US oil supplies at a 14 year low after record jump in oil exports; oil+products exports at a record high; oil+products inventories at an 8 year low

natural gas hits $8, a 13½ year high, before retreating; SPR at a new 20 year low, total oil supplies at a 14 year low after record jump in oil exports; distillates supplies at a 14 year low, total oil + products exports at a record high; total oil + products inventories at an 8 year low; natural gas ​rigs at a 30 month high​; ​DUC backlog at 4.6 months as DUCs fall to a record low

oil prices fell for the third time in four weeks after the International Monetary Fund (IMF) cut its global economic growth forecast and as Covid-related lockdowns in China continued to impact demand... after rising 8.8% to $106.95 a barrel last week after Ukrainian peace talks failed and the EU considered a ban on Russian oil imports, the contract price for US light sweet crude for May delivery opened higher on Monday after protesters closed down the Sharara field in western Libya, adding to Russia related supply problems, but reversed those overnight gains to trade lower as traders reacted to a sharp decline in China's consumption tied to Covid-19 shutdowns of major cities, before rallying late to close $1.26 higher at $108.21 a barrel as the outages in Libya deepened concern over tight global supplies amid the Ukraine crisis....but oil prices moved lower in tandem with softening equities on Tuesday as traders refocused on a slowing economy in China and a downgraded global economic growth forecast from the World Bank, and then accelerated their decline after the International Monetary Fund (IMF) cut its global economic growth forecast by nearly a full percentage point, and warned of higher inflation. to settle $5.65, or 5.22% lower at $102.56 a barrel....but oil prices advanced in pre-inventory trading early Wednesday after preliminary data from the American Petroleum Institute showed a surprise drop in U.S. commercial crude oil inventories, along with a larger-than-expected drawdown from distillate stocks, and then rose to over $104 a barrel after the EIA confirmed the API report, but backed off to close just 19 cents higher at $102.75 a barrel as the positive U.S inventory data was overshadowed by Covid-related deaths in China, which raised questions about near-term demand in the world’s No.2 oil importer. as trading in the May oil contract came to an end...with oil price quotes now referencing the contract price for US light sweet crude for June delivery, which had closed Wednesday 14 cents higher at 102.19 a barrel, oil prices moved higher on Thursday, as those who sold crude down in the prior two sessions covered their shorts amid a return of the supply issues that had fueled much of the year’s energy rally, as oil settled $1.60 higher at $103.79 a barrel, supported by concerns over a potential EU ban on Russian oil imports and the supplies already lost to the ongoing disruption in Libya, where violent protests had shut-in more than 500,000 barrels (bbl) in daily output, leading to a declaration of force majeure on exports....however, oil prices unwound those gains on Friday, falling 1.72 to $102.07 a barrel, after Bloomberg reported that China’s demand for gasoline, diesel and aviation fuel in April was expected to slide 20% from a year earlier, and thus finished with a weekly loss of nearly 5%, on the prospect of weaker global growth, higher interest rates and the COVID-19 lockdowns in China, while the June oil contract, which had closed last week priced at $106.38 a barrel, ended just over 4% lower, as a strengthening U.S. dollar index in the aftermath of comments from Federal Reserve officials indicating an aggressive pivot towards interest rate hikes further pressured U.S. crude benchmark...

Meanwhile, natural gas prices fell for the first time in six weeks, but not before hitting a new 13 year high, as an early Spring cold spell gave way to more seasonable temperatures...after rising 16.3% to $7.300 per mmBTU last week as the heating season ended with natural gas supplies at a 3 year low, the contract price of natural gas for May delivery opened 2% higher on Monday and rallied 10% to trade as high as $8.06 per mmBTU, the highest price since September 2008, before settling 52.0 cents higher at $7.820 per mmBTU, fueled by stronger weather-led demand gains, recovering LNG feed gas deliveries and storage adequacy concerns...however, natural gas prices completely reversed Monday's gain in falling over 11% on Tuesday, before rebounding to settled 8.24% lower at $7.176 per mmBTU, as traders took profits after weather models backed off the prior forecast of cooling in the eastern half of the nation at the end of April and early May...after the bouncing back to a $7.410 intraday high on Wednesday, the May gas contract price fell more than 3% to settle 23.9 cents lower at $6.937 per mmBTU, as forecasts indicated a turn to slightly warmer weather and heating degree day projections over the next two weeks moved closer to normal for this time of year....after falling another 3% early Thursday on the EIA report of a bigger-than-expected inventory increase, natural gas prices steadied to settle 2.0 cents higher at $6.957 per mmBTU...however, prices tumbled 42.3 cents to $6.534 per mmBTU on Friday, with the pullback from the 13-year high hit earlier in the week hastened by the larger-than-expected weekly storage build, and thus finished 10.5% lower on the week...

The EIA's natural gas storage report for the week ending April 15th showed that the amount of working natural gas held in underground storage in the US rose by 53 billion cubic feet to 1,450 billion cubic feet by the end of the week, which still left our gas supplies 428 billion cubic feet, or 22.8% below the 1,878 billion cubic feet that were in storage on April 15th of last year, and 392 billion cubic feet, or 16.8% below the five-year average of 1,742 billion cubic feet of natural gas that have been in storage as of the 15th of April over the most recent five years....the 53 billion cubic foot injection into US natural gas working storage for the cited week was considerably more than the average forecast for a 31 billion cubic foot injection from an S&P Global Platts survey of analysts, and it was also more than the average injection of 42 billion cubic feet of natural gas that have typically been added to our natural gas storage during the same week over the past 5 years, and more than the 42 billion cubic feet that were added to natural gas storage during the corresponding week of 2021... 

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending April 15th indicated that because of a record increase in our oil exports, we had to withdraw oil out of our stored commercial crude supplies for the 14th time in 21 weeks and for the 30th time in the past forty-six weeks…our imports of crude oil fell by an average of 159,000 barrels per day to an average of 5,837,000 barrels per day, after falling by an average of 305,000 barrels per day during the prior week, while our exports of crude oil rose by a record 2,090,000 barrels per day to 4,270,000 barrels per day during the week, after our exports had fallen by an average of 705,000 barrels per day during the prior week...applying our oil exports to offset oil supplies from imports to determine our effective trade in oil, we find there was a net import average of 1,567,000 barrels of oil per day during the week ending April 15th, 2,249,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, production of crude oil from US wells was reportedly 100,000 barrels per day higher at 11,900,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have totaled an average of 13,467,000 barrels per day during the cited reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,717,000 barrels of crude per day during the week ending April 15th, an average of 194,000 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 1,817,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US….so based on that reported & estimated data, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from storage, from net imports and from oilfield production was 433,000 barrels per day less than what our oil refineries reported they used during the week…to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+433,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an 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 1,817,000 barrel per day decrease in our overall crude oil inventories left our total oil supplies at 969,713,000 barrels at the end of the week, our lowest oil inventory level since January 11th, 2008, and thus a 14 year low….this week's oil inventory decrease came as 1,146,000 barrels per day were being pulled our commercially available stocks of crude oil, while 672,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve at the same time....that draw on the SPR included a withdrawal under the initial 30,000,000 million barrel release from the SPR to address Russian supply related shortfalls, as well as an earlier ongoing withdrawal under the administration's 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 100,169,000 barrels have now been removed from the Strategic Petroleum Reserve over the past 21 months, and as a result the 555,980,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since February 1st, 2002, or at a 20 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs has already drained those supplies considerably over the past dozen years...with Biden's recent "Plan to Respond to Putin’s Price Hike at the Pump", an additional and unprecedented 1,000,000 barrels per day will be released from the SPR daily starting in May and running up to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising further up until that time....that total 180,000,000 barrel drawdown over six months will remove almost a third of what remains in the SPR at this time, as the following graph illustrates...

The above graph comes from a post by oil and gas researcher Rory Johnston at Substack, wherein he discusses the implications of the planned SPR release, and it shows the historical quantity of oil held in our Strategic Petroleum Reserve, beginning from its inception following the Arab Oil Embargo of 1973-74 to the present day...the graph is further annotated to indicate the reasons for major additions to and withdrawals from the SPR, most of which were due to disruptions to oil supplies following hurricanes in the Gulf (you can get a better view of that by clicking on the graph, or even better yet, the enlarged version at substack.com....on the far right, Rory has projected where the strategic petroleum Reserve will end up after the Biden withdrawals are complete, which will take the SPR back to its level of 1983, while it was still being filled...based on an estimated average daily US oil consumption of 18,000,000 barrels per day, the US will have roughly 18 1/2 days of oil supply left in the Strategic Petroleum Reserve this November, after all three of the Biden administration's SPR withdrawal programs have run their course ...

Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,098,000 barrels per day last week, which was still 3.1% more than the 5,916,000 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 100,000 barrels per day higher at 11,900,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 11,500,000 barrels per day, while Alaska’s oil production fell by 16,000 barrels per day to 428,000 barrels per day but had no impact on the final rounded national 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 still 9.1% below that of our pre-pandemic production peak, but was 41.2% 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 91.0% of their capacity while using those 15,717,000 barrels of crude per day during the week ending April 15th, up from the 90.0% utilization rate of the prior week, and close to the historical utilization rate for mid April refinery operations…the 15,717,000 barrels per day of oil that were refined this week were 6.4% more barrels than the 14,765,000 barrels of crude that were being processed daily during week ending April 16th of 2021, when refineries were still recovering from winter storm Uri, and 26.1 more than the 12,456,000 barrels of crude that were being processed daily during the week ending April 17th, 2020, when US refineries were operating at what was then a much lower than normal 67.6% of capacity at the onset of the pandemic, but 5.2% less than the 16,583,000 barrels that were being refined during the week ending April 19th 2019, when refinery utilization was at a modest 90.1% for the same week of April...

With the increase in the amount of oil being refined this week, gasoline output from our refineries was also higher, increasing by 335,000 barrels per day to 9,836,000 barrels per day during the week ending April 15th, after our gasoline output had increased by 377,000 barrels per day over the prior week.… this week’s gasoline production was 4.8% more than the 9,386,000 barrels of gasoline that were being produced daily over the same week of last year, and fractionally above the gasoline production of 9,781,000 barrels per day during the week ending April 19th, 2019, ie, the year before the pandemic impacted gasoline output....at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 162,000 barrels per day to 4,816,000 barrels per day, after our distillates output had decreased by 388,000 barrels per day over the prior week…with that increase, our distillates output was 5.7% more than the 4,555,000 barrels of distillates that were being produced daily during the week ending April 16th of 2021, but 4.9% less that the 5,064,000 barrels of distillates that were being produced daily during the week ending April 19th, 2019...

Even with the increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the tenth time in eleven weeks, decreasing by 761,000 barrels to 232,378,000 barrels during the week ending April 15th, after our gasoline inventories had decreased by 3,648,000 barrels over the prior week....our gasoline supplies decreased by less this week even though the amount of gasoline supplied to US users increased by 132,000 barrels per day to 8,868,000 barrels per day, because our imports of gasoline rose by 158,000 barrels per day to 597,000 barrels per day while our exports of gasoline rose by 32,000 barrels per day to 918,000 barrels per day...and even with 10 inventory drawdowns over the past 11 weeks, our gasoline supplies were still only 1.1% lower than last April 16th's gasoline inventories of 234,982,000 barrels, and 3% below the five year average of our gasoline supplies for this time of the year…

Likewise, even with this week's increase in our distillates production, our supplies of distillate fuels decreased for the eleventh time in fourteen weeks and for the 23rd time in thirty-three weeks, falling by 2,642,000 barrels to a fourteen year low of 108,735,000 barrels during the week ending April 15th, after our distillates supplies had decreased by 2,902,000 barrels during the prior week…our distillates supplies fell again this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 338,000 barrels per day to 3,822,000 barrels per day, even as our exports of distillates fell by 261,000 barrels per day to 1,478,000 barrels per day, and while our imports of distillates fell by 50,000 barrels per day to 104,000 barrels per day.....after thirty-six inventory decreases over the past fifty-two weeks, our distillate supplies at the end of the week were 23.6% below the 143,464,000 barrels of distillates that we had in storage on April 9th of 2021, and about 20% below the five year average of distillates inventories for this time of the year…

The depressed level of our distillate supplies has led to diesel fuel and heat oil prices that are often $1 per gallon more than the already elevated price of gasoline...supplies of diesel and pricing of it are also elevated in Europe and globally, leading to economic restrictions ​and power outages ​in countries that cant afford it, such as Sri Lanka and Pakistan...although those diesel shortages had developed over time, the loss of Russian oil has exacerbated the situation, ​because refineries get more diesel per barrel oil out of a heavy crude than they do from a light one, and most Russian oil exports are medium heavy sour crudes....that global shortage of diesel also explains ​the thinking behind ​the 1 million barrel per day SPR release better than the administration's political messaging around gasoline prices...for US Gulf Coast and European refineries that were built to use a medium heavy crude like Russian Urals, ​they need to find an equivalent grade ​of crude ​to replace it, or do some expensive blending of other grades to match it…remember that the administration’s first frantic moves ​after the Russian oil ban ​were to try to get Venezuelan oil and even Iranian oil back on the market to ​replace it?…the US Strategic Petroleum Reserve is 60% heavier grades of crude, so it appears tha​t they’re pulling it out​ to replace embargoed Russian oil​…most oil we get from shale ​is light​ and sweet​, typically more expensive, but worthless when one is trying to replace Russian oil losses...and th​ose losses also explain our rising exports to Europe..

The big jump in our oil exports, combined with elevated exports of distillates and most other petroleum products, also meant that our total exports of crude oil and all the products made from it were at a record high of 10,600,000 barrels during the week ending April 15th, an increase of 17.9% from our total exports of 8,987,000 the prior week, and 60.1% higher than our total exports during the first four weeks of this year, before European demand was impacted by Russian troop movements...thiose record ​exports are quite evident in the chart below...

Meanwhile, with th​is week's record jump in our oil exports, our commercial supplies of crude oil in storage fell for the 24th time in 38 weeks and for the 33rd time in the past year, decreasing by 8,020,000 barrels over the week, from 421,753,000 barrels on April 8th to 413,733,000 barrels on April 15th, after our commercial crude supplies had increased by 9,382,000 barrels over the prior week…with this week’s decrease, our commercial crude oil inventories slipped to about 15% below the most recent five-year average of crude oil supplies for this time of year, but were still 18.7% above the average of our crude oil stocks as of the third weekend of April 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 then jumped again after last year's winter storm Uri froze off Gulf Coast refining, our commercial crude oil supplies as of this April 15th were 16.1% less than the 493,017,000 barrels of oil we had in commercial storage on April 16th of 2021, and were also 20.2% less than the 518,640,000 barrels of oil that we had in storage on April 17th of 2020, and 10.2% less than the 460,633,000 barrels of oil we had in commercial storage on April 19th of 2019…

The big jump in our oil exports, combined with elevated exports of distillates and most other petroleum products, meant that our total exports of crude oil and all the products made from it were at a record high of 10,600,000 barrels during the week ending April 15th, an increase of 17.9% from our total exports of 8,987,000 the prior week, and 60.1% higher than our total exports during the first four weeks of this year, before demand was impacted by Russian troop movements...

Finally, with our inventories of crude oil and our supplies of all products made from oil remaining near multi year lows, we are ​also ​continuing to keep track of 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 12,795,000 barrels this week, from 1,711,881,000 barrels on April 8th to 1,699,086,000 barrels on April 15th, after our total supplies are down b by 89 347,000 barrels over the first fifteen weeks of this year...this week was also the first time our total inventories have been below 1.7 billion barrels since March 14th, 2014, and hence our total inventories of oil & its products are at an eight year low, as the graph below shows...

This Week's Rig Count

The number of drilling rigs running in the US rose for the 70th time over the prior 82 weeks during the period ending April 22nd, but it still remained 12.4% below the prepandemic rig count (note: this week's tally includes 8 days, because last week's report was out a day early due to Good Friday)......Baker Hughes reported that the total count of rotary rigs drilling in the US increased by two to 695 rigs this past week, which was also 257 more rigs than the pandemic hit 438 rigs that were in use as of the April 23rd report of 2021, but was still 1,234 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 1 to 549 oil rigs during this week, after rigs targeting oil had increased by 2 during the prior week, and there are now 206 more oil rigs active now than were running a year ago, even as they still amount to just 34.1% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 19.6% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations was also up by 1 to 144 natural gas rigs, the most since October 11th, 2019, and up by 50 natural gas rigs from the 94 natural gas rigs that were drilling during the same week a year ago, even as they were still only 9.0% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008…in addition to rigs targeting oil and gas, Baker Hughes continues to show two "miscellaneous" rigs active; one is a rig drilling vertically for a well or wells intended to store CO2 emissions in Mercer county North Dakota, and the other is also a vertical rig, drilling 5,000 to 10,000 feet into a formation in Humboldt county Nevada that Baker Hughes doesn't track...

The offshore rig count in the Gulf of Mexico was unchanged at twelve this week, with all of this week's Gulf rigs drilling for oil in Louisiana waters....that's one more than the number of offshore rigs that were active in the Gulf a year ago, when ten Gulf rigs were drilling for oil offshore from Louisiana and one was deployed for oil in Texas waters…​and ​in addition to rigs drilling in the Gulf, this week also saw the startup of an offshore rig in the Cook Inlet of Alaska, where natural gas is being targeted at a depth greater than 15,000 feet...a year ago, there were no rigs offshore other than those in the Gulf....however, last year did have an inland water based rig active, while this week the last "inland waters" rig that was active has been shut down...

The count of active horizontal drilling rigs was up by 3 to 639 horizontal rigs this week, which was also 242 more rigs than the 398 horizontal rigs that were in use in the US on April 23rd of last year, but still 53.5% less than the record 1,374 horizontal rigs that were drilling on November 21st of 2014....on the other hand, the directional rig count was down by one to 31 directional rigs this week, but those were still up by 12 from the 19 directional rigs that were operating during the same week a year ago…meanwhile, the vertical rig count was unchanged at 25 vertical rigs this week, while those were still up by 3 from the 22 vertical rigs  that were in use on April 23rd 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 April 22nd, the second column shows the change in the number of working rigs between last week’s count (April 14th) and this week’s (April 22nd) count, the third column shows last week’s April 14th 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 23rd of April, 2021...

As you can see, there weren't many changes this week; there were two oil rigs added in North Dakota's Williston basin, another rig was added in Oklahoma's Cana Woodford, and yet another oil rig was added to Oklahoma's Ardomore Woodford at the same time....however, since the Oklahoma rig count was unchanged, and since the national oil rig count was only up by one, we can figure that two oil rigs had to have been shut down elsewhere in Oklahoma, in a basin or basins that Baker Hughes doesn't track... checking the Rigs by State file at Baker Hughes for the changes in the Eagle Ford region, we find that two rigs were added in Texas Oil District 1, but that a rig was pulled out of Texas Oil District 2; one of those rig additions accounts for the addition of a 10th natural gas rig in the Eagle Ford; the other addition was offset by the rig removal in District 2 and could have been targeting oil or gas (the North America Rotary Rig Count Pivot Table (XLS) provides county level details, should you want to know exactly what and where those changes were)...since the Alaska rig addition was also targeting natural gas in the Cook inlet, and since the national gas rig count was only up by one, that means there had to have been a natural gas rig removed elsewhere that had been drilling for natural gas... checking the aforementioned North America Rotary Rig Count Pivot Table, we find the rig that was removed from Wyoming was a horizontal rig that had been targetting naturual gas at a depth of more than 15,000 feet in the Green River Basin in Sublette County, which is a basin that Baker Hughes doesn't track...

DUC well report for March

Monday of this week saw the release of the EIA's Drilling Productivity Report for April, which included the EIA's March data on drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions (shown under the report's tab 3)....that data showed a decrease in uncompleted wells nationally for the 22nd consecutive month in March, as both completions of drilled wells and drilling of new wells increased in March, but remained well below average pre-pandemic levels...for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 114  wells, falling from 4,387 DUC wells in February to 4,273 DUC wells in March, which was the lowest number of US wells left uncompleted on record, and also 38.1% fewer DUCs than the 6,905 wells that had been drilled but remained uncompleted as of the end of March of a year ago...this month's DUC decrease occurred as 823 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during March, up from the 779 wells that were drilled in February, while 937 wells were completed and brought into production by fracking them, up by 9 from the 928 well completions seen in February, and up by 387 from the 854 completions seen in March of last year....at the March completion rate, the 4,273 drilled but uncompleted wells remaining at the end of the month represents a 4.6 month backlog of wells that have been drilled but are not yet fracked, down from the 4.7 month DUC well backlog of a month ago, and the lowest backlog since December 2014, despite a completion rate that is still more than 20% below 2019's pre-pandemic average...

only the oil producing regions saw a net DUC well decrease during March, since the natural gas producing Haynesville shale saw an increase in DUCs that was greater than the Appalachian DUC decrease....the number of uncompleted wells remaining in the Permian basin of west Texas and New Mexico decreased by 71, from 1,380 DUC wells at the end of February to 1,309 DUCs at the end of March, as 362 new wells were drilled into the Permian basin during March, while 433 already drilled wells in the region were being fracked....in addition, DUC wells in the Niobrara chalk of the Rockies' front range decreased by 14, falling from 331 at the end of February to a record low of 317 DUC wells at the end of March, as 90 wells were drilled into the Niobrara chalk during March, while 104 Niobrara wells were completed....meanwhile, the number of uncompleted wells remaining in Oklahoma's Anadarko basin decreased by 13, falling from 753 at the end of February to 740 DUC wells at the end of March, as 55 wells were drilled into the Anadarko basin during March, while 68 Anadarko wells were completed....at the same time, there was a decrease of 11 DUC wells in the Bakken of North Dakota, where DUC wells fell from 426 at the end of February to a record low of 415 DUCs at the end of March, as 65 wells were drilled into the Bakken during March, while 76 of the drilled wells in the Bakken were being fracked.....in addition, DUCs in the Eagle Ford shale of south Texas also decreased by 11, from 653 DUC wells at the end of February to a record low of 642 DUCs at the end of March, as 90 wells were drilled in the Eagle Ford during March, while 101 already drilled Eagle Ford wells were being fracked....

among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 6 wells, from 473 DUCs at the end of February to a record low of 467 DUCs at the end of March, as 89 wells were drilled into the Marcellus and Utica shales during the month, while 95 of the already drilled wells in the region were fracked....on the other hand, the uncompleted well inventory in the natural gas producing Haynesville shale of the northern Louisiana-Texas border region rose by 12, from 371 DUCs in Februrary to 383 DUCs by the end of March, as 72 wells were drilled into the Haynesville during February, while 60 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of March, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) decreased by a total of 120 wells to 3,423 DUC wells, while the uncompleted well count in the major natural gas basins (the Marcellus, the Utica, and the Haynesville) increased by net of 6 wells to 850 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas... 

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An Oil Billionaire Is Trying to Crush Nina Turner in Ohio – A super PAC bankrolled by a fossil fuel magnate is launching last-minute ads to try to crush the congressional candidacy of a leading proponent of a Green New Deal as scientists warn that oil and gas emissions are making the planet unlivable. If successful, the gambit would deliver an intimidating message from the fossil fuel industry to other Democratic candidates pressing the government to address the climate crisis.One month after Samson Energy mogul Stacy Schusterman poured $2 millioninto Democratic Majority for Israel (DMFI) PAC, the group purchased TV adsstarting Monday to boost Representative Shontel Brown (D-OH) in her primary campaign rematch against former Ohio state senator Nina Turner in a newly redrawn Cleveland congressional district. The primary election date is May 3.Last year, DMFI PAC spent $1.9 million attacking Turner and promoting Brown, helping the latter win the seat in a special election. The group also spent $1.4 million attacking Senator Bernie Sanders (I-VT) during his 2020 presidential campaign.Turner, who cochaired Senator Sanders’s 2020 campaign, has been campaigning for a Green New Deal and pressing the Biden administration to ban fracking. Brown has declined to cosponsor some of House Democrats’ most high-profile climate legislation, including the Climate Emergency Act — even after United Nations scientists’ recent dire warning about the crisis.While Brown’s campaign website says she supports “the principles laid out in the Green New Deal,” she has not cosponsored the measure in Congress. Schusterman chairs Oklahoma-based Samson Energy, whose website describes it as a company that “was formed to allow the Schusterman family to remain in the oil and gas exploration and production business following their sale of Samson Investment Company in 2011.” The company has been one of the country’s largestper-well emitters of greenhouse gas emissions.

Marcellus Natural Gas Conduit Adelphia Begins Partial Service on Expansion Adelphia Gateway LLC has started partial service on its brownfield natural gas pipeline expansion project moving Marcellus Shale supply to growing demand markets in eastern Pennsylvania and beyond, pipeline flow data shows. Adelphia started flowing on Monday, moving natural gas supply from the Quakertown meter station through the Marcus Hook facility to the Tilghman meter. Receipts at the Texas Eastern Transmission Co. West Rockhill interconnect are at around 8.1 MMcf/d, while deliveries at Peco Energy Co.’s Tilghman interconnect are at 8 MMcf/d, according to Wood Mackenzie. However, flows are expected to ramp up, Wood Mackenzie analyst Devin Cao said. “This partial service will deliver 31.5 MMcf/d from the West Rockhill receipt to the Peco-Tilghman delivery point,” which is subscribed by Peco and parent company Exelon Corp. The Adelphia Gateway Phase II project is around 93% completed, with most of the remaining work still to be done at the Quakertown compressor station, Cao said. The meter station portion of the Quakertown facility already is operational and flowing gas to the south zone. FERC granted Adelphia a certificate for the expansion project in late 2019 in a 2-1 vote after it secured the permits needed to begin construction from the Pennsylvania Department of Environmental Protection. It started pre-construction activities in the fall of 2020. Part of the pipeline was already moving gas to two power plants in Northampton County, PA, but the expansion repurposes the southern segment to move additional volumes. The system – which once delivered oil to a refinery near Philadelphia – has been designed to move 175,000 Dth/d on Zone North A, 350,000 Dth/d on Zone North B and 250,000 Dth/d on Zone South. In January, the Federal Energy Regulatory Commission granted Adelphia an extension until June 2023 to complete the entire project. The pipeline developer cited regulatory delays, the ongoing Covid-19 pandemic and supply chain issues in its request for an extension. However, Cao said it seems more likely that the project would come online before the end of this year.

Monday Deadline for Comments on PA Gas Pipeline Expansion - Pennsylvanians have until Monday to submit public comments on a draft Environmental Impact Statement for a gas pipeline expansion in Northeastern Pennsylvania. Some critics of the project say the Federal Energy Regulatory Commission has not properly considered all the effects of the proposal.The Regional Energy Access Expansion, by the Transcontinental Gas Pipe Line Company, would add 22 miles of pipeline in Luzerne County and nearly 14 miles in Monroe County.Jessica O'Neill, senior attorney for the group PennFuture, said the draft Environmental Impact Statement does not go far enough in discussing how additional pipelines would affect natural resources."This pipeline would cut across really sensitive, exceptional value waterways, and we don't think the draft EIS does enough to look at the cumulative impact of the cuts through these waterways," O'Neill explained. "There's endangered and protected species; there are a lot of people that rely upon the high-quality waterways for their living."The public comment deadline is 5 p.m. Monday, and comments can be submitted online. A spokesperson for FERC said the commission will address issues raised in the comments and provide recommendations in a final Environmental Impact Statement in July.O'Neill added it is important for Pennsylvania residents, especially from the affected counties, to make their views known. She pointed out they will have information unique to their communities the agencies involved might not know about."That's how we can make sure that even if these pipelines are built, that appropriate measures are put in place to protect waterways," O'Neill stressed. "And that the permits have appropriate protective requirements and conditions and mitigation requirements, to try to preserve our high-quality streams and wetlands." Pennsylvania is the nation's second-largest natural gas producer. The proposed pipeline route also crosses habitat for threatened and endangered plant and animal species, including white-fringed orchid, Indiana bat, northern long-eared bat, timber rattlesnake and bog turtle.

Children and adults call for environmental justice review of proposed Newark power plant - Some residents of Newark's Ironbound section oppose a natural gas-fired backup power plant proposed by the Passaic Valley Sewerage Commission for its treatment plant on Newark Bay. They held a protest at a community garden on Ferry Street on Wednesday.

Steeper basis discounts hit Eastern Gas South as Appalachian production climbs - S&P Global - Peak-summer basis prices at Appalachia's benchmark hub Eastern Gas South have fallen to an eight-week low in recent trading as gas production across the region shows signs of upward momentum. Calendar-month prices for June, July and August 2022 are now trading at roughly $1/MMBtu discount to the Henry Hub, making for the widest spread since late February when a series of production freeze-offs fueled a steep rise in benchmark US gas prices, S&P Global Commodity Insights data shows. After rallying alongside Henry Hub earlier this spring, prices at Eastern Gas South appeared to dislocate from the US benchmark recently as Henry Hub summer prices tested historic highs at over $8/MMBtu. Since mid-April, the Eastern Gas South peak-summer strip has widened its discount to Henry Hub by roughly 25 cents, or about 30%, as traders began to doubt the sustainability of $6-$7/MMBtu gas prices in Appalachia this summer. The widening forward price spread from Eastern Gas to Henry Hub also comes as Appalachian Basin gas production shows modest but steady signs of growth. In April, production across the Marcellus and Utica shales has edged up to an average 33.2 Bcf/d, or its highest since January, S&P Global data shows. Based on recent upstream activity, production could be expected to continue growing this summer. Drilling, completions In March, operators across the Appalachian Basin drilled an estimated 89 new wells, hitting a pandemic-era high not seen since April 2020, data from the US Energy Information Administration shows. While well completions in March were unchanged at 95, the monthly numbers appear to have plateaued recently at close to prepandemic levels, the Drilling Productivity Report data shows. While well completions in March were unchanged at 95, the monthly numbers appear to have plateaued recently at close to prepandemic levels, the Drilling Productivity Report data shows. In the week ended April 20, the drilling rig count across the Marcellus and Utica shales edged up to 53 and is now just two rigs shy of a 30-month high recorded in March, data published by Enverus shows.Recent upstream investments could be a bullish indicator for Appalachian gas production this summer – a topic that is likely to be addressed by the region's producers on upcoming first-quarter earnings calls.According to an updated forecast published by S&P Global, combined output from the Marcellus and Utica could top 34 Bcf/d by later this summer and potentially reach 34.5 Bcf/d by late 2022.’

Natural gas pipeline future in doubt after SCOTUS rejection - The U.S. Supreme Court on Monday declined to hear a St. Louis-based natural gas company’s appeal of a lower court’s decision that could close a pipeline that runs through parts of Illinois and Missouri.The court rejected Spire Inc.’s appeal without comment. Spire President Scott Smith pledged to continue fighting to keep the 65-mile (105-kilometer) pipeline up and running.The Federal Energy Regulatory Commission granted approval for the pipeline in 2018 and it became fully operational in 2019. The Spire STL Pipeline connects with another pipeline in western Illinois and carries natural gas to the St. Louis region, where Spire serves around 650,000 customers.The Environmental Defense Fund sued in 2020, raising concerns that the pipeline was approved without adequate review. In June, a three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled that FERC had not adequately demonstrated a need for the project, vacating approval of the pipeline.EDF attorney Erin Murphy said in a statement Monday that the lower court ruling found “serious flaws” in FERC’s approval, “including failing to assess the harms to ratepayers and landowners.”As the case played out in court, FERC last year issued a temporary certificate allowing the pipeline to remain operational. The temporary order continues to stand while the agency considers Spire’s appeal to FERC seeking new approval of the pipeline. “We are confident that when people have an opportunity to review the proven benefits of the STL Pipeline, they will agree that there is a critical need to keep this infrastructure fully operational to ensure continued access to reliable, affordable energy for families and businesses in the greater St. Louis region,” Smith said in a statement.

U.S. Climate Envoy John Kerry Puts Natural Gas on Notice - U.S. climate envoy John Kerry on Thursday put natural gas on notice, saying the world’s reliance on the fossil fuel should be limited to potentially a decade, unless its greenhouse gas emissions are fully captured. Though natural gas burns cleaner than coal when used to generate electricity, it should not be part of a long-term climate strategy without emission-control technology, Kerry said in an interview Thursday with Bloomberg Television.“If you can capture the emissions -- literally, genuinely -- then you’re reducing the problem,” said Kerry, the U.S. special presidential envoy for climate. “We have to put the industry on notice: You’ve got six years, eight years, no more than 10 years or so, within which you’ve got to come up with a means by which you’re going to capture, and if you’re not capturing, then we have to deploy alternative sources of energy”

Gas ban 2.0: Building wars Across the U.S., government officials, utilities and the natural gas industry are unveiling road maps that could change how buildings derive their heat over the coming decades, a shift with major consequences for emissions. The blueprints wrestle with the same question: Will natural gas and its alternatives be the fuel of choice or will electricity? The tug of war between the two visions could decide how — or if — the nation manages to scale down a top source of greenhouse gases for many cities and states. It also could influence the trajectory of U.S. natural gas and how it is used. Advertisement For the gas industry and its allies, low-emissions heating can be achieved by still using gas and gradually blending in lower-carbon substitutes like hydrogen. But many climate activists and progressives are aiming to grant electric technologies the overwhelming share of the market, while banning the use of gas boilers, water heaters and stoves. This year, the battle has heated up with competing legislative plans and industry road maps. It remains unclear which technologies will win and ultimately dominate. Nationally, natural gas and electricity currently are neck and neck as sources for building heat, with each one providing roughly 40 percent of the market. “We’re just starting down this road,” “We’re still not sure what the future holds.” In Maryland and New York, Democratic legislators tried to push through this year what would have been the first statewide fossil fuel bans for new buildings — but fell short amid resistance. Other states are contemplating a more limited step of ending free natural gas hookups in new homes. On Capitol Hill, progressive Democrats also are urging President Joe Biden to guarantee a federal buyer for millions of electric heat pumps. They say that could help Europe disconnect from Russian gas and, in passing, make it cheaper for Americans to ditch gas heat. Across much of the country, however, there are already multiple laws backed by the natural gas industry that have helped lock in the fuel’s role in heating buildings. Twenty states prevent cities from banning gas use in buildings. Ten others prohibit electric utilities from encouraging customers to ditch gas. The industry is adding to that foundation with road maps that eye greater use of new fuels such as “renewable natural gas” and hydrogen for building heat. In February, for example, the American Gas Association published a road map called “Net-Zero Opportunities for Gas Utilities” in which low-carbon gases would supply anywhere from 39 percent to 58 percent of the necessary emissions reductions. “Through this work we’re really hoping to elevate the conversation beyond just a simple — is it electric versus gas?” said Richard Meyer, AGA’s vice president of energy markets, analysis and standards.

US Natural Gas Output Seen Climbing in May on Strength of Haynesville, Appalachia - Natural gas production is set to rise more than 700 MMcf/d from April to May on the strength of output growth from the Haynesville Shale, and from the Appalachian and Permian basins, updated projections from the Energy Information Administration (EIA) show.Modeling trends from seven key U.S. onshore producing regions, EIA said in its latest Drilling Productivity Report (DPR) Monday that it expects total natural gas output from these areas to climb 721 MMcf/d from April to May, reaching slightly under 91 Bcf/d.Of the seven regions — the Anadarko, Appalachian and Permian basins, as well as the Bakken, Eagle Ford, Haynesville and Niobrara formations — only the Anadarko is expected to see natural gas output decrease from April to May. EIA said the Anadarko region is on pace for a 15 MMcf/d month/month decline. Appalachia (up 197 MMcf/d), the Bakken (up 27 MMcf/d), the Eagle Ford (up 110 MMcf/d), the Haynesville (up 245 MMcf/d), the Niobrara (up 3 MMcf/d) and the Permian (up 154 MMcf/d) will all contribute output growth for the period, according to the DPR modeling.The latest domestic production forecasting comes as Nymex futures have soared to nearly $8/MMBtu, with analysts pointing to supply adequacy fears as a key catalyst driving prices higher. Only time will tell how much the pace of domestic output growth is able to quell market concerns over refilling storage and accommodating summer cooling demand.Oil production from the seven regions, meanwhile, is set to increase by 132,000 b/d month/month to around 8.65 million b/d, EIA said. The Permian (up 82,000 b/d), Eagle Ford (up 26,000 b/d) and the Bakken (up 17,000 b/d) are set to contribute most of the oil productivity gains. More modest growth is expected from the Anadarko (up 3,000 b/d), Appalachia (up 3,000 b/d) and Niobrara (up 1,000 b/d) regions.The total number of drilled but uncompleted (DUC) wells across the seven regions fell 114 units to 4,273 between February and March, the most recent DPR data show. The Permian posted the largest drawdown for the period at 71, leaving its total DUC backlog at 1,309 as of March, according to EIA.DUC totals also declined in the Anadarko (down 13), Appalachia (down 6), Bakken (down 11), Eagle Ford (down 11) and Niobrara (down 14) regions. The Haynesville, meanwhile, added 12 DUC wells to its backlog month/month, ending with 383 as of March, the EIA data show.EIA’s DPR makes use of recent rig data along with drilling productivity estimates and estimated changes in production from existing wells to model changes in production from the seven regions.

Natural gas surges to highest level since 2008 as Russia's war upends energy markets - U.S. natural gas prices surged to the highest level in more than 13 years Monday as Russia's war on Ukraine causes a global energy crunch and as forecasts called for cooler spring temperatures. Futures jumped 10% to trade as high as $8.05 per million British thermal units, the highest since September 2008. The jump builds on recent strength, with natural gas coming off five straight positive weeks. Prices later retreated slightly, with the contract ending the day 7.12% higher at $7.82. "The impact of the conflict between Ukraine and Russia is likely to be long-lasting for North American natural gas markets," EBW Analytics added that a "bullish weather shift" has sent the U.S. market into "overdrive." For the year, U.S. natural gas prices are now up 108%, which is adding to inflationary concerns across the economy. The move is less extreme than in Europe, where natural gas futures have risen to record levels as the bloc scrambles to move away from dependence on Russian energy. The U.S. is now sending record amounts of liquefied natural gas to Europe, which is lifting Henry Hub prices. "LNG exports have taken on more significance with geopolitics and demand from both power generation/ industrial usage are strong. The US role as an exporter continues to increase," noted RBC. "There is a fundamentally constructive backdrop driven by record LNG outflows, strong Mexico exports, and producer discipline," the firm added. Amid the jump in prices producers have kept output under control, and inventory in storage is now 17% below the five-year average, a "[T]he US is starting to potentially look like Europe this time last year crushing the near-term seasonality and switching the curve to a constant demand scenario," he said. "Additional pressure on natural gas is also coming from the battle between Asia and Europe for spare LNG cargoes which will inevitably be diverted away from the US west coast and New England coming into next winter,"

Natural gas drops 10%, pulls back from more than 13-year high - U.S. natural gas futures plunged more than 11% at the lows Tuesday, reversing Monday's surge which saw the contract rally more than 10% at one point to break above $8 per million British thermal units and hit the highest level since September 2008.Henry Hub prices declined 11.1% at the session low to trade at $6.95. However the contract made back some of those losses during afternoon trading, and ultimately settled 8.24% lower at $7.176.From Monday's high to Tuesday's low the May contract shed 13.8%. Natural gas prices have been on a tear since Russia's invasion of Ukraine in late February. The contract is coming off five straight weeks of gains and is up nearly 90% for the year. Pointing to the relative strength index, a momentum indicator, Maley said the commodity was second-most overbought since 2003. "Its RSI chart is now up to levels that have been followed by short-term pullbacks in the past," he noted Thursday. "We are still bullish on natural gas (and natural gas-related stocks), so we're not saying that investors should take profits right here. Instead, we [are] merely saying that investors should avoid chasing these assets over the near term." Prices surged Monday on forecasts for colder spring temperatures, fuel switching from coal to natural gas, as well as the U.S. sending record amounts of LNG to Europe.

Natural Gas Forward Prices Ease Lower as Rally Finally Starts to Lose Steam -As the relentless march higher for natural gas prices finally began to show signs of slowing down, forwards prices recorded discounts throughout the Lower 48 during the April 14-20 trading period, NGI’s Forward Look data show. Fixed prices for May delivery at benchmark Henry Hub eased 6.0 cents lower to end the period a hair below $7 at $6.938/MMBtu. In turn, fixed price discounts of around a nickel to a dime were the norm at most locations, though pipeline maintenance appeared to drive steeper declines at a number of Appalachian natural gas hubs.Meanwhile, Nymex futures had appeared poised to reach beyond the $8.00 threshold, but after setting a high of $8.065 in Monday’s session, the May contract retreated from there. Following a bearish storage miss from the latest Energy Information Administration (EIA) report Thursday, the prompt month eked out a 2.0-cent gain to settle at $6.957. June climbed 3.1 cents to $7.096.Entering Thursday’s session, it was a technically significant question whether bears could push prices “decisively” below the $7 mark for the June contract, ICAP Technical Analysis analyst Brian LaRose told clients.“With the June contract just holding above this level, a surge to $8.570-8.606 still can not be ruled out,” LaRose said. “However, for that to happen, the bulls will have to stage an immediate intervention. Should the bulls fail to step in the door will be open for a ‘mean reversion’ and a visit to the 22-day moving averages.”The latest inventory report offered little incentive for bulls to stage such an intervention and reclaim the momentum Thursday.EIA reported a 53 Bcf injection into U.S. gas stocks for the week ended April 15, overshooting both consensus estimates and the 42 Bcf five-year average build.The print left inventories at 1,450 Bcf, 292 Bcf (minus 16.8%) lower than five-year average stocks, according to the agency.Bespoke Weather Services observed that the latest EIA number could represent something of a “make-up” following a bullish miss in the data from a week earlier. “Either way, we have definitely loosened, just based on these last couple of weeks.”The latest balances would put inventories on a trajectory for end-of-season storage above 3.6 Tcf, according to the firm’s modeling.“Keep in mind, this is solely extrapolating forward based on the last two weeks, so is prone to large errors,” Bespoke said. “That means we are not in the clear, but this probably limits near-term upside risk.”As recent price action showed the market making a clear call on supplies, the latest numbers from Enverus point to a modest sequential decline in rig activity. Still, upstream operators have increased development substantially over the past year. Enverus recorded a three-rig increase in the U.S. count for the week ended April 20, raising the total number of active domestic rigs to 770.“Activity levels are down less than a percent in the last month and up 49% year/year,” according to Enverus. “The count was as high as 781 in the last week, which is up 12 compared to the prior week’s peak.”

U.S. natgas futures extend decline on milder weather forecasts (Reuters) - U.S. natural gas futures fell more than 3% on Wednesday, extending their decline as forecasts indicated a turn to slightly warmer weather that could dent demand for the fuel to heat homes and businesses. Front-month gas futures settled 23.9 cents or 3.3% lower at $6.937 per million British thermal units after having dropped as much as over 5% to 6.791 per mmbtu earlier in the session. On Tuesday, prices settled 8% lower following rallies to 13-year peaks in preceding days driven in part by an unseasonal cold snap coming at a time when the market generally shifts to moving gas into storage in preparation for the next winter. "If you look at the weather path next two weeks, we will start to get some single day double digit storage injections and we should start to normalize a little bit more towards the traditional summer injection schedule," Data provider Refinitiv estimated there would be 131 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, closer to the 30-year norm of 122 HDDs for this time of year. HDDs, used to estimate demand to heat homes and businesses, measure the number of days a day's average temperature is below 65 degrees Fahrenheit (18 Celsius). Refinitiv projected average U.S. gas demand, including exports, would drop from 99.5 bcfd this week to 91.9 bcfd next week. Those forecasts were higher than Refinitiv's outlook on Tuesday. Meanwhile, data from Refinitiv showed average gas output in the U.S. Lower 48 states was at 94.4 billion cubic feet per day (bcfd) so far in April from 93.7 bcfd in March, down from December's monthly record of 96.3 bcfd. "There still remains much upside risk in the current market," analysts at Gelber & Associates said in a note. "Storage injections through the month of April will not be able to keep up with those of the five-year average, and the deficit between 2022 storage and the five-year will increase, placing the market in an environment where the prospect of additional tightness could allow prices to reclaim territory lost today."

Weekly US gas storage build surpasses analyst forecast at 53 Bcf | S&P Global Market Intelligence --Natural gas storage operators injected a net 53 Bcf into Lower 48 inventories during the week ended April 15, above the five-year average build of 42 Bcf, the U.S. Energy Information Administration reported.The injection, which surpassed the 31 Bcf forecast by an S&P Global Platts analyst survey, brought total working gas supply to 1,450 Bcf, or 428 Bcf below the year-ago level and 292 Bcf below the five-year average.By region:

• * In the East, inventories rose by 9 Bcf to 238 Bcf, 26% lower than the year-ago level.
• * In the Midwest, inventories increased by 11 Bcf to 304 Bcf, 28% under a year ago.
• * In the Mountain region, storage levels decreased by 1 Bcf to 89 Bcf, down 25% from a year earlier.
• * In the Pacific region, stockpiles were unchanged at 169 Bcf, down 19% from the year-ago level.

* In the South Central region, stockpiles climbed by 33 Bcf to 650 Bcf, down 20% from a year earlier. Of that total, 201 Bcf was in salt cavern facilities and 449 Bcf was in non-salt-cavern facilities. Working gas stocks grew 8.1% in salt cavern facilities from the week before and rose 4.2% in non-salt-cavern facilities.

U.S. natgas marks weekly dip after bigger storage build — U.S. natural gas futures fell on Friday en route to their first weekly dip in six, with the pullback from 13-year peaks scaled earlier in the week hastened by a larger-than-expected weekly storage build. Front-month gas futures fell 42.3 cents to settle 6.1% lower at $6.534 per million British thermal units. Prices shed more than 10% this week, its worst week since the one ended Feb. 11 and also its first weekly dip in six. U.S. Energy Information Administration data showed utilities added 53 billion cubic feet (bcf) of natural gas to storage last week, compared with analysts' expectations for a smaller-than-usual 37 bcf build. Meanwhile, the number of U.S. gas rigs increased to 144 this week, matching a firgure last touched in early October 2019, energy services firm Baker Hughes Co said on Friday. However, U.S. gas stockpiles are still currently 16.8% below the five-year (2017-2021) average for this time of year. U.S. gas futures have soared about 79% so far this year with much higher prices in Europe keeping demand for U.S. LNG near record highs as several countries try to wean themselves off Russian gas after Moscow invaded Ukraine on Feb. 24. Prices hit a 13-year high of $8.065 per mmBtu on Monday, driven by expectations of an unusually cold April, but have since retreated as weather forecasts turned more moderate. "The recent gas price roller-coaster ride certainly has caught everyone's attention," said Zhen Zhu, managing consultant at C.H. Guernsey and Co in Oklahoma City. "As the gas market becomes more and more internationally integrated, we will definitely see the convergence in gas prices, with the U.S. price rising to eliminate or narrow down that gap." Data provider Refinitiv estimated there would be 126 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, slightly above the 30-year norm of 116 HDDs for this time of year. The estimate is higher than Thursday's forecasts. HDDs, used to estimate demand for heating of homes and businesses, measure the number of days a day's average temperature is below 65 degrees Fahrenheit (18 Celsius). Refinitiv projected average U.S. gas demand, including exports, would drop from 98.4 bcfd this week to 92.7 bcfd next week. Meanwhile, data from Refinitiv showed average gas output in the U.S. Lower 48 was at 94.4 billion cubic feet per day (bcfd) so far in April, down from 93.7 bcfd in March, and well below December's monthly record of 96.3 bcfd.

DT Midstream Joins Growing Endeavor to Tackle Emissions Across Natural Gas Industry - Natural gas pipeline and storage provider DT Midstream Inc. (DTM), with a portfolio that includes 900 miles of regulated interstate pipelines, said Wednesday it would join a rapidly growing project aimed at better understanding the energy industry’s role in greenhouse gas (GHG) emissions. A day later, Houston-based Kinder Morgan Inc. (KMI), one of the largest energy infrastructure companies in North America, jumped aboard as well. The companies said they partnered with Cheniere Energy Inc., the largest U.S. producer of liquefied natural gas (LNG), in an effort to study emissions. They also aim to develop new protocols to capitalize on technology and bolster clean energy supplies.The project, which includes a swelling slate of midstream companies as well as academic researchers, involves quantification, monitoring, reporting and verification (QMRV) of emissions at natural gas gathering, processing, transmission and storage systems. Earlier this week, Williams joined the Cheniere-led effort. It followed several others, including Aethon Energy Management, Ascent Resources Utica LLC, EQT Corp., Indigo Natural Resources LLC and Pioneer Natural Resources Co.“Joining this collaborative is one of the many steps our team has taken to position DT Midstream on a path to net zero by 2050,” which is also the federal standard, said DT Midstream CEO David Slater. “It will also serve as an important step towards providing a carbon neutral pathway for customers interested in reaching Cheniere’s LNG export terminal.”

Would natural gas by any other name smell the same? - Everyone knows what natural gas is. It’s the stuff we use to heat our homes and fuel power plants across the state. But now, with the stroke of a pen and a vote, the 22-member group charged with designing New York’s road map to a carbon-free economy has changed the name of natural gas to “fossil gas.” The new name emerged back in December when members of the state’s appointed Climate Action Council agreed to use the term in their draft scoping plan which is a road map to clean energy in the coming years. The plan lays out preliminary strategies and policies for making large-scale reductions in CO2 emissions by 2050, as outlined in a 2019 law, the Climate Leadership and Community Protection Act. The draft plan refers to fossil gas in a number of contexts. “The vast majority of current fossil gas customers (residential, commercial, and industrial) will transition to electricity by 2050,” reads part of the plan that calls for electrification of buildings — that is using electricity rather than gas to heat homes, offices, schools and industrial spaces. The move hasn’t come without some controversy. And it’s an example of how language and semantics play a role in discussions about climate change and how to combat it. There are some technical reasons for changing the terminology. Natural gas, for instance, is in fact a fossil fuel. But using the term fossil gas rather than natural gas could also be seen as part of a larger effort to sell the state’s clean energy plans to the public. As policymakers enact an ambitious shift toward renewable power such as solar and wind, New Yorkers will see changes — in the kinds of cars they drive, the way they power their homes and probably in their energy bills, which will likely rise, at least in the short term, due to the changes. With that in mind, the language used to describe these changes is important in convincing the broader public that the cost is worthwhile in order to fight global warming. Council members reaffirmed that idea during a meeting last month when they voted to swap the term fossil gas for natural gas in a chapter about infrastructure such as pipelines in the draft scoping plan. “They said, and I agree, that calling gas ‘clean’ or ‘zero emissions’ or ‘natural’ is misleading. They further suggested calling gas ‘fossil gas’ rather than ‘natural gas,’ ” explained Robert Howarth, a Cornell University ecology and biology professor who serves on the Climate Action Council. The initial suggestion, he explained, came from a subcommittee of the CAC. “We have agreed that ‘fossil gas’ is less misleading than ‘natural gas,’ ” he said in an email.

Resource limits and our strange game of musical chairs - With a wide range of commodities in limited supply, various regions of the world are now behaving as if they are engaged in simultaneous games of musical chairs when it comes to commodity shortages.The games differ by commodity and by region, but they all share one characteristic: As in a game of musical chairs, someone will have to go without. And, as in a game of musical chairs, available supplies are shrinking (as represented by the removal of chairs).An interesting twist on this game is that now some chairs are being transferred from one game to another. For example, the Biden administration has declared that U.S. liquefied natural gas (LNG) exports to Europe will be stepped up in order to displace natural gas from Russia—which has become a suspect source due to the conflict between Russia and Ukraine and the broad economic sanctions against Russia. The gas still flows for now. But will Russia use a gas cutoff as a weapon? That is a question agitating all of Europe.Now here's what I mean about moving chairs from one game of musical chairs to another. It turns out that all of the United States' LNG export capacity is in use. There's none left to increase exports. Adding to the problem is Europe's limited ability to accept LNG cargoes as those cargoes need to be regassified and put into pipelines at special receiving and processing facilities that take years to build. It will also take years to build U.S. capacity substantial enough to make a dent in European dependence on Russian natural gas. The Russian threat of a cutoff remains and will remain a potent weapon for some time to come.Meanwhile, U.S. natural gas prices have levitated to levels last seen in the natural gas bull market of the late 2000s. Those prices may well go higher and stay there as domestic users vie for natural gas supplies that aren't going abroad. It's another game of musical chairs, in this case for U.S. consumers of natural gas.There is a persistent but erroneous belief that the so-called shale gas revolution in the United States is permanent and not a temporary phenomenon driven by too much "dumb" capital chasing a losing proposition. Higher prices will incentivize the extraction of more difficult-to-get gas. But that difficulty also means that the volumes are likely to be less per well. Meanwhile, production from existing wells continues to fall by 75 to 90 percent within three years. All that lost production has to be replaced BEFORE U.S. production can grow. By committing U.S. production for delivery to Europe, the United States has almost certainly condemned itself to a higher energy cost economy—unless it reneges on its promise. As I said, there are only so many chairs in this natural gas game of musical chairs and the United States just gave some of its chairs away. The Biden administration also announced that it is "waiving rules that restrict ethanol blending" in gasoline. The practical significance is that the percentage of ethanol in gasoline-based fuel will rise from 10 percent to 15 percent in areas where this has been previously prohibited between June 1 and September 15 because summertime weather is believed to increase smog from vehicles using this higher concentration of ethanol. The change will have only have a small impact on price—perhaps 10 cents for per gallon—and affect about 2,300 of the country's more than 100,000 gas stations. There will be another effect as well. The ethanol industry will require more corn to make corn ethanol for blending with gasoline. This is happening when corn prices are registering near all-time highs as supplies have been constricted by a combination of bad weather, sanctions related to the Russia/Ukraine conflict, and rising prices for nitrogen and other fertilizers necessary to maximize yields. In this game of commodity musical chairs, the U.S. administration has just moved a chair from the corn musical chairs game to the ethanol musical chairs game. Ethanol and therefore gasoline prices will be moderated and corn prices and therefore the price of many foods containing corn will be levitated.

Should EPA Back-Off Pollution Controls to Help LNG Exports Replace Russian Gas in Germany? - The nation’s top exporter of liquified natural gas, Cheniere Energy, is using Russia’s war on Ukraine to pressure the Biden administration for a break on regulations aimed at reducing toxic air emissions at its LNG export terminals in Louisiana and Texas. Environmental advocates are hoping the Biden administration stands firm on its March decision to finally, after nearly two decades, enforce limits on toxic air emissions from certain kinds of gas-powered turbines used in a variety of industrial operations, including the chilling and liquefaction of natural gas at Cheniere’s export terminals on the Gulf Coast for shipment overseas in large tanker vessels. But Russia’s war in Ukraine has placed enormous counterpressure on the president from the oil and gas industry and its supporters in Congress, Republicans and Democrats alike, who want U.S. LNG exports to replace Russian gas.Before the war, Russia was supplying about 40 percent of the EU’s gas. Jane Williams, executive director of California Communities Against Toxics, said now is precisely the moment in which Biden should show resolve in the face of Cheniere’s request to relax pollution controls. “If EPA says, ‘No, you don’t have to comply now, we will give you a waiver for two more years,’ then as soon as they do, every other operator of a stationary turbine will ask for the same thing,” said Williams, who is closely following the issue. In addition to the chillers making LNG, gas powered turbines are commonly used in electricity generation. “We have been trying to get (EPA) to reduce emissions from turbines for 30 years.” Attorneys at Bracewell, the Houston-based law firm that asked EPA in March for the break on Cheniere’s behalf, say the federal agency has not responded. An EPA spokeswoman said the agency was considering Cheniere’s request. The next move is Biden’s, and It’s not at all clear how the administration is going to react with the war in Ukraine raging, natural gas prices soaring, gasoline prices at the pump near record highs and the 2022 midterm elections approaching. At issue are rules for a type of gas turbine the EPA had held in abeyance since 2004 at the request of users in industry. EPA justified its action at the time by saying it might scuttle the pollution limits on those turbines altogether. A court ruling in 2007 eliminated the agency’s rationale for its stay on enforcement of the turbine pollution limits. Still, EPA kept the stay in place until March. In documents posted on its website, EPA acknowledged it was again reviewing a new petition from industry that could potentially result in sweeping aside the toxic air limits on the turbines. But it concluded those decisions were not likely to be made quickly, so there was no reason to continue a policy of not enforcing the toxic air limits, according to an agency explanation in the Federal Register.

‘Too Many Constraints’ to Rapidly Boost Lower 48 Oil, Natural Gas Production, Experts Say - Lower 48 oil and natural gas production is on the rise, particularly in the Permian Basin, but shortages of labor, materials and equipment will prevent a rapid supply response to current market tightness, according to experts. The Biden administration has called on U.S. producers to ramp up supply in order to lower gasoline prices and reduce global dependence on energy imports from Russia. However, publicly traded and privately held producers alike will be hard pressed to achieve dramatic production increases over the near term, according to NGI’s Patrick Rau, director of strategy and research. “Based on public guidance and Wall Street consensus estimates, we estimate that U.S. publics are going to grow natural gas production at about 3% this year,” Rau said on the latest episode of NGI’s Hub and Flow podcast. Their privately owned counterparts will “grow faster than that, and they are adding rigs at a faster pace. But we think there are simply too many constraints in place right now that will prevent both publics and privates from increasing production too quickly in 2022.” The Energy Information Administration (EIA), for its part, is forecasting a 4% increase in U.S. dry gas output and a 7% increase in oil production in 2022 versus 2021. One major constraint on supply is a lack of high-end, high-horsepower “super-spec” drilling rigs and qualified hydraulic fracturing crews, Rau said. “We note that there are a number of prominent oilfield service companies who are saying that capacity utilization for both those things right now is north of 90%, so there’s only so many extra rigs and crews folks could add even if they wanted to add more.” Producers also can no longer rely on their inventory of drilled but uncompleted (DUC) wells, which have fallen dramatically. The DUC well count throughout the primary Lower 48 onshore basins stood at 4,273 as of March, down from 6,905 in March 2021, according to EIA. \ Exploration and production (E&P) firms also have cited pressure from investors as a factor limiting production growth, as shareholders have demanded that a greater percentage of cash flow from operations be returned to them, rather than reinvested as capital expenditure. Lower 48 E&Ps have obliged, and as a result the energy sector has significantly outperformed the S&P 500 over the last year. Lower 48 E&Ps including Pioneer Natural Resources Co. and Devon Energy Corp., meanwhile, have pledged to limit annual production growth to 5% or lower, regardless of the oil price. However, the notion of investor pressure as the primary factor holding back production is “outdated a little bit,” Jeff Nichols, a partner at Haynes and Boone LLP, told NGI.* He said producers’ “current limitation is people and rigs and supplies. With the price of oil as high as it is, they’re currently doing everything they can to increase production.” Nichols explained that “a lot of people left the industry during the downturn. You need people, you need engineers to supervise these drilling projects.”

EPA floats options to curb gas plant carbon emissions - -EPA tipped its hand today on the kinds of control options it is considering for a future rule to meaningfully curb carbon pollution from new natural gas power plants. The agency released a white paper seeking public comment for efficiency measures and carbon control technologies that could form the basis of the rule, which is expected to be proposed later this year. EPA’s acting air chief, Joseph Goffman, said in a statement that the white paper “is intended to advance EPA’s work to cut greenhouse gas emissions and amplify the leadership that we are seeing from power companies, states, investors, communities and other organizations.” The paper explores design features of electric generating units that could boost a gas plant’s efficiency and help it produce more power with less emissions or to better support intermittent renewable energy. These run the gamut from combined cycle turbines instead of simple cycle turbines, features to help units ramp up quickly for lower-capacity use and options for limiting other pollutants without sapping efficiency. It explores combined heat and power — which allows the same fuel to produce both electricity and thermal output. It also delves into options that would average emissions from a gas-fired unit with nonemitting renewable generation at the same site. It requests comment on how carbon capture, utilization and storage could be applied to gas-based power generation. And, it evaluates how hydrogen could be used to bring down overall emissions. “Hydrogen is often included as a component of broad decarbonization goals of the overall economy, and its potential as a low-[greenhouse gas] alternative to natural gas — especially as a fuel for combustion turbines — has received much attention of late,” the paper notes. It looks at options for generating hydrogen, ranging from coal to nuclear and renewable energy. EPA’s public comment period on the white paper closes June 6. Also in June, the U.S. Supreme Court is expected to rule on a case, that while not directly related to the new power plant rule, is likely to inform the kind of standard EPA proposes later this year.

Cheniere Energy, Kinder Morgan to study greenhouse gas emissions along this Louisiana pipeline - Kinder Morgan and Cheniere Energy are teaming up with university researchers to study greenhouse gas emissions along natural gas pipelines in Louisiana and across the country. The companies said in a news release they will partner with researchers from Colorado State University and the University of Texas to quantify and monitor the greenhouse gas levels along the pipelines and their compressor stations. Kinder Morgan’s Louisiana Pipeline, which stretches from Cameron Parish to Evangeline Parish, will be involved in the studies, as will the Tennessee Gas Pipeline and the Natural Gas Pipeline of America. The Louisiana Pipeline supplies natural gas to Cheniere’s Sabine Pass LNG facility in Cameron Parish. The companies said the work is intended to develop advanced monitoring technologies and protocols for greenhouse gas emissions at facilities that extract, process and transport natural gas. “We believe our collaboration in this project further demonstrates our dedication to better understanding the GHG emissions from our facilities and supporting the needs of our customers,” Kimberly Watson, Kinder Morgan’s interstate natural gas president, said in a statement. Kinder Morgan and Cheniere Energy said they also will partner with midstream operators and methane detection technology providers for the study. Those other partners were not named in the news release. “Collaboration with our midstream partners is a vital part of Cheniere’s efforts to measure and verify our emissions and look for opportunities for reductions across our value chain,” Scott Culberson, Cheniere’s senior vice president of gas supply, said in a statement. “KMI is a critical teammate in this effort to provide cleaner sources of energy around the world, and their leadership will help to improve the environmental performance of U.S. natural gas and LNG.”

American Noble to Explore for Natural Gas in Kansas’ Hugoton Field -American Noble Gas Inc. has agreed to acquire a 40% participation in a farmout agreement with an unspecified operator in the Hugoton natural gas field in Haskell and Finney Counties, KS. The Kansas-headquartered independent exploration and production (E&P) company would join three other partners to explore for and develop oil and gas and brine reserves on the property. The field has a long history of gas production dating back to 1919, but has mainly been discarded as mostly depleted. The E&P thinks there are still resources to be tapped. “We believe that commercial-level reserves of helium are present in the acreage included in our Farmout Agreement,” said CEO Stanton Ross. The agreement covers drilling and completion of up to 50 wells. The Hugoton joint venture would utilize existing infrastructure assets, including water disposal, existing brine stream, gas gathering and helium processing. The first exploratory well is scheduled to commence this month near Garden City, with a goal to evaluate “an unconventional theory” for reinvigorating production from the Hugoton field. If successful, the company thinks they could unlock “substantial gas and helium reserves” embedded in the Hugoton gas field that were previously considered depleted. The massive Hugoton natural gas field has been a producer of gas and helium for decades. It straddles the southwestern edge of Kansas and northern Oklahoma. A 2007 study by the Kansas Geological Survey at the University of Kansas found that the gas still in place could be extended through 2050, provided the integrity of 40- to 70-year-old wells was maintained. In 2007, the Hugoton produced 358 Bcf, making it at the time the fifth largest source of natural gas in the United States. The Hugoton Gas Field currently ranks second in cumulative natural gas production and eighth in estimated total reserves globally, according to American Noble Gas.

Why States Continue To Overrule Local Regulation Of Fossil Fuels - Like their counterparts in many other state capitals, Tennessee lawmakers recently passed a reform, Senate Bill 2077, that will stop local politicians from interfering with pipelines and other energy infrastructure projects through local regulation and taxation. Senator Ken Yager (R), sponsor of SB 2077, which passed out of the Tennessee Senate on March 24 and now awaits House consideration, explains the motive behind this effort to preempt local regulation of energy infrastructure:“These lines go across many several counties in this state, and at its worst case, if you allow micromanaging by each local level, sadly some of which who may have political agendas, you would end up with patchworks of regulations that would only serve to hurt our Tennessee economy,” said Senator Yager.SB 2077 and similar preemption bills enacted in other states prohibit local governments from regulating or taxing various economic activities, transactions, products, and industries. Despite amendments intended to address concerns, local officials and environmental organizations are working to defeat SB 2077, which is now working its way through the Tennessee House. The Tennessee House Ways & Means is scheduled to take up HB 2246, the House companion to SB 2077, during an April 19 hearing.“We think that cities and counties, people concerned with protecting public safety and protecting the environment, have made this bill better, but it’s still unnecessary to preempt local government,” said Scott Banbury, spokesman for the Sierra Club’s Tennessee chapter. “I know we do a lot of preemption up here, but this a very serious scenario where it could potentially have very devastating effects in someone’s neighborhood,” added Senator Raumesh Akbari (D). Though it is not a new phenomenon, preemption legislation continues to garner intense opposition and has caused some policymakers to be conflicted. An example of that conflict was on display in Texas a few years ago. In 2015, Texas lawmakers and Governor Greg Abbott enacted a reform that, as the legislative language made clear, “expressly preempts regulation of oil and gas operations by municipalities and other political subdivisions.” That bill came about in response to efforts by some local officials in Texas to ban hydraulic fracturing.“We have sued the federal government multiple times because of the heavy hand of regulation from the federal government – trying to run individuals’ lives, encroaching upon individual liberty,” Governor Abbott said when signing that preemption bill. “At the same time, we are ensuring that people and officials at the local level are not going to be encroaching upon individual liberty or individual rights.”Yet even pro-fracking conservatives in and outside the Texas Legislature were conflicted over that 2015 reform. “I agree … that banning fracking is a bad idea,” said Mark Davis, a popular Dallas-based radio host, “but I also believe in local control. Shouldn’t local towns be able to do what they want?”

Redlined neighborhoods in cities across the US saw more oil drilling, study finds - Roughly 17 million people in the U.S. live within a mile of an oil or gas well — putting them at higher risk of health problems like heart disease, breathing issues, anxiety and depression, and complications during pregnancy, a growing body of research shows.But all is not equal when it comes to who exactly lives near oil wells — and intentional racial discrimination in federal mortgage policies, reflected in a practice known as “redlining,” may have played a role, according to a new study published in the Journal of Exposure Science & Environmental Epidemiology.There are nearly twice as many oil and gas wells in neighborhoods that were redlined in the 1930s, the study found. That pattern was visible in 33 cities across 13 states where oil and gas wells were drilled, and drilling in those neighborhoods intensified after the federal government issued redlining maps. The relationship was visible not only in heavily drilled southern states like Texas and Louisiana, but also in cities like Oklahoma City, Tulsa, Kansas City, Detroit, Indianapolis, Buffalo, Cleveland, Pittsburgh, New York City, and Los Angeles.“Our study adds to the evidence that structural racism in federal policy is associated with the disproportionate siting of oil and gas wells in marginalized neighborhoods,” researchers from the University of California at Berkeley and Columbia University in New York wrote in the paper.The research has implications not only for public health, but also for upcoming battlesover the cleanup — known as plugging and abandonment — of the nation’s aging oil and gas wells, including questions of which wells should be plugged first and how to ensure that wells remain plugged over time. The federal government intends to spend $4.7 billion over the next nine years to plug inactive oil and gas wells whose owners can’t be found, under the 2021 Infrastructure Investment and Jobs Act, dispensed in grants to state oil and gas regulators.Oil drillers look to drill wherever oil is found — but when you zoom in a bit and look acre-by-acre, companies and regulators tend to have a fair amount of discretion over where exactly drilling is done.The new study used data from Enverus Drilling Info, an industry data provider, showing the locations of oil and gas wells that were drilled as far back as 1898, plus federal census data, and maps drawn by the Home-Owners Loan Corporation (HOLC), a New Deal-era program that was initially intended to prevent foreclosures during the Great Depression. Towards the end of the 1930s, HOLC was given the job of mapping out the lending risks associated with neighborhoods across the U.S. It wound up producing notorious “redlining” maps that explicitly discriminated against people of color based on their race — a practice PBS dubbed “the Jim Crow laws of the North.”

Permian Could See Production Surge As New Permits Reach All-Time High - Horizontal drilling permits for new wells in the Permian Basin hit an all-time high in March, with 904 total permit awards, driven by elevated oil prices and production demand, Rystad Energy research shows. Weekly approved permits have hovered between 188 and 227 since March 7, 2022, an unprecedented period of high activity that pushed the four-week average to 210 for the week ending April 3, a record for horizontal permit approvals in the core US shale patch over four weeks. “The surge in permitting activity positions the industry for continuous rig count additions in the second half of 2022 and foreshadows a significant increase in supply capacity from early 2023,” However, it is advisable to practice caution when using these numbers as a concrete indicator of future drilling plans. Many permits never get drilled, and operators follow diverse permitting strategies – in other words, the time from permit approval to the start of drilling varies substantially across producers in the same basin. Even with this caveat, the current permit activity trend points to a continuous uptick in drilling in the coming months. Weekly horizontal permit approvals have occasionally spiked above 200 in recent years, but the persistently elevated levels currently being seen from regulators in Texas and New Mexico are unprecedented. The regular monthly average for permit approvals ranges between 400 and 500 locations, which makes the magnitude of the sequential increase between February and March particularly extreme. Privately owned operators finished with almost 500 new horizontal drill permits approved in March – larger than the number of wells currently being drilled in the Permian in any given month by all operators. Public independent producers also saw a material increase, being awarded 410 horizontal locations – an unusually high number compared to their usual range of 230 to 320 in recent months. As many as 10 of the 22 largest contributors saw higher activity in March than their maximum monthly count between March 2021 and February 2022. Pioneer Natural Resources stood out, with 99 horizontal permits approved in March – a record high for the operator’s portfolio on a pro-forma current operatorship basis. Diamondback Energy was another public producer with unusually high activity in March, at 59, while Franklin Mountain Energy, Birch Resources and Spur Energy Partners were the most significant among private operators in terms of the number of permits in March relative to the average rate in the previous 12 months.

Texas Sees Oil Employment Rise In March --Citing the latest Current Employment Statistics report from the U.S. Bureau of Labor Statistics, the Texas Independent Producers and Royalty Owners Association (TIPRO) noted that new employment figures showed another month of positive job growth for the Texas upstream sector in 2022. According to TIPRO’s analysis, direct Texas upstream employment for March 2022 totaled 184,700, an increase of 4,300 jobs from February numbers, subject to revisions. Texas upstream employment in March 2022 represented an increase of 21,700 positions compared to March 2021, including an increase of 3,600 positions in oil and natural gas extraction and 18,100 jobs in the services sector. TIPRO said that the Houston metropolitan area, the largest region in the state for industry employment, added 1,500 upstream jobs last month compared to February, for a total of 64,500 direct positions. Houston metro upstream employment in March 2022 represented an increase of 5,300 jobs compared to March 2021, including an increase of 2,100 positions in oil and natural gas extraction and 3,200 jobs in the services sector. TIPRO once again noted strong job posting data for upstream, midstream, and downstream sectors for March in line with rising employment, showing continued demand for talent, and increasing exploration and production activities in the Texas oil and natural gas industry. According to the association, there were 11,433 active unique job postings for the Texas oil and natural gas industry in March of 2022, a 14 percent increase compared to February. TIPRO also highlighted that in February a record number of drilling permits for new wells were issued in the Permian Basin as producers respond to higher commodity prices and the call to increase domestic production to address global supply shortages. Among the 14 specific industry sectors TIPRO uses to define the Texas oil and natural gas industry, Support Activities for Oil and Gas Operations once again ranked the highest in March for unique job listings with 3,167 postings, followed by Crude Petroleum Extraction (1,512) and Petroleum Refineries (1,040). The leading three cities by total unique oil and natural gas job postings were Houston (3,895), Midland (1,256), and Odessa (583), said TIPRO. The top three companies ranked by unique job postings in March were Baker Hughes with (637), Weatherford International (494), and Halliburton (488). Top posted occupations for March included heavy tractor-trailer truck drivers (489), software developers and software quality assurance analysts and testers (271), and personal service managers (270).

Unregulated Texas gathering line leaks methane — A natural gas pipeline in Texas leaked methane from a 16-inch (41-centimeter) pipe that’s a tiny part of a vast web of unregulated gathering lines across the U.S., linking production fields and other sites to bigger transmission lines. New federal reporting requirements start next month for these pipes. Energy Transfer LP, which operates the line where the leak occurred through its ETC Texas Pipeline Ltd. unit, said an investigation into the cause of the event last month is ongoing and all appropriate regulatory notifications were made. It called the pipe an “unregulated gathering line.’’ The timing of the release and its location appeared to match a plume of methane observed by a European Space Agency satellite that geoanalytics firm Kayrros SAS called the most severe in the U.S. in a year. Methane is the primary component of natural gas and traps 84 times more heat than carbon dioxide during its first 20 years in the atmosphere. Severely curbing or eliminating releases of the gas from fossil fuel operations is crucial to avoiding the worst of climate change. The International Energy Agency has said oil and gas operators should move beyond emissions intensity goals and adopt a zero-tolerance approach to methane releases. ETC Texas Pipeline reported a “line break” that lasted from 8:08 a.m. to 9:17 a.m. local time March 17 on its Big Cowboy pipeline that is jointly owned with Kinder Morgan Inc., according to a filing to the Texas Commission on Environmental Quality. The incident caused a release of 52,150 thousand standard cubic feet of natural gas. The event likely released about 900 metric tons of methane into the atmosphere, according to the Environmental Defense Fund, a non-profit group that has used aerial surveys to map releases of the fossil gas over oil and gas operations in the U.S. Permian basin. That amount of the greenhouse gas will trap about as much heat as 75,600 tons of carbon dioxide during its first two decades in the atmosphere. The ETC Texas Pipeline filing to the TCEQ didn’t include an estimate for how much methane was released and the state agency said it doesn’t regulate releases of the gas. The Texas Railroad Commission said it has an ongoing investigation into the Big Cowboy incident without elaborating. The U.S. Environmental Protection Agency said that as of April 7 it hadn’t received a report about the release but that it’s communicating with the TCEQ. One of the major insights from satellite observations of methane is the amount of total emissions for which super-emission events are responsible. Although these events can be infrequent and sometimes only last a few hours, oil and gas ultra-emitters account for as much as 12% of global methane emissions from the sector, according to a study published in Science in February by French and American scientists. The researchers used satellite observations to identify more than 1,800 major releases of the gas.

Study: Low-producing oil wells cause 50% of methane emissions - Low-producing oil and gas wells are to blame for roughly half of the methane emitted from all U.S. well sites, despite making up 6 percent of the country’s total production, according to new research published this week.The study, published in Nature Communications, is the first comprehensive look at low-production well site emissions nationwide, researchers said. The paper found that low-producing or “marginal” wells emit methane at a rate 6 to 12 times higher than the national average — releasing some 4 million metric tons of the potent greenhouse gas a year. “Our research shows that the total methane emitted from the country’s half million low-producing wells has the same impact on the climate every year as 88 coal-fired power plants,” said Mark Omara, a scientist with the Environmental Defense Fund and lead author, in a statement. Omara said methane emissions from low-producing well sites can come from sources that are common throughout oil and gas operations, including both intentional vented emissions as well as unintentional emissions like those from equipment malfunctions. Marginal wells produce less than 15 barrels of oil equivalent per day, according to the study. Yesterday, EDF said draft methane rules from EPA released in November omit many smaller well sites from regular monitoring. The organization warned that the agency risks overlooking a big source of methane. “The EPA proposal is an important step forward by the agency towards addressing methane pollution broadly at oil and gas facilities, but based on this study, we’re leaving a big chunk of potential emissions reductions on the table if EPA doesn’t comprehensively require inspections and fixing of leaks at smaller sites,” said Rosalie Winn, an EDF senior attorney, on a call with reporters. Timothy Carroll, an EPA spokesperson, said the agency received the information contained in the Nature study during the public comment period on the November proposal.Omara at EDF said the study supports the need for including low-production well sites “as part of any effective mitigation strategy” for oil and gas methane emissions. Environmental groups have long opposed exemptions for low-producing wells, something that oil and gas companies, as well as trade associations and some state regulators, have pressed EPA for in recent years (Climatewire, April 6).Last year, for example, Texas energy and environmental regulators said the 2016 rule from the Obama administration was “especially burdensome for stripper and marginal well operators.” “Of particular concern is the effect the cost of leak detection and monitoring will have on the marginal wells that account for approximately 20% of Texas’s production,” said the letter, signed by the executive directors of the Texas Railroad Commission and the Texas Commission on Environmental Quality, dated July 30, 2021 (Energywire, Aug. 5, 2021).

New study shows New Mexico has seen an increase in oil spills– During the pandemic, fewer people were out and about so demand for fuel was down, now that things are getting back to normal, oil production is back and so is the number of spills. According to a new study by the Center for Western Priorities, oil and gas companies spilled over 658,000 gallons of oil in New Mexico last year from a total of 1,368 spills. That’s significantly higher than the 1,269 spills in 2020. Officials are attributing the lower numbers in 2020 to the pandemic and now things are returning to normal, and so is oil production. “What we’re trying to do is, you know, encourage operators to look at, their operations holistically,” said ENMRD Oil Conservation Division Direction Adrienne Sandoval. She said that would encourage companies to take preventative measures beforehand. “What we have found is that if we trend all of the spill data a lot of times these spills are preventable, so we want to encourage operators to take a look at their operations, put preventative mechanisms in place so that, we’re preventing these spills upfront rather than having to clean them up on the backend,” said Sandoval. Sandoval said the state recently adopted new rules to eliminate pollution from oil and gas. “The OCD changed our spill rules in 2021, which went into effect at the end of the year and it changed small wording that spills are now unlawful,” said Sandoval. The new regulations would slap violators with immediate fines and bans routine flaring, which is the burning of excess gas. Total volume of Natural Gas Vented/Flared or released (Waste rule went into effect May 25, 2021)

2020 – 1,738,092 mcf
2021 – 6,886,590 mcf
2022 – 3,758,155 mcf

Critics say the new rules are too demanding for small oil producers. State Representative Jim Townsend (R), who represents much of southern New Mexico, said the companies he’s worked with have always put safety first by thinking of the community. “They try to prevent environmental damage. They live in the communities that they work in. Them and their children go to school, those communities,” said Rep. Townsend.” “So there they are, good citizens, in the communities they work in and they try real hard to prevent those types of things from occurring.” Rep. Townsend said the companies he has worked with over the years of his life have also always been proactive even with the new rule changes. “There’s all sorts of new technologies out, inline inspection tools for pipelines, for example, that you can run in a pipeline while it’s in service, and it can identify areas of the wall of the pipe that may be thinning,” said Rep. Townsend. “So you can go in and make repairs long before there’s ever any release. That technology is also available for tanks and other metal devices that you can run up that type of detection on.” So far this year, there have been 400 liquid releases or oil spills.

NM Adopts Stiffer Pollution Rules For Oil and Gas - (AP) — New Mexico regulators have approved more rules aimed at cracking down on pollution from the oil and natural gas industry amid the national debate over domestic production and concerns about global energy market instability. Gov. Michelle Lujan Grisham’s administration on Thursday praised the rules, calling them among the toughest in the nation. “This is a momentous step forward in achieving our goals of lowering emissions and improving air quality. New Mexicans can be proud of the fact that we are leading the nation by implementing rules that protect our families and their environment,” said Lujan Grisham, who is running for reelection. The Democrat has pushed for more regulations throughout her first term and the rules approved this week by the state Environmental Improvement Board mark the second part of her plan for tackling pollution blamed for exacerbating climate change. High fuel prices are hurting household finances as the New Mexico state government benefits from a financial windfall linked to record-setting oil production in the Permian Basin. New Mexico last year surpassed North Dakota to become the No. 2 oil-producing U.S. state behind Texas. State oil and gas regulators adopted separate rules earlier this year to limit venting and flaring at petroleum production sites to reduce methane pollution. This latest effort, led by the state Environment Department, focuses on oilfield equipment that emits smog-causing pollution, specifically volatile organic compounds and nitrogen oxides. It includes minimum requirements for oil and natural gas producers to calculate their emissions and have them certificated by engineers and to find and fix leaks on a regular basis. The rule would apply to compressors, turbines, heaters and other pneumatic devices used at the production sites. The New Mexico Oil and Gas Association, which represents producers, expects the new rules will reduce emissions. But industry officials said New Mexico oil and gas production is responsible for only a small amount of the state’s ozone pollution. Ozone pollutants also can also be found in wildfire smoke and vehicle emissions. The U.S. Environmental Protection Agency is considering classifying some of the largest cities in the nation as “severe” ozone pollution violators. The Independent Petroleum Association of New Mexico criticized the rules, saying the state opted to remove a more flexible regulatory framework for low-volume producers after being pressured by environmental groups. The industry group said Friday that the rules will lead to premature plugging of still-productive wells. “The combination of these new federal and state oil and gas restrictions will continue to punish New Mexicans at the gas pump, undermine our domestic security, increase our dependency on foreign adversaries at a time when we should be increasing domestic production,”

Clean energy is buried at the bottom of abandoned oil wells -The UN climate report from early April makes clear we’re on a path that will careen past the climate goals set in the Paris Agreement, and we need to cut carbon emissions — fast. But while solar and wind power are important (they are, after all, key parts of the Biden administration’s climate plan) they’re the kind of thing we’ve seen plenty of before, which means they’ll only get us so far. What we need, the UN report says, is new solutions. Which is why a pilot programrecently detailed by the US Department of Energy (DOE) is particularly intriguing. If it works, it could help solve multiple problems at once, using an often-overlooked solution: geothermal energy.Geothermal energy works on a simple premise: The Earth’s core is hot, and by drilling even just a few miles underground, we can tap into that practically unlimited heat source to generate energy for our homes and businesses without creating nearly as many of the greenhouse gas emissions that come from burning fossil fuels. However, drilling doesn’t come cheap — it accounts for half the cost of most geothermal energy projects — and requires specialized labor to map the subsurface, drill into the ground, and install the infrastructure needed to bring energy to the surface.But the US, in the wake of an oil and gas boom, just so happens to have millions of oil and gas wells sitting abandoned across the country. And oil and gas wells, it turns out, happen to share many of the same characteristics as geothermal wells — namely that they are deep holes in the ground, with pipes that can bring fluids up to the surface. So, the DOE asks, why not repurpose them?That’s exactly what the agency’s pilot program, called Wells of Opportunity: ReAmplify, aims to do, awarding a total of $8.4 million to four projects across the country that will each try to tap into some of those old wells to extract geothermal energy rather than gas or oil. If they work, they could be the key to not only reducing the country’s use of planet-damaging fossil fuels, but also helping answer the question of how to transition many of the more than 125,000 people who work in oil and gas extraction across the country into clean-energy jobs.“The idea here is basically that you produce oil and gas resources for a couple of decades, and at the end of the production of oil and gas, you don’t completely retire the assets — you turn them toward heat production,” said Saeed Salehi, associate professor of petroleum engineering at the University of Oklahoma and the leader of one of the four groups receiving funding from the DOE. Oil and gas wells have a limited lifespan of a few decades, Salehi explained, after which they become depleted. Geothermal energy, if managed correctly, doesn’t have that problem. “The beauty is that this is a constant source of energy which is not going to change. It’s probably going to be [there] forever, as long as your well is functioning,” Salehi told Recode.

Oil, Natural Gas Industry Warns of Permitting Delays as Biden Restores Trump’s NEPA Repeal - The White House on Tuesday restored three core elements of the National Environmental Policy Act (NEPA) that had been rolled back under the Trump administration, heralding tighter environmental scrutiny for energy projects during the federal review process. “The specific changes made by today’s ‘Phase 1’ rule restore longstanding provisions that were modified for the first time in 2020; these 2020 changes caused implementation challenges for agencies and sowed confusion among the general public,” officials said. Enacted in 1969, NEPA is a cornerstone of the federal permitting process for a wide range of activities. It applies to upstream oil and gas development, as well as the construction of fossil and renewable energy infrastructure, roads, bridges and transit systems. The Trump Administration’s overhaul of NEPA was designed to streamline the approval process for major infrastructure projects, including oil and gas pipelines, and was hailed by industry advocates. The regulation finalized on Tuesday by the White House Council on Environmental Quality (CEQ) requires federal agencies to evaluate “all relevant environmental impacts — including those associated with climate change – during environmental reviews,” officials said. It requires agencies to “consider the ‘direct,’ ‘indirect,’ and ‘cumulative’ impacts of a proposed action, including by fully evaluating climate change impacts and assessing the consequences of releasing additional pollution in communities that are already overburdened by polluted air or dirty water. CEQ Chair Brenda Mallory indicated that restoring the old framework would make project approvals less susceptible to legal challenges. Industry groups did not appear convinced, however. The American Petroleum Institute’s (API) Frank Macchiarola, senior vice president of policy, economics and regulatory affairs, warned that the rulemaking “adds more bureaucratic red tape into the permitting process” for fossil fuel as well as renewable, hydrogen and carbon capture, utilization and storage (CCUS) projects. “With energy costs high for American consumers and European allies looking to the U.S. for access to an affordable and stable energy supply, we need policies in place that provide certainty and ensure American producers can meet rising demand at home and abroad,” Macchiarola said. He urged the administration “to change course and establish a timely and efficient permitting process that supports the energy security needs of the U.S. and our allies overseas.” Macchiarola also cited the recently announced task force between the United States and European Union to shore up supply of liquefied natural gas (LNG) to Europe in order to lessen its dependence on Russian natural gas. “An effective and efficient NEPA process is critical to expanding LNG export projects, which will likely require additional interstate pipeline capacity,” he said. “Without a timely and efficient permitting system, infrastructure projects that are critical to U.S. energy security cannot be constructed under a timeframe that reflects the urgency for which they are needed.” The U.S. Chamber of Commerce’s Marty Durbin, senior vice president of policy, spoke out against the rulemaking as well. “It should never take longer to get federal approval for an infrastructure project than it takes to build the project, but that very well may be the result of the administration’s changes that revert back to the broken 1978 NEPA review process,” Durbin said. “A more efficient permitting process is critical for building modern infrastructure, including new roads, renewable energy facilities, telecommunications, and other critical forms of infrastructure.”

Interior Department to resume oil and gas leasing, charge higher fees - As pressure increases on the Biden administration to lower the price of fuel, the Interior Department announced on Friday plans to hold its first onshore oil and gas lease sales since President Biden took office. The department said it plans to open roughly 144,000 acres up for lease next week and will charge oil and gas companies higher royalties to drill on federal land, raising the fees for the first time. Under the plans unveiled Friday, royalty rates would increase to 18.75 percent from 12.5 percent for oil and gas lease sales. The long-awaited announcement follows a report the department issued last fall, which called for royalty fees to be more in line with the higher rates charged by most private landowners and major oil- and gas-producing states. The Biden administration’s willingness to move forward with oil and gas leasing angered climate activists, who called the department’s plans a betrayal of the president’s pledge to ban new drilling on public lands. According to the latest report from the U.N. Intergovernmental Panel on Climate Change, issued last week, the world is on pace to burn through its remaining “carbon budget” by 2030 — putting the ambitious goal of keeping warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) out of reach. Drilling on federal land and offshore is responsible for almost a quarter of the United States’ greenhouse gas emissions. “This is pure climate denial,” Jeremy Nichols, climate and energy program director for WildEarth Guardians, said in a statement. “While the Biden administration talks a good talk on climate action, the reality is, they’re in bed with the oil and gas industry.”

Interior Department to Relaunch Limited Federal Oil, Natural Gas Leasing - The Biden administration aims to substantially curb new oil and natural gas drilling on public lands as it attempts to combat climate change and emphasize renewable fuels. The White House said it would resume selling leases to drill for oil and gas on federal lands, though the number of acres available declined dramatically and it will cost drillers more to work on public property. Auctions are expected to start later this year. The Interior Department’s Bureau of Land Management (BLM) is planning to release a sale notice for leases to drill on 144,000 acres of government land this week. However, that level marks an 80% reduction in available land for leasing when compared with a previous federal leasing plan. Energy companies also would have to pay higher royalties for the oil and gas they cull with new leases. The royalty rate is climbing to 18.75% from 12.5%. “How we manage our public lands and waters says everything about what we value as a nation,” said Interior Secretary Deb Haaland. “For too long, the federal oil and gas leasing programs have prioritized the wants of extractive industries above local communities, the natural environment, the impact on our air and water, the needs of tribal nations, and, moreover, other uses of our shared public lands.” Haaland said Interior has begun “to reset how and what we consider to be the highest and best use of Americans’ resources for the benefit of all current and future generations.” The Biden administration is attempting to strike a balance between its long-term environmental protection goals and a near-term need to ramp upproduction to tamp down lofty prices. The president’s new lease sales approach is an attempt to target the lands with the greatest potential while minimizing impacts on wildlife habitats and environmentally sensitive communities.This comes amid the war in Ukraine and resulting hits to Russian exports. Global markets in recent weeks have seesawed on supply worries.In response, President Biden vowed to unleash 1 million b/d from the U.S. Strategic Petroleum Reserve for the next six months. Other countries collectively promised to release 60 million bbl as part of a plan overseen by the International Energy Agency.At the same time, U.S. exploration and production (E&P) companies have gradually ramped up output in recent weeks. U.S. production for the week ended April 8 held even with the prior week at 11.8 million b/d — after hovering around 11.6 million b/d through most of February and March.U.S. output, however, remains more than 1 million b/d below pre-pandemic highs. With supplies light, gasoline prices recently reached record levels. Biden, by extension, is under pressure to further increase production to relieve consumers’ pain at the pump.Against that backdrop, the BLM this week resumed the lease sales process after a long delay to review the merits of drilling on public lands. It marks the first round of onshore lease sales under Biden, who took office in January 2021.

Activists Decry Biden’s ‘Reckless’ Resumption of Fossil Fuel Leases on Public Lands- Activists condemned Friday’s announcement by the Biden administration that the U.S. Bureau of Land Management will resume oil and gas lease sales on public lands as yet another betrayal of President Joe Biden’s promises to reduce greenhouse gas emissions and tackle the climate emergency.The U.S. Interior Department explained Friday afternoon that the lease sale resumption is in compliance with a 2021 federal injunction blocking the Biden administration from enforcing atemporary pause on new leases for oil and gas drilling on public lands and waters.The department described the onshore oil and gas lease sales as “significantly reformed,” while announcing a “first-ever increase in the royalty rate for new competitive leases to 18.75%,” up from the 12.5% minimum rate required by law.While the progressive watchdog Accountable.US applauded the administration’s decision to raise the royalty rate, most climate campaigners decried the resumption of the fossil fuel lease sales amid a worsening planetary emergency.“It is never a good sign when the president announces something at 5:00 pm on a Friday. But President Biden can’t get away with this disastrous climate decision,” said Varshini Prakash, executive director of the youth-led Sunrise Movement. “The fact of the matter is that more drilling won’t solve high gas prices right now—so why is Biden breaking his campaign promise to stop drilling on public lands?”The Western Environmental Law Center noted that “the communities most at risk from new fossil fuel extraction are primarily Black, Brown, and Indigenous peoples, people of the global majority, and those on the frontlines of fossil fuel industry expansion. These are the same communities that turned out in record numbers to get Biden elected in 2020 and who have since been urging Biden to use his executive authority to fulfill his campaign promise and ban new federal fossil fuel projects.”Randi Spivak, public lands director at the Center for Biological Diversity, argued that “the Biden administration’s claim that it must hold these lease sales is pure fiction and a reckless failure of climate leadership.” “It’s as if they’re ignoring the horror of firestorms, floods, and megadroughts, and accepting climate catastrophes as business as usual,” she added. “These so-called reforms are 20 years too late and will only continue to fuel the climate emergency. These lease sales should be shelved and the climate-destroying federal fossil fuel programs brought to an end.” Collin Rees, U.S. program manager at Oil Change International, asserted that “in the midst of a climate emergency and a fossil-fueled war that has exposed the dangers of fossil fuel dependency, President Biden’s decision to double down on leasing new public lands for fossil fuel development is a disastrous choice.”

Why Biden broke his promise on no new drilling on federal lands | Grist - In 2020, at a campaign event in New Hampshire, then-presidential candidate Joe Biden made a promise to voters. “No more drilling on federal lands, period,” he said. “Period, period, period.” Last week, Biden broke that promise. His administration announced it was opening up public land to new oil and gas leases, several months after suspending those types of leases. Biden officials have a handy excuse for the reversal. In the summer of 2021, a federal judge in Louisiana struck down the Biden administration’s pause on new oil and gas leases on public lands. Climate advocates were furious when the White House announced the new leasing plan last week, but senior officials, citing the 2021 ruling, said their hands were tied. Biden’s new leasing plan opens up approximately 144,000 acres for new drilling, 80 percent less acreage than the Department of the Interior had originally evaluated for leasing. It also hikes up royalty rates on new leases from 12.5 percent to 18.75 percent. The Biden administration tried to balance its leasing move byreleasing a report yesterday that shows it is on course to produce enough renewable energy to power roughly 9.5 million homes by 2025. Some climate activists weren’t sold. “This is the Biden administration caving to the fossil fuel industry and directly breaking the promises he made on the campaign trail,” Collin Rees, a U.S. program manager at the climate group Oil Change International, told Grist, referring to Biden’s new leasing plan. Biden’s latest decisions don’t have much to do with meeting (or not meeting) his climate goals. They’re not even really about reducing gas prices. Opening up new acreage for drilling won’t affect gas prices for at least a year; it certainly won’t have an impact as soon as the summer, when gas demand peaks. So what’s it really about? “It’s a political move,” Paul Bledsoe, a strategic advisor for the Progressive Policy Institute and a former climate advisor for President Bill Clinton, told Grist. Nearly all of Biden’s domestic energy policies these days are centered around controlling the way American voters perceive his administration. Biden, Bledsoe said, “is playing a four-dimensional game of chess.”

‘One quarter’ of US emissions since 2005 come from fossil fuels on public lands - Carbon Brief - Emissions equivalent to nearly a quarter of the US total since 2005 have come from fossil fuels extracted on the nation’s public lands and waters, according to recent analysis.The study, published in Climatic Change, assesses the volumes of greenhouse gases generated by extracting and burning coal, oil and natural gas from regions owned by the federal government. It also estimates how much this will change over the next decade, concluding that “minimal” reductions to these emissions are expected by 2030, the date by which the US has committed to cutting its emissions to 50-52% below 2005 levels.This analysis was conducted before the Biden administration’s latest announcement that it will open up new federal lands to drilling amid growing pressure to address rising fuel costs.The study’s lead author tells Carbon Brief that unless the government introduces new policies such as a carbon fee added to these fossil fuels, emissions from this sector could remain high long into the future.The study assesses the “lifecycle” emissions from coal, oil and natural gas produced on US federal lands and waters between 2005 and 2019. This includes everything from methane leaking out of pipelines to carbon dioxide (CO2) from burning coal.On average, these emissions amounted to 1,408m tonnes of CO2 equivalent (MtCO2e) per year – equivalent to around 23% of domestic US emissions across this 15-year period. Study author Laura Zachary, an energy analyst at Apogee Economics and Policy tells Carbon Brief that this includes both fuels that are used in the US and those that are exported abroad – although previous research has shown that only 4% of the lifecycle emissions are produced outside the US. Only domestic emissions count towards the nation’s climate goals.These values were calculated using data on production and consumption of fossil fuels available from the US Environmental Protection Agency (EPA), the US Energy Information Administration (EIA) and the US Office of Natural Resources Revenue (ONRR).The researchers then used a combination of EIA’s projections and a machine-learning approach that enabled them to forecast future trends for coal, oil and gas production across public lands and waters, and work out how much emissions they would generate.As the coloured area of the chart below shows, emissions from these fossil fuels have fallen since 2005, mainly due to a decline in coal use, which is shown in dark grey. (The light grey area in the chart indicates total historical US emissions, for comparison, while the red line shows emissions from the energy sector alone.)Most of this drop took place between 2010 and 2016 when gas r apidly replaced a lot of coal in the US power sector. Since then, emissions from this sector have been fairly stable. The study’s modelling, shown by the dotted lines in the chart above, predicts “minimal additional emissions reductions stemming from fuels produced on federal lands and waters”. The findings suggest they will fall by just 6% between 2019 and 2030.The researchers conclude that given the “aggressiveness” of the Biden administration’s upcoming climate target – a 50-52% reduction in domestic emissions by 2030, compared to 2005 – the government “should consider how policies directed at federal lands and waters fit into their broader climate strategy”.

12,000 gallons of petroleum products spilled in Medford, Ore., fire - — Environmental cleanup is underway following a Tuesday fire at a gas station in Medford. The Oregon Department of Environmental Quality said Thursday that over 12,000 gallons of various petroleum products, mostly lube oil, were released into nearby Bear Creek and surrounding areas during the incident. The U.S. Environmental Protection Agency, the Oregon Department of Environmental Quality, and NEXGEN Logistics, LLC are working on the cleanup, which also involves smaller amounts of diesel, gasoline, and kerosene. Absorbent booms have been placed in the creek to help absorb the oil. Crews were also removing petroleum from the creek and its bank. Crews on Friday morning observed small areas of light sheen on the Rogue River downstream of Bear Creek which has prompted the placement of additional hard boom – which traps petroleum – and absorbent boom into areas of Bear Creek downstream of the incident. The agencies are investigating the extent of sheen on the Rogue, DEQ said. Above-ground tanks at the fuel business were being emptied. DEQ said the containers appeared to have remained mostly intact. Officials also said Oregon Department of Fish and Wildlife biologists have captured and cleaned several oiled waterfowl that remain under observation. So far officials said no impacts to fish have been observed. EPA set up community air quality monitors and said the air has remained at safe levels. On Friday, the city of Medford identified seven businesses impacted by the fire, the Mail Tribune reported. Authorities are investigating the fire’s cause.

Agencies, Company Continue Oil Spill Cleanup After Fire (AP) — Oil cleanup continues after a gas station fire in Medford last week, state officials said. The Oregon Department of Environmental Quality said Tuesday that the agency and NEXGEN Logistics had collected and disposed of most of the recoverable oil in and around Bear Creek. The agency says more than 20,000 gallons of petroleum products – primarily lube oil – were released during the blaze April 12 that spread from the fueling station to adjacent buildings. EPA spokesman Bill Dunbar told the Mail Tribune the estimate of spilled oil increased to over 20,000 gallons after cleanup crews inspected above-ground tanks containing gasoline, diesel and other petroleum products and determined they were “down more.” DEQ and NEXGEN don't have an estimate of how much oil entered Bear Creek through storm water systems and how much the fire consumed. NEXGEN operates the Pacific Pride fuel depot in Medford that burned and is paying for incident response including wildlife rescue and recovery efforts, DEQ said. Some oiled Canada geese and mallard ducks have been taken in by International Bird Rescue for care, DEQ said. The state Department of Fish & Wildlife urges people not to approach or pick up any oiled wildlife and to instead notify trained experts. Occasional sheens along the creek likely will be seen over the next several weeks to months, officials said.

Helms: Blizzard reduced oil and gas production; federal oil lease sale scheduled - North Dakota's daily oil and gas production in February was virtually unchanged from January. In his monthly "Director's Cut" briefing , state mineral resources director Lynn Helms said the state produced 1,089,193 barrels per day in February. In January, that number was 1,088.613 barrels per day. But Hems said preliminary reports show the recent blizzard reduced that daily production number. "It looks like about a 25 percent drop in production, due to the blizzard," Helms said. He won't have the4 actual numbers for April for a few months. "At least during the blizzard, we would have dropped below a million barrels a day, with probably 25 percent of our production shut in because of an inability to transport oil, and to keep things operating if they went down," Helms said. Helms said he thinks about half that reduced production has come back. The federal Bureau of Land Management has scheduled an oil and gas lease sale in June, involving tracts in North Dakota and Montana. This comes after the Department canceled plans for a lease sale in the first quarter of 2022. "The North Dakota parcels was a ditto of what was supposed to be auctioned off last month," Helms told reporters. Helms said the number of leases in Montana were reduced. BLM has also decided the royalty rate for those leases will be 18.75 percent, up from 12 percent. Helms said he doesn’t know what affect, if any, the increased royalty rate will have on that sale. "I will say this, that the tracts ready for lease in North Dakota are prime acreage," Helms said. "Industry is still going to want them." The sale is scheduled June 28th.

Pipeline Authority director: Proposed crude oil pipeline shows continued confidence in the Bakken - The director of the North Dakota Pipeline Authority said the announcement of a crude oil pipeline to be built from McKenzie County to Baker, Montana shows continued confidence in the Bakken. The pipeline is proposed by Bridger. It would be a 16 inch line, that could carry 105,000 barrels of Bakken crude per day, expandable to 250,000 barrels a day. Once that oil gets to Baker, it would be taken to either Guernsey, Wyoming or Cushing, Oklahoma. "Pipeline systems are not built on speculation," said Authority Director Justin Kringstad. "In early 2021, there were some open seasons held for folks to commit to this specific project." Kringstad said pipelines would not get built unless there are shipper commitments. "It is encouraging to see these projects move forward, that there's additional confidence in production and the need for new transport options and marketing options out of North Dakota," Kringstad said. Kringstad said this is the only large-scale oil pipeline project on the docket right now.

The Rights of Nature movement and wild rice could stop Line 3 expansion - Rights of Nature – an innovative legal movement that protects water, animals and ecosystems by giving them legal rights – might stop a pipeline. In 2018, Frank Bibeau, an attorney for the White Earth Nation, helped the tribe write a law that recognized the rights of wild rice, which they call Manoomin, or “good berry”, to “exist, flourish, regenerate, and evolve.” The law relies on a section of an 1837 treaty between the Ojibwe and the U.S. government.In Minnesota, wild rice, and the waters it depends on, are in danger from climate change and the expansion of Line 3, a controversial pipeline operated by a Canadian energy company and fiercely opposed by Indigenous people and environmental activists. The pipeline’s proposed corridor would run directly through wild rice beds and could threaten the environmental health of the whole area. In 2021, he used the Rights of Manoomin law to sue the State of Minnesota over the construction of the pipeline. “I couldn’t figure out how to get authority over them to compel them to do anything we might want to do. And right in my brain, you know, it just clicked,” Bibeau said. “Wild rice is mentioned specifically in the 1837 Treaty. It talks about how we retain the rights to hunt fish and gather wild rice on the lakes and rivers and lands that we’re ceding. Well, that’s huge.” In a setback for the case in March, the White Earth Ojibwe Appellate Court dismissed the tribe’s own lawsuit. The ruling said that the court does not have jurisdiction over non-tribal member activities on off-reservation land. The case is still awaiting a decision from a Federal appeals court over that exact question. Since Bibeau first developed Rights of Manoomin, other tribes have used it as a model. In 2019, the Yurok Tribe in Northern California adopted a resolution recognizing the rights of the Klamath River. In Seattle, the Sauk-Suiattle Indian Tribe is suing the city over its hydroelectric dams on behalf of salmon. Bibeau believes that these two cases will be the next step in the growing Indigenous Rights of Nature movement and have the potential to lead to widespread use by tribes across the country.

Trans Mountain Expansion Reaches Halfway Mark - Canada’s Trans Mountain Pipeline expansion (TMX) has reportedly reached “a major milestone” by passing its halfway mark to completion. The oil pipeline system reported that since August 2019, about 20,000 workers cleared 344 miles of right-of-way, laid 247 miles of pipe and made 32 trenchless river and stream crossings. “The way we are constructing this project reflects a new approach to building major projects in Canada,” said acting President Rob Van Walleghem in a progress report. The project is intended to roughly triple the pipeline’s capacity to 890,000 b/d on the 690-mile route across Alberta and British Columbia. Pipeline hurdles and increased costs have increasingly stretched the project’s price tag and timeline. The original line was completed in 32 months, from incorporation with a federal government charter in 1951 to its first delivery in 1953 from Edmonton to the suburban Burnaby shoreline of Vancouver Harbor. The greenfield construction project cost C$93 million ($74.4 million). Adjusted for inflation, the original price tag works out to C$975 million ($780 million), according to the Bank of Canada. In contrast, TMX started work 15 years ago with its first leg built between 2007-08 across the Rocky Mountains and the Alberta-British Columbia (BC) boundary, using a clause in the 1951 pipeline corporate charter that granted permission for a single capacity addition job. The full expansion project stayed on hold for five years. Oil shippers largely waited until 2013 before inking transportation contracts that enabled TMX to proceed. Contested regulatory approval hearings, conflict between the Alberta and BC governments, environmental and native opposition, and community resistance led the line’s last investor-owned proprietor, Kinder Morgan Inc., to drop TMX. The Canadian government bought Trans Mountain for C$4.5 billion ($3.6 billion) in 2018. It then helped steer TMX into construction through multiple protest lawsuits and a second contested regulatory and federal cabinet approval process. When first approved in 2016, TMX costs were estimated at C$7.4 billion ($5.9 billion). In February, the latest reported estimate nearly tripled to C$21.4 billion ($17 billion). The completion target date has been delayed for a year until 2023.

Quebec Pulls Trigger & Commits Energy Suicide – Bans All O&G Prod. In the end, we didn’t think they would actually do it–but they did. The province of Quebec, Canada, with a huge supply of Utica Shale gas sitting beneath it, has just passed a new law outlawing all oil and natural gas production throughout the province. It is a breathtaking grab of totalitarian power. It’s also energy suicide. Quebec says it will pay a piddly $79.5 million (US) to expropriate the oil and gas drilling rights of companies owning those rights in the province. We’ve seen estimates that those rights are worth more than $5 billion. Questerre Energy, which owns more than 1 million acres of leases and an estimated 6 Tcf of Utica Shale reserves in the province, is considering its next legal move.

Argentina Looking to Secure Winter Natural Gas Volumes Amid Soaring Cost of LNG - Argentina took a step towards securing additional natural gas supplies for this upcoming Southern Cone winter with a new agreement with neighboring Bolivia. The agreement guarantees Argentina will receive 14 Mm3/d of gas from Bolivia from May to September, the same volume of imports as last winter. Bolivia had initially said it would send out about half of this to Argentina this year. Additionally, Argentine President Alberto Fernández said that in the event of excess volumes being available in Bolivia, Argentina would “have priority.” In separate talks, Argentine officials reached an agreement with Brazil to import electricity during the winter months in order to be able to divert some natural gas from power plants to the industrial and residential segments. Argentina traditionally imports liquefied natural gas (LNG) through its two floating storage and regasification units in winter to meet higher seasonal demand. But given the war in Ukraine amid an already tight global market, LNG is less attractive than in previous years. Although Argentina has sufficient production to export gas in summer months, the country is also heavily reliant on natural gas. The country uses gas for 58% of its total energy consumption, according to Buenos Aires-based IAE Argentine Energy Institute. The costs of the Bolivian gas would be $12.18/MMBtu, energy secretary Darío Martínez said. This is about double Henry Hub, but significantly lower than European benchmark prices, which have been as high as $70 this year. The Bolivian imports would save the country $769 million and replace 14 LNG cargoes during the winter months, Martínez said.

PM does not think it makes sense to seal shale gas wells, minister says - Boris Johnson has told the business secretary, Kwasi Kwarteng, that it does “not make sense” to seal its shale gas wells, the business secretary has revealed, amid tensions with his department which has repeatedly denied the government will change its position on fracking. Johnson’s spokesperson opened the door to a shift in the UK’s position on fracking on Wednesday, saying that “all options” would be considered before the forthcoming energy strategy is completed. A No 10 source confirmed it was under review. Labour said the government should double its onshore wind capacity – a measure which No 10 sources said was also under discussion – as well as recommitting to nuclear, as part of a five-point plan for energy security released by Ed Miliband. Kwarteng, who has been a public sceptic about the benefits of fracking, insisted the government’s position had not changed, but he gave the strongest indication yet that the prime minister could change course on the order that shale gas wells will be closed with concrete by 30 June. “In conversation with my right honourable friend the prime minister, we were clear that it didn’t necessarily make any sense to concrete over the wells. We’re still in conversations about that,” he told the House of Commons. Amid tensions with backbenchers and rightwing campaign groups, Johnson’s spokesperson said the energy supply strategy would “consider all options, given the ongoing situation in Ukraine and the effect that that’s having on oil and gas prices.” A source at the Department for Business, Energy and Industrial Strategy (BEIS) said Kwarteng “accepted that fracking would not make a difference” to gas prices, but suggested the energy strategy could open the door to new fracking only if new safety evidence emerged, similar to the phrasing of the Tory manifesto. The source expressed scepticism any new scientific basis would in fact emerge. Earlier this week, Kwarteng tweeted: “The wholesale price of gas has quadrupled in UK and Europe. Additional UK production won’t materially affect the wholesale market price. This includes fracking – UK producers won’t sell shale gas to UK consumers below the market price. They’re not charities.”

To fight climate change, and now Russia, too, Zurich turns off natural gas - European officials are debating whether they can stop buying natural gas imports from Russia. Many say it can't be done. But the biggest city in Switzerland — Zurich — is already taking ambitious steps to wean itself off gas. It's shutting down the flow of gas to whole parts of the city. Zurich started down this path a decade ago to save money and fight climate change. The plan provoked controversy at first. Today, as the city's residents install alternatives to gas heating, there appears to be broad support for the switch — in part, because of Russia's invasion of Ukraine. About half of Switzerland's natural gas supply comes from Russia. "Attitudes have changed once again, dramatically," says Rainer Schöne, a spokesman for Energie 360°, Zurich's city-owned gas utility. "Today, it's clear. People want to, and have to, move away from fossil gas." Zurich's experience may offer lessons to other cities around the world that are encouraging residents to switch away from natural gas appliances but are not, so far, shutting down the infrastructure that delivers it. Zurich's move to abandon gas was driven in part by economics. The city wanted to expand a "district heating" system that uses excess heat from a waste incinerator on the edge of the city, a modern plant outfitted with the latest pollution control technology. The incinerator — supplemented by other facilities that burn wood or gas — heats water, and that hot water or steam circulates through underground pipes to homes and businesses that tap it as a heat source. It made little sense for the city to maintain both hot water and gas pipelines side by side, says Zurich's energy commissioner, Silvia Banfi Frost. "It's quite clear that we don't want to have parallel networks for supplying heat," she says. In 2011, city officials announced that they would start shutting down gas service within five years in one part of the city that's well-served by district heating. This area, historically dominated by industry and apartment buildings, is home to 93,000 people. But protests erupted. The plan "was indeed a shock" to many people who relied on gas, says Schöne. Residents argued that they'd received too little notice and that they were being forced to buy costly replacements for their gas appliances. So officials backed off, promising to compensate people who had to replace gas furnaces that were less than 20 years old. Zurich also delayed the start of the gas shutdown to 2021. Now, however, it's underway. Some residents of Zurich, especially those in single-family homes, can't easily connect to the district heating system and have to find alternatives. Ernst Danner is a member of Zurich's City Parliament from the centrist Evangelical People's Party. He lives in a single-family home, and he installed an electric heat pump that draws warmth from water circulating through pipes that go deep underground. It cost him just over $40,000 after tax breaks and city subsidies, but it also cut his heating bill in half. Over the lifetime of the system, he says, "I pay a bit more, but it's not that much more, and it's more ecological." Many of his neighbors, Danner says, have installed less-costly "air-source" heat pumps that draw heat from the air outside. "Those I know are very happy with their heat pumps. It's very good!" he says

Italy prime minister: EU can cut Russian energy dependence sooner than thought — Europe can reduce energy dependence on Russia quicker than previously estimated, Mario Draghi said in an interview with Corriere della Sera. “Diversification is possible and feasible relatively quickly, shorter than we imagined just a month ago,” the Italian prime minister said after reaching an agreement to increase gas imports from Algeria. “We have gas in storage and will have new gas from other suppliers,” Draghi said, adding that the affects of any “containment measures” would be mild. “We are talking about a 1-2 degrees reduction in heating temperatures and similar variations for air conditioners.” Italy’s proposal to cap prices for natural gas used to generate power in order to reduce dependence on Russia is “gaining consensus” among other European countries, Draghi said in his first newspaper interview since he took office in February 2021. “Europe continues to finance Russia by purchasing oil and gas, among other things, at a price that has no relation to historical valuesand production costs,” he said. Italy currently gets about 40% of its gas from Russia, and Draghi has sought alternative sources since President Vladimir Putin launched an invasion of Ukraine in February. He also said that he’s starting to agree with those who say that talking to Putin is “useless” and “a waste of time.” “I have the impression that the horror of war with its carnage, with what they have done to children and women, is completely independent of the words and phone calls that are made.” ”

Europe Braces for Diesel Deluge - Europe’s diesel imports are set to soar to levels last seen before the pandemic, even as cargoes from top-supplier Russia subside. Shipments of diesel-type fuels to the continent are expected to jump to 1.45 million barrels a day this month, the highest since August 2019, according to Bloomberg calculations using data from energy analytics firm Vortexa Ltd. Flows from Russia will account for 43% of the April total -- shrinking to the lowest since December -- compared with an average of 56% for all of last year. Europe is racing to diversify its energy supplies following President Vladimir Putin’s invasion of Ukraine, and many companies in the oil industry are avoiding Russian cargoes amid an evolving raft of trade sanctions. Shipments from other regions are now more than compensating for the loss of Russian diesel supplies. “This jump in flows is the response from European buyers seeking to lower exposure to or self-sanctioning Russian diesel,” said Jay Maroo, senior market analyst at Vortexa. “Non-Russian origin diesel imports into Europe have almost doubled month-to-month in April.” Cargoes from the Middle East are expected to more than double on a monthly basis, reaching the highest level since October 2020. Imports from India are set to hit a six-month high. Diesel exports from the U.S. have also jumped, pushing arrivals in Europe to the highest in nine months. Europe’s diesel crack -- the difference between the price of the fuel versus crude oil -- surged to record levels after the start of the war in Ukraine. A busy refinery maintenance period has also contributed to Europe’s market tightness. “Europe has been the region where diesel cracks have been the highest, to pull in cargoes from other regions,” said Jonathan Leitch, an oil analyst at Turner, Mason & Co. “These cargoes are needed to meet strong demand currently and to make up for expected shortfalls in Russian diesel imports.” Europe still remains heavily reliant on Russian diesel, and supplies of any origin are still allowed to be traded on the continent, even as international sanctions mount on Moscow. .

Russia Ready To Sell Oil At Any Price - Russia is ready to sell crude oil at pretty much any price, but only to friendly countries, Energy Minister Nikolay Shulginov told Russian news agency Interfax.Commenting on oil price forecasts, Shulginov said that these will need to be revised soon in light of the changes in the geopolitical and economic situation. He added that while a price range of between $80 and $150 per barrel of crude was possible, Russia was ready to sell its oil at any price range because its priority was to keep its oil industry going."A price range of $80 to $150 per barrel is generally possible," Shulginov told Interfax, "but it is not our job to play guesswork with prices. Our job is to ensure the continue operation of the oil industry. We are ready to sell friendly countries oil and oil products at any price range."Separately, commenting on news about foreign companies' exit from the Russian energy industry, Shulginov said this exit is, for now, hypothetical. These companies, he said, would first need to find a buyer for their Russian business.The minister's statement suggests sanctions, although not directly targeting Russia's oil industry, are beginning to bite. With lower sales due to the sanctions, Russia may soon need to start shutting down wells because it is running out of storage space, and new facilities are being built with haste.The limited storage capacity has been a problem for a while but has only come into the spotlight now that Russian oil cargos are being shunned by Western buyers. According to the International Energy Agency, Western sanctions could reduce Russian exports by some 3 million barrels daily this quarter.This would mean a 3-million-bpd shortfall in global supply with no immediate replacement. Also, if fuel exports are included, the shortfall could become even greater, as OPEC's secretary-general warned the EU this week during talks in Vienna."We could potentially see the loss of more than 7 million barrels per day (bpd) of Russian oil and other liquids exports, resulting from current and future sanctions or other voluntary actions," Mohammed Barkindo said. "Considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude."

Oil firms spill 1,545 barrels of crude oil in Q1’22 - By Prince Okafor - Oil and gas companies operating in the Niger Delta spilled 1,545 barrels of crude oil, an equivalent of 246, 000 litres, in three months, from January to March 2022, according to data obtained from the National Oil Spill Detection Response Agency, NOSDRA. Although this indicates 52.6 percent less than the 3,262 barrels of crude oil spilled in the corresponding period of 2021, the development reflects the severe impact of environmental pollution on the nation’s economy due to crude oil exploration. On a company by company basis, the report revealed that Heritage Energy Operational Service Limited recorded the highest spills, with 404.3 barrels of crude oil spilled in 31 incidents; followed by Shell Petroleum Development Company, SPDC, with 404.3 barrels of crude oil spilled in 31 incidents. Others on the list include Empire energy, 314.47 barrel of crude oil spilled in one incident; Eroton Exploration and Production Limited spilled 69.57 barrels of crude oil in one incidents; Nigerian Agip Oil Company, NAOC, spilled 49.7 barrels of crude oil in 16 incidents; while Enageed Resource Limited spilled 15 barrels in two incidents. While the value of the crude oil spilled might not be huge, the damage to the environment, the disruption to the livelihoods of individuals within the impacted communities, and the manpower and financial resources required to clean up the spill and return the environment to its original state, run into billions of dollars. Reacting to the development, the former Chairman, Petroleum Association of Nigeria, Bank-Anthony Okoroafor, said, “It cost millions of dollars to clean a barrel of a crude oil spill. The cost of managing oil spillage is very huge, it cannot be quantified because the cost to human life is more. Environmental degradation caused by the spillage affects human life. A lot of people in the next 10 years or more will suffer from serious lungs problems, cancer among others.

Petronet considering fourth Indian LNG facility -Petronet LNG may look at constructing a fourth liquefied natural gas import facility in its native India as gas demand in the country continues to grow, according to chief executive AK Singh. "We believe gas demand will continue to grow and we will need avenues to meet such requirement," he told the Press Trust of India in an interview. "We could possibly look at setting up a fourth LNG import and regassification terminal… these are preliminary thoughts, and we will come back to you once plans are firmed up." The company currently operates the 17.5 million tonnes per annum Dahej receiving and regasification terminal, currently undergoing expansion to a capacity of 22.5 million tonnes per annum, and the 5 million tpa Kochi import facility – both of which are land-based terminals. Adding the planned 5 million tpa of additional capacity at Dahej – already the world’s largest import facility - involves construction of new jetty able to also handle propane and ethane shipments, plus an additional LNG storage tanks and bays for the truck-loading of LNG. The company's third LNG import terminal is a planned floating storage and regasification unit-based facility at Gopalpur in the state of Odisha, expected to enter operation within three years. Upstream reported on 6 September 2021 that Petronet LNG had signed a memorandum of understanding with Gopalpur Ports and was looking to finalise details of the commercial and technical terms of this agreement before taking the final investment decision for this project. Gopalpur is envisaged as an initial 4 million tpa FSRU that could later be replaced by a 5 million tpa onshore terminal. Petronet LNG’s touted locations for a fourth LNG import facility includes Gangavaram in Andhra Pradesh, and the remote Andaman and Nicobar Islands that are located nearer to the coasts of Myanmar and Thailand than to the Indian mainland. India’s demand will have to increase to more than 500 million cubic metres per day from the current 165 MMcmd if the government is to meet its goal of boosting the share of natural gasi in the primary energy mix to 15% by 2030. Domestic production today accounts for around half of current consumption, pointing to higher LNG imports. The nation already has other LNG import facilities – not operated by Petronet LNG - at Hazira, Dabhol, Mundra and Ennore.

Iraq may finalise gas deal with Halliburton next month in bid to boost output --Iraq may finalise a gas deal with US oil company Halliburton to drill wells in the western gasfield of Akkas next month as Opec’s second-biggest producer seeks to boost production.Iraq's Cabinet may reactivate the agreement with the company to help the Oil Ministry obtain clear data on the output capacity of Akkas field, Iraq's Oil Minister Ihsan Abdul-Jabbar said in an interview with Al-Forat Network TV channel on Saturday. The agreement “will depend on the data we get from the exploration and well-drilling operations”, Mr Abdul-Jabbar said.Iraq is trying to increase its oil and gas output to capitalise on higher energy prices. The country relies heavily on the sale of hydrocarbons for revenue to fuel its economy and benefits from price increases to accelerate growth. Oil prices, which rose 68 per cent last year amid a faster-than-expected economic rebound, have been extremely volatile this year, rocked by the Russia-Ukraine conflict. Brent, the global benchmark for two thirds of the world's oil, is up more than 40 per cent since the start of this year after falling from a 14-year high when it nearly touched $140 per barrel last month. Iraq is aiming to sell its oil for an average of $106 to $107 per barrel this month if prices remain at current levels, Mr Abdul-Jabbar said. The country exported $11.07 billion worth of oil in March, the highest level in 50 years, as crude prices soared amid supply concerns due to Russia’s military offensive in Ukraine, the oil ministry said.Iraq is also keen to tie up with more international energy companies to invest in its energy sector after oil majors such as ExxonMobil and Lukoil considered leaving the country due to political instability and security concerns.In September, Iraq signed an agreement worth $27bn with France's TotalEnergies for four oil and gas projects.TotalEnergies will make an initial investment of $10bn, with engineering investment on projects to start “immediately”, the company's chairman and chief executive Patrick Pouyanne said.South Korea's state-run Korea Gas (Kogas) had signed a deal to develop the Akkas field in Al Anbar province in 2011, but the field was seized by ISIS and recaptured by Baghdad in late 2017. The field is believed to have reserves of 5.6 trillion cubic feet of gas.

China's gasoline exports rebound in March as COVID restrictions weigh - China's gasoline exports jumped in March from the previous two months as refiners strived to ease inventory pressure amid tepid domestic demand. The exported volume was nonetheless 26% lower than a year ealier, because of cuts to export quotas. China shipped out 1.16 million tonnes of gasoline last month, data from the General Administration of Customs showed on Monday. That compared with 1.02 million tonnes in February and 1.56 million tonnes in March 2021. The daily average in March was 37,419 tonnes, up from 31,864 in the previous two months, the first to be affected by the quota cuts. Diesel exports reached 670,000 tonnes in March, which was up from a seven-year low in February but still 76% short of 2.81 million tonnes a year before. Jet kerosene exports were up 7.2% on March 2021, at 770,000 tonnes, the data showed. In December, Beijing slashed 2022 quotas for exporting fuel products, except marine fuel, with the aim of shutting excess refining capacity, balancing domestic supply and demand, and reducing greenhouse gas emissions. Then, in March, it prompted increased production to secure supply as the Ukraine crisis drove up interational prices. Yet measures to reduce mobility in response to COVID outbreaks have cut domestic gasoline and diesel demand and left refiners with too much stock, prompting them to lower operating rates and use quotas quickly to export more. Analysts and traders do not expect China's fuel demand to pick up before mid-May. So exporters meanwhile have an incentive to further increase exports. Customs data on Monday also showed China's liquefied natural gas (LNG) imports slid 17% from a year earlier to 4.63 million tonnes in March.

OPEC Is Treading Lightly As Bearish News Mounts - This week saw some good news finally for oil consumers. Both OPEC and the International Energy Agency revised down their demand projections, suggesting that prices finally had some meaningful downward potential. But OPEC stands ready to change track. "Severe new lockdown measures amid surging Covid cases in China have led to a downward revision in our expectations for global oil demand in 2Q22 and for the year as a whole," the IEA wrote in its latest Oil Market Report this week.The agency also noted that OECD members consumed less oil than previously expected, which led the IEA to revise down its demand outlook for the year by 260,000 bpd from last month's OMR to a total 99.4 million bpd.At the same time, the agency cited stable and significant production additions during the first quarter of the year, noting that it was led by non-OPEC producers. Whenever a production increase is led by non-OPEC producers, it's worth watching OPEC even more closely than usual for its response.This response has yet to come, but the cartel itself is also revising down its outlook for demand for this year. And it is revising it down by a lot more than the IEA. Global oil demand was going to be 480,000 bpd lower than previously expected, OPEC said in the latest edition of its Monthly Oil Market Report. The cartel cited slower economic growth because of the war in Ukraine as one reason for the revision, and Covid-related lockdowns in China as another.As for supply, the IEA seems to be perfectly calm. After sounding the alarm about the potential loss of 3 million bpd of Russian oil exports because of Western sanctions, the agency now said that the coordinated release of a total 240 million barrels of crude, of which 180 million bpd to be released by the United States, would offset the effect of lost Russian supply.It seems that the IEA is assuming that the loss of Russian supply will be temporary—just as the effect of the reserve release will only last for as long as the release lasts, if not less. And OPEC may yet serve a nasty surprise to IEA members ready to tap their own strategic reserves to normalize benchmark prices.Earlier this month, OPEC met with European Union representatives only to tell them that it would not be stepping in to help if Russian oil exports were completely shut off. "We could potentially see the loss of more than 7 million barrels per day (bpd) of Russian oil and other liquids exports, resulting from current and future sanctions or other voluntary actions. Considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude," said the secretary-general of the cartel, Mohammed Barkindo. Yet with demand forecasts being revised, OPEC might just decide to revise its production plans as well. With millions of Russian oil out of the (official) picture and a very slim chance of Iranian barrels coming back for the time being, it's up to OPEC and the U.S. to fill the gap. If, that is, they want to.

Saudi Feb crude exports hit near two-year high – JODI (Reuters) – Saudi Arabia’s crude exports in February rose to 7.307 million barrels per day (bpd), the highest level since April 2020, official data showed on Monday. Crude oil exports in February rose 4.4% from about 7 million bpd reported for January. The world’s largest oil exporter’s February crude production also rose to its highest level in nearly two years at 10.225 million bpd from 10.145 million bpd in the previous month. Saudi Arabia’s domestic crude refinery throughput fell 0.271 million bpd to 2.506 million bpd in February while direct crude burn fell 111,000 bpd to 291,000 bpd. Monthly export figures are provided by Riyadh and other members of the Organization of the Petroleum Exporting Countries (OPEC) to the Joint Organizations Data Initiative (JODI), which published them on its website.

OPEC+ Missed Its March Output Quota By 1.45 Million Bpd - The gap between target levels and actual production of the OPEC+ group further widened in March to over 1.4 million barrels per day (bpd) as Russian crude output started to feel the sting of the sanctions and self-sanctioning of buyers and was 300,000 bpd below target, according to an OPEC+ report seen by Reuters.Last month, the producers in the OPEC+ alliance saw their combined crude oil production lag behind the quota by 1.45 million bpd, with the compliance rate shooting up to a record 157 percent since the start of the 10-million-bpd production cut agreed upon in April 2020.Russia’s crude oil production, in particular, averaged 300,000 bpd below target at 10.018 million bpd, per secondary sources in the report seen by Reuters.The OPEC+ crude production in March fell further behind the target levels after February output was more than 1 million bpd below the collective quota and the compliance rate was 136 percent.In March, Russia began to feel the pinch from the sanctions, according to the latest OPEC+ estimates.Russia’s oil industry is already showing signs of slowing down as Western buyers shun Russian oil while Moscow struggles to replace lost sales in the West with sales in emerging Asian markets. The war Putin started in Ukraine is hitting home: storage capacity is full, infrastructure and shipping logistics prevent Russian from exporting all the oil unwanted in the West to China and India, refineries are cutting run rates as product storage is overflowing, and as a result, companies are scaling back crude production.OPEC only raised its oil production by just 57,000 bpd in March from February, as African members’ struggles to pump more crude partially offset increases at the core OPEC members of the Middle East, OPEC’s Monthly Oil Market Report (MOMR) showed last week.Russian oil supply is expected to fall by 1.5 million bpd in April, with shut-ins projected to accelerate to around 3 million bpd from May, the International Energy Agency (IEA) said in its monthly report last week. The IEA was ditched by OPEC at its latest meeting as a secondary source provider to assess production

Rystad: Oil Demand To Sink By 1.4 Million Bpd - Global oil demand will drop by 1.4 million barrels per day, according to the latest forecast by Rystad Energy on Friday cited by the National.The 1.4 million bpd loss would sink oil demand to 99.6 million bpd on average, below 2019 levels of 100.2 million bpd. And a rebound in this demand isn’t expected to happy until next year at the soonest, Rystead said.The drop in oil demand will likely come from the Russian invasion of Ukraine, soaring inflation, China’s covid-inspired lockdowns, and supply chain disruptions. And even more oil demand pressure could be applied through future lockdowns or geopolitical issues.“Shrinking demand is a direct result of the impact of lower economic activity globally,” the consultancy said, adding that such a demand decrease could ease today’s tight oil markets, calming oil prices.Rystad isn’t the only one lowering oil demand forecasts. OPEC cut its 2022 oil demand growth forecast by 480,000 bpd on the back of lower expected global economic growth given the war in Ukraine and China’s covid lockdowns.The IEA also cut its oil demand forecast by 260,000 bpd to reflect the return of severe covid lockdowns in China.Meanwhile, the World Bank and the IMF have both cut their overall global growth expectations for this year.But Rystad isn’t changing its outlook for bullish oil prices. According to Rystad, if the Russian war in Ukraine drags on, it will increase oil and gas prices, particularly if the EU ends up banning oil and gas this year.“The Russian war worst case for oil demand is premised on Brent prices reaching $180 per barrel in the fourth quarter, triggering a further economic slowdown and outright destruction of oil demand,” Rystad said.’

Oil tanker stranded off Tunisian coast - A commercial oil tanker carrying more than 750 tons of diesel ran aground overnight from Friday to Saturday in the Gulf of Gabès in southeastern Tunisia. According to the Environment Ministry, the ship sank late Saturday morning due to water seeping into the engine room. Only the bow of the boat was still visible. It’s unclear if it is leaking fuel. As soon as the accident was announced Friday night, the Environment Ministry announced the activation of the national emergency response plan, put in place over the potential threat of maritime pollution. That consists of experts, marine guards, and civil protection agents being deployed to the danger zone, and buffers such as tarpaulin put around the perimeter to contain any leak. The “Xelo,” which was flying the flag of Equatorial Guinea, had left the port of Damietta in Egypt heading for Malta, but was diverted from its route due to bad weather conditions. The crew was saved by teams from the Maritime Guard and Civil Protection.

Tunisian Environment Ministry attempts to contain diesel spill after oil tanker runs aground - Arabian Business - A commercial Guinean ship named XELO carrying 750 tonnes of diesel has run aground off the coast of Gabes in the South of Tunisia, and has sunk, according to the environment ministry of Tunisia. The wrecked commercial cargo ship, flying the flag of Equatorial Guinea and coming from the Egyptian port of Damietta, did not reach its final destination, Malta, due to bad weather conditions and rough seas, according to the environment department. The ship sank after water seeped into the engine room, Bloomberg reported, after raising the alarm of a major oil spill. Tunisian authorities intervened and rescued all the crew. The nation’s environment ministry has placed barriers and have put up a perimeter around the ship to contain the diesel spill. Divers have been mobilised to examine the extent of the spill and the infiltrated fuel will be pumped out, the ministry added. Tunisian Environment Minister Leila Chikhaoui went to Gabes to examine the situation and coordinate interventions to undertake the necessary preventive measures. The authorities had already announced the implementation of the National Marine Pollution Emergency Response Plan, to contain the damage, state-run news agency, Wam reported.. The Tunisian environment ministry’s response is being undertaken in close coordination with the ministries of defense, interior, and transport as well as the Tunisian customs. On Saturday, April 16, the environment ministry said it was following with ”concern” the environmental effects of the sinking of the cargo ship, adding all efforts are being made to avoid “an environmental disaster”.

Oil Tanker With 750 Tons Of Diesel Sinks Off Tunisia -A tanker carrying 750 tons of diesel fuel from Egypt to Malta sank Saturday off Tunisia’s southeast coast, but there is a possibility of avoiding a large spill. The tanker in question – named Xelo – sought shelter in Tunisian waters from bad weather before going down in the Gulf of Gabes. Environment Minister Leila Chikhaoui said that the situation was under control. She added that she was traveling to Gabes “to evaluate the situation […] and take necessary preventive decisions in coordination with the regional authorities.” Also, the spokesman for a court in Gabes Mohamed Karray said: “There are minimal leaks, which are not even visible to the naked eye, and fortunately the oil is evaporating, so there should not be a disaster in the Gulf of Gabes.” The Tunisian environment ministry said that the 63-yard-long and 9.8-yard-wide tanker began taking water around four miles offshore in the Gulf of Gabes and that the engine room was engulfed. It said that Tunisian authorities evacuated the seven-member crew. The Georgian captain, four Turks, and two Azerbaijanis were briefly hospitalized for checks and were later moved to a hotel. Furthermore, authorities activated the national emergency plan for the prevention of marine pollution with the aim of ‘bringing the situation under control and avoiding the spread of pollutants.’ The environment ministry added that the defense, interior, transport, and customs ministries were working to avoid a marine environmental disaster in the region and limit its impact. Before the ship sank, the ministry described the situation as ‘alarming but under control.’ The Gulf of Gabes where the ship sank is a fishing area but has suffered from pollution from phosphate processing industries based nearby and the presence of a pipeline bringing oil from southern Tunisia. After the vessel sank, divers inspected the hull of the tanker and detected no leaks. The inspection was carried out by divers accompanied by the ship's captain and engineer. Xelo, after sinking settled on its side at a depth of around 65 feet. Access to the vessel is sealed off by Tunisia's military. The valves were closed, and the team of divers ensured they were sealed and intact. Authorities claimed that the situation was not dangerous and that the outlook was positive. The ship is currently stable as it ran aground on sand. The priority now was to pump the diesel fuel and prevent any spillage or pollution. An Italian ship specialized in cleaning up marine pollution will be sent alongside a team of divers to aid with efforts. The previous incident in Tunisia occurred in October 2018. Tunisian freighter Ulysse hit the Cyprus-based Virginia anchored some 20 miles off northern Corsica. As a consequence, hundreds of tons of fuel spilled into the Mediterranean. It took several days to disentangle the boats and pump some 18,360 cubic feet of fuel that escaped the tanks.

Protests disrupt oil production in Libya, worsening Russia supply problems On Monday, oil prices rose for the fourth session in a row as Libya sees production disruptions, adding to the market dilemma due toWestern sanctions on Russian exports. According to Bloomberg, the Sharara field in western Libya closed down after protesters mobilized at the site, demanding that the Libyan Prime Minister, Abdul Hamid Dbeibah, resign. El Feel oil deposit has also been closed down for the same reason. Brent crude oil settled Monday's price at $113.16, up $1.46 or 1.3%. Last week, Brent gained 8.7% after two weeks of losses which ate 13% of crude prices. West Texas Intermediate finished Monday at $108.21, up $1.26 or 1.2%. WTI increased 8.8% last week, after a 13% loss over two previous weeks. This year, Libya's oil production averaged just over 1 million barrels a day, a decrease from 2021, 1.2 million, according to media reports. This drop is bleeding the economy millions of dollars in revenue. Recently, the International Energy Agency warned that around 3 million barrels a day of Russian oil could be halted from May onward due to the sanctions implemented on Russian oil and exports. According to the Interfax news agency on Friday, Russian oil output has been on a decrease in April, declining 7.5% from March till the first half of April.

Protest forces Libya’s national oil firm to close Al-Fil field --Libya’s National Oil Corporation (NOC) has announced the suspension of production at a major oil field in the country’s south, declaring a “force majeure” due to a protest at the site. Located some 750km (466 miles) southwest of Tripoli, the Al-Fil field is jointly managed by the NOC and Italian energy giant ENI and produces about 70,000 barrels of oil per day. The field was already forced to close temporarily in early March when an armed group shut down valves delivering crude. “On Saturday… the Al-Fil field was subjected to arbitrary closure attempts, due to the entry of a group of individuals and the prevention of the field’s workers from continuing production,” the NOC said in a post to Facebook on Sunday. The firm added that the field was shut down on Sunday, marking the second closure in a matter of weeks and “making it impossible for the NOC to implement its contractual obligations”. Declaring force majeure is a legal move that allows involved parties to free themselves from contractual obligations when factors beyond control, such as fighting or natural disasters, make meeting those obligations impossible. According to Libya’s state news agency, the closure comes after an unidentified group entered the site and declared that they were halting production “until a government appointed by parliament takes office in the capital”. Libya has recently found itself again with two rival governments after the eastern-based parliament in February appointed a new prime minister in a direct challenge to the UN-backed government in Tripoli. Fathi Bashagha, a former interior minister, was named prime minister in February by the House of Representatives, which has been based in Tobruk. Abdul Hamid Dbeibah, who is based in the capital, Tripoli, has refused to step down as interim prime minister and insists he will hand over power only to an elected government.

Oil Futures Slip as China's Slowdown Offsets Libyan Outage - Reversing overnight gains, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange slipped in early trade Monday as investors balanced a sharp decline in China's consumption tied to COVID-19 shutdowns of major cities against another disruption of Libyan oil production after violent protests shut down operations at the north African nation's largest oilfields. Libya's National Oil Corporation on Sunday declared force majeure on oil exports from the El-Feel oilfield in the country's southwest, affecting 90,000 barrels (bbl) in daily output. In a statement, the company said oil production was halted until further notice after a group of armed civilians entered the facility and halted operations. Tribal leaders in southern Libya earlier announced they were halting production from the oilfield until Prime Minister Abdul Hamid Dbeibeh hands over power to the newly appointed government of Fathi Bashagha. They also called for the sacking of Mustafa Sanalla, the head of the NOC, and for the appointment of a new board for the company. Political turmoil in Libya prompted a 370,000 barrels per day (bpd) decline in March oil production, according to secondary sources from Organization of the Petroleum Exporting Countries, with supplies likely to take a further hit in April. NOC formally suspended loadings from the eastern port of Zueitina and said it was the "start of a painful wave of closures." The NOC has also declared force majeure -- a clause in contracts allowing exports to be stopped -- from Mellitah, a western port fed by Sharara and El Feel. Offsetting bullish headlines, economic data out of Asia's largest economy, China, showed sharp contraction in retail sales and industrial production last month after health authorities shut down entire cities and regions in some instances to slow the spread of COVID-19. China's retail sales, a main gauge of consumption, fell 3.5% year-on-year in March, the first contraction since August 2020. An unexpected outbreak of omicron cases has thrown several domestic cities into short-term disarray, including the country's financial hub Shanghai in eastern China and heavy manufacturing center, Jilin, in northeastern China. The Shanghai lockdown is particularly concerning as the city acts as financial hub of China's giant $18 trillion economy. Coronavirus infections have kept growing in China with a total caseload that has now exceeded 200,000 during the latest omicron outbreak, making Shanghai the worst hit city in China's mainland since 2020. . In early trading, NYMEX May West Texas Intermediate were little changed near $107 bbl and ICE June Brent contract edged higher to $112 bbl. NYMEX May RBOB futures were down 2.25 cents to $3.3589 gallon and May ULSD contract fell 4.85 cents to near $3.8065 gallon.

Oil Gains as Libya Shuts Its Largest Oil Field Amid Protests -- Oil rose with the shutdown of Libya’s biggest oil field, which is straining an already under-supplied market and overshadowing signals that China’s lockdowns are weighing on its economic growth. Brent crude futures rose above $113 a barrel for the first time since late March and West Texas Intermediate traded around $108. Global markets face further interruptions to oil supplies after demonstrations against Libya’s Prime Minister Abdul Hamid Dbeibah shut down Sharara, the country’s biggest oil field. Protesters also forced two Libyan ports to stop loading, with output halted at the El Feel field. Earlier, prices fell as Chinese economic data signaled bearish news for the market. China reported its biggest decline in consumer spending and worst unemployment rate since the first months of the pandemic, adding another threat to global growth. Oil rallied above $100 this year as the war in Ukraine disrupted an already-tight market, with some traders shunning Russian crude. The surge in prices spurred the U.S. and allies to announce the release of millions of barrels from strategic reserves to quell inflationary pressures. Nonetheless, global supplies remain tight with the European Union considering banning Russian crude and with OPEC+ declining to raise their output pace. A key oil market indicator suggests that bullish sentiment is rising. Brent so-called prompt spread, the difference between its two nearest contracts, surged to $1.15 a barrel, up from 21 cents a week ago. The recent rebound comes as European Union is considering banning Russian oil and gas exports, exacerbating an already tight market. Any “embargo decision by the EU would be a catalyst for even higher oil prices,” “Realistically, it would not be viable to replace” all of the crude that would be disrupted from a European Union ban on Russian crude.

Oil Rises Over 1% as Libya Outages Add to Russia Supply Fears -- (Reuters) -Oil prices rose more than 1% on Monday, with Brent crude topping $114 a barrel, as outages in Libya deepened concern over tight global supply amid the Ukraine crisis. Adding to supply pressures from sanctions on Russia, Libya's National Oil Corp on Monday said "a painful wave of closures" had begun hitting its facilities and declared force majeure at Al-Sharara oilfield and other sites. "With global supplies now so tight, even the most minor disruption is likely to have an outsized impact on prices," said Jeffrey Halley, analyst at brokerage OANDA. Brent crude, the global benchmark, rose $1.46, or 1.3%, to settle at $113.16 a barrel. The contract rose to $114.84 a barrel, its highest since March 28. U.S. West Texas Intermediate rose $1.26, or 1.2%, to settle at $108.21 a barrel. The benchmark hit $109.81 a barrel, also the highest since March 28. Deeper supply losses loom. Russian production declined by 7.5% in the first half of April from March, Interfax reported on Friday, and EU governments said last week the bloc's executive was drafting proposals to ban Russian crude. Those comments came before an escalation in the Ukraine war. Ukrainian authorities said missiles struck Lviv early on Monday and explosions rocked other cities as Russian forces kept up their bombardments after claiming near full control of the port of Mariupol. In a bearish signal for prices, China's economy slowed in March, taking the shine off first-quarter growth numbers and worsening an outlook already weakened by COVID-19 curbs. Data on Monday also showed China refined 2% less oil in March than a year earlier, with throughput falling to the lowest since October as the surge in crude prices squeezed margins and tight lockdowns reduced demand. Oil surged to the highest since 2008 in March, with Brent briefly topping $134.

Crudes Slide From 3-Week Highs With Growth Outlook in Focus - With the U.S. dollar holding recent gains in early trade Tuesday, oil futures nearest delivery moved lower in tandem with softening equities as investors refocused on a slowing economy in China and deceleration of economic growth across emerging markets tied to surging prices for essential food and fuel imports. The World Bank on Monday downgraded global economic growth this year to 3.2% from 4.1% seen at the start of the year, as record levels of inflation and Russia's invasion of Ukraine continue to weigh on the economic outlook. The single largest factor in the reduced growth forecast was a projected contraction of 4% across Europe and Central Asia, according to World Bank President David Malpass, because of disruptions to trade and logistics brought about by the war. In particular, Russia, ranked as the world's 11th largest economy prior to the Feb. 24 invasion, is seen contracting by 11% this year, which would mark the steepest deceleration of growth since 1994. Russia's Central Bank more than doubled its key interest rate to 20% on Feb. 28 as the first wave of Western sanctions hit before the bank trimmed rates to 17% on April 8. Despite early losses, sentiment in the oil market remains supported by the growing possibility of a European Union-wide embargo on Russian oil imports and unplanned supply outages in Libya, where violent protests shut-in nearly half of the country's 1.2 million barrels per day (bpd) of oil production. Analysts forecast Libya's oil production could fall by as much as 1 million bpd in coming days after demonstrations closed off the nation's largest oil field, El Sharara, with daily production capacity of 300,000 barrels (bbl). The closure of smaller oil fields of El Feel, Nafoora and Abu Al- Tilf has led to the loss of an additional 200,000 bpd, effectively shutting down operations at the key export ports along Libya's Mediterranean coast. Tribal leaders in charge of the protests demand the ouster of the country's prime minister, Abdul Hamid Dbeibah, and the head of Libya's National Company, Mustafa Sanalla, who has been in control of state-owned oil giant since 2014. Meanwhile, European leaders are said to be working on a sweeping ban of Russian oil imports as part of the next sanction package in response to Moscow's offensive in eastern Ukraine. Data from the U.S. Energy Information Administration showed in 2021 EU bought 2.3 million bpd of Russian oil -- almost half of Russia's exports. Near 7:30 a.m. EDT, NYMEX May West Texas Intermediate fell $1.42 to trade near $106.79 bbl ahead of expiration Wednesday afternoon, with the next-month June contract narrowing its discount to $0.55 bbl. ICE June Brent futures fell a like amount to near $111.65 bbl. NYMEX May RBOB futures fell 5.28 cents to $3.3253 gallon, and May ULSD contract declined 3.69 cents to $3.8539 gallon.

Oil falls 5% to 107.25 dollar per barrel after IMF cuts growth outlook (Reuters) -Oil prices were down about 5% in volatile trading on Tuesday on demand concerns after the International Monetary Fund (IMF) cut its economic growth forecasts and warned of higher inflation. Brent crude, the global benchmark, fell $5.91, or 5.22%, to settle at $107.25 a barrel, while U.S. West Texas Intermediate dropped $5.65, or 5.22%, to settle at $102.56 a barrel. Prices declined despite lower output from OPEC+, which produced 1.45 million barrels per day (bpd) below its targets in March, as Russian output began to decrease following sanctions imposed by the West over its invasion of Ukraine, according to a report from the producer alliance seen by Reuters. Russia produced about 300,000 bpd below its target in March at 10.018 million bpd, based on secondary sources, the report showed. OPEC+, which groups OPEC and allies led by Russia, agreed last month to a monthly oil output boost of 432,000 bpd for May, resisting pressure by major consumers to pump more. The IMF lowered its forecast for global economic growth by nearly a full percentage point, citing Russia's invasion, and said that inflation is now a "clear and present danger" for many countries. The bearish outlook added to price pressure from the dollar trading at a two-year high. A firmer greenback makes commodities priced in dollars more expensive for holders of other currencies, which can dampen demand. [USD/] Chicago Federal Reserve Bank President Charles Evans on Tuesday said the Fed could raise its policy target range to 2.25% to 2.5% by year-end, but if inflation remains high will likely need to hike rates further. Meanwhile, St. Louis Federal Reserve Bank President James Bullard said on Monday that U.S. inflation is "far too high" as he repeated his case for increasing interest rates to 3.5% by the end of the year to slow what are now 40-year-high inflation readings. The IMF's lower growth forecast, along with the Strategic Petroleum Reserves reporting that emergency stocks fell by 4.7 million barrels on Monday, is "causing some nervousness," Concerns over demand growth were already in focus after a preliminary Reuters poll on Monday showed U.S. crude oil inventories are likely to have risen last week. China's economy slowed in March, worsening an outlook already weakened by COVID-19 curbs and the conflict in Ukraine. Fuel demand in China, the world's largest oil importer, could begin to pick up as manufacturing plants prepare to reopen in Shanghai. The price decline on Tuesday followed a rise of more than 1% on Monday, when oil prices hit their highest since March 28 on Libyan oil supply disruptions. Libya's National Oil Corp (NOC) warned on Monday of "a painful wave of closures" and declared force majeure on some output and exports as forces in the east expanded their blockade of the sector over a political standoff. NOC on Tuesday declared force majeure at the Brega oil port. United Kingdom Prime Minister Boris Johnson on a call with Western leaders on Tuesday underscored the need to increase the pressure on Russia with more sanctions and diplomatic isolation. The possibility of a European Union ban on Russian oil continued to keep the market on edge. French Finance Minister Bruno Le Maire on Tuesday said that an embargo at an EU level was in the works.

WTI Gains on Large Crude Draw, USD Pullback From 2-Year High --- Oil futures nearest delivery advanced in pre-inventory trade Wednesday after preliminary data from the American Petroleum Institute showed a surprise drop in U.S. commercial crude oil inventories during the week ended April 15, along with a larger-than-expected drawdown from distillate stocks, while an overnight retreat in the U.S. Dollar Index lent further support for the West Texas Intermediate May contract ahead of its expiration Wednesday afternoon. The U.S. Dollar Index, which tracks the value of the greenback against a basket of foreign currencies, reversed lower from a two-year high early Wednesday. The greenback's recent gains came on the back of a solid performance by the U.S. economy compared to its global peers, with COVID shutdowns in China and disrupted trade flows in Eurozone clouding their regional outlooks in a post-pandemic recovery. The International Monetary Fund revised lower its forecast for Eurozone's growth this year to 2.2%, down 1.1% from January's forecast, citing the indirect impact of war in Ukraine. "The main channel through which the war in Ukraine and sanctions on Russia affect the euro area economy is rising global energy prices and energy security," the IMF said in its World Economic Outlook report released Tuesday. The war has hurt some countries like Italy and Germany more than other European nations because they had "relatively large manufacturing sectors and greater dependence on energy imports from Russia," the IMF said. Overnight data showed industrial production in the 19-nation Eurozone bloc increased 0.7% in February, with Russia's invasion of Ukraine starting on Feb. 24. The data shows eurozone industrial output continued to grow ahead of the war, as production had stabilized at levels seen prior to the pandemic and supply chain problems were diminishing. However, the outlook for the bloc's manufacturing sector is clouded by uncertainty triggered by the conflict with clear risks to output in March and April. On a global scale, IMF revised lower its economic outlook for growth of 3.6% in 2022 and 2023, down from 4.2% annual expansion rate projected in January. For Ukraine, the World Bank estimates over half of the businesses there are closed would slash the country's gross domestic product by 45% this year. Estimates of infrastructure damage exceeding $100 billion by early March, which accounted for about two-thirds of Ukraine's GDP in 2019, are well out of date "as the war has raged on and caused further damage," said the World Bank. Separately, API data reported late Tuesday showed commercial crude oil stocks declined a sizable 4.496 million bbl (barrels) last week compared with market expectations for a 2.2 million bbl build. Crude stocks at the Cushing tank farm in Oklahoma, the delivery point for U.S. crude benchmark contract, increased 93,000 bbl. For refined fuels, gasoline stocks, according to API, increased 2.933 million bbl against expectations for an 800,000 bbl draw. Distillate stocks were drawn down 1.652 million bbl last week per API, more than estimates for a 900,0000 bbl drawdown to have occurred. In early trading, WTI May futures advanced $1.14 to $103.70 bbl, with the June WTI contract narrowing its discount to the expiring contract to $0.45 bbl. The June Brent contract jumped to $108.46 bbl, up $1.21 on the session. NYMEX RBOB May contract edged up 0.73 cents to $3.2547 gallon, and the front-month ULSD contract rallied 3.97 cents to $3.9016 gallon.

Oil Posts Marginal Increase with Tight Global Supply Concerns | Rigzone -Oil edged higher after a tumultuous session where traders weighed concerns about tight global supply with Germany announcing a ban on Russian oil and a sharp drop in U.S. crude inventories. West Texas Intermediate settled above $102 on Wednesday after swinging between gains and losses. German Foreign Minister Annalena Baerbock said that the country plans to stop importing oil from Russia by the end of the year, with natural gas soon to follow, Reuters reported. Earlier the U.S. reported crude stockpiles fell 8.02 million barrels last week, the biggest draw since January 2021 and Russia’s oil output declined in April. Though earlier this week, hawkish comments from the central bank and a downgraded growth forecast from the IMF muddled the future outlook. “Price action tells us two things: first, macro traders are firmly in control of crude markets at the moment,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. “Secondly, that the narrative of tight physical markets is stale and may not be able to induce momentum to the upside in the near term.” Oil rallied to the highest level since 2008 last month in the aftermath of President Vladimir Putin’s invasion of Ukraine. Since then, crude has seen volatile trading as investors gauge moves by the U.S. and U.K. to ban Russian imports, as well as the impact of major releases from strategic reserves. “The price of oil continues to hold above $100 per barrel and is likely to remain supported around here,” said Fiona Cincotta, senior financial markets analyst at City Index. “It would take the EU banning Russian oil for the price to really charge higher again and that isn’t looking likely for now.” Germany previously resisted an EU ban on Russian energy exports before announcing its own phase out on Wednesday. Russian oil accounted for over a third of Germany’s oil imports in 2021. - WTI for May delivery, which expired Wednesday, rose 19 cents to settle at $102.75 in New York. The more active June contract rose 14 cents to $102.19 a barrel. Brent for June settlement dropped 45 cents to $106.80 a barrel. In China’s leading commercial hub of Shanghai, carmakers to supermarkets are now starting to resume their operations as the city seeks to recover from the economic toll of an unprecedented lockdown. Kazakhstan -- another source of recent oil supply disruption -- said it expects its main oil-export route to be fully restored this week. Repairs to moorings at the Black Sea port from which its crude is shipped are “basically completed,” and one of the two moorings affected is due to restart full operations Wednesday, news agency Interfax reported, citing the nation’s energy minister. Meanwhile, Russia’s Rosneft PJSC surprised traders in Europe and Asia with offers to sell large amounts of crude at speed, as well as setting out significant changes to the payment process for at least some of the cargoes.

Oil Snaps 2-Day Slide as Supply Issues Back in Focus- Oil prices rose almost 2% Thursday as those who sold crude down in the past two sessions covered their shorts amid a return of the supply issues that had fueled much of this year’s energy rally. Brent, the London-traded global benchmark for crude, settled up $1.53, or 1.4%, at $108.33 per barrel. Brent had lost almost 6% over two previous sessions largely due IMF downgrades of 2022/23 global economic growth and the scare over new Covid deaths in China, the world’s second largest consumer of oil. New York-traded West Texas Intermediate, or WTI, the benchmark for U.S. crude, gained $1.60, or 1.6%, to settle at $103.79 on Thursday. WTI lost a net of more than 5% over the past two days, despite closing up in the previous session. Prior to Wednesday’s rebound, it fell below key $100 support to a session low of $99.89. Thursday’s higher close in Brent and WTI came as Germany suggested it will halve its Russian oil imports by the summer and end them by the end of the year. Oil traders have disputed for weeks that Berlin and the rest of the EU will be able to disengage with Russia as simply as stated, despite the West’s stand that the action is appropriate and in line with its sanctions against Moscow for the war in Ukraine. “Given how big a market (Germany) is for Russia, accounting for roughly half its exports will come as a real blow” to the supply-demand situation in oil, said Craig Erlam, analyst at online trading platform OANDA. “Oil prices are creeping higher again but remain pretty much in the middle of the range they've traded within for the last month.” Oil’s narrative was also made more bullish by Libya, which said Wednesday that it was losing more than 550,000 barrels per day of oil output due to blockades at major fields and export terminals. The North African country is one of the main contributors to the output of OPEC+, the global oil producing alliance. Made up of 23 countries and officially led by Saudi Arabia, with assistance from Russia, OPEC+ has struggled to meet its output targets for months due to under-investment in global oil fields during the height of the coronavirus outbreak. The situation has worsened since the start of the Feb. 24 Ukraine war and the consequent sanctions on Russia.

WTI, Brent Rally on Concerns Over Libyan, Russian Supplies - - While the front-month ULSD contract ended lower, crude and RBOB futures nearest delivery settled Thursday's session higher. Futures were supported by concerns over less available supply on the global market as the European Union mulls a potential ban on Russian oil imports that would further restrict worldwide oil trade. Market participants also priced in lost supply due to an ongoing disruption in Libya, where violent protests have shut-in more than 500,000 barrels (bbl) in daily output leading to a declaration of force majeure on exports. Global oil markets face an even greater supply disruption after demonstrations in Libya that demand the resignation of Libyan Prime Minister Abdul Hamid shut down El Sharara, the country's biggest oil field. Protesters also forced two of the North African nation's ports to halt loadings with output halted at the El Feel field. The Libyan outages are occurring as Russia's unprovoked war in Ukraine disrupted an already tight market, with the late February invasion prompting some traders to shun Russian crude and countries including the United States and United Kingdom to ban Russian oil imports. The European Union is now considering banning Russian oil. Russia's Deputy Prime Minister Alexander Novak said last week that if more nations banned Russian energy flows, prices may "significantly exceed" historic highs. In a weekend phone call, Russian President Vladimir Putin and Saudi Arabian Crown Prince Mohammed bin Salman gave a "positive assessment" of their efforts to stabilize the oil market, suggesting that no change in production policy is likely. The two nations lead the alliance that groups the Organization of Petroleum Exporting Countries and its partners, known as OPEC+. As OPEC+ stands firmly against accelerating production increases, the United States and 30 member countries of the International Energy Agency have announced the planned release of millions of barrels of strategic reserves to bridge the gap in lost Russian supply and quell surging price pressures. The Department of Energy this afternoon announced winning bidders for 30 million bbl of crude oil from the U.S. Strategic Petroleum Reserve and said it plans to post a Notice of Sale for another 40 million bbl on May 24. Despite the release of reserves, data published Wednesday by the Energy Information Administration show U.S. commercial crude oil inventories declined by a massive 8 million bbl during the week-ended April 15 as refiners hiked run rates and crude exports surged to a more than two-year high at 4.27 million barrels per day (bpd). At settlement, West Texas Intermediate futures for June delivery advanced $1.60 to $103.79 per bbl, and June Brent gained $1.53 to $108.33 per bbl. NYMEX RBOB May futures rose 5.38 cents to $3.3386 per gallon, and the front-month ULSD contact declined 7.23 cents to $3.9008 per gallon.

Oil Slides as China's Covid Puts EU-Russia on Back Burner -- Deja vu of a 2020 China in lockdown is weighing on oil, even as the EU-Russia face-off over Ukraine suggests crude prices have little way to go but up. Oil’s global benchmark Brent and U.S. crude’s West Texas Intermediate, or WTI, benchmark settled down on Friday, logging a third weekly loss in four, on the prospect of weaker global growth, higher interest rates and Covid clampdowns in China’s financial hub Shanghai. London-traded Brent settled down $1.68, or 1.6%, at $106.65 per barrel. For the week, Brent showed a 4.5% loss that came after a near 9% gain last week and the 13% drop in two prior weeks. If the declines keep up, April will be the first month in the negative this year for Brent. New York-traded WTI settled down $1.72, or 1.7%, at $102.07. Like Brent, WTI showed a drop of 4.5% for the week, and similar volatility to the U.K. benchmark in three previous weeks. “The risks are certainly more tilted to the upside, given the war in Ukraine and a potential embargo on Russian exports, but lockdowns in China and the risk of a Fed-driven economic slowdown are also significant,” said Craig Erlam, head of research for Europe at online trading platform OANDA. Bloomberg reported that China’s demand for gasoline, diesel and aviation fuel in April is expected to slide 20% from a year earlier, according to people with inside knowledge of the country’s energy industry. That would be equivalent to a drop in crude oil consumption of 1.2 million barrels a day, they said, and will be the largest hit to demand since the lockdown more than two years ago in Wuhan — the central Chinese city where Covid-19 was first identified. Federal Reserve Chairman Jerome Powell also spooked markets with hawkish talk at the IMF/World Bank Spring meetings this week. Powell said it would be “appropriate” for the central bank to move faster and heavier on interest rates — a strong sign that the Fed’s rate decision committee would approve a half point rise at its upcoming May 4-5 meeting after a previous hike of just a quarter point in March. “Some fear that a 50 basis point rate increase will be the first of many and could slow down the economy and the demand for oil,” Phil Flynn, energy analyst at Price Futures Group in Chicago, wrote in a commentary. “It is not just a tightening cycle upsetting traders overnight but also the pricing in of a 50-basis point interest rate increase by September by the European Central Bank. The Bank of Japan on the other hand wants to remain dovish but worries that the course of the U.S. and Europe could force them to change course.”

Crudes Fall 4% Week Over Week as China's Lockdowns Stoke Demand Fears - West Texas Intermediate futures nearest delivery on the New York Mercantile and Brent crude traded on the Intercontinental Exchange settled Friday's session with losses between 1.5% and 2%. Losses were triggered by a deepening COVID-19 crisis in China, the world's largest oil importer, where government-mandated lockdowns have led to the largest demand shock since the early days of the pandemic, while a strengthening U.S. dollar index in the aftermath of comments from Federal Reserve officials indicating an aggressive pivot towards interest rate hikes further pressured U.S. crude benchmark. China's fuel demand has fallen by more than 20% in March and April, according to private data analyzed by Bloomberg, hit by the COVID-19 shutdowns in major metropolitan areas of Shanghai and Shenzhen. That is equivalent to a drop in oil consumption of 1.2 million barrels per day (bpd) and marks the largest hit to demand since the lockdown of Wuhan more than two years ago. The decline is estimated to be in the ballpark of 9% of China's daily oil consumption when compared with the 2021 average. Gasoline demand registered the biggest drop, while jet fuel demand is coming off an already low base amid heavy restrictions on outbound flights from China. Demand for diesel from the trucking industry has also plunged. China has struggled to contain its latest COVID-19 outbreak that has led to a series of lockdowns across the country, most notably in the financial hub of Shanghai. The government's pursuit of a COVID-zero strategy has resulted in a web of quarantine rules that has crimped mobility and industrial output, snarling supply chains that has undercut fuel consumption. China's COVID-19 crisis has spread far beyond its borders, with European manufacturers feeling the squeeze from disruptions in Shenzhen factories and Shanghai ports. Overnight data from Eurozone showed business activity in manufacturing stalled near a two-year low in April amid soaring fuel prices and rattled supply chains. Offsetting the decline in manufacturing, Eurozone's growth in the service sector accelerated to a 57.7 eight-month high in April, helped by a loosening of COVID-19 restrictions and still strong demand for services. In financial markets, U.S. dollar index regained upward momentum to finish the week at 101.213, gaining 0.6% against a basket of foreign currencies, while further pressuring front-month WTI futures. Greenback's strength follows comments from Federal Reserve Chairman Jerome Powell who said on Thursday that a 50-basis point hike is "on the table" at the Federal Open Market Committee's next meeting on May 3-4. If realized, that would be the first half-point increase since 2000, adding to investor concerns that economic growth, and with it, demand for oil could slow. On the session, WTI futures for June delivery fell $1.72 to $102.07 per barrel (bbl), and June Brent dropped $1.68 to $106.65 per bbl. NYMEX RBOB May futures declined 3.36 cents to $3.3050 gallon, and the front-month ULSD contact settled 3.78 cents higher at $3.9386 per gallon.

Israeli air strikes hit government positions near Damascus, says Syrian State TV -- Syrian state television reported that Israeli air strikes had hit several locations in the countryside west of the capital Damascus on Thursday. Syrian state news agency SANA, citing a military source, said Syrian air defences had shot down "some" of the missiles fired. It said the strikes only caused physical damage but did not specify further. Israel has mounted frequent attacks against what it has described as Iranian targets in Syria, where Tehran-backed forces including Lebanon's Hezbollah have deployed over the last decade to support President Bashar al-Assad in Syria's war. A pro-government allied commander denied to Reuters that Thursday's strikes had hit their positions outside Damascus. There was no immediate comment from the Israeli government. In March, state media reported that an Israeli attack over the Syrian capital Damascus killed two civilians and left some material damage.

Syrian fighters ready to join next phase of Ukraine war (AP) — During a visit to Syria in 2017, Vladimir Putin lavished praise on a Syrian general whose division played an instrumental role in defeating insurgents in the country’s long-running civil war. The Russian president told him his cooperation with Russian troops “will lead to great successes in the future.” Now members of Brig. Gen. Suheil al-Hassan’s division are among hundreds of Russian-trained Syrian fighters who have reportedly signed up to fight alongside Russian troops in Ukraine, including Syrian soldiers, former rebels and experienced fighters who fought for years against the Islamic State group in Syria’s desert. So far, only a small number appears to have arrived in Russia for military training ahead of deployment on the front lines. Although Kremlin officials boasted early in the war of more than 16,000 applications from the Middle East, U.S. officials and activists monitoring Syria say there have not yet been significant numbers of fighters from the region joining the war in Ukraine. Analysts, however, say this could change as Russia prepares for the next phase of the battle with a full-scale offensive in eastern Ukraine. They believe fighters from Syria are more likely to be deployed in coming weeks, especially after Putin named Gen. Alexander Dvornikov, who commanded the Russian military in Syria, as the new war commander in Ukraine. Though some question how effective Syrian fighters would be in Ukraine, they could be brought in if more forces are needed to besiege cities or to make up for rising casualties. Dvornikov is well acquainted with the multiple paramilitary forces in Syria trained by Russia while he oversaw the strategy of ruthlessly besieging and bombarding opposition-held cities in Syria into submission.

UN: At least 35 presumed dead after boat capsizes off Libya coast -At least 35 people are presumed dead after a boat capsized off the Libyan coast, the United Nations migration agency said on Saturday. The International Organization for Migration (IOM) said the boat sank off the western Libyan city of Sabratha, a major launching point for people from Africa who attempt to make the dangerous voyage across the Mediterranean.IOM said the bodies of six people were retrieved from the sea while 29 others were missing and presumed dead. It was not immediately clear what caused the wooden boat to capsize on Friday.“The continued loss of life in the Mediterranean must not be normalised, human lives are the cost of inaction,” the IOM tweeted.“Dedicated search and rescue capacity and a safe disembarkation mechanism are urgently needed to prevent further deaths and suffering.”list 2 of 4

Russians unlikely to leave Libya, despite Ukraine war - Russia’s Wagner Group, a shadowy paramilitary organisation tied to the Kremlin, has played a significant role in Libya, supporting renegade military commander Khalifa Haftar’s self-styled Libyan National Army (LNA) in the country’s civil war. Western observers had begun wondering in recent weeks whether Wagner forces would be withdrawing from Libya to instead focus on supporting Russia’s invasion of Ukraine. Although Moscow might need to adjust and reconfigure its mission in Libya, there is good reason to expect the Russians to continue their campaign, which has served to shape the security architecture of Libya’s east, where Haftar is based, and entrench itself. “Before February 24 [when the Russian invasion of Ukraine began], there was no indication that the clandestine Russian mission [in Libya] was withdrawing, shrinking, or anything of the sort,” Jalel Harchaoui, a researcher specialising in Libya, told Al Jazeera. “It was rather quiet. The Libyans who live near [Russian] bases got used to seeing some Russians at the grocery store. Some camps, bases, and air bases are known to be fully controlled by Russians,” Harchaoui added. “In those particular cases, even the LNA itself sometimes needs to get permission before entering the base.” While there are some unconfirmed reports that Russian mercenaries have been withdrawn from the country to fight in Ukraine, the majority have remained. “The number of [Russian] fighters who made their way to Ukraine would probably be tiny as the Kremlin wants to have a stake in Libya’s future and needs these foreign mercenaries to maintain their hold on the country,” said Ferhat Polat, a Libya researcher at the TRT World Research Centre. Sustaining a military presence in Libya is key to Russia’s agendas elsewhere on the African continent, especially in the Sahel region.