this week's EIA oil data was not updated; natural gas rigs at a 33 month high; DUCs lowest on record; 4.4 month DUC backlog is lowest in 7 years; completions still 16% below the prepandemic average..
oil prices fell for a second week after 7 straight weekly increases as fears of a monetary policy induced recession kept the pressure on prices...after falling 9.2% to $109.56 a barrel last week after the Fed raised interest rates three-quarters of a percent and Russian oil output returned to pre-war levels, the contract price for US light sweet crude for July delivery was volatile in overseas trading Monday, first rising more than $1 in Asia as tightening supplies outweighed concerns about slowing global economic growth and fuel demand. then tumbling to trade lower as concerns about slowing global economic growth and fuel demand offset worries about tightening supplies, as US markets were closed in observance of the Juneteenth holiday...oil prices were higher in mid-morning trade in Asia on Tuesday as the recessionary fears that plagued markets receded and traders focused on bullish near-term fundamentals, and continued higher in New York on high summer fuel demand and tight supplies to settle with a gain of $1.09 at $110.65 a barrel as trading in the July oil contract expired, while the more active August crude contract rose $1.53 to $109.52 a barrel at the same time...with Wednesday's price quotes referencing the contract for WTI for August delivery, oil prices skidded $6 in early Asian trading on Wednesday amid a push by US President Biden to bring down fuel costs, including by pressuring on major US oil firms and were still off by more than 4% as US traders turned their focus to concerns over inflation and expectations for continued tighter monetary policy ahead of Congressional testimony from Fed Chairman Powell and settled $3.33 lower at $106.19 a barrel as traders worried that the Fed's rate hikes could push the U.S. economy into recession, dampening demand for fuel....oil prices fell another 1% in early trading Thursday, after the American Petroleum Institute reported U.S. crude and gasoline inventories unexpectedly increased during the prior week, and came under further pressure as the U.S. Dollar rallied after weaker-than-expected manufacturing data in the Eurozone, and settled Thursday’s trade down $1.92, or 1.8%, at a six week low of $104.27 per barrel after another round of remarks from Federal Reserve Chair Jerome Powell fanned worries that interest rate hikes would slow economic growth....however, oil prices more than reversed Thursday's drop in early trading Friday, on comments from the Libyan oil minister that Libya's oil production had risen in the past week to around 700,000 to 800,000 barrels a day, with those figures in doubt as the National Oil Corporation chairman was withholding production data from him, and settled the session $3.35, or 3.2% higher, at $107.62 a barrel, supported by tight supplies just as demand was recovering from the Covid pandemic...while oil price quotes finished 1.8% lower than last week's close, the August contract price, which finished last week at $107.99 a barrel, was only 0.3% lower..
natural gas prices also finished lower this week, as the prospect of lower LNG exports more than offset rising domestic demand...after falling 21.5% to a seven week low of $6.944 per mmBTU last week on the news that the Freeport LNG export terminal would be down for months, the contract price of natural gas for July delivery slid 13.6 cents, or 2% to $6.808 per mmBTU on Monday on a forecast for a break from the record heat by the coming weekend...but prices recovered 5.0 cents of that loss to settle at $6.858 per mmBTU on Wednesday, on record power demand in Texas and on a slow slide in daily gas output...however, natural gas prices imploded on Thursday after the EIA reported natural gas working stocks rose by a larger-than-expected 74 billion cubic feet during the prior week and settled 61.9 cents or 9% lower at an eleven week low of $6.239 per mmBTU, as the bigger-than-expected storage build indicated that the extended shutdown of the Freeport LNG export plant would allow utilities to quickly rebuild low gas stockpiles...natural gas prices slipped another 1.9 cents to settle at eleven week low of $6.220 per mmBTU on Friday as the drop in LNG exports offset forecasts for hotter weather, higher demand and less output than last month, and thus finished 10.4% lower on the week...
The EIA's natural gas storage report for the week ending June 17th indicated that the amount of working natural gas held in underground storage in the US rose by 74 billion cubic feet to 2,169 billion cubic feet by the end of the week, which left our gas supplies 305 billion cubic feet, or 12.3% below the 2,474 billion cubic feet that were in storage on June 17th of last year, and 331 billion cubic feet, or 13.2% below the five-year average of 2,500 billion cubic feet of natural gas that have been in storage as of the 17th of June over the most recent five years....the 74 billion cubic foot injection into US natural gas working storage for the cited week was more than the average forecast for a 70 billion cubic foot injection from an S&P Global Platts survey of analysts, and substantially higher than the 49 billion cubic feet that were added to natural gas storage during the corresponding week of 2021, but less than the average injection of 82 billion cubic feet of natural gas that had typically been added to our natural gas storage during the same week over the past 5 years....
The Latest US Oil Supply and Disposition Data from the EIA (not)
as you know, i've been covering the Weekly Petroleum Status Report from the EIA in this weekly newsletter for several years now. but this week there wasn't any; the header on the report's main access page (https://www.eia.gov/petroleum/supply/weekly/) simply says Next Release Date: TBD
the following notice was on top of all the EIA oil websites i usually access all week:
Several U.S. Energy Information Administration product releases scheduled for the week of June 20, 2022, will be delayed as a result of systems issues.
their press release on this issue says:
EIA statement on data releases for the week of June 20, 2022
Several U.S. Energy Information Administration (EIA) product releases scheduled for the week of June 20, 2022, will be delayed as a result of systems issues. Our experts are working on a solution to restore the affected systems.
We will release the Weekly Natural Gas Storage Report as scheduled on June 23. All other data releases scheduled for this week will be delayed. We will resume our normal production schedule and release delayed data as soon as possible.
We apologize for the inconvenience of this delay, and remain committed to our mission of collecting, analyzing, and disseminating independent and impartial energy information as we resolve this issue.
In a dozen years of covering weekly and monthly reports from government agencies, i've never seen anything like it....
This Week's Rig Count
The number of drilling rigs running in the US rose for the 77th time over the prior 91 weeks during the week ending June 24th, but still remained 5.1% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US increased by 13 to 753 rigs this past week, which was also 283 more rigs than 470 rigs that were in use as of the June 25th report of 2021, but was also 1,176 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 increased by 10 to 594 oil rigs during the past week, after rigs targeting oil rose by 4 during the prior week, and there are 222 more oil rigs active now than were running a year ago, even as they still amount to just 36.9% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 13.0% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations rose by 3 to 157 natural gas rigs, which was the most natural gas rigs deployed since September 6th, 2019, and up by 59 natural gas rigs from the 98 natural gas rigs that were drilling during the same week a year ago, even as they were still only 9.8% 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 natural gas, Baker Hughes continues to show two "miscellaneous" rigs still 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...a year ago, there were no such "miscellaneous" rigs running...
The offshore rig count in the Gulf of Mexico was unchanged at fifteen rigs this week, with all of this week's Gulf rigs drilling for oil in Louisiana waters....that's one more than the 14 offshore rigs that were active in the Gulf a year ago, when 13 Gulf rigs were drilling for oil offshore from Louisiana and one was deployed for oil offshore from Texas.…in addition to rigs drilling in the Gulf, we also have an offshore rig drilling in the Cook Inlet of Alaska, where natural gas is being targeted at a depth greater than 15,000 feet, while year ago, there were no offshore rigs other than those deployed in the Gulf of Mexico....
in addition to rigs offshore, we continue to have 3 water based rigs drilling through inland bodies of water this week, including a directional rig drilling for oil at a depth between 10,000 and 15,000 feet, inland in the Galveston Bay area, and two directional inland water rigs drilling for oil in Terrebonne Parish, Louisiana, one of which is targeting a formation greater than 15,000 feet in depth, while the other is shown drilling to between 10,000 and 15,000 feet... during the same week of a year ago, there were two such "inland waters" rig deployed...
The count of active horizontal drilling rigs was up by eleven to 685 horizontal rigs this week, which was 264 more rigs than the 421 horizontal rigs that were in use in the US on June 25th of last year, but less than half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....at the same time, the directional rig count was up by two to 41 directional rigs this week, and those were up by 11 from the 30 directional rigs that were operating during the same week a year ago…meanwhile, the vertical rig count was unchanged at 27 vertical rigs this week, while those were up by 8 from the 19 vertical rigs that were in use on June 25th 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 June 24th, the second column shows the change in the number of working rigs between last week’s count (June 17th) and this week’s (June 24th) count, the third column shows last week’s June 17th 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 25th of June, 2021....
as usual, we'll start by checking the Rigs by State file at Baker Hughes for the changes in the Texas Permian basin...there we find that there were two rigs added in Texas Oil District 8, which covers the core Permian Delaware, and that there was a rig added in Texas Oil District 7C, which includes the southern counties of the Permian Midland....since that means that the Texas Permian rig count was up by 3 rigs, we can then conclude that the rig added in New Mexico must have been added in the western Permian Delaware in the southeast corner of that state for the national Permian count to be up four...
elsewhere in Texas, we find that two rigs were added in Texas Oil District 1, and that two more rigs were added in Texas Oil District 4....three of those four rig additions were in the Eagle Ford, and included two oil rigs and one targeting natural gas, while the other addition was targeting a basin that Baker Hughes doesn't track in the same region; the Eagle Ford now has 10 natural gas rigs, in addition to 62 targeting oil...meanwhile, a rig was pulled out of Texas Oil District 6, which was likely targeting natural gas in the Haynesville shale, because a rig was added in the Haynesville shale region of northwest Louisiana at the same...for those who are counting, the Texas rig count was up by 6 due to the addition of the rig in the state's offshore waters, not covered by a state district..
while there were three rigs added in Colorado, the DJ Niobrara chalk of the Rockies front range only saw a one rig increase, so two of those Colorado rigs and the rig in Wyoming were apparently targeting basins that Baker Hughes doesn't track....in Oklahoma, there were three rigs added in the Cana Woodford, but there were rigs pulled out of those areas of the Granite Wash and the Mississippian basins within the state at the same time, so the Oklahoma count was just up by one...meanwhile, the natural gas rig count was up by 3 because two natural gas rigs were added in a basin or basin that Baker Hughes doesn't track, in addition to the natural gas rig addition we've already noted in the Eagle Ford...
DUC well report for May
Monday of last week (June 13) saw the release of the EIA's Drilling Productivity Report for June, which included the EIA's May 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 23rd consecutive month, as both completions of drilled wells and drilling of new wells increased in May, 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 46 wells, falling from 4,295 DUC wells in April to 4,249 DUC wells in May, which was the lowest number of US wells left uncompleted on record, and also 33.0% fewer DUCs than the 6,339 wells that had been drilled but remained uncompleted as of the end of May of a year ago...this month's DUC decrease occurred as 911 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during May, up from the 824 wells that were drilled in April, while 957 wells were completed and brought into production by fracking them, up by 13 from the 944 well completions seen in April, and up by 157 from the 800 completions seen in May of last year....at the May completion rate, the 4,249 drilled but uncompleted wells remaining at the end of the month represents a 4.4 month backlog of wells that have been drilled but are not yet fracked, down from the 4.5 month DUC well backlog of a month ago, and the lowest backlog since December 2014, despite a completion rate that is still more than 16% below 2019's pre-pandemic average...
only the oil producing regions saw a DUC well decreases during May, since both the natural gas producing Appalachian and Haynesville shales saw modest DUC well increases....the number of uncompleted wells remaining in the Permian basin of west Texas and New Mexico decreased by 37, from 1,294 DUC wells at the end of April to 1,257 DUCs at the end of May, as 399 new wells were drilled into the Permian basin during May, while 436 already drilled wells in the region were being fracked....in addition, the number of uncompleted wells remaining in Oklahoma's Anadarko basin decreased by 9, falling from 724 at the end of April to 715 DUC wells at the end of May, as 61 wells were drilled into the Anadarko basin during May, while 70 Anadarko wells were completed....meanwhile, DUC wells in the Niobrara chalk of the Rockies' front range decreased by 6, falling from 320 at the end of April to a record low of 314 DUC wells at the end of May, as 99 wells were drilled into the Niobrara chalk during May, while 105 Niobrara wells were completed....at the same time, DUCs in the Eagle Ford shale of south Texas decreased by 5, from 612 DUC wells at the end of April to a record low of 607 DUCs at the end of May, as 105 wells were drilled in the Eagle Ford during May, while 110 already drilled Eagle Ford wells were being fracked....in addition, there was a decrease of 3 DUC wells in the Bakken of North Dakota, where DUC wells fell from 429 at the end of April to a record low of 426 DUCs at the end of May, as 75 wells were drilled into the Bakken during May, while 78 of the drilled wells in the Bakken were being fracked.....
among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, rose by one well, from 497 DUCs at the end of April to 498 DUCs at the end of May, as 98 wells were drilled into the Marcellus and Utica shales during the month, while 97 of the already drilled wells in the region were fracked....at the same time, the uncompleted well inventory in the natural gas producing Haynesville shale of the northern Louisiana-Texas border region rose by 13, from 419 DUCs in April to 432 DUCs by the end of May, as 74 wells were drilled into the Haynesville during May, while 61 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of May, 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 60 wells to 3,319 DUC wells, while the uncompleted well count in the major natural gas basins (the Marcellus, the Utica, and the Haynesville) increased by net of 14 wells to 930 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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Muskingum Watershed Conservancy District anything but a conservancy - Randi Pokladnik - The Muskingum Watershed Conservancy District includes parts or the entirety of 27 Ohio counties. All of these counties have seen some impact from oil and gas development. However, the counties of Carroll, Harrison, Belmont, Noble, and Guernsey have been significantly impacted. Citizens living near oil and gas activities have expressed concerns about drilling operations which include: the chemicals/additives used to drill/frack, the radionuclides brought up to the surface in produced water, increased radon gas levels in homes, drilling in ecologically sensitive areas, contamination from spills, leaks, blowouts, and deliberate releases, and subsurface migration of contaminants among aquifers.Yet, a recent announcement stated that the MWCD signed a lease agreement with Encino Energy to frack 7,300 acres of property at Tappan Lake in Harrison County. The MWCD has a long history with oil and gas extraction, leasing thousands of acres for Utica shale drilling and selling water from MWCD lakes to be used by drillers for fracking. It was once stated that the MWCD is the“number 1 beneficiary of drilling in Ohio.”It is impossible to protect land, air and water from the pollution of fracking since this industry is basically exempt from all major federal environmental laws and regulations such as: Clean Air Act, Clean Water Act, Safe Drinking Water Act, National Environmental Policy Act and Emergency Planning and Community Right-to Know Act. Workers and nearby residents can be exposed to air contaminants like nitrogen oxides, benzene, ozone, toluene, methane, and fine particulate matter during the fracking process. Run-off of toxic compounds from the well pads can enter Tappan Lake, the drinking water source for Cadiz, Ohio. Should the lake become impaired, where will Cadiz get its water supply? The U.S. EPA and Department of Energy said that an average of seven million gallons of water and over 70,000 gallons of chemicals are used for each well fracked. Over 80% of these compounds have never been reviewed by the International Agency for Research on Cancer (IARC). Many of those reviewed are known carcinogens and hormone blockers. Accidents happen. The XTO Energy well blowout in Belmont County in February 2018 spewed out 120 tons of methane an hour for twenty days. Methane is 84 times as potent a greenhouse gas as carbon dioxide. You cannot be a good steward of the land and ignore all the externalities visited on the landscape from fracking. I live on Tappan Lake and have seen the effects of fracking in the county. Pipelines crisscross the forested hills, fracking trucks congest the rural roadways, water is being withdrawn from local creeks, and even the night skies are obliterated by fracking flares. How can the MWCD justify financing improvements by allowing the fossil fuel industry to destroy the very landscape they (MWCD) are supposedly conserving? The definition of conservancy is: a body concerned with the preservation of nature, specific species or natural resources. The Muskingum Watershed Conservancy District is anything but a conservancy.
As Oil and Gas Prices Climb, So Do Royalties - – While skyrocketing energy prices have forced households to trim their budgets, they’ve also meant higher royalty checks to Columbiana County landowners with acreage tied to producing oil and natural gas wells. Energy companies have also stepped up leasing activity in the county over the last year and a half, a sign that interest in this section of the Utica Shale/Point Pleasant formation remains very much alive. For these landowners, higher prices represent a reversal of fortune compared with two years ago, when the oil and gas market bottomed out during the pandemic. Even last summer, landowners griped that royalty payments remained well below the levels that big companies such as Chesapeake Energy Corp. promised when they swept into the region more than a decade ago. Today, these landowners say payments have noticeably improved and are more in line with rising energy costs. “The royalties have bounced up. They’ve more than doubled,” says Cynthia Koonce, a sheep farmer in Guilford Lake. Koonce has 225 acres tied into the Huffman South well nearby, while another 1½ acres are tied to the Huffman North well. Chesapeake drilled both wells but they are today owned by Houston-based Encino Energy’s exploration subsidiary, EAP Ohio. In 2018, Encino acquired the remaining stake of the Chesapeake position in eastern Ohio, which included 900 wells and nearly one million leasehold acres. At one point in 2019, Koonce says, royalty payments had collapsed from an average of $2,000 to $3,000 per month to less than $400. Since last September, however, payments have risen. “Now they’re more than what they were before,” she says. She attributes the heftier royalties to higher commodity prices for oil and gas, not increased volume from the wells. “It’s primarily gas coming out of the well,” Koonce says. “It pays the mortgage, which is good from my point of view.” Other landowners have experienced the same results. Jeffrey Dick, a geology professor at Youngstown State University who has acreage under lease with Houston-based Hilcorp Energy Co., says his royalty checks have more than doubled since last year. “They started to increase about eight months ago,” he says. He says it’s harder today to measure drilling activity or production in terms of rig counts or permits compared to 10 years ago. Then, energy companies descended on eastern Ohio in a frenzied effort to lock up leasehold acreage and kickstart drilling programs by putting as many rigs into commission as possible. Technology, however, has allowed companies such as Encino and Hilcorp to operate more efficiently with fewer rigs in the field. Energy companies have combined horizontal drilling with hydraulic fracturing to tap into tight shale formations such as the Utica/Point Pleasant. Rigs are able to drill about 6,000 feet deep and then turn the drill bit horizontally across a thin layer of carbon-rich shale.
Several businesses evacuated after car crashes into natural gas line in Troy - — A ruptured gas line caused by a crash forced multiple business evacuations in Troy Wednesday afternoon, according to firefighters. Fire crews were called to the area of County Road 25A and Union Street around 11 a.m. on reports of a car that hit a natural gas distribution line, Troy Fire Platoon Commander Dale Thompson told News Center 7. An extended closure was expected on County Road 25A, Thompson said. However, the roadway had reopened by 2 p.m. Multiple CenterPoint Energy crews remained on scene making repairs, according to our crew on the scene. “We had a substantial leak and it was something we could not control ourselves,” Thompson said. “The gas company (CenterPoint Energy) was called in during that process.” At least seven structures were evacuated prior to their arrival and they shut down all gas utilities, Thompson said. Fire crews also had to deal with 90 degree temperatures outside. “It was something we were thinking about,” he added. “We called in another engine and had other stations be with us to back us up.”
Oil, Gas Production to Increase Across Shale Regions - – Oil and gas producers in the Utica and Marcellus shale plays are expected to boost output in July, according to the latest report from the U.S. Energy Information Administration. Oil production in the Appalachia region – that is, eastern Ohio, western Pennsylvania and West Virginia – is projected to increase from 124,000 barrels per day to 127,000 barrels, or 3,000 more barrels per day, the agency said. Natural gas production is also expected to rise, the agency reported. Gas output in the Appalachian basin is projected to increase from 35.155 billion cubic feet daily to 35.386 billion per day, a boost of 231 million cubic feet per day. Six of the seven shale plays throughout the United States reported that they would boost oil production next month amid historically high oil prices. Collectively, these energy producers anticipate increasing oil output by 143,000 barrels per day. The Permian basin in Texas is projected to see the biggest change, increasing daily production by 84,000 barrels in July. Production from the Haynesville shale, which straddles eastern Texas and western Louisiana, is expected to remain flat at 36,000 barrels per day, according to EIA. Natural gas production, led by the Appalachia region, is expected to increase by a combined 781 million cubic feet per day in July across the seven shale plays, EIA reported. Just the Andarko shale in Oklahoma is expected to decrease natural gas production in July, from 6.275 billion cubic feet per day to 6.265 billion cubic feet, a decline of 10 million cubic feet per day.
Shale well impact fees rise as natural gas prices surge - Surging natural gas prices could raise Pennsylvania's impact fee revenue from shale gas wells to new highs this year and shrink its effective tax rate to new lows, according to a report from the state's Independent Fiscal Office. The new revenue estimates — between $245 million and $259 million for the 2022 reporting year — come as the Pennsylvania Public Utility Commission confirmed a strong rebound in the impact fee collection for the 2021 reporting year after a pandemic-driven trough. Companies operating Marcellus and Utica shale wells paid $234 million for 2021 — about $88 million more than for 2020, when the impact fee hit a record low. The annual collection was primarily driven up by the higher average annual price of natural gas last year, the PUC said. Impact fees are paid in April and distributed in July. Natural gas prices have continued to climb and are expected to push impact fees higher, even as new drilling has increased only modestly so far this year. Impact fees are charged per well, but they fluctuate based on a well's age and the average annual price of natural gas on the New York Mercantile Exchange. Through June, the price was $6.06 per million British thermal units, a 119% increase from the same period in 2021, the fiscal office said. Analysts expect the price to remain above $6 for the year, which is the maximum rate on the state's fee schedule. At that rate, companies would have to pay $64,900 for each new horizontal well and as low as $10,900 for older wells depending on their age, the fiscal office said. Companies would not have to pay higher fees for wells that are four years old or older. For 2021, more than 85% of the nearly 11,000 wells subject to the fee were four years old or older, according to the fiscal office. Most gas-producing states implement severance taxes whose rates are based directly on natural gas price and production, but those are secondary factors in calculating Pennsylvania's impact fees. The fiscal office found that the annual average effective tax rate for the 2021 impact fee dropped 2 percentage points to 1.3% — the lowest in the program's history — because the market value of Pennsylvania's shale gas increased 295% while impact fee collections rose just 60%. Pennsylvania produced nearly 7.6 trillion cubic feet of natural gas last year, which was worth $17.7 billion at the wellhead, the fiscal office said.
EQT shows progress toward net-zero goals - Pittsburgh Business Times = EQT Corp. continues to move toward its goal of having net zero greenhouse gas emissions from its natural gas production by 2025 and reducing its methane emissions intensity by 35% compared with a baseline four years ago, the company said in its annual sustainability report released Wednesday. "We've made tremendous progress toward our long-term emissions targets," said Toby Z. Rice, president and CEO of Pittsburgh-based EQT. Sustainability and lessening the environmental impacts of natural gas production have been, along with operational efficiency and excellence, a hallmark of Rice's tenure at the top of EQT. The company is the largest natural gas producer in the United States and an exclusively Marcellus/Utica-shale driller. Wednesday's sustainability report details EQT's progress, which Rice said in an interview with the Business Times is a critical component of the company's and the industry's success in making strides on ESG. EQT has reduced its production-related greenhouse gas emissions by 36% in terms of carbon dioxide equivalent since 2018, the last full year before Rice took over as president and CEO. Its emissions intensity, another industry metric, has dropped 44% for greenhouse gases and 35% for methane, another potent greenhouse gas that EQT and others are trying to eliminate. It has also reached certification from Equitable Origin and MiQ, two independent organizations, on 200 of its well pads that represent 4 billion cubic feet of natural gas production a day. That, said Rice, makes EQT the largest producer of natural gas in North America. It is also replacing all of its pneumatic devices by the end of 2022, a change that will reduce a big chunk of emissions, while also developing other processes to cut even more. Those initiatives at EQT include further electrifying its operations in the field, operating more efficiently and getting more done with less equipment. EQT is developing technology that will provide direct measurement of the carbon capturing at the source in the ground, something Rice said will be important to show accurate, data-driven performance. Rice said that he believes EQT and the industry should and will embrace even further transparency initiatives and more collaboration with outside independent organizations.
Reducing GHG emissions, increasing production for plunger lift applications in the Marcellus shale - CNX Resources is a premier natural gas development, production, midstream, and technology company, with operations throughout the Appalachian basin, primarily in the Marcellus and Utica shales in Pennsylvania, Ohio and West Virginia. The company is continuously reducing GHG emissions year-over-year, while also investing capital in emissions reductions technologies that will further help to reduce its Scope 1 and Scope 2 CO2e emissions. The company has reduced GHG emissions by 90% since 2011. CNX sought to optimize production and reduce the number of liquid loading events across its horizontal Marcellus shale wells with plunger lift systems deployed. As a result, the CNX operations team vented wells regularly to remediate liquid loading, leading to challenges across emissions profile, productivity and efficiency. To overcome these challenges, CNX worked with Ambyint and Amazon Web Services (AWS) to deploy a solution capable of optimizing well productivity with improved analytics and autonomous management. This resulted in improved production volumes and workforce efficiency, with no additional hardware required. The Marcellus shale formation is one of two prolific dry natural gas plays within the Appalachian basin, which spans parts of Pennsylvania, West Virginia and Ohio. Per the EIA, production in the region has been growing since 2008. Monthly production recently set new record highs—reaching 32.5 Bcfgd in December 2020, and it averaged 31.9 Bcfgd during the first half of 2021, the highest average for a six-month period since production began in 2008. The Marcellus and Utica shale plays accounted for 34% of all U.S. dry natural gas production in the first half of 2021. Many gas-producing wells in the Marcellus experience liquid loading at some point during production, which negatively impacts overall well economics. Liquid loading is the inability of a producing gas well to remove its co-produced liquids from the wellbore. The liquid flowing as droplets or film accumulates at the well bottom, thereby imposing backpressure at the sandface and triggering increasingly higher pressure loss in the wellbore. The problem initiated by liquid loading is manifested in terms of loss of well deliverability, causing the wellhead pressure to decline significantly, which, in turn, leads to the cessation of gas production. Accordingly, the liquid-loading issue reduces the ultimate recovery of a gas well.1. Plunger lift is an artificial lift method used principally in gas wells to unload relatively small volumes of liquid. An automated system, mounted on the wellhead, controls the well of an intermittent flow regime. When the well is shut-in, a plunger is dropped down the production string. When the control system opens the well for production, the plunger and a column of fluid are carried up the tubing string. The surface equipment receiving the mechanism detects the plunger when it arrives at surface and, through the control system, prepares for the next cycle.
What shale pros, foes are saying about the SEC's climate disclosure rule - When CNX Resources Corp. sent a letter to the U.S. Securities and Exchange Commission ahead of the closing of its public comments period against a major change in how companies would have to disclose climate risks, it was one of thousands that were received. But it was one of the few natural gas producers, particularly in the Marcellus and Utica Shale, to do so. There have been more than 20,000 comments so far on the SEC's climate-change disclosure proposal, officially titled "The Enhancement and Standardization of Climate-Related Disclosures for Investors." Every publicly traded company, regardless of type of work, would be impacted by the regulations that set out to further clarify a company's impact on climate change. But not surprisingly, energy companies come under particular scrutiny and their supporters and detractors are well represented. CNX CEO Nicholas DeIuliis, in the Southpointe-based driller's letter to the SEC, said that the company wanted to embrace the proposed regulations as a way to show how CNX and other energy companies were backing up their words with actions when it came to climate. "Unfortunately, the proposal falls short of establishing the kind of level-playing field necessary to give the public what it deserves," DeIuliis wrote. "Instead, it injects confusion and undermines investors' access to truly comparative data. It is important that investors receive adequate information to understand the full scope of a company's end-to-end lifecycle emissions profile."The National Association of Manufacturers said that the proposed regulations were too confusing and wide-ranging to be of use."The proposed rule instead institutes a wide-ranging mandate for public companies to generate and report pages upon pages of information, much of which is not material to their operations or financial performance," NAM wrote. "In many instances the required information is not even available."That was also discussed by Targa Resources, a Texas-based oil and gas pipeline company, that said there would be substantial costs to complying with the regulation and it was concerned about wording about "expertise in climate-related risks" mentioned in the proposed regulations."The lack of a clear definition presents challenges for registrants as they work to determine how to comply with this rule," Targa said.Elected officials in Pennsylvania and West Virginia are among those who have spoken out. GOP senators, including U.S. Sen. Pat Toomey, R-Pennsylvania, and U.S. Sen. Shelley Moore Capito, D-West Virginia, wrote to SEC Chair Gary Gensler that climate disclosure wasn't in the purview of the SEC."There are serious questions about whether the SEC has the technical expertise to assess climate models and underlying assumptions used in companies' metrics and disclosures," Toomey and the others wrote. "Without such technical expertise, the SEC will likely review submissions arbitrarily, leading uneven or unfair application."U.S. Sen. Joe Manchin, D-West Virginia, and one of the industry's strongest supporters, questioned in his own letter the SEC's motivations."The most concerning piece of the proposed rule is what appears to be the targeting of our nation's fossil fuel companies," Manchin wrote. "Not only will these companies face heightened reporting requirements on account of their operations, but they will also be subjected to additional scrutiny for Scope 3 emissions disclosures of other companies that utilize their services and products."
Expected break from record heat, natural gas futures fall further on improving supply – After a sharp drop early Tuesday, natural gas futures took most of the ground and ended the day less than 15 cents above Friday’s close. Weather models brushed off early morning losses, while technicals fueled a rebound, eventually leaving July’s Nymex futures contract down 13.6 cents at $6.808/MMBtu. August futures fell 12.3 cents to $6.783. Spot gas prices also extended their losses after coming back from the Juneteenth holiday. NGI spot gas National average fell 29.5 cents to $6.475.With news last week that an explosion at a Freeport liquefied natural gas (LNG) facility is set to dent gas demand for several months, the weather on Sunday went to the fore in trading, increasing losses at the start of Tuesday’s session. occurred as traders weighed in on a significant loss of cooling degree days in the weekend weather model, particularly in late June and early July. Although NatGasweather noted that the pattern for the coming two weeks is not bearish, it is “not as bullish” as predicted by previous models.The forecaster said extreme heat will continue for the rest of this week, with highs of 90 to low 100 stretching from Texas to the Great Lakes to the Mid-Atlantic Coast. Temperatures are also forecast to drop over the west-central United States.However, by Sunday, cooler trends are expected among broader weather systems in the Midwest and East, keeping day temperatures in the 60s to 80s. According to NetGasweather, this could help move the warm upper ridge across the west-central United States. As such, national demand is expected to be “regional strong”.Overnight data supported the return of a more intimidating pattern on July 2-7 as the warm ridge spread back to the east. However, this is far from the time where change should be expected, according to the prophet “Going forward, we expect a protracted battle between tight US supplies and normal-to-warm weather patterns for most of this summer versus slowdown LNG exports due to the Freeport LNG outage,” NetGasweather said. “The Bulls have bought every dip for over a year, and they have done so again” on Tuesday.The latest data from the Commodity Futures Trading Commission shows that as of June 14, natural gas net long positions fell by almost half a week/week. According to EBW, it was the second biggest one-day drop. The firm said bullish conditions were on the chopping block after the storage target rose above 3.5 Tcf in late October following news of an extended 90-day outage to Freeport. As for prices, some of the sharpest declines were seen on the East Coast. in Appalachia, east gas south The next day the gas fell 67.5 cents from Friday to average $5.735. Transco Zone 6 Non-NY fell 54.5 cents to $5.755. Meanwhile, New England prices maintained a handle of $6.00. On the opposite coast, the reduction in prices was less. Malin Spot gas was down 24.5 cents at $6.105, and El Paso s Mainline / n. baja was down 23.5 cents to $6.555.Meanwhile, maintenance of the pipeline with several systems was underway this week. Among the more notable incidents was a hydrotest being carried out on the Northwest Pipeline (NWPL) via the section between Willard and Goldendale compressors. Work is scheduled for Tuesday through July 4, cutting up to 134 MMcf/d of northward flow.
U.S. natgas edges up on Texas heat, small output decline (Reuters) - U.S. natural gas futures edged up about 1% on Wednesday on record power demand in Texas and a slow slide in daily gas output. That price increase came despite forecasts for less demand over the next two weeks than previously projected and a drop in liquefied natural gas (LNG) exports with the Texas Freeport plant shut down. The Freeport shutdown on June 8 reduced the amount of U.S. gas available to the rest of the world, especially in Europe where most U.S. LNG has gone as countries there wean themselves off Russian energy after Moscow invaded Ukraine in February. Analysts said leaving more gas in the United States, however, should give American utilities a chance to rebuild extremely low stockpiles quickly. Freeport, the second-biggest U.S. LNG export plant, consumes about 2 billion cubic feet per day (bcfd) of gas, so a 90-day shutdown would make about 180 billion cubic feet (bcf) more gas available to the U.S. market. Front-month gas futures for July delivery on the New York Mercantile Exchange (NYMEX) rose 5.0 cents, or 0.7%, to settle at $6.858 per million British thermal units (mmBtu). On Tuesday, the contract closed at its lowest since April 25. With the U.S. Federal Reserve expected to keep raising interest rates, open interest in NYMEX futures NG-TOT fell on Tuesday to its lowest since August 2016 as investors continued to cut back on risky assets. Despite recent declines, U.S. gas futures are still up about 84% so far this year as much higher prices in Europe and Asia keep demand for U.S. LNG exports strong, especially since Russia's Feb. 24 invasion of Ukraine stoked fears Moscow might cut gas supplies to Europe. Gas was trading around $39 per mmBtu in Europe and $37 in Asia. Data provider Refinitiv said average gas output in the U.S. Lower 48 states slid to 94.9 bcfd so far in June from 95.2 bcfd in May. That compares with a monthly record of 96.1 bcfd in December 2021. With hotter weather coming, Refinitiv projected average U.S. gas demand, including exports, would rise from 92.8 bcfd this week to 95.5 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Tuesday. The amount of gas flowing to U.S. LNG export plants fell from an average of 12.5 bcfd in May to 11.4 bcfd so far in June due to the Freeport outage, according to Refinitiv. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.6 bcfd of gas into LNG. On a daily basis, LNG feedgas was on track to drop to 10.3 bcfd on Wednesday, the lowest since November 2021, due to small reductions at all of the operating Gulf Coast facilities.
Natural gas futures plummet after EIA reports 74 Bcf build into storage | S&P Global Commodity Insights - US natural gas working stocks rose by a larger-than-expected 74 Bcf during the week ended June 17, reducing the deficit to a seasonal low of 13.2%, which helped spur a selloff for US natural gas futures. Storage inventories rose to 2.169 Tcf for the week ended June 17, the US Energy Information Administration reported on June 23. The build was more than an S&P Global Commodity Insights' survey of analysts calling for a 70 Bcf net injection. The weekly injection was substantially higher than the 49 Bcf build reported during the corresponding week in 2021 but less than the five-year average build of 82 Bcf, according to EIA data. As a result, stocks were 305 Bcf, or 12.3%, less than the year-ago level of 2.474 Tcf and 331 Bcf, or 13.2%, below the five-year average of 2.500 Tcf. While the deficit to the five-year average increased in absolute terms, it fell to its lowest point, percentage wise, so far this injection season. By mid-session on June 23, the NYMEX Henry Hub July contract had dropped more than 60 cents, trading around $6.20/MMBtu by 1 pm ET. The contract was trading 15 cents lower around $6.70/MMBtu in the minutes before the weekly storage report published at 10:30am ET, with the downward momentum accelerating after the report came out. If the bearish sentiment holds to daily settlement, it will be the prompt-month's lowest settlement since April 6. NYMEX July had been in a holding pattern over the most recent three trading sessions, settling in a tight range of around $6.80-$6.95/MMBtu. Opposing forces of supply and demand had introduced some uncertainty around this week's storage number, with the S&P Global survey of analysts showing a wider-than-normal range of responses. The lowest response recorded was 48 Bcf and the highest response 96 Bcf. Market watchers noted stronger-than-normal power burn could absorb some of the looseness in the market created by an extended unplanned outage at Freeport LNG, but the extent to which elevated power burn would be enough to stave off further losses in gas futures had been unclear. June has seen record-breaking heat sweep across the eastern half of the country, lifting gas-fired power demand well above seasonal norms. Data from Platts Analytics shows that power burn demand has averaged 37.7 Bcf/d so far this month, up 2.1 Bcf/d from the same time last year. On the supply side, robust US gas production has been a bullish thumb on the scales for supply-demand balances, with month-to-date production coming in 2.4 Bcf/d higher than year-ago levels. A forecast by S&P Global's supply and demand model calls for a smaller draw of 56 Bcf for the week ending June 24, which would widen the deficit in absolute terms. The week in progress has seen a continuation of the very hot temperatures, especially in Texas, with the Electric Reliability Council of Texas reporting a series of record-breaking daily power loads. Gas-fired generators have provided 35%-45% of daily load in the ERCOT service area over the last week, data from the system operator shows.
U.S. natgas futures hold near 11-week low as LNG exports decline (Reuters) - U.S. natural gas futures held near an 11-week low on Friday as forecasts for hotter weather, higher demand and less output than last month offset a drop in liquefied natural gas (LNG) exports due to the extended shutdown of the Freeport LNG export plant in Texas. In Texas, power demand hit record levels again this week during a lingering heat wave. Analysts said the Freeport shutdown should allow U.S. utilities to quickly rebuild low gas stockpiles for next winter. Front-month gas futures for July delivery fell 1.9 cents, or 0.3%, to settle at $6.220 per million British thermal units (mmBtu), their lowest close since April 6 for a second day in a row. That kept the contract in technically oversold territory, with a relative strength index (RSI) below 30 for a fifth day in a row for the first time since January 2020. For the week, the front-month was down about 10% after dropping 22% last week. Those big declines in the July front-month pushed the premium of futures for August over July to a record high. Despite recent declines, U.S. gas futures are still up about 66% so far this year as much higher prices in Europe and Asia keep demand for U.S. LNG exports strong, especially since Russia's invasion of Ukraine stoked fears Moscow might cut gas supplies to Europe. Gas was trading around $40 per mmBtu in Europe and $37 in Asia. For the week, gas prices at the Title Transfer Facility (TTF) in the Netherlands, the European gas benchmark, were up about 5% after Russia reduced pipeline exports to Europe earlier in the week. Russia kept pipeline exports at around 3.7 bcfd for a fourth day in a row on Thursday on the three mainlines into Germany - North Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany), and the Russia-Ukraine-Slovakia-Czech Republic-Germany route. That compares with a recent high of 6.5 bcfd about two weeks ago, and an average of 11.6 bcfd in June 2021. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has slid to 95.0 bcfd so far in June from 95.2 bcfd in May. That compares with a monthly record of 96.1 bcfd in December 2021. With hotter weather coming, Refinitiv projected average U.S. gas demand including exports would rise from 92.9 bcfd this week to 95.2 bcfd next week and 97.2 bcfd in two weeks. The forecast for next week was lower than Refinitiv's outlook on Thursday. The amount of gas flowing to U.S. LNG export plants has fallen from an average of 12.5 bcfd in May to 11.3 bcfd so far in June due to the Freeport outage, according to Refinitiv. That compares with a monthly record of 12.9 bcfd in March.
Every Hour, This Gas Storage Station Sends Half a Ton of Methane Into the Atmosphere - —The Petal Gas Storage Station lies halfway between the winding banks of the Leaf River and the International Checker Hall of Fame. It’s a warren of pipes, wellheads and metal buildings where noisy compressors pump gas underground and then suck it back up to the surface again. In the process, the Petal plant releases half a ton of a potent greenhouse gas into the atmosphere every hour—more than any other gas storage facility in the country. Petal is one of hundreds of underground natural gas storage facilities across the United States, where operators pump gas into underground salt formations, aquifers or depleted oil and gas reservoirs, storing the gas until it is needed. Underneath the Petal plant lies a vast dome of salt nearly two miles in diameter that formed millions of years ago, during the Mesozoic Era, when other layers of rock pushed down on the surrounding salt formation until it was squeezed upwards into a bulging dome. A gas company began hollowing out the Petal Dome, creating the nation’s first salt cavity specifically designed for natural gas storage in 1951. Today, eight artificial caverns carved into the Petal Dome store up to 30 billion cubic feet of natural gas, fuel that provides a critical backstop for the region’s fluctuating energy needs. The Petal storage plant is relatively small as gas storage facilities go: It ranks as the 41st largest underground gas storage facility in the country. However, its emissions of methane, the primary component of natural gas, are far and away the highest of all such facilities in the nation. In 2020, Petal emitted 4,947 metric tons of methane, according to reports submitted by the facility’s owner, Gulf South Pipeline, and its parent company, Boardwalk Pipeline Partners, to the U.S. Environmental Protection Agency. The emissions were three-and-a-half times higher than the methane released that year from any other U.S. gas storage facility. The Petal facility has held onto the dubious distinction of being the largest such methane emitter for each of the last five years, according to data the companies have submitted to the EPA. In 2020, three of the seven highest emitting gas storage facilities in the country were owned by Boardwalk and its subsidiaries. Gulf South and Boardwalk have begun to curb emissions at the Petal facility, cutting them in 2020 by nearly 50 percent of what they were in 2019, a year when Petal’s emissions were more than five times larger than any other underground gas storage facility in the country. Boardwalk executives said they slashed emissions again, this time by 54 percent, in 2021.
Texas repeatedly raises pollution limits for Cheniere LNG plant (Reuters) - Cheniere, the largest U.S. exporter of liquefied natural gas, boasts that it’s helping to “improve local air quality in communities globally” because the cleaner burning fuel it ships displaces coal in power plants. But in the Corpus Christi, Texas region, where the fuel is prepared for shipment, the company is making air quality worse -with the consent of state regulators. Cheniere’s massive LNG plant, on the outskirts of the Gulf Coast city, has exceeded its permitted limits for emissions of pollutants such as soot, carbon monoxide and volatile organic compounds (VOCs) hundreds of times since it started up in 2018, according to a Reuters review of regulatory documents. Instead of levying penalties for such violations, the Texas Commission on Environmental Quality (TCEQ) has responded by granting Cheniere big increases in the plant’s pollution limits, the documents show. The facility is now allowed to chuff out some 353 tons per year of VOCs, double the limit set out in its original permit eight years ago. The state raised limits on four other pollutants by more than more than 40%. The issue has infuriated nearby residents who cite the frequency of large flares, used to burn off excess gas to relieve pressure, and evidence that local air quality has deteriorated significantly since the facility’s start-up. They have petitioned the state to crack down on the plant’s pollution rather than allowing it to emit more. Texas regulators have acknowledged the plant's impact on the local air quality: In its annual enforcement report for fiscal year 2019, the agency blamed the Corpus Christi region’s 83% increase in emissions from the prior year in part on the startup of the Cheniere facility. Cheniere said in a statement to Reuters that it had initially underestimated emissions from the plant because it was required to apply for the original permit before its engineering work was completed. The company said its design and equipment adhere to federal standards requiring the "best available control technology" to limit pollution. When actual emissions exceeded those estimates, Cheniere sought amendments from regulators to "reconcile" the higher pollution with its early assumptions, the company said. The plant could not run consistently and efficiently under the lower pollution limits, which would require frequent shutdowns, plant general manager Ari Aziz said in an interview. The emissions from Cheniere’s Corpus Christi LNG facility highlights a broader danger of surging air pollution as the United States and other nations seek to expand U.S. gas exports. LNG facilities are substantial polluters, and regulation will be key to ensuring their emissions don’t pose big health problems for residents near the plants.
Why we must nationalize Big Oil - During the financial crisis in 2008, the federal government protected the economy by bailing out companies it considered “too big to fail.” Normally, the government protects the economy from companies that are too big to exist. Companies that prevent competition by dominating an industry are called monopolies. The Justice Department or Federal Trade Commission use federal anti-trust laws to break them up.But what should the government do about companies that use deception to dominate a marketto the detriment of the economy and the long-term welfare of the American people? What should it do when an industry repeatedly violates the public trust?In other words, what shall we do about the oil industry? By covering up its knowledge that its products are destabilizing the climate, funding a denial campaign and pressuring Congressnot to address global warming, big oil should have lost its social license to operate long ago.Instead, it has used its influence and cash to sustain billions of dollars in annual taxpayer subsidies (nearly $6 trillion for fossil fuels in 2020) and cut-rate permits to extract oil and gas from public lands. For years, these practices suppressed the ability of clean substitutes like solar and wind energy to compete. More recently, the industry has opposed carbon pricing, which would correct market signals by better reflecting the actual social and environmental costs of carbon fuels.The American people also underwrite the industry by sacrificing their health to air pollution, suffering through economic recessions triggered by spikes in oil prices and losing the services of degraded or destroyed ecosystems. Those “subsidies” cost more than $635 billion annually, according to the International Monetary Fund (IMF).What should the federal government do? First, it should acknowledge that the quickest and most effective way to stabilize the climate is not to waste more time trying to decarbonize carbon fuels; instead, it should facilitate a shift to genuinely clean and renewable energy.Second, it should fix America’s energy market by eliminating policies that distort price signals. With prices that accurately reflect full lifecycle benefits and costs, renewable resources would advance more quickly because they are free, inexhaustible, ubiquitous and naturally clean.Third and most important, the government should nationalize Big Oil. That would allow the government to manage the industry’s drawdown, a process the private sector is ignoring. A coalition of climate-action groups showed the world’s 60 largest banks financed nearly $4 trillion in fossil energy projects over the last five years, investments that could be stranded and lead to more requested taxpayer bailouts when the carbon bubble pops.“If ever there was an industry that merited nationalization, the fossil fuel industry is it,” columnist and podcaster Thom Harman writes. A significant number of analysts agree.
'Cancer Alley' groups want to know how new industry impacts health. This bill could require it. - The reboot of a 2020 environmental bill aims to bolster protections for Black, Indigenous and low-income communities often disproportionately harmed by pollution — an issue documented across Louisiana.Crafted by Arizona Rep. Raul Grijalva, a Democrat, the “Environmental Justice for All Act” attempts to tackle a wide range of issues: codifying President Joe Biden’s executive orders on environmental justice, creating grants to help research and heal the health of overburdened areas and expanding the federal process for communicating the environmental impact of major projects.But one of its key provisions would address one of Louisiana advocates’ greatest complaints: assessing the cumulative health impact industrial projects pose on residents.“The cumulative effect is the right to know not just what one little Formosa plant is going to do, but what the accumulation of the 25 along that stretch are doing,” Grijalva, who chairs the House Natural Resources Committee, said Saturday while touring chemical plants in St. John and St. James parishes.Participants on a "Toxic Tour" promoting Arizona Rep. Raul Grijalva's proposed "Environmental Justice for All Act" stop at Denka Performance Elastomer, a chemical plant in Reserve, La. on June 18, 2022.While the problem isn’t unique to Louisiana, advocates point to the 85-mile stretch of Mississippi River between Baton Rouge and New Orleans as the poster child for environmental injustice. Nicknamed “Cancer Alley,” the region, which includes the parishes Grijalva visited, holds more than 150 petrochemical plants, andresearch has found that low-income and Black residents there bear a higher cumulative risk of cancer than whiter, more affluent areas.As recently as 2020, when COVID-19 spread rampantly, a studyreinforced that finding by examining census tract data that showed a higher burden of air pollution was associated with larger percentages of Black residents and increased unemployment. Higher death rates from the virus were associated with exposure to respiratory and immunological hazards — and a larger proportion of Black residents.Though companies are required to keep pollution below a legal threshold, that limit isn’t necessarily protective of human health, said Kimberly Terrell, a staff scientist for the Tulane Environmental Law Clinic, especially if other sources nearby emit a similar level of a chemical with similar risks.“There is nothing to protect people from combined exposures,” she said.
Nation's largest dredging company fined $1 million for causing oil spill in Louisiana -- Houston-based Great Lakes Dredge & Dock Co. LLC, the nation's largest dredging company, has been ordered by a federal judge to pay a $1 million fine after pleading guilty a year ago to criminal charges of causing the spill of 160 barrels of oil in Bay Long in 2016 while rebuilding Louisiana's Chenier Ronquille barrier island east of Grand Isle.The charges stem from an incident where the driver of a marsh buggy equipped with a small dredge cut an oil pipeline while clearing a canal used by Great Lakes workers to access the Plaquemines Parish island they were rebuilding under a $36 million contract with NOAA. But neither Great Lakes nor the worker were authorized by NOAA to be working in that canal, according to federal officials. Great Lakes pleaded guilty in June 2021 to misdemeanor charges of violating two federal laws, the Clean Water Act and the Pipeline Safety Act, and failing to make use of Louisiana's "One Call" program to alert pipeline operators when work was planned near their pipelines. The sentence was handed down last week.“The defendant in this case recklessly violated regulations designed to protect the environment and then tried to hide their actions,” said Kimberly Bahney of EPA’s criminal enforcement program in Louisiana, in a news release announcing the sentencing. “This sentencing demonstrates that we will hold violators responsible for breaking our environmental laws.”James Tassin of Houma, a marsh buggy driver with Shallow Water Equipment LLC, pleaded guilty in March 2021 to a misdemeanor charge of violating the Clean Water Act for his role in the spill, after agreeing to cooperate with federal officials in their investigation of Great Lakes. He is scheduled for sentencing on that charge on Aug. 16. According to a U.S. Justice Department news release, court documents in Tassin's case showed a Great Lakes supervisor instructed Tassin to use the marsh buggy to dig near pipelines, even though the digging was not part of plans approved by NOAA for the restoration project, and without Great Lakes getting approval from companies operating pipelines in the area that the dredging would be safe.
U.S. oil refining capacity drops in 2021 for 2d straight year -EIA (Reuters) - Capacity for U.S. oil refiners fell in 2021 for the second year in a row, the most recent government data showed on Tuesday, as plant shutdowns kept whittling away on their ability to produce gasoline and diesel. Pump prices are near $5 a gallon nationwide as soaring demand for motor fuels collides with the loss of about 1 million barrels of processing capacity in the last three years due largely to closings to plants that were unprofitable when fuel demand cratered at the height of the COVID-19 pandemic. The U.S. Energy Information Administration figures showed a capacity decline of 125,790 barrels per day (bpd) last year on top of the 800,000 bpd drop in 2020. Sky-high gasoline prices may soon crimp fuel demand as if drivers cut travel, a Dallas Federal Reserve Bank economist said. The nationwide average for a gallon of regular unleaded was $4.968 on Tuesday, up 62% from a year ago. While current pump prices are not historically high in inflation-adjusted terms, they may be "closer to consumers’ pain threshold than inflation-adjusted prices might suggest," wrote Garrett Golding, senior business economist with the Dallas Fed. "And if prices climb higher, expect consumers to respond by cutting back on fuel consumption and overall spending sooner than later." U.S. refining capacity has fallen by 5.4%, or 1.03 million bpd to 17.9 million bpd since it peaked in 2019 at 18.98 million bpd. Capacity in 2021 dropped 4.5% to 18.13 million bpd. Profit margins at U.S. refiners are up sharply despite higher oil and gas costs as demand soars for gasoline, diesel and jet fuel. Analysts say the demand could continue to rise with low U.S. unemployment and pent-up demand for travel. The biggest factor in the latest decline of refining capacity was closure of the 255,600-bpd Alliance, Louisiana, refinery, following extensive damage from last year's Hurricane Ida. That was only partially offset by capacity expansions at other refineries, the EIA said. With capacity down, fuel demand is up thanks to the global recovery from the COVID-19 pandemic. Also, shifts in market flows due to the Russian invasion of Ukraine have placed new strains on U.S. refiners. The nation's plants are running at about 94% of operable capacity, the highest since September 2019. The high level of capacity utilization and relatively low levels of storage have experts worried about possible fuel shortages given this year's forecasts for a well-above average hurricane season. About half of the nation's refining capacity is on U.S. Gulf Coast, where storms often make landfall.
Oops! U.S. oil and gas exports fuel domestic price rise - The U.S. oil and natural gas industry long fought for and in the last decade finally won release from federal restrictions that limited exports. The ostensible reason was that because of the so-called "shale revolution" in the country's oil and gas fields, the United States would have plenty of oil and gas to spare for export.This made it almost certain that as U.S. prices rose to match world prices, U.S. consumers would feel the pain. And, since energy prices affect everyone who votes, they are always politically consequential.So, it is unsurprising that with U.S. regular gasoline prices over $5 per gallon President Joe Biden lashed out at U.S. oil companies—which are having one of their best years ever—saying they need to increase production of refined oil products. The companies have responded that their refineries are running at close to maximum capacity and so there is not much they can do in the short run.What is left unsaid is that it has long been the policy of the United States to allow the export of refined (as opposed to crude) petroleum products such as gasoline, diesel and heating oil. The country has refinery capacity significantly in excess of domestic needs and so exports a considerable volume of refined products including about 1 million barrels per day (mbpd) of gasoline and 1.4 mbpd of diesel and heating oil (for the week ending June 10). If the U.S. were to curtail such exports in order to reduce prices at home, the country would be violating long-term commitments to free trade and free markets, and would be reducing supply and thus raising prices for customers abroad.The boom in U.S. natural gas exports has also strained U.S. domestic natural gas suppliessending prices from less than $2 per thousand cubic feet (mcf) two years ago to about $7 per mcf today. (That's down from $9 recently.) That has meant sharply rising costs for residential and industrial heating and for natural gas based plastics and other chemicals including nitrogen fertilizer derived from natural gas.The boom in liquefied natural gas (LNG) exports now sends about 11 percent of U.S. natural gas production abroad (based on shipments from January through March 2022). The volume of LNG exports rose by a factor of 50 from 2011 through 2021. (See these numbers from the U.S. Energy Information Administration here and here.) The world's free trade advocates have long insisted that all commodities should circulate freely across the globe going to the highest bidder. These advocates also believed that government policies should not favor or subsidize one industry over another. The idea was crystallized in 1992 by Michael Boskin, chair of the White House Council of Economic Advisors under President George Bush, when Boskin was asked whether the United States should have a policy that encouraged domestic semiconductor production. He is reported to have said, "Potato chips, computer chips—what's the difference?" It turns out that it really does matter whether a country produces potato chips or computer chips. In the wake of the Russia/Ukraine conflict which has resulted in the sudden breakdown and wrenching realignment of the global trading system countries around the world are grappling with shortages of food, fuel and crucial industrial goods including semiconductors.
US Treas Sec Yellen says a gasoline-tax holiday should be under consideration - US Treasury Secretary Yellen is speaking, mainly on oil and gas:
- We are making supply chains more resilient to protect us.
- They Keystone XL pipeline is up to Biden to decide, and it would take years to have an impact
- I do not see resuming the Keystone XL oil pipeline as a short term measure that can address high oil prices
- The US is having talks on oil-price caps
- We are continuing to have productive conversations on restricting energy revenues to Russia without spillovers to the global economy
- An exception, or ban on insurance for certain Russian oil shipments would effectively provide a price cap on oil
- Gas tax reductions from US states have reasonably high pass-through to prices, but less at federal level
- A gas-tax holiday should be under consideration
- Evidence is mixed on the level of pass-through from gasoline tax holiday to lower prices
- Canada can supply critical metals and minerals needed by US industries
- The discussions with Canada on friend-shoring of supply chains at a relatively early stage
- Evidence is mixed on the level of pass-through from gasoline tax holiday to lower prices
I know it's a holiday there in the US but Yellen should probably not be smoking whatever it is she is smoking if speaking with the media.
Biden's top economic advisor says restarting the Keystone XL pipeline now won't lower oil prices - President Joe Biden's top economic advisor suggested Friday the White House is not rethinking its decision to cancel the controversial Keystone XL oil pipeline in response to elevated crude and gasoline prices. National Economic Council Director Brian Deese told CNBC the Biden administration is instead concentrating on policies and strategies that can deliver lower fuel prices as soon as possible. He pointed to Biden's decision Thursday to begin releasing 1 million barrels of oil per day from the Strategic Petroleum Reserve over the next six months. "Any action on Keystone wouldn't actually increase supply, and it would transmit oil years in the future," Deese said in a "Squawk on the Street" interview. "What we're focused on right now is what we can do right now, and ... there are wells that are shut in and that can be brought back online over the course of the next couple months. What we need right now is to address the immediate supply disruption," he added. The Russia-Ukraine war delivered a supply shock to global oil markets, which had already been tight as demand recovered from Covid-pandemic related declines. As crude prices hit record highs recently so has prices at the gasoline pumps. Russia, a major energy exporter, has been hit with a wave of sanctions after it invaded neighboring Ukraine. The U.S. banned Russian oil imports, in an attempt to punish Moscow, and the U.K. also is phasing them out. Oil prices have retreated from their early March peaks, when they traded at their highest levels since 2008, However, they are still are up considerably for the year, adding to inflationary pressures in the economy. West Texas Intermediate crude, the U.S. oil benchmark, traded around $100 per barrel Friday, up 35% so far in 2022. Brent crude, the international benchmark, hovered around $104 per barrel.
Biden says he's considering gas tax holiday as admin targets July 4 announcement -President Joe Biden said Monday that he is seriously considering a temporary halt in the federal gas tax as the White House looks to take steps to lower the cost at the pump ahead of the July 4 holiday. White House officials say the July 4 weekend, when tens of millions of Americans are expected to hit the road, is a target for announcing new measures to help lower record-high gas prices. Biden said Monday that he could make a decision on pausing the federal gas tax by the end of this week. "I hope I have a decision based on data," he told reporters traveling with him in Rehoboth, Del. A gas tax holiday would require congressional action and one White House official acknowledged it would be challenging. "Republicans don't want gas prices to come down," the official said. "They want Biden to suffer." The official pointed to a comment made by Sen. Rick Scott, R-Fla., to the Wall Street Journal last November saying rising gas prices and inflation are "a gold mine for us." Other possible steps the administration is considering include a gas rebate, though one White House official dismissed the idea as "a stretch" and said it is "not in serious contention." While a gas tax holiday appears to be getting more serious attention, officials said among the unresolved questions is how long it would last. The effort to announce new measures comes ahead of a meeting Energy Secretary Jennifer Granholm plans to meet with oil refining executives, which a source familiar with the plans said is scheduled for Thursday, June 23. The meeting comes amid growing tensions between the White House and the U.S. oil industry. Granholm noted on CNN on Sunday that if the administration moved forward on a federal gas tax pause, some federal funds could stop going toward roadway projects as part of the infrastructure law Biden signed last year. "If we remove the gas tax, that takes away the funding that was just passed by Congress to be able to do that," she said. "So you know, that's one of the challenges, but I'm not saying that that's off the table."
Biden expects decision on federal gas tax holiday by end of week -President Biden on Monday told reporters he hoped to make a final decision about whether to support a federal gas tax holiday by the end of the week as high fuel prices continue to pose a problem. “I hope I have a decision … by the end of the week,” Biden said from Rehoboth Beach, Del., where he spent the weekend. Biden did not rule out sending gas rebate cards to Americans, though administration officials have in recent days sounded cool to the idea. Suspending the federal gas tax would require an act of Congress, but a public push by Biden in favor of the policy could help spur action on Capitol Hill. An estimate from the Penn Wharton Budget Model released earlier this year found that suspending the federal gas tax from March to December of this year would reduce average per-capita gasoline spending by between $16 and $47 for that period.
Democrats cool to Biden's gas tax holiday plan - Congressional Democrats offered mixed responses yesterday to a White House-backed proposal to temporarily suspend the federal gas tax, with some citing fears that it would do little to help consumers. Lawmakers will likely face the prospect head on in the coming days. Senior administration officials familiar with the plan told E&E News yesterday that President Joe Biden plans to announce as soon as today his decision to back a pause through the end of September on the 18.4 cent per gallon tax. The goal is to cool rising gasoline prices. Suspending the gas tax would need congressional approval. It has been an idea floated by moderate Democrats in recent months as prices have soared. But getting Congress to agree on the matter could be a tough sell. Most Republicans, and even some Democrats, consider the idea a gimmick that would do little to ease recent price shocks. Rep. Peter DeFazio (D-Ore.), the chair of the House Transportation and Infrastructure Committee, repeated his displeasure with such a move, urging Democrats in a statement “to see this for what it is: a short-sighted proposal that relies on the cooperation of oil companies to pass on minuscule savings to consumers — the same oil companies that made record profits last year and a staggering $35 billion in the first quarter of 2022.” Fears have mounted that a pause could also undercut the highway trust fund, which derives most of its revenue to improve roads and bridges from the tax. Sen. Tom Carper (D-Del.), chair of the Environment and Public Works Committee, wrote in a tweet last night that “suspending the primary way that we pay for infrastructure projects on our roads is a shortsighted and inefficient way to provide relief.” He added, “We should explore other options for lowering energy costs.” A senior administration official said the White House will also call on states to suspend their own gas taxes. Indeed, gasoline tax holidays have been implemented in multiple states in the face of rising prices, including in Maryland, Georgia, Connecticut, New York and Florida. Other states are pondering implementing their own approach. In the case of Maryland, the pause was constructed in such a way that ensured the relief would go toward consumers, and not just gas stations, Sen. Ben Cardin (D-Md.) told reporters yesterday. “I think it provided temporary relief but it didn’t buy permanent relief,” Cardin said. “And it affected the financing of infrastructure in Maryland, so it was mixed results.” Biden yesterday downplayed the impact a pause could have on federal infrastructure dollars. He said the $1.2 trillion infrastructure law passed by Congress last year has given enough federal dollars to provide some cushion for federal improvement funds. “Look, it will have some impact, but it’s not going to be impact on major road construction and major repairs,” Biden told reporters. “Is it going to, in fact, make it difficult to maintain our roads? The answer is: We have plenty of capacity to do that.” While Democrats are cool to the tax holiday idea, Republicans yesterday said they see little incentive for helping the White House out of a jam that they blame the Biden administration for creating.
Pelosi declines to endorse gas tax holiday -Speaker Nancy Pelosi (D-Calif.) said Wednesday that Democratic leaders will gauge the party’s support for President Biden’s proposed gas tax holiday but stopped short of endorsing the idea, suggesting a rare break between the Speaker and her White House ally on an issue that’s threatening Democrats’ prospects at the polls in November. “We will see where the consensus lies on a path forward for the President’s proposal in the House and the Senate, building on the strong bills to lower prices at the pump already passed by House Democrats including the Consumer Fuel Price Gouging Prevention Act and the Lower Food and Fuel Costs Act,“ Pelosi said in a statement. The statement represents a tepid response from a Democratic leader who’s typically effusive in praising the president’s agenda, economic and otherwise. And it reflects the concerns of a number of Democrats on Capitol Hill that suspending the federal gas tax simply won’t show up as significant savings at the pump. “The challenge on the gas tax is: Is the savings really going to flow to the consumer? Or is it going to be pocketed by the oil companies?” said Rep. Richard Neal (D-Mass.), chairman of the House Ways and Means Committee. “Those are legitimate questions.” Pelosi’s legislative references were to a pair of bills designed to reduce prices gas prices, one by curbing price gouging and the other by promoting homegrown biofuels. Both have passed through the House in recent weeks, though they have little chance of moving through the Senate.
Biden announces a likely doomed gas tax holiday - President Joe Biden on Wednesday called for suspending the federal gasoline tax, in his latest bid to curb rising fuel prices, though it stands almost no chance of passage in Congress.Biden asked lawmakers to pass a three-month pause on the federal 18-cent-per-gallon levy, casting the proposal as a temporary measure that would provide relief to Americans without harming the road-building projects the tax traditionally funds.The president also urged individual states to suspend their own gas taxes during that period, or seek ways to offer similar discounts from high prices at the pump. It’s a reflection of the intensifying political pressure on a White House combating near-record levels of inflation.“A federal gas tax suspension alone won’t fix the problem we face,” a senior administration official told reporters Tuesday night. “But it will provide families a little breathing room.” Biden’s gas tax holiday, however, has already been met with skepticism from senior Democrats in the House. Speaker Nancy Pelosi and others have questioned whether the policy will lead to savings at the pump, rather than excess profits for gas companies. Democrats chose not to include it in their own bill aimed atlowering gas prices last month.“I’ve not been a proponent of the gas tax,” House Majority Leader Steny Hoyer said in a brief interview on Tuesday night. “I just don’t know that it gives much relief.”White House officials began telegraphing their intentions over the weekend: Multiple Democrats received phone calls from aides in the legislative affairs office, informing them Biden was strongly considering the idea.On Tuesday, Biden offered a preemptive defense of the proposal, arguing that while it would have some financial effect on the highway trust fund, “it’s not going to have an impact on major road construction and major repairs.”The White House estimates that a three-month suspension of the tax would cost the trust fund $10 billion, which officials said could be offset through other unspecified revenues.
Ohio Gov. Mike DeWine opposes President Biden's gas tax holiday proposal - — In an effort to help curb the high gasoline prices across America, President Joe Biden has called on Congress to suspend gas and diesel taxes for three months. Biden is also encouraging states to suspend their own gas taxes or provide similar relief.Ohio Gov. Mike DeWine is apparently not on board with that idea.In a statement released to 3News, DeWine press secretary Dan Tierney says the governor believes the Biden Administration's energy policies are to blame for the continually high gas prices. "Governor DeWine has noted that the most significant things our country can do to reduce gas prices is to increase fuel refining capacity and reverse Biden administration policies that have had the adverse effect of reducing supply and increasing gasoline prices," the statement read. The statement follows a tweet that DeWine put out in May criticizing Biden for high gas prices. "Gas prices are at an all-time high," DeWine wrote. "While @JonHusted and I have worked to keep pipelines open, President Biden and his Administration have restricted pipelines, driving up gas prices and hurting Ohioans."
Congress likely to reject gas tax push - Congress is likely to quash the White House effort to back a suspension of the federal gasoline tax. The White House has flirted for weeks with the idea of temporarily halting the 18-cent tax as one way to bring relief to drivers amid record gas prices — and President Biden is expected to officially announce support for it on Wednesday. But with skepticism spanning the ideological spectrum — from Speaker Nancy Pelosi (D-Calif.) to swing vote Sen. Joe Manchin (D-W.Va.) to much of the GOP — the idea is unlikely to make it across the finish line. Biden’s position on the gasoline tax issue had been unclear for weeks, but the president will call on Congress to suspend the federal gasoline and diesel taxes. White House Press Secretary Karine Jean-Pierre affirmed on Tuesday, prior to the announcement, that if Biden supported the measure, he’d be looking at an act from Congress. “The way we see it is there would be congressional action,” Jean-Pierre told reporters during a press briefing. “The president is looking at an array of options to figure out how he is going to help give relief to the American public, especially as they are looking at gas prices at the pump,” she said. “This is a No. 1 priority for the president.” Doubts about pausing the federal gasoline tax are coming from both allies and foes of the White House. Democrats have expressed concerns that some of the savings may get passed to oil companies rather than consumers and have also raised worries about a reduction in federal highway spending that is funded by the tax. “We have a situation where there’s money coming out of the Highway Trust Fund, it’s going to the oil companies, they may not give it to the consumer, and it has to be paid for. … That’s the con,” Pelosi, who is among those who have expressed reservations, said during a March press conference. Pelosi’s office declined to comment further for this story. Other Democrats, such as House Transportation and Infrastructure Committee Chairman Peter DeFazio (Ore.), have made similar points.
Biden’s proposed federal tax cut on gas could cost dearly in the future - America’s hard-pressed drivers may be about to receive a holiday. On Wednesday Joe Biden called on Congress to suspend the federal tax on gas and diesel until September as the country struggles with soar away costs at the pump. But experts warned the tax holiday is unlikely to have a major impact on prices and will probably further harm the US’s already battered roads and bridges. If the tax cut even gets passed. Blaming Russia’s invasion of Ukraine for the surge in gas prices Biden proposed cutting the 18-cents-a-gallon federal taxes on fuel until September and called on states to cut their gas taxes too. “Together, these actions could help drop the price at the pump by up to $1 a gallon or more. It doesn’t reduce all the pain, but it will be a big help,” said Biden. The tax cut’s first obstacle may be its last. The Senate Republican leader, Mitch McConnell, called the plan an “ineffective stunt” and other critics in his own party may join Republicans in blocking any cut. But with prices still soaring and midterm elections looming the administration is increasingly looking for ways to spare the public from prices at the pump, currently averaging at just under $5 a gallon. The non-partisan Tax Foundation called the plan a “uniquely ill-suited policyfor addressing rising prices”. Pointing out that the money from the tax is theprimary funding source for highway construction and its suspension could cost $10bn in funding. “Anything that could help the price at the pump is good, but it’ll come at a significant cost to the federal government that supposedly uses that money for the highway fund to maintain highways,” said Mark Finley, fellow in energy and global oil at the center for energy studies at Rice University. US energy economists also warn that dropping taxes on gasoline – a similar program has been suggested in the UK and other countries – does not address the fundamental issues of high demand.In a February report, the committee for a responsible federal budget found a federal gas tax holiday could “further increase demand for gasoline and other goods and services at a time when the economy has little capacity to absorb it”.“Gas prices are high because supply and demand are tight in the US and around the world both for oil and refined products. The prices are a signal that producers should produce more and consumers should consume less. You don’t fix the problem and you may exacerbate it, if you try to hide those signals,” said Finley.Moreover, prices may surge when the tax is lifted, according to a study released from the Wharton School at the University of Pennsylvania. Earlier this year, Maryland introduced a month-long gas tax holiday. The study found that prices rose when it expired and the tax may have cost the state $100m.
Suspend transit fares instead of the gas tax, climate advocates tell Biden -President Biden should be pushing for a transit fare holiday, rather than a gas tax holiday, if he's serious about tackling climate change and cutting emissions from America's car-centric transportation system, according to climate advocates and some House Democrats.Biden appealed to Congress on Wednesday to suspend the federal gasoline and diesel tax for three months, as the national average price of gas hovers at nearly $5 a gallon. But his proposal faces skepticism from lawmakers in both parties — and even some White House economistsand Treasury Department officials — who worry that it would not meaningfully bring down prices at the pump.And some Democrats say Biden, who took office promising ambitious action to fight climate change, should reduce costs for consumers in a way that doesn't increase planet-warming emissions from fossil-fuel-powered vehicles.“There's a whole series of things we could do to reduce our dependence on single-occupancy vehicles, which is killing people,” Rep. Earl Blumenauer (D-Ore.) told The Climate 202 on Wednesday.“There's a whole suite of opportunities in terms of dealing with bike share as mass transit, giving relief in terms of transit fares, and helping people in terms of biking and walking,” said Blumenauer, who often wears a bicycle pin on his lapel.Tony Dutzik, associate director and senior policy analyst withFrontier Group, a nonpartisan research and public policy organization, echoed that assessment.“If we're looking to address climate change and to give people flexibility to avoid high gas prices in their daily lives, then we should be giving them as many choices as we can,” Dutzik told The Climate 202. “And providing transit fare relief would help people who have access to transit make better use of it.”The transportation sector recently surpassed the power sector as the country's largest source of planet-warming pollution, accounting for 27 percent of all carbon emissions in 2020, according to the Environmental Protection Agency. Cars and trucks produce the bulk of those emissions.To reach Biden's goal of slashing economywide emissions in half by 2030, climate advocates say the administration should not only encourage electric vehicle adoption, but also incentivize carpooling, transit ridership, biking and walking. “In a lot of parts of the country, you sort of have to drive — you don't have other options,” said Matt Casale, director of environment campaigns for U.S. Public Interest Research Group. “So there has to be a longer-term strategy to give people better options to make it easier not to drive.”
Biden blames Russia for gas prices as he presses Congress, states and oil companies - - The White House on Wednesday again blamed Russia’s war in Ukraine for recent hikes in fuel prices, as President Joe Biden pushed for Congress to suspend the federal gas tax.Both Biden and Energy Secretary Jennifer Granholm acknowledged on Wednesday that a gas tax holiday wouldn’t be enough on its own to counteract the forces raising gas prices, but framed it as an important step in a continuing process to help American consumers as oil supplies are constrained.“We could have turned a blind eye to Putin’s murderous ways,” Biden said in a short speech at the White House, referring to President Vladimir Putin of Russia. “The price of gas wouldn’t have spiked the way it has. I believe that would have been wrong.”The president contrasted the bipartisan support for Ukraine with criticism of his administration on rising gas prices. His administration has facedmounting disapproval for near-record levels of inflation.“Are you saying that we would rather have lower gas prices in America and Putin’s iron fist in Europe?” Biden said. “I don’t believe that.”Biden asked oil companies to increase refining capacity and pass “every penny” of their savings from the proposed gas tax holiday on to consumers. Earlier Wednesday he called for a three-month suspension of the 18-cent-per-gallon federal gas tax, but it seems unlikely to pass in Congress.The conversation between the administration and both Democrats and Republicans is ongoing, Granholm said.
Oil CEOs will visit White House for emergency meeting - Responding to President Joe Biden’s call for an explanation of soaring petroleum prices and surging industry profits, oil and gas executives will visit the White House tomorrow for an emergency meeting with Energy Secretary Jennifer Granholm. Granholm and White House officials will meet with executives from BP PLC, Chevron Corp. and Phillips 66 Co., the companies confirmed to E&E News. Other oil majors, including Shell PLC and Exxon Mobil Corp., didn’t confirm their attendance. “We look forward to engaging with the Administration,” a Phillips 66 spokesperson said in a statement yesterday. “We are a company of problem-solvers, and only good things can come from working collaboratively to address near- and long-term issues facing our country and energy consumers.” White House spokesperson Karine Jean-Pierre said Biden won’t attend the meeting, but is keenly interested in its outcome. She said seven CEOs will attend, but she did not name them. “They’re going to sit down and have a conversation, the second step is coming up with a solution and ideas,” she said. Facing political heat for gasoline prices averaging around $5 a gallon nationwide, Biden has sought to partly shift blame to oil and gas companies, which he said are sitting on 9,000 unused drilling leases on public lands and also cutting refining. Biden told reporters Monday that he wants the oil and gas companies to justify profits of $35 billion in the first quarter, a time when gas prices have skyrocketed to historic levels due to supply constraints, increased demand and Russia’s war on Ukraine. “They don’t want to get caught in a position where eventually they’re going to move to alternative energy, renewable energy, and they don’t want to get stuck,” Biden said. “Well, guess what? There’s a logical transition to be made here. And I want an explanation from them as to why they aren’t refining more oil.” Biden is facing headwinds from two opposing directions. On the one hand, high gasoline prices are costing American drivers hundreds of dollars more each year and helping fuel inflation. On the other, the administration’s climate policy is flagging amid congressional gridlock. Later this week, Biden will embark on a trip to Europe and the Middle East where he will ask Group of Seven countries to do more on climate, and then sit down with Saudi leaders to ensure more oil keeps flowing. The purpose of tomorrow’ emergency White House meeting is to discuss steps that energy companies can take to increase refining capacity and cut gas prices, according to DOE. Administration officials want the companies to bring “actionable, near-term solutions,” the department said.
Oil CEOs Get Olive Branch From Granholm in Gas-Price Huddle -- The US energy chief struck a conciliatory tone in a high-stakes meeting with top oil executives to discuss soaring gasoline prices on Thursday, though the huddle yielded little progress on a plan to address the supply crunch. For more than an hour, Energy Secretary Jennifer Granholm met in Washington with leaders of some of the nation’s top oil companies, discussing possible waivers of air pollution limits on fuel and other changes that could help ease pump prices. The meeting was described by multiple people familiar with the discussion who asked for anonymity because it was closed to the public. Granholm stressed that the administration wants to collaborate with the industry to bolster refining capacity and boost gasoline production, the people said. Her opening comments attempted to preempt some oil industry arguments by emphasizing that the administration recognizes refiners need more regulatory certainty and supportive market signals from Washington to drive investment in the sector, according to the people. Although Granholm downplayed the possibility of a ban on the export of gasoline and other refined petroleum products, she didn’t explicitly rule out trade limits, the people said. Administration officials and executives also extensively discussed the potential for waiving gasoline from anti-smog rules that require low-volatility fuel in the summer, a shift that could reduce costs by allowing fuel blenders to mix in less-pricey butane. Such waivers would have to come from the Environmental Protection Agency, which did not have representatives in the meeting, the people said. The group also strategized ways to prepare for possible hurricane disruptions to fuel refining and supply. “The secretary set a collaborative tone early on by acknowledging the global nature of oil markets and prices, and that some companies, including Shell, have diminished refining capacity because we’re busy converting century-old assets to produce biofuels,” Gretchen Watkins, president of Shell USA Inc., said in a statement. “There was wide acknowledgment that Americans are feeling a lot of price pain and no ideas were spared in an effort to find solutions to that.” Watkins urged the administration to accelerate permitting to boost Gulf of Mexico oil and gas production in the short term, while clearing a path for offshore wind development along the East Coast. President Joe Biden ordered the meeting last week, demanding in letters to the heads of seven oil companies that they explain any reduction in their refining capacity since 2020, when the pandemic spurred plant closures globally. The president also insisted they deliver “concrete ideas that would address the immediate inventory, price and refining capacity issues in the coming months.” The meeting came amid escalating tensions between the oil industry and the Biden administration, which have risen along with the price of oil and unleaded gasoline, now hovering around $5 per gallon in the US. Biden has cast companies as profiteering from the crisis while oil refiners and producers blame the government’s anti-fossil fuel agenda for chilling investment.
U.S. meets with refiners on high pump prices; no plan yet -sources U.S. Energy Secretary Jennifer Granholm recently expressed interest in possibly lifting smog-fighting gasoline rules to help fight high gas prices at the nation’s pumps.The secretary also backed off a plan to ban fuel exports during a wide-ranging meeting with refiners. Reuters says tensions are high between President Biden and oil refiners.The two sides departed from the meeting far apart on possible solutions. Industry sources familiar with the meeting say both sides will continue talking. Biden has recently been critical of oil industry CEOs for pulling in huge profits from a supply crunch made worse by Russia invading Ukraine.The White House is unhappy with the refining industry’s move to idle a bout one million barrels per day of production capacity since 2020.Administration officials say the companies need to use those profits to restart plants and help fill the supply gap. Refiners say investing in reopening plants carries significant financial risks.
'Constructive' talk but no deal as Granholm meets oil execs - A meeting on Thursday of oil company executives and Energy Secretary Jennifer M. Granholm concerning high consumer gas prices and refining capacity was “constructive,” even as it failed to produce a policy to address prices at the pump, industry leaders said. The White House called for the meeting with executives from Exxon Mobil, Chevron, BP and Phillips 66, as it faces political pressure over gas prices that average nationally at $4.94 per gallon, according to AAA, nearly $1.88 higher than the average this time last year. On Wednesday, President Joe Biden called for companies to increase refining capacity as part of a wider push to reduce the price consumers pay at the pump. He also called on Congress to pass legislation waiving the gas tax for 90 days and asked states to do the same. Following the meeting at the Energy Department, the American Petroleum Institute and the American Fuel and Petrochemical Manufacturers released a joint statement that said there had been a “constructive discussion.” [Drill, baby, drill? Not so fast, say crash-wary energy investors] “While these challenges and their causes are complex — from Russia’s war in Ukraine to market imbalances leftover from COVID — productive outcomes today should send a positive signal to the market that the U.S. is committed to long-term investment in a strong U.S. refining industry and aligning policies to reflect that commitment,” the groups’ statement said. White House Press Secretary Karine Jean-Pierre said the meeting was a “first step” and that the Energy Department will continue conversations with the companies. “The meeting was a productive dialogue focused on creating an opportunity with industry to work with government to help deliver needed relief to American consumers,” Jean-Pierre said. “The secretary made clear that the administration believes it imperative that companies increase supply of gas, and she reiterated that the president is prepared to act quickly and decisively, using the tools available to him as appropriate.” Chevron CEO Mike Wirth similarly said the meeting was “a constructive conversation about addressing both near-term issues and the longer-term stability of energy markets.” The comment came after Wirth sent a letter to Biden on Tuesday that said bringing down prices would require a change in approach and that the White House was at times vilifying the oil industry. In response, Biden said Wirth was “mildly sensitive. I didn't know they’d get their feelings hurt that quickly."
Oil CEOs call for 'tone shift' from White House on finger-pointing over gas prices - The oil industry pushed for an easing of tensions and a dialing back of finger-pointing from the White House during a Thursday meeting with the Energy Department as high gas prices continue to anger politicians and consumers."Our guys raised concerns about the ongoing tone from the administration. We asked that their tone shift," American Petroleum Institute CEO Mike Sommers told CNN after the in-person meeting at Energy Department headquarters between oil CEOs and Energy Secretary Jennifer Granholm.Sommers, who was not in the meeting but was briefed by oil CEOs who were there, said the industry made a series of policy recommendations to the Biden administration to address high gasoline prices. The oil industry also urged President Joe Biden to get personally involved and meet with oil CEOs to address high prices."We'd welcome an opportunity to sit down with the president himself," said Sommers, who, along with Big Oil CEOs, met with former President Donald Trump in early 2020 when oil prices were crashing. "That's something that almost every president has done. This one has not."No concrete actions or commitments were announced following Thursday's meeting.In a statement, the Energy Department described the meeting as "productive" and expressed hope that it will be part of an "ongoing dialogue for more effective collaboration."Secretary Granholm called on the industry to "bring supply online" to lower prices and reiterated that Biden is prepared to "act quickly and decisively," the Energy Department said in a readout following the meeting, which included executives from ExxonMobil, Chevron, BP, Shell, Valero, Phillips 66 and Marathon Petroleum.Sommers told CNN the Biden administration seemed open to some of the industry's proposals, including waiving the Jones Act to speed up the delivery of gasoline and diesel from the Gulf Coast to the East Coast.The Jones Act is a federal law aimed at protecting US shipbuilders by limiting shipping by foreign vessels. It has been waived in the past during supply crunches.In a statement Thursday evening, Ku'uhaku Park — president of the American Maritime Partnership — said, "The Jones Act is not a cost driver for increased gas prices, representing an average of less than one cent per gallon of the overall cost of gasoline."Sommers said Thursday's meeting was "a really constructive dialogue."
Senate Democrats renew call to limit crude oil exports - A group of Senate Democrats renewed their call yesterday for President Joe Biden to limit the export of crude oil in the face of record-high gasoline prices.The letter, led by Senate Armed Services Chair Jack Reed (D-R.I.), came as Energy Secretary Jennifer Granholm met behind closed doors yesterday with top oil and gas producers in hopes of finding common ground on policies that can help increase the supply of energy and bring down rising prices.Limitation of crude oil exports would represent an escalation of federal intervention into oil and gas markets to shore up supplies. White House officials have indicated that either a partial or full ban was under consideration to lower gas prices, but no action has yet been taken by Biden.Democratic supporters, however, see an opportunity to renew their calls for limiting exports following Biden’s announcement earlier this week to back a federal gas tax holiday.
Weekly Petroleum Inventory Data Supplied By API And SeekingAlpha -- June 23, 2022 - Link here: Shares of energy companies fell sharply on Thursday, again sitting at the bottom of the S&P 500 leaderboard, as signs of slowing consumption sent oil prices sliding to six-week lows. U.S. crude oil futures (CL1:COM) closed -1.8% to $104.27/bbl, the lowest since May 10, after the American Petroleum Institute estimated U.S. crude inventories surprisingly increased by 5.6M barrels for the week ending June 17, underscoring concerns about demand destruction.The Energy Information Administration delayed the release of its weekly report on oil inventories due to problems with its systems; analysts were forecasting a 1.2M-barrel drop in crude inventories and an 800K-barrel decline in gasoline stockpiles.U.S. natural gas futures (NG1:COM) settled -9% to $6.239/MMBtu, the lowest closing price since April 6, as stockpiles showed a bigger than expected build of 74B cf during the week ended June 17.Germany's government moved closer to rationing natural gas after Russia cut deliveries in an escalation of the economic war triggered by the invasion of Ukraine.
ExxonMobil CEO says oil and gas markets may be tight for 3 to 5 more years -Oil and gas markets may be tight for another three to five years as the industry tries to catch up with underinvestment in new production due to the pandemic, ExxonMobil CEO Darren Woods said June 21. Two years of a "significant reduction" in investment in exploration while the industry put more focus on "rebuilding the balance sheet" due to COVID-19 is likely to leave the oil market "fairly tight" for the next three to five years as the industry tries to catch up, depending on what happens to demand, Woods told the Qatar Economic Forum in Doha. Oil and gas prices have surged in the wake of Russia's February invasion of Ukraine, which has prompted many European buyers of Russian hydrocarbons to seek alternatives, including gas from Qatar. Qatar's energy minister Saad al-Kaabi, who told the conference that QatarEnergy would be announcing ExxonMobil as a partner in its North Field East LNG expansion later June 21, echoed Woods' comments, saying that underinvestment is the "underpinning reason" why prices have climbed. Meanwhile Kuwait Petroleum Corp's deputy chairman and CEO Shaikh Nawaf Saud Al-Sabah said that Kuwait is "committed to making the investment necessary to ensure we can meet the increasing demand in hydrocarbons going into the future." After 80 years of producing oil and gas onshore, Kuwait has taken the first step to offshore exploration and last week got its first offshore oil drill, which will spud "soon," he told the conference. Kuwait is limited to current oil production of 2.768 million b/d under its OPEC+ allocation, but "we can go higher than that," he added.
Clean up efforts continue following on oil spill on Flint River- Officials say that cleanup efforts continue following an oil spill in the Flint River. The leak was first reported Wednesday. State investigators confirmed Friday that the source of the Flint River oil spill came from the Lockhart Chemical Company. So far, recovery is going well, according to Genesee County Sheriff Chris Swanson. Swanson said if crews continue working as they are, response teams could scale back operations as soon as Sunday. A county wide no contact order with the river remains in place. Residents should not fish, boat or swim in the Flint River from Stepping Stone Falls to the Genesee County Line. Genesee County Board Chairman Domonique Clemons said he is grateful for the joint effort. “It is our hope that if we continue progress as planned, by mid-next week we will be able to lift the order. We will be able to return to a state of normal, as far as our river is concerned,” Clemons said.
St. Mary's River clean up complete; investigation into oil spill incident underway | Sault Star - Algoma Steel has completed its cleanup of the oil spill on the St. Mary’s River, the Ministry of Environment reports. Gary Wheeler, spokesperson for the ministry, confirmed the operation required by the steelmaker has been wrapped. Algoma Steel must also submit a report to the ministry that outlines the cause of the spill, its impacts, and preventative measures to prevent a re-occurrence.A due date for the report has not been provided.In the meantime, ministry officials have initiated an investigation to determine if prosecution is warranted. “At this point, commenting on the investigation would be inappropriate,” Wheeler said in response to questions from The Sault Star. Algoma Steel’s manager of communication and branding, Brenda Stenta, did not respond Monday to an email request for information. The June 9 oil spill reported from Algoma Steel in the morning hours shut down shipping on the St. Mary’s River and resulted in a quick warning from Algoma Public Health to well users close the shoreline that there may be a risk of contamination. Recreational St. Mary’s River water users, including swimmers, kayakers and anglers, should also avoid using the river for those purposes until further information is provided. APH warns people not to drink, swim, bathe or shower with the water. Instead, use alternative water sources such as bottled water or from the municipal drinking water system. Algoma Steel reports its technical advisors estimate that between 1,000 and 1,250 litres of oil (264 imperial gallons) were discharged into the river while the U.S. Coast Guard has called it a 5,300-gallon oil spill. The spill also forced Echo Bay to turn off its intake pipe for the water treatment plant, declaring a state of emergency. The community has been trucking in clean drinking water. Monitoring of the area around the Echo Bay water treatment plant and its intake on Lake George continued throughout the weekend and additional samples were collected for testing on Monday, Wheeler said. Those sample results will be reviewed with Algoma Public Health to determine next steps. “In the interim, the community will continue to haul water from Bruce Mines and Sault Ste. Marie,” he said.
Enbridge expert: No jump in gas prices with Line 5 replacement — New court documents in the fight over Line 5 show that an energy industry consultant hired by Enbridge estimates shutting down the pipeline that runs under the Straits of Mackinac would have a minimal impact on fuel prices.The documents stem from a federal lawsuit in Wisconsin filed by the Bad River Band of the Lake Superior Tribe of Chippewa Indians.According to the report filed by Neil Earnest, prices for gasoline, jet fuel and diesel would rise by an estimated 0.5 cents per gallon. The impact in Ontario would be far greater, closer to 5 cents per gallon.Sean McBrearty, the legislative and policy director for Clean Water Action, says this proves we don’t need a pipeline in the Straits of Mackinac.“Enbridge’s main argument, for years, ever since we started talking about (Line 5), is that Michigan really needs Line 5,” McBrearty told News 8. “We need it for gas. We need it for propane. Then, once we started getting experts in the energy industry to look into these claims with publicly available information, the experts were able to disprove that notion.”A spokesperson for Enbridge refutes those claims, accusing environmental activists of “cherry picking” select parts of Earnest’s analysis and presenting “an inaccurate view of the impacts associated with shutting down Line 5.”While the final impact on fuel costs is correct, Enbridge claims that figureassumes replacement infrastructure has been built and is fully operational. Before the new line is up and running, costs would presumably be higher. The company also claims refineries would be forced to shut down and many jobs would be lost, specifically in Michigan, Ohio and Pennsylvania. McBrearty refutes that claim.“If you have the same supply of oil and the same demand of oil, which the fact that there’s no price difference tells you there would be no supply difference,” he said. “There are other ways of getting that oil to refineries.”McBrearty notes that fact is beside the point, saying the burden should be on Enbridge to find another way to transport its product without threatening the Great Lakes.“There have been studies for years that show we don’t need Line 5. … This shows that Enbridge knows that, too. They need Line 5 to keep their profits flowing, but Michigan doesn’t need Line 5, the region doesn’t need Line 5, and not even Canada needs Line 5,” McBrearty said. Enbridge also pointed to a study published in March by the Consumers Energy Alliance that estimates Michigan families and businesses would pay approximately $2 billion more per year on gas and diesel if Line 5 shuts down. The Consumers Energy Alliance is comprised of several fuel, trucking, mining and energy companies and unions. Beth Wallace, the Great Lakes partnerships manager for the National Wildlife Foundation, said the study was “not grounded in fact.” “The Consumers Energy Alliance calling this a ‘study’ is a major stretch of the imagination – this is an oil disinformation PR effort,” Wallace told the Detroit News. “The report is full of unrealistic assumptions that are so far from reality, it will be alarming if any decision-makers take it seriously.”
Honor The Earth wants Walz Administration to drop charges against Line 3 protests - — Mark Ruffalo, Jackson Browne, Jane Fonda and more join Honor the Earth and other Indigenous leaders condemning the charges against more than 800 activists who were arrested one year ago for protesting the Enbridge Line 3 pipeline. “A lot of people support water protectors and a lot of people believe that water should be protected over the rights of a Canadian corporation. A lot of people are deeply concerned with the fact that Minnesota took over $8 million from a Canadian multinational to arrest, charge and harass people like us,” Honor The Earth Executive Director Winona LaDuke said. Honor the Earth has sent a letter featuring celebrities and several Indigenous tribes calling for Minnesota leadership to drop charges or have Attorney General Keith Ellison lead Line 3 cases as a special prosecutor. The long list of charges includes obstruction, trespassing and conspiring, aiding and abetting. “There were some people however that were charged with felonies including a theft of time. They were charged with stealing time from Enbridge. Stealing time. I found that was a very interesting suggestion. I feel that Enbridge stole years of my time. Years of my life so maybe I can charge them with that,” LaDuke said. Enbridge Inc. says in a statement activists took part in “Illegal and unsafe acts that endangered themselves, first responders and workers and caused millions of dollars in damages. We support the justice system holding those activists who flouted the law accountable.” “The price of oil is too high in terms of blood and arrests and certainly the environment. I can never accept Enbridge’s fantasy world where they believe they have done us a good favor,” LaDuke said. LaDuke says North Dakota and Minnesota governments are too focused on short-term profits and election favors instead of thinking about how their negligence affects future generations.
New research reveals U.S. gas pipeline leaks have not improved (Reuters) - Over 2,600 hazardous gas pipeline leaks in the United States caused more than $4 billion in damages and emergency services, killed 122 people, and released 26.6 billion cubic feet of fuel as methane or carbon dioxide, according to a report released on Thursday. The report, by the U.S. PIRG Education Fund, Environment America Research & Policy Center and Frontier Group, comes as the Biden administration prepares in the coming months to unveil new safety-related rules to curb methane emissions from pipeline systems that transport gas from production to local distribution. In addition, the federal Bipartisan Infrastructure Law, passed last year, will enable the Department of Transportation to spend $1 billion to replace leaky gas distribution pipelines. On average, a major new gas leak incident is reported to the federal government every 40 hours, while more minor leaks can go undetected and unrepaired for years. The report, which shows that the incidence of major pipeline leaks or explosions has not decreased over the last decade, makes the case that the U.S. should move away from the widespread use of natural gas in homes and businesses toward electrification. "House explosions and leaking pipelines aren’t isolated incidents – they’re the result of an energy system that pipes dangerous, explosive gas across the country and through our neighborhoods," said Matt Casale, U.S. PIRG Education Fund Environment Campaigns director. The incidents included in the report were caused by an array of factors, from operator errors to equipment failures to natural causes. The report recommends that policymakers step up incentives to fast-track the transition from a gas-dependent economy to one that is all-electric, encouraging homes and buildings to use electric heat pumps, stoves and other appliances. During the transition, the report says gas infrastructure investments should focus on fixing leaks. Methane is over 80 times more potent than carbon dioxide during the first 20 years it lasts in the atmosphere.
New Mexico people of color most impacted by oil and gas, study says -People of color, those living in poverty, elderly people and childrencould be affected by air pollution associated with oil and gas at a higher rate than other groups in New Mexico, recent research showed.Researchers, with the Environmental Defense Fund, studied the demographics of “frontline” communities where people live alongside oil and gas facilities – many less than a mile away.These installations emit air and water pollution which seeps into such local communities, the study read, causing myriad health conditions like cancers and respiratory illness.Nationwide, the study showed 18 million people live within a mile of active oil and gas wells, and a large portion of that population were non-white, elderly, children or impoverished.Researchers looked at population data from the San Juan Basin in northwest New Mexico and the Permian Basin in the southwest corner of the state – both active oil and gas fields the report showed had large populations of “marginalized” communities such as people of color.The study used air monitoring to find where wells and other fossil fuel facilities were and compare that information with available population data.Four distinct “clusters” of marginalized communities were discovered around fossil fuel areas, per the study, in southeast New Mexico and West Texas, northwest New Mexico, California and Appalachia in the American southeast.The San Juan Basin sits along Native American communities within the Navajo Nation – the largest Indigenous reservation in the U.S. spanning about 27,000 acres in the Four Corners area in New Mexico, Utah and Arizona.This area is largely populated by people who are Indigenous, the study read, and the high-density of natural gas wells and processing facilities puts them at a high risk of health impacts.The Permian Basin region had a high density of Hispanics and those of low education and income levels, per the report, as the area is near the U.S-Mexico Border.About 3.3 million Hispanic Americans, nationwide, live within a mile of active oil and gas wells, per the study, the most of any other group, and about 5.7 percent of the total U.S. population of that group.Research showed about 457,000 Native Americans lived within that same radius. That’s about 8 percent of the nation’s entire Indigenous population.
Report: Leaks in Gas Pipeline Network Cause Damage, Death, Pollution - A new study shows that almost daily leaks along America's 310,000-mile network of natural gas pipelines are causing death, injury and large-scale property damage.The report from the Arizona PIRG Education Fund finds over the past decade, pipeline incidents serious enough to require reporting occurred every 40 hours. Diane Brown - executive director with Arizona PIRG - said the report found between 2010 and 2021, 2,600 explosions killed 122 people, seriously injured 600 and cost Americans more than $4 billion. "Leaks can occur anywhere," said Brown, "from the transport of gas from the well, through the gathering and transmission pipelines and the distribution lines that carry gas to homes and businesses." The report - published this week in conjunction with the nonprofit Frontier Group - also found that pipeline leaks in Arizona and elsewhere released 26 billion cubic feet of methane, a greenhouse-gas pollutant linked to climate change.Brown added that the serious pipeline incidents addressed in the report likely represent only some of the leaks experienced in producing, transporting and burning gas."Federally reported gas leaks represent just a fraction of the total," said Brown. "Not all serious gas explosions that have caused death or injury are included in the data if they did not occur in the pipeline system."The report calls for the U.S. to stop relying so heavily on methane for home heating and cooking, as well as electricity generation. Brown said Arizona regulators have already started down that road."The Arizona Corporation Commission is starting to look at some of the risk posed by gas," said Brown. "The commission has brought Southwest Gas before them to discuss recent incidents that have caused Arizonans harm." In addition to calling for tougher regulations, Arizona PIRG is advocating for better pipeline infrastructure, with improved gas-leak detection systems.
After winter drilling permit slump, BLM approvals back up - The Biden administration’s oil and natural gas drilling approvals on public lands rose this spring from a winter low point that alarmed the oil industry. On average, the Bureau of Land Management has approved nearly 300 oil or gas permits per month since January, giving operators permission to punch new wells on federal lands in states like Wyoming and Colorado. Applications for permits to drill, or APDs, have attracted attention under the Biden White House as an indicator of whether the administration’s climate focus will influence day-to-day oil and gas development on federal lands. Initially, even as administration officials talked about climate change — and paused leasing on federal lands and waters to review the federal oil program — the drilling approvals in President Joe Biden’s first year outpaced those from the Trump administration’s first year (Energywire, July 13, 2021).But a close look at the data showed the monthly approvals mostly plunged in late 2021 and into this year (Energywire, March 14).This trend was noticed just as climbing oil prices prompted Republicans to demand a Biden administration response — a chorus that grew louder after Russia’s invasion of Ukraine in February. Biden’s subsequent call on U.S. oil and gas producers to drill more — and his ban on Russian oil imports — has further focused attention on the administration’s handling of the federal oil program.Constituting 22 percent of the national supply, it is one oil and gas policy area an administration can hold sway over. More broadly, experts have emphasized that the White House has limited tools to influence companies’ drilling habits or global commodity prices that are driven by international oil markets (Energywire, March 10). Recent BLM drilling approvals don’t reveal a steady trend, instead fluctuating month by month, from a surprising bottom of 95 in January to a high of 448 in March. Approvals fell again last month to 150, according to publicly reported data reviewed by E&E. The pace of monthly permitting on federal land this year has yet to hit the high of 656 the Biden administration reached shortly after taking office. But the Biden administration has reduced the backlog of pending permit applications it inherited from roughly 5,300 to 4,200 as of May. Brian Hires, a spokesman for the BLM, said the agency continues to process APDs “in a timely manner.” “The review process for an application for a permit to drill is comprehensive to ensure oil and gas development will be done in an environmentally sound and responsible manner,” he said in an email. Biden himself has highlighted what he describes as the abundant opportunities for companies to drill on federal land. The current number of approved drilling permits that the industry is not yet developing sits at roughly 9,000, a figure the administration and congressional Democrats have pointed to as evidence that the White House is not standing in the way of public oil development.
Bridger’s Bakken pipeline has its permits - A 105,000 barrel per day pipeline proposed by Bridger Pipeline, a subsidiary of True Companies, has a thumbs up from the North Dakota Public Service Commission. In approving Bridgers Bakken pipeline project, Commissioners said the pipeline’s route is important for Bakken crude, particularly given the high demand for petroleum products right now throughout the country. They also noted that the company has taken steps to address its past spill record, installing a two-part monitoring system and implementing new training protocols for employees to try to prevent any future problems. Bridger and sister company Belle Fourche are both facing litigation related to oil spills in Montana and North Dakota respectively. Bridger pipeline was for the 2015 oil spill that released an estimated 758 barrels of oil into the Yellowstone River. The spill was caused by a weld that split open, allowing oil to leak into the river 7 miles above Glendale. Ice and snow at the time complicated efforts to contain and clean the spill, allowing some oil to travel downstream. The company settled a civil suit last year with Montana, in which they agreed to pay $2 million to recover natural resource damages caused by the spill near Glendive. Belle Fourche, meanwhile, owned and operated a pipeline that ruptured during a landslide in 2016, leaking 4,200 barrels of oil into a hillside, some of which found its way into the Ash Creek, a tributary to the Little Missouri. The spill was contained before it got into the Little Missouri, according to the Department of Environmental Quality.
The push to ban new gas stations is coming to Los Angeles -A couple of years ago, banning the construction of new gas stations anywhere in the United States would have seemed like a far-fetched idea. But it could soon become a political reality, not in a public transit dreamland, but in the sprawling, car-centric city of Los Angeles.Last March, the town of Petaluma, California, became the first town in the country to prohibit new gas stations, following through on its declaration of a “climate emergency” in 2019. Other small towns in Sonoma County, like Rohnert Park and Sebastopol, have followed Petaluma’s lead. The effort has since expanded beyond California, with policies to prevent new gas stations being developed in the Comox Valley district in British Columbia as well as in Bethlehem, New York.If Los Angeles institutes a ban, it would be the first major city to do so. At a press call arranged by the nonprofit Stand.Earth on Wednesday, Andy Shrader, who advises city councilmember Paul Koretz on environmental issues, said that Koretz plans to introduce a policy to end the permitting of new gas stations. “We’re keen on getting it done before the end of this year,” Shrader said.“Our great and influential city, which grew up around the automobile, is the perfect place to figure out how to move off the gas-powered car,” Koretz said in a statement.While the idea might sound controversial on the surface, the bans that have been approved so far only stop the construction of proposed gas stations, meaning that there will still be plenty of places left for Americans to fill up their cars. The United States has one gas station for every 2,500 people — more than twice the number of gas stations per person than the European Union. Gas prices have soared to an average of $6.37 in California, the highest price in the country. But the local bans aren’t expected to have an effect on the cost of gasoline. “Prohibiting construction of new gas stations is not going to do anything to impact gas prices right now,” said Anne Pernick, who works to help communities to shift away from fossil fuels with the nonprofit Stand.Earth, at the press call. “But the cost of new gas stations in terms of the health, equity, and safety of the community, as well as future stranded assets, is a bill that definitely ends up being paid by public dollars.” Proponents of the policy say that the destructive wildfires, killer heat waves, and heavy flooding that have hit the U.S. recently, fueled by climate change, are a sign that it’s time to stop expanding fossil fuel infrastructure. They also point out that gas stations can cause lasting health effects, releasing benzene — a known carcinogen — and contaminating the air, water, and soil. Shuttered gas stations make up half of the country’s 450,000 contaminated brownfield sites, according to the Environmental Protection Agency. That number is sure to grow as electric vehicles take over the road in the coming years, cutting the demand for gasoline.
A community poisoned by oil - When I visited Christina Gonzalez and her family in April, she sat slumped in her family’s worn black faux-leather couch, trying to recall which explosion had shaken her neighborhood the most. The seven decades they’ve lived in Wilmington, California, are marked by the dates of the high-octane industrial fires that have erupted at each of the five refineries that surround their home. There were so many disasters, she and her husband, Paul, both 73, told me. Was it the one in ’84? Or maybe the one in ’92 or ’96? Each fire painted the sky in different shades of black and orange. Paul believes the biggest one might have been later — closer to ’01, maybe, or even 2007 or 2009... “When that refinery blew, there were black dots everywhere,” . “All over the cars, the house, our fruit trees and patio furniture. “It was raining oil,” she said. . She had worked in the attendance office at Wilmington’s Banning High School. “I’d see it in their notes,” she said. “Gone to the doctor, asthma, breathing issues, coughing — all the time. It was kind of heartbreaking to see these kids have to suffer as teenagers, and you could see it in their faces, how they didn’t feel well.” Poor health, she says, is a painful but routine fact of life in her South Los Angeles community, an 8.5-square-mile tract surrounded by the largest concentration of oil refineries in California, as well as the third-largest oil field in the U.S., and the largest port in North America. A recent Grist investigation found that since 2020, Wilmington has experienced a dramatic rise in deaths related to Alzheimer’s, liver disease, heart disease, high blood pressure, strokes and diabetes — all conditions known to be exacerbated by high levels of pollution. Illness has spread through the Gonzalez home, too. Christina has been diagnosed with lung disease, lupus and fibromyalgia, while her daughter, Jennifer Gomez, 42, has acute lymphoblastic leukemia, a cancer of the blood cells. Jennifer’s husband has had two heart attacks, and her teenage son has “been hospitalized more times than a 90-year-old” for multiple severe respiratory infections.Eight members of the family reside in the house today. Paul’s mother, the first to move in, battled breast and skin cancer during her life. Paul himself beat testicular cancer — twice. With his daughter’s diagnosis, that’s three generations of cancer in the same household. Since the early 1960s, the family has lived on Island Avenue, just one block from the Port of Los Angeles and about one mile from the Phillips 66 Los Angeles refinery. Jennifer jokes that a sane family would have moved, but the family knows it’s not that simple.Since 2000, more than 16 million pounds of toxic chemicals, primarilyhydrogen cyanide, ammonia and hydrogen sulfide, have been spewed into Wilmington’s air from industrial sites in the city, according to the EPA. That amounts to more than 2,000 pounds of chemicals every single day. Two-thirds of the chemicals were emitted by the Phillips 66 refinery. In response to an inquiry from HCN and Grist, a representative from Phillips 66 sent an email statement, writing that its Los Angeles refineries are striving to improve operations in a “safe, reliable and environmentally responsible” way and noting that company has employed $450 million in “emissions-reduction technology” since the early 2000s. The EPA’s Toxics Release Inventory data does not include another major source of pollution in Wilmington: The twin ports of Los Angeles and Long Beach are the largest in the nation as well as the single largest fixed source of air pollution in Southern California; collectively, they are responsible for more pollution than daily emissions from 6 million cars.
Alaska oil and gas commission cancels monthly public meetings --The state commission that oversees oil field activities in Alaska is ending its long-running practice of holding monthly public meetings, drawing concerns about transparency.The Alaska Oil and Gas Conservation Commission approved the policy during a five-minute meeting on June 1, when it canceled the remaining monthly meetings this year.The meetings were a chance for for commissioners to discuss regulatory, legislative and investigative matters. They included time for public comment and a report from the agency on recent activity. Commissioners said the monthly meetings had little to no public attendance and were frequently canceled because the commission had no items on the agenda for discussion.
Utica Resources files lawsuit seeking billions of dollars if Quebec implements Bill 21 - Utica Resources Inc. filed a lawsuit this week seeking to invalidate the Quebec government’s ban on hydrocarbon exploration and exploitation, or obtain billions of dollars in compensation for what it claims is an expropriation, giving new life to critics’ claims that the legislation will hamper economic development and prove counterproductive to the intended goal of reducing greenhouse gas emissions (GHGs).In April, the Quebec legislature passed Bill 21 (not to be confused with the legislation aimed at strengthening the French language, which bears the same legislative designation). The law, which has received Royal Assent and will come into force as soon as regulations are promulgated, makes Quebec the first North American jurisdiction to ban hydrocarbon exploration and production.The legislation both bans future exploration and revokes existing licenses. Licence holders must permanently close their wells and restore their sites, but the government will only reimburse 75 per cent of the expenses incurred. Currently, 182 permits are extant, and 62 wells are subject to rehabilitation.Quebec has offered $100 million as compensation. But the offer does not account for potential revenue losses and falls far short of the $500 million the companies say they have spent exploring for oil and gas over the past 15 years. Nor does it take into account the value of the holdings themselves, which could be worth hundreds of millions of dollars, perhaps billions. “If this law is upheld, it is a direct threat to individual property rights, a massive expropriation and a wrong signal to investors around the world,” said Mario Lévesque, chief executive of Utica Resources, which controls 20 per cent of all oil and gas claims in Quebec. “I did not believe that Canada would be a place where this could happen.”
Quebec faces C$18bn suit over oil, gas ban - Utica Resources said June 22 it had filed a lawsuit in Quebec’s Superior Court seeking nullification of Bill 21, the provincial law banning oil and gas production in the province, or failing that, compensation in the amount of C$18bn (US$14bn).Citing Quebec’s Charter of Rights and Freedoms, Utica is arguing that Bill 21 constitutes an attack on Utica’s right to “the peaceful enjoyment and free disposition of its property.” Further, Utica says the expropriation under Bill 21 violates that section of the Civil Code of Quebec which says that “no owner may be compelled to transfer his ownership except by expropriation according to law for public utility and in return for a just and prior indemnity.”“We will defend our rights so that this disguised expropriation, the public utility of which does not exist, is compensated at the fair value of our properties,” Utica CEO Mario Levesque said. “A leading independent expert has concluded that Utica’s properties would generate $67bn in future profits (net value of recoverable resources in place), the equivalent of $18bn in net present value using the discount rate of the court.”Levesque said previous Quebec administrations had invited the exploration and production of the province’s oil and gas resources, which include significant reserves of shale gas in the Utica formation, the northern edge in Canada of the Marcellus shale, the largest shale gas resource in the US.“We acted in good faith, found local and foreign investors and respected all of Quebec’s regulatory requirements,” he said. “Then from one day to the next, the government changed its mind for political reasons and effectively expropriated our properties without proper prior compensation.”Bill 21, Levesque added, “is completely irresponsible and without logic” and goes against the wishes of a “significant majority” of Quebec residents. “It is bad for Quebec, our European allies who desperately need our gas and even for the environment.” Utica’s action is the second legal challenge against Bill 21, which Quebec premier Francois Legault introduced in February and which the National Assembly passed in April. In May, Questerre Energy, which holds a Utica shale gas resource in Quebec’s St Lawrence Lowlands estimated at 6 trillion ft3, filed a statement of claim against the legislation, which has not yet been enacted, pending finalisation of associated regulations.
Utica Resources files lawsuit seeking billions of dollars if Quebec implements Bill 21 - Utica Resources Inc. filed a lawsuit this week seeking to invalidate the Quebec government’s ban on hydrocarbon exploration and exploitation, or obtain billions of dollars in compensation for what it claims is an expropriation, giving new life to critics’ claims that the legislation will hamper economic development and prove counterproductive to the intended goal of reducing greenhouse gas emissions (GHGs).In April, the Quebec legislature passed Bill 21 (not to be confused with the legislation aimed at strengthening the French language, which bears the same legislative designation). The law, which has received Royal Assent and will come into force as soon as regulations are promulgated, makes Quebec the first North American jurisdiction to ban hydrocarbon exploration and production.The legislation both bans future exploration and revokes existing licenses. Licence holders must permanently close their wells and restore their sites, but the government will only reimburse 75 per cent of the expenses incurred. Currently, 182 permits are extant, and 62 wells are subject to rehabilitation.Quebec has offered $100 million as compensation. But the offer does not account for potential revenue losses and falls far short of the $500 million the companies say they have spent exploring for oil and gas over the past 15 years. Nor does it take into account the value of the holdings themselves, which could be worth hundreds of millions of dollars, perhaps billions. “If this law is upheld, it is a direct threat to individual property rights, a massive expropriation and a wrong signal to investors around the world,” said Mario Lévesque, chief executive of Utica Resources, which controls 20 per cent of all oil and gas claims in Quebec. “I did not believe that Canada would be a place where this could happen.”Nova Scotia Power fined $175K over 2018 Tufts Cove oil spill - Just over four months after a pipe leaked about 24,000 litres of oil at the Nova Scotia Power Plant in Tuft’s Cove, the utility says cleanup is complete. Alicia Draus has the latest – Dec 7, 2018 Nova Scotia’s power utility has been fined $175,000 over an oil spill at Tufts Cove four years ago. More than 24,000 litres of oil from a Nova Scotia Power generating station leaked into the Halifax Harbour in the summer of 2018.The company said the leak, which was discovered on Aug. 2 of that year, was due to a small section of a pipe that was corroded.Cleanup took more than four months.In a news release Tuesday, Environment and Climate Change Canada said Nova Scotia Power pleaded guilty to one charge under the Fisheries Act last week in provincial court.
Cut pipeline causes oil spill in Fyzabad - People from at least 12 homes in Fyzabad have been offered temporary housing as a result of Wednesday's oil leak in water courses off Gowers Well Road. The spill happened on the compound of Primera Oil and Gas Ltd, a subsidiary of Touchstone Exploration Inc. The company estimates that a maximum of 240 barrels of oil may have been spilled when vandals cut an oil transfer line. Workers from the company continued overnight cleanup work on Thursday to minimise the damage. A statement from Touchstone on Thursday afternoon said the source of the leak had been isolated and contained. It also said no injuries were reported. The company deemed the cut line an act of vandalism, and said it had notified all relevant authorities, including the police. Residents of the area said they began smelling the fumes on Wednesday evening, then spotted oil in the drains and other water courses and land. By that night, company representatives had told them about the spill and offered them food. The company also provided housing at a building at Delhi Road. Dial Samaroo said, "I did not take up the offer. I stayed home. He estimated about 40 people were affected. Samaroo said he saw oil in his drain while a cow was grazing in bush across the road. He said he alerted the owner, who removed the animal. He added, "Someone sabotaged the company. It is not the company's fault." Other residents said the leak was the latest incident in the area. Less than two weeks ago, someone set a gauge hut on fire. Nearby, someone spray-painted "Ask Kern where my money for my pipeline" on one of the company's tanks. No one has been held in connection with either incident. Another affected resident, Anand Mahabir, said he lost a goat and two kids, as the animals were grazing, and the grass became contaminated. The family also lost several ducks and common fowls. He said his two children were complaining about the fumes, but he did not get a chance on Thursday to take up the company's offer of a free medical checkup. The family spent the night at the building at Delhi Road. "We did not know what was going on. Last night was bad. "Right now, its is breezy, so it is not as bad. We are seeing people cleaning up. They worked throughout the night," a relative said. A neighbour, Marlene Ali, 69, said the same thing. "No one from the company talked to us. No one came and dropped off food for us. Workers are cleaning up. The smell is bad," she said.
Oil Majors Warn UK’s Windfall Tax Will Hurt North Sea Investment --Representatives of some of the biggest oil and gas companies operating in the North Sea on Thursday warned the UK’s Chancellor of the Exchequer Rishi Sunak that the new windfall tax on energy profits would undermine the government’s efforts to attract investment, industry body Offshore Energies UK said.Oil companies operating in the North Sea, including Shell, BP, and Equinor, warned the Chancellor of the Exchequer during a meeting today that a windfall tax could slow investments in new oil and gas production in the basin, Reuters energy reporter Ron Bousso reports.Moreover, David Cairns, representing Equinor in the meeting, told Sunak that the Norway-based major company has to decide on a major new oilfield development in 2023, but it “no longer knows if the UK is where we want to put our money,” Bousso reports, citing people who attended the meeting. Sunak met with 20 business leaders from the UK’s oil and gas industry in Aberdeen, the home of the UK North Sea oil and gas sector, and was told during a “candid and constructive” meeting that the industry was “deeply concerned” by the new tax rate, Offshore Energies UK (OEUK) said.Following months of rumors and indecision, the UK government announced at the end of May a 25% Energy Profits Levy, commonly referred to as a “windfall tax”, as part of a package to ease the cost-of-living crisis stemming from huge rises in household energy bills.The move has long been opposed by the industry, which argued that a windfall tax would add uncertainty to the UK tax regime and hit new investments in the UK North Sea at a time when the UK grapples with reducing reliance on foreign imports of oil and gas.“The new rate has deeply concerned the industry, not only because it is so high but also because of the speed with which it was imposed. This sudden change in tax policy, Sunak was told, risks undermining the UK’s hard-won reputation for fiscal stability – a key factor for companies considering new investments,” Offshore Energies UK said in a statement today. The UK government has yet to finalize the details of the windfall tax proposal, which is open for public consultation until June 28.
Diesel Price Shock Imminent As Reserves Drop, Refining Lags - Global diesel and gasoline markets are witnessing blowout crack spreads in the $50-60 per barrel (bbl) range, reflecting a clear lag in the refining system to respond effectively and decide between supplying diesel or gasoline, Rystad says. The precarious situation is driven by inventory stocks across the globe being at their lowest levels historically and, therefore, unable to provide the necessary shock absorbers. According to Rystad, the loss of Russian refining owing to operational outages and product containment challenges has caused a diesel/gasoline hole greater than 1 million barrels per day (bpd) in Europe that is not easy to plug. “Diesel is the lifeblood of the global economy, essential to vital sectors such as agriculture, construction, and transportation – its price impacts almost all supply chains and goods. Governments face tough decisions. They can assist consumers by dropping taxes on diesel, but this will likely only increase demand, which may support the overall economy but will worsen the existing tight supply situation. “If supply does not improve, governments will be forced to enact emergency plans to limit sales to consumers to ensure essential sectors are kept going,” says Per Magnus Nysveen, Head of Analysis at Rystad Energy On the demand side, the recovery is resilient as residual Covid-related restrictions are being removed. The US Centers for Disease Control and Prevention recommended removing all Covid testing requirements for incoming flights is one such clear indicator. On the supply side, Russia’s invasion of Ukraine has disrupted product flows and crude flows to the European market at a time when the rest of the world has limited ways in which to respond. The loss of crude supply has hindered the shrinking European refining sector’s ability to run at high utilization rates and has accelerated a downward trend in Europe which has lost 2 million bpd of crude refining since its peak capacity of 17.5 million bpd in 2005. The US has been following a similar trend, losing between 1 million and 1.5 million bpd of refining capacity in the last 3-4 years. The move to phase out Hydrofluoric Acid Alkylation technology and lower availability of imported vacuum gas oil/residues has dented the US refining sector’s ability to increase gasoline production.
Yellen Says ‘Stay Tuned’ for Word on Russian Oil Price-Cap Plan -- Treasury Secretary Janet Yellen said talks are continuing on how the US and its allies might cap the price of Russian oil exports, possibly through a plan that offers exceptions to the European ban on insuring Russian oil shipments. “We are continuing to have productive conversations, today and with our partners and allies around the world with how to further restrict energy revenues to Russia while preventing spillover effects to the global economy,” Yellen said during a press conference in Toronto alongside Canadian Finance Minister Chrystia Freeland. “We are talking about price caps or a price exception that would enhance and strengthen recent and proposed energy restrictions by Europe, the United States, the UK and others,” she said. The US and Canada have banned imports of Russian oil while the European Union has agreed to prohibit seaborne imports of Russian crude in six months. Atop that, the EU has worked toward coordinating with some Group of Seven members, including the UK, on a ban on the insurance services needed to ship Russian oil anywhere in the world. About 95% of the world’s tanker liability coverage is arranged through a London-based insurance organization called the International Group of P&I Clubs that has to heed European law. Asked to explain further her “price exception” comment, Yellen said it would be “essentially a price cap” and act as an exception to the European insurance ban. When asked if it would be ready for G-7 leaders who meet June 26-28 in Germany, she said, “Stay tuned,” adding, “we’re really actively working on this with our partners.” Since Russia’s invasion of Ukraine in February, global oil prices have risen dramatically, exacerbating inflation already whipped high during the pandemic by supply-chain disruptions and, especially in the US, the fiscal response to the pandemic. The national average price for a gallon of gasoline in the US recently topped $5. On a related topic, Yellen rejected the idea that restarting the Keystone XL pipeline project would help increase supplies of oil and lower prices because it would take years to accomplish, though she added the decision is not in her hand. President Joe Biden, who campaigned on an ambitious climate platform, canceled the Keystone XL pipeline -- which would would run between the US and Canada -- hours after taking office. The project was under construction when Biden revoked its presidential permit. It would have transported more than 800,000 barrels of oil a day.
Germany Rations Gas Amid Russian Cuts, Mandates Return To Coal For Electricity Production --German Vice Chancellor and Economy Minister Robert Habeck said Sunday that the country will limit the use of natural gas for electricity production amid concerns about possible shortages caused by a cut in supplies from Russia. As a member of the environmentalist Green Party, Habeck pushed through legislation in April to raise Germany’s energy target to 80% renewables. He is also an opponent of nuclear energy. Habeck said that Germany will try to compensate for the move by increasing the burning of coal, a more polluting fossil fuel.“That’s bitter, but it’s simply necessary in this situation to lower gas usage,”The decision comes just days after Russian gas company Gazprom announced that it was sharply reducing supplies through the Nord Stream 1 pipeline for technical reasons, but which Habeck said appeared to be politically motivated.“It’s obvious that (Russian President Vladimir) Putin’s strategy is to unsettle us by driving up the price and dividing us,” Habeck said. “We won’t let that happen.”Habeck's Press Release on Reducing Natural Gas Consumption.“The situation on the gas market has deteriorated in recent days. The missing quantities can still be replaced, and the gas storage tanks are still being filled, albeit at high prices. Security of supply is currently guaranteed. But the situation is serious. We are therefore further strengthening precautions and taking additional measures to reduce gas consumption. This means that gas consumption must continue to fall, so more gas must be stored in storage, otherwise things will get really tight in winter. We will now take the next steps. For months we have been in the process of sharpening tools, creating new ones and removing existing obstacles. We are accelerating the expansion of renewable energies in an unprecedented way, we are pushing through the storage of gas and driving the expansion of LNG terminals and energy efficiency measures. The urgency of these tasks determines our ongoing work. Now we're going to pull out and use another set of tools. We will reduce gas consumption in the electricity sector and in industry and force storage tanks to be filled. Depending on the situation, we will take further measures."“With the law, we are setting up a gas replacement reserve on demand. And I can already say: We will call off the gas replacement reserve as soon as the law comes into force. That means, to be honest, more coal-fired power plants for a transitional period. That's bitter, but in this situation it's almost necessary to reduce gas consumption. We must and we will do everything we can to store as much gas as possible in summer and autumn. The gas storage tanks must be full in winter. That has top priority," said Habeck.Germany has not yet had a port where liquid gas can be landed. However, this is necessary in order to strengthen the gas supply from non-Russian sources and thus become independent of Russian imports. The federal government is therefore pushing ahead with the construction of so-called floating LNG terminals. First, it has secured four special ships, so-called FSRU , on which liquid gas is converted back into gas. Secondly, with on LNG Acceleration Act, it has created the legal prerequisites to accelerate the construction of the necessary connections on land so that two of the four FSRU ships can go into operation in winter and thus LNG can be fed into the German gas supply network. Everyone involved is working hard on this.
‘The situation is serious’: Germany plans to fire up coal plants as Russia throttles gas supplies - Germany has said the deteriorating gas market situation means Europe's largest economy must limit the use of natural gas for electricity production and burn more coal for a "transitional period." Economy Minister Robert Habeck on Sunday warned that the situation is going to be "really tight in winter" without precautionary measures to prevent a supply shortage. As a result, Germany will seek to compensate for a cut in Russian gas supplies by increasing the burning of coal — the most carbon-intensive fossil fuel in terms of emissions and therefore the most important target for replacement in the transition toward renewable alternatives. "That's bitter, but it's almost necessary in this situation to reduce gas consumption. We must and we will do everything we can to store as much gas as possible in summer and autumn," the Green Party's Habeck said in a statement, according to a translation. "The gas storage tanks must be full in winter. That has top priority," he added. That comes shortly after an ominous warning from Russia's state-backed energy giant Gazprom exacerbated fears of a full supply disruption to the European Union. Gazprom said last week that it had further limited supplies via the Nord Stream 1 pipeline that runs from Russia to Germany under the Baltic Sea. German Economy Minister Robert Habeck said the "tense situation and high prices are a direct consequence of Putin's war of aggression against Ukraine." Picture Alliance | Picture Alliance | Getty Images Gazprom cited a technical problem for the supply cut, saying the issue stemmed from the delayed return of equipment serviced by Germany's Siemens Energy in Canada. Habeck has rejected that claim, saying the move was politically motivated and designed to unsettle the region and ramp up gas prices. It's not yet known when or if Nord Stream 1 gas flows will return to normal levels.In fiery comments likely to have sent alarm bells ringing throughout European capitals, Gazprom CEO Alexei Miller said Thursday that Russia will play by its own rules after the firm halved supplies to Germany. "Our product, our rules. We don't play by rules we didn't create," Miller said during a panel session at the St. Petersburg International Economic Forum, according to The Moscow Times. Italy, Austria and Slovakia have also reported supply reductions from Russia.
Netherlands activates energy crisis plan, removes cap on coal plants - The Netherlands on Monday said it would activate the "early warning" phase of an energy crisis plan and lifted a cap on production by coal-fired power plants as it seeks to reduce reliance on Russian gas in the wake of the war in Ukraine. The Ukraine conflict has pushed several European countries to seek alternatives to Russian oil and gas. The Netherlands, which imported as much as 15 per cent of its gas from Russia, is already buying LNG and cutting back gas consumption, but still may face a shortage this winter. "With these measures, less money will flow to Putin's war chest," Dutch Energy Minister Rob Jetten said at a news conference in The Hague to announce the moves. Germany's economy ministry has taken similar action to lift caps on coal energy production. The Netherlands' removal of the cap on coal-fired energy production is expected to save 2 billion cubic meters (bcm) of gas use per year. The country had capped production at 35 per cent of capacity at its coal-fired plants to limit carbon dioxide emissions. Jetten said the Netherlands would still meet 2030 climate goals. The Dutch government also announced plans to produce 2.8 billion bcm of gas from the Groningen gas field in the year ending October 2023. That is down from 4.5 bcm in the current production year, but previously the government had indicated close to zero production from Groningen in 2023. The Netherlands has been winding down production at the field for years due to earthquakes it triggers, but has left open the possibility that production could be increased if households were facing a physical shortage. The "early warning" phase of the country's three-phase crisis plan, alerts users, regulators and governments to a concrete threat of a gas shortage. The plan also includes "alarm" and "emergency" phases, though it remains unclear how industrial users' gas would be rationed in case of physical shortages. As of Monday, Dutch gas storage facilities were about 48 per cent full. The government announced a subsidy in May to encourage private companies to fill a key storage at Bergermeer. Its reserves have been filling up by several percentage points per week -- not quite quickly enough to meet a target of having them 80 per cent filled before winter.
Ukraine war: Europe turns to coal as Russia squeezes gas supplies -Reduced flows of Russian gas and the specter of a full supply disruption have prompted some European governments to reconsider coal, one of the dirtiest and most polluting ways of producing energy.It has stoked fears that the energy crisis could see Europe delay its transition away from fossil fuels, although policymakers insist the burning of coal is a necessary stopgap to help prevent a winter supply shortage.Coal is the most carbon-intensive fossil fuel in terms of emissions and therefore the most important target for replacement in the pivot to alternative energy sources.However, Germany, Italy, Austria and the Netherlands have all indicated that coal-fired plants could be used to compensate for a cut in Russian gas supplies.Russia's state-backed energy giant Gazprom has cut capacity via the Nord Stream 1 pipeline that runs to Germany under the Baltic Sea, citing the delayed return of equipment serviced by Germany's Siemens Energy in Canada.It's not clear when — or if — Nord Stream 1 gas flows will return to normal levels.German Economy Minister Robert Habeck has described the government's decision to limit the use of natural gas and burn more coal as a "bitter" one but said the country must do everything it can to store as much gas as possible ahead of winter."The gas storage tanks must be full in winter. That has top priority," Habeck said in a statement, according to a translation.The Netherlands on Monday said it would activate an "early warning" phase of an energy crisis plan and remove a production cap at coal-fired plants to preserve gas, according to Reuters.Italy and Austria have also reported plans to consider burning more coal to offset a sharp drop in Russian gas supplies.
Russia is squeezing Europe’s gas supplies, sparking a bitter and reluctant return to coal - Reduced flows of Russian gas and the specter of a full supply disruption have prompted some European governments to reconsider coal, one of the dirtiest and most polluting ways of producing energy. It has stoked fears that the energy crisis could see Europe delay its transition away from fossil fuels, although policymakers insist the burning of coal is a necessary stopgap to help prevent a winter supply shortage. Coal is the most carbon-intensive fossil fuel in terms of emissions and therefore the most important target for replacement in the pivot to alternative energy sources. However, Germany, Italy, Austria and the Netherlands have all indicated that coal-fired plants could be used to compensate for a cut in Russian gas supplies. Russia's state-backed energy giant Gazprom has cut capacity via the Nord Stream 1 pipeline that runs to Germany under the Baltic Sea, citing the delayed return of equipment serviced by Germany's Siemens Energy in Canada. It's not clear when — or if — Nord Stream 1 gas flows will return to normal levels. The critical thing now is that they ensure that any new measures are temporary, and that we are on the pathway to fully exit coal in Europe by 2030 at the latest. German Economy Minister Robert Habeck has described the government's decision to limit the use of natural gas and burn more coal as a "bitter" one but said the country must do everything it can to store as much gas as possible ahead of winter. "The gas storage tanks must be full in winter. That has top priority," Habeck said in a statement, according to a translation. The Netherlands on Monday said it would activate an "early warning" phase of an energy crisis plan and remove a production cap at coal-fired plants to preserve gas, according to Reuters. Italy and Austria have also reported plans to consider burning more coal to offset a sharp drop in Russian gas supplies. "The worst-case scenario is energy rationing. That would be that non-essential industries are asked at the first stage to reduce consumption in return for compensation. That's a plan the government in Germany published over the weekend," Gloystein said. "The next step would be to ration industries and households and ask them to consume much less and that is something in Europe that most people have never experienced," he continued. "That in winter means people will get cold and, in some areas, if it is a cold winter, some people will die and that's politically really toxic and of course, it is a nasty situation to be in." European governments are currently scrambling to fill underground storage with natural gas supplies to provide households with enough fuel to keep the lights on and homes warm during winter.
Double Whammy Hits European Gas Markets Last week, a double whammy hit European gas markets, according to Rystad Energy analyst Zongqiang Luo. “First, it was confirmed that the Freeport LNG facility will be offline for 90 days before gradually ramping up LNG production by the end of the year,” Luo said in a market note sent to Rigzone on Tuesday, adding that the facility has been exporting most of its volumes to LNG thirsty Europe over the last months. “Secondly, and more seriously, what hit the European gas market even harder last week was that Nord Stream 1 reported that it will reduce exports from Russia to Europe from 167 million cubic meters (mcm) per day to 67 mcm per day,” Luo added. The news caused the TTF gas prices to surge from EUR 83 ($87.7) per MWh on Monday 13 to EUR 117 ($123.7) on June 17, Luo highlighted. “Germany has responded by introducing additional measures announced by the Federal Ministry for Economic Affairs and Climate Action (BMWK) on 19 June, which includes planned reductions in electricity use, introducing a gas auction model to reduce gas usage in the industrial sector in the hope that these moves will strengthen gas storage in Germany,” Luo said. “Germany also plans to partially shift to coal fired plants for power generation to meet electricity need, later similar decisions were proposed by Netherland and Australia that more coal should be burned to secure the energy demand in an emergency or if gas supplies from Russia are further restricted,” Luo added. “For Spain and Portugal, a one year period gas price cap had been put in force since 14 June with a total subsidy of EUR 8.4 billion [$8.8 billion] (EUR 6.3 billion [$6.6 billion] for Spain and EUR 2.1 billion [$2.2 billion] for Portugal) to lower the input costs of power plants and benefit end-users,” Luo continued. Looking at the U.S., Luo noted that Henry Hub gas prices slumped below $7 per MMBtu on the last trading day before the three-day holiday break, settling at $6.944 per MMBtu “following a huge drop on 14 June”. “With the higher than normal temperature, gas for power generation has reached the level of 5.29 TWh for the U.S. Lower 48 on 15 June and this indicates strong cooling demand in the power sector for the coming days,” Luo said. “EIA reported a storage level of 2095 billion cubic feet (bcf) on 16 June and a weekly net change of 92 bcf addition in underground storage. But the current storage is still 14 percent lower than the year ago level and 13 percent lower than the five-year average,” Luo added. “Therefore, there is little reason to believe that the U.S. gas price would step into a downward trend and the U.S. gas market is expected to remain tight with a blistering summer around the corner and relatively low storage levels,” Luo continued.
IEA: Europe Should Prepare For Complete Russian Gas Shutdown -- Europe should prepare for a complete suspension of Russian natural gas deliveries, the head of the International Energy Agency told the Financial Times in an interview.“Europe should be ready in case Russian gas is completely cut off,” Fatin Birol told the FT. “The nearer we are coming to winter, the more we understand Russia’s intentions,” he added. “I believe the cuts are geared towards avoiding Europe filling storage, and increasing Russia’s leverage in the winter months.”As a means of countering the worst effects of such a scenario, Birol advised European governments to keep nuclear power stations running and take other contingency measures, too. These other contingency measures seem to focus on demand.“I believe there will be more and deeper demand measures [taken by governments in Europe] as winter approaches,” Birol told the FT, adding gas rationing was a distinct possibility in case of further cuts to Russian gas supplies.In the past three months, Russia has cut off supply to several European countries that refused to pay for gas in rubles. It has also substantially reduced the flow along the Nord Stream, effectively cutting off supply to France and reducing flows to Germany by some 60 percent.Gazprom and its equipment maintenance service provider Siemens Energy have blamed the reduction on a turbine delivery delay resulting from new Canadian sanctions against Moscow. Germany has blamed Gazprom.The European Union’s largest economy is facing a certain recession in case Russian gas flows stop completely, an industry body warned this week. BDI cut its growth projection for Germany to 1.5 percent from 3.5 percent for this year and said that if Russia cuts off the gas, the economy will inevitably slip into a recession. Meanwhile, to make up for lost gas supply, Germany, Austria, and the Netherlands are restarting coal power plants. The IEA’s Birol defended the move in his FT interview, saying the restart was temporary and whatever the increase in emissions, it would be offset by future renewable energy capacity.
Egypt, US Chevron agree on East Mediterranean gas exploration, transfer – Middle East Monitor - The state-owned Egyptian Natural Gas Holding Company (EGAS) and the United States Chevron Corporation have signed a memorandum of understanding (MoU) to cooperate in activities of transporting, importing and liquefying the exports of East Mediterranean gas, the country's petroleum ministry announced yesterday.The ministry added in a statement that Chevron was planning to "drill the first exploration well in its concession area in the Mediterranean Sea next September." On its part, Chevron recently signed three agreements last year with its partner, Egyptian Tharwa Petroleum, to explore for natural gas in three regions in the Mediterranean, including North Sidi Barani, Narges offshore, and North El Dabaa.
EU signs energy deal with Egypt and Israel to wean itself off Russian gas – As Europe scrambles to wean itself off Russian oil and gas and tries to confront Russia for its use of energy to blackmail European countries, the EU signed in Cairo last Wednesday a Memorandum of Understanding (MoU) with Egypt and Israel, aimed at using the energy potential of Eastern Mediterranean to cover the shortfall in energy supplies to Europe. It should be noted that in the wake of the war in Ukraine, Gazprom- the Russian energy giant-has halted gas flows to Poland and Bulgaria and has drastically reduced supplies to Germany, Italy and France. The preliminary deal reached in Cairo, which was described as “a historic agreement” was signed by Egypt’s Minister of Petroleum, Tarek El Molla, Israel’s Energy Minister, Karine Elharrar, and the EU’s Energy Commissioner, Kadri Simson. Ursula von der Leyen, the President of the EU Commission, who was present at the signing ceremony, said the MoU was “a big step forward in the energy supply to Europe that would put an end to EU’s dependence on Russian fossil fuel”, while Elharrar pointed out that Egypt and Israel make a commitment to share their natural gas with Europe to help with the energy crisis. For his part, Egypt’s Petroleum Minister Tarek el-Molla described the deal as “an important milestone for cooperation between Egypt, Israel, and the EU. “The move is a benchmark that opens the road for concluding more deals in the future,” El-Molla said. In a statement, the European Union explained that the agreement envisages that natural gas from Israel, Egypt and other sources in the Eastern Mediterranean region will be shipped to Europe via Egypt’s liquefied natural gas export infrastructure. This would be done in line with “long-term decarbonization objectives” and would be based on market-related prices. Furthermore, the EU declared that it would also help Egypt and Israel increase gas production and exploration in their respective territorial waters. It also pledged relief worth USD 104 million to Egypt, which is facing acute grain shortages due to the Ukraine war. The Memorandum signed envisages that gas from Israel will be brought via a pipeline to two LNG terminals on Egypt’s Mediterranean coast, where significant quantities will be liquefied and transported on tankers to Europe, increasing in this way Egyptian LNG exports. As Eni, the Italian Energy Company has developed a giant gas discovery off Egypt, it is expected that the volume of natural gas that will be exported to Europe will increase significantly. Israeli gas will be brought to Egypt’s two liquefaction plants – which are currently not operating at full capacity- and will increase the gas volumes to be exported or will free up for export gas currently used in Egypt for domestic consumption. More significantly it could prove a major step in realizing the long-discussed potential of the Eastern Mediterranean as an important energy supplier for European industries. However, a significant increase in gas exports from Israel via Egypt would require major long-term infrastructure investments, particularly as other countries like Cyprus or Lebanon which are believed to have commercial quantities of natural gas may join the project.
Lebanon signs deal with Egypt to import natural gas via Syria - - Lebanon has signed a deal to import natural gas from Egypt via Syria to boost power supply in the crisis-stricken country, AFP reported on Tuesday. Lebanese Energy Minister Walid Fayad, Egyptian and Syrian officials signed the deal in Beirut earlier today. "The importance of this deal... stems from the fact that it will secure an additional four hours of electricity per day following its implementation," Fayad told a press conference following the signing event. In September 2021, Egypt agreed to supply Lebanon with natural gas for its power plants through Jordan and Syria in a revival of the Arab Gas Pipeline to help Lebanon in its longtime crippling electricity problem amid the country's worst-ever financial crisis. The Egyptian gas is expected to activate gas-operated power plants that have been non-functional for 11 years. In statements to Lebanese Al-Joumhouria newspaper on Monday, Fayad said the agreement stipulates that 650 million cubic metres (22.95 billion cubic feet) of gas will be exported to Lebanon through the pipeline annually to the Deir Ammar power station in the north. This is expected to lead to the production of 450 megawatts of electricity, Fayad added. The deal is a part of wider efforts – which include a separate electricity deal with Jordan – to boost supply by eight to 10 hours a day in the coming months, up from just two currently. Two years into Lebanon's economic meltdown, the cash-strapped state is struggling to purchase fuel for its power stations. With mains electricity effectively non-existent, many rely on private generators, but prices have increased after the government lifted fuel subsidies as global fuel prices soared. Lebanon's crumbling electricity sector has cost the country more than $40 billion since the end of its 1975-1990 civil war. Successive governments have failed to cut down on losses, repair crumbling infrastructure or even collect electricity bills regularly across the country.
Iraq Joins Liquefied Gas Market - Iraq has entered the market for liquefied petroleum gas, with its first shipment ever taking place this week.In a statement, the Iraqi Oil Ministry said that first shipment was an achievement and quoted the managing director of Basra Gas Company, Malcolm Mayes, as saying it was a "historic moment".A report by an Iraqi media earlier this week inaccurately stated that Iraq had started exporting LNG.Liquefied petroleum gas is used for cooking in developing nations as well as for powering internal combustion engine vehicles."Today, we can load and export compressed and semi-cooled liquefied gas," said Mayes this week, as quoted by Shafaq. He added that "this step allows us to triple our exports globally via tankers. We will also gain access to many global markets that use the semi-cooled liquefied gas exclusively."Iraq has been busy trying to make the most of its hydrocarbon reserves, including associated gas, a by-product of oil extraction, both for the domestic market and for international markets.The country is now eager to develop its natural gas reserves in addition to oil, in a bid to reduce its dependence on Iranian imports. Recently, as part of these efforts, the Iraqi government sealed a deal with a subsidiary of China's CNPC for the construction of a gas processing plant in Naserya.Reducing gas flaring—the burning of associated gas at oilfields—is also among Iraq's energy industry priorities. Capturing the gas, liquefying it, and exporting it appears to be a viable avenue of development."Our strategic plan for the future is to maximise semi-refrigeration exports and eventually participate in the global LPG-trading market when we start exporting fully refrigerated LPG," BGC's Mayes also said this week, as quoted by The National.
Gas production at South Pars Phase 11 to start in Oct. - - Speaking to reporters on Tuesday afternoon, the Iranian oil minister briefed them on the latest situation of gas production in South Pars and the work on the development of the Phase 11 of the giant gas field in the Persian Gulf which is shared with Qatar. "Although the last and most uncertain phase of South Pars was phase 11, and the French Total company, despite having studied it, stopped work on it and gave up the project due to sanctions, during the President Raeisi's government and at the start of the new Oil Ministry, the issue of extracting from the phase 11 was put on agenda and We have made the beginning of the implementation of phase 11 our priority, and with the measures and initiatives taken by our colleagues in the ministry, I promise you that we will start the production at phase 11 in October," Owji said. "It is expected that 670 million cubic feet of gas per day will be extracted from South Pars Phase 11 and for this purpose we have used the capacity and capablities of domestic companies," he added.
Oil giants to build world's largest floating wind farm in Norway - A consortium of oil giants headed by Equinor and including TotalEnergies, Petoro, Shell and ConocoPhillips are set to commence a feasibility study into what could be the world's largest floating offshore wind farm, 65km off the coast of Bergen, Norway. The Trollvind farm could produce as much as 4.3TWh, with an installed capacity of 1GW, and could supply much of the power needed to run the Troll and Oseberg offshore fields, which it forms a part of, through an onshore connection. Read more: Poland celebrates its "golden decade" of solar power The Bergen area already provides for several of Equinor and its partners' wind farms, but it requires more power on its energy grid, which is the reason for this new study. The current plan is that the partners will buy as much energy for the site as it can produce at a cheap price to make the project possible, in the hopes that, once set up, the project can aid in the rapid electrification of oil and gas - hoping to lower the sector's emissions while energy firms look for alternate forms of generation. Equinor CEO Anders Opedal hopes that by ensuring oil and gas operates at lower emissions it can help Norway's energy sector remain competitive as the world looks to shift away from fossil fuels. He also belies it could make generation more consistent as electrification adds many optimisations. "Trollvind is a concept where renewable energy works to facilitate several objectives; helping cut emissions through electrification, delivering power to an area where shortages have already created challenges for new industrial development, and Norway maintains its position as a leader in the industrialisation of floating offshore wind", he said.
Russia Demands Lithuania Lift "Openly Hostile" Blockade; Panic Buying Ensues --The Russian Foreign Ministry has responded to Lithuania's partial blockade of Kaliningrad, writing in a statement that they consider the "provocative measures" to be "openly hostile" and warning that the Kremlin may take action to "protect its national interests." Kaliningrad is sandwiched between the EU and NATO members Poland and Lithuania. Supplies from Russia are delivered via rail and gas pipelines through Lithuania - which announced last week that it was banning the rail transit of goods subject to EU sanctions, which include coal, advanced technology, metals and construction materials. "If in the near future cargo transit between the Kaliningrad region and the rest of the territory of the Russian Federation through Lithuania is not restored in full, then Russia reserves the right to take actions to protect its national interests," the statement reads. They have demanded that Lithuania immediately lift the ban on a number of goods to the Kaliningrad region. Earlier Monday, the Kremlin called Lithuania's announcement "unprecedented" and "in violation of everything there is." "The situation is more than serious and it requires a very deep analysis before formulating any measures and decisions," said Kremlin spokesman Dmitry Peskov in a statement to the press. Lithuanian Foreign Minister Gabrielius Landsbergis said they were simply complying with sanctions imposed by the EU, and that they were taken after "consultation with the European Commission and under its guidelines." "Sanctioned goods (will) no longer be allowed to transit Lithuanian territory," he added.
NATO’s Baltic blockade opens new front in war against Russia - On Monday, the Baltic state of Lithuania, a member of NATO, imposed an effective blockade on Russia, preventing the transportation of many goods, including steel and coal, to its external enclave of Kaliningrad, which is separated from the rest of Russia by Estonia, Latvia and Lithuania. Traditionally, the imposition of a blockade has been seen as an act of war. With this reckless provocation, the United States and its NATO allies are seeking to goad Russia into a military attack on NATO territory, which would lead to the invocation of Article V of the NATO Charter and a full-scale war with Russia. Faced with a series of military reversals on the ground in Ukraine, the US, NATO and the European powers are seeking to open a new, northern front in the war. Lithuanian officials implied that the decision to implement the blockade against Russia was taken in close consultation with other NATO members and Washington. “It is not Lithuania doing anything, it is European sanctions that started working,” Lithuanian Foreign Minister Gabrielius Landsbergis said. Responding to the blockade, Russia’s foreign ministry bluntly warned, “If cargo transit between the Kaliningrad region and the rest of the Russian Federation via Lithuania is not fully restored in the near future, then Russia reserves the right to take actions to protect its national interests.” A sharp warning must be made. The United States and European powers, each facing a raging economic, social, and political crisis and fearing a growing social movement of the working class, are recklessly escalating a war that threatens the use of nuclear weapons. The imposition of a blockade against Russia by a NATO member comes just days after a series of highly provocative statements by European military and civilian leaders. In an internal message to military service members, Sir Patrick Sanders, the incoming chief of the British general staff, declared, “There is now a burning imperative to forge an Army capable of fighting alongside our allies and defeating Russia in battle.” In a chilling allusion to the First and Second World Wars, he concluded, “We are the generation that must prepare the Army to fight in Europe once again.” Speaking to the German newspaper Bild am Sonntag, NATO Secretary-General Jens Stoltenberg said, “We must not cease to support Ukraine... we need to prepare for the fact that it could take years.” Writing Saturday in the Times of London, UK Prime Minister Boris Johnson called on NATO to “finish this war on the terms that President Zelensky has laid out,” that is, to reconquer the Donbas and Crimea, which Russia sees as part of its territory. In yet another blood-curdling threat, Ingo Gerhartz, head of the Luftwaffe (German Air Force), declared that Germany must be prepared to use nuclear weapons, saying, “We need both the means and the political will to implement nuclear deterrence.” Already, hundreds of Ukrainian troops are dying every single day. What would it mean for the UK and other European countries to fight “alongside” Ukrainian forces in a war against Russia and for this conflict to last “years”? European officials are describing a war spanning the entirety of the European continent, with deaths in the hundreds of thousands or millions. All of Europe is to be transformed into a massive killing field. /p>
Lithuania’s Step Too Far — Blockade of Kaliningrad Draws No Support from US, UK, EU, NATO, as Russia Prepares “Practical Steps”, “No Diplomacy” - The action the Lithuanian government implemented over the weekend to stop Russian trains carrying sanctioned cargos into Kaliningrad is regarded in Moscow as a long anticipated move, prompted among Lithuanian officials by the British government. The initial Lithuanian embargo action has been followed by a second one this week extending the blockade to trucks and road transport. Neither action has been publicly announced by the Lithuanian government.The first news came from Anton Alikhanov, the governor of the Russian oblast of Kaliningrad, following a notice sent to him by Lithuanian officials. That notice has not been published.Lithuanian president Gitanas Nauseda (lead image) has said nothing.Lithuanian Prime Minister Ingrida Simonyte announced through the British Broadcasting Corporation that the blockade was not a blockade because only some cargoes were halted, and because “Lithuania is complying with the sanctions imposed by the European Union on Russia for its aggression and war against Ukraine ” . She also told the British state radio “it was important not to overreact”.She tweeted: “Any talk of a blockade of Kaliningrad is a lie. Lithuania is complying with the sanctions imposed by the EU on Russia for its aggression and war against Ukraine. The sanctions were agreed by all the EU member states on March 15…. Passenger transit is also taking place, under a special agreement by the EU, RU, & LT. Steel and ferrous metal products account for only around 1% of the total rail freight to Kaliningrad via LT.”In the three days which have followed the Lithuanian action, the US and British Governments, the European Union (EU), and the North Atlantic Treaty Organization (NATO) have not supported the Lithuanian blockade.The Russian Security Council met on Wednesday morning, but issued no statement on Lithuania. The Secretary of the Council, Nikolai Patrushev, who was in Kaliningrad on Tuesday, had announced there that the “consequences will have a serious negative impact on the population of Lithuania.”Yesterday, at the same time as President Vladimir Putin was chairing the Security Council meeting, the Russian Foreign Ministry announced it is delaying “concrete measures” in reaction: “The measures will not be diplomatic, but practical, they are now being worked out in an interdepartmental format, We are not talking about this not because we are hiding something, but because the process of their coordination and elaboration is underway. I would like to emphasize once again (the third time for today’s briefing): we have told the European Union and Lithuania about the need to change the steps they have taken. Perhaps something from that side will be changed, and, accordingly, our reaction will be different.”Here is a compilation of the official documents.
Moscow and NATO could be about to clash over Russia's European exclave Kaliningrad -A new front in tensions between Russia and NATO has opened up after one of the Western military alliance's members, Lithuania, banned the transit of some goods coming from Russia to its exclave Kaliningrad on the Baltic Sea. Russia has vowed to retaliate over what it described as the "hostile actions" of Lithuania, warning of "serious" consequences, while NATO members have reiterated their support for the country. Here's a brief guide to what's going on, and why it matters as the Russia-Ukraine conflict rumbles on in the background. Lithuania said last week that it would ban the transit of some EU-sanctioned goods coming from Russia across its territory to the Russian exclave of Kaliningrad. The government said the blockade would apply to all EU-sanctioned goods coming from the mainland via rail, effectively blocking the transit of metals, coal, construction materials and high-technology products to the Russian sea port. Lithuania said that its decision was taken after consultation with the European Commission, the EU's executive arm, and that it's enforcing sanctions on Russia that were imposed following the unprovoked invasion of Ukraine on Feb. 24. Russia responded to Lithuania, a former Soviet republic, by calling the move an "unprecedented" and "hostile" act, with its Foreign Ministry issuing a statement Tuesday in which it said "if in the near future cargo transit between the Kaliningrad region and the rest of the territory of the Russian Federation through Lithuania is not restored in full, then Russia reserves the right to take actions to protect its national interests." Kaliningrad is a small Russian exclave located on the Baltic Sea and sandwiched between Lithuania and Poland. It is home to over 900,000 people and covers an area of around 160 square miles. Once part of the German empire, it was seized by Soviet troops from Nazi Germany in 1945 and has remained in Russian hands ever since, becoming an important seaport for Russia allowing it straightforward access to the Baltic Sea. Indeed, the Kaliningrad Oblast (or province) acts as the headquarters of Russia's Baltic Fleet. The fleet holds regular military drills in the Baltic Sea, having completed 10 days of exercises on June 19 that involved 60 warships and 10,000 military personnel. A disused border crossing point to Russia is seen on April 15, 2022 in Nida, Lithuania. Russia's Kaliningrad exclave, on the shore of the Baltic Sea, is sandwiched between NATO members Lithuania and Poland and is the Baltic coasts most strategic transport and trade port. Paulius Peleckis | Getty Images News | Getty Images Lithuania's ban on the transit of some EU-sanctioned goods, announced last Friday and implemented on Saturday, prompted panic buying in Kaliningrad. The region's governor, Anton Alikhanov, insisted Russia would increase the number of cargo ships transiting goods from St. Petersburg to the exclave over the remainder of the year.
Russia reportedly suspends shipment of Kazakh oil - Russia suspended the shipment of oil from Kazakhstan exported to Europe through the port of Novorossiysk, Kommersant reported citing sources. More than 50 objects that may be a World War II-era explosive devices were found in the port waters, according to sources. After their discovery, the port water area was closed and as a result, the Caspian Pipeline Consortium, which supplies oil from Kazakhstan for export, was suspended. Works on de-mining the water area are scheduled for June 20. They may last until the end of the month, Novorossiysk port administration said. Kazakhstan annually supplies 67 million tons of oil through Russia to Europe. The Caspian Pipeline Consortium had already stopped the operation around 3 months ago, when the pipeline was reportedly damaged during the storm. According to experts, the world market lost about 1 million barrels of oil per day during the three weeks of repair work. Kazakhstan's Energy Minister Bolat Akchulakov said that the temporary suspension of oil shipments will not affect oil exports of the country.
Sri Lanka contacts Russian firm for crude oil: Minister - Sri Lanka has reached out to several companies suggested by Russia's embassy in Colombo to buy crude oil, Energy Minister Kanchana Wijesekera said on Sunday, in an attempt by the debt-ridden island nation to get oil on credit to keep its only oil refinery running. Wijesekera told the media that the Russian ambassador in Colombo "asked me to send the replies of the company, and he will also intervene in the process". The minister said he had replies from the Russian companies suggested by the ambassador, Sri Lanka's Economy Next news portal reported. "Also we have sent the message to the Sri Lankan Ambassador in Russia, Janitha Liyanage, the minister said, adding that the process was taking time. Sri Lanka has already bought one shipment of Siberian crude from Dubai-based Coral Energy in the international market, officials have said. However, the Russian state companies are reportedly giving crude at lower prices to countries that can afford to pay. Sri Lanka's sole refinery is now running with the last Siberian crude shipment. Sri Lanka is currently facing its worst economic crisis since independence from Britain in 1948. Due to monetary instability triggered by central bank money printing, Sri Lanka has forex shortages, making it difficult to find dollars at fixed prices for large import bills.
India's Russian imports up 3.5 times on oil buys despite Western pressure - On the back of rising crude oil purchases, India’s bill for imports from sanctions-hit Russia jumped 3.5 times in a year in April to $2.3 billion, showed data from the commerce ministry. In April, India’s crude oil imports from Russia were valued at $1.3 billion, 57 per cent of India’s total inbound shipments from Russia. Other major imported items during the month included coal, soybean and sunflower oil, fertilisers, and non-industrial diamonds. That month, Russia was also the fourth-largest crude petroleum supplier to India, after Iraq, Saudi Arabia, and the United Arab Emirates (UAE). As far as overall imports are concerned, Russia was the sixth largest import partner in April. During the same month last year, Russia was the 7th biggest source of crude oil for India and on an overall basis, it ranked 21st among India’s import partners. Russia was also India’s 9th largest trading partner in April (including both exports and imports), with the size of trade at $2.42 billion. This even as the value of outbound shipments to Russia nosedived to $96 million in April, down by 59 per cent year-on-year. Top items exported to Russia during the month included electrical machinery and equipment, iron and steel, pharmaceutical products, marine products, and automobile components. Crude oil imports to India from Russia are on the rise since Russia's invasion of Ukraine on February 24. The invasion was followed by economic sanctions on Russia by the US and its allies, in an attempt to isolate the country from global trade and this led to spike in commodity prices. Despite pressure from Western nations, India did not pick a side and it chose to maintain a neutral stance considering its historical relationship with Russia. India was also criticised for continuing trade with Russia despite the imposition of economic sanctions. India on various global fora has been defending its stand holding that petroleum products do not fall under the ambit of sanctions by Western countries and New Delhi has always looked to diversify its energy sources. “If you're looking at energy purchases from Russia, I'd suggest that your attention should be focused on Europe. We do buy some energy, which is necessary for our energy security. But I suspect, looking at figures, our total purchases for the month would be less than what Europe does in an afternoon,” External Affairs Minister S Jaishankar said in April during a press conference for the India-US 2+2 Ministerial Dialogue.
Russia oil demand surge in Asia offsets Europe cuts - A surge in demand from Asia for discounted Russian oil is making up for the sharply lower number of barrels being sold to Europe, dulling the effects of the West's efforts to punish Moscow over its invasion of Ukraine and keeping revenue flowing to the Kremlin. Most of the additional oil has gone to two countries: China and India. China's imports of Russian oil rose 28% in May from the previous month, hitting a record high and helping Russia overtake Saudi Arabia as China's largest supplier. And most of the increase went to India, which has gone from taking in almost no Russian oil to bringing in more than 760,000 barrels a day, according to shipping data analysed by Kpler, a market research firm. Although South Korea and Japan have cut back on Russian oil, those volumes are a fraction of what is being bought by China and India. "Asia has savedRussian crude production," said Viktor Katona, an analyst at Kpler. "Russia, instead of falling further, is almost close to its prepandemic levels." Russian oil is being sold at a steep discount because of the risks associated with sanctions imposed to punish Russia for its invasion of Ukraine. Even so, soaring energy prices have led to an uptick in oil revenue for Russia, which took in $1.7 billion more last month than it did in April, according to the International Energy Agency. Although it remains to be seen how much Asia will continue buying the oil as Europe weans itself off Russian energy, the shift has allowed Moscow to maintain its production levels and defy analysts' expectations that its output would plunge. Russian crude sales dropped by 554,000 barrels a day to Europe from March to May, while Asia refiners increased their take by 503,000 barrels a day - nearly a replacement of one for one. Of those, 165,000 barrels are going to China from eastern Russian ports. Russian sales to India reached a record 841,000 barrels a day in May, eight times the annual average from last year.
Russian Oil Disappears as Tankers Go Dark -Russian oil cargoes are increasingly disappearing from view in the Atlantic Ocean as sanctions against the nation’s exports ratchet up. In the past 10 days, at least three tankers have vanished from vessel-tracking systems as they approached the Azores, a tiny group of islands about 950 miles west of mainland Portugal. They probably transfered their consignments onto other vessels. Such transfers didn’t happen there before Russia invaded Ukraine, let alone out of view of satellite monitoring. It’s not clear why the ships have gone dark -- it could be that some buyers want to conclude their purchases as privately as possible. The European Union instituted a ban on Russian oil buying that fully enters into force only in December. Some Russian cargoes are also starting to disappear from view while en route to Asia. Ship-to-ship transfers are commonplace in the oil market and Russian cargoes have for years been switched off the coast of Denmark and more recently in the Mediterranean and even off the Azores. What’s less regular is for them to disappear from view. That’s a tactic that has often been used for sanctioned flows from the likes of Iran and Venezuela. Vessels will move next to each other and -- normally -- the smaller tanker will discharge its load into a bigger one. That larger ship will then transport the cargo on a long-distance trade route, often to Asia.M
Asia clean tanker rates sail to record high on brisk demand for refined products - Clean tanker rates across Asia-Pacific reached multiyear highs June 16, and a record for some routes, as strong demand to lift naphtha cargoes from the Persian Gulf and deliver distillates to Africa and Australia drove up the daily earnings of owners, despite rising bunker prices. Ships are ballasting to Asia from almost every corner of the world to push up their earnings. It is definitely positive for the owners to position their fleet in the East, one of the brokers said. Owners of both Long Range I and II, or LR1s and LR2s, are raking in the moolah, earning around $55,000 daily at current freight on the benchmark Persian Gulf-Japan route, according to brokers’ estimates. Earnings are even better for Medium Range, or MR, tankers around $60,000/day on the key Singapore-Australia route, prompting ships to ballast from even Latin America. Clean tankers are enjoying hefty earnings at a time when the dirty tankers are bleeding, with VLCCs bearing daily losses of more than $20,000 on key Persian Gulf-East Asia routes. Fundamentals are totally different for VLCCs, where heavy supply with hardly any scrappings in recent years, is more than sufficient to meet the current demand, said a broker in Singapore. A flurry of LR1 fixtures, including at least 10 since late-last week to move naphtha on the Middle East-North Asia routes, is pushing up rates for the last five successive trading days, gaining a whopping 145 Worldscale points during the period, according to S&P Global Commodity Insights data. Owners are holding back their ships in anticipation of even further increase, said a chartering executive in North Asia. “Charterers are not looking, but instead begging for LR1s,” said a broker in Copenhagen. MR rates on the key South Korea-Australia and Persian Gulf-East Africa routes are in uncharted territory, at all-time highs, breaking the previous records set in April 2020, according to S&P Global data.
Russia is now China's biggest oil supplier, overtaking Saudi Arabia as Western demand for its crude has dropped - Russia has vaulted ahead of OPEC heavyweight Saudi Arabia to become China's biggest supplier of oil, according to data released on Monday by the Chinese General Administration of Customs. Russia supplied 2.02 million barrels per day to China in May, up from 1.31 million in April, the data showed. This is a jump of almost 30% from the previous month, and of 55% from May 2021. Saudi Arabia has traditionally been China's biggest supplier. It exported 1.88 million barrels per day in May, marking a drop of 12.5% from the 2.15 million in April, forfeiting market share in the world's biggest importer of commodities to Russia, the United Arab Emirates and Oman. "The expectation that Russian crude would cease to be traded on international markets has not transpired, and instead the steep discount on Russian crude has seen vessels redirected to alternative markets," Wei Cheong Ho, vice president of downstream at consultancy Rystad Energy, said. "While the cost of financing these vessels and trades has increased significantly due to be freezing out of the Western financial system, the discount on Urals is too attractive for some refiners to ignore," he said. In May, China imported 1.13 million barrels a day from Iraq, 982,000 barrels a day from the UAE, and 956,000 from Oman, the data shows. Imports from both the UAE and Oman were up by around a third from April, according to the data. China, like India, has been snapping up Russian oil at discounted prices following the invasion of Ukraine. Western nations have reduced their imports of Russian gas and oil to try cut off funding to for Moscow's military machine and ultimately put pressure on Putin to end to the war. Russia has responded by halting natural gas supplies to some European countries over their refusal to meet a demand to pay in rubles. The European Union relies on Russia for around 40% of its natural gas needs, but it cuts both ways. The EU is Russia's biggest natural gas customer, accounting for over 70% of its gas exports.
Huge Fire Breaks Out at Sinopec's Shanghai Complex, Leaving 1 Dead - A huge fire broke out Saturday at the headquarters of a petrochemical facility in southeast Shanghai and at least one person died. The fire started around at 4 a.m. at an ethylene glycol processing unit owned by Sinopec Shanghai Petrochemical, a state-owned oil company whose headquarters are in an industrial park in the suburban Jinshan district. Firefighters were able to put the blaze under control, the company said in a statement posted to its Chinese social media account. Sinopec said a “third-party driver” had died in the disaster and that one of its employees was injured. “The specific cause is under further investigation,” the company said. Videos on social media of the scene showed raging fires and huge plumes of dark smoke rising from what appeared to be part of Sinopec facility, which is separated from the district’s residential area. Some residents living near the facility fled their buildings after hearing loud bangs from the explosion and described a pungent smell from a few miles away, according to a local media report. The company said that the blaze had been “effectively controlled” but that it was carrying out “protective burning.” Sinopec said it was monitoring the area for volatile organic compounds and had yet to detect any harmful impact on local water supplies.
Coast Guard monitoring marine pollution, if any, from sunken vessel - The Coast Guard is using six vessels and two aircraft in its effort to check marine pollution in case of an oil spill from the sunken foreign vessel, mv Princess Miral. In a press release here, Karnataka Coast Guard Commander and Deputy Inspector-General S.B. Venkatesh said that six vessels and two Dornier aircraft are being used for monitoring, mapping and combating oil spill in the area. In addition, two vessels from local resource agencies are being used, he said. The damaged and sunken merchant vessel, Mr. Venkatesh said, is said to be carrying more than 220 tonnes of fuel onboard. The Coast Guard is coordinating with the State administration, Pollution Control Board, New Mangalore Port Authority, Mangalore Refinery and Petrochemicals Ltd. to prevent any threat of large scale oil spill from the sunken vessel. “So far, only a minor sheen of oil, assessed to be from engine bilges and dirty water tanks, has been observed,” he said. To achieve sustained operations, he said, a specialised pollution control vessel, ICGS Samudra Pavak, has sailed from Porbandar. It will arrive in Mangaluru in the morning on Saturday. “The entire area is being continuously monitored for any marine pollution eventuality,” he said.
After oil spill incident, Jadestone shuts in Australian field pending tank repairs - AIM-listed and Singapore-headquartered oil and gas player Jadestone Energy has been forced to halt production from its field in the Timor Sea offshore Australia in preparation for repairs following an oil leak.Jadestone Energy revealed on Monday that during the transfer of crude oil between two crude oil tanks onboard the FPSO Montara Venture at its Montara field off Australia, oil was observed on the surface of the sea adjacent to the FPSO on Friday, 17 June 2022. Due to this incident during the routine production and crude oil cargo operations, the transfer operations ceased immediately and production from the Montara fields was shut in as a precautionary measure.The company informed that the release of oil to sea was quickly halted by pumping water into the tank, indicating a leak somewhere at the tank base. Afterwards, a subsequent inspection using an ROV confirmed a small 30mm diameter hole in the bottom of the tank. Having now controlled the release of oil, Jadestone says that its next step will be to apply a temporary repair in order to remove the remaining oil from the tank. Following this, the firm advised that the tank will be accessed and cleaned in order to complete an inspection and permanent repair..Jadestone confirmed that this is the same work plan which has already been applied to all the other main crude oil storage tanks, as part of the five-yearly inspection and repair programme.According to Jadestone, the volume of released oil is estimated at three to five cubic metres, which was monitored and had fully dispersed by the morning of 19 June 2022. The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) was notified of the incident immediately and will initiate an onsite inspection of the Montara facilities on 21 June 2022.The firm’s preliminary estimate is that it will take approximately four weeks to complete the tank inspection and effect repairs sufficient to re-commence production at Montara, with appropriate isolation of the crude oil tank. Following consultation with key stakeholders, Jadestone intends to conduct a full remediation programme, similar to that which has been completed on all the other main crude oil tanks.
Nigeria: Supreme Court upholds freeze on Shell’s asset sale - Al Jazeera (video) Nigeria’s Supreme Court is set to rule on a lower court’s decision halting oil major Shell from selling its assets in Nigeria until a dispute over a 2019 oil spill is resolved between the company and a community in the oil-rich Niger Delta.In March, a high court had barred Shell from any asset sale in Nigeria until a decision is reached on the dispute. Eighty-eight communities in Rivers State were awarded $1.95bn compensation for an oil spill they blamed on Shell and which damaged their farms and waterways.Shell, which denied causing the spill, appealed the compensation verdict and the ruling blocking the sale of its assets. The company then went on to advertise for bids for the assets after filing an appeal.But the Supreme Court, in a ruling dated June 16, said the parties should “maintain the status quo” until a hearing of all applications from Shell and the communities later this year.“What the status quo means here is that there should be no bids, no sales until the hearing of the applications which has been fixed for November 3, 2022,” Mohammed Ndarani, the lawyer representing the Delta communities, told Reuters on Monday. The delta, the source of crude in Africa’s largest producer, is a poverty-stricken region, where life expectancy is 10 years lower than the national average. Residents have become accustomed to decades of spills, gas flares and other issues like coastal erosion.Shell wants to sell its stake in Nigeria’s onshore fields, where it has been active since the 1930s, as part of a global drive to reduce its carbon emissions.The company, the most significant international oil major operating in Nigeria, has faced a string of court cases in the past over oil spills.In April, Shell said the volume of crude oil spills caused by sabotage in the delta more than doubled to 3,300 tonnes last year, a level last seen in 2016.
Nigeria, Angola won't meet OPEC output quotas for at least another year: IEA | S&P Global Commodity Insights - Top African oil producers Nigeria and Angola are unlikely to meet current OPEC output quotas for at least another year as persistent underinvestment and maintenance issues have crippled energy facilities, according to the International Energy Agency. Nigeria, the region's largest producer, has seen production plunge to its lowest level in more than 30 years to 1.23 million b/d in May, according to estimates by S&P Global Commodity Insights, due to a host of security, operational and technical problems since early 2021. Nigeria's crude and condensate production is almost half its 2.2 million b/d output capacity, with key oil fields and terminals struggling, exacerbated by a resurgence in attacks on oil infrastructure. Angola, meanwhile, Africa's third biggest producer, has also seen output plummet from close to 1.8 million b/d five years ago to 1.16 million b/d in May, according to the Platts OPEC survey. Angolan crude output had been on a steep downward trajectory because of technical and operational problems at some fields, aggravated by a lack of upstream investment and incentives. The last time Angola's crude production was at these levels was in 2006 when output from its offshore fields was still ramping up. The IEA noted in its special report on Africa on June 20 that "persistent underinvestment and maintenance have left many facilities in key African OPEC producers struggling to restart and ramp up production." The report added that Nigeria and Angola are not expected to be able to meet their current OPEC quotas "for at least another year, having produced almost 300,000 b/d less than their combined quotas throughout 2021." Nigeria has an OPEC quota of 1.753 million b/d and Angola has a quota of 1.465 million b/d, with Platts estimates suggesting current overcompliance with output cuts at 788% and 584% respectively -- the two largest among the OPEC producers. Platts Analytics expects Nigerian crude supply to recover towards 1.5 million b/d in the fourth quarter of 2022, but that would still suggest a very limp recovery. Further out, Nigerian crude production is not expected to reach much more than 1.51 million b/d in 2023 and could dip lower by the end of next year, according to Platts Analytics. Meanwhile, Angola's crude production is forecast to continue declining in the coming years, dipping below 1 million b/d by 2024. "The sharp fall in oil demand and prices at the start of the pandemic led to a near 20% drop in oil production in Africa," the IEA noted as it documented a tale of woe in its report, which point to "flagging" investment in African oil and natural gas production since the price downturn in 2014.
Namibia Bets On Recent Major Oil Discoveries To Double Its Economy Following several offshore oil discoveries in recent months, Namibia hopes that the major oil finds could help it double its economy in the next two decades, the head of the National Petroleum Corporation of Namibia (NAMCOR) told Bloomberg on Tuesday.Since the beginning of the year, oil majors Shell and TotalEnergies have announced discoveries offshore the African country.“More than 30 years of exploration and we finally we hit the jackpot,” Jennifer Comalie, NAMCOR’s chairperson, told Bloomberg in an interview.“At peak, these two discoveries could bring $5.6 billion to a very small economy,” Comalie said.The economy of Namibia, neighbor to the south of OPEC producer Angola, is currently valued at around $11 billion.Namibia could begin production around 2030 or a little bit earlier if appraisals for the recent discoveries support initial estimates and, of course, majors commit to developing those discoveries while they look to become net-zero energy companies by 2050.In April, Shell said it was “very encouraged” by the early results from the deep-water Graff-1 exploration well completed earlier this year.“Over the coming months, we’ll need to conduct further evaluation of the well results, and additional exploration activity, in order to determine the size and recoverable potential of the hydrocarbons that were identified,” said Dennis Zekveld, Shell’s Country Chair in Namibia.Shell also made a second discovery in the Orange basin in April.In the same basin offshore southern Namibia, TotalEnergies has made a significant discovery of light oil with associated gas on the Venus prospect, the French supermajor said in February this year. TotalEnergies also needs to proceed with appraisal drilling operations in the area in order to assess the commercial prospects for the discovery.
Time is running out for Africa to profit from its gas, IEA says - Africa must act quickly to profit from its vast reserves of natural gas that the world will only want until it can shift towards lower carbon technology, the International Energy Agency said on Monday. In its Africa Energy outlook for 2022 published on Monday, the IEA said Africa could be in a position by the end of the decade to export some 30 billion cubic metres (bcm) to Europe, which is currently hungry for gas because it is trying to reduce its reliance on Russia. The group of 31 mostly industrialised countries said in a ground-breaking outlook in 2021 that achieving a U.N. goal of net zero emissions by mid-century meant that from this year no investment in new fossil fuel was necessary. Executive Director Fatih Birol told Reuters in an interview Africa’s development of gas did not contradict that. The continent, he added, has borne the brunt of climate change even though it has emitted just a tiny fraction of the emissions caused by the developed world and it has limited time to earn hydrocarbon revenues. “If we make a list of the top 500 things we need to do to be in line with our climate targets, what Africa does with its gas does not make that list,” Birol said. “New long lead time gas projects risk failing to recover their upfront costs if the world is successful in bringing down gas demand in line with reaching net zero emissions by mid‐century,” the Paris-based agency said in Monday’s report. If all of Africa’s gas discoveries turned into production, Birol said that could provide an additional 90 bcm per year by 2030, around two-thirds for domestic needs, and the rest for export. To reduce new developments and emissions, the IEA said flaring less methane could provide a third of new output. Oil and gas-producing regions, such as Africa, have bristled at the idea that avoiding climate change may mean keeping resources in the ground. They say demand is robust and developed states have enjoyed a centuries-long headstart from hydrocarbons. While a fifth of the world’s population lives in Africa, the continent has accounted for less than 3% of the world’s energy‐related carbon dioxide emissions so far and has the lowest emissions per capita of any region on earth, the IEA said.
Saudi Arabia’s oil exports hit 25-month high in April: JODI Saudi Arabia’s crude oil exports grew 147,000 barrels per day in April to 7.38 million, according to the latest monthly data released by the Joint Organisations Data Initiative. This is the highest monthly level of volume since March 2020 when the Kingdom’s exports were 7.39 million bpd. Exports of crude rose by 2 percent in April from 7.24 million bpd in March 2022. Year-on-year, the Kingdom’s shipments of crude abroad surged by 1.97 million bpd — an increase of 36.5 percent. As for the production of crude, in April it grew by 141,000 bpd to 10.44 million bpd. Production rose by 1.4 percent from 10.3 million bpd in March. China’s crude oil imports from Russia soared 55 percent from a year earlier to a record level in May, displacing Saudi Arabia as the top supplier, as refiners cashed in on discounted supplies amid sanctions on Moscow over its invasion of Ukraine, reported Reuters. Imports of Russian oil, including supplies pumped via the East Siberia Pacific Ocean pipeline and seaborne shipments from Russia’s European and Far Eastern ports, totaled nearly 8.42 million tons, according to data from the Chinese General Administration of Customs. That is equivalent to roughly 1.98 million barrels per day (bpd) and up a quarter from 1.59 million bpd in April. China is the world’s biggest crude oil importer. Chinese firms, including state refining giant Sinopec and state-run Zhenhua Oil, have ramped up purchases of Russian oil, enticed by steep discounts after Western oil majors and trading houses pulled back due to sanctions. Saudi Arabia trailed as the second-largest supplier, with May volumes up 9 percent on year at 7.82 million tons, or 1.84 million bpd. This was down from April’s 2.17 million bpd. Russia took back the top ranking after a gap of 19 months. Customs data released on Monday also showed China imported 260,000 tons of Iranian crude oil last month, its third shipment of Iran oil since last December, confirming an earlier Reuters report. Despite US sanctions on Iran, China has kept taking Iranian oil, usually passed off as supplies from other countries. The import levels are roughly equivalent to 7 percent of China’s total crude oil imports. China’s overall crude oil imports rose nearly 12 percent in May from a low base a year earlier to 10.8 million bpd, versus the 2021 average of 10.3 million bpd. Customs reported zero imports from Venezuela. State oil firms have shunned purchases since late 2019 for fear of falling foul of secondary US sanctions. Imports from Malaysia, often used as a transfer point in the last two years for oil originating from Iran and Venezuela, amounted to 2.2 million tons, steady versus April but more than double the year-earlier level. Imports from Brazil fell 19 percent from a year earlier to 2.2 million tons, as supplies from the Latin American exporter faced cheaper competition from Iranian and Russian barrels.
Iran’s Oil Exports Surge In June --Iran’s crude oil exports are estimated to have jumped to an average of 961,000 barrels per day (bpd) between June 1 and June 19, according to data from seaborne oil trade analytics company Petro-Logistics cited by commodity analyst Giovanni Staunovo.To compare, the average crude oil exports out of Iran stood at 461,000 bpd for the entire month of May, per Petro-Logistics data. Despite the diplomatic impasse over the nuclear deal, Iran has been preparing to rejoin the global oil market. The country has boosted production, as well as exports to its main market, China. If a new deal is reached between Iran and the world powers, the flow of Iranian oil abroad could increase by between 500,000 bpd and 1 million bpd, according to analysts. China has been the main outlet for Iranian crude oil exports since the U.S. re-imposed sanctions on the Islamic Republic’s oil industry in 2018 when then-President Donald Trump pulled the United States out of the so-called Iranian nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA).Most recently, Iran on Monday blamed the U.S. for the stalled talks on the revival of the nuclear deal.China has never stopped importing Iranian crude since 2018, and even the Chinese General Administration of Customs officially reported earlier this week that China did indeed import Iranian crude in May.Last week, China received 2 million barrels of Iranian crude, most likely with the purpose of sending the oil to state reserves, tanker-tracking firms told Reuters on Wednesday.According to Reuters, the crude cargo, delivered by a tanker owned by the National Iranian Tanker Company (NITC), would be the fourth cargo to go to state reserves that China has imported since the end of last year. The shipment is also likely to be reported in the Chinese crude import data for June when figures are released in July.
Oil wobbles as global economic worries offset tightening supply --Oil prices edged down on Monday, reversing earlier gains, as concerns about slowing global economic growth and fuel demand offset worries about tightening supplies. Brent crude futures slipped 8 cents, or 0.1%, to $113.04 a barrel by 0242 GMT, after rising as much as 1% earlier. Front-month prices tumbled 7.3% last week, its first weekly fall in five. U.S. West Texas Intermediate crude was at $109.49 a barrel, down 7 cents, after rising more than $1 earlier. Front-month prices dropped 9.2% last week, the first decline in eight weeks. "Clearly macro factors are driving oil at the moment, rather than fundamentals, which are still supportive," Warren Patterson, ING's head of commodities research said. Oil from Russia, the world's second-largest exporter, remains out of reach to most countries because of Western sanctions over the war in Ukraine. The impact has been partly mitigated by the release of strategic petroleum reserves, led by the United States, and a ramp-up of production from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, although that is thinning the world's buffer against further supply disruption. "If Washington sticks to its current pace, the U.S. strategic reserve will hit a 40-year low of 358 million barrels by October," ANZ analysts said in a note. Still, U.S. oil and gas production is climbing. The oil and gas rig count, an early indicator of future output, rose by seven to 740 in the week to June 17, its highest since March 2020, energy services firm Baker Hughes Co said in its report on Friday. In Libya, oil production remained volatile following blockades by groups in the country's east. The Libyan Oil Minister Mohamed Oun told Reuters on Monday that the country's total production is at about 700,000 barrels per day (bpd). Libya's output had fallen to 100,000 to 150,000 bpd, a spokesman for the oil ministry said last week. Oil products exports from China, once a major exporter, continued to decline, keeping global supplies tight. The country's gasoline exports in May fell 45.5% from a year earlier and diesel exports plunged 92.7% despite stalling domestic demand, as companies ran short of export quotas, Chinese customs data showed on Saturday.
Crude oil futures extend gains as recession fears ease; outlook remains bullish - Crude oil futures were higher in mid-morning trade in Asia June 21, extending overnight gains as recessionary fears that plagued markets in recent weeks receded and investors returned focus to bullish near-term fundamentals. At 10:33 am Singapore time (0233 GMT), the ICE August Brent futures contract was up $1.48/b (1.3%) from the previous close at $115.61/b, while the NYMEX July light sweet crude contract rose $2.45/b (2.24%) from the June 17 close at $112.01/b. US markets were closed June 20 for the Juneteenth holiday. Recession fears that earlier sent crude prices tumbling by more than $8/b appeared to have receded, with investors now returning to buy the dip, analysts said. While financial markets remained vulnerable to further declines as central banks worldwide move to raise borrowing costs, oil fundamentals in the near-term were supportive. "After getting hammered into the US long weekend due to recession and fuel demand destruction concerns, oil prices are rallying again," SPI Asset Management's managing partner Stephen Innes said in a June 21 note. "Those global economic worries are seemingly offset by prospects for higher US and China demand in the near term amid tight prompt supplies." Tightness in refined product supplies remained a concern. Cash differentials for Northwest European and Mediterranean gasoil cargoes hit record highs late last week. Meanwhile, stocks of diesel and gasoil in the Northwest European Amsterdam-Rotterdam-Antwerp hub fell 3.15% on the week to 1.41 million mt in the seven days to June 16, according to Insights Global data on June 17. Stocks were now 41% lower than a year earlier. European markets were in the midst of a severe gas shortage after Russia cut deliveries to the region, with some of the bullishness expected to spill over into oil. The Netherlands government June 20 triggered the country's gas crisis plan, which contains measures the country can take if there is a threat of a shortage of gas. The Danish government implemented a similar plan June 20. Germany, meanwhile, is advancing plans to reduce gas demand this summer in power generation and industry to boost storage for winter, the energy ministry said June 19.
Oil prices climb $2 on strong demand, tight supply --Oil prices edged up on Tuesday on high summer fuel demand while supplies remained tight because of sanctions on Russian oil after its invasion of Ukraine. Brent crude futures settled 52 cents, or 0.5%, higher at $114.65 a barrel. The U.S. West Texas Intermediate (WTI) crude contract for July expired on Tuesday, closing at $110.65, with a gain of $1.09, or 1%. The more active August contract was up $1.53 at $109.52. Both benchmarks posted a weekly loss last week. For WTI it was the first weekly loss in eight weeks, for Brent the first in five. The 50-day simple moving average of U.S. front month futures touched its highest since 2008, and Brent's touched its highest since 2013. Prices drew support when Exxon Mobil Corp Chief Executive Darren Woods predicted three to five years of fairly tight oil markets. Vitol's head Russell Hardy flagged under-investment and a decline in production capacity for crude oil and a tight refining situation. "We expect oil demand to improve further, benefiting from the reopening of China, summer travel in the northern hemisphere and the weather getting warmer in the Middle East. With supply growth lagging demand growth over the coming months, we continue to expect higher oil prices," The market has been supported by supply anxiety after sanctions on oil shipments from Russia, the world's second-largest oil exporter, and worries Russian output could fall due to sanctions on equipment needed for production. European Union leaders aim to maintain pressure on Russia at their summit this week by committing to further work on sanctions, a draft document showed.
Oil Up as Strong Market Negates Downturn Concerns -Oil climbed as financial markets recovered from last week’s rout, with traders confident that tight supplies will sustain higher prices even if the global economy contracts. West Texas Intermediate August delivery rose to settle above $109 a barrel after plummeting before the US holiday weekend. Top trader Vitol Group said Chinese demand is recovering in a market that’s struggling to increase supplies, meaning prices are unlikely to drop. Under mounting political pressure to ease the strain on consumers, US President Joe Biden said he’s aiming to decide this week whether to suspend the federal gasoline tax. Markets have been volatile amid moves by the Federal Reserve and other central banks to cool inflation, raising the specter of an economic slowdown. The idea the US could see a recession within months has traders on edge, said Dennis Kissler, senior vice president of trading at BOK Financial. “But it seems for now the latest sell off on crude may have been overplayed as near-term demand remains strong,” Kissler said. The oil market has been vulnerable to any signs of disruption since Russia’s invasion of Ukraine almost four months ago upended global commodity markets. Crude fell by several dollars on Friday on growing concern that the Fed’s pivot toward tighter monetary policy will lead to stunt economic growth. Despite the dramatic dips, crude is still headed for a quarterly gain. The more actively traded contract, WTI August delivery, added $1.53 to settle at $109.52 a barrel in New York. The July contract that expired Tuesday settled at $110.65. Brent for August settlement rose 52 cents to $114.65 a barrel. The US Treasury Secretary said talks are continuing on how to cap the price of Russian oil, possibly through a plan that offers exceptions to a European Union insurance ban. Asked whether such measures would be ready for the Group of Seven leaders meeting June 26-28, she said, “stay tuned.” Potentially exacerbating disruptions on the supply side of crude markets, Petroecuador said Monday it may have to halt oil exports due to strikes, while Libya’s oil minister reported highly volatile production numbers.
Oil prices plunge $6 per barrel, Brent crude reaches $108.98/bbl - Oil prices skidded more than $6 a barrel on Wednesday amid a push by US President Joe Biden to bring down soaring fuel costs, including pressure on the country's major energy firms to help ease the pain for drivers during peak summer consumption. By 0718 GMT U.S. West Texas Intermediate (WTI) crude futures were off lows but still down $5.98, or 5.46%, at $103.54 a barrel. Similarly, Brent crude futures dropped $5.67, or 4.95%, to $108.98 a barrel. As the United States, the world's largest oil consumer, struggles to tackle soaring gasoline prices and inflation, President Joe Biden is expected to call on Wednesday for temporarily suspending the 18.4-cents a gallon federal tax on gasoline, a source briefed on the plan told Reuters. "I think the non-stop Biden headlines, with the administration seemingly in inflation panic mode, have played a part in the latest sell-off as investors hate any uncertainty, even if irrational in the context of the known supply concerns," said Stephen Innes, managing partner at SPI Asset Management, in a note. Seven oil companies are set to meet Biden on Thursday, under pressure from the White House to drive down fuel prices as they make record profits. Chevron Chief Executive Michael Wirth, however, said on Tuesday criticising the oil industry was not the way to bring down fuel prices. "These actions are not beneficial to meeting the challenges we face," Wirth said in a letter addressed to Biden, which sparked a response from Biden saying the industry was being too sensitive. Despite worries about inflation, demand is still on the road to recovery to pre-COVID levels and supply is expected to lag demand growth, keeping the market tight, as flagged by trading giant Vitol and Exxon Mobil Corp this week. "From here, a more likely outcome is a widening of the Brent premium over WTI," Jeffrey Halley, analyst at energy consultancy OANDA said in a note, adding that Brent is the internationally traded benchmark and in the real world, supplies remain tight. US oil refining capacity fell in 2021 for the second year in a row, latest government data showed on Tuesday, as plant shutdowns kept whittling away at their ability to produce gasoline and diesel. The official data showed a capacity decline of 125,790 barrels per day (bpd) last year on top of the 800,000 bpd drop in 2020.
Oil Slides as Inflation Worry Clouds Macroeconomic Outlook - With equity futures in retreat and the U.S. Dollar Index strengthening, oil futures fell sharply early Wednesday, with the crude contracts down 4% as investors return their focus on concerns over inflation and expectations for continued tighter monetary policy in the United States ahead of Congressional testimony Wednesday morning from Federal Reserve Chairman Jerome Powell, who last week oversaw the largest interest rate hike since 1994. Recession concerns are in the spotlight Wednesday, with equity futures and oil prices dropping sharply as investors await Powell's testimony, when the Fed chief is expected to undergo scrutiny over the central bank's plans to stabilize prices and the potential fallout from those efforts. On June 15, the Federal Open Market Committee raised interest rates by 75 basis points, the biggest rate hike in 28 years. The Fed's Thomas Barkin said Tuesday he expects even more aggressive moves by the central bank to come as it seeks to reduce inflation that climbed to a fresh 40-year high 8.6% in May. "Inflation is high, broad-based and persistent," said Barkin during a conversation sponsored by the National Association for Business Economics. Debate over the potential that the Fed's aggressive rate hikes will push the U.S. economy into recession intensified after the Federal Reserve Bank of Atlanta's GDPNow tracker last week showed no growth for the second quarter following a 1.5% contraction over the first three months of the year, and modeling by the New York Federal Reserve Bank pointed to an 80% probability for a "hard landing." The indicators coincide with a steady increase in weekly jobless claims, stalled consumer spending and a weakening housing market. Near 7:30 a.m. EDT, the U.S. dollar advanced 0.08% to 104.285 in index trading, adding pressure to August West Texas Intermediate futures, which fell below $105 barrel (bbl), down more than $4. ICE August Brent futures declined $4.44 to $110.27 bbl. NYMEX July RBOB futures retreated 7.49 cents to $3.7196 gallon and NYMEX July ULSD futures fell to $4.3040 gallon, down more than 5 cents. Oil futures registered higher settlements on Tuesday after AAA projected the strongest demand for road travel for the upcoming July 4th holiday on record at 42 million people despite retail gasoline prices averaging on either side of $5 gallon. "Earlier this year, we started seeing the demand for travel increase and it's not tapering off. People are ready for a break and despite things costing more, they are finding ways to still take that much-needed vacation," said Paula Twidale, senior vice president of AAA Travel. Garrett Golding, senior business economist in the research department at the Federal Reserve Bank of Dallas, sees the potential for even higher fuel prices. "Though daily national average prices recently eclipsed $5 a gallon, there may be room for prices to rise much higher based on prior episodes, when consumers experienced, and to some extent withstood, such prices," he said in a paper released Tuesday. Golding noted the price advances for oil products outpaced those for crude oil following refinery closures during the COVID-19 pandemic, with about 1.5 million barrels per day (bpd) of capacity now out of service. The scramble in supply chains earlier this year triggered by Russia's unprovoked invasion of Ukraine on Feb. 24 has further tightened the global oil-supply demand balance, with gasoline prices up 34% since December and diesel prices spiking 53% in 2022.
Oil falls around 3% as investors eye U.S. Fed rate hikes - Oil prices tumbled around 3% on Wednesday as investors worried that rate hikes by the Federal Reserve could push the U.S. economy into recession, dampening demand for fuel. Brent crude futures fell $2.91, or 2.5%, to settle at $111.74 a barrel. The global benchmark hit a session low of $107.03, its lowest since May 19. U.S. West Texas Intermediate (WTI) fell $3.33, or 3%, to settle at $106.19 a barrel. The session low was $101.53, its lowest since May 11. Investors assessed on Wednesday how interest rate hikes designed to cool soaring inflation might stall an economic recovery. Oil prices pared losses, however, during the session after Fed Chair Jerome Powell pledged an "overarching focus" on bringing down inflation and reiterated that ongoing increases in the central bank's policy rate would be appropriate, with the pace depending on the economic outlook. Meanwhile, U.S. President Joe Biden called on Congress to pass a three-month suspension of the federal gasoline tax to help combat record pump prices and provide temporary relief for American families this summer. While lower pump prices could actually boost demand for fuel and support crude prices, PVM analyst Stephen Brennock said traders could be worried the Biden administration might take further measures to cool high energy prices. Lawmakers of both major parties have expressed resistance to suspending the federal gasoline tax. The White House asked the chief executives of seven oil companies to a meeting on Thursday to discuss ways to increase production capacity and reduce gasoline prices of around $5 a gallon. Biden has publicly criticized Big Oil for banking big profits but he has rarely spoken directly to the heads of energy companies or their representatives, White House records and interviews with industry sources show. Chevron CEO Michael Wirth said criticizing the oil industry was not the way to bring down fuel prices and the government should change its approach. Biden replied he was unaware oil executives could "get their feelings hurt that easily." U.S. oil refining capacity fell in 2021 for the second year in a row, government data showed, as plant shutdowns kept whittling away on their ability to produce gasoline and diesel. U.S. crude and gasoline inventories likely fell last week, a Reuters poll showed. Weekly oil data is delayed by Monday's public holiday, with industry data due on Wednesday at 4:30 p.m. (2030 GMT) and government data scheduled for Thursday at 11 a.m. The $2.4 trillion set to be invested globally in energy this year includes record spending on renewables but falls short of plugging a supply gap and tackling climate change, the International Energy Agency said.
Oil Slips as EZ PMIs Sink; US Crude, Gasoline Stocks Build - Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange slipped in early trade Thursday after the American Petroleum Institute reported U.S. crude and gasoline inventories unexpectedly increased during the week ended June 17, easing some concern over tight domestic supplies, while an overnight rally in the U.S. Dollar Index spurred by weaker-than-expected manufacturing data in the Eurozone further pressured West Texas Intermediate. API data released late Wednesday afternoon showed commercial crude oil stocks increased by a sizable 5.607 million barrels (bbl) last week, missing calls for a 1.2 million bbl draw. If realized by official government data, this would be the third consecutive weekly build in domestic crude oil inventories. Stocks at the Cushing, Oklahoma, hub -- the NYMEX delivery point for the West Texas Intermediate futures contract -- declined 390,000 bbl. Gasoline inventory, meanwhile, posted a build of 1.216 million bbl compared with calls for a draw of 800,000 bbl. Distillate inventories fell 1.656 million bbl, missing an expected 300,000 bbl week-on-week increase. On the macroeconomic front, Eurozone's manufacturing activity fell by a larger-than-expected margin in early June, falling to a 22-month low 52 compared with 54 reading in the previous month. Manufacturing output contracted for the first time in two years and service sector growth cooled considerably, easing most notably for consumer-facing services, according to private data released overnight. Remarkedly, June's slowdown was the most abrupt recorded by the survey since the height of the global financial crisis in November 2008. Companies also scaled back their business expectations for output over the coming year to the lowest since October 2020. In the United States, investors will continue to monitor comments from Federal Reserve Chairman Jerome Powell who will testify before U.S. lawmakers for a second day Thursday. Powell reassured markets on Wednesday that the U.S. central bank is committed to crushing the hottest inflation in 40 years, promising to raise interest rates until there is "compelling evidence" that prices are falling. Powell noted the risk of recession as it tightens monetary policy while indicating the central bank is not trying to "provoke a recession." His testimony comes just one week after the Fed voted to raise interest rates by 75 basis points, the largest single rate hike since 1994, underscoring just how serious policymakers are about tackling the inflation crisis after a string of alarming economic reports. The move puts the key benchmark federal funds rate between 1.5% and 1.75%, the highest since the pandemic began two years ago. Near 7 a.m. EDT, U.S. equity futures edged modestly higher with the Dow Jones Industrial Average indicating a 122-point opening bell bump while those linked to the S&P 500, which is down 21.1% for the year, its worst first half performance since 1962, are priced for a 10-point gain. Futures linked to the tech-focused Nasdaq are looking at a 75-point opening bell advance. The U.S. dollar climbed 0.26% against a basket of foreign currencies to trade near 104.250, while weighing on front-month WTI futures that traded $0.46 lower to $105.74 bbl. The international crude benchmark Brent contract for August delivery slipped $0.28 to $111.43 bbl. NYMEX RBOB July contract retreated 1.74 cents to $3.8167 gallon and NYMEX July ULSD futures fell to $4.3802 gallon, down more than 2 cents.
Oil prices slump as investors fear Fed rate hikes will hurt demand -- Oil prices dropped by nearly $2 a barrel on Thursday after another round of remarks from Federal Reserve Chair Jerome Powell fanned worries U.S. interest rate hikes would slow economic growth. Brent crude futures settled at $110.05 a barrel, falling $1.69, or 1.5%. U.S. West Texas Intermediate (WTI) crude futures settled at $104.27 a barrel, down $1.92, or 1.8%. Powell said the Fed`s focus on curbing inflation was "unconditional" and the labor market was unsustainably strong, comments that stoked fears of more rate hikes. Investors have been paring positions in risky assets as they assess whether inflation-fighting central banks could push the world economy into recession with higher interest rates. "If the U.S., and the rest of the world goes into a recession, you can significantly impact demand," Also, high gasoline prices could be starting to slow demand, U.S. retail prices are currently averaging $4.94 a gallon, down about 10 cents from the peak, according to AAA. Major U.S. oil refiners and Energy Secretary Jennifer Granholm emerged from an emergency meeting over the issue with no concrete solutions to lower prices, according to a source familiar with the discussions, but the two sides agreed to work together. The most recent estimates by the American Petroleum Institute, according to market sources, showed U.S. crude and gasoline inventories rising last week, which also weighed on prices, Yawger said. Official weekly estimates for U.S. oil inventories were scheduled to be released on Thursday but technical problems will delay those figures until next week, the U.S. Energy Information Administration said, without giving a specific timeline. OPEC and allied producing countries including Russia will likely stick to a plan for accelerated output increases in August in hopes of easing crude prices and inflation as U.S. President Joe Biden plans to visit Saudi Arabia, sources said. The group known as OPEC+ agreed at its last meeting on June 2 to boost output by 648,000 barrels a day in July, or 7% of global demand, and by the same amount in August, up from the initial plan to add 432,000 bpd a month over three months until September.
Crude Oil Higher; OPEC Meeting Dominates Next Week --- Oil prices traded higher Friday, helped by continued tight supply, but the market is still heading for a second weekly fall on fears that tight monetary policy will push the global economy into recession.By 08:45 AM ET (1245 GMT), U.S. crude futures traded 2.3% higher at $106.66 a barrel, but still on course for a weekly loss of around 3%, while the Brent contract rose 2.1% to $112.34 a barrel, set to lose 1% this week.U.S. Gasoline RBOB Futures were up 1% at $3.8041 a gallon. The crude market has been helped by comments from the Libyan oil minister, who said late Thursday that the National Oil Corporation chairman was withholding production data from him. He had said earlier in the week that Libya's oil production has risen in the past week to around 700,000 to 800,000 barrels a day, but these figures must now be in doubt as an increase in political tension and protests at energy fields and ports has severely curtailed production in this country, home of Africa’s largest oil reserves.That said, the crude market is on course for its second consecutive losing week amid concerns that interest rate hikes by a number of central banks, and the Federal Reserve in particular, will severely limit global economic activity.Fed Chair Jerome Powell said on Thursday the central bank's focus on curbing inflationwas "unconditional", suggesting more interest rate hikes ahead, which he added raised the “possibility” of recession.“The move lower in oil appears to be almost exclusively driven by macro influences, while oil fundamentals still remain supportive,” said analysts at ING, in a note. “We just have to look at the time spreads, which have not followed the flat price lower over the week…This suggests that there is tightness in the market right now and we would expect this to only grow as we lose more Russian supply.”Next week sees the latest meeting of the Organization of Petroleum Exporting Countries and allies to discuss the group’s production levels.The cartel, known as OPEC+, is widely expected to stick to its plan to boost output by 648,000 barrels a day in July and by the same amount in August, despite the plans of U.S. President Joe Biden to visit Saudi Arabia, the de facto leader of the group, to plead the case for lower crude prices.Also likely to emerge next week will be the delayed inventory data from the U.S. Energy Information Administration, after the official body was unable to publish this week’s figures on Thursday due to technical problems. “This delay comes at a crucial time for the market when there are plenty of concerns over the tightness in refined product markets,” ING added.
Oil Loss Deepens as U.S. Recession Fears Grow; Weekly Data Delayed - Fed Chair Jerome Powell reiterates the central bank has no intent to crash the U.S. economy. But the rate hikes it’s threatening investors with aren’t giving any comfort to the oil market, which deepened its losses on Friday to settle below $105 a barrel on recession fears. Adding to the cautious mood of investors was the surprise delay in the weekly U.S. oil inventory report, which Bloomberg said was held up by “power issues” and unlikely to see publication until next week. New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled Thursday’s trade down $1.92, or 1.8%, at $104.27 per barrel. London-traded Brent crude, the global benchmark for oil, settled down $1.69, or 1.5%, at $110.05. “Crude prices may remain heavy until Wall Street is done fully pricing in an economic slowdown that will bring this economy on the verge of a recession,” said Ed Moya, analyst at online trading platform OANDA. Powell reiterated on the second day of his biannual testimony to the U.S. Senate that the Fed had no intention of deliberately slowing the economy to bring down inflation raging at over 8% a year — more than four times its target. Yet, the central bank would be reluctant to shift from raising rates to cutting them until it saw clear evidence that inflation was coming down in a convincing fashion, Powell said. “We can’t fail on this. We really have to get inflation down,” Powell said. “We’re going to want to see evidence that it really is coming down before we declare ‘mission accomplished.'” The Fed announced last week its stiffest US rate hike in 28 years to fight inflation, adding a three-quarter point that brought key lending rates to as high as 1.75% from May’s peak of 1%. That hike came after US inflation, as indicated by the Consumer Price Index, grew at an annualized rate of 8.6% in May — more than four times the Fed’s target. The Fed’s preferred rate of inflation is a mere 2% a year and it has vowed to raise rates as high and long as necessary to bring price growth back to its annual target. Economists, however, fear that the central bank will push the US economy into a recession with its rate hikes. The economy experienced a negative growth of 1.4% for the first quarter. If it does not return to positive growth by the second quarter, it will technically be in a recession, given that it takes just two straight quarters of negative growth to make a recession. As for the weekly oil inventory data, as of Wednesday analysts tracked by Investing.com expected the EIA to report a crude stockpile drop of 569,000 barrels, versus the 1.96-million barrel rise reported during the week to June 10. On the gasoline inventory front, the consensus is for a draw of 452,000 barrels over the 710,000-barrel decline in the previous week. With distillate stockpiles, the expectation is for a climb of 328,000 barrels versus the prior week’s gain of 725,000.
Oil Futures Rebound as Traders Refocus on Libyan Supplies-- Oil futures nearest delivery rallied more than 3% Friday, with both crude benchmarks finishing the volatile week little changed as traders assessed recessionary risks in the United States against a tightening global oil market with less supply available in Libya and Russia amid sanctions and political turmoil.Libya was back in the spotlight this week after violent protests once again disrupted more than 1 million barrels in daily oil production from the North African producer. Libya's oil minister said on Thursday that production has since recovered to 700,000 barrels per day (bpd) from just under 100,000 bpd seen earlier this month. That was welcomed news for the oil-consuming nations that are scrambling to look for additional supplies as crude from Russia, the world's third-biggest producer, comes under Western sanctions. Analysts believe that additional supplies from Libya could partially offset the loss of Russian oil on the global market but caution that production remains volatile amid political turmoil.In financial markets, Federal Reserve Chairman Jerome Powell raised the probability of a recession in the U.S. tied to surging inflation and tightening monetary policy. During testimony before the U.S. Senate Banking Committee on Wednesday, Powell cautioned that lowering rapidly broadening inflation without tipping the U.S. economy into a painful downturn would be "very challenging," and that a recession is "certainly a possibility." U.S. consumer prices, a gauge of inflation, climbed to 8.6% in May, with prices for essential items such as food and fuel accelerating rapidly from the previous month. Consumer sentiment in the U.S. slumped to a record low 50 in late June, according to the University of Michigan's closely watched survey, with consumers abruptly lifting their short- and long-term inflation expectations. Nearly 46% of respondents attributed their negative views about the economy to persistent price pressures. Just 13% expect their incomes to rise more than inflation, the lowest share in almost a decade. Separately, U.S. Energy Information Administration was forced to delay its Weekly Petroleum Status Report until next week due to "systems issues," leaving traders to rely on the American Petroleum Institute for a weekly update on U.S. inventory levels. API data showed commercial crude oil inventories increased by a surprise 5.6 million barrels (bbl) during the week-ended June 17 -- the third consecutive weekly build. Building inventory likely signals slowing fuel demand as high gasoline prices prompt consumers to drive less while a slowing economy tilting closer to recession saps demand for diesel fuel. API reported gasoline inventories in the U.S. increased 1.216 million bbl last week compared with calls for a draw of 800,000 bbl, while distillate inventories fell 1.656 million bbl, missing an expected 300,000 bbl week-on-week increase. At settlement, NYMEX August WTI futures climbed $3.35 to $107.62 bbl and ICE Brent crude for August delivery advanced $3.07 to $113.12 bbl. NYMEX RBOB July contract rallied 11.92 cents to $3.8848 gallon and NYMEX July ULSD futures gained 2.5 cents to $4.3629 gallon.
Oil settles up but posts weekly decline on recession fears - Oil prices settled up by more than $3 a barrel on Friday, supported by tight supply, but they notched their second weekly decline on concern that rising interest rates could push the world economy into recession. Brent crude settled up $3.07, or 2.8%, at $113.12 a barrel by 12:10 p.m. EDT (1610 GMT). U.S. West Texas Intermediate (WTI) crude settled up $3.35, or 3.2%, at $107.62. The U.S. Federal Reserve "was talking very hawkish which was undermining the oil rally, but sentiment is changing a little especially on strong economic data," On Thursday, Fed Chair Jerome Powell said the central bank's focus on curbing inflation was "unconditional", adding to fears about more interest rate hikes. A survey on Friday showed U.S. consumer sentiment hit a record low in June even as the outlook for inflation improved slightly. Russia's invasion of Ukraine exacerbated tight supplies this year just as demand has been recovering from the COVID pandemic, and oil came close to an all-time high of $147 reached in 2008. Crude has gained support from the almost total shutdown of output in OPEC member Libya due to unrest. On Thursday, the Libyan oil minister said the National Oil Corporation chairman was withholding production data from him, raising doubts over figures issued last week. The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, meet on June 30 and are expected to stick to a plan to only slightly accelerate hikes in oil production in July and August. U.S. energy firms this week added oil and natural gas rigs for a second week in a row in a record 23-month streak of increases, as high crude prices and prodding by the government prompted drillers to return to the wellpad, energy services firm Baker Hughes Co said in its closely followed report on Friday. The latest weekly U.S. oil inventory figures, which will give a snapshot of supply tightness in the top consumer, have been delayed to next week due to technical issues.
Nuke Deal Breakthrough? Iran Drops Demand That IRGC Be Removed From Terror List --In a significant concession aimed at reviving stalled negotiations with the United States, Iran has dropped its demand that the Iranian Revolutionary Guard Corps (IRGC) be removed from Washington's list of designated terror groups, Middle East Eye reports.Previously, Iran made the IRGC's removal from the list a precondition for restoring the multinational deal that limits Iran's nuclear energy program in exchange for sanctions relief. In May, it was reported that Biden decided not to budge on the IRGC designation. The Iran nuclear deal—officially, the Joint Comprehensive Plan of Action (JCPOA)—was signed during the Obama administration after lengthy and intense negotiations involving not only the United States and Iran, but also China, France, Germany, Russia and the United Kingdom. It imposed a host of additional restrictions on a nuclear energy program that was already operating under tight International Atomic Energy Agency supervision. Though Iran was complying with the deal, Donald Trump—caving to neocon foreign policy advisors and Israel-first mega-donor Sheldon Adelson—unilaterally withdrew the United States from the deal in May 2018. Progressing further along a neocon to-do list that also included moving the U.S. embassy from Tel Aviv to Jerusalem, Trump designated the IRGC as a terrorist organization in 2019. In a Hebrew-language tweet, then-Israeli prime minister Benjamin Netanyahu thanked Trump for "acceding to another one of my important requests." Lacking any specifics, Trump's designation centered on vague claims that Iran engaged in "malign" behavior in the Middle East and around the world. The IRGC is a major Iranian military organization that's independent from the country's regular army. Established in 1979 to safeguard the nascent Islamic republic, it has grown to become the country's dominant military entity—a force of some 125,000 complete with its own army, navy, air force and intelligence service. It also wields political and economic power. It was the first time a state military institution had been labeled as a terrorist organization. The move was opposed by officials in the CIA and Department of Defense, along with former Obama national security advisor and current secretary of state Antony Blinken. Given other sanctions already in place on Iran and the IRGC, the designation's actual financial impact was muted.In tit-for-tat fashion, Iran responded by designating the Pentagon's Central Command (CENTCOM) a terrorist organization and the U.S. government as a "supporter of terrorism." CENTCOM is responsible for military operations across a geographic swath stretching from Egypt through the Middle East to Kazakhstan and Pakistan.
Iran Says Legal Work Underway for Release of Seized Ships --Iran said Greece is preparing legal documents required for the release of two Greek ships seized by the Islamic Republic in retaliation for an Iranian oil cargo that Athens detained to enforce US sanctions. Iran’s Foreign Ministry spokesman, Saeed Khatibzadeh, told reporters that he hopes the Greek government will “in practice” in return release the Iranian tanker and cargo it seized. His comments come after a court in Greece overturned a decision that allowed the cargo to be confiscated. The seizures have stoked tensions in the oil-rich Persian Gulf, where tit-for-tat attacks on ships and energy installations have been frequent since the US withdrew from the 2015 nuclear deal and reimposed sanctions on Iran. The latest dispute comes as negotiations to revive the landmark accord remain stalled amid a standoff about the removal of a Trump-era US terrorism designation on Iran’s Islamic Revolutionary Guard Corps. Greek authorities seized the Iranian tanker and confiscated its cargo last month. At the time, Iranian officials said the seizure was made in coordination with the US. Days later, the IRGC diverted two Greek oil tankers into Iranian territorial waters in the Persian Gulf.
USA Navy and Iran Corps Clash in Strait of Hormuz -U.S. Naval Forces Central Command Public Affairs announced Tuesday that three vessels from Iran’s Islamic Revolutionary Guard Corps Navy (IRGCN) interacted in an “unsafe and unprofessional manner” as U.S. Navy ships transited the Strait of Hormuz on June 20. Patrol coastal ship USS Sirocco (PC 6) and expeditionary fast transport ship USNS Choctaw County (T-EPF 2) were conducting a routine transit in international waters when three Iranian fast inshore attack craft approached, the U.S. Navy noted. One of the IRGCN vessels approached Sirocco head-on at a “dangerously high” speed and only altered course after the U.S. patrol coastal ship issued audible warning signals to avoid collision, according to the U.S. Navy, which added that the Iranian vessel came within 50 yards of the U.S. Navy ship during the interaction and that Sirocco responded by deploying a warning flare. “The full interaction among all vessels lasted one hour and ended when the IRGCN craft departed the area. U.S. Navy ships continued their transit without further incident,” the U.S. Navy stated. “The IRGCN’s actions did not meet international standards of professional or safe maritime behavior, increasing the risk of miscalculation and collision,” the U.S. Navy added. “U.S. naval forces remain vigilant and will continue to fly, sail and operate anywhere international law allows while promoting regional maritime security,” the U.S. Navy continued. Earlier this month, the U.S. Navy revealed that naval forces from the United Arab Emirates and United States had begun a 10-day maritime exercise on June 13 in the Arabian Gulf. The exercise is an annual bilateral training event between U.S. Naval Forces Central Command and forces from the United Arab Emirates, the U.S. Navy outlined, adding that the exercise focuses on maritime security operations, mine countermeasures and harbor defense. According to an update in April this year by Statista, which describes itself as a leading provider of market and consumer data, around 18 million barrels of oil passed through the Strait of Hormuz every day in 2020.
Russia Attacks US-Backed Fighters In Syria At American Outpost -- US military officials have told The Wall Street Journal that Russia forces have carried out multiple military operations against the US-led coalition in Syria this month. This included a Wednesday attack on the al-Tanf garrison along the Iraq border in southeast Syria, though so far it appears the operations have targeted American proxies, namely local Arab and Kurdish factions that US trainers have been supporting.Given that Russia informed the Americans of the attacks ahead of time via a military-to-military communications line, the Pentagon believes Russia "wasn’t actively targeting American troops but was harassing the US mission in Syria." With al-Tanf, US officials described that "a combat outpost at the garrison" was hit in the Russian strike, but no US troops were there at the time, in an attack that appeared to target ”US-backed Maghawir al-Thawra fighters" - which Russia says was responsible for an earlier roadside bomb attack against its troops. There were no reports of casualties, as coalition forces quickly evacuated due to the prior Russian warning.It's clear that this is perhaps the closest Russian and US forces have ever come to direct conflict, something the Pentagon has expressed a desire to avoid, but said Russia's recent actions are a serious "provocation" and mark an escalation. "We seek to avoid miscalculation or a set of actions that could lead to unnecessary conflict: that remains our goal," Army Gen. Erik Kurilla, the head of US Central Command said. "However, Russia’s recent behavior has been provocative and escalatory."CNN added in a follow-up to the WSJ report:The initial US assessment is the Russian forces were likely ordered to notify the US ahead of time and conduct the airstrikes knowing they would not hit US troops and that the Americans would warn their allies, the officials said.But the Russians still likely achieved their goal of "sending a message" to the US that they can strike without being worried about retaliation, one official said.There have been a number of 'close calls' between US and Russian troops operating in Syria over the years. Russian forces are there at the invitation of the Syrian government, while President Assad has called the Americans hostile foreign occupiers and demanded they withdraw. Sometimes the rival convoys block each other in standoffs on key Syrian roadways near areas of the US occupation, which is heaviest in the northeast. However, some observers are seeing in this month's strikes near US positions a deliberate signal that things are intensifying related to Ukraine, and the Kremlin is engaged in muscle-flexing in the face of the some 900 US troops still in Syria.
Ukraine strikes drilling platforms off Crimea - Ukrainian military forces targeted offshore oil and gas drilling platforms in the Black Sea on Monday, the country’s officials and Russia-installed head of Crimea have said.Oleksiy Honcharenko, People’s Deputy of Ukraine, first broke the news on Telegram, which was later confirmed on the same platform by Sergei Askyonov, who was appointed as head of the peninsula that Russia annexed from Ukraine in 2014.The drilling rigs known as the Boyko’s Towers were struck by missiles and “slightly hampered gas production in the Ukrainian Black Sea by the Russians,” wrote Honcharenko.The 2010-built jackup Petro Godovanets and the 2012-builtUkraine are under the control of Crimea-based oil and gas exploration company Chernomorneftegaz, which operates in the Black Sea and the Sea of Azov. Chernomorneftegaz was seized by Russia-backed officials in Crimea from Ukraine’s state gas firm Naftogaz after the Russian annexation and has been under US and EU sanctions ever since.According to Askyonov, there were more than 100 people on three, and not two, drilling rigs claimed to have been attacked in the Black Sea. Five people were injured, 21 were evacuated, and search operations were being carried out for the rest.Gas production has been temporarily halted from the platforms, but there are no disaster-like consequences, Russian media said citing Olga Kovitidi, a senator representing Crimea in Russia’s upper house of parliament.This is the first reported strike against offshore energy infrastructure in Crimea since Russia launched a military operation in Ukraine on February 24. Earlier this month, the Ukrainian military destroyed the Russian tug off Snake Island in the Black Sea for allegedly transporting ammunition, weapons, and personnel to the island.
VIDEO: US Harpoon missiles destroy a heavily-armed Russian vessel in Black Sea -Ukrainian military officials have said they struck the Russian Navy's Vasiliy Bekh tugboat in the Black Sea using two Harpoon missiles supplied by the US. The action marks the first time Ukraine has announced it has destroyed a Russian vessel with Western-supplied armaments.On Friday, the attack was announced on Ukraine's Armed Forces Strategic Communications Directorate's Telegram channel. It published a video purporting to show the anti-ship missile blowing up the vessel. Insider could not independently verify the footage. The head of the Odesa Regional Military Administration, Maxim Marchenko, said, "This morning, our naval forces struck the Black Sea Fleet support vessel Vasily Bekh, with the TOR anti-aircraft missile system on board. Later it became known that he sank."
China's Geopolitical Pivot Could Have Huge Ramifications For Oil - China stated two weeks before Russia invaded Ukraine that “there is ‘no limit’ to how far Russian and Chinese friendship may go” and signed a swathe of huge oil and gas deals shortly thereafter that provided an additional layer of insulation to both countries from any U.S. sanctions in the future. Only a day after the invasion began on 24 February, however, Chinese President Xi Jinping held urgent talks with Russian President Vladimir Putin and advocated peaceful negotiations between Russia and Ukraine. This was widely seen as a sign that Beijing had not believed that Russia would launch a full-scale invasion of Ukraine before it did so and that Xi thought that overtly lining China up on the side of Russia against the U.S. and its NATO allies at that point on that issue might be too much too soon. Developments over the past week or so, though, indicate that Beijing’s caution in challenging U.S. supremacy around the globe might be dissipating. The practical ramifications for the global oil sector from such a shift would clearly be enormous, given that China remains the big global backstop bid for oil and that Russia remains one of the world’s top three oil producers. Last Wednesday (15 June – and Xi’s birthday), Russian news sources in the first instance released statements from the Kremlin that Russian President Vladimir Putin and his Chinese counterpart, President Xi, had enjoyed a “warm and friendly” telephone call during which Xi had pledged China’s ongoing support for Russia. The Russian news sources cited the Kremlin as adding that President Xi had “noted the legitimacy” of actions taken by Russia to protect itself “in the face of challenges to its security created by external forces”. The Russian sources went on to state that the Kremlin highlighted that Putin and Xi both agreed that China-Russia relations were at an “unprecedentedly high level” and that they planned to deepen ties in energy, finance and industry. China has not contradicted any element of the Kremlin’s statements on the content of the lengthy call and nor has it sought to tone down any of the specific language used in the statements. Moreover, Beijing has still not condemned – or overtly criticised in any way – Russia’s invasion of the independent sovereign state of Ukraine. On the contrary, at the beginning of April, China’s Foreign Ministry spokesperson, Zhao Lijian, laid the blame for Russia’s invasion of Ukraine squarely at the feet of the U.S. “As the culprit and leading instigator of the Ukraine crisis, the U.S. has led NATO to engage in five rounds of eastward expansion in the last two decades after 1999,” he said during a virtual summit call with leaders of the European Union. With Russian troops still on the ground across sizeable portions of Ukraine, and keeping European theatre troops of the U.S. and its NATO allies focused on ‘breakout threats’ from that war, Xi - on the same day as his call to Putin – for the first time ever signed a document that provides a legal basis for China’s military to carry out missions other than those directly necessitated by a war against China. According to local news reports, the new directive signed by Xi will: “Standardise, and provide the legal basis for, Chinese troops to carry out missions like disaster relief, humanitarian aid, escort and peacekeeping, and safeguard China’s national sovereignty, security and development interests”. As other Chinese news sources highlighted, the order signed by Xi, which came into effect from the moment he signed it on the 15th of June: “[Comprises 59 articles and six chapters] that serve as a legal base for military operations other than war [and] aim to protect people’s lives and property, safeguard national sovereignty, security and development interest, and safeguard world peace and regional stability”.
