the number of working rigs between last week’s count (February 18th) and this week’s (February 25th) count, the third column shows last week’s February 18th 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 26th of February, 2021...

with the four rig increase in Texas and the three rig increase in the Permian basin, we'll start by checking the Rigs by State file at Baker Hughes for the changes in that basin...there we find that four rigs were added in Texas Oil District 8, which encompasses the core Permian Delaware, while two rigs were pulled out of Texas Oil District 7C, which includes the ​Texas ​counties ​in the southern part of the Permian Midland...with the net increase in Texas Permian thus accounting for just two of the three rig increase in that basin, we have to figure that the rig added in New Mexico was in the far western Permian Delaware, in the southeast corner of that state...

elsewhere in Texas, there were also two rigs added in Texas Oil District 6, which accounts for two of the natural gas rig additions in the Haynesville shale, with the other Haynesville addition​ being​ in northwest Louisiana, thus accounting for that state's rig increase this week...outside of the Permian and the Haynesville, the only other rig addition this week was an oil rig in the Mississippian limestone in Kansas, in the first drilling in that state since the sporadic drilling in 2019​; ​while there has been other Mississippi lime activity since, it has all been in Oklahoma...meanwhile, the two rigs that were removed from the Granite Wash basin had been deployed in Oklahoma, in the area of that state just east of the Texas Panhandle..

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Editorial: Ohio needs a consistent earthquake-risk policy on permitting fracking waste wells -- Northeast Ohio’s unique geology has long made it a favored site for deep-injection-well disposal of toxic waste. But 35 years ago, two geologists from Columbia University’s Lamont-Doherty Earth Observatory -- John Armbruster and Leonardo Seeber -- first linked a 1987 swarm of Ashtabula County earthquakes to a 1986 injection well. The two men pinpointed the epicenter of the main July 1987 earthquake at 0.7 kilometers from the well, which had started pumping toxic fluids into the sandstone formation one year earlier. They also found that the injected fluids had triggered a previously unknown near-vertical fault in the region’s basement rocks. The 1987 discovery put everyone on notice of two things: First, deep-well disposal of toxic fluids could trigger earthquakes. And second, Northeast Ohio’s unmapped substructure of ancient fault lines could behave in unpredictable ways across a wide swath of populated areas. Starting in March 2011, another swarm of earthquakes was felt along another previously unknown fault line in the Youngstown area. The 12 earthquakes were all within a mile of a deep-disposal well injecting oil and gas waste fluids into a Precambrian layer of rocks. Instrumentation from Lamont-Doherty was again deployed and, on December 24, 2011, pinpointed the epicenter of a 2.7 magnitude temblor at 2,454 feet below the injection well. The well was shut down six days later. The next day, on Dec. 31, a magnitude 4.0 earthquake hit, causing then-Gov. John Kasich to impose a moratorium on other deep-disposal wells in the area. Kasich later issued a temporary executive order imposing new regulations on deep-injection wells and increasing the authority of state officials. Eventually, the Ohio Division of Oil & Gas within the state Department of Natural Resources adopted new rules and approaches to improve its ability to detect and understand “induced seismicity” from such operations. AWMS has been trying ever since to get the #2 well reopened, cleveland.com’s Eric Heisig has reported, including trips to the state appellate courts and Supreme Court to argue that the state’s stance constituted “taking” of its property. Eventually, state regulators determined that the #2 well could reopen -- but must shut again if a 2.1 or greater earthquake was measured within a three-mile radius, allowing the state time to determine the earthquake’s cause. AWMS wants the trigger to be a 3.0 earthquake and it has asked the Ohio Oil & Gas Commission to let it reopen with the power to decide on its own when to restart after an earthquake-related shutdown. The state says a 3.0 earthquake trigger would create unacceptable risks in a populated area, including to an aging, unstable dam nearby. The hearing was held last week; a final determination is not expected anytime soon. What’s needed, however, is not a commission fiat, but a clear and consistent ODNR policy on seismic risk and deep-injection-well permitting that puts public safety first, but with the seismic-detection instrumentation to match. We now have decades of evidence that deep-injection disposal in Northeast Ohio can cause earthquakes. It’s time to spell out in permits what happens if a well is suspected of inducing earthquakes. Yes, AWMS knowingly drilled in an area of seismic risk, but its well was also fully permitted by the state -- and has now been closed for nearly eight years.

Fracking Wastewater Loaded With Toxic Chemicals, Study Shows - Fracking has already raised the ire of environmentalists for its effects on the planet, but new research sends up another red flag: The wastewater produced by the complicated oil and gas drilling process is loaded with toxic and cancer-causing contaminants that threaten both people and wildlife.In fracking, water that contains a number of additives is used in the drilling process. This injected water mixes with groundwater and resurfaces as a waste byproduct containing both the additives and contaminants from the drilling site.In this study, researchers analyzed untreated fracking wastewater samples from the Permian Basin and Eagle Ford formation, both in Texas, and found 266 different dissolved organic compounds.They included: a pesticide called atrazine; 1,4-dioxane, an organic compound that is irritating to the eyes and respiratory tract; pyridine, a chemical that may damage the liver; and polycyclic aromatic hydrocarbons (PAHs), which have been linked to skin, lung, bladder, liver and stomach cancers.In the water, 29 elements were also detected, including rare earth elements, selenium and hazardous metals such as chromium, cadmium, lead and uranium, according to the study.The findings were released as regulators work on proposed guidelines for the safe treatment and disposal of fracking wastewater."The discovery of these chemicals in [fracking wastewater] suggests that greater monitoring and remediation efforts are needed, since many of them are listed to be dangerous for human health by the World Health Organization," said study author Emanuela Gionfriddo, an assistant professor of analytical chemistry in the School of Green Chemistry and Engineering at the University of Toledo in Ohio. "Our comprehensive characterization sheds insight into the processes taking place during hydraulic fracturing and the nature of the geologic formation of each well site," Gionfriddo added in a university news release.

Shell Cracker Plant Update and Impact at Utica Green Upstream & Midstream Conference - -- A decade after Royal Dutch Shell announced it was looking at a Southwestern Pennsylvania site to build an ethane cracker, construction of the $10 billion project is nearing completion. In 2021, the latest economic impact study of the Beaver County facility (by a Robert University professor trio) projects an annual kick from operations to the state economy of more than $3.69 billion -- $81.68 billion over the 40-year life of the massive complex. While this study, previous studies on the cracker complex and predictions by economists, academicians, etc. have detailed tax and job impacts, Tom Gellrich says don’t forget the long-term positive benefits to plastic processors. Gellrich, president and founder of consulting firm TopLine Analytics, argues said processors are licking their proverbial chops as the Shell cracker nears completion. Gellrich will be one of the featured speakers at the Inaugural Utica Green Upstream & Midstream Conference on March 25, 2022 at the Pro Football Hall of Fame in Canton, Ohio which has Encino Energy as the presenting sponsor. Shale Directories and the Canton Regional Chamber of Commerce are producing the conference. Cost savings using the Shell facility vs. ethylene and polyethylene now shipped from the U.S. Gulf Coast can be huge. One study priced the transportation advantage, pellets shipped from Beaver County vs. the Gulf Coast, at nearly 25%. “The impact of the Shell cracker on plastics processors is immense,” Gellrich told Shale Directories. “We encourage all plastics processors in the Appalachian Basin and beyond to attend the Utica Green Upstream & Midstream Conference,” commented Joe Barone, President and Founder, Shale Directories. He further added, “The opportunities coming to these companies are significant as the result the availability and attractive pricing.” One potential customer fed by the Shell cracker could pursue is the world’s largest retailer. Walmart announced in March 2021 it will spend over the next 10 years $350 billion on additional items made, grown, or assembled in the U.S., rather than elsewhere. “No. 1 on Walmart’s list of categories it will focus on is plastics,” Gellrich pointed out.

Equitrans plans expansion of Ohio Valley Connector pipeline - Pittsburgh Business Times -- Equitrans Midstream Corp.'s plans to complete the Mountain Valley Pipeline might still be in limbo after several court rulings derailed its timeline, but the Canonsburg-based company said it's going ahead with another project that will increase the capacity of a pipeline in the tri-state area. Equitrans said Tuesday it had filed for Federal Energy Regulatory Commission approval for the Ohio Valley Connector Expansion Project, a $160 million initiative that will add compression along the lines in Pennsylvania, Ohio and West Virginia and allow Equitrans to flow more natural gas. "The creation of this incremental deliverability will provide shippers with additional flexibility to transport natural gas produced in the central Appalachian Basin to meet the growing demand by local distribution companies, industrial users, and power generation facilities located in the local and mid-continent, northeastern and gulf coast markets of the United States," Equitrans said in its FERC filing on Jan. 28. The pipeline, which began service in 2016, brings 850 million cubic feet per day of Pennsylvania and West Virginia-produced natural gas — primarily from EQT Corp. (NYSE: EQT) — to long-distance pipelines to the Gulf Coast and the middle of the country. It will add pipeline connections to Rockies Express Pipeline and Rover Pipeline LLC in Clarington, Ohio, and boost reliability to other pipelines including Texas Eastern Transmission LP, Columbia Gas Transmission and Eastern Gas Transmission and Storage. Most of the investment, $130 million, will go to increasing compression along the pipeline route. Compressor units are what move the gas from point to point along the pipeline and higher compression allows more gas to be flowed. The three compressor stations are in Greene County south of Waynesburg; in Wetzel County, West Virginia; and Monroe County, Ohio, near the Ohio River. The project is expected to be operational in 2023 and including the additional compression units will also add about 5.5 miles of pipeline near the compressor stations and a deep anode groundbed and rectifier in Greene County, Pa. It will add about 350 million cubic feet per day of natural gas and Equitrans already has 330 million cubic feet per day in long-term firm capacity commitments and an extension of its agreement with EQT.

‘Irreversible’: No easy fix for water fouled by gas driller - — Meeting with a Susquehanna County man whose well water has been polluted for years, officials in the Pennsylvania attorney general’s office asked him whether he’d consider accepting a treatment system from the gas driller charged with fouling his aquifer. Not a chance, Ray Kemble told them. “Are you going to drink and bathe in it?” Kemble asked the prosecutor and her colleague, a special agent. “Are you two going to come here and live in this house on that system for a month and use that water?” The officials demurred..The pushback from residents who have been fighting for clean water since the second Bush administration illustrates the delicacy of the attorney general’s task in Dimock, a place synonymous with the fracking debate, where acrimony and distrust are the default after nearly 14 years of bad water and broken promises to fix it. It was an exploding water well that first aroused public attention in the previously anonymous patchwork of homes and farms just south of the New York border. Around that time, residents began reporting their well water was making them sick with symptoms including vomiting, dizziness and rashes. Anti-drilling celebrities and documentary filmmakers descended on the town of Dimock, calling it an example of natural gas industry malfeasance in the nation’s No. 2 gas-producing state. Industry backers, meanwhile, touted the economic benefits of cheap gas and accused green groups of greatly exaggerating the threat. The hoopla eventually died down, but Dimock's water remained polluted. Fresh contamination cases have been reported as recently as December. One of the best-known pollution cases ever to emerge from the U.S. drilling and fracking boom has entered a difficult new phase as prosecutors pursue criminal charges against Pennsylvania's most prolific gas driller — and push for a settlement they say could yield more significant benefits for affected homeowners than a conviction. But the option prosecutors recently discussed has put them at odds with some residents who reject individual water treatment systems as inadequate and unworkable. These residents want to be hooked up to public water — itself a controversial idea in their rural community, one that state environmental officials talked up more than a decade ago but ultimately abandoned.

There are millions of orphaned gas and oil wells leaking methane in the U.S. — plugging them will cost billions -- The first U.S. oil well was drilled in Pennsylvania more than 150 years ago. Millions more followed, dotting the country from Southern California to Texas, Oklahoma and Appalachia. But those wells don't last forever. In fact, a well only produces a significant quantity of natural gas for between 20 to 40 years. After that, the company that owns the well is supposed to plug it with cement to prevent it from releasing methane into the air and leaking contaminants into the groundwater or at the surface. But it's an expensive process, costing thousands of dollars for onshore wells and millions for offshore wells. Oil giants like Chevron and ExxonMobil have the funds to plug their wells. But small, less well-financed operators often can't afford to do so. Others go bankrupt, leaving wells "orphaned," and then the plugging responsibility falls to the government. Steve Feldgus, the deputy assistant secretary for Land and Minerals Management at the U.S. Department of the Interior, says that there's no way to estimate the exact number of the country's orphaned wells. "States have counted about 130,000, but the [federal Environmental Protection Agency] estimates there might be as many as two million or more. And a lot of these are very old wells where the recordkeeping isn't very good, and we just don't know exactly where they are," he said. States go out and look for more, and "they keep finding them." Historically, states haven't had the resources to deal with the magnitude of the problem. But now, President Biden's $1 trillion infrastructure bill is devoting serious money — $4.7 billion — to addressing the issue.About 9 million Americans live within a mile of a documented orphan well, which can pose both an environmental hazard as well as an eyesore."A lot of these orphan wells are, you know, either a pipe sticking out of the ground, which creates their own danger, or it can come with a whole set of old oil and gas infrastructure — tanks, pumpjacks, things that are just left behind to rust," Feldgus said.Many of these old wells are also leaking methane, a particularly potent greenhouse gas that has over 80 times the global-warming potential of carbon dioxide over a 20-year period.

Bill that would boost DEP Office of Oil and Gas funding passes WV Senate -The West Virginia Senate has passed a bill designed to boost funding for the state’s cash-strapped oil and gas well inspection unit. The Senate green-lit Senate Bill 480 in a 25-8 vote Monday, advancing the measure to the House of Delegates. SB 480 has been estimated to restore the o¨ce’s inspector-to-well ratio to roughly 4,000-to-1 by imposing a $100 annual oversight fee for unplugged wells that produce 10,000 cubic feet or more of gas per day. The number of inspectors in the state Department of Environmental Protection’s O¨ce of Oil and Gas responsible for monitoring oil and natural gas drilling, storage and production statewide has fallen from 17 to nine. The offce needs $1.3 million more annually just to get back to previous staffing levels that well safety proponents say were already inadequate, a shortfall driven by its main revenue pipeline — permit fees — drying up amid oil and gas industry struggles. Senate Energy, Industry and Mining Committee Chairman Randy Smith, R-Tucker, said on the Senate floor prior to SB 480’s passage that he favored it over another bill aimed at bolstering Office of Oil and Gas funding, SB 613, because the latter was severance tax-based, whereas SB 480 is based on production.

Mountain Valley facing ‘greater uncertainty,’ lead partner in pipeline project says - The Mountain Valley Pipeline is facing what it calls “greater uncertainty” after losing two crucial permits and the confidence of one of its five corporate partners. Yet developers of the natural gas pipeline are not giving up, they said Tuesday in a conference call with financial analysts. “We’re all hands on deck to find the right path forward for MVP,” said Thomas Karam, chairman and chief executive officer of Equitrans Midstream Corp., the venture’s lead partner. Mountain Valley, which had hoped to complete the often-delayed project by this summer, no longer expects that to happen. Karam said the company will release more details after discussions with government agencies responsible for permitting the pipeline and its partners, which include a subsidiary of RGC Resources, the parent company of Roanoke Gas Co. On Friday, NextEra Energy of Florida — which has a nearly one-third partnership in the $6.2 billion project — said in a U.S. Securities and Exchange Commission filing that it was re-evaluating its role. “The continued legal and regulatory challenges have resulted in a very low probability of pipeline completion,” the filing stated. In late January and early February, the 4th U.S. Circuit Court of Appeals struck down two government approvals for the pipeline: a permit that allowed it to cross through the Jefferson National Forest and an opinion that its construction would not jeopardize endangered species. Karam called the decisions “in our view, wrong,” and said they represent a “significant departure from traditional judicial deference” that is afforded to government agencies. The rulings will make it more difficult for Mountain Valley and other needed infrastructure projects to move forward, he said. Since the project was proposed in 2014, it has faced fierce opposition from both community groups and national environmental organizations, which say building such a large pipeline across steep slopes and through clear-running streams will harm natural resources. The route of the 303-mile buried pipeline cuts though Southwest Virginia, taking it north of Blacksburg and southwest of Roanoke. Muddy runoff from construction sites has flowed into nearby streams, threatening endangered species and drinking water, critics say, while the burning of natural gas if the pipeline is completed will worsen a growing climate crisis.

Equitrans says it's still committed to Mountain Valley Pipeline but completion date uncertain - The developer behind the Mountain Valley Pipeline told investors Tuesday that the company is still committed to completing the embattled project but is unsure when it will enter service due to repeated judicial rulings stripping it of necessary permits. While recent decisions by the U.S. 4th Circuit Court of Appeals “are in our view wrong and represent a significant departure from traditional judicial deference,” they “elevate the uncertainty around our ability to bring MVP to completion,” said Equitrans Midstream CEO Tom Karam on a year-end earnings call Tuesday. “Obviously we are no longer targeting a summer 2022 in-service” date, said Karam. Asked by an investor whether 2023 is “still on the table right now” as a possible date for the pipeline entering operation, Karam said that “I can’t give you any timing.”Fourth quarter results released by the company ahead of Tuesday’s call also noted that “due to the evolving regulatory and legal environment for pipeline construction and ongoing challenges,” project backers are “evaluating the MVP Southgate project … including potential changes to the project design and timing.” The 303-mile Mountain Valley Pipeline would stretch from West Virginia to Pittsylvania County, Virginia, where the Southgate Extension would then connect to carry gas into North Carolina. In December, Virginia’s State Air Pollution Control Board denied MVP a key air permit for a compressor station planned to support the Southgate extension. North Carolina has also twice denied the pipeline a necessary water permit. Earlier this month, the 4th Circuit overturned a critical approval for the main pipeline from the U.S. Fish and Wildlife Service on the grounds that the agency hadn’t adequately evaluated the pipeline’s impact on several endangered species. The ruling was the second time the court had questioned the project’s Fish and Wildlife permit, and it followed a January decision yanking MVP’s Forest Service and Bureau of Land Management approvals. In the wake of the rulings, uncertainty over Mountain Valley Pipeline’s future has grown among investors. Last week, NextEra Energy revealed in filings with the Securities Exchange Commission that it was writing down $800 million of its investment in the project and that it had “determined that the continued legal and regulatory challenges have resulted in a very low probability of pipeline completion.” Financial analysts on Tuesday’s call also showed doubts about whether the project will be completed, asking questions about scenarios “if MVP doesn’t survive” or “where we’re not able to go forward on MVP.”

Why the Mountain Valley Pipeline Matters - Competitive Enterprise Institute - In what came as a surprise to few, if any, observers, the proposed Mountain Valley Pipeline has hit another judicial setback that will delay its completion date and could conceivably kill it off. It is yet one more roadblock in getting the Appalachian region’s surplus of natural gas to population centers on the East Coast, where it is needed.It is becoming difficult and bordering on impossible for major energy projects to navigate all the relevant federal statutes, such as the National Environmental Policy Act, Clean Water Act, and Endangered Species Act. This includes Mountain Valley’s proposed 303 miles of 42-inch pipeline carrying natural gas from West Virginia to Virginia. Years of developing the required Environmental Impact Statement (EIS) are followed by court challenges, a revised EIS, additional challenges on other grounds, and on and on. It was already enough of a chore to get a project approved during the generally pro-pipeline Trump administration, but now it is even harder under President Biden’s extreme appointees at the Department of Interior, Council on Environmental Quality, and other relevant agencies. This is particularly true of any projects related the fossil fuels (coal, oil, natural gas), as the administration and environmental activists seek to tie up such projects in red tape. The climate change-justified roadblocks may get even worse under new policy guidance from the Federal Energy Regulatory Commission, or FERC, which must approve natural gas pipelines that cross state lines. Essentially, pipeline developers have to go undefeated through multiple legal challenges costing millions of dollars over many years. Little wonder few are succeeding and fewer are even trying.According to the U.S. Energy Information Administration, the Appalachian region has the potential to increase output but is limited by a lack of pipeline capacity. Any additional natural gas supply would be much in demand on the East Coast, which is currently suffering shortages and high winter heating prices. Some could also be used to increase exports of liquefied natural gas, or LNG, to America’s European and Asian allies and thus reduce their reliance on natural gas from Russia.

Reckless Decision': Biden Administration Adds Climate Roadblocks for Future Pipelines, Energy Projects - The Federal Energy Regulatory Commission (FERC) announced that it will begin to “undertake a robust consideration” of the environmental justice impacts of such fossil fuel projects before granting approval, according to a fact sheet published Thursday. The agency, which is the top regulator of domestic natural gas infrastructure, said its new policy will presume projects that cause 100,000 metric tons of carbon dioxide per year will have a significant impact on the environment. In a major departure from its past policy, the FERC may also consider the eventual emissions caused by both upstream production and eventual burning of gas transported in a pipeline requiring approval. “I believe today’s long overdue policy statements are essential to ensuring the Commission’s natural gas siting decisions are reflective of all stakeholder concerns and interests,” FERC Chairman Rich Glick said in a statement. “We have witnessed the impact on pipeline projects when federal agencies, including the Commission, fail to fulfill their statutory responsibilities assessing the potential effects of a project on the environment, landowners and communities.”The announcement Thursday marked the first time the commission updated its natural gas policy since 1999. House Energy and Commerce Committee Chairman Frank Pallone applauded the policy change, saying it was “necessary and long-overdue.”“For far too long, FERC has allowed private pipeline developers to call the shots, while cutting those affected by the projects out of the process,” Natural Resources Defense Council senior attorney Gillian Giannetti said in a statement. “Communities and landowners will now have a say before new pipelines cut across their land or new compressor stations are built near their homes.”“FERC will now need to follow through and permanently establish a meaningful climate test for pipelines,” she added.But the new policy also attracted criticism from both Democratic and Republican lawmakers.“Today’s reckless decision by FERC’s Democratic Commissioners puts the security of our nation at risk,” Senate Energy and Natural Resources Committee Chairman Joe Manchin said in a statement. “The Commission went too far by prioritizing a political agenda over their main mission – ensuring our nation’s energy reliability and security.”“The only thing they accomplished today was constructing additional road blocks that further delay building out the energy infrastructure our country desperately needs,” he added.

Williams eyes Haynesville Shale as growth driver, certified gas opportunity: executives - Midstream operator Williams sees the Haynesville Shale as a major source of growth, both from a gathering perspective and as "wellhead to water" corridor to transport certified gas to LNG exporters hungry for lower emissions feedgas, executives said Feb. 22. "We've been rapidly expanding our Haynesville system to support the growth we see from existing and new customers in the basin, including significant volume growth," Chad Zamarin, senior vice president of corporate strategic development, said during company's fourth-quarter earnings call. Beyond infrastructure, the company has plans to help add more than 300 MMcf/d of new production in the basin by the end of 2022, through a joint-venture partnership with private equity-backed Haynesville producer GeoSouthern Energy. Williams entered into the GeoSouthern partnership to drive more volumes into its Haynesville midstream assets, Zamarin said. GeoSouthern has brought two rigs into operation on the acreage in recent weeks, with plans to soon mobilize a third. First production is expected in the second quarter of 2022, with gas production expected to ramp up to 350 MMcf/d by the end of the year. The company also sees the potential to grow its presence in the Haynesville through consolidation, Zamarin said. "We'll consider opportunities that further enhance our footprint, create more capacity optimization opportunities and enable us to aggregate even more responsibly sourced gas supplies that we can direct to premium markets," Zamarin said. A key pillar of Williams' strategy in the Haynesville involves connecting the basin's growing supply of certified gas, also known as responsibly sourced gas or RSG, with nearby LNG exporters. "We are very focused on positioning ourselves to have the infrastructure that can export responsibly sourced gas from key US basins and get those to these LNG facilities," CEO Alan Armstrong said. "And so we really think we're going to be an important player, not in the ownership of the actual LNG facility, but a lot of the key infrastructure that it's going to take to deliver this gas and to be able to do it with a responsibly sourced gas certificate." As of Feb. 22, Haynesville producers had completed third-party certification on 1.2 Bcf/d of gas. Public producer commitments total 6.2 Bcf/d by the end of 2022, around 45% of year-to-date daily average Haynesville production. Williams intends to connect this supply of certified gas to potential LNG buyers through a combination of existing and proposed infrastructure. Around 75% of proposed LNG export terminals are located along Transco's path, Armstrong noted. For new infrastructure, the company has proposed the 2 Bcf/d Louisiana Energy Gateway project, which would gather certified gas from multiple Haynesville producers and transport it south to the Gulf Coast.

A deep dive into the process, quirks, and idiosyncrasies of US natural gas pricing. - If you’re going to be involved in any aspect of U.S. natural gas, it’s critically important to understand how physical, futures, and forward gas markets work and how pricing is determined. That reality was emphasized almost exactly a year ago when physical spot prices for U.S. natural gas had their most volatile and bizarre weeks ever as Winter Storm Uri sent a blast of bitter-cold, icy weather down the middle of the country, wreaking havoc on gas infrastructure just when heating demand was at its highest. Prices in the Northeast, which normally see winter spikes, barely reacted, while prices across the Midcontinent and Texas rocketed to record-shattering levels, above $1,000/MMBtu. The events of the Deep Freeze of February 2021 have since brought renewed scrutiny to the various aspects of the gas and power markets, and a need among legislators, regulators and everyone who deals with energy commodity markets to understand how gas is traded in the U.S. and how prices are set. We’re here to help. So, in today’s RBN blog, we begin a deep dive into the process, quirks and idiosyncrasies of U.S. gas pricing.During Uri last February, on the same day that physical next-day (spot) prices at some gas trading locations trackedover $1,000/MMBtu, spot price settlements at the national benchmark Henry Hub went only as high as around $23/MMBtu, according to pricing data from our good friends at Natural Gas Intelligence (NGI). The exchange-traded futures market for next-month gas barely reacted, settling at a little over $3/MMBtu. Over-the-counter forward prices for regional hubs rose somewhat but were also relatively muted. By the time the market was scheduling physical gas for March, the panic had dissipated, and month-ahead prices were nowhere near the lofty levels seen for those few days in mid-February. These stark differences in prices have to do with what factors drive the various pricing mechanisms, their respective settlement or delivery periods, and when and how they are traded and used in the gas market. We will get to describing those in the next part of this deep dive. But before going there, we’ll take a trip in the way-back machine to see how these pricing systems even came to be in the U.S. gas market in the first place. The U.S. natural gas market is one of the most transparent, liquid, and efficient commodity markets in the world. Physical and financial trades are done directly between counterparties through one-on-one bilateral, negotiated transactions and also via open and transparent trading on organized/regulated exchanges like the Chicago Mercantile Exchange (CME) and the Intercontinental Exchange (ICE). Physical trading is anchored by thousands of miles of gathering, interstate and intrastate transport, distribution pipeline networks, and well over 100 distinct trading locations across North America with location-specific price indices. A subset of the physical trades is reported to price reporting agencies (PRAs) like Natural Gas Intelligence (NGI), Platts and Argus, which then publish indices on a daily basis, and there are tough Federal Energy Regulatory Commission (FERC) rules around how prices get reported to those PRAs. Additionally, just about every company involved in the business of buying and selling physical natural gas is required to report their transaction volumes and pricing mechanisms in some detail to the FERC.

U.S. natgas gains on colder forecasts, European price spike (Reuters) - U.S. natural gas futures rose more than 1% on Tuesday, helped by forecasts for cooler weather and higher heating demand over the next two weeks and a 10% jump in European gas futures that could keep U.S. liquefied natural gas exports near record highs. Front-month gas futures for March delivery rose 6.7 cents, or 1.5%, to settle at $4.498 per million British thermal units (mmBtu). Data provider Refinitiv estimated 383 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states. The normal is 358 HDDs for this time of year. Refinitiv projected average U.S. gas demand, including exports, would rise from 119.9 billion cubic feet per day (bcfd) this week to 123.2 bcfd next week as temperatures drop. European prices rose as tensions between Russia and Ukraine escalated after Moscow ordered troops into two breakaway regions in eastern Ukraine. Britain on Tuesday imposed sanctions on Gennady Timchenko and two other billionaires with close links to Vladimir Putin, while Germany halted the Nord Stream 2 Baltic Sea gas pipeline project, designed to double the flow of Russian gas direct to Germany. The United States and Europe have said they would sanction Russia if it invaded Ukraine. This could prompt Russia to cut exports to Europe, where Russia provides around 30%-40% of gas supplies, about 16.3 bcfd in 2021. Refinitiv said the amount of gas flowing to U.S. LNG export plants has averaged 12.6 bcfd so far in February, which would top January's monthly record of 12.4 bcfd. Refinitiv said average gas output in the U.S. Lower 48 states fell from a record 97.3 bcfd in December to 94.0 bcfd in January and 93.2 bcfd so far in February, as cold weather froze oil and gas wells in several producing regions earlier in the new year.

Natural Gas Futures Rally Further Wednesday as Plunging Temperatures Lead to Freeze-Offs; Cold Ignited Cash - Natural gas futures rallied again midweek as sub-freezing temperatures descended into the Lower 48, resulting in a precipitous decline in production from freeze-offs. The March Nymex contract, which expires on Thursday, settled at $4.623/MMBtu, up 12.5 cents on the day. April climbed 13.2 cents to $4.593. Spot gas prices also gathered momentum, with plump increases in the Northeast driving NGI’s Spot Gas National Avg. up $1.175 to $5.710. Already in the green at the start of Wednesday’s trading session, the March Nymex futures contract rallied to a $4.704 intraday high as early data suggested that production had fallen by around 4 Bcf day/day. Bloomberg showed output near 91.4 Bcf, off 3.4%. The bulk of the decline occurred in the Midcontinent, where output tumbled 10% day/day. The Permian Basin also recorded a noteworthy 3% decrease. StoneX Financial Inc.’s Tom Saal told NGI the steep drop in production is “significant, especially in a market that is much tighter than it was a year ago.” Even though output may rebound quickly as conditions thaw, the gyrations in the U.S. gas market, he said, are now part of the everyday norm in the new $4.00 price environment. NatGasWeather said frigid air is seen persisting throughout the next week, with widespread rain, snow and overnight lows of minus 20s to 20s sweeping across the western, central and northern United States. Temperatures are expected to plummet into the 10s as far south as Texas and portions of the South. However, the overnight weather data once again lessened the intensity of a return cold shot this weekend into early next week. It also trended warmer for March 2-7 as comfortable conditions were seen gaining ground across much of the interior United States. The midday Global Forecast System (GFS), however, showed cool air lingering over the Great Lakes and East longer, according to NatGasWeather. In addition, it teased colder temperatures returning into the west-central and northern United States March 8-10, although the data was far from convincing.

US natural gas storage inventories decline 129 Bcf as winter demand slackens: EIA | S&P Global Platts - US natural gas inventories for the week ended Feb. 18 fell in line with market expectations, which was below the five-year average decline for the first time this year. Storage fields withdrew 129 Bcf, according to data released by the US Energy Information Administration on Feb. 24. Working gas inventories decreased to 1.782 Tcf. The storage deficit collapsed to 209 Bcf, or 10.5%, less than the year-ago level of 1.991 Tcf. The deficit to the five-year average narrowed to 214 Bcf. The withdrawal was in line with the 128 Bcf draw expected by an S&P Global Platts survey of analysts. Responses to the survey ranged from a 107 to 143 Bcf withdrawal. The draw was a fraction last year's massive 324 Bcf pull in the corresponding week. That week marked the second-largest withdrawal on record as the US experienced a severe winter storm. The storm knocked a sizable share of domestic production offline, exacerbating the draw on storage fields. The draw was also well below the week prior's 190 Bcf pull. US supply and demand fundamentals loosened considerably during the reference week as cold weather-driven demand subsided and production staged a significant rebound from the lows seen a week earlier. Total demand during the week ended Feb. 18 was down 9.3 Bcf/d week over week, according to Platts Analytics. The majority of the decline was driven by the residential-commercial sector, followed by smaller losses in the power generation and industrial sectors. LNG feedgas was the only demand fundamental to see a gain week over week, rising 500 MMcf/d. Upstream, total supplies were 3.2 Bcf/d higher on the week as production staged a nearly 4 Bcf/d rebound after tumbling a week earlier due to weather-driven freeze-offs. The thaw-out helped production not only recover from those declines but also return higher than before. The NYMEX Henry Hub March contract fell 5 cents to $4.57/MMBtu during late afternoon trading on Feb. 24. The upcoming summer strip, April through October, added 4 cents to average $4.71/MMBtu. Henry Hub futures prices were seen trading roughly 20 cents higher by mid-morning Feb. 24, with much of the run-up taking place even before the release of the Weekly Natural Gas Storage Report and likely being carried higher along with the large price movements in global energy markets stemming from the conflict in Ukraine. Market balances have trended tighter during the week in progress, setting the stage for a larger withdrawal for the week ended Feb. 25 which is currently estimated to be around the 150 Bcf mark, according to Platts Analytics.

U.S. natgas falls over 3% on lower demand forecasts, drop in European prices (Reuters) - U.S. natural gas futures fell more than 3% on Friday, weighed down by forecasts for lower demand over the next week and a sharp drop in European gas prices. On its first day as the front-month, April gas futures fell 17.1 cents, or 3.7%, to settle at $4.470 per million British thermal units (mmBtu). For the week, the contract is up 0.8%, after rising 12.4% last week. Data provider Refinitiv estimated 382 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, slightly lower from 384 HDDs estimated on Thursday. The normal is 338 HDDs for this time of year. With cold weather moderating, Refinitiv projected that average U.S. gas demand, including exports, would drop from 125.1 billion cubic feet per day (bcfd) this week to 112.5 bcfd next week. Meanwhile, gas prices in Europe fell more than 30% after sharp gains the previous day on the Russian invasion of Ukraine and as auction results showed flows might resume westward through Russia's Yamal-Europe pipeline. Refinitiv said the amount of gas flowing to U.S. LNG export plants has averaged 12.4 bcfd so far in February, in line with January's monthly record of 12.4 bcfd. Average gas output in the U.S. Lower 48 states fell from a record 97.3 bcfd in December to 94.0 bcfd in January and 93.2 bcfd so far in February, as cold weather froze oil and gas wells in several producing regions earlier in the new year.

ArkLaTex natural gas industry could play important role in US response to Ukraine crisis - As the world watches the Russian invasion of Ukraine and possible ramifications of war, the local gas industry could play an important role in the crisis.Sanctions placed on Russia will have a major impact on Russian natural gas exports, which several European countries rely on.According to attorney Drew Burnham with Cook, Yancey, King & Galloway, the U.S. is in a better position to respond with its own exports."The federal government has been better about in recent months, over the last year probably, in encouraging greater export capacity in helping Europe," Burnham said.An important question is whether Europe will be open for business."Europe's ability to import natural gas has been restricted by its own import capacity. There's a lot of political pressure, especially from the left leaning political groups there to restrict the import capacity of natural gas there for reasons of promoting green energy," Burnham said.Burnham says there are already signs of a shift in direction among European leaders. This would put the local natural gas industry in a key position. "We're seeing incredible investment in our area for the production of natural gas. And it's becoming quite clear to the federal government, as it's been clear to many for a long time that our ability to export natural gas is a national security issue. It's a great tool in our arsenal to support peace around the world," Burnham said.

Kinder Morgan, TVA expanding gas pipeline across Dickson County – Houston-based oil and gas giant Kinder Morgan is pursuing a new pipeline across three Tennessee counties to deliver natural gas to the Tennessee Valley Authority’s Cumberland Fossil Plant and residents of Stewart, Dickson and Houston Counties question the necessity of the expansion, citing safety and environmental concerns.Kinder Morgan operates 83,000 miles of pipelines and 143 fuel terminals across the country. It is one of the nation’s largest shippers of crude oil, gasoline, natural gas, and carbon dioxide, claiming $16.6 billion in revenue and $70.4 billion in assets in 2021. The proposed project across Middle Tennessee adds a 32-mile branch to a 11,755-mile pipeline network that runs from Texas to New England operated by Kinder Morgan’s biggest subsidiary, Tennessee Gas Pipeline Company LLC.Open houses in Vanleer, Tenn., on Jan. 18 and Erin, Tenn., on Jan. 19, as well as a virtual open house on Jan. 27 were the first public-facing events since Kinder Morgan filed preliminary paperwork with the Federal Energy Regulatory Commission (FERC) in late October. The project, referred to in company documentation as the “Cumberland Lateral,” will move through the state and federal permitting process with cooperation from TVA, currently facing scrutiny from Congress about its continued reliance on fossil fuels. The proposed expansion of gas infrastructure is an early indication of how TVA plans toreplace aging coal units across the state.Based on preliminary maps, the pipeline would run underneath TVA’s high voltage transmission lines, which cut a direct route from the Tennessee Gas Pipeline to Cumberland City. Kinder Morgan began approaching landowners with easement contracts last summer about the project. “The contract they gave me, I don’t think anyone would sign something like that. It was a frightening contract,” said Barbara Miller, a resident of White Bluff, near the origin of the pipeline. She is one of hundreds of landowners in the path of the pipeline. “It is just illogical to me, with the climate being as bad as it is, that they would even consider this. They are presenting it as our first option. I may not be able to stop them, but I won’t just let it happen.”

Louisiana Marathon oil refinery explosion rocks Garyville; 1 injured --An explosion rocked a Louisiana oil refinery Monday, shaking homes and businesses as firefighters raced to douse the resulting blaze. One person was injured after the blast, heard for miles around, around 9:30 a.m. local time at the refinery in Garyville, Marathon Petroleum said in a statement. Video showed smoke billowing from the site. Garyville is about 40 miles west of New Orleans and 50 miles southeast of Baton Rouge. "The fire has been controlled, and all employees and contract workers have been accounted for," company spokesman Joe Gannon said. "One contract worker sustained an injury and is currently being evaluated at a local health care facility as a precaution." Air monitoring was deployed in the community, and emergency responders were notified, Gannon said. The state Department of Environmental Quality said some of the refinery was placed under a shelter-in-place order, and some workers were moved to a closed area to avoid contamination. The explosion and the fire were contained on Marathon property. The refinery, on the banks of the Mississippi River, has a crude oil refining capacity of 578,000 barrels per day, according to the company's website. A major expansion project was completed in 2009 that increased Garyville’s crude oil refining capacity, making it one of the largest refineries in the USA.

Marathon’s Huge Louisiana Refinery Rocked by Explosion, Fire — Marathon Petroleum Corp.’s oil refinery near New Orleans exploded into flames on Monday, threatening to crimp fuel supplies and raise pump prices at a time of already rampant inflation. The company’s Garyville, Louisiana, plant is one of the nation’s largest and a key supplier of gasoline, diesel and other fuels. Marathon said five people were injured. The blaze that started around 9:30 a.m. local time was declared extinguished about 4 1/2 hours later. The fire occurred in a hydrocracker, according to a person familiar with the operation, a crucial price of equipment that breaks heavy petroleum molecules down into lighter products such as diesel. If any damages are significant enough to halt production at the Garyville complex, regional fuel supplies may be stretched. Benchmark gasoline futures rose 1.6% on news of the fire. Demand has been on the rise at a time when more than 10% of Gulf Coast refining capacity already is idle for repairs and other maintenance work. Retail gasoline prices have climbed 7.5% this year, adding to 2021’s 46% advance, according to AAA. The last time prices were this high was the summer of 2014, when international oil prices were above $100 a barrel.

Explosion at huge Louisiana refinery; 6 minor injuries -(AP) — A huge Louisiana refinery was rocked by an explosion and fire Monday. Marathon Petroleum Corp. said six workers suffered minor injuries. Officials later gave the all-clear sign, but it was not immediately clear what caused the morning blast at the Marathon Petroleum Corp. plant in Garyville, between New Orleans and Baton Rouge. Six contract workers were injured, Marathon spokesperson Joe Gannon said in an emailed statement. He said three were treated at the plant and three were treated and released at a health care facility where they were taken as a precaution. “The safety of responders, employees, contractors, and the community are our top priority, and we will conduct a full investigation to determine the cause of the fire,” he wrote. According to Marathon’s website, the facility along the Mississippi River has a refining capacity of 578,000 barrels per calendar day, making it one of the largest in the country.

Texas oil refinery workers ratify Exxon labor contract offer (Reuters) -Union workers locked out of their jobs at a Texas oil refinery for nearly 10 months voted on Monday to accept an Exxon Mobil Corp contract offer, ceding to a key company demand that it have the right to determine plant assignments. About 600 United Steelworkers union members at the 369,024 barrel-per-day (bpd) refinery and Mobil 1 motor oil plant were locked out May 1 to preclude a wildcat strike, Exxon has said. The Beaumont, Texas, facility has continued to run since with managers and temporary workers. The contract allows Exxon to decide all assignments, an issue that led to a rejection vote in October. A quarter of assignments previously were determined by worker seniority. The contract also adds Martin Luther King Jr. Day as a paid holiday. Exxon said it was "thrilled" by the vote, adding employees would return to work "as soon as safely possible." The contract was made effective from Feb. 1, 2021. The six-year contract was approved by a vote of 214 to 133, according to USW International representative Bryan Gross. "The membership decided to accept the offer after 10 months of a fight," Gross said. "The company started the lockout; they can end it at any time." USW local 13-243 intends to continue with an unfair labor practices complaint, Gross said. The USW has alleged Exxon imposed the lockout to force removal of the union. Also to be decided is whether the USW will continue to represent the plant's hourly workers. The U.S. National Labor Relations Board (NLRB) oversaw a vote in November and December on removing the USW, a move sought by 30% of union members.m

US projected to give up net oil exporter status this year -- The United States is projected to lose its status as a net petroleum exporter this year as refiners and other customers seek out more product from elsewhere amid ballooning demand. This change in trade dynamics would disrupt what the Energy Information Administration described as the "historic shift" that took place in 2020, when the U.S. became a net exporter of petroleum products due to its strong production output and the effects the COVID-19 pandemic had on oil markets. "During 2020, COVID-19 mitigation efforts caused a drop in oil demand within the United States and internationally. International petroleum prices decreased in response to less consumption, which diminished incentives for key petroleum-exporting countries to increase production," the EIA said in detailing data from its recent Short-Term Energy Outlook. Now, demand is back, and the U.S. is expected to bring in an average of 3.9 million barrels of oil per day on an average basis for the year, building on the 19% growth in net crude oil imports in 2021. Jacques Rousseau, a managing director at ClearView Energy Partners, said the trade balance is largely determined by what refiners want. "U.S. refiners want more oil, but they don't necessarily want the oil produced in the United States," Rousseau said. "The U.S. produces mostly light oil, and many U.S. refiners prefer to process heavier oils.”

Plains All American Gets Back in Black as Oil Demand, Permian Activity Mount - Plains All American Pipeline LP said a rebound in oil demand and a corresponding jump in Permian Basin crude production bolstered its fourth quarter and full-year 2021 earnings, and the company expects continued momentum in the prolific region through this year and beyond. s The Houston-based company’s management team told analysts that the Permian, where Plains is focused, closed out 2021 producing roughly 5 million b/d, with crude output up about 540,000 b/d over year-end 2020. Plains expects the basin to add about 600,000 b/d annually for the next several years. CEO Willie Chiang noted during the fourth quarter earnings conference call earlier this month that crude demand had nearly returned to pre-pandemic levels by the end of 2021 – after a bruising 2020 – and that both U.S. and global oil prices had increased about 50%, recently hovering above $90/bbl. Plains, which owns and operates midstream infrastructure and provides logistics services for crude and natural gas delivery, said the surge in Permian activity boosted demand for its services. This, in turn, fueled a revenue revival. Its fourth quarter top line more than doubled to $13 billion from a year earlier, while its full-year revenue soared 80% to $42 billion.

Energy Transfer Eyes Adding Natural Gas Takeaway from Permian - Energy Transfer LP is gauging the interest of potential customers as it weighs building a natural gas pipeline from the Permian Basin to the Gulf Coast, management said during its fourth quarter and full-year 2021 earnings call with analysts. Citing “the growing need for additional natural gas takeaway from the Permian Basin,” co-CEO Tom Long said the project under consideration would combine new and existing pipelines to serve coastal gas hubs. A 260-mile newbuild pipeline would extend eastward from the Midland sub-basin along existing rights-of-way, interconnecting with Energy Transfer’s existing 36-inch pipeline near Fort Worth, TX, management said. “From there, it would interconnect with our existing assets with available capacity…to markets at Carthage, as well as to Katy, Beaumont, and the Houston Ship Channel and other markets along the Gulf Coast, including deliveries” to the Gillis and Henry hubs, Long said. The “bottom line is we will take Permian Basin molecules and deliver them to the best markets on the Gulf Coast,” said co-CEO Mackie McCrea. He told analysts the proposed project’s targeted gas takeaway capacity would be between 1.5 and 2 Bcf/d. “Given the proposed route and our ability to utilize existing assets, we believe we could complete construction…in two years or less” after taking a final investment decision, said Long. Energy Transfer also reported that it broke ground earlier this year on another project: the expected 1.65-Bcf/d-capacity Gulf Run Pipeline, which will carry natural gas from the Haynesville Shale to the Gulf Coast. The 135-mile interstate pipeline is backed by a 20-year, 1.1 Bcfd commitment by cornerstone shipper Golden Pass LNG LLC, Long said. In addition to the committed Golden Pass capacity, “we’ve got about 500-plus” Mcf/d of gas transport capacity “that we’re looking to sell. We’re aggressively tying that into our conversations for those producers that would like to reach the markets at the end of the Gulf Run,” said McCrea. Enable Midstream Partners LP, which Energy Transfer acquired in December, proposed Gulf Run in 2018. Long said construction on Gulf Run “is expected to be completed by the end of 2022.”

Permian, Haynesville Activity Climbs as US Drilling Total Continues Ascent - Owing to further growth in the Haynesville Shale and the Permian Basin, the U.S. rig count continued its upward climb during the week ended Friday (Feb. 25), adding five units to end at 650, according to the latest tally from Baker Hughes Co. Three natural gas-directed rigs and two oil-directed rigs were added in the United States for the week. That left the combined domestic tally nearly 250 units ahead of its year-earlier count of 402, according to the BKR numbers, which are based partly on data from Enverus. Land drilling increased by five units in the United States, while the Gulf of Mexico count remained unchanged at 12. Four horizontal units were added alongside one vertical rig, with directional units unchanged week/week. The Canadian rig count climbed four units overall to finish the week at 224, up from 163 in the year-earlier period. Net gains there included three oil-directed rigs and one miscellaneous rig. Broken down by major region, the Permian and Haynesville each added three rigs week/week, growing their respective counts to 309 and 61. The Cana Woodford added two rigs for the period, while the Mississippian Lime added one. The Granite Wash, meanwhile, saw two rigs exit for the period to drop its total to three. In the state-by-state count, BKR recorded a four-rig gain in Texas for the week, with Kansas, Louisiana and New Mexico each adding one rig to their respective totals. Oklahoma saw a two-rig decrease for the week, lowering its total to 51 overall, versus 17 in the year-ago period, BKR data show.

How Greenhouse Gases Released by the Oil and Gas Industry Far Exceed What Regulators Think They Know - —Wayne Christian wanted to brag, he said, rocking in his burgundy leather chair atop the dais of the powerful Railroad Commission of Texas. Colleagues and staff were doing “a darn good job,” and people who “gripe about the environmental issues” were misinformed. The self-congratulatory pause came during an October meeting of the agency that oversees a more than $400 billion oil and gas industry in the top-producing state of the top-producing country on a rapidly warming planet. Christian, a former Grammy-nominated gospel singer, complained that negative media reports had obscured “the good job our staff and this industry has done for a cleaner environment, the cleanest industrialized nation on the planet.” Then the chairman and his two fellow elected commissioners returned to their agenda and, without debate, approved 39 more requests from oil and gas companies seeking permission to burn off or vent natural gas that’s rich in methane, a powerful greenhouse gas. Over much of the last decade, oil and gas operators in Texas and a dozen other U.S. states have flared, or burned off, at least 3.5 trillion cubic feet of natural gas, according to an analysis of satellite data by the Howard Center for Investigative Journalism. That’s the greenhouse gas emissions equivalent of nearly 42 million cars driving for a year. The industry has also directly released unknown amounts of gas into the atmosphere through a process called venting. Between them, flaring and venting release a noxious cocktail of carbon dioxide, methane and other pollutants. Climate scientists have warned that without steep, immediate reductions in emissions of carbon dioxide and methane, the world will miss its chance to avert the deadliest and most destructive effects of climate change, which is already contributing to unprecedented wildfires, floods and other natural disasters across the planet. Epidemiologists have also linked flaring emissions to preterm births. Flaring has surged alongside the fracking boom that’s helped producers unlock previously unreachable fossil fuels and boosted local, state and national economies over the last decade and a half. The United States now produces enough oil and natural gas to be energy independent, its volumes surpassing Saudi Arabia and Russia. While companies sometimes flare and vent to relieve dangerous pressure buildups or perform equipment maintenance, cost is another motivator. Natural gas is far less profitable than oil, and it’s often cheaper for companies to get rid of the gas associated with operations than to transport and process it for sale. Regardless of the reasons, every act of flaring and venting releases methane, which traps heat 80 times more effectively than carbon dioxide over a 20-year period, making methane reduction one of the fastest routes to reducing global warming, experts say.

Oil and Gas Companies ‘Flare’ or ‘Vent’ Excess Natural Gas. It’s Like Burning Money—and it’s Bad for the Environment - When companies flare, they do more than burn natural gas. They burn money. Every year, U.S. oil and gas companies set fire to billions of cubic feet of natural gas and directly vent an additional unknown amount. These processes, known as flaring and venting, don’t just waste resources; they also pollute the atmosphere with hazardous, global-warming gases, such as methane. Companies argue that they flare and vent for safety and maintenance and because selling or reusing the gas is not financially feasible. The industry and its regulators even refer to this gas as “waste.” But experts say a valuable resource is being squandered because of weak regulations, ineffective tracking of flaring and venting, and a lack of economic incentives to capture and sell the gas. “The atmosphere is a free dumping place,” said Robert L. Kleinberg, senior research scholar at the Center on Global Energy Policy at Columbia University. “It’s like throwing garbage out the window back in the Middle Ages.”

Are U.S. Shale Firms Spending Enough On New Oil Projects? -The overwhelming majority of analysts expect oil prices to continue climbing, with Brent widely expected to top $100 per barrel by the end of this year. Prices at the pump are also rising, but this time it will take more than an SPR release for the Biden administration to curtail. And help is not coming. Gas prices are a sensitive matter for any administration. Just how sensitive they have become for the Biden administration was made clear last year when the U.S. President first asked and then insisted that OPEC increase its production of crude oil to boost supply at a time when it was falling well short of supply.OPEC, however, did not respond to the demands, forcing the White House to consider turning to the local oil industry—an industry it had demonstrated from the very beginning that it would not befriend. But there are needs, and Biden did discuss the oil supply situation with U.S. oil companies last year. This did not, however, lead to anything particularly productive. The rig count is rising, for sure, but it is not rising anywhere near fast enough to dampen retail fuel prices.Under normal circumstances, the oil industry would have responded to higher oil prices by increasing production, especially in shale, where this increase could be implemented a lot more quickly than in conventional oil fields. These are not normal circumstances, however. The oil industry is under pressure from shareholders, regulators, and the very government to not produce more oil because there is an energy transition underway, and we need to put a stop to our oil addiction.Despite abundant evidence that demand for oil and gas, even coal, is still quite robust, the pressure is paying off in that U.S. oil companies are now prioritizing returns to shareholders rather than growth. And they appear adamant that they will not change these priorities even if Brent hits not $100 but $200.“Whether it's $150 oil, $200 oil, or $100 oil, we're not going to change our growth plans," Pioneer Natural Resources' chief executive Scott Sheffield told Bloomberg in an interview last week. "If the president wants us to grow, I just don't think the industry can grow anyway."Also last week, Devon Energy's Rick Muncrief told the Financial Times, "In the back of everyone's minds is, 'When is it going to be [production] growth? . . . We have investors saying 'My gosh, if not now, when?' But for everyone saying that there's at least one other if not two others waiting to say, 'Gotcha! We knew that discipline would be shortlived.' We have learned our lesson."Speaking to Bloomberg in a separate interview, Muncrief also said, "We've had enough head fakes that we're going to be very thoughtful in ramping activity up. Let's face it: we all are recovering in one way or another from this pandemic. We're just slowly getting healthier and healthier over time, but you don't get there overnight."It's not just the desire to keep shareholders happy or take their time to fully recover that is motivating restraint. According to some, sizeable growth is physically impossible for most parts of the shale patch, even at these higher prices because the low-cost, economically viable drilling spots are running out. At the same time, higher costs resulting from inflation and continued shortages in some segments are adding pain to the industry, further motivating it to keep it cautious and wait with growth plans.

Frackers Push Into Once-Dead Shale Patches as Oil Nears $100 a Barrel -- Spurred by the highest oil prices in years, shale companies are moving drilling rigs back into oil fields that were all but abandoned a few years ago.Private oil producers are leading an industry return to places like the Anadarko Basin of Oklahoma and the DJ Basin in Colorado, where drilling had almost completely stopped in mid-2020 when those areas became unprofitable because of lower oil prices. Oil production in these marginal regions isn’t expected to move the needle in the global market, which is facing tight supplies, but it could help some oil producers who have lost money in past years. Output in the contiguous U.S. by year-end is expected to increase almost solely from the Permian Basin of West Texas and New Mexico, offset by declines elsewhere, according to energy consultant Wood Mackenzie. Some of the largest shale companies told investors this past week they plan to remain disciplined on capital spending and limit production growth. But with oil climbing above $90 a barrel, near the highest levels in more than seven years, some peripheral drilling, particularly by smaller companies, is now becoming more feasible even in places like Kansas and Utah, where wells produce far less oil than prolific fields in Texas and New Mexico. The regional revivals show the economic ripple effects when prices surge and mark a turnaround for companies hard-hit by the pandemic. Brent, the global oil benchmark, rose to $95.39 a barrel Monday, up almost 2%. Putting drilling rigs back to work in the Anadarko Basin wouldn’t have made sense when oil prices were around $45 a barrel or lower in 2020, with some companies needing at least $60-per-barrel oil, or even $80 a barrel, to increase investments, executives said. The average number of active drilling rigs in the Anadarko Basin has surged from the pandemic low of seven to 46, according to energy data analytics firm Enverus. The latest number is several more than the region had before oil prices collapsed because of economic shutdowns in the spring of 2020, and almost double the average of mid-2021. In the DJ Basin in Colorado, the average number of active rigs has risen to 15, up from four in 2020, Enverus data show. In the Powder River Basin in Wyoming and the Uinta Basin in Utah, which both saw rigs fall to zero in mid-2020, the rig count has increased to almost a dozen. All three areas need higher oil prices to make wells profitable.

Higher barrel of oil price could up Kansas crude production(KSNW) – There are no guarantees in life. But some oil producers say there may be more exploration in Kansas with oil prices where they are now.And that could mean jobs. Chris Toy with Knighton Oil Company in Wichita says the pandemic hit the oil and gas industry in Kansas like many other areas of the economy. “It’s going to take a while to unwind the pricing and the lack of manpower and the supply chain issues that we’ve had over the last 18 months,” said Toy. Both Toy and Kansas State University’s assistant professor of Geology, Behzad Ghanbarian, say COVID-19 hit the supply chain hard. But oil production in Kansas has jobs coming back.“Which means so many job opportunities in the past couple of years. Definitely, the pandemic impacted us in Kansas with oil and gas,” said Ghanbarian. “The 2020-2021 demand was down. Now that restrictions are going away, demand is up again.”

Federal court ruling delays U.S. oil and gas drilling permits — Permits to drill for oil and gas on U.S. public land will be delayed after a federal judge ruled against the Biden administration’s estimates of the social costs of greenhouse gas emissions, the Interior Department said Saturday. At issue is a 2021 executive order directing federal agencies weighing environmental permitting and regulatory decisions to consider a metric for estimating the societal costs from carbon dioxide associated with those moves. A Louisiana-based federal district judge last week blocked federal agencies from using that “social cost of carbon” plan, following a lawsuit by Louisiana and other states challenging the way it was imposed. The Biden administration could rely on a higher social cost of carbon to justify moves against fossil fuels and to counter climate change. But because the court ruling bars the federal government from adopting or relying on the metric, in the short term it upsets current work on federal drilling permits as well as new regulations. For instance, the Interior Department said the injunction is expected to lead to delays in permitting and leasing for federal oil and gas programs. “The Interior Department continues to move forward with reforms to address the significant shortcomings in the nation’s onshore and offshore oil and gas programs,” the agency said. “Specifically, the Department is committed to ensuring its programs account for climate impacts, provide a fair return to taxpayers, discourage speculation, hold operators responsible for remediation, and more fully include communities, tribal, state and local governments in decision-making.” The court’s ruling will have wide impact across the federal government, as the Biden administration moves to counter climate change and advance environmental rules. In a filing Saturday, the Justice Department said the social cost of the carbon decision will affect 21 rules being developed at the Energy Department, five at the Environmental Protection Agency, nine at the Transportation Department and three at the Interior Department. That includes a $2.3 billion Federal Transportation Administration grant program and a draft Interior Department rule to combat methane emissions and the waste of natural gas from wells on federal land, the administration said.

Biden Administration Halts New Drilling in Legal Fight Over Climate Costs - The Interior Department is pausing new federal oil and gas leases and permits after a judge blocked the government from weighing the cost of climate damage in decisions.— The Biden administration is indefinitely freezing decisions about new federal oil and gas drilling as part of a legal brawl with Republican-led states that could significantly impact President Biden’s plans to tackle climate change. The move, which came Saturday, was a response to a recent federal ruling that blocked the way the Biden administration was calculating the real cost of climate change, a figure that guides a range of government decisions, from pollution regulation to whether to permit new oil, gas or coal extraction on public lands and in federal waters. Under President Barack Obama, the government estimated that the damage from wildfires, floods and rising sea levels was $51 for every ton of carbon dioxide generated by burning fossil fuels. President Donald J. Trump lowered that number considerably, setting it at $7 or less per ton. Upon taking office, Mr. Biden revived the $51 level and set about updating it further — work that is underway. Known as the “social cost of carbon,” the metric is designed to underline the potential economic threats from greenhouse gas emissions so they can be compared to the economic benefits from acts like oil drilling. Economists and climate scientists say it is needed because climate-fueled heat waves, storms, wildfires and flooding already cost the United States billions of dollars annually but those costs are often not taken into account by policymakers. Factoring in those costs could make it harder for fossil fuel projects to win federal approval. But 10 Republican-led states sued the government, and on Feb. 11, Judge James D. Cain Jr. of the U.S. District Court for the Western District of Louisiana found that the Biden administration’s calculations “artificially increase the cost estimates” of oil and gas drilling. Judge Cain, a Trump appointee, said using the social cost of carbon in decision-making would harm his native Louisiana and other energy producing states. He issued an injunction preventing the administration from considering the metric. The Justice Department said it intends to appeal.

Environmentalists Claim Line 5 Tunnel Would Have Large Climate Consequences - Climate experts are presenting evidence to the Michigan Public Service Commission on why the proposed tunnel for Enbridge’s Line 5 pipeline would have a huge impact on the environment. It’s being seen as a huge milestone for environmentalist groups. “This is really history making, because for the first time in Michigan, the potential climate impacts of a proposed project, a fossil fuel infrastructure, are being considered during a hearing under the Michigan Environmental Protection Act,” said Kate Madigan, executive director of Michigan Climate Action Network. Madigan said denying the permit for a tunnel, as well as putting Line 5 out of commission, would be a step in the right direction. “We all know that we want to be moving into the future, there are lots of jobs in the future, it’s a cleaner future, and we’re also solving the climate crisis by moving faster in that direction as well,” said Madigan. Madigan further stated that if Enbridge is allowed to build a tunnel in the Straits of Mackinac, there could be a severe impact on the environment. “Allowing a line five tunnel would result in climate emissions, equal to about 10 coal power plants every year, or the exhaust from about six million cars every year,” explained Madigan.

Canadian Report Poses Alternatives to Line 5 Pipelines - New research from Environmental Defence Canada makes the case that there's a path forward to shutting down the Line 5 dual pipelines, which run under the Straits of Mackinac. The Canadian gas company Enbridge Energy plans to build a tunnel to contain the pipeline, but some engineers think the proposal poses safety risks. Canadian officials have supported the pipeline, citing the company's claims that closing it would put the country's oil and gas supply at risk. But Beth Wallace, conservation partnerships manager at the National Wildlife Federation's Great Lakes Regional Center, said this report shows alternatives that would not cause major disruptions. "Line 5 is almost 20 years past its useful engineered life, according to the experts that originally constructed the pipeline," said Wallace. "The location itself, 20% of the world's freshwater, drinking water for millions of people, it should have never been put there to begin with." The report outlines possible alternatives, such as rerouting some of the Line 5 supply to another pipeline, Line 78, and other fossil-fuel-transport options. Enbridge says Line 78 is full serving existing customers and cannot accommodate more, and that increasing fuel-transport capacity would take years to develop, and also harm the environment. Wallace added that another motivation for closing Line 5 - not covered in the report - is how fast the transition away from fossil fuels is moving, particularly in the automotive sector. She said the risks to the environment and Tribal water rights are too high to continue operating the pipeline. "Now that it's 70 years old, we have alternatives," said Wallace. "We're transitioning away from fossil fuels, there's just absolutely no reason why we can't start to transition, including with this particular pipeline." After Michigan Gov. Gretchen Whitmer ordered Line 5 to be shut down last year, the Canadian government invoked a 1977 treaty between the U.S. and Canada to block that action.

Dakota Access pipeline suffers U.S. Supreme Court setback (Reuters) -The U.S. Supreme Court on Tuesday rejected a bid led by Dakota Access oil pipeline operator Energy Transfer LP to avoid additional environmental review of a section that runs under an artificial lake and is opposed by nearby Native American tribes, leaving the pipeline vulnerable to being shut down. The justices left in place a lower court's decision that ordered the federal government to undertake a more intensive environmental study of the pipeline's route underneath Lake Oahe, which straddles the border of North Dakota and South Dakota. The pipeline, known as DAPL and open since 2017, will continue to operate as the review is carried out. "We call on the administration to close the pipeline until a full safety and environmental review is complete. DAPL never should have been authorized in the first place, and this administration is failing to address the persistent illegality of this pipeline," said Jan Hasselman, a lawyer for the environmental group Earthjustice who represents the Standing Rock Sioux Tribe. The Dakota Access pipeline has been the subject of a lengthy court battle between tribes seeking its closure and Dallas-based Energy Transfer. Whether the project should be shut down was not at issue in Energy Transfer's Supreme Court appeal. But Energy Transfer said in court papers that the pipeline remains "vulnerable to a shutdown" with the new environmental review pending. The company did not immediately reply to a request for comment. The Standing Rock Sioux Tribe, along with the Yankton Sioux Tribe, the Oglala Sioux Tribe and the Cheyenne River Sioux Tribe, have opposed the biggest pipeline out of the Bakken shale basin. The pipeline runs about 1,170 miles (1,885 km) from North Dakota to Illinois. The disputed section on federal property under Lake Oahe, an artificial reservoir on the Missouri River, is 1.7 miles (2.7 km) long. The tribes draw water from the lake for various purposes, including drinking, and also consider the waters of the Missouri River to be sacred. Their lawyers have said the tribes are worried about a potential oil spill. The tribes lobbied hard to prevent the easement under the lake from being approved and initially appeared to have succeeded when in 2016 the administration of Democratic former President Barack Obama said it would review its original action to allow construction. But after Republican Donald Trump became president in 2017, the government endorsed the original decision to grant an easement. Democratic President Joe Biden's administration urged the Supreme Court not to hear the appeal, saying the pipeline operator concerns about a shutdown were overstated.

North Dakota Oil Production Flat, But Gas Increases 1% - North Dakota’s Bakken Shale oil production under-performed in its most recent monthly statistics, reflecting a “serious shortage of hydraulic fracturing (fracking) crews,” the state’s chief oil/natural gas regulator Lynn Helms reported Tuesday. Helms told a webinar with reporters that he expects to see improvement in the summer months, but the May statistics — 34.9 million bbls (1.127 million b/d) compared to 33.6 million bbls (1.123 million b/d in April) — come with eight fracking crews in the field compared to the usual 20-25 such crews at the current level of prices around $60/bbl. “Operators are trying with all their resources to hire, but they are not finding employees who want to come back to the industry and come back to North Dakota, ” said Helms, director of the Department of Mineral Resources. “Pre-Covid-19 pandemic we had 25 frack crews, and during the deepest part of the pandemic we went down to one crew.” While oil production was “flat as a pancake,” Helms reported natural gas production rose 1% in May — 92.4 Bcf (2.98 Bcf/d), compared to 88.4 Bcf (2.94 Bcf/d in April). “So again we continue to see an increase in gas-oil ratios and more pressure on gas gathering infrastructure even when oil production stays flat,” Helms said. Natural gas prices have climbed up substantially, according to Helms, nearing $4/Mcf on Henry Hub. “This has relieved a lot of pressure on producers and operators because natural gas liquids [NGL] are following suit,” he said. “It’s now profitable to separate out NGLs and move them down a pipeline.” Red ink for gas processing and gas prices has gone away recently, Helms noted, adding that Bakken operators are “very slow” about adding rigs, which hit 23 on Tuesday compared to 20 and 19 in June and May, respectively. Helms reported that North Dakota is still losing ground in its efforts to remain ahead of hard-charging New Mexico as the second largest oil producing state. After outproducing New Mexico by 140,000 b/d in April, North Dakota’s margin decreased to 90,000 b/d in May, he said. “We’ll see just how long we can stay ahead in this race, but with only 23 rigs operating here and 75 in New Mexico, it is going to be a severe challenge [to stay in second place],” Helms noted. A combination of some new, tough flaring regulations and the continuing western drought could help dampen the New Mexico production, he said. Gas capture remains better than the state mandated target of 91% at the 92% level, but Helms is hoping to raise that higher in the months ahead. And in May permitting increased substantially with 75 permits issued, Helms said. Another milestone in May was one county, McKenzie, exceeding 5,000 wells. Helms said for comparison before the shale boom in 2006, North Dakota’s total statewide well count was 3,525. In contrast, the Fort Berthold Reservation statistics declined in May with rigs dropping by two and production by 19,000 b/d, and a big decrease in wells waiting on completion to 64, while the reservation Fee Lands fell back to 84% for gas capture during the month.

As Russian invasion spikes oil prices, observers say Bakken boost is unlikely - Russia's invasion of Ukraine drove already lofty global oil prices to their highest point in more than seven years Thursday morning, Feb. 24, but observers of the North Dakota oil industry aren’t holding their breath for the volatile situation in Europe to spur a drilling stampede here. Prices of Brent crude, the international benchmark, blew past $100 a barrel in the wake of Russia's offensive, while West Texas Intermediate, the U.S. benchmark, briefly jumped over $100 a barrel before both settled back to previous levels later in the day. Those prices had been climbing through much of the last year, but they rose quickly over recent weeks as the world waited to see whether Russian President Vladimir Putin's provocations would lead to deadly conflict. His decision to push troops into Ukraine Wednesday night spiked U.S. oil prices to a level not seen since 2014.Some experts also predicted Thursday that the Russian advance could precipitate a rise in gasoline prices. The national average Thursday afternoon was $3.54 a gallon, according to AAA , up slightly from the day before, while North Dakota prices sat at $3.39 a gallon. Prices at the pump in North Dakota have inched up in recent months and are nearly 80 cents per gallon above their level a year ago.Speculation over the impacts of war and international sanctions for Russia, which produces around 10% of the global oil supply, come as North Dakota’s oil industry has struggled to break away from a steady output of around 1.1 million barrels of production a day, down from a peak of more than 1.5 million barrels a day in November 2019. The climbing prices have also coincided with a more financially conservative approach from oil producersand shrinking industry appetites in the Bakken . “The Bakken has to compete now for every penny that it gets for investment,” North Dakota Petroleum Council President Ron Ness said. Many of North Dakota's top oil producers have focused their resources on paying down debts and building up their presence in New Mexico and Texas, and Ness predicted that even a continuation of recent price trends would be unlikely to prompt a substantial increase in drilling activity in North Dakota.

Activists Armed With Axes Attack Disputed Canadian Pipeline Site, Workers - Masked activists with axes and flare guns attacked the Canadian Coastal GasLink pipeline site, causing millions of dollars in damage as workers fled for their safety. About 20 people participated in the attack on Thursday in northern British Columbia, as they swung axes at vehicles and through truck windows. In one instance, the individuals tried to set a vehicle on fire while workers were still inside. No injuries from the workers have been reported, Coastal GasLink said in a statement. The attack comes as tension are high in Canada from so-called "Freedom Convoy" protests, for which Prime Minister Justin Trudeau invoked emergency powers for the first time in 50 years. The incident at Coastal GasLink is just the most recent demonstration they've seen regarding its 420-mile pipeline to the west coast of British Columbia as part of the LNG liquified natural gas project, Reuters reported. "This is truly disturbing," federal Industry Minister Francois-Philippe Champagne posted on Twitter. "Violence and illegal acts are not the way forward on any matter. We are a rule of law country and we cannot tolerate this type of violence and intimidation." Coastal GasLink alleged that attackers wearing camouflage surrounded the workers in a "highly planned and dangerous unprovoked assault." They entered the site by using grinders to cut the locks on the gate and then cut fuel lines and equipment hydraulics, causing dangerous leaks. The company said it's assessing the damage and environmental impact while working to contain and clean the mess.

"Multimillion Dollar Damage" As Canada's Anti-Vax Protesters Attack Site – Canadian police said Friday they were investigating a "violent confrontation" at a gas pipeline construction site in the western province of British Columbia. Shortly after midnight Thursday, police attempted to inspect the Coastal GasLink (CGL) construction site near Houston, where they say "approximately 20 people, some armed with axes" had been reported to be "attacking security guards and smashing their vehicle windows," according to a statement released by the Royal Canadian Mounted Police. On the road to the site, police discovered "downed trees, tar covered stumps, wire, boards with spikes in them, and fires" blocking the way. "As police worked their way through the debris and traps, several people threw smoke bombs and fire lit sticks at the police, injuring one officer," the statement added. When the police finally arrived at the worksite, they discovered "a multimillion dollar path of destruction." Photos accompanying the statement showed heavy machinery overturned or their windows and engines smashed, and a trailer with a wall ripped off. "This coordinated and criminal attack from multiple directions threatened the lives of several workers," said CGL in a statement. "In one of the most concerning acts, an attempt was made to set a vehicle on fire while workers were inside," the company, headquartered in neighboring Alberta province, added. The CGL pipeline aims to bring natural gas from eastern British Columbia to be liquified in a facility on the Pacific coast, before being exported. The project has stirred controversy in Canada for years. At the beginning of 2020, protesters against the pipeline mobilized across multiple Canadian provinces with some blocking rail traffic for weeks. At the moment, the CGL pipeline is 60 percent completed, the company said.

Trans Mountain says pipeline expansion cost surges to $21.4 billion -The federal government said on Friday it will halt any further public funding for the Trans Mountain oil pipeline expansion, after the government-owned company behind the project said costs had surged to $21.4 billion. Trans Mountain Corp also delayed the finish date of the expansion by a further nine months, dealing another blow to a project beset by regulatory delays and opposition.With the latest cost overrun, the government has told the Crown corporation to secure the necessary financing from public debt markets or financial institutions, Finance Minister Chrystia Freeland said.On Friday, Trans Mountain Corp. blamed the cost overrun on the impact of COVID-19 and extreme weather in B.C. that washed out roads across the south of the province and temporarily shut down the existing pipeline.It also said there had been increases in cost from design changes and improvements and to reflect financing costsThe company now expects to finish the expansion in the third quarter of 2023. The previous official cost estimate, made in February 2020, was $12.6 billion. It’s the second time since early 2020 that the cost estimate was raised, for a total of about 70 per cent. In 2017, just before Ottawa bought the company, it was pegged at $7.4 billionOnce completed, the Trans Mountain expansion would nearly triple the capacity of the existing oil pipeline running from Alberta to Burnaby to 890,000 barrels a day. It is the only pipeline carrying oil from Alberta to the West Coast.“This project was crazy from a climate perspective when it was supposed to cost $7.4 billion, but at $21.4 billion and rising, it is now economic madness,” said Keith Stewart, a strategist for Greenpeace Canada. “It’s time to cut our losses on this white elephant. “I want to assure Canadians that there will be no additional public money invested in Trans Mountain Corp,” Freeland said.The government has hired BMO Capital Markets and TD Securities to provide advice on raising more money.“Their analyzes confirm that public financing for the project is a feasible option that can be implemented swiftly. They have also confirmed that the project remains commercially viable,” Freeland added.“The progress we have made over the past two years is remarkable when you consider the unforeseen challenges we have faced including the global pandemic, wildfires and flooding,” CEO Ian Anderson said in a statement.Freeland reiterated that the Canadian government did not plan to be the long-term owner of the pipeline, and would launch a sale process in due course. In order to quell opposition to the project, the government has been in talks with First Nations groups that are willing to own as much as 100 per cent of the pipeline.

Trans Mountain to receive no more federal funding as costs surge - Finance Minister Chrystia Freeland, facing a gigantic bill from the federal government’s COVID-19 rescue effort, said the Trans Mountain pipeline will receive no more federal funding, even though the Crown corporation that owns the pipeline revealed on Feb. 18 that construction costs have surged by some 70 per cent.m “There will be no additional public money invested in TMC,” or Trans Mountain Corp., the company the federal government created when it bought the pipeline in 2018, Freeland said at a press conference. “TMC will secure necessary funding to complete the project through third-party financing, either in the public debt markets or with financial institutions.” Prime Minister Justin Trudeau’s government bought Trans Mountain from Kinder Morgan Inc. for $4.5 billion to keep the project alive. It would expand capacity to 800,000 barrels per day from 300,000, and give oil producers in Alberta a meaningful connection to Asian markets, which should result in higher prices. The oilpatch currently is at the mercy of conditions in the United States, and transportation bottlenecks tend to depress prices by creating a glut of Canadian bitumen. "There will be no additional public money invested in TMC,” or Trans Mountain Corp., the company the federal government created when it bought the pipeline in 2018, Freeland said at a press conference. “TMC will secure necessary funding to complete the project through third-party financing, either in the public debt markets or with financial institutions.” Prime Minister Justin Trudeau’s government bought Trans Mountain from Kinder Morgan Inc. for $4.5 billion to keep the project alive. It would expand capacity to 800,000 barrels per day from 300,000, and give oil producers in Alberta a meaningful connection to Asian markets, which should result in higher prices. The oilpatch currently is at the mercy of conditions in the United States, and transportation bottlenecks tend to depress prices by creating a glut of Canadian bitumen.

Eni Flows Oil From FPSO Offshore Mexico - Italian energy giant Eni has started production from the Miamte Floating Production, Storage, and Offloading (FPSO) vessel at the Miztón field offshore Mexico. The field is located within the Development Project in Area 1 in the Gulf of Mexico some 6 miles off the Tabasco coast. Eni said that the FPSO would increase the country´s production with an economical benefit for Mexico. Upon its arrival in Mexico in January 2022, Miamte FPSO has been connected to its Mooring System and went through pre-commissioning and integrated commissioning activities. Chinese shipbuilder Cosco Shipping Heavy Industry converted the FPSO from an oil tanker and delivered it in December last year to Eni. Following the first hydrocarbon introduction into the FPSO and two more platforms start-up in Amoca and Tecoalli fields, production will ramp up till the full field development will be completed by 2024. The FPSO has an oil treatment capacity of 90 kbopd and a gas treatment capacity of 75MMscfd. Eni added that the FPSO was built following the most stringent specification and the most advanced techniques for ensuring the safety of the operations for the people and the environment. The construction has involved 5 yards in 3 different countries including Mexico, maximizing the involvement of local suppliers. Early production from Miztón field started in June 2019, after only 3.5 years from the award of the Contractual Area 1, and 7 months from the Final Investment Decision (FID). Eni currently holds interests in eight exploration and production blocks – six as an operator – all located in the Sureste Basin in the Gulf of Mexico.

Vaca Muerta Shale's Natural Gas Pipe Said 'First Step to Going Global' --Argentina’s government has published a decree granting the natural gas transport concession for the Néstor Kirchner pipeline project to state natural gas buyer Integración Energética Argentina SA (Ieasa). Ieasa, which is also responsible for sourcing liquefied natural (LNG) imports in the country, has been given authorization to create a trust to construct the pipeline. The state firm is launching a tender and will be in charge of construction, maintenance and operation of the pipeline. The $1.5 billion, 24 million cubic meters/day (Mm3/d) Néstor Kirchner pipeline is to run from Tratayen in Neuquén to Salliqueló in Buenos Aires province. It would be key in allowing more natural gas from the Vaca Muerta shale formation to reach demand centers. Officials said the pipeline would be in operation by winter 2023. What Is In Second Phase? A second phase of the project would include upgrades to the Gasoducto Norte pipeline system, including flow reversal works and compression stations in the north of the country. Together, the two-phased project has a price tag of $3.5 billion. Ieasa is expected to issue an engineering, procurement and construction tender for the pipeline shortly. “A local firm will probably be involved,” Wood Mackenzie’s Ignacio Rooney told NGI from Buenos Aires. “There is ample experience in building gas pipelines in Argentina. I would expect them to work in a consortium with other firms, possibly international.” The Fiji Times » Peru oil spill remediation and cleaning could cost $65 million, Repsol CEO says (Reuters) – Clean-up and remediation costs after a major oil spill of more than 10,000 barrels at a Repsol facility in Peru could total more than $65 million, the Spanish company’s chief executive said on Thursday. “What we are seeing today in cost terms could be around $65 million more or less … this figure could increase in coming weeks,” Josu Jon Imaz told analysts on a conference call. “A main part of this figure is going to be covered by insurance companies and so on,” Imaz added. The spill occurred just off the coast of Lima on Jan. 15 when a tanker was rocked by waves caused by the eruption of a volcano in Tonga, Repsol and Peruvian officials have said.

Peru oil spill affected area the size of Paris, Repsol says — An executive of Spain’s Repsol SA said on Friday a large oil spill off the coast of Peru’s capital Lima affected an area of 106 square kilometers, the size of the French capital Paris or almost twice the size of Manhattan. The spill of over 10,000 barrels of oil in January is one of the largest environmental disasters to affect Peru and its Pacific coast biodiversity, including environmentally protected islands. While the company says it is close to cleaning up the ocean, it also acknowledged in a press conference on Friday that it will have to monitor environmental conditions for several months ahead, although it downplayed any negative effects. “The models we are seeing indicate that the (environmental) effects should be limited,” said Jaime Fernandez-Cuesta, Repsol’s CEO in Peru. “This I’m saying with a lot of caution.” The incident took place on Jan. 15 as oil was being discharged onto Repsol’s La Pampilla refinery, Peru’s largest. Repsol first blamed the eruption of a volcano in Tonga for causing abnormal waves that triggered the spill. Then it said the oil tanker had shifted positions abnormally during the discharge, allegations the tanker company denies. Prosecutors are also investigating the incident and have banned Fernández-Cuesta and three other executives from leaving Peru for the next 18 months. Fernández-Cuesta told reporters the spill lasted only minutes, although he declined to give a specific timeframe, citing an ongoing investigation. “The spill lasted minutes, in no case was it a larger amount of time than a few minutes,” he said. Repsol has so far paid 1.5 million soles ($405,405) in fines, executives said, a number that could rise. The company has estimated the cleaning up tasks – excluding fines – will cost about $65 million.

Deadly Nigerian oil-blast ship has peers all over the world — The decades-old, oil-storage ship that blew up off the coast of Nigeria recently -- killing some of its crew and spewing its contents into the Atlantic Ocean -- is one of many vessels of similar vintage dotted across the globe. That ship, still partially floating above the surface, was first launched 46 years ago when U.S. President Gerald Ford still held office and was reconfigured for storage 25 years ago. There are over 30 others still in operation that were originally constructed before 1977, according to data compiled by Bloomberg. Vessels like Trinity Spirit typically start out as oil tankers before reaching the end of their useful lives as transporters -- typically a lifespan of not more than 20 years. To prolong their worth as assets, they get converted to vessels that float -- usually in a single location -- producing or just storing crude for other ships to collect. They’re known as FPSOs or FSOs and they can go on for years. “It is a challenge for FPSOs in the late stage of their lifetime, especially when there has not been sufficient maintenance and necessary upgrade, as corrosion develops and equipment condition gets worse, and system integrity is a headache,” said Zhenying Wu, a senior analyst for Rystad Energy. The ships need to withstand harsh environmental conditions and extremes of weather, such as huge storms, rogue waves and big temperature swings. While most are rigorously looked after, their need for maintenance increases with age. The American Bureau of Shipping, which classifies vessels for their operating safety, last year raised the need to address safety issues such as structural integrity and maintenance challenges around the global fleet of FPSOs, with over 50 of them reaching the end of their design life in the next five years. More than half are over 30 years old and a quarter over 40 years old. The cause of the Trinity Spirit accident that killed at least two crew has yet to be determined along with the amount of crude spilled, according to the National Oil Spill Detection and Response Agency. Its conversion 25 years ago means it was at the end of a typical life of a storage ship after it’s been reconfigured.

Germany halts approval of gas pipeline Nord Stream 2 after Russia's actions - Germany on Tuesday halted the certification of the Nord Stream 2 gas pipeline designed to bring natural gas from Russia directly to Europe, after Russian President Vladimir Putin recognized breakaway parts of eastern Ukraine and ordered troops into the region. Germany's chancellor, Olaf Scholz, said that his country would not accept the recognition of the two self-proclaimed, pro-Russian separatist regions in the Donbas area of eastern Ukraine, and that Germany had to reassess the situation regarding Nord Stream 2. "In light of the most recent developments we must reassess the situation in particular regarding Nord Stream 2," Scholz said at a news conference. Scholz said he'd asked the German Economy Ministry to take steps "to make sure that this pipeline cannot be certified at this point in time, and without this certification Nord Stream 2 cannot operate." "The appropriate departments of the Economy Ministry will make a new assessment of the security of our supply in light of what has changed in last few days," he added. Germany has been accused of failing to act decisively over the Russian threat to Ukraine but on Tuesday Scholz said Europe faced "difficult hours" ahead and added that "almost 80 years after the end of the Second World War, we might see a new war in Eastern Europe. It is our task to avert such a disaster and I call upon Russia once more to contribute their share." The $11 billion pipeline is designed to double the amount of gas flowing from Russia to Germany and it was completed late last year. But German regulators had yet to give the green light to the pipeline to officially allow it to operate. In the course of a dramatic few hours on Monday evening, Putin said Russia would recognize the independence of the two self-proclaimed and pro-Russian republics, and then said he would send Russian troops to the region on a "peacekeeping" mission. Many fear that the deployment of troops into the so-called Donetsk People's Republic and Luhansk People's Republic is a precursor to a full-scale invasion of Ukraine.

German chancellor says the West has to 'work very hard' to find energy sources beyond Russia -- German Chancellor Olaf Scholz has told CNBC that the West has to work "very hard" to find alternative sources of energy beyond Russia as talks of potential sanctions intensify.Speaking to CNBC's Hadley Gamble at the annual Munich Security Conference, Scholz stressed that much of the West is reliant upon Russia's energy supplies."There is a lot of exports of oil, coal and gas from Russia to many countries – there is also a big [export] of oil to the United States," he said Saturday."So we all have to work very hard to produce a situation where we have alternatives. It's necessary that we also make it feasible that there is good cooperation – that we come back to a situation where there is not this confrontation … This is what we are working for." Russia was the largest supplier of natural gas and oil to the European Unionlast year. It follows much talk from Western officials over recent weeks about sanctioning Russia — and its energy industry in particular — if it invades Ukraine. Russia has repeatedly denied that it is planning to invade its neighbor but has amassed an estimated 150,000 troops near the border.German Chancellor Olaf Scholz says 'we are not willing to threaten Russia' over Ukraine There were also multiple claims of shelling across cease-fire lines from both Russian and Ukrainian sources this week. On Saturday, as part of a "planned exercise," Russia launched ballistic and cruise missiles in a show of its nuclear readiness.European Commission President Ursula von der Leyen told CNBC earlier Saturday that energy sanctions against Russian gas giant Gazprom remained "on the table" if an invasion took place.However, such sanctions could have significant financial implications for Ukraine, as a number of Russia's gas pipelines run through the country. Scholz insisted "we are taking care" of the issue.

Why Europe is so dependent on Russia for natural gas - Europeans have been suffering under painfully high energy prices in the lead-up to Russia launching an attack on Ukraine on Thursday morning. The European Union is especially dependent on Russian energy, which is becoming increasingly unsustainable.So how did the region become so dependent on Putin's Russia for its energy supplies?In the 1960s and 1970s, Europe was supplying roughly the same amount of natural gas that it was using, according to Tim Schittekatte, a research scientist at the MIT Energy Initiative and an expert on the European grid and the issues it is facing.Production of natural gas in Europe decreased because the North Sea gas fields, which are particularly important sources of natural gas production from the U.K. and the Netherlands, were depleted. And later the Netherlands announced they were completely shutting down their Groningen gas fields because of earthquakes.Over the same period, the EU has been reducing its dependence on coal to reach its climate goal of achieving carbon neutrality by 2050 and cutting emissions by at least 55% by 2030. Currently, about 20% of EU's electricitycomes from coal production.Since 2012, the EU has decreased its coal power generation by about a third, according to the Directorate-General for Energy for the EU.In addition, Germany summarily rejected investments in nuclear energy with its Atomic Energy Act in 2011, a decision made in response to the Fukushima nuclear disaster in 2011. Only 13% of Europe's energy now comes from nuclear power.About 25% of the EU's energy consumption comes from natural gas, according to the Directorate-General for Energy for the EU. Oil and petroleum (32%), renewable energy and biofuels (18%), and solid fossil fuels (11%) make up the rest.That dependence on natural gas means a dependence on Russia. Today, the EU is the largest importer of natural gas in the world, according to theDirectorate-General for Energy for the EU, with the largest share of its gas coming from Russia (41%), Norway (24%) and Algeria (11%)."In terms of foreign suppliers, Russian gas was just the cheapest. Rather than diversifying suppliers, routes to import Russian gas were diversified," Schittekatte told CNBC.In addition to Russian's natural gas being the cheapest, the Russian gas reserves were larger than any other nearby sources, Georg Erdmann, the former chair for the Department of Energy Systems at the Institute for Energy Technology at Berlin University of Technology, told CNBC. For the former German Democratic Republic (East Germany), "Russian gas and oil where the only affordable energy imports," Erdmann told CNBC. "Until today Russia fulfilled all long term contracts.... So the gas industry assumes Russia to be a rather reliable commercial partner."

EU plans to cut cord from Russian gas -As the Russia-Ukraine crisis continues to escalate, the European Union is making long-term plans to overhaul its energy supply chain, following decades of dependence on Moscow, The Washington Post reported.This change in strategy, expected to be announced on March 2, would call for a 40 percent reduction in fossil fuel use by 2030, according to the Post. The strategy would also require European energy companies to fill their storage tanks with gas this summer to reduce reliance on Russian gas next winter, the Post reported.These plans — which would require the approval of all 27 EU members — would allow governments to offer subsidies to customers struggling with energy bills, while accelerating permits for renewable energy projects, according to the Post. Yet Europe would still depend on Russia for the foreseeable future, as a total “shift can’t happen overnight,” the Post reported.“In the short and medium term, there are no good options,” Nathalie Tocci, head of the Italian Institute of International Affairs and an adviser to E.U. policymakers in Brussels, told the Post. “The problem is not now, but next fall. And by next fall we will not have found the silver bullet.”

Reviving the MidCat Natural Gas Pipeline Is Critical to Answering Russian Aggression - As U.S. and EU officials jet around the world to identify additional energy supplies for a Europe in crisis, Spain and Portugal are breathing new life into a stalled natural gas interconnector that carries profound implications. While this all plays out amidst the backdrop of mounting Russia-Ukraine tensions, the question remains whether France and the EU will lend their support to the project. President Emmanuel Macron may simultaneously be the greatest hope and challenge to the project’s success and, therefore, European energy security. French advocacy for the transnational interconnector would go far in advancing EU solidarity, particularly as France occupies the critical position of European Council President and President Macron seeks to fill the leadership void left by Chancellor Angela Merkel’s departure. The MidCat Pipeline, which would connect the Iberian Peninsula’s significant natural gas import capacity to the broader EU market through France, has reemerged as a point of interest for the EU and even NATO. The newfound attention is a bold recognition of the pipeline’s critical importance to transatlantic interests, particularly as the bloc seeks to mitigate chronic exposure to Russian energy manipulation and political interference. Just as Nord Stream 2 stokes further division and dependence, MidCat provides a feasible pathway for integration and diversification. But just how much can MidCat help alleviate Europe’s historical dependence on Russian supplies? Together, Spain and Portugal possess eight LNG import terminals capable of receiving more significant volumes today. In total, these terminals equate to a nominal import capacity of approximately 76 billion cubic meters per annum (bcm/a). Of course, this doesn’t factor in the direct pipeline links between Spain and North Africa. Algeria alone offers an additional five bcm/a. To put this in perspective, the Iberian Peninsula represents approximately 34 percent of total EU LNG import capacity. Unfortunately, this potential is primarily confined to the peninsula itself, as a lack of interconnections with the French system and the broader EU market creates a significant bottleneck. The result is the underutilization of import terminals and the very market illiquidity that the EU has attempted to overcome. Beyond doubling the volumes capable of being dispatched from the peninsula, MidCat enhances the long-term viability of transatlantic clean energy trade. The more fully utilized import capacity of Spain and Portugal would provide new opportunities for long-term contracts with U.S. LNG suppliers - contracts that offer greater consumer protection from price volatility.

Biden moves ahead with sanctions on company behind Nord Stream pipeline - President Joe Biden said Wednesday he was moving ahead with sanctions on the company in charge of building Russia's Nord Stream 2 gas pipeline after blocking such measures last year using a national security waiver."Today, I have directed my administration to impose sanctions on Nord Stream 2 AG and its corporate officers. These steps are another piece of our initial tranche of sanctions in response to Russia's actions in Ukraine. As I have made clear, we will not hesitate to take further steps if Russia continues to escalate," Biden wrote in a statement."Through his actions, President (Vladimir) Putin has provided the world with an overwhelming incentive to move away from Russian gas and to other forms of energy," Biden wrote.The move is part of a series of penalties the US and its allies have imposed on Russia this week in response to Putin's recognition of separatist territories in eastern Ukraine as independent.On Wednesday, signs were emerging of escalation in the crisis, despite the new raft of sanctions. Sources including Latvia's Prime Minister told CNN that Russian troops have moved into the eastern region of Ukraine that Russia has now recognized as independent.

Will Fresh US-EU Sanctions Hurt the EU More Than Russia? - The sanctions could end up causing more pain to U.S. allies in Europe than Russia itself, which will probably use this opportunity to take another step closer to autarky. Following Vladimir Putin’s recognition of the breakaway regions in eastern Ukraine, the US has said it will unveil a raft of new sanctions against Russia on Tuesday. This follows a Reutersreport on Monday, citing “three unnamed sources familiar with the matter,” that new sanctions could include could include a measure that would prevent financial institutions in the U.S. from carrying out transactions with Russian banks. This is apparently the ace up Washington’s sleeve. Finally, sanctions on Russia that will really bite. However, as Reuters points out in the article, the White House hasn’t publicly announced plans to force US banks to sever relationships with Russian financial institutions. But behind closed doors that is what is allegedly happening — again, according to Reuters’ three unnamed sources: They aim to hurt the Russian economy by cutting so-called ‘correspondent’ banking relationships between targeted Russian banks and U.S. lenders that enable international payments. The sources also said the U.S. would place certain Russian individuals and companies on the Specially Designated Nationals list. It would effectively kick them out of the U.S. banking system, ban trade with Americans and freeze their U.S. assets. Experts believe it would be a meaningful blow to sanctioned bodies, as it would make it difficult to deal in U.S. dollars – the global reserve currency. Severing transactions between Russian banks and U.S. financial institutions could have a bigger impact on Russia’s economy than the sanctions unleashed to date, but they could also backfire. Not only could it hurt Russia’s economy by further weakening the ruble, which is currently close to a historic low against the dollar, and turbocharging inflation (already at 8.73% in January); it could also set off ripple effects across Europe, which has far closer economic ties with Russia than the U.S. The Italian lender Unicredit has already backed out of a potential acquisition in Russia over fears of sanctions. One of the biggest concerns in Europe is that the EU’s package of sanctions against Russia will include the continued closure of Nord Stream 2, the 750-mile, $11 billion underwater gas pipeline connecting Russia with Germany. The pipeline was finished in September 2021 but is still yet to receive final certification from German regulators. If it ever becomes operational, it will significantly boost deliveries of gas directly from Russia to Germany and then on to other parts of Europe, relieving some of the pressure in energy markets. But the pipeline has faced concerted opposition from the United States, the United Kingdom, Ukraine and other European countries, which have been calling for the project’s cancellation ever since its launch in 2015 over fears that it will significantly increase Russian influence over Europe. Of course, the United States, as the world’s largest producer of natural gas, has a direct financial interest in preventing Russia, the world’s second largest producer, from increasing its market share in Europe.Russia is the EU’s fifth largest trading partner, with imports of $188 billion and exports of $94 billion in 2021, according to Statista. And many European countries, including Germany, are massively dependent on imports of Russian natural gas. Around a dozen European countries procured more than half of their natural gas requirements from Russia in 2020,according to the European Union Agency for the Cooperation of Energy Regulators (ACER).

Gas is key in the Russia-Ukraine conflict — and supply could be disrupted around the world -Russian forces on Thursday launched their long-feared attack on Ukraine, sending shockwaves through financial markets and ratcheting up fears about the ramifications for gas supplies around the world. Russian President Vladimir Putin cast aside international condemnation and the first tranche of sanctions by declaring the beginning of a "special military operation" aimed at the "demilitarization" of Ukraine. Russian forces have reportedly fired missiles at military control centers in Kyiv and sirens were heard throughout the capital. NBC News reporters on the ground also saw and heard explosions in Kyiv and in other cities across the country. The crisis in Ukraine is changing rapidly and specific reports from the country are difficult to confirm. Ukrainian Foreign Minister Dmytro Kuleba said via Twitter on Thursday that Putin had "launched a full-scale invasion," of the country, which he described as "a war of aggression." Kuleba called on world leaders to stop the Russian president. "The time to act is now," he said. European gas prices jumped on news of the invasion, while international benchmark Brent crude futures surpassed $100 a barrel for the first time since 2014. "While Western governments probably will exempt energy transactions from sanctions, the blizzard of new restrictions will force many traders to be exceedingly cautious in handling Russian barrels," analysts at political risk consultancy Eurasia Group said. "Gas transiting Ukraine will likely be disrupted, affecting supplies to several central and eastern European countries, and raising gas prices in Europe," they added. What if Russia turns off the gas? Russia's invasion of Ukraine represents one of the worst security crises in Europe in decades. It is also expected to have far-reaching implications for the global economy, particularly given Russia's role as the world's second-largest producer of natural gas and one of the world's largest oil-producing nations. For several months, Russia has been accused of intentionally disrupting gas supplies to leverage its role as a major energy supplier to Europe amid an escalating dispute with Ukraine. Indeed, this was even the subject of a rare public rebuke from the International Energy Agency, which called on Russia to increase gas availability to Europe and ensure storage levels were filled to adequate levels during a period of high winter demand.

Energy prices skyrocket after Russia attacks Ukraine - Gas and oil prices in Europe skyrocketed after Russia attacked Ukraine early Thursday morning, February 24, 2022. Meanwhile, stock markets around the world tumbled amid rising concerns while Euro plunged to its lowest level against the dollar since June 2020 and hit a nearly 7-year low against the Swiss franc. Europe relies on Russia for nearly 40% of its natural gas and 25% of its oil. Fears that a war could disrupt global energy supplies sent Brent crude jumping as much as 9% to $105.79 a barrel as futures linked to TTF, Europe’s wholesale gas price, surged 60% to €141 per megawatt-hour.1 The extent of the Russian military operation ordered by President Vladimir Putin appeared to surprise some market participants, and could explain the powerful jump in prices, said Richard Bronze, head of geopolitics at Energy Aspects.2 "There was a mistaken view in the market as recently as yesterday that either Putin had gotten enough to pause or that things would be limited to the Donbas," he said. "Oil and natural gas prices have become the crisis’ fear barometer," said Norbert Rücker of Julius Baer. "Any disruption of flows between Russia and Europe, due to damage or sanctions, would drastically add to the already present supply scarcity." The crisis in Ukraine means that new gas contracts with Russia are inconceivable, the chair of Germany’s foreign affairs committee said Thursday.3 Earlier this week, Germany suspended the certification of the Nord Stream 2 pipeline, putting the energy project with Russia on hold indefinitely. NS2 is aimed at increasing Russia’s capacity to deliver gas to Germany and other EU countries via the Baltic Sea, bypassing transit countries such as Ukraine. "It’s all about duration now -- how long does geopolitics remain so unsettled that oil and other commodities stay very high? The longer that occurs, the more it will stoke inflation and the more of a headwind it will put on economic growth in the coming months and quarters," said Tom Essaye, founder of The Sevens Report.4 "And that sets up a potentially bad scenario where we have the Fed tightening, we have very high commodity prices putting a headwind on growth, and that will lead to an economic slowdown." If you think it can't get worse, think again. Vigilant citizens in neighboring countries, Europe, and around the world should have all their open plans finalized now.

European NatGas Jumps 60% On Ukraine Turmoil - Conflict in Ukraine continues to send European energy prices higher Thursday morning. Dutch TTF Gas Futures are up a staggering 60%, the most since 2005, in their fourth consecutive daily gain. German power contracts for March soared as much as 42%. Crude also increased, with Brent futures trading as high as $105 a barrel.Despite the Russian invasion of Ukraine, the US is unlikely to target Russian oil in the next round of sanctions for fear energy prices would continue to skyrocket. "I expect stringent sanctions, but nothing on energy -- bankers, ships and oligarch," Bob McNally, a former White House official who is president of consultant Rapidan Energy Group, told Bloomberg. "They don't want to add upward pressure on oil prices -- they are absolutely terrified," McNally said. Meanwhile, Putin's right-hand man, Dmitry Medvedev, warned on Tuesday that Germany's move to halt the process of certifying the Nord Stream 2 natgas pipeline would only result in soaring natural gas prices for the continent running low on supplies. German Chancellor Olaf Scholz has issued an order to halt the process of certifying the Nord Stream 2 gas pipeline. Well. Welcome to the brave new world where Europeans are very soon going to pay €2.000 for 1.000 cubic meters of natural gas!— Dmitry Medvedev (@MedvedevRussiaE) February 22, 2022 Rising energy prices due to geopolitical turmoil in Ukraine will unleash more inflationary pressures that could cause a global economic slowdown and an environment that Nomura's Charlie McElligott says could produce stagflation.

Massive Gas Imports Route May Stop at Any Point - As the Russia-Ukraine crisis unfolds, the massive gas imports route via Ukrainian trunk pipelines may stop at any point. That’s according to GlobalData’s senior oil and gas analyst Veronika Kustkova, who warned that this brings an immediate threat to Europe while withdrawals from gas storages continue to rise. Kustkova added, however, that it is doubtful these gas storages will reach 2018 historical lows. “European demand for gas has increased since 2020 and is expected to stay at the same level in the short term, placing Europe in an uncomfortable position as Qatar has already declared they will not be able to fulfil the supply shortage,” Kustkova said in a statement sent to Rigzone. “According to Eurostat and GlobalData analysis, Russian imports made up 45 percent of EU imports in the first 10 months of 2021. Similarly, Russian gas exports are reliant on Europe and Turkey, which made up around 78 percent in 2021 despite increasing volumes going to China,” the analyst added in the statement. “An alternative source of gas is U.S. LNG imports, but volumes will be constrained by capacity. However, medium-term increases will depend on new projects with the likes of the Rio Grande, which has already seen a delay,” Kustkova continued. The GlobalData analyst highlighted that in the past two months GlobalData has seen U.S. LNG imports to Europe taking over from Russian pipeline gas for the first time in history. In a statement posted on its website early on February 24, which was translated from Ukrainian, the Ukraine energy ministry outlined that Russia was trying to destroy Ukraine’s military and critical infrastructure. In that statement, the ministry, which said Ukraine’s armed forces had repelled an air attack, noted that the power system of the country was operating “normally” and said the availability of the necessary energy resources was “fully ensured”. “From … [Thursday], the UES of Ukraine and burshtyn TPP island are synchronized into one power system operating autonomously from Russia and Belarus in a single regulatory block with the Moldovan energy system,” the ministry said in the statement. “At all sites, security and security equipment have been strengthened. Systematic monitoring of the stability of enterprises and networks of the energy sector is taking place,” the ministry added in the statement.

Biden: Sanctions will 'allow energy payments to continue' - President Biden today announced a new round of sanctions on Russia after President Vladimir Putin’s invasion of Ukraine but said the penalties are intended to skirt impacts to the energy sector. “In our sanctions package, we specifically designed to allow energy payments to continue. We are closely monitoring energy supplies for any disruption,” Biden said in a speech from the White House this afternoon. “We’ve been coordinating with major oil-producing and -consuming countries toward our common interest to secure global energy supply.” Biden nonetheless said the sanctions from the U.S. and its allies would be “severe.” They penalize four major Russian banks, including VTB, Russia’s second largest, freezing their American assets. The sanctions will cut off major Russian state-owned companies, penalize additional Russian billionaires and restrict access to technology exports, Biden said. “Putin is the aggressor. Putin chose this war,” Biden said. “And now he and his country will bear the consequences.” The president’s speech came shortly after press reports that Russia had taken control of the Chernobyl nuclear power plant, the site of the worst nuclear disaster in world history situated north of Kyiv near the border with Belarus. Biden and the European Union have stopped short of cutting Russia off from SWIFT, the global banking payment system. Ukrainian leaders have been asking nations to ban Russia from the system, which could impact its oil and gas industry. Biden said it remains an option but “that’s not the position that the rest of Europe wishes to take.” “The sanctions that we have proposed on all their banks have equal consequence, maybe more consequence than SWIFT,” Biden said. The U.S. and other nations imposed an initial round of sanctions on Russia earlier this week targeting Russian banks and oligarchs. Germany has also suspended certification of the Nord Stream 2 natural gas pipeline. Leaders of the Group of Seven are in agreement to “limit Russia’s ability to do business in dollars, euros, pounds and yen,” Biden said. He also said the U.S. would send additional troops to support NATO allies in Eastern Europe but reiterated that they would not get involved on the ground in Ukraine.

UK, Europe gas prices plunge a day after record surge - British and Dutch gas plunged on Friday, just a day after posting historic gains on account of the Russian invasion of Ukraine.In the Dutch gas market – a closely watched measure for European prices – the front-month contract fell by 27.50 euros to 108.50 euros per megawatt hour (MWh) by 0816 GMT, having risen to an intraday high of around 140 euros/MWh on Thursday.The price for April was down 5.50 euros at 110.50 euros/MWh, while the May contract was down 16.50 euros at 107.50 euros/MWh.In the UK, the weekend gas price was down 15.00 pence at 261.00 pence per therm, while the summer 2020 contract slumped by 70.00 pence to 260.00 p/therm.On Thursday, the price of British gas for next-day delivery jumped 53 percent to 326p per therm as the Russian invasion stoked fears of a major disruption to global energy supplies. Similarly, Dutch futures had also jumped 57 percent on contracts for delivery in March.In the United States, the March New York Mercantile exchange natural gas futures contract approached $5.00, up more than 30 cents early Thursday, before giving back the gains. The contract settled at $4.568, down 5.5 cents on the day.According to US Global Investors Inc. head trader Mike Matousek, the war in Ukraine threatens the flow of gas to Europe at a time when natural gas consumption is near peak levels during the late-season throes of winter. “This presents the potential for major energy supply headwinds,” Matousek told NGI.

Cargill Ship Hit In Missile Attack In Ukraine Waters - Star Tribune reports a vessel chartered by Cargill Inc., a Minnesota-based agribusiness giant, was hit in a missile attack after leaving a deep-sea port on the outskirts of Odessa on Thursday. "Right now, our priority is the safety of our people in the region. This is a rapidly evolving situation with a great deal of uncertainty," said April Nelson, a Cargill spokeswoman, in an e-mail. "We are currently gathering information and assessing potential impacts to Cargill and our customers." Cargill said that the crew was safe, and the vessel was rerouted to Romania to undergo a damage report. Cargill has a majority stake at a port in the Odessa port, exporting grains and oils worldwide. The company didn't name the vessel. Since the attack on Thursday, Cargill implemented contingency plans as Russia invades Ukraine for the second day. Its plan is to concentrate on guaranteeing its global customers' food supplies. Ukraine and Russia account for 25% of global trade in wheat and 20% of corn sales. With port and railway closures in Ukraine, Bloomberg Agriculture Spot Index has risen to record highs.

Oil Tanker Owners Avoid Russian Crude --Russia relies on tankers for about two thirds of its crude exports. Oil tanker owners are avoiding offering their ships to collect crude from Russia as they wait to see what sanctions the country might face after invading Ukraine. Two shipbrokers and three owners said owners are currently unwilling to make offers to collect Russian barrels. The owners said that oil-freight transportation costs are also very low anyway, making it even more unattractive to do so. Russia relies on tankers for about two thirds of its crude exports meaning that any prolonged disruption to shipping would be more serious. The country’s oil has already been already selling at the deepest discounts in years to an international benchmark as traders fret over how the Ukraine situation will play out. The West is threatening further punishing sanctions after Russian forces attacked targets across Ukraine and President Vladimir Putin vowed to “demilitarize” the country and replace its leaders, triggering the worst security crisis in Europe since World War II. Companies that are due to carry out contracts in the Black Sea will now find themselves in the difficult position of deciding whether to perform or to turn back, each with costly consequences, said Andrew Brooker, managing director at marine insurance broker Latitude Brokers. Insurers would decline to cover a trip that could soon breach sanctions. On the other hand, not fulfilling contracts also runs the risk of litigation.

"Nothing Compares To The Chaos We're Seeing Now": Tanker Rates On Russian Crude Routes Soar Sixfold In One Day Amid War Fears - As OilPrice reports, amid a general unwillingness of tanker owners to send their vessels to Russian ports, the freight rates for a medium-sized tanker to load Russian crude jumped nearly threefold on Thursday from Wednesday, shipbrokers and traders told Bloomberg.The freight rate to hire an Aframax tanker on the Baltic Sea to Europe route surged after Russia invaded Ukraine, while owners of oil tankers had already started to avoid Russian ports because of both the military invasion of Ukraine and apprehension that sanctions for oil could also come soon. Rates for oil tankers on the TD6 Black Sea-to-Med route surged more than six-fold, by $90,752/day, to $107,382/day from under 17,000, according to data from the Baltic Exchange in London. That’s the highest since April 2020. Baltic Sea oil tanker rates have also soared. Ships on the TD7 Baltic-to- U.K. Cont. route rose by $13,407 to $135,148/day, the highest in data going back to 2008.Rates to charter Suezmax ships climbed $55,800 to $67,027/day, the highest since April 2020 when every oil merchant was scrambling to store oil offshore.As a result of the surging Baltic-Europe tanker rates, the Middle East to Europe rates also rose, and on Friday hit the highest on record.Two-thirds of Russia's crude oil exports are seaborne, from ports in the Black Sea and the Baltic Sea. The Russian flagship Urals crude grade loads from ports in the Baltic Sea, and most of it is sold in Europe.As we reported on Thursday, while international benchmark oil prices were soaring on Thursday, the Urals grade was offered at the deepest discount in at least 11 years—$11.60 a barrel below Dated Brent, as traders feared sanctions on Russian oil. Even Chinese buyers of Russian seabourne oil had put their purchases on hold amid US concerns over Russian sanctions.Owners of tankers have become reluctant to offer their vessels to load crude from Russia for fear that their future cargo could be breaching potential sanctions if the West decides to deploy the harshest sanctions against Russia after it invaded Ukraine early on Thursday.As Bloomberg reports, at least two merchant ships have been reportedly hit since Russian forces began the attack on its neighbor this week. Insurers are either not offering to cover vessels, or they’re demanding huge premiums to do so.That has compounded oil trading and shipping markets that were already -- with a few exceptions -- leery of doing Russian deals while people figure out the sanctions risk of buying the nation’s crude. Trade lawyers said that commodities from Russia should ultimately keep flowing, but that caution is likely in the near term and the situation is fast-changing.

Oil spill heads towards Morecambe Bay after North Wales leak - OIL is set to flood towards the Morecambe Bay after a spillage in North Wales earlier this week. Over 500 barrels of crude oil spilt from a leaking pipe off the coast of Wales on Monday, and the spillage has been drifting north ever since. And now it's moving towards the English coast, on course to beach in the North-West. ENI, the company in charge of the oil platform from which the spill originated, have reported that small tar balls have already washed up on the Blackpool coastline. It could mean danger for marine birds which call the region home. Dr Emily Baxter, Senior Marine Conservation Officer for the North West Wildlife Trusts said: "Our greatest concern is for the welfare of seabirds - offshore populations of sea ducks and divers in Liverpool Bay, coastal wading birds that feed and roost in our estuaries and along the coastline, as well as fish and other marine life that live and feed in our coastal waters. "We are also concerned about the effect that the spill (oil and tar balls) will have on vital coastal habitats such as mud and sand flats, saltmarsh and sand dunes. Thousands of migratory and overwintering birds, as well as fish, shellfish, crabs and other wildlife rely a variety of different coastal habitats found across the Lancashire coastline." News of the spill came on the 26th anniversary of what has been called Wales’ worst ecological disaster, when 72,000 tonnes of crude spilled from the Sea Empress oil tanker off the Pembrokeshire coast. Large numbers of seaweeds and invertebrates were killed on the beaches where it drifted ashore, and it took over a year to clean the slick. The high winds of Storm Dudley have helped to disperse the oil spill. It is now being recorded to be washing up in the form of small tar balls, rather than a slick (which can smother birds, wildlife and habitats). However, tar balls can be very persistent in the marine environment, travel vast distances and be difficult to clean up depending on their size and where they wash up.

SPRC pipeline leaks again -- More crude oil has spilled from the same underwater pipeline owned by Star Petroleum Refining Plc (SPRC) off the Rayong coast. Rayong governor Channa Iamsaeng said Thursday's leakage occurred near previous pipeline breaches. He said the amount of leakage has not been determined although oil containment booms have been put in place to prevent spill expansion. The Marine Department has also deployed ships for spraying dispersant chemicals on the spill. Mr Channa criticised the company for not implementing adequate prevention measures, which has led to repeated accidents. On Jan 25, 47,000 litres of oil leaked from an SPRC pipeline. Another 5,000 litres leaked earlier this month.

Third oil leak confirmed at Rayong pipeline - Authorities have been informed by Star Petroleum Refining (SPRC) that another leak in its underwater oil pipeline has been found and sealed during its investigation regarding the previous oil spills. SPRC has sent a letter notifying the Rayong Marine Department about the incident on Tuesday (Feb 15), saying that a leak was found in a pipeline near the location that caused the major oil spill last month. The company, majority owned by Chevron, stated that it has taken emergency measures to stop the leak but has also requested assistance from authorities while they fortify the pipelines to prevent future oil spills. Two oil spills occurred in the Gulf of Thailand in recent weeks. The first oil spill cause a massive oil slick off the coast of Map Ta Phut area on January 25. Another oil leak was then reported on February 10 due to operations to investigate the first leak. Meanwhile, Deputy Rayong Governor Anant Nakniyom stated that authorities are still patrolling the beaches to prevent any oil slick from reaching the area. He noted that business owners can apply their compensation complaints at the provincial office, urging anyone affected by the oil spill to make a legal complaint. Deputy Governor Anant added that officials will make sure the SPRC compensates the victims as soon as possible

Owner of damaged oil pipeline in Rayong expects approval today to commence repairs -An urgent meeting is scheduled for today (Sunday) between officials of the Marine Department, other agencies and representatives of Star Petroleum Refining Plc (SPRC) to consider the oil company’s application for permission to plug the second rupture in their submarine oil pipeline. The company reports that there are still about 12,000 litres of crude still in the damaged pipe. SPRC recently sought permission to gain access to the offshore mooring platform to undertake repairs, but the Rayong office of the Marine Department postponed a decision, pending consultation with relevant agencies and more technical details from the oil company over its repair plan. The company has already deployed numerous vessels to lay booms to contain any spillage which may occur during the maintenance work. According to Phuripat Theerakulpisut, deputy director-general of the Marine Department, the company estimates that it will take a week repair the pipe, including three days to apply special adhesive material. Once the crack is sealed, the company will then start pumping the residual crude oil out of the pipeline, followed by the removal of a specific section of the damaged pipe, which will be handed over to the local police as evidence. On February 10th, about 5,000 litres of crude oil left in the pipeline leaked into the sea off Rayong province, prompting another operation to prevent it from reaching the provincial shoreline and Samet Island. Yesterday, SPRC sent a drone to a location about 2 nautical miles to the southeast of the mooring platform for an aerial survey, after the skipper of a fishing vessel claimed to have seen traces of oil. The company, however, said no oil spill could be detected. This was confirmed by satellite images from the Geo-informatics and Space Technology Development Agency (GISTDA). Regarding claims for compensation by about 2,000 fishermen and clam farmers, the provincial fisheries office said that a meeting is scheduled for Tuesday, between their representatives and SPRC, to discuss the matter.

Thai Marine Department approves oil pipeline repair plan | Thai PBS World - Thailand’s Marine Department has finally granted permission for Star Petroleum Refining Plc (SPRC) to start repairing the ruptured submarine oil pipeline at the offshore mooring platform off Rayong province. The decision, after several days’ delay, was reached during an urgent Zoom meeting today (Sunday), which was attended by representatives of the oil company, the Marine Department, the Council of Engineers of Thailand, the Engineering Institute of Thailand, the Federation of Thai Industries, the Department of Pollution Control and Map Ta Phut police. The approved maintenance plan will consist of applying leak stopping compounds, pumping residual oil out of the pipeline and the use of special adhesive material wrapped around the two points of rupture in the pipeline. Phuripat Theerakulpisut, deputy director-general of the Marine Department, said today that all the repair work must be done under the supervision of experts from abroad and representatives of the pipeline’s manufacturer, in close coordination with the Marine Department and the Royal Thai Navy, who will ensure safety and limit the potential damage cause by any oil spilt during the repairs. He also said that SPRC has prepared three response groups, one of which is responsible for laying five booms, each about 200 metres long, near the mooring platform. 10 vessels will be deployed to tow the booms to contain any further leakage of oil. The second group is responsible for applying dispersant and the third comprises the Si Racha Offshore 881 vessel, which is specially designed to collect spilt oil at a rate of up to 100,000 litres per hour. Another vessel is equipped to trap submarine oil spills and pump it on board. Meanwhile, the Royal Thai Navy will place a vessel on standby to observe the repair and support operations, with 24 drivers available to provide support.

Repair of oil pipeline in Gulf of Thailand expected to take ten days -The delicate work of plugging the ruptured submarine oil pipeline is set to begin soon, but only after all 12,000 litres of crude oil still in the pipe are removed. This will start tomorrow (Tuesday) and is expected to take about two days, according to Star Petroleum Refining (SPRC), the company responsible for the oil leaks in the Gulf of Thailand early this year. Once the residual oil is completely removed, the repairs can begin. They are expected to take a further 10 days. PCD Director-General Attapol Charoenchansa told Thai PBS today that SPRC must make sure that everything proceeds according to plan, especially the prevention of any leakage of oil during the repair process. He said he had proposed, at an urgent meeting held yesterday, that a team must be deployed to record the repair work in full, as he cited the importance of the pipeline, which is a key piece of evidence and must be protected. Attapol also said, however, that he is optimistic that SPRC will make sure that there are no further spills, adding that the whole operation will be under the close supervision of experts and done in close coordination with the PCD and other relevant agencies. According to the repair plan, sealant will be injected into the two cracks in the pipe, to be followed by the removal of the residual oil. Then, special adhesive material will be wrapped around the defects and tests will be conducted to make sure that they are completely sealed. Attapol said that the process of removing residual oil from the pipeline will be closely monitored by divers and, if there is an oil leak, work will immediately be suspended. While the repair work is to take place mostly under the sea, ten vessels are being deployed near the offshore mooring platform, equipped with booms and oil dispersant to contain any oil leaked. In case waves are higher than 1.5 metres, dispersant will be applied. A vessel is also deployed to collect oil floating on and below the sea’s surface.

Tanker Carrying Iranian Oil Caught Fire Near China’s Shores - A tanker carrying half a million barrels of oil originating in Iran caught fire near China’s shores on Friday but the crew controlled the blaze.One day after the incident, Iran’s official IRNA news agency denied there was any link between the country and the oil tanker.The IRNA report tried to use vague wording in its denial, suggesting that the cargo had been sold by Iran to an intermediary for delivery to a final customer, saying, “IRNA has learned from informed sources that this oil tanker does not belong to Iran and the only possibility is that its cargo belongs to one of Iran’s customers.”Tanker tracking firm TankerTrackers confirmed the news in a tweet on Saturday, saying that “an old uninsured foreign-flagged tanker carrying half a million barrels of Iranian oil caught fire in the Far East”.TankerTrackers added that they informed clients of the vessel’s identity and location.According to reports, Iran normally transfers oil to different tankers in the sea to get round US sanctions since 2018 and send oil to China.Fars news agency affiliated with the Revolutionary Guard said earlier in February that Iran’s oil export income grew by 494 percent in the first 5 months of the Raisi administration. Earlier in January, a report detailed Iran’s large diesel smuggling network, revealing the role of the Revolutionary Guard and private shipping companies in the illicit trade.

Move to fill up crude oil storages - India has invited bids from oil companies to lease out storage space equivalent to 1.05 million tonnes (mt) of crude oil as global prices simmer on account of the Russia-Ukraine conflict. The West has threatened Russia, a top oil and gas supplier, with new sanctions if it attacks Ukraine; Russia denies planning any attacks. Indian Strategic Petroleum Reserves Limited (ISPRL) has issued tenders to fill up the reserves at Visakhapatnam and Mangalore. The tender invited bids to fill up the Visakhapatnam storage facility — they are in the form of underground caverns — up to 0.3mt with only Basrah light as the rest of cavern holds the same grade. The Mangalore cavern offers 0.75mt storage for leasing that can be filled up with any grade. Analysts expect crude prices to remain high, with the stand-off in Ukraine heightened by low production by Opec nations and rising demand following the gradual restoration of normality from the pandemic Prices ended the week mixed on Friday as investors weighed a potential supply disruption resulting from the Russia-Ukraine crisis against the prospect of increased Iranian oil exports. India is vulnerable to rising prices as it imports more than 84 per cent of its crude requirement. ISPRL can undertake partial commercialisation by leasing the caverns to Indian or foreign companies with the Indian government having the right of first use in case of any disruption in supplies.

India prepared to release emergency oil reserves to combat skyrocketing prices - India prepared to release emergency oil reserves to combat skyrocketing prices © Associated Press/Saurabh Das India, the world's third largest oil consumer and importer, on Saturday said it would tap into its national stockpile for oil reserves in an effort to curb rising global energy prices amid Russia's invasion of Ukraine. The country already released 3.5 million barrels as part of an agreement with the U.S. to combating rising gas prices. But India is now further "supporting initiatives for releases from strategic petroleum reserves to mitigate market volatility and calm the rise in crude oil prices," according to a government statement reviewed by Reuters. India has about 31 million barrels in emergency reserve, according to Bloomberg. The price per barrel of oil soared past $100 internationally after Russia invaded Ukraine on Thursday. Senate Democrat calls on Biden to release oil from strategic reserves On The Money — Inflation held firm in January as omicron raged President Biden on Thursday signaled he was working with other nations to limit energy prices and help consumers at the pump. “We are actively working with countries around the world to elevate collective release from the strategic petroleum reserves of major energy consuming companies, and the United States will release additional barrels of oil as conditions warrant,” he said in a speech addressing the Russian invasion of Ukraine. Japan and Australia have also agreed to tap oil reserves, according to Reuters.

Saudi Arabia boosts oil production to 10m barrels per day - Saudi Arabia’s crude oil production has soared to over 10m barrels per day, (bpd) according to data from the Joint Organisations Data Initiative (JODI). It revealed the oil giant had increased production by 110,000 bpd to 10.02m in December. This was 1.04 million bpd above the levels it recorded in the year prior at the height of the pandemic, and 428,000 above the figures it published in December 2019. Exports of oil products from Saudi Arabia rose to a three-year high of 1.67 million bpd in December, from 1.55 million bpd in November. Despite the boom in production, JODI outlined that exports from Saudi Arabia and other oil-exporting countries worldwide fell slightly to 6.937 million bpd from 6.949 million bpd in November. Along with other members of the Organization of the Petroleum Exporting Countries (OPEC), Saudi Arabia is trying to ramp up output every month as global oil demand rises on the back of a recovery from the COVID-19 pandemic. OPEC alongside key allies such as Russia (OPEC) is aiming to boost production by 400,000 bpd over the course of 2022. However the organisation has been missing its headline target, with multiple members including Nigeria and Angola failing to meet required quotas. This has helped boost rallies on both major benchmarks amid tightening supplies – with analysts speculating the $100 milestone could be reached for the first time since 2014.

No need for extra OPEC+ supplies amid Iran talks, Nigeria says — There is no need for Opec+ to expand its oil production increases, Nigeria’s petroleum minister said today, as the group sees a potential deal between Iran and world powers unlocking more supplies. “We don’t have do anything extraordinary this time because we are expecting a lot of production,” Timipre Sylva said on the sidelines of a gas exporters conference in Qatar’s capital Doha. “We are expecting more production if a nuclear deal with Iran works out (since) there will be production from them,” Sylva added. Months of indirect talks between Iran and the United States to revive a 2015 nuclear deal abandoned in 2018 by then-US President Donald Trump are in their final stage, sources told Reuters. A deal could pave the way for Opec member Iran to raise its oil exports further, helping to ease what many analysts see as an acute tightness in the oil market. Brent crude traded just below US$100 a barrel today, its highest since September 2014, as the possibility of a Russian invasion of Ukraine heightened the risk of supply disruptions.

Vitol CEO sees oil above $100 for a ‘prolonged period’ this year — Oil prices could be set for a “prolonged period” above $100 a barrel over the next six to nine months, with the world setting fresh demand records this year, said Vitol Group Chief Executive Officer Russell Hardy. Crude already surged to within a few dollars of that level earlier this month, as the recovery in fuel use from the pandemic started to run into supply constraints. In an interview in London with Bloomberg television, the boss of the world’s largest independent oil trader said the market will get tighter, with daily consumption set to rise well above pre-Covid levels by the end of 2022. “The 100 million-barrel number is probably going to be exceeded this year,” Hardy said. “Demand is going to surge in the second half” if travel continues to return to normal. As some of the biggest players in oil market gather in London for International Energy Week -- the first time the event has happened in-person for two years -- their industry is still grappling with the consequences of the initial pandemic price slump. Energy supplies are struggling to keep up with a robust economic recovery. Several OPEC+ members, plagued by under-investment and disruptions, aren’t able to revive all of the output they shut down in 2020. Many companies, from U.S. shale drillers to global supermajors, are focused on giving cash to shareholders instead of growing production. The result is a surge in oil prices that’s feeding an inflationary spike. The situation threatens to derail the global economic recovery and inflict a cost-of-living crisis on millions. Brent crude oil for May rose to $92.08 a barrel at 2:36 p.m. in London, reversing a slump from earlier in the day.

Saudi Arabia Slams Shortsighted Campaign Against Oil -- The world’s top oil exporter, Saudi Arabia, has repeatedly said it wants to be the producer that will pump the very last barrel of oil. Until that time comes, the world and its growing economy will still need oil and gas, even as renewable energy capacity soars globally. The rebound of economies after the 2020 COVID slump has shown that global oil demand is not only not declining, but it is just months away from reaching pre-pandemic levels and exceeding them.This weekend, Saudi Arabia once again deplored the underinvestment in oil and gas and said that focusing only on renewables while campaigning against oil and gas was a mistake. The insufficient investment in the oil and gas industry harms consumers, raises concerns about short-term supply shortages, and creates challenges for policymakers, Saudi Energy Minister Prince Abdulaziz bin Salman said at the 2022 International Petroleum Technology Conference (IPTC) in Riyadh this weekend.The campaign against oil and gas investments is shortsighted, the minister said, as carried by Arab News.The sole focus on renewables is a mistake, said the most influential oilman of the OPEC+ coalition.“The net-zero does not mean cherrypicking, net-zero does not mean zero oil,” he added.The sharp decline in oil and gas investments has created a danger “that the world will not be able to produce all the energy it needs to promote recovery,” Prince Abdulaziz bin Salman said at the conference, per the Saudi Press Agency. The Saudi minister also criticized the International Energy Agency (IEA) for its contradictory messages, from “no new investment ever again” last year to calls last week for more investment in oil and gas amid the current energy crisis and soaring oil prices.

Oil prices jump as tensions between Russia and Ukraine escalate - Oil prices jumped as the crisis between Russia and Ukraine escalated. However, prices moved off their highs during mid-morning trading on Wall Street. On Monday evening, Russian President Vladimir Putin ordered forces into two breakaway regions of eastern Ukraine and said he would recognize the independence of Donetsk and Luhansk. U.S. crude surged more than 3% at one point to a high of $96. The contract stood 1.2% higher at $92.17 per barrel around 10:45 a.m. ET. Brent traded as high as $99.50, but was last at $96.20 for a gain of 0.85%. Loading chart... Rising tensions have sent jitters through markets, driving oil prices higher. On Friday, U.S. President Joe Biden said the U.S. believes Putin has decided to carry out an attack on Ukraine "in the coming days." Loading chart... Russia has built up some 150,000 troops along its border with Ukraine, and the Biden administration said last week that as many as 7,000 additional troops have joined. The military tensions have sparked concerns that Russia may be preparing to invade Ukraine, triggering fears of a repeat of the Kremlin's illegal annexation and occupation of Crimea in 2014. Russia was the largest supplier of natural gas and oil to the European Union last year, and these tensions are lending support to oil prices. Crude prices recently crossed $90 per barrel, representing an increase of more than 20% this year and a rally of more than 80% since the beginning of 2021. Those gains, however, can also be attributed to other factors such as tight supply. Oil could spike to $110 per barrel if the crisis worsens, according to Andy Lipow, president of Lipow Oil Associates. "Should we actually have Russian oil supplies cut off to Europe, which is 3 million barrels a day, we could see oil prices rise another $10 to $15 a barrel, putting Brent at about $110 a barrel," he told CNBC's "Street Signs Asia" on Tuesday. "The market will rally on an invasion of Russian troops into Ukraine proper, and then it's going to wait to see where the resupply comes from," he added. A deal aimed at reviving Iran's 2015 nuclear agreement is expected to be very close to being reached, raising the possibility of more than 1 million barrels a day of Iranian crude returning to the market. Lipow said markets would look toward Saudi Arabia, United Arab Emirates and Kuwait to utilize some spare capacity, which he estimated at about 3.5 million to 4 million barrels a day.

Oil prices surge to almost $100 a barrel after Putin ordered troops into Ukraine - Oil has surged to its highest price since 2014 after Russia ordered troops into two breakaway regions in eastern Ukraine, adding to supply concerns that are pushing prices to near $100 a barrel. West Texas Intermediate (WTI) crude, the US benchmark, jumped by more than 3 percent and touched a seven-year high on Tuesday as it peaked at $96. 'We see the oil market in a period of frothiness and nervousness, spiced up by geopolitical fears and emotions,' said Julius Baer analyst Norbert Rucker. 'Given the prevailing mood, oil prices may very likely climb into the triple digits in the near term.' The US, UK and European allies are poised to announce new sanctions against Russia after President Vladimir Putin formally recognized the two regions in eastern Ukraine - Donetsk and Luhansk - escalating a security crisis on the continent. But Russia is a major exporter of oil to the US, and roughly a third of Europe's supply of natural gas comes from Russian pipelines - some of which run through Ukraine itself, raising the specter of huge disruptions to global energy markets. German Chancellor Olaf Scholz announced this morning that he had asked the regulator of the Nord Stream 2 pipeline - which would provide a direct supply of Russian gas to Germany - to halt the certification process. 'There can be no certification of the pipeline and without this certification, Nord Stream 2 cannot begin operating,' he said, in a move which strengthens Germany's position in implementing economic sanctions against Russia. The announcement came hours after Ukrainian President Volodymyr Zelensky demanded an immediate halt to the Nord Stream 2 project, following months of German reluctance. Western allies have thus far been vocal about intentions to impose brutal sanctions should Russia proceed with a full-scale invasion of Ukraine, but doing so would put their energy supply from Moscow at risk. The crisis has placed even more stress on an oil market that has surged due to tight supplies as demand recovers from the coronavirus pandemic.

Oil Futures Pare Gains as Traders Parse Russian Sanctions - Nearby delivery oil futures pared gains in afternoon trade Tuesday, although all petroleum contracts finished the session sharply higher after the United States and European Union announced new sanctions on Russian banks, sovereign debt and government officials in response to Russia's recognition of two separatist regions in eastern Ukraine and movement of Russian troops across the Ukrainian border. The punitive package adopted Tuesday afternoon by western allies will likely have a limited impact on the Russian economy, according to financial analysts, suggesting tougher measures are still being held in reserve to convince Russian President Vladimir Putin to abandon his military adventures in the former Soviet satellite. Among economic sanctions announced against Russia on Tuesday are limits on access to EU primary and secondary capital markets for certain Russian banks and companies; export and import bans on trade in arms; and curtailment of Russian access to certain sensitive technologies and services that can be used for oil production and exploration. Additionally, the Biden administration announced a total economic embargo on the newly Russia-recognized republics of Donetsk and Lugansk in eastern Ukraine, while warning that the world might be seeing "the beginning of a Russian invasion." Of potential greater consequence for the Russian economy would be the German suspension of the Nord Stream 2 natural gas pipeline which was completed last year and has awaited EU regulatory approval since late November. The $11 billion pipeline designed to carry Russian gas under the Baltic Sea to northern Germany would have sharply increased the share of Russian gas on the European energy market. A bad situation could get much worse however, and that would depend on Putin's next move. Should he choose to march further into Ukraine, allies would contend they have no other option but to respond with harsh sanctions that could include energy. Even if he pulls back troops and sits down at the negotiating table with Ukrainian leadership, this crisis is far from over. NYMEX West Texas Intermediate for March delivery expired $1.28 higher at $92.35 barrel (bbl) after trading at $96 overnight, and April futures settled the session at a $0.44 discount at $91.91 bbl. Brent April contract on Intercontinental Exchange settle $1.45 higher at $96.84 bbl. March RBOB futures surged more than 4 cents to a $2.7108 gallon settlement, and front-month ULSD futures advanced 3.73 cents to $2.8188 gallon.

WTI Shrugs Off Huge Crude Inventory Build, Cushing Draws Continue -- Oil prices fell modestly today after the Biden admin hinted at more SPR releases and the algos auto-reacted. When asked if the US considering another release of the SPR to stem rising gas prices given the Ukraine crisis, White House Press Secretary Jen Psaki said “that is certainly an option on the table.” “What we’re trying to do and focus on is take every step we can working around the world with our counterparts and partners to minimize the impact on the global energy market,” Psaki said. The other side of the market was also making news today as Iran’s foreign minster said on Wednesday that it wants to settle the remaining issues in the coming days, but that it won’t concede on its red lines “under any conditions.” Any restoration of Iranian barrels to the global market would help ease tightness. Obviously, geopolitical tensions are dominating price action in the energy complex but any notable surprise from inventories may be enough to trigger the next leg one way or another... API

• Crude +5.983mm (+767k exp) - biggest build since Oct 2021
• Cushing -2.066mm - 7th straight weekly draw
• Gasoline +427k
• Distillates -985k

Crude stocks rose dramatically last week according to API, building almost 6mm barrels relative to a modest 767k expectation... WTI did rally after the settlement today and was hovering around $92.25 ahead of the API print and dipped below $92 after the data hit then bounced back...

Oil Futures Retreat From Highs After Russian Incursion - Nearby delivery oil futures fell in early trade Wednesday, with the international crude benchmark briefly sliding below $96 per barrel (bbl) after Western sanctions against Russia stopped short of including oil and gas exports, with oil traders now waiting for Russian President Vladimir Putin's next move after he recognized the separatist regions of Donbass and Lugansk in eastern Ukraine and moved his troops across the Ukrainian border. The markets are in a waiting mode now to see how far Russia's 190,000 troops will go into Ukraine after the Russian Parliament gave Putin the greenlight to use troops outside of country. The central question is whether he will stop with two pro-Russian republics in eastern Ukraine or order his troops to capture Kiev, Ukraine's capital. The current news flow is not encouraging, with the Russian government ordering the evacuation of all its staff in Kiev. Ukrainian President Volodymyr Zelensky called on military reserves to face off with the Russians, and Putin himself suggested that Russia recognized the two breakaway republics in their "expanded version." Donbass and Lugansk are currently divided into two parts -- Russian and Ukrainian -- with the Ukrainian military in control of about two-thirds of the territory. This includes a strategic seaport of Mariupol that is home to Ukraine's largest steel mills and its biggest machine-building company that produce much of the country's exports. Depending on Putin's next move in the Ukraine, U.S. and European allies may consider an additional round of sanctions on top of the measures already announced in response to Russia after Moscow recognized the two republics as independent from Ukraine. A rather mild package of Western sanctions suggests that U.S. and European allies still hold tougher measurements in reserve to convince Putin to abandon his military adventures in the former Soviet satellite. According to estimates, about 2.3 million barrels per day (bpd) of Russian crude heads west each day, which sanctions could threaten. This comes at the time when the global economy needs every barrel of oil. The current deficit on the global markets exceeds 1 million bpd, according to analysts, with OPEC+ consistently missing their production targets in recent months. Near 7:30 a.m. EST, NYMEX West Texas Intermediate for April delivery fell $0.51 to $91.35 bbl, while international crude benchmark Brent softened $0.44 to $96.40 bbl. March RBOB futures added 0.5 cents to $2.7158 gallon, and front-month ULSD futures dropped 2.48 cents to $2.7940 gallon. Liubov Georges can be reached at

Oil steadies as U.S. seen unlikely to sanction Russian exports (Reuters) - Oil prices steadied on Wednesday, holding below 2014 highs, as U.S. officials indicated escalation between Russia and Ukraine was unlikely to result in sanctions on energy supplies from Russia, one of the world’s top oil producers. Brent crude remained unchanged, settling at $96.84 a barrel, after hitting $99.50, its highest since September 2014 on Tuesday. U.S. West Texas Intermediate (WTI) crude futures ended up 19 cents to $92.10 a barrel. On Tuesday, WTI hit $96. Oil prices rose on Tuesday on fears that sanctions imposed by Western nations on Russia, after it sent troops into two breakaway regions in eastern Ukraine, could hit energy supplies. Sanctions imposed by the United States, the European Union, Britain, Australia, Canada and Japan were focused on Russian banks and elites, while Germany halted certification of a gas pipeline from Russia. But the United States made it clear that sanctions agreed and those which may be imposed will not target oil and gas flows. The Biden administration is not expected to target Russia’s crude oil and refined fuel sector with sanctions due to concerns about inflation and the harm it could do to its European allies, global oil markets and U.S. consumers, administration officials told Reuters. Moscow denies planning an invasion and has described warnings as anti-Russian hysteria. But it has taken no steps to withdraw the troops deployed along Ukraine’s frontiers. Ukraine declared a state of emergency on Wednesday and told its citizens in Russia to flee, while Moscow began evacuating its Kyiv embassy. Analysts expect oil prices to continue seeing support from the Russia-Ukraine crisis, with some Western countries promising more sanctions if Russia launches a full invasion.. The potential return of more Iranian crude to the market weighed on prices, as Tehran and world powers inch closer to reviving a nuclear agreement. “Nuclear talks in Vienna are reaching a sensitive and important point,” Iran’s foreign minister Hossein Amirabdollahian said on Wednesday. Yet analysts say there is little chance of Iranian crude returning to the market in the immediate future to ease current supply tightness. “If a U.S.-Iran deal is reached, it will ease some of the pressure but not enough to stop oil prices inching towards triple digits,” Pratibha Thaker of the Economist Intelligence Unit said. U.S. crude stocks rose 6 million barrels last week while distillate stocks fell, according to market sources citing American Petroleum Institute figures late Tuesday.

Oil soars past $105 as Russia’s attack on Ukraine rattles markets --Oil prices jumped on Thursday, with Brent rising above $105 a barrel for the first time since 2014, after Russia’s attack on Ukraine exacerbated concerns about disruptions to global energy supply. Russia launched an all-out invasion of Ukraine by land, air and sea in the biggest attack by one state against another in Europe since World War II. The United States and Europe have promised the toughest sanctions on Russia in response. “If sanctions affect payment transactions, Russian banks and possibly also the insurance that covers Russian oil and gas deliveries, supply outages cannot be excluded,” At least three major buyers of Russian oil were unable to open letters of credit from Western banks to cover purchases on Thursday, sources told Reuters. Brent crude was up $8.15, or 8.4 percent, at $104.99 a barrel as of 12:21 GMT, having touched a high of $105.79. US West Texas Intermediate (WTI) crude jumped $7.33, or 8 percent, to $99.43. Brent and WTI hit their highest since August and July 2014 respectively. “Russia is the third-largest oil producer and second-largest oil exporter. Given low inventories and dwindling spare capacity, the oil market cannot afford large supply disruptions,” “Supply concerns may also spur oil stockpiling activity, which supports prices.” Russia is also the largest provider of natural gas to Europe, providing about 35 percent of its supply. United Kingdom Prime Minister Boris Johnson vowed the UK and its allies would unleash a massive package of economic sanctions on Russia and said the West must end its reliance on Russian oil and gas. China warned of the impact of tensions on the stability of the energy market. “All countries that are truly responsible should take responsible actions to jointly maintain global energy security,” a Chinese foreign ministry spokesperson said. Global oil supplies remain tight as demand recovers from coronavirus pandemic lows. Underscoring the tight market, premiums on crude contracts for loading in one month over contracts for loadings in six months, a metric closely watched by traders, hit a record high at $11.55 a barrel. Analysts believe that Brent is likely to remain above $100 a barrel until significant alternative supplies become available from the Organization of the Petroleum Exporting Countries (OPEC). The US and Iran have been engaged in indirect nuclear talks in Vienna that could lead to the removal of sanctions on Iranian oil sales. Iran’s top security official Ali Shamkhani said on Twitter on Thursday that it is possible to achieve a good nuclear agreement with Western powers after significant progress in negotiations. Analysts are warning of inflationary pressure on the global economy from $100 oil, especially for Asia, which imports most of its energy needs.

Oil prices jump 8% as Russia invades Ukraine; Brent tops $100 for first time since 2014 -Oil prices on Thursday jumped following Russia's invasion of Ukraine, with international benchmark Brent crude surpassing $100 a barrel for the first time since 2014. The attack is expected to have far-reaching implications for energy markets given Russia's role as the world's second-largest producer of natural gas and one of the world's largest oil-producing nations. Oil prices have jumped more than $20 a barrel since the start of the year amid escalating Russia-Ukraine tensions. Now, it is feared a wave of international sanctions on Russia's energy sector could disrupt supplies. Brent crude futures rose more than 8% at one point to trade above $105 per barrel. By 11:30 a.m. on Wall Street the contract stood at $103.74 for a gain of 7%. U.S. West Texas Intermediate futures, meanwhile, climbed over 5% to trade at $97.02. WTI had traded above $100 a barrel for the first time since 2014 earlier in the session before paring gains. Natural gas prices popped 6.5%. Spot gold, traditionally seen as a safe-haven asset, climbed 2.6%, last trading at $1,957.46 per troy ounce. Russian President Vladimir Putin launched an attack on Ukraine early Thursday local time after months of military buildup along the border they both share. The directive came days after the Kremlin leader formally recognized the independence of two pro-Moscow separatist regions in eastern Ukraine. Explosions were heard in Ukraine's capital of Kyiv, NBC News reported. The crisis in Ukraine is changing rapidly and specific reports from the country are difficult to confirm.

WTI Holds Gains After Surprise Crude Build, Another Hint At SPR Release - Crude prices are (obviously) dramatically higher heading into this morning's DOE inventory data (as geopolitical crisis dramatically trumped an unexpectedly large crude build reported by API). Bloomberg Intelligence Energy Analyst Fernando Valle weighs in: “The rally in WTI and Brent prices is being aided by escalating tension between Russia and NATO allies, but also by disappointing shale-output growth. Calls to the U.S. and OPEC+ to boost production may do little good, with OPEC still underdelivering on quotas at record levels. “Global interest rates remain the key risk to 2022 oil demand, we believe. A significant hike by the Federal Reserve may hinder global investments and drive lower emerging-market consumption of both refined products and crude oil.” DOE:

• Crude +4.514mm (+767k exp) - biggest build since Oct 2021
• Cushing -2.049mm - 7th straight weekly draw
• Gasoline -582k
• Distillates -584k

The official data confirmed API's large crude build andthe 7th straight week of inventory increases at Cushing... Cushing stocks are moving even lower, to their lowest since 2018. Bloomberg's Devika Krishna Kumar notes that crude inventories at Cushing, Oklahoma, plunged below 25 million barrels and are fast approaching operational lows. This has been a key reason for the steep backwardation in the front-month U.S. crude futures spread as traders worry about tight supplies. March is expected to bring some respite though, as refiners conduct seasonal maintenance and demand cools. US crude production was flat on the week.. U.S. crude imports from Russia averaged about 106,000 barrels a day last week. Volumes have remained muted in recent weeks after averaging zero for three weeks straight in January. It remains to be seen how flows will be impacted based on what kind of sanctions the U.S. imposes now that Russia has invaded Ukraine.

WTI Pares Gains After EIA Data Shows Large Crude Build -- West Texas Intermediate futures traded on the New York Mercantile Exchange slide below $96 barel (bbl) after weekly inventory data released late morning by the U.S. Energy Information Administration showed a second consecutive build in domestic crude oil inventories through the week ended Feb. 18, even as refiners picked up run rates to meet rebounding gasoline demand in the United States. Near 12:15 p.m. EST, front-month WTI futures reduced some of the sharp gains made overnight to trade near $95.80 bbl, still up 4% on the session, and international benchmark Brent crude gained more than $6 to $102.84 bbl. NYMEX March RBOB futures rallied 12.62 cents to $2.8515 gallon, with front-month ULSD futures adding 15.37 cents or 5% to $2.9829 gallon. EIA's inventory report might not have a lasting impact on prices this week amid an unprecedented military campaign launched by Russian President Vladimir Putin in Ukraine. Latest reports suggest Russian army have taken control of more than two-thirds of eastern Ukraine after quickly establishing air superiority over the country. Missile attacks have been launched against at least 17 cities from Kiev, the capital, to Odessa, a key seaport on the Black Sea. EIA data showed U.S. commercial crude stockpiles increased by a larger-than-expected 4.5 million bbl last week to 416 million bbl and are now about 9% below the five-year average. Analysts expected crude stockpiles would increase by just 300,000 bbl from the prior week. Oil stored at Cushing, Oklahoma, the delivery point for WTI futures, fell 2 million bbl from the previous week to 23.8 million bbl, EIA said in its weekly report. U.S. crude oil production was unchanged at 11.6 million barrels per day (bpd). A large crude build came despite domestic refiners having increased their run rates by 2.1% last week to 87.4% of capacity, processing 344,000 bpd more crude compared to the previous week. In the gasoline complex, commercial stockpiles fell 582,000 bbl to 246.5 million bbl compared with analyst expectations for inventories to have dropped by 1.5 million bbl. Demand for motor gasoline strengthened 87,000 bpd to 8.657 million bbl, suggesting demand has begun to gradually rebound from the winter wave of omicron infections. Distillate stocks fell by 584,000 bbl from the previous week to 119.7 million bbl, and are now about 18% below the five-year average, EIA said. Analysts expected distillates inventories would fall by 2 million bbl. Total commercial petroleum inventories decreased by 1.8 million bbl last week. Total products supplied over the last four-week period averaged 21.9 million bpd, up 12.1% from the same period last year. Over the past four weeks, gasoline supplied to the U.S. market averaged 8.6 million bpd, up 10.7% from the same period last year. Distillate fuel product supplied averaged 4.4 million bpd over the past four weeks, up 3.7% from the same period last year. Jet fuel product supplied was up 40.4% compared with the same four-week period last year.

Oil Fades From Highs After Sanctions Leave Out Oil Exports- After a historic trading session that sent oil prices above $100 barrel (bbl) in reaction to Russia's pre-dawn invasion of Ukraine, oil futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled Thursday with gains of about 2% amid signs that the United States and European allies would not consider sanctioning Russia's oil and gas exports in an effort to ensure adequate supplies on the global market but instead go after its financial, military and industrial sectors. Oil futures spiked more than 8% overnight after Russian President Vladimir Putin announced the beginning of a "special military operation" against Ukraine, a former Soviet state that had sought membership in the North Atlantic Treaty Organization in defiance of Moscow's objections. What started as an air-raid campaign in several Ukrainian cities quickly grew into a major offensive that gave Russia superiority over Ukrainian airspace in a matter of hours. Putin made his televised announcement before 6 a.m. local time, but Russians woke up to his speech repeated continuously on Russian stations through midmorning, while learning their currency, the ruble, fell to a historic low against the dollar. Some took to anti-war protests, but they were quickly dispersed by Russia's secret service. Alongside Saudi Arabia, Moscow leads a group of 23 oil exporters known as OPEC+, which has gradually boosted global production to meet soaring demand. Russia alone exports 7.5 million barrels per day (bpd) of crude and petroleum products, with 2.3 million bpd of those volumes destined for Western Europe and the United States. It is also the single biggest exporter of natural gas. Lost energy trade volume globally would lead to painful economic consequences for American and European consumers who are already struggling with spiking prices for gasoline and food. Russia is the world's leading exporter of wheat, with Ukraine the third largest exporter of the global staple food. Combined Russia and Ukraine account for 25% of global wheat production. U.S. sanctions stopped short of banning Russian oil and gas industries or from cutting Russia off from the SWIFT (Society for Worldwide Interbank Financial Telecommunication) global payment system. On the session, NYMEX West Texas Intermediate for April delivery settled $0.71 higher at $92.81 bbl after trading at $100.54 bbl, and international benchmark Brent finished just above $99 bbl, up $2.24, paring an overnight advance to $105.79 bbl. March RBOB futures added 4.57 cents to $2.7710 gallon, down from a $2.9149 overnight high, and front-month ULSD futures rallied 6.77 cents to $2.8969 gallon after trading at $3.0474 overnight.

Oil prices dip after soaring on Russia's invasion of Ukraine - Oil prices slipped Friday after sharp rises early in the session on concern over potential global supply disruptions from sanctions on major crude exporter Russia. The April Brent crude futures contract fell $1.15, or 1.2per cent, to settle at $97.93 a barrel, after climbing as high as $101.99. The more active May contract shed $1.30, or 1.4per cent, to $94.12. U.S. West Texas Intermediate (WTI) crude fell $1.22, or 1.3per cent, to settle at $91.59 a barrel, after hitting a session high of $95.64. For the week, Brent rose about 4.7per cent, while WTI was on track to rise about 0.6per cent. On Thursday, Russia's invasion of Ukraine boosted prices above $100 a barrel for the first time since 2014, with Brent touching $105, before paring gains by the close of trade. The assault was the biggest attack on a European state since World War Two, prompting tens of thousands of people to flee their homes. On Friday, Russian missiles pounded Kyiv, families cowered in shelters and authorities told residents to prepare Molotov cocktails to defend Ukraine's capital. On Thursday, U.S. President Joe Biden responded to the invasion with a wave of sanctions that impede Russia's ability to do business in major currencies along with sanctions against banks and state-owned enterprises. "As much as 2.3 million b/d of Russia's 4.6 million b/d of crude oil exports go to the West," Wood Mackenzie said in a note. "We are seeing slowdowns in Russian crude purchases. Until payment terms are clarified, further tightening in the supply and demand balance is expected." Biden said the United States is working with other countries on a combined release of additional oil from their strategic crude reserves. China has ramped up purchases into its oil reserves this year even as oil prices soared, despite calls from Washington for a global coordinated stocks release to help cool the market, industry data showed and traders said. Top buyers of Russian oil are struggling to secure guarantees at Western banks or find ships, sources told Reuters. A deal among OPEC+ oil producers is showing no cracks so far, OPEC+ sources told Reuters, and the group is likely to stick to a planned output rise of 400,000 barrels a day in April despite crude topping $100 a barrel. In an indication of future U.S. supply, the number of oil-directed drilling rigs rose by 2 to 522 in the week to Feb. 25, data from oil services firm Baker Hughes showed on Friday.

Impending Iran nuclear deal alarms Israel (AP) — While the world’s attention has been focused on Ukraine, the Biden administration also has been racing with world powers toward restoring the 2015 international nuclear deal with Iran. After months of negotiations in Vienna, the various sides have indicated a new deal is close, perhaps in the coming days. But instead of the “longer, stronger” agreement originally promised by the U.S., the deal is expected to do little more than reinstate the original pact, whose key restrictions on Iranian nuclear activity expire in a few years. This modest accomplishment appears to be the best the Biden administration can hope for at a time when it is restrained by Congress at home, and overwhelmed abroad with the Ukraine crisis and longer-term challenges such as China and climate change. But it is setting off alarm bells in Israel, whose leaders have grown increasingly vocal in their condemnations of a deal they fear will not prevent Iran from developing nuclear weapons. “The emerging deal, as it seems, is highly likely to create a more violent, more volatile Middle East,” Israeli Prime Minister Naftali Bennett said this week, repeating his threat that Israel is not bound by the deal and is prepared to attack Iran if needed. Here is a closer look at the agreement and what lies ahead: The 2015 agreement, spearheaded by former President Barack Obama, aimed to prevent Iran from being able to build a nuclear bomb. It offered Iran relief from harsh economic sanctions in exchange for curbs of 10 to 15 years on its nuclear activities. Iran says its nuclear activities are peaceful. Critics, led by then-Israeli Prime Minister Benjamin Netanyahu, complained the restrictions were temporary, not airtight and gave Iran a pathway to developing atomic weapons capability. They also argued that the deal, known as the Joint Comprehensive Plan of Action or JCPOA, did not address Iran’s non-nuclear activity, including its support for regional proxies and its development of long-range missiles capable of delivering a bomb. At Netanyahu’s urging, President Donald Trump withdrew from the agreement in 2018, promising a campaign of “maximum pressure” on the Iranians. Despite tougher sanctions, that strategy appears to have backfired. The Iranian government, now under a more hard-line leader who was elected last year, remains firmly in power, and with the deal unraveling, Iran has raced ahead with uranium enrichment and other research far beyond the boundaries of the original agreement.Iran has shown little interest in seeking a longer-term agreement. Even if one could be reached, Biden would face a tough time implementing it. Under a 2015 U.S. law, any new agreement granting Iran relief from sanctions would require congressional approval, a process that would be slow and uncertain. Instead, the White House has signaled it plans to argue that any deal emerging from the Vienna talks would be simply “re-entering” the initial JCPOA. That could avert a battle with Congress but means that key aspects of the original deal, such as limits on uranium enrichment, would expire in 2025. The administration appears to have concluded that a flawed short-term deal is better than nothing at all.