US oil exports rose to a record high, even with US oil supplies at a 20½ year low, the Strategic Petroleum Reserve at a new 38 year low, & total oil + oil products supplies at a 17½ year low..
US oil prices finished higher for the first time in three weeks as US oil & fuel inventories shrunk and our oil exports rose to a record high....after rising 0.5% to $85.05 a barrel last week (even as the quoted price of oil ended lower due to the expiration of the higher priced November contract), the contract price for the benchmark US light sweet crude for December delivery fell in Asian trading on Monday as traders feared weak oil demand and a global economic downturn after Chinese data showed a 2% drop in their oil imports, and slumped lower in New York as the bearish Chinese data was compounded when Xi Jinping was given a third five-year term, dashing hopes that Beijing would pivot away from Xi's demand-sapping zero-COVID policy, but partly recovered to settle 47 cents lower at $84.58 a barrel as traders tried to gauge what might happen to supply and demand after the US midterms, and whether U.S. and global economic recessions could be avoided...oil prices fell more than 1 percent again early on Tuesday, reflecting lingering concerns about the outlook for global demand, particularly in China, but then followed Wall Street prices higher, as the dollar tumbled and energized markets, while traders continued to evaluated the potential for slowing commodities demand against near-term supply tightness. and settled with a 74 cent gain at $85.32 a barrel after Saudi Energy Minister Abdulaziz bin Salman warned that using emergency oil supplies to manipulate oil prices now might be painful in the months to come....oil prices pushed even higher early Wednesday, finding additional support from acute and widening diesel shortages along the East Coast that are heightening concern over historically low inventory levels heading into the heating season, and then surged nearly 3% to settled $2.59 higher at $87.91 after the EIA reported record U.S. crude exports and that refiners operated at higher-than-usual levels for this time of year, with the dollar's weakness adding support....oil prices continued to rise in early Asian trade on Thursday, driven by record US crude exports and a weaker dollar, and then spiked after the BEA reported that U.S. gross domestic product had expanded more than expected in the third quarter, and hung on to settle $1.17 higher at a two week high of $89.08 a barrel, on the expectation that a US economic rebound would bolster demand for oil, even if the possibility of interest rate hikes weighed on other markets...however, oil prices turned lower in Asia on Friday, after Chinese cities had ramped up Covid-19 curbs late on Thursday, sealing up buildings and locking down districts in a scramble to halt widening outbreaks, and gave back all of Thursday's gains to settle $1.18 lower at $87.90 a barrel as China widened its Covid-19 curbs, though losses were limited by the strong rebound in U.S. and German economies...hence, US oil prices finished the week with a 3.35% gain, as US fuel stockpiles dropped and exports rose to a record high, signaling robust demand despite recent bearish economic trends...
meanwhile, natural gas prices also finished the week higher for the first time in 10 weeks, boosted by the shift of price quotes to the higher priced December contract....[NB: while oil contract prices are presently lower in the future months, natural gas contract prices are higher for the winter months...hence, recent contract expirations have been lowering oil price quotes, but raising natural gas price quotes] after falling 23.2% to a seven-month low at $4.959 per million BTU last week on mild weather forecasts, expectations of easing demand, and rapidly rising inventories, the contract price of US natural gas for November delivery slid to a fresh seven-month low early in the Monday session, but quickly reversed as traders found value in the oversold contract and pushed it 24.0 cents higher to settle at $5.199 per mmBTU, the first increase in 7 trading sessions, on a technical rebound and on expectations that demand would rise once LNG export plants finish maintenance in the coming weeks...natural gas prices advanced for a second straight session on Tuesday amid forecasts for colder weather patterns, production interruptions and the looming expiration of the November contract, and settled 41.1 cents higher at $5.613 per mmBTU....however, natural gas prices reversed lower in early trading Wednesday amid a continued lack of early winter heating demand, but steadied as traders balanced expectations that demand would rise once LNG export plants exit maintenance outages against forecasts that demand will remain low through at least early November, and settled just seven-tenths of a cent lower at $5.606 per mmBTU...natural gas prices then fell on Thursday after the weekly storage report came in below already modest market expectations, and trading in the November contract ended 42.0 cents lower on the day at $5.186 per mmBTU, while the December contract, which would be the front month on Friday, fell 24.4 cents to $5.875 per mmBTU...thus, with the contract price of US natural gas for December delivery being quoted on Friday, prices slid from that level and settled down 19.1 cents at $5.684 per mmBTU amid light demand, strong production and forecasts for large storage injections, but still ended 14.6% higher on the week, with most of that due to the contract shift, while the December contract, which had finished last week priced at $5.472 per mmBTU, finished just 3.9% higher...
The EIA's natural gas storage report for the week ending October 21st indicated that the amount of working natural gas held in underground storage in the US rose by 52 billion cubic feet to 3,394 billion cubic feet by the end of the week, which still left our gas supplies 142 billion cubic feet, or 4.0% below the 3,536 billion cubic feet that were in storage on October 21st of last year, and 197 billion cubic feet, or 5.5% below the five-year average of 3,591 billion cubic feet of natural gas that were in storage as of the 21st of October over the most recent five years....the 52 billion cubic foot injection into US natural gas working storage for the cited week was lower than the average forecast for an injection of 59 billion cubic feet from a Reuters poll of analysts, and was much less than the 88 billion cubic feet that were added to natural gas storage during the corresponding week of 2021, and also less than the average injection of 66 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
US oil data from the US Energy Information Administration for the week ending October 21st indicated that due to two and a quarter million barrels per day of extra US oil supplies that could not be accounted for, we had oil left to add to our stored commercial crude supplies for the 5th time time in 8 weeks, and for the 21st time in the past 48 weeks, despite record shipments of crude oil exports....Our imports of crude oil rose by an average of 273,000 barrels per day to average 6,180,000 barrels per day, after falling by an average of 156,000 barrels per day during the prior week, while our exports of crude oil rose by 991,000 barrels per day to a record of 5,129,000 barrels per day, which together meant that the net of our trade in oil worked out to an import average of 1,051,000 barrels of oil per day during the week ending October 21st, 718,000 fewer barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly unchanged at 12,000,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 13,051,000 barrels per day during the October 21st reporting week…
With our oil exports at a record high, we'll include a historical graph of them below, where you can see that prior to the end of 2014, US oil exports, except for those allowed under NAFTA, had been negligible because they had been banned 40 years earlier, in the wake of the Arab oil embargo. The ban on US oil exports was lifted in a spending bill that Congress passed during the last week of 2015, part of a compromise that Obama agreed to in order to avoid a government shutdown...as you can see, the recent export spikes clearly beat the previous oil export highs by a large margin...
Meanwhile, US oil refineries reported they were processing an average of 15,436,000 barrels of crude per day during the week ending October 21st, an average of 114,000 fewer barrels per day than the amount of oil that our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that a net average of 118,000 barrels of oil per day were being pulled out of the varied supplies of oil stored in the US. So, based on that reported & estimated data, the crude oil figures from the EIA for the week ending October 21st appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 2,266,000 barrels per day less than what our oil refineries reported they used during the week. To account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+2,266,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed....moreover, since last week’s EIA fudge factor was at (+1,025,000) barrels per day, that means there was a 1,241,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, rendering those comparisons complete nonsense...however, since most everyone treats these weekly EIA reports as gospel, and since these figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)….
This week's 118,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 841,663,000 barrels at the end of the week, which was our lowest total oil inventory level since December 14th, 2001, and therefore at a 20 1/2 year low.….Our oil inventories decreased this week as an average of 370,000 barrels per day were being added to our commercially available stocks of crude oil, while 488,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve. That draw on the SPR was another installment of the emergency withdrawal under Biden's "Plan to Respond to Putin’s Price Hike at the Pump" (sic), that was intended to supply 1,000,000 barrels of oil per day to commercial interests over a six month period from its inception to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising until that time, and has been fluctuating in recent weeks because the administration has been attempting to use the Strategic Petroleum Reserve to manipulate prices on a weekly basis; moreover, last week Biden announced a final 15,000,000 barrel release from the Strategic Petroleum Reserve while simultaneously announcing he'd buy crude to replenish the SPR if prices fall to or below the $67-72 a barrel range, effectively putting a floor under oil at that price.....Including the administration's initial 50,000,000 million barrel SPR release earlier this year, their subsequent 30,000,000 barrel release, and other withdrawals from the Strategic Petroleum Reserve under recent release programs, a total of 251,014,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 27 months, and as a result the 401,718,000 barrels of oil that still remain in our Strategic Petroleum Reserve is now the lowest since May 25, 1984, or at a new 38 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration's SPR releases. The total 180,000,000 barrel drawdown of the current release program, now scheduled to run through December, will remove almost a third of what remained in the SPR when the program started, and leave us with what would be less than a 20 day supply of oil at today's consumption rate...
Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,025,000 barrels per day last week, which was 4.0% less than the 6,277,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be unchanged at 12,000,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was unchanged at 11,600,000 barrels per day, while Alaska’s oil production was 23,000 barrels per day higher at 431,000 barrels per day, but had no impact on the final rounded national total. US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 8.4% below that of our pre-pandemic production peak, but was 23.7% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021...
US oil refineries were operating at 88.9% of their capacity while using those 15,436,000 barrels of crude per day during the week ending October 21st, down from their 89.5% utilization rate during the prior week, but within the historical utilization rate range for mid October. The 15,436,000 barrels per day of oil that were refined this week were still 2.6% more than the 15,048,000 barrels of crude that were being processed daily during week ending October 22nd of 2021, but 3.5% less than the 15,998,000 barrels that were being refined during the prepandemic week ending October 25th, 2019, when our refinery utilization was at 87.7%, also within the normal range for mid October...
Even with the decrease in the amount of oil being refined this week, the gasoline output from our refineries was a bit higher, increasing by 58,000 barrels per day to 9,437,000 barrels per day during the week ending October 21st, after our gasoline output had increased by 213,000 barrels per day during the prior week. This week’s gasoline production was still 6.3% less than the 10,072,000 barrels of gasoline that were being produced daily over the same week of last year, and 7.3% below the gasoline production of 10,184,000 barrels per day during the week ending October 25th, 2019. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 45,000 barrels per day to 4,978,000 barrels per day, after our distillates output had increased by 160,000 barrels per day during the prior week. With that, our distillates output was 8.7% more than the 4,581,000 barrels of distillates that were being produced daily during the week ending October 22nd of 2021, and 0.2% more than the 4,970,000 barrels of distillates that were being produced daily during the week ending October 25th 2019...
Even with the increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 9th time in 12 weeks; and for the 29th time out of the past thirty-eight weeks, decreasing by 1,478,000 barrels to 207,890,000 barrels during the week ending October 21st, after our gasoline inventories had decreased by 114,000 barrels during the prior week. Our gasoline supplies fell by more this week because the amount of gasoline supplied to US users rose by 252,000 barrels per day to 8,930,000 barrels per day, while our imports of gasoline rose by 180,000 barrels per day to 655,000 barrels per day, and while our exports of gasoline rose by 95,000 barrels per day to 876,000 barrels per day. And after 29 gasoline inventory drawdowns over the past 38 weeks, our gasoline supplies were 4.2% lower than last October 22nd's gasoline inventories of 9,323,000 barrels, and about 6% below the five year average of our gasoline supplies for this time of the year…
Meanwhile, with the decrease in our distillates production, our supplies of distillate fuels increased for the 14th time in 23 weeks and for the 23rd time in the past year, rising by 170,000 barrels to 106,357,000 barrels during the week ending October 21st, after our distillates supplies had increased by 124,000 barrels during the prior week. Our distillates supplies rose again this week as the amount of distillates supplied to US markets, an indicator of our domestic demand, decreased by 194,000 barrels per day to 3,878,000 barrels per day, while our exports of distillates rose by 171,000 barrels per day to 1,215,000 barrels per day, and while our imports of distillates rose by 28,000 barrels per day to 139,000 barrels per day.. But after fifty-one larger inventory withdrawals over the past seventy-nine weeks, our distillate supplies at the end of the week were were 14.9% below the 124,962,000 barrels of distillates that we had in storage on October 22nd of 2021, and about 20% below the five year average of distillates inventories for this time of the year...
Meanwhile, despite the increase in our oil exports, our commercial supplies of crude oil in storage rose for the 14th time in 27 weeks and for the 21st time in the past year, increasing by 2,588,000 barrels over the week, from 437,357,000 barrels on October 14th to 439,945,000 barrels on October 21st, after our commercial crude supplies had decreased by 1,725,000 barrels over the prior week. After this week's increase, our commercial crude oil inventories remained to 2% below the most recent five-year average of crude oil supplies for this time of year, but were over 30% more than the average of our crude oil stocks after three full weeks of October over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels. And even though our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, and then jumped again after last year's winter storm Uri froze off US Gulf Coast refining, our commercial crude supplies as of this October 21st were 2.1% more than the 430,812,000 barrels of oil we had in commercial storage on October 22nd of 2021, while 10.7% less than the 492,427,000 barrels of oil that we had in storage on October 23rd of 2020, and 0.2% more than the 438,853,000 barrels of oil we had in commercial storage on October 25th of 2019…
Finally, with our inventories of crude oil and our supplies of all products made from oil near multi-year lows over the most recent months, we are also continuing to watch the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR. With the modest inventory decreases we've already noted for this week, the EIA's data shows that the total of our oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and thus including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, fell by 5,070,000 barrels this week, from 1,631,600,000 barrels on October 14th to 1,626,530,000 barrels on October 21st, after our total inventories had decreased by 6,097,000 barrels during the prior week. This week's decrease left our total liquids inventories down by 161,903,000 barrels over the first 42 weeks of this year, and at the lowest level since March 25th, 2005, or at a new 17 1/2 year low... ...
This Week's Rig Count
The number of drilling rigs running in the US fell for the seventh time in thirteenth weeks, and only for the 14th time over the past 109 weeks during the week ending October 28th, but even so, they're now 3.2% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US decreased by 2 rigs to 768 rigs this past week, which was still 224 more rigs than the 544 rigs that were in use as of the October 29th report of 2021, but was 1,161 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 decreased by 2 to 610 oil rigs during the past week, after the number of rigs targeting oil had increased by 2 during the prior week, while there are still 166 more oil rigs active now than were running a year ago, even as they amount to just 37.9% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 10.7% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations was down by one to 156 natural gas rigs, which was still up by 56 natural gas rigs from the 100 natural gas rigs that were drilling during the same week a year ago, even as they were only 9.7% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….
Other than those rigs targeting oil and natural gas, Baker Hughes also reports that two "miscellaneous" rigs continued drilling this week: one was a directional rig drilling to between 5,000 and 10,000 feet on the big island of Hawaii, while the other was a vertical rig drilling more than 15,000 feet into a formation in Humboldt county Nevada that Baker Hughes doesn't track....While we have seen no details on either of those, in the past we've identified various "miscellaneous" rigs as being exploratory, for carbon dioxide storage, and for utility scale geothermal projects...a year ago, there were were also two such "miscellaneous" rigs running...
The offshore rig count in the Gulf of Mexico was down by 1 to 13 rigs this week, with 11 of this week's Gulf rigs drilling for oil in Louisiana's offshore waters, and two rigs drilling for oil offshore from Texas....the Gulf rig count is now unchanged from the 13 Gulf rigs running a year ago, when 12 of 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 still have an offshore directional rig drilling to between 5,000 and 10,000 feet for natural gas in the Cook Inlet of Alaska, while a year ago, drilling offshore from Alaska had shut down for the winter...
In addition to rigs running offshore, there are still two water based rigs drilling through inland bodies of water this week; those include a directional rig drilling to between 10,000 and 15,000 feet, inland in St Mary Parish, Louisiana, and a directional rig drilling for oil at a depth greater than 15,000 feet in Terrebonne Parish, Louisiana; the inland waters rig that had been drilling for oil in Cameron Parish, Louisiana was shut down this past week...a year ago, there were two rigs drilling on inland waters...
The count of active horizontal drilling rigs was down by 5 to 703 horizontal rigs this week, which was still 220 more rigs than the 483 horizontal rigs that were in use in the US on October 29th of last year, but just 51.2% of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....on the other hand, the directional rig count was up by 2 to 43 directional rigs this week, and those were up by 11 from the 32 directional rigs that were operating during the same week a year ago…meanwhile, the vertical rig count was unchanged at 22 vertical rigs this week, which was down by 7 from the 29 vertical rigs that were in use on October 29th 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 October 21st, the second column shows the change in the number of working rigs between last week’s count (October 21st) and this week’s (October 28th) count, the third column shows last week’s October 14th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 29th of October, 2021...
we'll again start by checking the Rigs by State file at Baker Hughes for changes in Texas, where the count was down 3 rigs this week; first, there was a rig pulled out of Texas Oil District 1, which accounts for the decrease in the Eagle Ford shale; there was also a natural gas rig pulled out of Texas Oil District 8, which is the core Permian Delaware, but since that indicates a rig decrease in the Texas Permian, and since the national Permian basin count was unchanged, we can conclude that rig added in New Mexico was set up to drill in the far west Permian Delaware...however, since the Permian basin count for this week shows an increase of two, to 343, oil rigs and a decrease of two natural gas rigs to three, we can also conclude that the new New Mexico rig was targeting oil, and that in some other area of the Permian, a natural gas rig was pulled out while an oil rig was added that thus doesn't show up in our details...in addition, there was also a rig pulled out of Texas Oil District 10, which accounts for the decrease in the Granite Wash basin..
elsewhere, the Louisiana rig count was down by two with the removal of an oil rig from the adjacent Gulf of Mexico and the removal of the inland waters rig that had been drilling for oil in Cameron Parish; the North Dakota rig count was down by two with the removal of two oil rigs from the Williston basin, but the Williston basin was only down by one because an oil rig was added in the Williston in Montana, this time in Fallon county, at the same time...meanwhile, the rig added in Alaska was on the North Slope, where all Alaskan land drilling is now taking place, and even though the Oklahoma rig count was only up by 1, there were two oil rigs added in the state's Cana Woodford, and another oil rig added in the Arkoma Woodford; that means two rigs were removed from a basin or basins elsewhere in the state that Baker Hughes doesn't track...moreover, those basins that Baker Hughes doesn't track also account for the removal of four oil rigs and the addition of a natural gas rig, partly offsetting the Permian basin gas rig decrease...
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Ohio Energy Leaders Agree – Energy Future is Not an “Either/Or” Moment, but an “And” Moment - Ohio’s natural gas and oil industry is committed to a dual track of lowering the industry’s carbon footprint while maintaining reliability and affordability, according to panelists at the Ohio Chamber of Commerce’s recent energy conference. Participants were confident that this is achievable through an all-of-the-above energy portfolio that unleashes domestic oil and natural gas while capitalizing on renewable innovation. On Thursday, energy leaders from across the value chain gathered for the Ohio Chamber’s “Energy Supply Chain: Present & Future” conference. Participants included oil and natural gas producers, pipeline operators, policymakers, renewable companies, and more, with questions largely centering on the energy transition and how various resources fit into the sustainable future.A key point reiterated was how Ohio – and the larger Appalachian region – is blessed with an abundance of natural gas resources by sitting on top of the Marcellus and Utica shales.The region’s Shale Revolution has provided enormous direct and indirect economic benefits for the state including new markets, jobs, wage-growth, and more. Jackie Stewart with Encino Energy, one of Ohio’s largest oil and natural gas producers, emphasized this point:“The majority of our oil produced here in Ohio are going to Ohio refineries. Ohio made natural gas is running through these pipes…that means huge economic benefits.” Adam Parker from pipeline company Enbridge added: “We [the energy industry] exist to fuel our quality of life…from charging our cell photos to heating our homes. All of us working together are a key enabler for Ohio’s economy.”
Ohio Drillers Say They are Ready to “Unleash American Energy” | Marcellus Drilling News - Yesterday, the Ohio Chamber of Commerce held its “Energy Supply Chain: Present & Future” conference at the Ohio Statehouse Atrium in Columbus. Participants and speakers included oil and natural gas producers, pipeline operators, policymakers, renewable companies, and more. Questions largely centered on the energy transition and how various resources fit into a so-called sustainable future. The upshot was that Ohio’s natural gas (mostly Utica, some Marcellus) is front and center as a driving force for Ohio energy, and the Ohio economy.
Ohio Senate Contest Features Two Candidates Who Profess Love for Natural Gas - InsideClimate News - In the race for Ohio’s open U.S. Senate seat, Rep. Tim Ryan, a Democrat, fought off a debate attack by talking about his fondness for natural gas. “In the Inflation Reduction Act, we’re going all in on natural gas,” Ryan said in an Oct. 11 debate in Cleveland. “I’ve been a natural gas proponent since I’ve been in Congress and we have to get this right. We need to increase our production of natural gas.” He is running against J.D. Vance, the investor and author, who also wants to see an increase in production of gas, a fossil fuel that contributes to climate change. It’s not difficult to see why some environmental advocates are leery of some of Ryan’s views. But Ryan’s voting record shows him to be firmly within his party’s mainstream, despite his emphasis on positions that appeal to the political center. Meanwhile, Vance casts himself as an outsider in the tradition of former President Donald Trump and has adopted much of Trump’s approach to energy and the environment, downplaying the risks of climate change and criticizing the transition to renewable energy and electric vehicles. The race shows how energy gets discussed in a state that ranks sixth in the country in natural gas production and where Democrats, with the exception of Sen. Sherrod Brown and Ohio Supreme Court justices, are on an extended losing streak in statewide races. With polls showing a dead heat, the race is surprisingly close, considering that Trump easily won Ohio’s electoral votes in 2016 and 2020. If Ryan were to win, it would be an upset that would help to tilt the Senate, now divided 50-50 between the parties, in Democrats’ favor. “I don’t think Democratic enthusiasm is functionally going to be a problem for Ryan,” said Kyle Kondik, managing editor of Sabato’s Crystal Ball at the University of Virginia Center for Politics, and an Ohio native. Inside Climate News contacted both candidates’ campaign offices and neither responded.
ODNR issues permit for injection well in Little Hocking amidst pollution fears - (WTAP) - The Ohio Department of Natural Resources has issued a permit for an injection well in Little Hocking. Some locals and the Little Hocking Water Association fear the project could pollute their drinking water.Linda Aller, a hydrogeologist with Bennett and Williams who works with the Little Hocking Water Association, explained, “They’re using these wells to dispose of all those unwanted liquids from drilling and fracking.”It will be owned by Arrowhead Road Services LLC, which already has another injection well in the area.There have been several local meetings held about the project. Click the links below to learn more about those meetings.The Little Hocking Water Association General Manager John Smith said the injection site is only about a mile away from their well field.Aller said the new Arrowhead injection well could interfere with improperly plugged orphan wells that might be in the area.“..., there’s a lot of wells that were drilled in the old days where no one knows where they really are that weren’t correctly plugged,” she explained.The consequences of that would be contaminated drinking water and environmental pollution, according to Aller. She explained that injection wells inject fluid into the ground, which creates pressure, which could force the fluid back up if there’s a hole from an orphan well underground.“If it comes back up, it can then move into the shallower formations, which are where you get your water supply from,” she said. The Ohio Department of Natural Resources said it cannot calculate the risk orphan wells pose but acknowledged that the risk is there.
EQT CEO Toby Rice sees opportunity for Appachian hydrogen hub - One of the leaders in the Pittsburgh region’s push toward a regional hydrogen and carbon capture storage hub said Appalachia is the perfect spot when it comes to the expected next step in the energy transition. “Appalachia is ideally suited to lead the charge in clean hydrogen production in the United States, given abundant, low-cost, low-emissions natural gas, interconnected infrastructure and storage, existing transportation networks and proximity to major end-use markets,” said Toby Z. Rice, president and CEO of Pittsburgh-based EQT Corp. (NYSE: EQT). Rice and EQT have been among the leading voices for the region’s move to build a hydrogen/carbon capture hub, a multibillion-dollar initiative to reduce and eliminate the emissions linked to climate change by revamping manufacturing, power and other energy uses to hydrogen. EQT is a founding member of Appalachian Energy Future, a group of companies that are working to build up awareness among policymakers and the public on the wisdom of hydrogen and carbon capture. It’s also joined the Appalachian Regional Clean Hydrogen Hub, also known as ARCH2, a consortium of EQT, the state of West Virginia, Battelle and others that want to build a hydrogen production facility in West Virginia and infrastructure in Ohio and Pennsylvania. ARCH 2 will be one of the groups seeking funding from an $8 billion opportunity from the federal government. Proposals are due in early November and full applications in February; a decision on the first stage of funding between eight and 10 burgeoning hydrogen hubs nationwide is expected in the second half of 2023. EQT is among the companies that would like to see hydrogen, which has a low emissions profile in an end use, created from Marcellus and Utica shale natural gas. That would ensure a future for natural gas, especially paired with technology that would capture any carbon emissions and then turn it into a solid that would either be repurposed into another product or transported as a liquid to be stored permanently underground. In a conference call with analysts, Rice said he was excited about the potential for the technology to decarbonize and at an attractive price. It’s not clear, he said, when that would happen and that EQT would temper its spending in the short term. “Before we would put any dollars, significant dollars, there, we need to understand the profitability of those,” Rice said. Cost is a major issue. But so is demand because, for the time being, natural gas is far cheaper than hydrogen. The hydrogen hub “is going to allow us to get past that chicken and the egg issue, and I think it’s going to be a really good example of the collaboration necessary to make these exciting zero carbon solutions a reality,” he said. “More to come.”
EQT 3Q Completed Wells & Production Drops, but Profits Rise | Marcellus Drilling News - EQT faced some strong headwinds during the third quarter of 2022, but the company still came out on top. The headwinds included third-party (mainly pipeline) outages beyond EQT’s control, as well as droughts that decreased the volume of water the company could lay hands on for fracking. As a result, the company brought online to sales just 16 new wells instead of the 22 to 32 forecasted. Production slipped too, to 488 Bcfe (billion cubic feet equivalent), down 7% from last year’s 3Q. That 488 Bcfe calculates out to be 5.30 Bcfe/d. On the plus side, the company generated net income of $684 million in 3Q22 vs. losing $1.98 billion in 3Q21, and it generated free cash flow of $591 million.
Sinkholes Attributed to Gas Drilling Underline the Stakes in Pennsylvania’s Governor’s Race - The Allegheny Front —Standing in her granddaughter’s yard in Carlisle, Pennsylvania, on a recent fall day, Lynde Blymier pointed to a patch of ground where the grass was sparse. On this foot-wide spot, dead leaves were scattered over what looked like freshly overturned earth, the color of red clay.According to Blymier, it was a sinkhole, and although this one was filled in, it was only one of a series of such holes that stretched behind her granddaughter’s home, past her great-grandson’s swing set and toys, in a surprisingly neat line that marched toward the edge of the property. One of the craters had a chair positioned over it to prevent tripping. “Everything starts as a little hole, a perfect circle,” said Blymier, 70, “and then starts to get deeper and bigger and bigger. They expand over time. Blymier has lived in this mobile home park for more than 30 years and works as its property manager, so she has extensive knowledge of the utilities connected to the site and of its construction in 1987. She first noticed changes on the property after Sunoco, the Texas-based oil and gas company, began construction of a section of the Mariner East II pipeline in 2017 that cuts through the property. Since then, she said, engineers who surveyed the area have estimated that Sunoco has lost over 300,000 gallons of drilling fluid in the site, which includes the mobile home park, storage units, an office building and a parking lot and is bordered by the Appalachian Trail, the Pennsylvania Turnpike and Interstate Highway 81. Earlier this year, Blymier and her neighbors thought they had finally found someone in government who could help them: the current state attorney general, Josh Shapiro. Now the Democratic candidate for governor, Shapiro has earned a reputation as the rare Pennsylvania politician who was willing to openly challenge oil and gas companies, often citing the state’s constitutional right to clean air and pure water.
As Nov. 8 election approaches, Wolf and Pa. lawmakers look to push through massive tax incentives for natural gas · Democratic Gov. Tom Wolf and top state lawmakers are hurriedly negotiating a massive economic development package that would encourage natural gas development in Pennsylvania. The proposed credits, totaling $180 million a year, are aimed at different industries including hydrogen production, milk processing, and biomedical research, according to draft bill language viewed by Spotlight PA. The incentives would sunset in 2045, putting the potential price tag of foregone state taxes at roughly $3.6 billion if the credits are claimed in full.Taken as a whole, the package would be even bigger than the record-setting $1.65 billion incentive Pennsylvania gave Shell for its plastic factory in Beaver County.With the Nov. 8 election fast approaching, such a deal — rumored since September — could appeal to both major parties and their allies in business and organized labor. But Wolf and lawmakers are running out of time to push it through before voters head to the polls.The legislature is scheduled to adjourn this week until late next month, and the two-year session ends on Nov. 30.It’s unclear if legislative leaders will be able to rally support for the package, but it is a priority. Both state Senate Majority Leader Kim Ward (R., Westmoreland) and state House Appropriations Committee Chair Stan Saylor (R., York) acknowledged ongoing talks last week.“The governor wants some things, we want some things,” Saylor said.A Wolf spokesperson did not immediately reply to a request for comment.The keystone of the proposed deal is an annual $50 million tax credit to incentivize hydrogen production in Pennsylvania, according to the draft language.The package would also set aside $50 million each in annual tax breaks for milk processing and medical research, and expand an existing tax credit for companies using fracked methane in manufacturing.Wolf signed the latter in 2020, which created $26 million a year in tax incentives over 26 years. The new proposed tax deal would expand that credit by $30 million but cut its timeline short.
Could a new LNG export terminal be coming to the Marcellus / Utica's backyard? - Without a doubt, the two biggest changes to U.S. natural gas markets in the last 15 years have been the Shale Revolution and the development of LNG exports. These completely upended the way gas flowed in this country, with the Northeast now home to the largest gas-producing basin and the Gulf Coast — including its fleet of LNG export terminals — now the U.S.’s largest demand center. Production growth in the Marcellus/Utica has stalled, however, largely due to the regulatory and legal challenges associated with building new pipeline takeaway capacity. One possible fix would be a new East Coast LNG terminal, which in addition to having easy access to cheap, almost-local gas would also be close to gas-hungry European markets. But just how likely is such a project? In today’s RBN blog, we discuss the advantages and hurdles of developing LNG export capacity on the East Coast.The Mid-Atlantic region already has one LNG terminal, of course — Cove Point LNG, on the Chesapeake Bay in Maryland (yellow diamond in Figure 1) — and we should look at that facility in depth before we discuss the potential for a second LNG export terminal close to the Marcellus/Utica. Cove Point is a single-train, 5.25-MMtpa (700 MMcf/d) liquefaction-and-export facility owned by Berkshire Hathaway. All of its feedgas comes from the Marcellus/Utica via contracts with two area upstream producers, Coterra Energy in Northeast Pennsylvania and Antero Resources in Southwest Pennsylvania and West Virginia. The producers also manage gas transmission from the production area to Dominion Cove Pipeline (purple line), which feeds into the LNG terminal. [….] Cove Point has shown itself to be a viable and highly competitive LNG exporter. Could the same be said for a second export terminal in the Mid-Atlantic region? First, it’s clear that there would be ample gas production available — the Marcellus/Utica has extraordinarily large proven reserves of gas that would be economic to produce even at much lower prices. There’s also decent in-region pipeline capacity in place to move gas around. Depending on the exact terminal location, it’s likely that only a “last-mile” pipeline would be needed to connect to a new LNG terminal.Are any plans in the works? Well, New Fortress Energy had been planning a floating LNG project on the New Jersey side of the Delaware River but it put that project on hold because of local opposition. For now, all eyes are on Penn American Energy, which has been developing Penn LNG (see artist’s rendering below), a proposed 7.2-MMtpa (950 MMcf/d, requiring about 1.2 Bcf/d of feedgas) facility that could be built at one of four locations along the Delaware River near Philadelphia. Although the final site has not been selected, many think it could be at the Marcus Hook Industrial Complex (green diamond in Figure 1), which is already an export point for the area’s NGLs. Marcus Hook (and the three other locations under consideration) could receive gas from Texas Eastern and Transco pipelines. Feedgas could be purchased from the nearby Transco Zone 6 Non-NY or TETCO M3 pricing hubs in Southeast Pennsylvania, both of which trade at a discount to Henry Hub for most of the year. Far more likely, however, is that deals will be made directly with upstream producers to supply the terminal, cutting the producers in on the sale of LNG, thereby giving producers exposure to premium export markets in exchange for feedgas supply. It’s an attractive option for Marcellus/Utica producers who are all too familiar with low in-basin prices and constraints to get their supply out.
Range Resources CEO Says Marcellus, Utica Shales Vital to Stabilize Natural Gas Markets - Fort Worth, TX-based Range Resources Corp is among the country’s largest natural gas producers, with nearly one million net acres in Pennsylvania targeting the Marcellus, Utica and Upper Devonian shale formations. “As we continue to witness a global energy crisis, it’s apparent that the world desperately needs access to abundant, safe, reliable and ethical fuel sources,” CEO Jeff Ventura told analysts during a call to discuss Range’s second-quarter earnings. “Families in Europe are facing real challenges that may not be solved this winter…a stark reminder that evolving energy policy will need to be thoughtful, prioritizing security, affordability, availability and reliability.” Ventura cautioned that certain regions of the United States “are not insulated from these challenges, as large population centers on the East Coast and New England could be faced with limited supplies this winter due to a lack of pipeline infrastructure.” He added, “As the U.S. and the world look for reliable, safe and affordable long-term energy solutions, we believe Appalachian natural gas, and particularly Range, is well-suited to meet the call…” Range believes that “increased Appalachian supplies will be critical” to meet projected growth in U.S. gas demand, particularly for LNG exports, Ventura said. “But in order for that to happen in a meaningful way, additional infrastructure…is necessary.” He noted that “permitting delays and cancellations of critical infrastructure projects have obviously been a challenge, resulting in inflated energy costs in the U.S. and abroad. But in the long run, we believe that common-sense policy and economics will win the day, and allow this great resource to provide life-sustaining fuel to the people who need it.”Within Pennsylvania, “the good news is that the natural gas industry polls well,” Ventura said, citing that candidates on both sides of the aisle support it. He highlighted a proposed liquefied natural gas export terminal envisioned for the Delaware River near Philadelphia that would connect Appalachian gas supply with global demand.
New England Utility Urges Biden to Declare Emergency to Avoid Fuel Shortage - New England’s largest utility is imploring President Joe Biden to start preparing emergency measures to prevent a potential wintertime natural gas shortage.The Federal Energy Regulatory Commission has “acknowledged for many months that New England will not have sufficient natural gas to meet power supply needs for the region in the event of a severe cold spell this winter,” Joseph Nolan, chief executive officer of Springfield, Massachusetts-based Eversource Energy, wrote in a letter to Biden. “This represents a serious public health and safety threat.”The White House didn’t immediately respond to a request for comment.Eversource’s appeal comes amid growing worries about widespread energy shortages in some of the most populated parts of the US. Heating oil already is being rationed in the New York City area as the coldest months of the year approach -- and diesel supplies essential to trucking are precariously low in the Northeast. Federal energy officials have warned that fuel availability in New England is “a primary concern.” Among the reasons: soaring global demand for US exports and limited pipeline capacity in the six-state region.In its letter Thursday, Eversource asked the White House to consider emergency authorities including use of the Defense Production Act as well as provide a waiver of the Jones Act, a century-old law that can raise shipping costs.Eversource provides electricity and natural gas service to about 4 million homes and businesses in Connecticut, Massachusetts and New Hampshire.
Mountain Valley Pipeline's permit to cross streams in West Virginia faces legal challenge --A state permit that allows the Mountain Valley Pipeline to cross streams and wetlands is muddied by the company’s past violations of water quality standards, environmental groups asserted Tuesday. In oral arguments to the 4th U.S. Circuit Court of Appeals, an attorney for the Sierra Club and other organizations asked that a certification granted last year by the West Virginia Department of Environmental Protection be struck down. Derek Teaney told a three-judge panel of the court — which has consistently ruled against Mountain Valley in the past — that the West Virginia state agency should have taken more care to prevent a possible recurrence of muddy runoff from construction sites along the pipeline’s path. The department’s determination that there was a reasonable assurance that future problems with erosion and sedimentation would not occur, while at the same time downplaying the nearly 140 citations it has issued against the company in the past, is “entirely implausible and internally inconsistent,” Teaney said. A ruling by the 4th Circuit is expected later in what is the third round of ligation involving stream crossings for the project. The Sierra Club also has filed a lawsuit against Virginia’s State Water Control Board, which awarded a similar water quality certification for the portion of the pipeline that passes through Southwest Virginia. Oral arguments in that case are scheduled for December. Teaney, an attorney for the nonprofit law firm Appalachian Mountain Advocates, began an 87-page filing with the following line: “West Virginia has long resisted the requirements of the Clean Water Act,” which he quoted from a 2018 opinion by the 4th Circuit. “We would submit that this is just the latest incarnation of DEP’s resistance,” he said of the state environmental agency’s most recent decision that favored a 303-mile natural gas pipeline that begins in West Virginia. During arguments to the Richmond-based appeals court, questions and comments from the three judges hearing the case suggested they were sympathetic to Teaney’s position, at least in some respects. “You have to look at the past as a predictor of the future,” Judge Stephanie Thacker said of Mountain Valley’s record of environmental noncompliance since construction of the pipeline began in 2018. The West Virginia agency has fined Mountain Valley a combined $569,000 for failing to maintain erosion and sedimentation control measures in 2019 and 2021. But in evaluating those cases in light of the company’s application for a new water quality certification, Department of Environmental Protection attorney Lindsay See said, the agency did not consider the 140-some violations surprising. An “overwhelming majority” of the infractions did not involve water quality, See said. In Virginia, the Department of Environmental Quality has cited the company more than 350 times. Mountain Valley agreed to pay a fine of $2.15 million in 2019. More recently, a construction site in Wetzel County, West Virginia, was written up in August by state regulators for discharging sediment-laden water that flowed downhill and into a tributary of Stout Run.
Court poised to block key Mountain Valley pipeline permit - A three-judge panel with a history of tossing out permits for the Mountain Valley pipeline appeared ready Tuesday to reject yet another approval for the natural gas project. During oral arguments, the 4th U.S. Circuit Court of Appeals analyzed a water permit certification for the pipeline and questioned whether the West Virginia Department of Environmental Protection had done enough to protect the state’s waterways from sedimentation. But the judges seemed to stop short of overturning the permit entirely. “Maybe I’ve just been here too long,” said the judge, an Obama pick. “[We] send this back; they go into a room and then enter these additional things in the record — does it cure it?” The embattled Mountain Valley pipeline has been the subject of a litany of lawsuits over its federal permits and has become a political symbol in Washington of the need to overhaul how major federal projects are approved and litigated. The pipeline, designed to carry gas 300 miles through West Virginia and Virginia, recently announced plans to pull back on an extension of the project into North Carolina. Appalachian Mountain Advocates attorney Derek Teaney, who represented the Sierra Club and other environmental challengers, said Tuesday that their complaint about the state water certification for Mountain Valley was not about a harmless agency error and called for the permit to be scrapped instead of sent back to state regulators. “We need to know what they are going to do so these violations don’t happen again,” he said. The environmental groups sued West Virginia DEP over its December 2021 certification that the Mountain Valley pipeline complied with state water quality standards under Section 401 of the Clean Water Act. The challenge to the approval comes after the 4th Circuit had previously blocked the pipeline developer from using a general water permit called Nationwide Permit 12 to conduct dredge-and-fill activities across waterways in the path of the pipeline. Teaney told the 4th Circuit on Tuesday that the West Virginia DEP had improperly relied on Mountain Valley’s compliance with a separate oil and gas construction stormwater permit to ensure that the project met water quality standards, but the state agency had not made stormwater permit compliance a condition of 401 certification. Meanwhile, Mountain Valley had violated the state stormwater permit 139 times and state water quality standards dozens of times, Teaney said.
Mountain Valley Pipeline halts eminent domain actions for Southgate extension - Mountain Valley Pipeline has decided to withdraw eminent domain actions against land in North Carolina the company sought for its Southgate extension, a 75-mile offshoot of the main pipeline that would carry gas from Pittsylvania south to Rockingham and Alamance counties. “As the timing, design, and scope of this project continue to be evaluated, MVP has elected to dismiss this action, believing that to be the appropriate course of action for the time being and a demonstration of its desire to work cooperatively and in good faith with landowners and communities along the pipeline’s route,” said the motion filed Friday in U.S. District Court for the Middle District of North Carolina. But the company asked for the dismissal without prejudice, which would allow it to pursue eminent domain actions against the properties again. Mountain Valley “has not abandoned this project,” the pipeline wrote. Shawn Day, a spokesperson for the MVP Southgate project, reiterated the motion’s language, adding, “Mountain Valley remains committed to the MVP Southgate project, which is needed to help North Carolina achieve its lower-carbon energy goals and meet current and future residential and commercial demand for natural gas in the region.” “Proceedings currently remain under way with respect to a small number of tracts” along the proposed Southgate route in Virginia, Day added. A condition of the Federal Energy Regulatory Commission’s approval of the Southgate project in 2020 was that construction of the extension would not begin until the company received the required federal permits for the mainline system and the Director of the Office of Energy Projects, or its designee, lifted a stop-work order and authorized the project. The pipeline regained life in August after FERC extended its October 2022 completion deadline by four years. Regulators said their decision was an administrative one and that the proceedings were not the proper time to revisit the project’s approval. At that time, a company spokesperson said the company remains committed to securing federal and state permits to bring the project into service in the second half of 2023. Mountain Valley has said the main line is 94% complete, although some opponents dispute the company’s numbers. However, Mountain Valley still lacks necessary permits to complete the pipeline. An effort by U.S. Sen. Joe Manchin, D-West Virginia, to force approval and completion of the project through federal legislation on permitting reform stalled this fall.
FERC taking comment on proposed pipeline expansion project targeting Wetzel County ...A subsidiary of the Mountain Valley Pipeline’s lead developer is planning a project that would include constructing roughly 4.5 miles of pipeline in Wetzel County to help transport gas to mid-continent and Gulf Coast markets. Equitrans LP, subsidiary of Canonsburg, Pennsylvania-based Mountain Valley Pipeline lead developer Equitrans Midstream Corp., has proposed the construction as part of the Ohio Valley Connector Expansion project. The project includes natural gas transmission pipeline and aboveground facilities in Wetzel County, Greene County, Pennsylvania and Monroe County, Ohio.
Study reveals soil moisture plays the biggest role in underground spread of natural gas leaking from pipelines - Soil moisture content is the main factor that controls how far and at what concentration natural gas spreads from a leaked pipeline underground, a new study has found. Pipeline operators need to factor how the amount of water found in surrounding soil affects gas movement when trying to determine the potential hazards posed by a pipeline leak, said SMU's Kathleen M. Smits, who led the study recently published in the journal Elementa that examined soil properties from 77 locations around the country where a gas leakage had occurred. "We don't need to look any further than Dallas or Georgetown, Texas to see where underground pipeline leaks have the potential to result in catastrophic outcomes," "We often see that such incidents are the result of a lack of clear protocols to detect the leaks or assess damage. That's why there should be more focus on the importance of environmental factors such as soil moisture and how to properly account for them in leak scenarios." In general the team found that methane gas leaking from a pipeline does not spread as far when the soil moisture content increases. That results in a higher concentration of methane gas close to the leak site in more moist soil, the study revealed. The opposite was true with drier soil. But Smits stressed that simply knowing how wet the ground is at the time of the leak is not enough to make conclusions about how soil moisture content impacts gas movement. The moistness of the soil -- or lack thereof -- at the time of leak triggers different complex behaviors in the soil when methane gas seeps into the same spaces as water and oxygen in the pores of the soil. Soil moisture content can also change over time because of weather and other factors such as seasonal water table levels. "You have to understand how the moisture controls both the movement and concentration together," Smits said. "This is something we can assist [pipeline owners] with going forward in addressing leak incidents." The research team looked at more than 300 soil samples from leak sites around the country. The samples -- which were taken at the time of the leak and again after the leak was repaired -- were weighed when they were wet. They were also weighed a second time after they had been dried out in an oven. "The difference in the dry and wet weights, linked with knowledge of the volume of the soil sample, allowed us to calculate the soil moisture," Smits explained. Other soil qualities like its texture and permeability were also examined by the team, but did not demonstrate as much impact on how natural gas moved belowground. In another study aimed at improving gas leak detection, Smits and researchers from CSU's Energy Institute found that there are instances where operating a mobile detection unit from the front or roof of a car were not as effective as walkers carrying a handheld detection instrument. "For example, if you just isolated the speed of travel -- comparing a person walking at 2 to 3 miles per hour versus a car driving at a slow speed of 20 to 30 mph -- the probability of detecting a leak drops from 85 percent for a walking survey to 25 percent for a car," Smits said. The study, published in the journal Environmental Pollution, showed that atmospheric stability also had an effect on mobile surveys. Atmospheric stability essentially determines whether air will rise, sink, or do nothing. Warm, less dense air rises (unstable), while cooler, more dense air sinks (stable). Air staying at the same altitude is considered neutral. Researchers found that mobile surveys conducted at speeds between 2 to 11 miles per hour got progressively less effective (from 85 percent to 60 percent) at finding a leak as the atmospheric stability went from extremely unstable conditions to extremely stable. Walking surveys conducted under these same conditions did not reflect variability. "Walking surveys find the most leaks, by far, but they are labor intensive and cost a lot of money," Smits noted. "This study shows that if operators want to use another method such as a mobile survey, they need to thoughtfully choose a suitable survey speed under different weather conditions to achieve a detection probability equivalent to the traditional walking survey."
Future of pipelines, Black school hinge on court NEPA fight - An upcoming federal appeals court battle could reset the rules for environmental reviews of major projects like power plants and highways — and determine the fate of a historic Virginia school built to educate Black children during the Jim Crow era. As the Army Corps of Engineers weighs a permit for a “mega landfill” to be constructed within 1,000 feet of the former Pine Grove Elementary School in Cumberland County, Va., the agency’s consideration of more data on the project’s health and cultural impacts could hinge on its adherence to a 2020 Trump-era rule that overhauled — critics would say gutted — requirements for National Environmental Policy Act reviews dating back to 1978. The Trump NEPA rule will come under scrutiny Wednesday when Wild Virginia and other environmental groups challenge the White House Council on Environmental Quality regulation before the 4th U.S. Circuit Court of Appeals. Advertisement “The changing landscape of the CEQ regulations and how the Army Corps of Engineers should or shouldn’t implement that makes it hard for the Pine Grove project to monitor what is going on,” said Cale Jaffe, a law professor at the University of Virginia. Former Pine Grove students and their descendants are working to preserve the two-room school as a cultural center and are urging the Army Corps in public comments to conduct a more thorough analysis of the impacts of the landfill, which would accept 5,000 tons of waste per day, six days a week. “We are adhering to the current NEPA regulations,” said Army Corps spokesperson Breeana Harris in an email. Under the Trump rules — which the Biden administration has not yet fully revised — the agency could decide to conduct an environmental assessment of the proposed landfill near the Pine Grove school, instead of a more robust and detailed environmental impact statement. NEPA analysis is “sort of like a radar screen,” said Jaffe, who penned a “friend of the court” brief from Pine Grove school supporters backing the appeal from environmental groups to keep their challenge to the Trump NEPA rules alive. “It shows us what’s coming in and what’s happening,” he said. “And when you eviscerate the regulations under NEPA, the radar screen goes dark.”
US natural gas production and exports set new records - In 2021, both US natural gas marketed production and natural gas exports established new records, according to the US Energy Information Administration (EIA).Marketed, or wet, natural gas production (which includes both dry natural gas and natural gas plant liquids (NGPLs) such as ethane and propane) grew 3% in 2021 after declining in 2020. US natural gas exports, which have more than doubled since 2017, increased 26% in 2021.Natural gas production in the US has generally increased over the past decade because of the widespread adoption of horizontal drilling and hydraulic fracturing techniques that allow operators to increase the efficiency of natural gas production from shale formations. In 2021, natural gas from shale formations accounted for 79% of all US natural gas production. The increase in dry natural gas production was accompanied by an almost 4% increase in NGPL production in 2021, which has grown every year since 2005, averaging just under 8 billion ft3/d in 2021. The expansion of infrastructure needed to process growing volumes of marketed natural gas has resulted in more recovered NGPLs, leading to both greater domestic consumption and increased export volumes of ethane and propane.US natural gas exports have grown substantially over the past decade. In 2017, US natural gas exports surpassed imports for the first time since 1957. Major growth in natural gas exports in the second half of the decade was driven by growth in LNG, which the US began shipping overseas in 2016 from the Lower 48 states. In 2021, LNG exports grew to 54% of total US natural gas exports, up from 45% in 2020. Almost all other US natural gas exports were by pipeline to Canada and Mexico.So far in 2022, both natural gas marketed production and natural gas exports have continued to grow. In the EIA’s ‘Short-Term Energy Outlook’, it forecasts both marketed production and exports will continue to grow to record-high levels in 2023.
U.S. natgas gains 5% on technical move, forecast LNG export rise (Reuters) - U.S. natural gas futures jumped about 5% after sliding to a fresh seven-month low earlier in the session on a technical rebound and expectations demand would rise as liquefied natural gas (LNG) exports increase once export plants exit maintenance outages in coming weeks. Analysts at energy consulting firm Gelber & Associates said the price spike was largely due to technical factors, noting, "Prices have tumbled too far, too fast ... before rebounding amid oversold conditions." Before Monday's gain, futures plunged almost 60% over the past nine weeks - a move that could help cut U.S. consumer heating costs this winter - due to a combination of mild weather, record output and low LNG exports that allowed utilities to inject lots of gas into storage. Major LNG outages include Berkshire Hathaway Energy's shutdown on Oct. 1 of its 0.8 billion-cubic-feet-per-day (bcfd) Cove Point LNG export plant in Maryland for about three weeks of planned maintenance and the shutdown of Freeport LNG's 2.0-bcfd plant in Texas for unplanned work after an explosion on June 8. Freeport expects the facility to return to at least partial service in early to mid-November. Front-month gas futures rose 24.0 cents, or 4.8%, to settle at $5.199 per million British thermal units (mmBtu). On Friday, the contract closed below the psychologically significant $5 mark for the first time since March. Despite Monday's price increase, the front-month remained in technically oversold territory with a relative strength index (RSI) below 30 for a sixth day in a row for the first time since January 2020. Even after nine weeks of losses, U.S. gas futures were still up about 40% so far this year as soaring global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading at $28 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $31 at the Japan Korea Marker (JKM) in Asia. That put European forwards down about 16% for the day and on track to for their lowest close since June 13 as mild weather and strong LNG imports allowed utilities to boost the amount of gas in storage in Northwest Europe to healthy levels over 90% of capacity. TTF settled at a record high of $90.91 on Aug. 25. During the first nine months of 2022, roughly 60%, or 6.3 bcfd, of U.S. LNG exports went to Europe, as shippers diverted cargoes from Asia to fetch higher prices. Last year, just 29%, or about 2.8 bcfd, of U.S. LNG exports went to Europe. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 99.5 bcfd so far in October, up from a monthly record of 99.4 bcfd in September. With the coming of seasonally cooler weather, Refinitiv projected average U.S. gas demand, including exports, would rise from 93.9 bcfd this week to 97.1 bcfd next week. The forecast for this week was lower than Refinitiv's outlook on Friday.
U.S. natural gas steady on mild weather ahead of expected LNG export gain -U.S. natural gas futures were little changed on Tuesday as the market waits for demand to rise once liquefied natural gas (LNG) export plants start to exit maintenance outages in coming weeks. That expected demand increase was offset by record output, mild weather and low LNG exports in the past month or so, allowing utilities to boost the amount of gas in storage ahead of winter. Major LNG outages include Berkshire Hathaway Energy’s shutdown of its 0.8 billion cubic feet per day (bcfd) Cove Point LNG export plant in Maryland on Oct. 1 for about three weeks of planned maintenance and the shutdown of Freeport LNG’s 2.0 bcfd plant in Texas for unplanned work after an explosion on June 8. Freeport expects the facility to return to at least partial service in early to mid-November. At least three vessels were heading to Freeport, Refinitiv data showed, including Prism Brilliance (currently off the coast from the plant), Prism Diversity (expected to arrive Oct. 28) and Prism Courage (Nov. 1). Some traders expect Freeport to return to service in November while others believe the return will be delayed. Officials at Freeport have said the plant remains on track to return in November. Front-month gas futures for November delivery rose 1.8 cents, or 0.4%, to $5.217 per million British thermal units (mmBtu) at 8:18 a.m. EDT (1218 GMT). Despite the small gain, the contract remained technically oversold with a relative strength index (RSI) below 30 for a seventh day in a row for the first time since April 2019. With the front month down about 60% over the past nine weeks as the market gave up on cold weather in November, the premiums on futures for December 2022 over November 2022 and November 2023 over October 2023 have hit several record highs over the past few days. Traders use the October-November and November-December spreads to bet on winter weather. Despite weeks of declines, U.S. gas futures were still up about 39% this year as soaring global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia’s Feb. 24 invasion of Ukraine.
Bargain Buyers Sustain Natural Gas Futures Rally; West Texas Cash Prices Flip Negative - Natural gas futures on Tuesday advanced a second-straight session amid calls for colder weather patterns, production interruptions and the looming expiration of the prompt month contract. After a steep sell-off last week, traders also stepped back into the market to buy gas at a discount ahead of winter. Following a 24.0-cent rally in the previous session, the November Nymex gas futures contract, which rolls off the board Thursday, settled at $5.613, up 41.4 cents day/day. December rose 41.3 cents to $6.166. At its low in intraday trading this month, the front month had dipped below the $5.00 handle. Prices this year, however, have tended to rise heading into expiry. NGI’s Spot Gas National Avg., meanwhile, gained 36.5 cents to $4.545, despite West Texas spot prices going negative for the first time this year amid a production surge and temporary pipeline constraints. Prices at the Waha hub in West Texas, for example, dropped $1.745 day/day to average negative $1.165. Waha prices on Monday fell $2.020 from Friday’s levels. A “surge in production is now being compounded by capacity constraints from scheduled maintenance,” said analysts at The Schork Report. That said, the Schork analysts added Waha prices have printed negative about 40 times since 2019 before rebounding. “Owing to robust associated gas production and pipeline constraints throughout the market area, Waha negative prices are not unheard of,” they said. Following losses last week, cash prices in every other region of the Lower 48 advanced Tuesday, offsetting the West Texas losses.
U.S. natgas steady as mild weather offsets planned LNG export rise -(Reuters) - U.S. natural gas futures held steady on Wednesday as the market balanced expectations demand would rise once liquefied natural gas (LNG) export plants exit maintenance outages against forecasts that demand will remain low with the weather staying mild through at least early November. Traders also noted that the combination of record output, mild weather and low LNG exports has already allowed utilities to inject much more gas into storage than usual over the past month or so, boosting inventories to healthy levels for the winter. In the spot market, meanwhile, gas prices at the Waha hub in the Permian Shale in West Texas fell into negative territory in intraday trade this week as pipeline maintenance prevented gas from leaving the basin. Prices closed at a positive 2 cents per million British thermal units (mmBtu) for Wednesday, their lowest since settling in negative territory in October 2020. Traders, however, noted futures prices would soon jump higher once December becomes the front-month after the market close on Thursday, in part because LNG exports were expected to rise to record levels after a couple of liquefaction plants return to service. Major LNG outages include Berkshire Hathaway Energy's shutdown of its 0.8 billion cubic feet per day (bcfd) Cove Point LNG export plant in Maryland on Oct. 1 for a few weeks of planned maintenance and the shutdown of Freeport LNG's 2.0 bcfd plant in Texas for unplanned work after an explosion on June 8. At least three vessels were heading to Freeport, Refinitiv data showed. Prism Brilliance was off the coast from the plant, Prism Diversity was expected to arrive Oct. 28 and Prism Courage Nov. 1. While some traders expect Freeport to delay its return to service, company officials have said the plant remains on track to return in November. On its second-to-last day as the front-month, gas futures for November delivery fell 0.7 cent, or 0.1%, to settle at $5.606 per million British thermal units (mmBtu). Futures for December, which will soon be the front-month, were trading around $6.14 per mmBtu. Gas futures have been extremely volatile in recent weeks with prices up about 14% so far this week after crashing about 59% to a seven-month low over the prior nine weeks as utilities boosted the amount of gas in storage to healthy levels. Despite weeks of declines, U.S. gas futures were still up about 52% this year as soaring global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading at $29 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $30 at the Japan Korea Marker (JKM) in Asia.
U.S. natgas drop 8% on contract expiration, milder weather forecasts (Reuters) - U.S. natural gas futures dropped about 8% on Thursday as the market focused on near record output and forecasts for milder weather next week than previously expected that should allow utilities to add more gas to storage than usual in coming weeks. Traders noted that big price drop came on the last day the November contract will be the front-month on the New York Mercantile Exchange, which has traditionally been a day of low volume and extreme volatility. The price drop also came despite a smaller-than-expected storage build last week, expectations demand will rise in the near future as liquefied natural gas (LNG) export plants return to service, and renewed concerns about a possible rail strike. A rail strike could boost demand for gas by threatening coal supplies to power plants. The Brotherhood of Railroad Signalmen union, representing more than 6,000 members, said workers voted against ratifying a national tentative agreement reached in mid-September, the second union not to approve the deal. The U.S. Energy Information Administration (EIA) said utilities added 52 billion cubic feet (bcf) of gas to storage during the week ended Oct. 21. That was lower than the 59-bcf build analysts forecast in a Reuters poll and compares with an increase of 88 bcf in the same week last year and a five-year (2017-2021) average increase of 66 bcf. On its last day as the front-month, gas futures for November delivery fell 42.0 cents, or 7.5%, to settle at $5.186 per million British thermal units (mmBtu). Futures for December, which will be the front-month, were trading around $5.91 per mmBtu. In the spot market, gas prices at the Waha hub in the Permian Shale in West Texas fell into negative territory in intraday trade this week as pipeline maintenance prevented some gas from leaving the basin. Waha prices closed at a positive 1 cent per mmBtu for Thursday, their lowest since settling in negative territory in October 2020 for a second day in a row. U.S. gas futures are up about 49% so far this year as soaring global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading at $31 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $30 at the Japan Korea Marker (JKM) in Asia. Data provider Refinitiv said average gas output in the U.S. Lower 48 states held at 99.4 bcfd so far in October, tying the monthly record in September. With seasonally cooler weather coming, Refinitiv projected average U.S. gas demand, including exports, would rise from 94.8 bcfd this week to 96.6 bcfd next week. The forecast for this week was higher than Refinitiv's outlook on Wednesday, while its forecast for next week was lower.
December Natural Gas Futures Stumble in Front Month Debut; Cash Clunks - The December natural gas futures contract on Friday floundered in its first session as the prompt month amid light demand, strong production and forecasts for plump storage injections. December Nymex gas futures settled at $5.684, down 19.1 cents day/day. January fell 18.3 cents to $5.953. NGI’s Spot Gas National Avg. shed 35.5 cents to $4.345. “The most important driver of Nymex gas…is overwhelming warmth enveloping the eastern two-thirds of the country through mid-November,” said EBW Analytics Group’s Eli Rubin, senior analyst. Citing DTN forecasts, he said gas-weighted heating-degree days could fall 75 below normal between late October and the middle of next month. “If the current weather pattern continues, it may be difficult to sustain an average December-February strip” near $6.00/MMBtu. NatGasWeather said Friday that its forecast also continued to point to light heating demand through the end of October and into the first half of next month. The firm said it may take until late November or early December for widespread cold to develop over the northern and eastern Lower 48. “And if it fails to by then,” the firm added, “there will be little supply concerns for the U.S. this winter season, barring sustained Arctic cold.” Production, meanwhile, hovered around 101 Bcf/d Friday, according to Bloomberg, keeping output near the record high it reached early this month and feeding expectations for robust storage increases into November. The Energy Information Administration (EIA) on Thursday reported a lower-than-expected 52 Bcf injection into Lower 48 storage for the week ended Oct. 21. The build left stockpiles at 3,394 Bcf, or 197 Bcf (minus 5.5%) below the five-year average. Brief bouts of cold and some temporary maintenance issues impacted the latest print. But with benign weather on the horizon and output again near all-time highs, analysts are looking for an injection around 100 Bcf with the next EIA print. Over the past six inventory reports, EIA posted a triple-digit storage increase five times. Analysts at The Schork Report said Friday bears “shrugged off” the latest inventory update “in anticipation of another monster” build with the next Thursday’s storage report. What’s more, analysts expect that production levels will remain elevated through next year.
'Our Lives Are At Stake': Protesters from Louisiana's Cancer Alley March to the White House - More than 100 black-clad protesters, many of whom had flown in from across the country, marched in a traditional Louisiana funeral procession from Freedom Plaza to the White House Tuesday. They held signs with the names of loved ones lost to illness due to the industrial pollution that runs rampant in Louisiana’s Cancer Alley. Debra Ramirez walked about half a block behind the rest of the march, occasionally stopping to rest. A great-grandmother from Mossville, Louisiana, Ramirez struggles with knee problems and had a heart attack just last year.“I’m determined to make it, I don’t care if I’m the last one,” Ramirez said to a woman marching beside her. “This might be my last march, but I’m going to make it.”As she walked, Ramirez held an ornate black umbrella and a sign that featured a “death tree” with more than a dozen names of those who had passed on its branches. She’s been involved with the fight for environmental justice in the region since the 1980s. When she did arrive at the march’s endpoint in front of the White House, Ramirez spoke alongside other advocates to a crowd of protesters that included Louisianans, Texans and others from out of town alongside many DMV locals. The group gathered behind a fake coffin reading simply “R.I.P.”“I was the last one to get here, but I’m going to be the last one standing,” she said over a megaphone. “All the governmental entities, all the presidents, everybody knew that we were being poisoned. They knew that our people were dying. They knew that they were killing our children.” The protesters held huge banners demanding President Joe Biden declare a climate emergency and stop approving all fossil fuel projects. Pollution from oil and gas production, as well other industries like plastics production, disproportionately harms Black communities. Cancer Alley, a stretch of land between Baton Rouge and New Orleans, includes more than 150 of these polluting facilities.Last month, a Louisiana judge blocked a new, huge plastics plant from being built. That victory came after years of organizing from the faith-based environmental justice group Rise St. James, which co-led Tuesday’s D.C. protest alongside the People vs. Fossil Fuels coalition. Shamell Lavigne recalled how that fight began in her mother Sharon Lavigne’s den in 2018.“Louisiana Governor John Bel Edwards basically greenlit that plastics plant, and we know from the other plants already located in St. James Parish, that it was going to basically kill us,” Shamell Lavigne said. “We were like, ‘we have to do something. And we cannot allow this $9.4-billion plastics plant to come into our community.’” Rise St. James has grown since then, and attracted support throughout environmental and climate justice communities. Rise St. James regularly partners with groups all along the Gulf in Louisiana and Texas impacted by industrial pollution. These areas, like Cancer Alley, have been called “sacrifice zones” because of the high levels of pollution-related illness. “Our lives are at stake,” Lois Booker Malvo, a resident of Lake Charles, Louisiana and a two-time cancer survivor, said to the crowd. “Stop using us to make money and destroying our lives! We are sick and tired of being killed by industry.”
New federal funding aims to plug hundreds of orphan oil wells across the state - After decades of exploration – and exploitation — Louisiana is covered with thousands of orphaned well sites that cause a plethora of problems for the environment and communities that live with them. But new funding, including a $12.7 million grant from the Bipartisan Infrastructure Law, was awarded to the U.S. Fish and Wildlife Service in partnership with the Louisiana Department of Natural Resources to make a dent in plugging 151 orphaned wells across five national wildlife refuge sites in Louisiana.The projects funded by the Bipartisan Infrastructure Law include the plugging and remediation of 59 sites in the Upper Ouachita National Wildlife Refuge, seven in the Atchafalaya National Wildlife Refuge, 11 in the Lacassine National Wildlife Refuge, six in the Black Bayou Lake National Wildlife Refuge and 68 in the D’Arbonne National Wildlife Refuge.“We're making progress on fixing these legacy pollution issues,” Guthrie said. “They've been sitting out there for years.”Orphaned wells are oil or gas wells that have been abandoned for long periods of time by fossil fuel companies that are either bankrupt or cannot be identified. Jim Guthrie, a senior adviser for the U.S. Fish and Wildlife Service said many of the orphaned well sites in the state have been abandoned since the first half of the 1900s.The number of sites currently sits at 4,500 in Louisiana, with the majority of them located near Shreveport and Monroe.Specifically, these abandoned oil well sites release hydrocarbons, methane and contaminated water. These pollutants often lead to a loss of habitat and cause public safety and health issues, and the continuous emission of the greenhouse gas methane contributes to global warming.“We saw one today, the previous owner had abandoned it, and the (well’s) retention area has just fallen apart. But there are still pollutants in there. Birds come in, they land and they find out that they landed in a pool of oil and that's terminal for them,” Guthrie said. “Other critters may fall in there or they may eat the birds, and then they're not doing so well either. So it's a domino effect that goes on.”Currently, oil and gas companies pay a small fee on oil produced in Louisiana to address abandoned wells that roughly amounts to $4 million a year — but the state is unable to keep up with the pace of the new sites coming to even plug up a huge backlog of wells, according to Guthrie.Louisiana typically plugs 120 to 200 sites a year through the state Oilfield Site Restoration OSR Program. The Oilfield Site Restoration Program typically receives $10 million in funding a year.
Oil Futures Mixed, ULSD Spikes to 6-Month High on Low Supply - While advancing on the week, New York Mercantile Exchange oil futures and the Intercontinental Exchange Brent contract settled Friday's session mixed with ULSD futures the outlier, rallying for a sixth consecutive session, and spiking to a six-month high. The moves came amid critically low inventory of middle distillates in the United States and globally just days ahead of the start of the heating season. The November ULSD contract, which expires Monday, Oct. 31, surged $0.2159 Friday and $0.7175 since the prior Friday to a $4.5498-per-gallon settlement after trading at a $4.6841 six-month intraday high on the spot continuous chart. Low stock levels and strong demand pull as buyers look to secure product on worry over supply availability blew out the prompt spread, with the backwardation widening to $0.8043 per gallon. The previous high, a record, was reached in late April at $1.127 per gallon amid a short squeeze ahead of the May contract's expiration as the market worried over product availability in the weeks following supply disruptions caused by Russia's invasion of Ukraine. This week's rally in ULSD futures was realized amid widening diesel shortages, which are spreading from New England and broader New York area to the Southeast and westward to Tennessee. Reported outages and allocations at distribution terminals all along the East Coast were exacerbated by low levels on the Mississippi River that is constraining barge movement. Valero Energy reportedly cut runs at Memphis refinery by about 20% due to shipping issues on the Mississippi River. Nationwide distillate inventories have been running consistently below the five-year average for much of the year, with strong exports and domestic demand drawing down stockpiles. Now, with the heating season beginning in less than a week, low supply is amplifying fears over fuel rationing this winter. Particularly sensitive are New England states, which account for the largest concentration of households and businesses that use heating oil for space heating. Diesel shortages are not just an issue for the U.S. energy market. In Europe, expected loss of Russian diesel exports combined with production outages in France have left parts of the continent short supply, according to the head of Spanish oil refiner Repsol SA. "We are running out of middle distillates in some European countries," Chief Executive Officer Josu Jon Imaz said on an earnings call, adding that "there is room to see high diesel prices in the coming months." Recent strikes in France, which knocked refineries offline, have also squeezed the market, triggering a surge in imports. Last week, U.S. exports of crude and petroleum products surged to a record-high 11.4 million barrels per day (bpd) amid the tight global market disposition. The resulting high prices for distillates amid the low supply will further contribute to rising inflation. In Germany, the European Union's largest economy, inflation unexpectedly accelerated this month to 11.6% from a year earlier, following a trend already seen in France and Italy. Italy, the EU's third-largest economy, Friday morning reported consumer prices grew to 11.9% in October -- the fastest since 1984 -- with energy prices surging a mind-blowing 73.2% year on year, up from 44.5% in September. For the Eurozone, inflation quickened to 10.7% in October from 9.8% in the previous month.
Texas natural gas plunges toward zero as output swamps pipelines — Natural gas prices in the Permian Basin of West Texas are plunging toward zero as booming production overwhelms pipeline networks, creating a regional glut of the fuel. Gas in an area of the vast Permian known as Waha was trading for as little as 20 cents to 70 cents per million British thermal units on Monday, traders said. That compares with the US benchmark futures contract that’s trading around $5 and European prices close to $28. If West Texas prices tumble into negative territory, energy producers will effectively be paying someone to take gas off their hands -- something that hasn’t happened in two years. The price collapse illustrates the sharp contrast between bountiful US supplies of the fuel and Europe’s worsening energy crisis as winter approaches. Tight gas markets in Europe and Asia threaten to have knock-on effects for diesel, coal and power as governments and utilities scramble for energy, according to Bloomberg Intelligence. The Texas price plunge stems from maintenance scheduled for Kinder Morgan Inc.’s Gulf Coast Express and El Paso Natural Gas pipeline systems. Insufficient pipeline capacity has actually been a long-term problem that has dogged Permian Basin gas producers for years. The choke points worsen when pipeline operators must perform repairs and preventative maintenance work that forces temporary reduction in pressure or halts to shipping. Permian pipeline constraints “have never been relieved,” making the region more susceptible to sudden gluts and price volatility, said Campbell Faulkner, chief data analyst at OTC Global Holdings LP. What Bloomberg Intelligence Says An early-October disruption in polar vortex formation -- making it more elongated -- is channeling colder air toward the upper northern hemisphere, including the US, Canada, Europe and China, as Severe Weather Europe suggests. That could raise the specter of energy shortages as heating needs spike, stoking strong demand for natural gas, coal and oil products. -- Henik Fung and Chia Cheng Chen, BI analysts Waha gas went negative eight times in 2020 and more than two dozen times in 2019, data compiled by Bloomberg shows.
Chesapeake cuts workforce prior to sale of South Texas oil assets -Chesapeake Energy has laid off nearly 3% of its workforce ahead of its potential sale of oil properties in South Texas, Reuters reported, citing people familiar with the development.Last week, the gas producer got rid of approximately 40 workers including geoscientists and geologists involved in its oil production, the sources said.In April 2022, Reuters reported that Chesapeake was working with two undisclosed banks on a potential sale of its oil-producing South Texas assets to raise as much as $2bn. In August, the company said it intends to shift its focus towards its mainstay natural gas operations by offloading oil-producing properties in the Eagle Ford shale region of Texas.
Oil output in Permian to rise in August to highest on record -EIA - (Reuters) - Oil output in the Permian in Texas and New Mexico, the biggest U.S. shale oil basin, is due to rise 66,000 barrels per day (bpd) to a record 5.413 million bpd in October, the U.S. Energy Information Administration (EIA) said in its productivity report on Monday. Total output in the major U.S. shale oil basins will rise 132,000 bpd to 9.115 million bpd in October, the highest since March 2020, the EIA projected. In the Bakken in North Dakota and Montana, the EIA forecast oil output will rise 21,000 bpd to 1.204 million bpd in October, the most since November 2020. In the Eagle Ford in South Texas, output will rise 26,000 bpd to 1.250 million bpd in October, its highest since April 2020. Total natural gas output in the big shale basins will increase 0.606 billion cubic feet per day (bcfd) to a record 94.741 bcfd in October, the EIA forecast. In the biggest shale gas basin in Appalachia, Pennsylvania, Ohio and West Virginia, output will rise to 35.577 bcfd in October, the highest since hitting a record near 36.0 bcfd in December 2021. Gas output in the Permian and the Haynesville in Texas, Louisiana and Arkansas will also rise to record highs of 20.736 bcfd and 16.023 bcfd in October, respectively.
Approval of oil leases in New Mexico prompts legal challenge (AP) — The Biden administration’s approval of oil leases in a corner of New Mexico that has become a battleground over increased development and preservation of Native American sites has prompted a legal challenge. Environmental groups are suing the Bureau of Land Management and U.S. Interior Secretary Deb Haaland. They contend in a complaint filed Wednesday that the federal government is going back on its word by clearing the way for oil and gas development on federal lands near Chaco Culture National Historical Park. At issue are leases that span more than 70 square miles (180 square kilometers) in northwestern New Mexico. The groups say the federal government agreed in April to reconsider the Trump-era leases given their proximity to homes and an area held sacred by Navajos. “We are disappointed that the Bureau of Land Management decided to double down on fracking and ignore the cumulative impacts, inequities and injustices of oil and gas leasing and drilling in the Greater Chaco (area),” Ally Beasley with the Western Environmental Law Center said in a statement.
Fracking bottlenecks threaten US output growth The US government continues to press domestic oil producers to boost output to help address surging energy prices, but the reality on the ground, according to one of the country's leading oil field services companies, is that a lack of available staff and equipment for hydraulic fracturing present a huge obstacle to raising production. There is very little spare equipment to go around and, even if producers wanted to step up drilling, they would find it difficult to obtain a frac fleet, Chris Wright, chief executive of Liberty Energy, the second-largest provider of fracking services to US onshore producers, tells Argus. "There are a lot of barriers to growing, but if I had to point to one, tightness in the frac market might be the biggest issue of all," Wright says. Shale producers have faced significant obstacles in ramping up activity this year, ranging from surging inflation to supply-chain bottlenecks. Investor demands for capital discipline and improved returns have also capped any growth ambitions public operators might harbour during a year of high oil prices. But labour shortages, which have plagued the industry over the past year or so, are finally starting to ease. "They're still quite challenging today but, fortunately, they're less challenging than they were six months or 12 months ago," Wright says. Liberty, which moved up the ranks of US service providers with its 2020 purchase of Schlumberger's North American fracking business, is now hiring skilled workers from outside the oil and gas industry and training them up. Meanwhile, delivery times for everything from engines to electronic components have grown longer, while costs for parts and labour-intensive services have increased. "All of these things are still real," Wright says. "They are making it a little harder to run frac operations for us and certainly for the whole industry." The most recent conversations with customers have focused on security of supply and timeliness. The normal seasonal slowdown going into the year-end may be less marked this year if producers are reluctant to risk losing existing frac crews. "You don't want to drill a bunch of wells and have them ready to frac at the end of January and then not have them fracked until July," Wright notes. Liberty reactivated six fleets acquired through the Schlumberger deal during the third quarter, but may add just two fleets next year if the company decides it is "too challenging to hire and staff further", Wright says. The Permian has dominated shale activity as the industry has emerged from the Covid-19 pandemic, but other basins such as Eagle Ford in South Texas and North Dakota's Bakken are holding their own — although the Bakken is still facing significant labour challenges. "There's pretty robust activity across the basins," Wright says, even though some have slowed from the rapid growth rates seen in the previous decade. Faced with the prospect of a global recession, the industry may cope better than others given the tight market. "If it's modest, which I think is most people's default assumption, then commodity prices sort of already reflect that," Wright says.
Baker Hughes Shows Weak U.S. Drilling Activity - The number of total active drilling rigs in the United States fell 3 this week, according to new data from Baker Hughes published on Friday. The total rig count slipped to 768 this week—224 rigs higher than the rig count this time in 2021. Oil rigs in the United States fell 2 this week, to 610. Gas rigs fell 1 to 156. Miscellaneous rigs stayed the same at 2. The rig count in the Permian Basin held steady again this week at 346. Rigs in the Eagle Ford fell 1 to 70. Granite Wash and Williston also saw a decrease of a single rig, while Cana Woodford saw a 2-rig gain. Arkoma Woodford saw a single rig gain. Primary Vision’s Frac Spread Count, an estimate of the number of crews completing unfinished wells—a more frugal use of finances than drilling new wells—rose for the seventh week in a row, to 298 for the week ending October 21, from 295 in the previous week. This compares to 288 a month ago and 265 a year ago. Crude oil production in the United States was unchanged in the week to October 21, at 12 million bpd, according to the latest weekly EIA estimates. U.S. production levels are up just 300,000 bpd so far this year and up 700,000 bpd versus a year ago. At 11:30 a.m. ET, the WTI benchmark was trading down $1.51 per barrel (-1.70%) on the day at $87.57 per barrel—up nearly $3 per barrel since this time last week. The Brent benchmark was trading down $1.62 at $98.34 per barrel (-1.67%) on the day, but up roughly $6.50 per barrel compared to last Friday. WTI was trading at $87.68 minutes after the data release.
With Fossil Fuel Companies Facing Pressure to Reduce Carbon Emissions, Private Equity Is Buying Up Their Aging Oil, Gas and Coal Assets - Inside Climate News --When Continental Resources announced a deal last week to take the oil company private, it joined a trend that has swept across the fossil fuel sector in recent years. With investors agitating for energy companies to lower their greenhouse gas emissions, many oil and gas drillers and utilities have sold off wells and coal plants to private companies or private equity firms, which have been eager to scoop up the industry’s dirtier assets. Now, some environmental advocates are warning that these transactions, supposedly driven by an effort to reduce emissions and climate risks, may instead do the opposite. Privately held companies are exempt from many of the financial reporting rules that publicly traded companies face, and they are more insulated from the social and environmental pressures that investors have placed on the fossil fuel sector in recent years. As the impacts of climate change have worsened and more governments have acted to reduce emissions, investors have increasingly pressed oil companies to prepare for a pivot away from fossil fuels by scaling back drilling plans and investing in alternatives like renewable energy or biofuels.The concern is that these privately held companies, facing less external pressure, might continue to run coal plants and oil wells for longer than the publicly traded concerns would have. Advocates also warn that the shift into private hands could increase the risks that the public will be left with the bill for cleanup when the operations are eventually shut and abandoned.In the case of Continental, a large independent oil producer with headquarters in Oklahoma City, the move to go private was driven explicitly by a desire to free itself from investor restraints.“We will play an essential role for decades to come as we do our part to help secure America’s energy independence without any encumbrances,” the company’s founder and chairman, Harold Hamm, wrote in a letter to employees, explaining his proposed purchase of the company. (The letter was disclosed in a securities filing, which privately held companies generally are not required to submit.) “Let’s go find some oil.”In other cases it has been private equity firms, which promise large returns for investors by buying companies and placing riskier bets than traditional investment firms that have been purchasing oil fields and coal plants across the country, often through holding companies.In recent years, BP, ExxonMobil, Shell and ConocoPhillips have all sold assets to private equity firms or privately held energy companies, taking polluting wells off their books while shifting them to less transparent owners. Utilities have made similar sales of coal- and gas-fired power plants. All told, private equity firms have invested more than $1 trillion in the energy sector, including renewable energy, since 2010, according to the Private Equity Stakeholder Project, which works to help “communities, working families, and others impacted by private equity investments.” The trend is driven in large part by the flight of traditional investors seeking to green their portfolios. “Public investors like mutual funds, hedge funds, university endowments, pension funds — they are actively shifting away from fossil fuels,” . “As public investors are divesting fossil fuels, someone’s buying it. They’re not disappearing into thin air.” To further complicate the picture, pension funds are in some cases divesting from fossil fuels in parts of their portfolios even as they continue to invest in others, if indirectly: Public pension funds have plowed money into private equity funds because of their high yields, and many of those private funds are using that money to buy fossil fuel assets. All of this serves to decrease transparency about who owns what. And some environmentalists say it undermines the efforts of a growing movement backed by many large investors, including some public pension funds, to use their money to exert pressure on the fossil fuel industry.
Biden team reworks plan for Russia oil-price cap as markets sour - U.S. officials are being forced to scale back a plan to impose a cap on Russian oil prices, as investors have grown skeptical and risks have grown in financial markets, Bloomberg News reported on Wednesday. The United States and other G7 countries are developing a price cap on Russian seaborne oil deliveries to cut Russia’s oil revenues, while encouraging Moscow to continue to produce oil. The United States and the European Union are likely to settle for a more loosely policed cap at a higher price than once envisioned, with just the Group of Seven (G7) nations and Australia committed to abide by it, the report said, citing people familiar with the matter. South Korea has also privately told G7 nations it plans to comply, while G7 officials are seeking to bring New Zealand and Norway on board as well, the report added. Officials involved in the plans are discussing a cap at the higher end of the range of $40 to $60 per barrel and above, which was spearheaded internally and externally by U.S. Treasury Secretary Janet Yellen in an earlier iteration of the U.S. plan, according to the outlet. “The White House and the administration are staying the course on implementing an effective, strong price cap on Russian oil in coordination with the G7 and other partners,” a spokeswoman for the White House’s National Security Council, Adrienne Watson, said in a statement to Bloomberg. Deputy Treasury Secretary Wally Adeyemo said this month that the United States was starting to see success with discussions of a Russian oil price cap by the G7.
Why Biden Wants To Release More Oil From The SPR - Last week, the White House caused a splash by announcing that President Biden was ready to release more crude from the strategic petroleum reserve.That would be on top of the largest-ever release of 180 million barrels, approved earlier this year as a tool for bringing down retail fuel prices. Back then, experts warned this tool could hurt its wielder. Now, the danger seems to be even greater.“We remain very able, very vigilant: if we need to deal with additional challenges with supply, with affordability, we’ll have additional opportunity with the SPR if we need to do more sales into the future beyond that December time period,” one senior administration official told the Financial Times this week.This makes further sales from the SPR virtually a certainty: analysts expect prices to rise in December after the European Union embargo on Russian crude comes into effect, which will happen on the 5th of the month.With OPEC+ reducing output by about a million barrels daily from November, this means that the supply of crude globally will tighten in the coming months. And when supply tightens, prices rise.Many see Biden’s latest move as a way of earning credit for the Democrat government ahead of the midterm elections. Biden himself says there is no political motive behind the SPR release strategy. And Goldman Sachs analysts justsaid this week that SPR releases would have only a modest effect on prices.In a note last week, they wrote that they expected the White House to release another 16 million barrels in 2023 “from FY2023 Congressionally mandated sales” but that those sales, first, would depend on oil prices and, second, would only have a limited impact on prices of less than $5 per barrel.The biggest problem with using the SPR as a way of regulating oil prices is that, being a strategic reserve, it would be dangerous to draw too much from it. Another 16 million barrels on top of the 180 million approved for release this year should not make a major difference in inventory levels, but observers are already getting nervous about those levels.At a little over 400 million barrels, the current amount of oil in the SPR is not enough for a month of consumption in case of emergency. One might point out that the U.S. cannot consume only locally produced oil for any length of time, which makes the SPR redundant, but it could certainly trade it for other blends should such a need arise.It seems not everyone is really buying the assurance that there is no political motive for the new release plans. Indeed, as early as the original reserve release plan, many commentators in the media argued that with it, Biden wanted to try and make sure the Democrats win the midterms or at least do not lose them very badly because of high retail fuel prices.“After the Opec meeting and with the midterms in mind, the administration needed to be seen doing something — and that seems to be announcing more SPR barrels that were already planned,” Energy Aspects’ Amrita Sen told the FT this week.What this means is that the administration is, for all its talk of all tools on the table, severely short of actual tools. There must be awareness in the White House that the SPR is a double-edged sword, and wielding it is quite risky. Yet they are wielding it for lack of a better option.
Biden's SPR follies will hurt Americans and damage our national security -- President Joe Biden’s latest politically timed release of another 15 million barrels from the Strategic Petroleum Reserve — when it was already at a 40-year low — is just the latest disgraceful move in a decades-long Democratic drive to pretend the SPR is a magic gas-price wand, which now leaves the reserve too depleted to serve its actual, important purpose.The SPR was created in 1975 to guard against attacks on the US oil supply, after the 1973-74 Arab oil boycott sought to blackmail America into abandoning Israel in the wake of the 1973 Yom Kippur War, which began with a surprise attack on the Jewish state and ended after President Richard Nixon sent Jerusalem critical supplies.In short, the reserve’s purpose is to deter foreign powers from even trying to cut off the US oil supply. It’s authorized to hold up to 714 million barrels in four Texas and Louisiana salt caverns along the Gulf of Mexico coast, near pipelines that can rapidly deliver the crude to US refineries.But the United States consumes around 20 million barrels of oil a day; the world, more than 90 million. America now produces about 12 million barrels a day, so a full SPR would let the nation go about three months if the rest of the world cut us off (assuming we had the capacity to refine it all, which sadly we don’t). But it has a far more limited capacity to address a global oil shortage.Yet since at least the turn of the century, Democrats, led by New York’s own Sen. Chuck Schumer, have pretended otherwise: It’s Schumer’s, and now Biden’s, go-to whenever gas prices spike.Problem #1: Minor releases can’t actually do much. Biden’s latest 15-million-barrel move is supposed to counter the OPEC+ cut of 2 million barrels a dayafter Saudi Arabia ignored his pleas to hold off until after the November election. (The Saudis aren’t doing Biden any favors after he vowed to make them a “pariah” state and renewed the Obama-era bid for a strategic partnershp with their arch-rival, Iran.) Do the math: This release won’t make up the difference for more than a week or two.And SPR releases can’t do much more than that because Biden’s been emptying it all year as part of of his futile effort to fight the inflation his policies caused. Plus, of course, his war on domestic production has increased what America needs to import. Also, Biden took office with a depleted SPR because, when oil prices went into freefall during the Trump years, oil-hating Dems refused to let the prez refill the SPR — and doing so simply wasn’t on the agenda when Biden came into office as prices hadn’t yet exploded. For the record, President Barack Obama wasn’t as foolish as Biden: When gas prices spiked on his watch, he embraced an “all hands on deck” approach, letting US production surge (even fracking, though it infuriated the greens).Not Joe: This president won’t abandon his shameless pander to the Green New Dealers; all he’ll do is empty out the SPR to pretend to voters that he’s addressing the issue. Meanwhile, the reserve is in no shape to protect the nation if it faces a real boycott or global supply crisis. Biden’s all-politics, short-term thinking has left us all at risk.
Central Coast crude oil pipelines tied to Refugio spill acquired by ExxonMobil - Two crude oil pipelines on the Central Coast owned by beleaguered company Plains All American have been acquired by oil giant ExxonMobil.“ExxonMobil has signed an agreement with Plains All American Pipeline to acquire lines 901 and 903 located in Santa Barbara, San Luis Obispo and Kern counties,” said Julie L. King, an ExxonMobil spokeswoman. “A team from ExxonMobil Pipeline Company will conduct a thorough inspection of the pipelines to determine how to safely and responsibly return them to service.”On May 19, 2015, Plains’ pipeline 901 ruptured near Refugio State Beach, spilling up to 630,000 gallons, or 15,000 barrels, of crude oil onto the shoreline and into the ocean. Plains was found criminally liable in 2018 for the oil spill because of failed maintenance and extensive pipeline corrosion.According to the Justice Department, the discharge was caused by Plains’ failure to address external corrosion and have adequate control-room procedures in place, and was further exacerbated by Plains’ failure to respond properly.In Santa Barbara, a Superior Court judge in 2019 ordered Plains to pay a$3.3 million criminal fine for the Refugio oil spill. The spill devastated the fishing industry and polluted coastal properties from Santa Barbara County to Los Angeles County. Plains All American Pipeline also in May of this year agreed to settle a class-action lawsuit, and pay $230 million to fishers, fish processors, and shoreline property residents damaged by the Refugio oil spill in 2015.
Alaska’s push to drill in the Arctic National Wildlife Refuge backfired. Here’s how. --When Congress passed then-President Donald Trump’s tax reform package in 2017, with provisions to open the Arctic National Wildlife Refuge to oil drilling, Alaska’s congressional delegation said the decision would change the state’s future for the better. “This is a watershed moment for Alaska and all of America,” Republican U.S. Sen. Lisa Murkowski said in a statement at the time. Murkowski drafted the section of the bill opening the refuge, and hailed the impending arrival of “thousands of jobs” with better pay, as much as $60 billion in oil royalties for the state of Alaska and “renewed hope for growth and prosperity.”The decision to open the refuge has indeed shaped Alaska’s future — but not in the way its promoters predicted. With leases suspended by the Biden administration and a federal lawsuit still playing out over environmental reviews, all the private companies that leased refuge land for oil development have nowbacked out of their deals, leaving an Alaska state agency as the only leaseholder. The final company with drilling rights in the refuge, Knik Arm Services, gave up its lease in August, with its owner saying it was time to move on to “better opportunities.” Amid the global economy’s transition away from oil and the long timeline for any future development, the industry’s exodus from the refuge makes it unlikely that Alaska will win any significant near-term benefits from the area’s opening, which came after a decades-long political push. But even more significant is the backlash against Alaska’s broader oil industry, outside the refuge, that was sparked by the push to drill inside it. Now, it’s not just the refuge that’s increasingly out of reach for wildcatters: It’s the entire Alaska portion of the Arctic, the site of nearly all of the industry’s existing and hoped-for projects in the state. That result stems from a successful campaign by green groups to cut off oil companies’ access to loans and insurance for development in the refuge. The effort was successful not only in convincing big banks and insurers to rule out financing those developments; it also got many of them to swear off deals anywhere in the Arctic.
Biden admin backs contested Alaska LNG project - - The Biden administration signaled support Monday for a massive liquefied natural gas project in Alaska, touting the energy benefits of a proposal critics have called a terrible idea. U.S. Ambassador to Japan Rahm Emanuel held a summit in Japan focused on the proposed Alaska LNG project, which would include about 800 miles of pipeline as well as a gas export facility in Nikiski, Alaska.U.S. and Japanese officials discussed how “Alaska LNG can provide stable, sustainable, and affordable energy sources to Japan,” according to a statementMonday from Emanuel. He indirectly referenced Russia’s war in Ukraine, a conflict that has pushed numerous countries to seek new supplies of energy.“No need for Russian gas when #America stands ready to supply it,” Emanuel said on Twitter.The talks in Tokyo come as the Biden administration has pushed to boost U.S. LNG exports to Europe following Russia’s invasion of Ukraine in late February. U.S. LNG exports are forecast to average 11.7 billion cubic feet per day in the fourth quarter of 2022, according to a report last month from the U.S. Energy Information Administration, up 1.7 bcf per day from the third quarter of this year.The Alaska LNG project is being developed by the Alaska Gasline Development Corp. (AGDC), a state corporation. It is looking to ship LNG primarily to Asian markets. The Federal Energy Regulatory Commission approved the project in 2020 (Greenwire, May 21, 2020).The $39 billion project has garnered the support of policymakers such as Alaska Gov. Mike Dunleavy (R) and Sens. Dan Sullivan and Lisa Murkowski, both Republicans who represent Alaska. The $39 billion is for the proposed pipeline, a gas treatment facility on the North Slope and an LNG plant, according to Tim Fitzpatrick, a spokesperson for AGDC.“Our ongoing conversations with investors and developers, like the one early this morning, are to address funding and other aspects of completing the project,” Fitzpatrick said in an email Monday.But environmental groups have criticized the fossil fuel project, with groups opposing it because they do not want to see more oil and gas infrastructure built (Energywire, June 30). Concerns have ranged from climate change to the ecosystem in Alaska.Fitzpatrick said the Alaska LNG project is the only one under development by the company. The development corporation has signed multiple letters of intent with potential LNG purchasers, he said.The project’s benefits include proximity to Asian markets, a “strong safety culture” and a “cold climate that ensures more efficient production,” according to a video on Alaska LNG’s website.The facility, which could export up to 20 million metric tons of LNG annually, has faced legal challenges over a FERC analysis of the project’s climate risks (Energywire, Sept. 15).One environmental group said the Alaska LNG summit appeared to be an example of the U.S. government trying to facilitate deals between project developers and Japanese companies.“This is part of a broader pattern,” said Talia Calnek-Sugin, the associate director of legislative and administrative advocacy for the Sierra Club’s Beyond Dirty Fuels campaign, in an email.“This is helping proposed US export facilities reach a final investment decision (FID) that might otherwise not get enough contracts to attract financing, contradicting the Biden Administration’s climate goals and international fossil fuel finance policy,”
Montney Natural Gas Output Poised to Reach 9.2 Bcf/d on Pipeline Expansions - Processing plant and pipeline additions should enable natural gas production to more than double in the Montney Shale, according to the Canada Energy Regulator (CER). Expansions by 46 plants have grown capacity in northeastern British Columbia (BC) along the Alaska Highway to 9.2 Bcf/d, or 59% more than the current 5.8 Bcf/d processing volume, a CER survey conducted for CER by Calgary investment dealer Peters & Co. found. Pipeline capacity is poised to nearly double to 11.5 Bcf/d, including additions by Enbridge Energy Inc.’s Westcoast network plus TC Energy Corp.’s Coastal GasLink (CGL) conduit for the LNG Canada export project. CGL, 70% completed, is forecast to start operating at about 1 Bcf/d. However, the 670-kilometer (400-mile) delivery route has built-in ability to grow to 5 Bcf/d with compressor additions to its 48 inch diameter system, as LNG Canada adds export production lines. “Northeastern BC has significant existing gas plant capacity and pipeline egress to support future development,” the survey noted. The survey was commissioned by the NEBC Connector proposal for a 98,000 b/d Montney natural gas liquids line. The CER requested the survey to adapt its environmental cumulative effects assessment of NEBC Connector, sponsored by Toronto-based Brookfield Infrastructure LP. NEBC is a native sore spot in the outlook for Montney supplies for BC liquefied natural gas projects. A 2021 court verdict won by Blueberry First Nation, near Fort St. John in the Montney heartland, bans new industry permits until the BC the government agrees to provide a native role in granting them. While banning new provincial permits, the court verdict did not halt industry. The BC government rescued 195 previously approved natural gas and forestry projects last fall by paying Blueberry compensation of $49 million. The Peters survey said land disturbances above the Montney formation would be limited because of environmentally favorable side effects of unconventional output, which uses horizontal drilling and hydraulic fracturing. Counting 13,000 vertical wells drilled before unconventional techniques began in 2005, total cumulative industry intrusions are projected to grow to 46-58 square miles, or 0.4-0.6% of the 10,400-square-mile BC Montney region by 2065. Annual well counts are forecast to vary from 400-1,000, depending on the success of LNG exports.
Alberta Advances Multiple Carbon Storage Hubs -- Capturing carbon dioxide (CO2) emissions from industrial and oil and gas activities is already a big challenge but having a safe, permanent place to store them is vital if the goal is to meet or exceed emission-reduction targets. To this end, Alberta, home to most of Canada’s oil and gas industry, including the vast oil sands, is steadily advancing plans to develop carbon sequestration hubs and underground reservoirs across the province in parallel with above-ground CO2 capture plants and pipelines. In separate announcements this year, the province gave the go ahead to 25 projects to develop sequestration hubs and determine if they can achieve commercial viability. In today’s blog, we consider Alberta’s latest efforts to push forward with its emissions capture and storage plans. Alberta has long been a leader in the production of hydrocarbons — and the emissions associated with them. Although there has been intensified focus on increasing production of oil and gas in light of the current North American and global focus on energy security, and in response to greatly improved prices for oil and gas, Canada’s producers and provincial regulatory agencies have also kept their eye on the ball in terms of advancing plans to reduce and capture anthropogenic-CO2 (A-CO2) emissions — those associated with human activities. In the year or so since we last looked at this topic, Alberta has been advancing legislation and laying the groundwork for the development of carbon sequestration hubs through which A-CO2 would be injected deep into underground reservoirs where it would be permanently sequestered “forever and for always.” With the pressure being increased on the oil and gas sector by the Canadian federal government to meet emission-reduction targets by 2030, determining sites for sequestration has taken on added urgency. In Part 1 of this series, we undertook a high-level review of the A-CO2 emissions profile for Canada and its oil and natural gas industry. In that discussion, we mentioned that Canada accounts for under 2% of global A-CO2emissions, a share which has been falling slowly over the past 20 years as emissions and the share of emissions from other major developing economies such as China have been growing steadily. We also noted that even though Canada’s overall emissions profile has held relatively steady over the past two decades, decreases in some sectors of its economy have been offset by a rising share of emissions from the oil and gas sector, from around 20% in 2000 to near 27% in 2019, with a majority of that increase driven by emissions from Alberta’s oil sands. Finally, we discussed three project proposals put forward by major energy players that would capture and sequester emissions from the oil sands and other energy-related activities. We moved past proposals in Part 2 by examining active and pending capture/sequestration projects in the oil and gas sector. The first of these is the Weyburn-Midale site in southern Saskatchewan, at which captured and injected A-CO2 is used for enhanced oil recovery (EOR). In operation since the late 1990s, it remains one of the most successful carbon capture and sequestration (CCS) projects in the world, handling emissions from a synthetic fuels plant just across the U.S.-Canada border in North Dakota, as well as a nearby coal-fired power plant in southern Saskatchewan. Aspects of the use of A-CO2 for EOR projects can be found in our The Air That I Breathe series. Two other operating projects, Quest, operated by Shell Canada at its Scotford Upgrader, and the Alberta Carbon Trunkline (ACTL), which transports captured A-CO2 for EOR operations in Alberta, continue to advance the goal of capturing an ever-increasing share of emissions in the province. Another Shell project in advanced planning is Polaris, which would capture additional emissions from its Scotford Upgrader as well as establish a larger carbon sequestration hub for use by third-party emitters. Two other initiatives being advanced involve the production ofblue hydrogen from natural gas, which would capture the emissions associated with the production process. Readers that want to learn more about the technologies, challenges, and economics of CCS should reference ourWay Down in the Hole series.
Doctors decry 'record profits' for fossil fuel companies as climate change weighs on global health - Doctors are taking aim at the fossil fuels industry, placing blame for the world's most dire health problems on the companies that continue to seek oil and gas profits even as climate change worsens heat waves, intensifies flooding and roils people's mental health. "The burning of fossil fuels is creating a health crisis that I can't fix by the time I see patients in my emergency department," said Dr. Renee Salas, summarizing the findings of a report published Tuesday in The Lancet. "Fossil fuel companies are making record profits while my patients suffer from their downstream health harms." Salas, an emergency medical physician at Massachusetts General Hospital and Harvard Medical School, is one of nearly 100 authors who contributed to the prestigious medical journal's annual report on climate change and health. The report accuses fossil fuel purveyors — and the governments that subsidize them — of subverting "efforts to deliver a low carbon, healthy, liveable future" and demands that world leaders pursue a health-centered approach to solving the climate crisis. The report's theme reflects a growing frustration and helplessness expressed by medical professionals left to deal with the impacts of climate change as world leaders struggle to address the root cause. "The report highlights the harm the fossil fuel industry has really wreaked in creating this crisis," said Dr. Jerry Abraham, the director and chief vaccinologist at Kedren Community Health Center in Los Angeles, who was not involved in writing the report. "Foe is a harsh word, but it has to be used." As in previous reports, the 2022 Lancet Countdown paints a grim picture of how climate change is threatening people's health and the care systems that are supposed to help manage it, calling its latest findings the "direst" yet. This year's report leaves little ambiguity about who the doctors view as responsible for the harms and stresses they feel in clinics. The annual report catalogs the health impacts of change worldwide and a separate policy brief outlines impacts in the U.S. According to these reports:
- Heat-related deaths worldwide have increased by about 68% since the beginning of the millennium, according to data comparing 2000-04 to 2017-21, when the issue was made worse by Covid-19. Extreme heat was linked to 98 million cases of hunger worldwide. In the U.S., heat-related deaths for people over age 65 are estimated to have increased by about 74% during that same time period.
- Tiny particles released into the air as pollution during fossil fuel use were responsible for 1.2 million deaths in 2020. About 11,840 U.S. deaths were attributable to particulate air pollution, according to Salas.
- Changes in temperature, precipitation and population since the 1950s have increased the transmissibility of diseases spread by mosquitoes, with dengue fever, chikungunya and Zika all up by roughly 12%. In the U.S., the transmissibility of dengue fever was about 64% higher.
- Climate change is taking a toll on mental health. "There's strong evidence that climate change is associated with more depression, stress, post-traumatic stress disorder and anxiety," said Natasha K. DeJarnett, a lead author of the U.S. policy brief and an assistant professor of medicine at the University of Louisville.
Borders Tories toe the line in fracking vote | The Southern Reporter --Labour’s motion to force a vote on a bill to ban fracking was defeated, despite complete confusion in the Tory camp over whether it was being treated as a confidence vote in Liz Truss’ collapsing leadership. There were reports of Conservative backbenchers being “manhandled” and “bullied” into the “No” lobby, and conflicting reports of whether or not the party’s whips had resigned following the alleged stramash. Borders MPs John Lamont and David Mundell both voted with the government, even though several high-ranking Tories, including Scottish Secretary Alister Jack, elected not to vote. The Southern asked both Mr Lamont and Mr Mundell why they both voted against what could have seen the end of the ecologically unpopular method of extracting gas and oil from shale rock, a practice that was stopped in 2019 after an outcry from environmental groups. Mr Lamont has elected not to answer, but Mr Mundell said: “I voted with the government on Wednesday because the motion put down by the Labour Party was in fact a procedural attempt by the Opposition to hijack the Order Paper and play political games with legislation. The issue of fracking is, of course, also a matter devolved to the Scottish Parliament.” In Scotland, fracking is a devolved matter, and there has been a ban since 2017. A few days is now a lifetime in politics … and Ms Truss resigned at the end of last week, a day after sacking Kwasi Kwarteng for signing off on the mini-budget which crashed the economy. Amid calls from the opposition parties for an immediate general election, the Tories are intent on installing a new leader instead, with former Chancellor Rishi Sunak leading the race. Speaking ahead of Boris Johnson’s decision not to stand for a second time, Mr Mundell was clear on who he didn’t want to be Prime Minister, but less clear on who he would be supporting. He said: “Nominations are not due to close until Monday and I will decide between the candidates once it is confirmed who they are. I will not, however, be supporting Mr Johnson.”
Simon Fell and Tim Farron reject fracking | The Westmorland Gazette - On Wednesday evening Labour brought a vote on whether MPs should get a say on the Government's fracking plans. Labour wanted to put down a bill banning shale gas extraction, which is the controversial method of forcing water down a pipe into the ground and has caused small earth tremors. Either on the record or off the record, many Conservative MPs agreed or sympathised with this. However, it was turned into a confidence vote on Wednesday, where if Conservative MPs did not vote against the bill they would be kicked out of the parliamentary party. This then turned into chaos on Wednesday evening during the vote as Conservative whips were unclear in communicating if this was or was not a confidence vote. Simon Fell voted against the motion, in an apparent u-turn from his previous voting record of being opposed to fracking. He received criticism of this on Twitter from Cumbria County councillor Sol Wielkopolski who asked him 'what changed your mind?' Mr Fell replied: "I didn't. I voted against what was a confidence motion in the Government and then for an amendment saying that fracking should ONLY ever take place when a community consents to it. My opposition hasn't shifted a jot." When asked what he would like the new Government to do about fracking, Mr Fell said: "I would like the Government to drop it altogether. It won't help our short-term energy needs, it hasn't proven any safer than when we put in the moratorium, and our time is better spent on growing our renewable sectors. "Locally, there is huge potential for more wind, hydrogen, tidal and nuclear. That is good for our energy supplies, great for local jobs and our economy too." The Liberal Democrat MP for Westmorland and Lonsdale Tim Farron said: "Cumbria is a place where shale gas is present and it could be fracked. It's dangerous because it makes the ground geologically active." Mr Farron has long been opposed to fracking and both he and Mr Fell have advocated building a tidal barrage across Morecambe Bay as an alternative.
Mild weather sees 11% drop in gas demand for September - Gas Networks Ireland has said that gas demand in September fell by 11% compared to August due to mild conditions and above-average temperatures in many areas. However, in a report issued today (Monday, October 24), the company said that natural gas usage was up 6% on September 2021 when Covid-19-related public health restrictions were still in place. Year-on-year gas demand increased by 85% in the air travel sector, 27% in retail, 25% for leisure and sports arenas and 15% in hotels. There was an 80% jump in demand from the residential sector compared to August. As students returned to schools and colleges, usage in the education sector was up 63% on the previous month. Gas generated 55% of Ireland’s electricity in September, down 14% on August and up 12% when compared to September last year. Wind generated 25% of Ireland’s electricity in September, down 32% on August, but up 19% on September last year. Coal generated 10% more of Ireland’s electricity in September than it did in August. The Gas Networks Ireland report also includes data for the third quarter (Q3) of the year. From July until the end of September, gas demand increased by 10% when compared to the same period last year, and fell by 2% on the previous quarter.
Gas consumption in Slovakia fell by a quarter - spectator.sme.sk -In August and September, the consumption of gas in Slovakia decreased by 24 percent compared to the five-year average, according to the gas distribution company SPP-Distribúcia data. These take into consideration the real, that is, the physical consumption of gas by consumers. "Slovakia demonstrated the fulfilment of the European Council regulation on coordinated measures to reduce gas demand," stated the Economy Ministry. R The council introduced a voluntary goal of reducing gas consumption by 15 percent compared to their average gas consumption in the period from August 1 to March 31 during five consecutive years, i.e. between 2017 and 2022. The plan was to prepare for the coming winter or possible disruptions of gas supplies from Russia this winter, arguing that the country is using energy supplies as a weapon. The idea was also to fill gas storage facilities to 80 percent capacity by November 2022, and to 90 percent in the following years. Dependent on Russian gas at 85 percent for a long time, Slovakia has also been diversifying gas imports for a few months following the Russian invasion of Ukraine. More than 60 percent of Russian gas, reduced amounts of which continue to flow to Slovakia, is understood to have been replaced. Čítajte viac: https://spectator.sme.sk/c/23041689/gas-consumption-in-slovakia-fell-by-a-quarter.html
EU Leaders Place Price Caps on Natural Gas, Design New LNG Benchmark -European natural gas prices continued to dip after the 27 European Union (EU) leaders agreed to a “roadmap” of emergency measures, including capping prices on gas sales, to help meet Europe’s energy crisis. Following many hours of negotiations, agreement was reached on several measures, including a proposal for a temporary price limit on gas transactions at the Dutch benchmark, Title Transfer Facility (TTF), after Germany conceded to the idea. “There is a lot of work now ahead of us, but the roadmap is very clear,” European Commission President Ursula von der Leyen said.At least 15 of the 27 EU member countries including France, Italy, Poland and Spain supported some type of price cap, while other countries including Germany, Ireland and the Netherlands opposed the idea.Germany and the Netherlands requested more guarantees to handle potential supply risks linked to capping prices. German leaders had been warning for weeks that potential impacts to Europe’s price premium over LNG could send cargoes to Asia and other markets.Dutch Prime Minister Mark Rutte also expressed doubts that a price cap could be launched quickly enough to begin providing relief to households by the start of winter. “We really have to assess all the pros and cons and the ramifications,” Rutte said.EU members also agreed to cap the price of gas used for power generation under a scheme dubbed the “Iberian mechanism,” which was similarly introduced in Spain and Portugal earlier in the year.European gas and power prices made a brief rise Thursday over fears “about the situation of the upcoming winter” analysis with Energie Danmark wrote, but those gains were erased Friday. The TTF price for gas in December dropped almost $3 to around $41.51/MMBtu.By Monday, the TTF price for December gas dropped more than $2/MMBtu to close around $39 as markets tracked the expected impacts from the EC’s decisions.Members agreed to pursue the creation of a new liquefied natural gas price index that would help separate imported gas from the TTF. Details on a timeline for the index’s development weren’t announced after the European Commission meeting, but von der Leyen said its design would “better reflect the LNG price situation.” EU leaders expect next winter to be worse than the 2022-2023 winter, and approved the Commission’s proposal for a joint purchasing scheme. Under the plan, at least 15% of any gas volumes purchased would be used to fill storage facilities for the next 2023-2024 winter season.
EU countries look to map out path to gas price cap - (Reuters) – European Union energy ministers will discuss a bloc-wide gas price cap on Tuesday, attempting to navigate their next steps although it is likely to be weeks before any final decisions. Europe has been scrambling to tame high energy prices after Russia slashed gas supplies following its invasion of Ukraine – sending gas prices skywards and pushing European power prices to record levels in August. With no legal proposal for a price cap on the table yet, ministers meeting in Luxembourg are expected to debate the principles of how an EU gas price limit could work, as well as possible drawbacks. But gas costs have tumbled in recent days, amid mild weather and as countries have filled storage tanks. Some EU diplomats suggested this could dampen momentum to cap energy costs, but others said a cap was still needed to guard against potential price spikes as Europe heads into winter. The European Commission last week asked for countries’ approval to draft a proposal for a price limit on trades at the Title Transfer Facility (TTF) Dutch gas hub, which could be triggered if prices spiked. A few days later, EU country leaders requested “concrete decisions” from their ministers and Brussels on this idea. EU diplomats said Tuesday’s talks could give the Commission the green light on that proposal, but some countries were seeking more details on how a price cap would work.
Shell and Deltic Energy to start drilling on new North Sea prospect - Oil major Shell has announced plans to explore the Pensacola gas prospects in theUK North Sea, with drilling starting mid-November 2022. Shell and Deltic Energy, an oil and gas exploration company, have confirmed they will relocate the Maersk Resilient drilling rig to the site.A statement from Deltic Energy said: “The company looks forward to providing a further update when the rig is on-site at Pensacola and drilling has started.” Pensacola has approximately 309 billion cubic feet (bcf) of potentially recoverable gas resources. Deltic previously stated that if successful, it will be “one of the highest impact exploration targets to be drilled in the gas basin” in the Southern North Sea recently.
Europe’s natural gas prices drop to lowest levels since June 2022 - Russia’s invasion of Ukraine has, among other things, sparked an energy crisis in Europe, with countries scrambling to find alternative sources of fuel amid concerns that Russia will shut off gas taps as winter approaches. However, fears of winter energy shortages in Europe seem to be abating with unusually mild weather for the time of the year. In addition, the scramble to fill in the inventory of natural gas, along with steps the EU took to alleviate the energy crisis in the short term, seems to be bearing fruit. On October 24, news of the natural gas prices in Europe falling to €100/MWh (~$98.35/MWh) hit Twitter, as Welt’s Holger Zschaepitz shared the news that filled gas storages and arrivals of liquified natural gas eased concerns over supply shortages. Benchmark futures for European natural gas fell by 12%, now down over 70% from their highs seen in August of this year. While the weather is expected to remain mild throughout October and possibly early November, more breathing room has been given to battered EU economies, which are still rushing to fill in gas inventories.
Wave of LNG tankers overwhelms Europe and hits natural gas prices - The U.S. is exporting more LNG to Europe as a result of Russia's war in Ukraine and cuts made to natural gas supplies ahead of winter, but there has been a buildup of LNG vessels waiting to unload at ports with European infrastructure unable to handle the increased LNG shipments. There are 641 LNG vessels operating in the world and 60 of them are waiting to discharge their fuel in Europe. These LNG tankers have been idling or slowly sailing around northwest Europe, the Mediterranean, and the Iberian Peninsula, according to MarineTraffic. One is anchored at the Suez Canal. Eight LNG vessels that came from the U.S. are underway to Spain's Huelva port. "The wave of LNG tankers has overwhelmed the ability of the European regasification facilities to unload the cargoes in a timely manner," said Andrew Lipow, president of Lipow Oil Associates. These delays postpone the tankers' return to the Gulf Coast of the United States to pick up the next load, according to Lipow, and as a result, natural gas inventories rise more than the market expected. The underlying infrastructure issue is a lack of European regasification capacity due to a shortage of regasification plants and pipelines connecting countries that have regasification facilities. As a result, the amount of LNG on the water — floating storage — increases and in turn drives down the price of natural gas . Rousseau said the increase in floating storage, with vessels needed to move capacity around the globe tied up for longer, has contributed to an approximate doubling in LNG tanker rates year over year. The cut in vessel capacity of 10% of the overall fleet available for use comes at a time when the majority of LNG vessels are linked to long-term contracts, and has left the spot market thin with vessels. This is fueling prices to $500,000 a day. Energy experts tell CNBC they are keeping an eye on an EU LNG price cap. The cap was discussed last Thursday even as prices have come down. "The price cap potentially pushes traders out of the market which would impact future supply arriving in Europe," Rousseau said. European gas prices had soared above 340 euros ($332.6) per megawatt hour in late August, but this week dipped below $100 for the first time since Russia cut supplies. Before the war, the price had been as low as 30 euros. Russia, which supplies a large portion of natural gas to Europe, cut gas supplies as a response to sanctions after the country's war with Ukraine.
Shipping Liquified Methane Costs $450,000 Per Day - The cost of shipping liquified methane gas (also known as LNG) to Europe hit $450,000 per day last week with ships waiting as long as four days just to unload at Western European ports, the Wall Street Journal reports. Brokers say daily cargo prices — which are already as much as fifteen times higher than they were a year ago — could more than double again to $1 million per day as winter approaches. Though physical infrastructure constraints are an issue for deliveries, about half of the existing 650-boat-strong global methane shipping fleet is being used as floating storage.Capital Product Partners CEO Jerry Kalogiratos told the Walls Street Journal, “Certain gas traders are keeping the cargoes because there is no fixed price on them. If gas prices go up, the delivered LNG can be worth millions more and can end up with a different customer that will pay the higher price.”The exorbitant costs of shipping liquified methane gas, and paying such high daily costs just waiting to unload, illustrate how greatly European demand has distorted the global market in the wake of Russia’s war in Ukraine. Efforts to export as much U.S. methane gas to Europe as possible have driven up American methane gas prices and will increase home heating costs for those burning methane gas by 28% over last winter. High prices have also shut out Pakistan from being able to afford gas altogether, causing blackouts in nations responsible for a negligible amountof historic climate pollution but facing the worst impacts of climate change. (Wall Street Journal $)
Why Russian LNG Exports To Europe Exploded This Summer -- Whereas supplies of Russian pipeline gas--the bulk of Europe’s gas imports before the Ukraine war--are down to a trickle, Europe has been hungrily scooping up Russian LNG. Europe has been working hard to wean itself off Russian energy commodities ever since the latter invaded Ukraine. The European Union has banned Russian coal and plans to block most Russian oil imports by the end of 2022 in a bid to deprive Moscow of an important source of revenue to wage its war in Ukraine.But ditching Russian gas is proving to be more onerous than Europe would have hoped for. Whereas supplies of Russian pipeline gas--the bulk of Europe’s gas imports before the Ukraine war--are down to a trickle, Europe has been hungrily scooping up Russian LNG. The Wall Street Journal has reported that the bloc’s imports of Russian liquefied natural gas jumped by 41% Y/Y in the year through August.“Russian LNG has been the dark horse of the sanctions regime,” Maria Shagina, research fellow at the London-based International Institute for Strategic Studies, has told WSJ. Importers of Russian LNG to Europe have argued that the shipments are not covered by current EU sanctions and that buying LNG from Russia and other suppliers has helped keep European energy prices in check.Maybe Europe’s LNG imports from Russia can be justified on a purely economic basis.Natural gas prices in Europe have plunged over the past few weeks with CNBC reporting that a “Wave of LNG tankers is overwhelming Europe in an energy crisis and hitting natural gas prices.” According to MarineTraffic via CNBC, 60 LNG tankers, or ~10% of the LNG vessels in the world, are currently sailing or anchored around Northwest Europe, the Mediterranean, and the Iberian Peninsula. Such vessels are considered floating LNG storage since they cannot unload, something that is impacting the price of natural gas and freight rates.It’s a fair bet that a good chunk of those vessels originated from the United States.Europe’s natural gas demand has skyrocketed as the EU tries to lower its reliance on Russian natural gas following its invasion of Ukraine. Europe has displaced Asia as the top destination for the U.S. LNG, and now receives 65% of total exports. The EU has pledged to reduce its consumption of Russian natural gas by nearly two-thirds before the year’s end while Lithuania, Latvia and Estonia have vowed to eliminate Russian gas imports outright. Unlike pipeline gas, supercooled LNG is much more flexible and can be shipped from far-flung regions, including the U.S. and Qatar. Europe is not alone here. Shipping data has revealed that China has imported nearly 30% more gas from Russia so far this year, typically at a steep discount. Still, it’s hard to argue that buying Russian LNG even in relatively small quantities is not playing a part in financing Putin’s war machine. Although Russian LNG has accounted for just 8% of the European Union and U.K.’s gas imports since the start of March, the trade runs counter to the EU’s efforts to deprive Russia of fossil-fuel revenue.A lot of blame falls on Switzerland, with 80% of Russian raw materials traded via the Central European nation and its nearly 1,000 commodity firms. Switzerland is an important global financial hub with a thriving commodities sector despite the country being far from all the global trade routes and without access to the sea; no former colonial territories and without any significant raw materials of its own. In fact, Oliver Classen, media officer at the Swiss NGO Public Eye, says that "this sector accounts for a much larger part of the GDP in Switzerland than tourism or the machinery industry." According to a 2018 Swiss government report, commodity trading volume reaches almost $1 trillion ($903.8 billion).
Underwater images show damage to over 50 m (165 feet) of Nord Stream 1 pipeline - (video) Underwater images show an explosion registered as an M2.3 earthquake on the Richter scale on September 26, 2022, damaged more than 50 m (165 feet) of one Nord Stream 1 pipe. There have been several investigations of the gas lines where the explosions took place, the Copenhagen police, the intelligence service PET, and the Danish defense announced in a press release. “The investigations have confirmed that there has been extensive damage to Nord Stream 1 and 2 in Denmark’s exclusive economic zone, and that the damage was caused by heavy explosions,” their joint press release reads. Videos and images made by Swedish Expressen, show at least 50 m (165 feet) of the gas pipeline are missing or have disappeared into the seabed.1 “It’s an extreme force that can bend such thick metal in the way we see,” said Trond Larsen, who controlled the underwater robot that filmed the material. None of the investigations carried out thus far state who blew up the pipelines, leaving people to draw their own conclusions based on the phrase ‘who benefits.’
Nord Stream 1 operator sends ship to survey pipeline damage - (AP) — A ship chartered by the operator of the Nord Stream 1 natural gas pipeline has arrived at the site of last month's explosions under the Baltic Sea to survey the damage, the company said Thursday. Undersea explosions late last month ruptured Nord Stream 1, which until Russia cut off supplies at the end of August was its main supply route to Germany. They also damaged the Nord Stream 2 pipeline, which never entered service as Germany suspended its certification process shortly before Russia invaded Ukraine in February. Investigators in Sweden, Denmark and Germany are looking into what happened. Danish officials last week confirmed that there had been “extensive damage” to the pipelines and that the cause of the damage was “powerful explosions.” The leaks occurred in international waters but within the exclusive economic zones of Denmark and Sweden. Investigators haven't yet given any information on who might have been responsible. Nord Stream 1 operator Nord Stream AG, in which Russia's Gazprom has a majority stake, said a specially equipped vessel has arrived at the location of the damage in Sweden's exclusive economic zone. It said survey work on the damaged area is expected to take three to five days. The Swiss-based company said it is still awaiting a Danish decision on permits for damage assessment in that country's exclusive economic zone. The Swedish Armed Forces confirmed to Swedish broadcaster SVT that a Russian ship was on site to carry out investigations for Nord Stream. “We have known about their plans for some time,” said Jimmie Adamsson, the navy's head of communications. “Since it is international water, no permission from the Swedish authorities is needed to carry out this type of investigation." Separately, the Swedish Navy said on Twitter that it was carrying out “supplementary bottom surveys" at the site of the gas leaks using minesweepers. It said that work was not part of the criminal investigation, but didn't elaborate.
Russia blames Britain for pipeline leaks - Russia has accused the British Navy of planning and carrying out attacks on the Nord Stream pipelines. The same unit was also behind a drone attack in Crimea in the morning. Great Britain rejected the claim. The Russian government has accused Britain of being responsible for the explosions at the Nord Stream 1 and 2 gas pipelines. “According to the available information, representatives of a unit of the British Navy were involved in the planning, preparation and implementation of a terrorist attack in the Baltic Sea on September 26 this year,” the Defense Ministry in Moscow said. The ministry did not provide any evidence for these allegations. The four explosions in the Baltic Sea off the Danish island of Bornholm had torn several leaks in the Nord Stream pipelines. The leaks discovered on September 26 were preceded by explosions. The first underwater investigations confirmed the suspicion of acts of sabotage. The Nord Stream pipelines were out of service at the time of their damage but filled with gas. So far, it has not been proven who is behind the explosions. The Swedish public prosecutor’s office had just announced new investigations into the crime scenes surrounding the gas leaks on the Nord Stream 1 and 2 pipelines. Russia has repeatedly complained that it was not included in the international investigation into the leaks allegedly caused by acts of sabotage. The government in London sharply rejected the allegations now being made by Russia against the British Navy. “To distract from their disastrous handling of the illegal invasion of Ukraine, the Russian MoD resorts to spreading false claims of epic proportions,” the British MoD said on Twitter. “This made-up story says more about disputes within the Russian government than about the West.” Former Royal Navy Admiral Chris Parry made similar comments about the Russian allegations. “It’s a blatant lie and we all know it was the Russians,” he told Sky News. “Russian propaganda always blames everyone else for what they actually did themselves.” The British Navy does not have the ability to blow up the gas pipelines. Attack on Black Sea Fleet The Russian government has also accused Britain of involvement in Saturday morning’s drone strikes in Crimea. “This morning at 4:20 a.m. the Kiev regime carried out a terrorist attack on the ships of the Black Sea Fleet,” the Russian Defense Ministry said. Most of the 16 drones were intercepted via Sevastopol. The minesweeper “Iwan Golubez” and installations in a bay were slightly damaged. The “act of terrorism” was carried out by British “specialists” stationed in Ochakiv in the Ukrainian region of Mykolayiv, it said. These British units are also responsible for training Ukrainian special forces for naval operations. The Defense Ministry also said that the ships now being targeted in Sevastopol were being used to protect the convoys exporting Ukrainian grain. Sevastopol is the home port of the Russian Black Sea Fleet. An adviser to the Ukrainian Ministry of the Interior, Anton Herashchenko, told Telegram that “negligent handling of explosives” caused explosions on board four of the fleet’s warships. The information about the events in Sevastopol cannot be independently verified. conflicting parties as a source Information on the course of the war, shelling and casualties provided by official bodies of the Russian and Ukrainian conflict parties cannot be directly checked by an independent body in the current situation.
UK rejects Russian claims over Nord Stream blast - Russia's defence ministry has said that British navy personnel blew up the Nord Stream gas pipelines last month, a claim that London said was false and designed to distract from Russian military failures in Ukraine. Russia did not give evidence for its claim that a leading NATO member had sabotaged critical Russian infrastructure amid the worst crisis in relations between the West and Russia since the depths of the Cold War. The Russian ministry said that "British specialists" from the same unit directed Ukrainian drone attacks on ships of the Russian Black Sea fleet in Crimea earlier today that it said were largely repelled by Russian forces, with minor damage to a Russian minesweeper. "According to available information, representatives of this unit of the British Navy took part in the planning, provision and implementation of a terrorist attack in the Baltic Sea on September 26 this year - blowing up the Nord Stream 1 and Nord Stream 2 gas pipelines," the ministry said. Britain denied the claim. "To detract from their disastrous handling of the illegal invasion of Ukraine, the Russian Ministry of Defence is resorting to peddling false claims of an epic scale," the British defence ministry said. "This invented story, says more about arguments going on inside the Russian government than it does about the West." Maria Zakharova at UN Headquarters in New York earlier this month Maria Zakharova, a spokeswoman for Russian foreign ministry, said Moscow will seek reaction from the UN Security Council saying on social media Moscow wanted to draw attention to "a series of terrorist attacks committed against the Russian Federation in the Black and Baltic Seas, including the involvement of Britain in them". Russia, deeply isolated by Western nations since its 24 February invasion of Ukraine, has previously blamed the West for the explosions that ruptured the Russian-built Nord Stream 1 and Nord Stream 2 pipelines on the bed of the Baltic Sea. But it had not previously given specific details of who it thinks was responsible for the damage to the pipelines, previously the largest routes for Russian gas supplies to Europe. A sharp drop in pressure on both pipelines was registered on 26 September and seismologists detected explosions, triggering a wave of speculation about sabotage to one of Russia's most important energy corridors. Reuters has not been able to immediately verify any of the conflicting claims about who was to blame for the damage.
Taibbi: Who Blew Up The Nord Stream Pipelines? - About a month ago, on September 26th, explosions rocked the undersea “Nord Stream” natural gas pipelines connecting Russia to Germany, sending boiling methane rushing to the surface in masses big enough to be seen from space.We’ve all seen the video of Joe Biden promising last February, “There will no longer be a Nord Stream 2” and “We will bring an end to it.”The history of America’s bellicose threats with regard to Nord Stream were far more expansive than just a clip or two.Stopping Nord Stream was a central goal of American foreign policy for nearly a decade, with politicians from both parties pounding the table to stop it, and all that history was disappeared the moment the blasts took place.We can’t say yet who blew up the pipelines. Matt Orfalea’s video captures three troubling things we already know about the Nord Stream blasts:
Fears over Russian threat to Norway's energy infrastructure - (AP) — Norwegian oil and gas workers normally don’t see anything more threatening than North Sea waves crashing against the steel legs of their offshore platforms. But lately they have noticed a more troubling sight: unidentified drones buzzing in the skies overhead. With Norway replacing Russia as Europe's main source of natural gas, military experts suspect the unmanned aircraft are Moscow's doings. They list espionage, sabotage and intimidation as possible motives for the drone flights. The Norwegian government has sent warships, coastguard vessels and fighter jets to patrol around the offshore facilities. Norway's national guard stationed soldiers around onshore refineries that also were buzzed by drones. Prime Minister Jonas Gahr Støre has invited the navies of NATO allies Britain, France and Germany to help address what could be more than a Norwegian problem. Precious little of the offshore oil that provides vast income for Norway is used by the country's 5.4 million inhabitants. Instead, it powers much of Europe. Natural gas is another commodity of continental significance. “The value of Norwegian gas to Europe has never been higher,” Ståle Ulriksen, a researcher at the Royal Norwegian Naval Academy, said. “As a strategic target for sabotage, Norwegian gas pipelines are probably the highest value target in Europe.” Closures of airports, and evacuations of an oil refinery and a gas terminal last week due to drone sightings caused huge disruptions. But with winter approaching in Europe, there is worry the drones may portend a bigger threat to the 9,000 kilometers (5,600 miles) of gas pipelines that spider from Norway's sea platforms to terminals in Britain and mainland Europe. Since the start of the war in Ukraine in late February, European Union countries have scrambled to replace their Russian gas imports with shipments from Norway. The suspected sabotage of the Nord Stream 1 and 2 pipelines in the Baltic Sea last month happened a day before Norway opened a new Baltic pipeline to Poland. Amund Revheim, who heads the North Sea and environment group for Norway's South West Police force, said his team interviewed more than 70 offshore workers who have spotted drones near their facilities. “The working thesis is that they are controlled from vessels or submarines nearby,” Revheim said. Winged drones have a longer range, but investigators considered credible a sighting of a helicopter-style bladed model near the Sleipner platform, located in a North Sea gas field 250 kilometers (150 miles) from the coast. Norwegian police have worked closely with military investigators who are analyzing marine traffic. Some platform operators have reported seeing Russian-flagged research vessels in close vicinity. Revheim said no pattern has been established from legal marine traffic and he is concerned about causing unnecessary, disruptive worry for workers. But Ulriksen, of the naval academy, said the distinction between Russian civilian and military ships is narrow and the reported research vessels could fairly be described as “spy ships.” The arrest of at least seven Russian nationals caught either carrying or illegally flying drones over Norwegian territory has raised tensions. On Wednesday, the same day a drone sighting grounded planes in Bergen, Norway’s second-biggest city, the Norwegian Police Security Service took over the case from local officers. “We have taken over the investigation because it is our job to investigate espionage and enforce sanction rules against Russia,” Martin Bernsen, an official with the service known by the Norwegian acronym PST. He said the “sabotage or possible mapping” of energy infrastructure was an ongoing concern.
Gas production temporarily halted at Risha Field in Jordan— The "temporary stoppage" of gas production at Risha field is due to the power generation plant reaching the end of its operational life, a source at the Energy Ministry said on Friday. The Risha power generation plant consumes some 18 million cubic feet (mcf) of gas per day, constituting around 56 per cent of the gas field’s daily production capacity of 32mcf, according to a ministry statement. The source added that extending the lifespan of two gas units at the plant was thoroughly considered by relevant partners in the sector. However, this option turned out to be economically infeasible due to the plant’s low efficiency as well as the additional costs placed on the National Electric Power Company, which currently stand at JD2.8 million per year. The source added that stakeholders are currently considering all available options to resume natural gas production at the field as soon as possible in a way that serves the public interest. Ministry data revealed that a feasibility study was conducted on the installation of a special pipeline from Risha Field to consumption centres in the central and northern regions of the Kingdom. The study turned out to be impracticable due to the long distance, estimated at 370 kilometres, and the low production rate of the Risha gas field, the ministry said. The option may be adopted, however, if production increases to levels higher than 150mcf. The source added that private sector investors are now welcome to transfer gas from Risha to consumption centres via tankers after pressing and/or liquefying the gas to provide the resource to consumers in the central and northern regions of the Kingdom, as per agreements signed between the National Petroleum Company and some investors. Such a step will contribute to increasing reliance on local resources, expanding job
QatarEnergy announces Shell as partner for giant LNG project - QatarEnergy’s chief executive on Sunday named Shell a partner on the company’s North Field South (NFS) expansion, part of the world’s largest LNG project. Shell will have a 9.3% share of the project and QatarEnergy will keep 75%, Saad al-Kaabi, who is also Qatar’s minister for energy, said at a news conference. The development contract for NFS would be awarded in the first quarter of 2023, Kaabi said. QatarEnergy was open to discussing working with Shell in all energy sectors, he added. Last month, QatarEnergy selected TotalEnergies as the first international partner in the NFS expansion project The North Field is part of the world’s biggest gas field that Qatar shares with Iran, which calls its share South Pars. State-owned QatarEnergy earlier this year signed deals for North Field East, the first and larger phase of the two-phase North Field expansion plan, which includes six LNG trains that will ramp up Qatar’s liquefaction capacity from 77 million tons per annum to 126 million tons by 2027. TotalEnergies, Shell, Exxon, ConocoPhillips and Eni took stakes in the North Field East expansion phase, and last month TotalEnergies was named as the first partner in the North Field South project. QatarEnergy had said partners for the North Field South would be selected from those already involved in the first phase.
Sinopec Announces Major Discovery of Shale Gas in Sichuan Basin: First Breakthrough in Cambrian Qiongzhusi Formation - Sinopec Southwest Oil & Gas Company of China Petroleum ("Sinopec Southwest") & Chemical Corporation (HKG: 0386, "Sinopec") has discovered new shale gas reserves in the Jinshi 103HF exploratory well deployed in the Sichuan Basin. With a daily natural gas production reaching 258,600 cubic meters and an evaluated resource capacity of 387.8 billion cubic meters, it is a major breakthrough for China's shale gas exploration, and the first discovery in the Cambrian Qiongzhusi Formation. The find has significantly expanded shale gas reserves and will further promote shale gas exploration and production in the Sichuan Basin. The Sichuan Basin is composed of two main formations, the Longmaxi and Qiongzhusi. The former has seen significant exploration and production including China's first deep shale gas field, Weirong, while Qiongzhusi boasts the most potential for future exploration. The breakthrough will provide a strong impetus for expanding shale gas exploration and development from the single formation to reach new formations and field types, and contribute to build a national natural gas (shale gas) reserve with 100 billion cubic meters of capacity in the Sichuan and Chongqing region. Sinopec Southwest has shifted from the traditional method of seeking shale gas in organic rich black shale and established new evaluation standards for the Cambrian shale beds, which led to the discovery of the silty shale gas exploration target layer. Faced by the challenges of the thin shale layer, large longitudinal stress difference and difficulty in scaled transformation, the company has implemented a new fracturing process and fracturing fluid system to achieve multi-stage fracturing transformation. In the past decade, Sinopec Southwest has advanced oil and gas exploration and development, with major achievements including the completion of the world's first ultra-deep, high-sulfur reef gas field, the Yuanba gas field, and the identification of China's first deep shale gas field, Weirong shale gas field. The company has implemented new reserves of the scale of over 100 billion cubic meters, including Hexingchang Xujiahe, Yongchuan Longmaxi and Jingyan Qiongzhusi formations. Its annual natural gas production has increased from 2.82 billion cubic meters in 2012 to 8.001 billion cubic meters in 2021, with a cumulative production of 52.95 billion cubic meters, which makes the subsidiary the largest natural gas producer in the Sinopec Group.
IEA: The Rapid Growth Of Natural Gas Demand Is Coming To An End - The world is investing hundreds of billions of U.S. dollars every year in renewable energy and other clean energy solutions, but it needs more than a trillion U.S. dollars in investments annually if it still stands a chance of reaching net-zero emissions by 2050. These are some of the key findings in the World Energy Outlook 2022 published bythe International Energy Agency (IEA) this week. Deployment of renewable energy sources in electricity is set to bring peak demand for coal and natural gas by the end of this decade, as the ongoing energy crisis pushes governments to adopt stronger policies to support clean energy and become less dependent on fossil fuels, especially after the Russian invasion of Ukraine, according to the agency. For the first time ever, a World Energy Outlook scenario from the IEA based on the current government policies and settings has global demand for every fossil fuelshowing a peak or plateau, the IEA said. Even natural gas, whose demand was previously expected to continue rising, could now join coal and oil in peaking around 2030, according to the IEA’s latest estimates.In the Stated Policies Scenario (STEPS), coal use is set to fall within the next few years, natural gas demand is expected to reach a plateau by the end of the decade, and rising sales of electric vehicles (EVs) mean that oil demand will level off in the mid-2030s before ebbing slightly by mid-century.“One of the effects of the current crisis is that the era of rapid growth in global gas demand draws to a close,” the IEA’s Executive Director Fatih Birol said.“In Europe, climate policies accelerate the shift away from gas. New supply brings prices down by the mid-2020s, and LNG becomes even more important to gas security,” Birol added.The recent rise in coal is small and only temporary, the IEA’s latest analysis shows. At the same time, renewables are expected to continue surging, eating into the share of coal and gas in the power mix.The current energy crisis could be the turning point for an even greater adoption of renewables, as domestically-produced clean energy will reduce reliance on imported fossil fuels. “Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable and more secure energy system,” Birol said.“The environmental case for clean energy needed no reinforcement, but the economic arguments in favour of cost-competitive and affordable clean technologies are now stronger – and so too is the energy security case. Today’s alignment of economic, climate and security priorities has already started to move the dial towards a better outcome for the world’s people and for the planet,” said the head of the agency. In the World Energy Outlook 2022, the IEA said that electricity generation from renewables needs to see one of the largest increases in investment in the Net Zero Emissions (NZE) Scenario, rising from $390 billion in recent years to $1.3 trillion by 2030. It would be equal to the highest level ever spent on fossil fuel supply, $1.3 trillion spent on fossil fuels in 2014, the IEA said.
Baker Hughes CEO Forecasts ‘Multi-Year Upturn’ in Global Upstream Spending - The executive team of Houston-based Baker Hughes Co. acknowledged there were challenges during the third quarter of 2022, but overall the team remains optimistic about the emerging upcycle, with a continuing bullish view for LNG. The oilfield services (OFS) giant operates around the world in four segments: OFS, Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions (DS). CEO Lorenzo Simonelli led the one-hour conference call with analysts last week, reiterating comments he had made during the second quarter conference call. “The macro outlook has grown increasingly uncertain,” he told analysts. “The global economy is dealing with the strongest inflationary pressures since the 1970s, a rising interest rate environment and sizable fluctuations in global currencies. “Despite these economic challenges, we remain constructive on the outlook for oil and gas, and believe that underlying fundamentals remain supportive of a multi-year upturn in global upstream spending.” Global operators continue to demonstrate “a great deal of financial discipline, which we expect to translate into a more durable upstream spending cycle, even in the face of an unpredictable commodity price environment.”
Europe’s Energy Crisis Is Sending Leaders to Africa for Help - European leaders have been converging on Africa’s capital cities, eager to find alternatives to Russian natural gas — sparking hope among their counterparts in Africa that the invasion of Ukraine may tilt the scales in the continent’s unequal relationship with Europe, attracting a new wave of gas investments despite pressure to pivot to renewables.In September, Poland’s president arrived in Senegal in pursuit of gas deals. In May, the German chancellor, Olaf Scholz, came seeking the same thing and in recent weeks told the German Parliament that Europe’s energy crisis necessitated working “together with countries where there is the possibility of developing new gas fields,” while keeping pledges to reduce greenhouse gas emissions.“With the war, it’s a U-turn,” The flurry of European overtures has led to new or fast-tracked energy projects, with talk of more to come. The hope in African capitals is that Europe’s appetite will mean the financing of gas facilities not just for export but for use at home. In parts of the continent, the economic stakes are enormous. Italian government ministers have accompanied executives from Eni, one of the largest energy companies in the world, to Algeria, Angola and the Republic of Congo as well as to Mozambique, where a natural-gas terminal operated by Eni is expected to begin supplying gas to Europe in a matter of days. Eni is now discussing an additional terminal with the Mozambican government.And in recent weeks, officials from the Democratic Republic of Congo have embarked on an international marketing tour to draw the attention of U.S. and European companies to new oil and gas blocks they have put up for auction. Climate activists have denounced the auction because it includes oil blocks that overlap a gorilla sanctuary as well as fragile peatlands that store immense amounts of carbon dioxide, a planet-warming greenhouse gas.In interviews, African leaders lamented that it had taken a war, thousands of miles away in Ukraine, to give them bargaining power on energy deals, and they described what they saw as a double standard. Europe, after all, used not just natural gas, but far dirtier fuels like coal, for hundreds of years to drive an age of empire-building and industrialization.Their main complaint: Less developed nations should be free to burn more gas in coming years, despite the climate crisis and the need for the world cut back on fossil fuels, because their citizens deserve higher standards of living and greater access to reliable electricity and other basics. But European and international lenders have made it far too costly, Africa’s leaders say.Instead, European leaders have often seemed to preach to Africans about reducing carbon dioxide emissions while providing little of the necessary financing to help build green energy alternatives, all while continuing to emit far more than Africa.“Just two to three months ago, those same Europeans who were lecturing us on ‘no gas’ say they’ll make a compromise,” said Amani Abou-Zeid, the African Union’s commissioner for energy and infrastructure. “We are trying to survive. But instead we are being infantilized.”A recent political cartoon by the Tanzanian artist Gado, widely shared on social media, captured that frustration after John Kerry, the United States climate envoy, spoke last month at an environmental conference in Senegal. In the cartoon, which paraphrases his speech, Mr. Kerry stands at a podium and delivers a remark that reflects the lecture many African leaders feel they’ve been receiving from Western counterparts. “Well guess what, folks?” he says while smiling next to billowing American flags. “Mother Nature does not measure where the emissions come from. We are all responsible for this.”As he speaks, clouds of pollution puff out of his mouth.
‘Monstrous’ east African oil project will emit vast amounts of carbon, data shows -An oil pipeline under construction in east Africa will produce vast amounts of carbon dioxide, according to new analysis. The project will result in 379m tonnes of climate-heating pollution, according to an expert assessment, more than 25 times the combined annual emissions of Uganda and Tanzania, the host nations.The East African crude oil pipeline (EACOP) will transport oil drilled in a biodiverse national park in Uganda more than 870 miles to a port in Tanzania for export. The main backers of the multibillion dollar project are the French oil company TotalEnergies and the China National Offshore Oil Corporation (CNOOC). Environmental assessments by the EACOP consortium were approved by the host governments, but only the construction and operation of the pipeline were considered.The new analysis, by the Climate Accountability Institute (CAI), found construction and operation contributed only 1.8% of the full emissions of the project when taking into account overseas transport, refining and burning of the 848m barrels of oil by end users. It considered the 25-year lifespan of the project and refining in Europe and China. In the years of peak oil flow, the associated emissions would be more than double those of Uganda and Tanzania in 2020.Richard Heede, at CAI, said: “It is time for TotalEnergies to abandon the monstrous EACOP that promises to worsen the climate crisis, waste billions of dollars that could be used for good, bring mayhem to human settlements and wildlife along the pipeline’s path.”Heede described EACOP as a “mid-sized carbon bomb”. In May, the Guardian revealed that world’s biggest fossil fuel firms were quietly planning scores of carbon bomb oil and gas projects that would drive the climate past internationally agreed temperature limits, with catastrophic global impacts.Omar Elmawi, coordinator of the Stop EACOP campaign, said: “EACOP and the associated oilfields in Uganda are a climate bomb that is being camouflaged us as an economic enabler to Uganda and Tanzania. It is for the benefit of people, nature and climate to stop this project.”TotalEnergies said that, as a pipeline project, “EACOP is neither the legal owner of the oil nor is it the ultimate end user”. It said environmental assessments followed national regulations and that an updated analysis, including oil use, had been performed, but did not provide details. CNOOC did not respond to a request for comment.
Shell terminal exports resume amid Nigeria’s oil production slump — Exports from Shell Plc’s Forcados oil terminal in Nigeria resumed after a 10-week interruption, offering a boost to the government amid tumbling crude production this year. Shipments restarted following the completion of repair work at the coastal facility in the oil-rich Delta state, a spokesman for Shell’s Nigerian unit said in a statement on Thursday night. The company introduced the suspension on Aug. 5 due to problems with a sub-sea hose. Nigeria’s oil output has been declining steadily since the first quarter of 2020, when it was roughly twice as much as it was last month. The West African country produced a daily average of 1.14 million barrels of crude oil and condensate -– a light hydrocarbon –- in September, according to government data. Much of the slump can be attributed to production of three major export grades -– Bonny, Brass and Forcados -- that has shriveled to a trickle in recent months. The government blames rampant theft on the pipelines that crisscross the Niger Delta for shutting down wells and killing off investment. The resumption of operations at the Forcados terminal and the 180,000 barrel per day Trans-Niger Pipeline will help add half a million barrels to daily output by the end of November, the Nigerian National Petroleum Co.’s chief executive, Mele Kyari, said in an interview earlier this month. During the first half of the year, Nigeria produced about 230,000 barrels a day of Forcados grade oil, according to government data.
World is in its 'first truly global energy crisis' - IEA's Birol -(Reuters) – Tightening markets for liquefied natural gas (LNG) worldwide and major oil producers cutting supply have put the world in the middle of “the first truly global energy crisis”, the head of the International Energy Agency (IEA) said on Tuesday. Rising imports of LNG to Europe amid the Ukraine crisis and a potential rebound in Chinese appetite for the fuel will tighten the market as only 20 billion cubic meters of new LNG capacity will come to market next year, IEA Executive Director Fatih Birol said during the Singapore International Energy Week. At the same time the recent decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to cut 2 million barrels per day (bpd) of output is a “risky” decision as the IEA sees global oil demand growth of close to 2 million bpd this year, Birol said. “(It is) especially risky as several economies around the world are on the brink of a recession, if that we are talking about the global recession…I found this decision really unfortunate,” he said. Soaring global prices across a number of energy sources, including oil, natural gas and coal, are hammering consumers at the same time they are already dealing with rising food and services inflation. The high prices and possibility of rationing are potentially hazardous to European consumers as they prepare to enter the Northern Hemisphere winter. Europe may make it through this winter, though somewhat battered, if the weather remains mild, Birol said. “Unless we will have an extremely cold and long winter, unless there will be any surprises in terms of what we have seen, for example Nordstream pipeline explosion, Europe should go through this winter with some economic and social bruises,” he added. For oil, consumption is expected to grow by 1.7 million bpd in 2023 so the world will still need Russian oil to meet demand, Birol said.
World "Still Needs Russian Oil To Flow" Amid "First Truly Global Energy Crisis"; IEA Chief Warns - “The world is in the middle of the first truly global energy crisis,” the executive director of the International Energy Agency, Fatih Birol, said today in Singapore.IEA projections show global oil consumption growing by 1.7 million barrels a day in 2023. Russian crude will be needed to bridge the gap between demand and supply, Birol said.As Reuters reports, a U.S. Treasury official told Reuters last week that it is not unreasonable to believe that up to 80% to 90% of Russian oil will continue to flow outside the price cap mechanism if Moscow seeks to flout it."I think this is good because the world still needs Russian oil to flow into the market for now. An 80%-90% is good and encouraging level in order to meet the demand," Birol said. The official went on to warn that natural gas and LNG markets would tighten further in 2023, with only 20 million tons of new liquefaction capacity scheduled to come online in that year, Reuters reported.Speaking at the Singapore International Energy Week, the head of the IEA also said that while supply remains tight, demand for gas will continue to be strong, especially in Europe and possibly in China.Birol’s warning comes amid expectations that this winter will not be the toughest for Europe. Next winter is believed to be potentially much worse because, during the first half of this year, the EU could stock up on Russian pipeline gas, which is unlikely to come back next year, leaving the EU with a supply gap that other suppliers would be hard-pressed to fill. Meanwhile, as many as 60 LNG tankers have turned into floating storage off European coasts as there is not enough regasification capacity on the continent to unload the cargo.This, CNBC reports, is delaying some of the tankers’ return to the Gulf Coast to reload, and pushes gas inventories higher, Andrew Lipow from Lipow Oil Associates told the network.“The wave of LNG tankers has overwhelmed the ability of the European regasification facilities to unload the cargoes in a timely manner,” Lipow said.The shortage of LNG import capacity is aggravating Europe’s gas supply crisis but there is no quick solution to this problem except floating regasification units that Germany, for one, is seeking to deploy by the end of the year.Price is also challenging, with LNG a lot costlier than the pipeline gas Europe was used to. Earlier this month, French president Emmanuel Macron slammed the U.S. for setting double standards in this respect, pointing to how gas cost much less on the U.S. market than on the international LNG market.
IEA: Russia's war in Ukraine won't save fossil fuels - The Russian invasion of Ukraine may have sparked the “first truly global energy crisis,” but it won’t stave off the decline of fossil fuels or create a need to tap new oil and gas fields, the International Energy Agency said Thursday.In a new “World Energy Outlook,” IEA projected — for the first time — that current policies will be enough to force a peak or plateau in the use of fossil fuels. That follows the passage of several important climate laws in rich countries, including the Inflation Reduction Act in the United States, the agency said.“No one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero [greenhouse gas] emissions by 2050,” IEA wrote. Over the next few years, demand for coal will hit its peak, while natural gas will plateau around 2030 and petroleum will reach its zenith in the mid-2030s, under current policy, according to the outlook. Clean energy will rise to take the place of fossil fuels to a certain extent, IEA found. About $2 trillion in annual global financing for technologies like electric vehicles and renewables is due to flood in by 2030, in reaction to recent climate laws. Yet that remains far short of what is needed for the world to comply with the 2050 net-zero emissions goal, as outlined in the Paris climate accord. At least twice as much clean energy investment, over $4 trillion per year, would be necessary by 2030 in order to comply, according to IEA’s modeling. The agency underscored a major shortfall in investments for clean energy in emerging economies, calling for a “renewed international effort” to help finance clean projects in less wealthy countries. “It is essential to bring everyone on board, especially at a time when geopolitical fractures on energy and climate are all the more visible,” said Fatih Birol, the IEA’s executive director, in a statement. In a foreword to the new report, Birol said Russia’s invasion of Ukraine — and the subsequent passage of climate laws in the United States, Europe, Japan and other countries — suggested a possible “historic turning point towards a cleaner and more secure energy system.” The war has disrupted the global trade in energy, delivering an “unprecedented energy shock” and amounting to the “first truly global energy crisis,” Birol wrote. Combined with the Covid-19 pandemic, the invasion will cause some 70 million people to lose access to electricity while 100 million people may no longer have clean fuels for cooking, he added.
Russia Leans On Turkey, India, China For Oil Sales Before EU Ban - The three countries that helped Moscow to maintain crude exports in the wake of its invasion of Ukraine appear to be stepping back into the market for Russian barrels, with Turkey taking a lead role in the latest buying. A marked increase in the volume of crude on tankers that have yet to signal a final destination makes the task of monitoring Russia’s exports more complicated, but most of those vessels end up in India, with a smaller number heading further east to China. Adding those ships into the calculation shows a steady increase in the combined flow of Russian crude to Turkey, China and India in recent weeks. Almost all tankers carrying Russian crude that signal destinations such as Port Said, Gibraltar or “for orders” eventually end up in one of those three countries. Time is running out to deliver crude from Russia’s Baltic ports to China and India before European Union sanctions that will deprive vessels of insurance and other services come into effect on Dec. 5. Tankers have until about Oct. 21 to depart Primorsk or Ust-Luga if they are to reach discharge terminals in eastern China before that deadline. Flows to China, India and Turkey peaked in June at 2.2 million barrels a day. In the four weeks to Oct. 14 that figure was down by about 350,000 barrels a day. However, shipments to Turkey have risen to the highest level for the year so far, while the volume on tankers yet to show final destinations is now so large, at the equivalent of more than 450,000 barrels a day, that it could send combined shipments to these three countries to new post-invasion highs once their actual destinations become apparent. Meanwhile, trading houses and refiners are racing to book storage tanks in Rotterdam in the coming months on expectations of a supply crunch after the EU sanctions take effect. Overall exports rose on a four-week average basis, climbing to the highest since mid-August and exceeding 3 million barrels a day for the first time in five weeks. The increase was driven by flows to Europe, which were higher to all three regions of the continent. All figures exclude cargoes identified as Kazakhstan’s KEBCO grade. These are shipments made by KazTransoil JSC that transit Russia for export through Ust-Luga and Novorossiysk. The Kazakh barrels are blended with crude of Russian origin to create a uniform export grade. Since the invasion of Ukraine by Russia, Kazakhstan has rebranded its cargoes to distinguish them from those shipped by Russian companies. Transit crude is specifically exempted from EU sanctions on Russia’s seaborne shipments that are due to come into effect in December.
Russian Oil Sales: U.S. says Russia oil price cap will not be aimed at OPEC --New steps from Group of Seven countries to cap Russian oil sales at an enforced low price will not be replicated against OPEC producers, whose plans to cut output have irked consumer countries, a United States Treasury official told Reuters. Washington has communicated to representatives of the Organization of the Petroleum Exporting Countries (OPEC) to reassure them of those limits to its plans, the official added. The comments could help ease a spat between the United States and Saudi Arabia, the top oil exporter and de facto OPEC leader, over what Washington sees as collaboration with Russia to deprive markets of supply just as a global recession looms. Tensions have simmered between consumer countries, such as the United States and oil producers over output policy, with sources telling Reuters that OPEC anger about the price cap plan was among the reasons for its decision to cut output. OPEC+, which groups the producer bloc with allies, including Russia, announced last week that it would cut production by 2 million barrels per day to balance markets and quell volatility. Saudi Arabia said the real reduction would likely be around 1 million barrels per day (bpd) as several OPEC members have struggled to meet their existing output targets. The White House said the United States' analysis showed the cut could have waited until the next OPEC meeting, after the November U.S. midterm elections. But OPEC officials did not link the move to the Russian oil price cap in their discussions with the United States, U.S. Deputy Treasury Secretary Wally Adeyemo said last week. The United States last week said the cut would boost Russia's revenue and suggested it had been engineered for political reasons by Saudi Arabia, which on Sunday denied it was supporting Moscow in its invasion of Ukraine. The price cap due for Dec. 5 was designed specifically to address Russia's invasion of Ukraine and will not be carried over to other producers, the official added, as their moves to rein in output drive up prices. Nor do the new sanctions signal the beginning of a buyer's cartel to counter the impact of OPEC policies on the oil market, the official, who declined to be named due to the sensitivity of the situation, said. The Paris-based International Energy Agency grouping of consumer countries said last week that the OPEC+ cut has driven up prices and could push the global economy into recession. But the U.S. Treasury official saw the cut's price impact as muted, saying it might take a $30-$40 price surge or an output cut 10 times the size of the actual cut to OPEC+ output of around 900,000 bpd to trigger a recession. The G7 is keen to deprive Moscow of wartime revenues but seeks to avoid a global supply shock, which could raise prices and hit their own citizens as global recession fears deepen. Agreed by G7 nations in September, the price cap plan faced clashing with much stricter European Union bans on Russian shipments ratified in June. The EU agreed to the cap this month but regulatory details have not been ironed out, increasing anxiety over the plan in the oil industry with six weeks to go.
Russia poised to largely skirt new G7 oil price cap - (Reuters) – Russia can access enough tankers to ship most of its oil beyond the reach of a new G7 price cap, industry players and a U.S. official told Reuters, underscoring the limits of the most ambitious plan yet to curb Moscow’s wartime revenue. The Group of Seven countries agreed last month to cap Russian oil sales at an enforced low price by Dec. 5 but faced consternation from main players in the global oil industry who feared the move could paralyse the trade worldwide. Months of discussions between the United States and those insurance, trading and shipping firms have mollified concerns on their exposure to sanctions but all parties now realize Russia can largely skirt the plan with their own ships and services. The forecasts on the resilience of the Russian oil trade and details of the discussions between Washington and the global oil and services industry have not previously been published. Estimates that 80-90% of Russian oil will continue to flow outside the cap mechanism are not unreasonable, a U.S. Treasury official told Reuters. As a result, only between 1 and 2 million barrels per day (bpd) of Russian crude and refined products exports could be shut in if the country refuses to abide by the cap, said the official, who declined to be named due to the sensitivity of the situation. Russia exported over 7 million bpd in September. That could pose financial and technical difficulties for Russia but would also deprive the world of 1-2% of its global supply just as inflation is on the rise and a recession looms. The United States is aware of some ships changing their countries of origin and trading entities being moved beyond the G7 to order to evade the plan, the official added. Russia would incur costs from having to conduct longer voyages and being relegated to subpar insurance and financing, the official said, making the United States optimistic Russia will be compelled to sell within the price cap over time. Industry and policy veterans have seen the limits of a plan which at first appeared to have the entire Russian oil trade in its crosshairs but whose scope could now be greatly diminished. “In theory there is a big enough shadow fleet to continue Russian crude flows after Dec. 5,” Andrea Olivi, global head of wet freight at commodities trading giant Trafigura told Reuters. “A lot of these shadow vessels will be able to self-insure or they will be able to be insured by Russian P&I”, he added, referring to protection and indemnity insurance. Bank JP Morgan sees the impact of the price cap as muted, with Russia almost completely skirting the ban by marshalling Chinese, Indian and its own ships – whose average age is nearly two decades old – relatively ancient by shipping standards. That could leave Russian exports in December reduced by just 600,000 bpd compared with September, the bank added.
More setbacks for Nigeria’s oil production as Addax workers resume strike — Nigeria’s oil production might again suffer further a decline of about 22,000 barrels per day, as workers of Addax Petroleum Development Nigeria have resumed their strike over alleged anti-labour practices. The 324 Nigerian employees of the oil firm cited the inability of the Federal Government and management of the company to address their grievances and payment of their exit packages, especially as Addax has commenced plans to exit Nigeria, as part of their reasons for resuming the strike. The striking workers, who are members of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), alleged that since the government withdrew the operating licences from Addax in March 2021 due to the company’s refusal to fully develop the oil wells allocated to it, the Nigerian National Petroleum Corporation (NNPC) Limited has taken over the assets and has resumed lifting oil products since June 2022. The oil workers, in a statement by PENGASSAN Secretary, Addax Branch, Ken Olubor, appealed to the NNPC to pay their exit packages, stating that Addax had since tidied its exit. Other allegations levelled by the workers include irregular payment of salaries and allowances, stoppage of appraisal performance reward, violation of employment working hour terms and undue elongation of working without compensation, prolonged stagnation and non-promotion since 2019, as well as no appraisal in the year 2022 due to the ongoing impasse. The statement disclosed that China’s Sinopec Group owns Addax with four Oil Mining Licences – OML 123, 124, 126 and 137, which it operates in a Production Sharing Contract (PSC) with the NNPC Limited. The letter read in part: “SINOPEC has withheld funding her Nigeria operation (Addax Petroleum Development Nigeria) following its ongoing exit which has created safety and operational challenges for employees and the much-anticipated operational funding from the NNPC/NAPIMS is yet to be received.
Namibia Could Join OPEC If Recent Oil Discoveries Fulfill Potential - Namibia could consider joining OPEC if recent offshore oil discoveries prove to be large enough for commercial development, Namibian petroleum commissioner Maggy Shino told Bloomberg on Wednesday, as oil majors that have made recent discoveries prepare for appraisal drilling.TotalEnergies made in February a significant discovery of light oil with associated gas on the Venus prospect offshore southern Namibia. The initial results are “very promising” in the so-called Orange Basin, Kevin McLachlan, Senior Vice President of Exploration at TotalEnergies, said at the time.Venus in Namibia could be a “giant oil and gas discovery,” TotalEnergies said in an investor presentation last month. Appraisal and testing are slated for 2023. Shell said in April that it was “very encouraged” by the early results from the deepwater Graff-1 exploration well in the same Orange Basin offshore Namibia, 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.Shell’s Graff and TotalEnergies’ Venus discoveries could be transformational for Namibia, analysts at Wood Mackenzie said earlier this year.“There’s a new kid on the block in Sub-Saharan Africa’s upstream industry. After two successive giant offshore discoveries, Namibia is the hottest play in the region right now,” WoodMac said in March.But Namibia, as well as Shell and TotalEnergies, will have to wait until the appraisal and testing programs are completed next year to see if the early promising results really meant that the oil discoveries are giant. The economy of Namibia, neighbor to the south of OPEC producer Angola, is currently valued at around $11 billion. If the discoveries are developed, they could double the country’s GDP.
Pakistan Imported Petroleum Products Worth $100 Million Under Saudi Oil Facility in September - Pakistan imported petroleum products worth $100 million on a deferred payment basis under the Saudi oil facility for the seventh consecutive month in September 2022. Official documents revealed that the government has budgeted estimates of $800 million for oil imports under the Saudi oil facility. The country has imported petroleum products worth $300 million in the first three months of the current fiscal year. Saudi Arabia also provided petroleum products worth $100 million each during March, April, May, June, July, and August 2022.The Financing Agreement worth $1.2 billion for the import of petroleum products was signed last November between the Saudi Fund for Development (SFD) and Pakistan’s Economic Affairs Division (EAD). Under this facility, the Pak-Arab Refinery Limited (PARCO) and the National Refinery Limited (NRL) will import petroleum products up to $100 million per month from Saudi Arabia.The SFD has extended the financing facility to facilitate the purchase of petroleum products on a deferred payment basis. According to the official documents, the terms of the financing include the price of purchase by the SFD and a margin of 3.80 percent per annum.
Saudi Arabia to Install $12 Billion Aramco Oil Refinery Unit in Gwadar - Saudi Arabia has decided to build a $12 billion Saudi Aramco Oil Refinery unit in Balochistan’s Gwadar district.Well-informed sources said the Government of Pakistan expended significant effort to persuade the KSA to uphold its past agreements and put more money in Pakistan. The current government has also thrown its support behind Saudi Arabia, which is at odds with the United States over a reduction in global oil supply.Saudi Arabia’s energy minister Khalid Al-Falih arrived in Pakistan over the weekend and has already visited the deep-water port of Gwadar to review the site of the planned oil city. He and his team were received by top representatives of the coalition government. The visiting Saudi delegation and their hosts discussed plans for signing a number of investment agreements in the coming month, including petrochemical, refining, renewable energy, and mining.Talking to reporters, Al-Falih said, “Saudi Arabia wants to make Pakistan’s economic development stable through establishing an oil refinery and partnership with Pakistan in the China-Pakistan Economic Corridor (CPEC)”.According to the Saudi official, who is also the Chairman of the Board of Saudi Aramco, bilateral relations between Pakistan and Saudi Arabia are very strong, “and Saudi Arabia will play a role in Pakistan’s development and prosperity through investment”.A high-level delegation from the Kingdom of Saudi Arabia, led by the Crown Prince, will visit Pakistan in the last week of November. The Crown Prince is in Pakistan at Prime Minister Shehbaz Sharif’s invitation. Pakistan made significant efforts to convince the KSA to fulfill the MoUs and invest in Pakistan.
Crude Slumps 1% After Demand Data From China Disappoints - West Texas Intermediate and Brent futures fell in early trading Monday in reaction to bearish economic data from China showing oil imports contracted 2% in September as refiners struggled to utilize increased quotas amid COVID-19 lockdowns. The bearish data was compounded as Chinese President Xi Jinping was given a third, five-year term during the twice-a-decade Communist Party Congress, and reshuffled his government, appointing loyalists to all key positions that dashed hope Beijing would soon pivot away from Xi's demand-sapping zero-COVID policy. China's economy has been hammered by rolling COVID-19 lockdowns, government restrictions on the property sector and international travel. Chinese stocks on Monday capped their worst day since the 2008 global financial crisis as investors fled mainland markets after a major power grab in Beijing. The onshore yuan fell as much as 0.6% against the U.S. dollar to the weakest level since January 2008. Underscoring the market meltdown is growing fear that the appointment of Xi's allies to the key government positions would make it impossible to enact pro-growth, market policies. A slew of China's key economic data released overnight after abrupt delays last week showed a mixed and sluggish recovery in the world's second largest economy. China's Gross Domestic Product for the third quarter bounced to a stronger-than-expected 3.9% growth rate after contracting by 2.6% in the previous three months, but retail sales disappointed with a 0.5% contraction. China's oil imports in September were down 2% from a year earlier despite increased quotas for independent refiners, signaling demand growth in the world's largest oil importer stalled. In August and July, weakness in China's oil imports was even more pronounced, averaging just 9.17 million bpd or a full 9% below 2021 level. China's demand for fuel this year is now expected to shrink for the first time on record, with data going back 20 years. With Xi's loyalists in power, investors will likely remain skeptical of China's potential to rebound from its COVID-scarred slowdown. Volatility in Asia's markets lifted the U.S. dollar in early trading Monday, with the greenback trading 0.3% higher against a basket of foreign currencies at 112. The Federal Open Market Committee is expected to raise the federal funds rates by another 0.75% at their Nov. 1-2 meeting, which would be the fourth consecutive rate hike of this magnitude in as many meetings. Near 7:30 a.m. EDT, December WTI futures dropped more than $1 to trade near $84.08 barrel (bbl), and the international crude benchmark for December delivery fell by $0.81 bbl to $92.72 bbl. ULSD futures for November delivery gained 1.46 cents to $3.8469 gallon, and November RBOB futures declined 4.29 cents to $2.6191 gallon.
Oil prices ease on Chinese demand data, stronger dollar – CNA -Oil settled lower in choppy trade on Monday as data showing demand from China remained lackluster in September and a strong U.S. dollar weighed, while weakening U.S. business activity data eased expectations for more aggressive interest rate hikes and limited price decline. Brent crude futures for December delivery settled at $93.26 a barrel, down 24 cents, 0.3 per cent, after rising 2 per cent last week. U.S. West Texas Intermediate crude lost $84.58 a barrel, losing 47 cents, 0.6 per cent. Both benchmarks had fallen by $2 a barrel earlier in the session. Although higher than in August, China's September crude imports of 9.79 million barrels per day were 2 per cent below a year earlier, customs data showed on Monday, as independent refiners curbed throughput amid thin margins and lacklustre demand. "The recent recovery in oil imports faltered in September," ANZ analysts said in a note, adding that independent refiners failed to utilise increased quotas as ongoing COVID-related lockdowns weighed on demand. Uncertainty over China's zero-COVID policy and property crisis are undermining the effectiveness of pro-growth measures, ING analysts said in a note, even though third-quarter gross domestic product growth beat expectations. Ongoing strength in the U.S. dollar, which was up again for part of the trading session following another suspected foreign exchange intervention by Japan, also posed problems for oil prices. A stronger dollar makes oil more expensive for non-U.S. buyers. "Further dollar strength would weigh on WTI values with a test of our expected downside at the 79.50 mark likely by week’s end,"
Oil Futures Settled Lower on Monday - Oil futures settled lower on Monday, as lackluster import data from China and the conclusion of the Communist party's national congress helped to dull expectations for energy demand from the world's second largest oil consumer. December WTI fell 47 cents, or nearly 0.6%, to settle at $84.58 a barrel, bringing to an end a three-session streak of increases. Energy commodities prices have seen plenty of twists and turns lately as investors try to gauge what might happen to supply and demand after US midterm elections that are set for early next month, and whether U.S. and global economic recessions can be avoided. Even as crude oil prices fell on Monday, which traders say was largely due to profit-taking, prices for RBOB and heating oil both rose sharply due to worries that weekly US inventory reports due Tuesday and Wednesday will show further declines in fuel stockpiles amid strong exports. RBOB for November delivery gained 6.82 cents per gallon, or 2.56% to $2.7302, while November heating oil gained 8.78 cents per gallon, or 2.29% to $3.9201. Brent for December delivery lost 24 cents per barrel, or 0.26% to $93.26. Bloomberg reported that the U.S. Northeast is so short on heating oil that the fuel is being rationed even before the start of winter. The president of the Connecticut Energy Marketers Association, Chris Herb, said some wholesalers in Connecticut are putting retailers on allocation, meaning they can only get a limited amount of fuel based on availability. These retailers must in turn ration their customers. There is currently a diesel shortage in U.S. as diesel inventories are “unacceptably low”. U.S. Northeast distillate fuel supplies trail the seasonal average. The main issue to replenish region fuel supplies has been a sustained backwardation in the diesel market. In addition to scarcity, there is also the cost. Wholesale heating oil in the New York Harbor averaged $4.09/gallon on Thursday, compared with $2.46/gallon at the same time a year ago. Meanwhile, some retailers are unable to source as much fuel as previous years because their credit lines are sustained and they are under financial stress. However, some supply relief is on the way, with a full Colonial pipeline and overseas cargoes headed to the region, which should also help east prices in the short term. Longer term, the global supply squeeze could make the diesel crisis worse as the cold winter months set in and European sanctions come into effect.According to Refinitiv analysis, gasoline exports to the U.S. are expected to increase this week to 222,000 tons from 185,000 tons in the previous week as the arbitrage spread widens.Goldman Sachs reported that it sees Brent prices averaging $104.20/barrel in 2022 and $110/barrel in 2023. It sees WTI prices averaging $99.80/barrel in 2022 and $105/barrel in 2023.Colonial Pipeline Co is allocating space for Cycle 61 shipments on Line 20, which carries distillates from Atlanta, Georgia to Nashville, Tennessee.
Oil Slides After Global PMIs Signal Economic Downturn (DTN) -- Oil futures moved lower in early trade Tuesday as investors parsed through bearish economic data for the United States, Eurozone, and China, indicating a deeper downturn for global oil demand at the start of the fourth quarter compounded by unusually mild weather across the European continent so far this month, easing demand for gas-to-oil switching in power generation. Dutch Transfer Title Facility gas futures for November delivery slid to 97.5 euros per megawatt-hour on Tuesday, down from 200 euros seen a month earlier, and the lowest trade since mid-June. The combination of milder weather and full gas storage in some of Europe's largest economies dragged European gas prices lower. TTF prices for January and February remain above 100 euros MWh but are down considerably since Russia first halted gas deliveries to European buyers this summer. Warm weather is welcome news for European manufacturers that have already struggled with sky-high energy prices eroding their output and profits. Germany's Purchasing Manufacturing Index for October fell to a lower-than-expected 44.1, down from 45.7 in September. This is not only a 29-month low but is also the fourth consecutive month that the PMI has been below the neutral 50 level, clearly suggesting negative GDP growth. The 50-mark separates growth from contraction. Domestically, survey on business activity for early October showed a surprise contraction across service and manufacturing sectors of the U.S. economy as operators fretted over rising interest rates and absent consumer demand. Except for the pandemic months of April and May 2020, the rate of decrease was the second-fastest since the 2008 Global Financial Crisis. On the back of weaker economic data, investors markedly reduced bets on another 0.75% increase in federal funds rates from the Federal Open Market Committee in December. Near 7:30 a.m. EDT, December West Texas Intermediate futures dropped $1.36 barrel (bbl) to $83.28 bbl, and the international crude benchmark Brent contract for December delivery fell $1.24 bbl to $91.90 bbl. ULSD futures for November delivery shed 3.96 cents to $3.8805 gallon, and November RBOB futures declined 3.22 cents to $2.6980 gallon.
Oil Prices Rise on Weaker Dollar, Supply Worries (Reuters) -Oil prices edged higher on Tuesday, rebounding from an early fall of more than $1 a barrel, on a lift from a weaker dollar and supply concerns highlighted by Saudi Arabia's energy minister. Brent crude futures rose 26 cents to settle at $93.52 per barrel, while U.S. West Texas Intermediate crude futures rose by 74 cents to $85.32. Both benchmarks rose and fell by $1 during the session. The U.S. dollar index fell during afternoon trade, making greenback-denominated oil less expensive for other currency holders and helping to push prices higher. Further support came from comments by Saudi Arabia's Energy Mister Prince Abdulaziz bin Salman that energy stockpiles were being used as a mechanism to manipulate markets. "It is my duty to make clear that losing emergency stocks may be painful in the months to come," he told the Future Initiative Investment (FII) conference in Riyadh. Meanwhile, tightening markets for liquefied natural gas (LNG) worldwide and supply cuts by major oil producers have put the world in the middle of "the first truly global energy crisis," Fatih Birol, the head of the International Energy Agency (IEA), said. The comments out of Riyadh and from the IEA are "a reminder that when it comes to the energy crisis, it's far from over," Uncertain economic activity in the United States and China, the world's two biggest oil consumers, limited oil's gains, however. On Monday, government data showed China's crude oil imports in September were 2% lower than a year earlier, while business activity contracted in the euro zone, Britain and the United States in October. Goldman Sachs Chief Executive David Solomon said that he believes a U.S. recession is "most likely," while a recession could be occurring in Europe. The U.S. Federal Reserve could raise its benchmark overnight interest rate beyond the 4.50%-4.75% range if it does not see real changes in behavior, he said at the FII conference. U.S. crude stocks rose by about 4.5 million barrels for the week ended Oct. 21, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories fell by about 2.3 million barrels, while distillate stocks rose by about 600,000 barrels.
Oil Climbs a Little as Saudis Issue Caution Over U.S. Reserves’ Release - Some say OPEC+ doesn’t like how the U.S. is influencing oil prices with its reserves. Others say members of the alliance are smirking at how the Biden administration is creating a bigger hole for America by draining down its emergency crude stockpiles when it might have a real emergency need later for those supplies. Saudi Energy Minister Abdulaziz bin Salman’s message to the United States on Tuesday seemed to have a combination of both — mild annoyance and derision — as he cautioned about the pitfalls of using the Strategic Petroleum Reserve (SPR) to keep a lid on market prices of both crude and fuel. “It is my profound duty to make clear to the world that losing (releasing) emergency stocks may be painful in the months to come," the minister, sometimes referred to by his initials as AbS, said at an industry conference in Riyadh. AbS’ remarks also came right after the head of the International Energy Agency said its members have oil reserves available to conduct another round of releases if needed. “We still have [a] huge amount of stocks to be released in case we see supply disruptions,” Fatih Birol, the executive director of the Paris-based adviser, said in a group interview at the Singapore International Energy Week Conference. “Currently it is not on the agenda, but it can come anytime.” Birol also said that tightening markets for liquefied natural gas worldwide and supply cuts by major oil producers have put the world in the middle of "the first truly global energy crisis." New York-traded WTI settled up 74 cents, or 0.9%, at $85.32 a barrel, after falling 1.6% in two previous sessions. London-traded Brent crude settled up 26 cents, or 0.3%, at $93.52 per barrel. It fell as much in the previous session. President Joe Biden announced the sale of an additional 15 million barrels from the SPR last week to follow through with some 180 million released from the reserve over the past six months by his administration. The releases helped pull Brent down from a March high of almost $140 a barrel to the low $80s by September. The higher volumes of oil in the market also created additional supply to refineries, bringing down fuel prices that at one point hit record highs above $5 per gallon. On Tuesday, a gallon of gasoline at U.S. pumps averaged $3.85 a gallon. The additional SPR release of 15 million barrels is expected to coincide with the 2 million barrels per day cut in global oil supply announced by OPEC+ for November onwards.
WTI Holds Gains Despite API Reporting Unexpectedly Large Crude Build - Oil prices rebounded today from earlier losses as fears over tight supplies once again became top of mind for many as 'peak hawkishness' overtook 'China demand fears'. Oil was also helped by a weaker dollar..."Oil prices, in the short term, are locked in a bit of a trading range," said Phil Flynn, senior market analyst at The Price Futures Group, in a daily report. "We are still in shoulder season and we're still being influenced by concerns about the global economy and interest rates."For now, algos switch attention to API's report for signs of that demand destruction... API:
- Crude +4.52mm (-800k exp)
- Cushing +740k
- Gasoline -2.278mm (-1.6mm exp)
- Distillates +635k (-1.5mm exp)
Analysts expected a second consecutive small crude draw last week, but instead API reports a major crude build (and unexpected build in distillates stocks also)...WTI was hovering just below $85 ahead of the API print and held its gains after... Finally, The Price Futures Group's Flynn noted that the oil market "tries to ignore the dollar but it can't. When the dollar shows strength, it has put downward pressure on oil," and today saw dollar weakness lend a hand to oil bulls.Still, as the market gets into the winter season, "we'll see a disconnect between the dollar/oil relationship because oil is going to be needed."The Sevens Report Research analysts said oil's new trading range spans "between support in the upper $70s and resistance in the low $90s, as traders assess the outlook for demand amid growing recession concerns but still-tight global supply dynamics."
WTI Futures Gain as USD Slides to 1-month Low on Bearish Data - With the U.S. dollar extending losses into the fourth consecutive session, oil futures pushed higher early Wednesday, finding additional support from acute and widening diesel shortages along the East Coast that are heightening concern over historically low inventory levels heading into the heating season. Diesel shortages in New England and the broader New York areas are now quickly spreading to states in the Southeast and westward, with parts of Tennessee seeing particularly severe shortages. Bloomberg News reported this morning some operators in the area now require 72-hour notice for deliveries to secure fuel and freight. Nationwide distillate inventories have been running consistently below the five-year average for much of the year, with strong exports and domestic demand drawing down stockpiles. Now, with the heating season beginning in less than a week, low supply is heightening concern over the possibility of supply outages in New England states in particular, where the largest concentration of households and businesses draw on heating oil for space heating needs. The shortages are also again driving diesel prices higher, lifting costs for trucking, further exacerbating inflationary pressures. Against this backdrop, the U.S. dollar index declined more than 0.6% against a basket of foreign currencies to trade near 110.130, a more than one-month low, pressured, in part, by weaker-than-expected economic data released this week. The Conference Board reported on Tuesday consumer confidence in the United States plunged to a three-month low in October, driven by increasing concern by consumers in their assessment of current business and labor market conditions. The expectations index also fell below the level that is typically associated with a recession. Overall, Americans now feel more pessimistic about the health of the economy than at any point since April 2021. The dismal reading on U.S. consumer confidence follows a bearish dataset on business activity in manufacturing and service sectors of the economy, with both measures falling deep into contraction last month. Except for the pandemic months of April and May 2020, the rate of decrease was the second-fastest since the 2008 Global Financial Crisis, illustrating deteriorating economic conditions. Wednesday's move higher in the oil complex also follows an inventory report from the American Petroleum Institute showing commercial crude and distillate fuel stocks increased last week, while gasoline inventories declined by a larger-than-expected margin. Further details of the report showed commercial crude oil stocks rose 4.52 million bbl last week, well above calls for inventories to have added 370,000 bbl. Stocks at the Cushing, Oklahoma tank farm, the New York Mercantile Exchange delivery point for West Texas Intermediate futures, increased 740,000 bbl while inventory from the Strategic Petroleum Reserve dropped 3.4 million bbl. At 405.135 million bbl, emergency reserves currently stand at their lowest level since 1984 when stocks were below 400 million bbl. The back-to-back withdrawals from the SPR are part of a more than six-month effort by the Biden administration to reduce retail gasoline prices which spiked to more than $5 per gallon in June. Gasoline stocks, meanwhile, tumbled 2.278 million bbl last week, above an expected 1.03 million bbl draw. API reported distillate inventories added 635,000 bbl in the week ended Oct. 21 versus an expected draw of 1.02 million bbl. Near 9 AM ET, December WTI futures gained more than $1 to trade near $86.50 bbl, and ICE December Brent advanced $0.90 to $94.43 bbl. ULSD futures for November delivery rallied more than 5.75 cents to $4.0260 gallon, and November RBOB futures jumped 4.4 cents to $2.9605 gallon.
WTI Extends Gains As 'Strategic Midterm Reserve' Hits 1984 Lows - Oil prices are rallying this morning as the dollar continued to weaken (to 3-week lows), shrugging off any worries about the surprise crude build API reported last night.“Crude oil remains rangebound,” “Short-term direction is being provided by the movements in the dollar and focus on today’s weekly US stock report.”Meanwhile the Biden-MbS cagematch continues as the Biden administration has released millions of barrels of crude from the nation’s strategic reserves to help rein in crude and gasoline prices; while on Tuesday, Saudi Arabia’s energy minister criticized major importers for trying to tame prices by selling down their inventories, while defending OPEC+’s supply cut. DOE:
- Crude +2.588mm (-800k exp)
- Cushing +667k
- Gasoline -1.478mm (-1.6mm exp)
- Distillates +170k (-1.5mm exp)
While smaller than the API build, official data showed a surprise increase in US crude stocks. Gasoline inventories drewdown while distillates rose very modestly.. The bigger-than-expected build in commercial crude stockpiles of 2.6 million barrels was more than offset by another 3.4 million barrels taken from the Strategic Petroleum Reserve. That left an overall nationwide crude draw of 829,000 barrels in the week to Oct. 21. The Strategic Midterm Reserve set to drop below 400MM this week for the first time since May 1984... Crude exports soared to a new record high, topping 5mm b/d... US crude production was flat on the week at 12mm b/d, even as rig counts rise... Graphics Source: Bloomberg Bloomberg notes that refinery capacity in PADD 2 decreased to 89.1% at a time when most refineries are running hot to maximize profits. The dip may be due to depleted Mississippi River water levels, which have impacted facilities such as Valero Memphis. In its earnings call, Valero said that such lower levels are impacting its ability to clear the refinery and supply the river terminals.WTI was hovering just below $87 ahead of the official data and lifted on the print...
Weak dollar, big U.S. crude exports buoy oil markets - Oil prices surged nearly 3% on Wednesday, bolstered by record U.S. crude exports and as the nation's refiners operated at higher-than-usual levels for this time of year. The dollar's weakness added support, as the greenback's strength of late has been a notable factor inhibiting oil market gains. Brent crude futures settled up $2.17, or 2.3%, to $95.69 a barrel. U.S. West Texas Intermediate (WTI) crude rose $2.59, or 3%, to $87.91. The U.S. dollar making oil cheaper for holders of other currencies. The U.S. greenback has been stronger than other key foreign currencies as the U.S. Federal Reserve has been more aggressive about raising rates. "Across the board this is a dollar-denominated move, and if you try to read outside out of that, it’s foolish," U.S. crude stocks rose 2.6 million barrels last week, according to weekly government data, more than anticipated, but that was lower than industry figures, which showed a 4.5 million-barrel build. Crude exports rose to 5.1 million barrels a day, the most ever, dropping net U.S. crude imports to their lowest in history. "Overall, thanks to the export market, this turns into a bullish report despite a medium-sized build in commercial crude inventories," Traders attributed the surge in exports to the widened WTI-Brent spread , which, coming into Wednesday's trade, was at more than $8 per barrel. U.S. refining rates remained steady at nearly 89% of capacity, the highest for this time of year since 2018. The Organization of the Petroleum Exporting Countries surprised markets with a larger-than-expected cut to its output targets earlier this month. Oil analysts anticipate supply will tighten in coming months after that move, and as Europe is expected next month to ban oil imports from Russia and restrict Russian shippers from the global shipping insurance industry. That ban may tighten world shipping markets, which could also increase the price of oil. Many analysts believe Russia will be able to circumvent the measures, but it could still cause Moscow to shut between 1 million and 2 million barrels of daily production; it could as well hit the distillates markets. "Until 2024 we believe oil price will be strongly influenced by the availability of tankers that are willing to transport Russian oil rather than global supply-demand fundamentals, keeping oil price elevated," JP Morgan analysts wrote.
Oil Rallies as US Economy Rebounds in Q3, ECB Lifts Rates -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled Thursday's session higher. The gains came after the U.S. gross domestic product expanded more than expected in the three months ending in September, halting two consecutive quarters of negative growth despite broadening inflationary pressures and rising interest rates from the Federal Reserve. Limiting gains for the oil complex was a rebound in U.S. dollar index that jumped back to the 110-level after European Central Bank President Christina Lagarde warned of an increased likelihood for a recession in the Eurozone as the central bank lifted interest rates to the highest level in more than a decade. ECB officials delivered a second straight 75-point rate hike on Thursday, matching expectations by economists, but softened language around their commitment to raise rates further for "several meetings" to simply saying they expect borrowing costs to be raised "further." Eurozone manufacturing data for October revealed sharp deterioration in business conditions along with plunging consumer confidence that has been hammered by rising energy costs and protracted war in Ukraine. Domestically, Department of Commerce on Thursday reported the economy expanded 2.6% for the third quarter following a 0.6% contraction reported for the three months ending in April and 1.5% fall seen over the first quarter. While the headline number came in better than expected, underlying fundamentals show signs of a broad slowdown amid faltering consumer and business spending. Further details of the report showed Americans shifted spending from goods to services as was expected, but at a slower pace. Businesses significantly cut their investments. Combined with bearish economic data, reports of acute diesel shortages along the U.S. East Coast are likely to worsen the outlook for the fourth quarter. Distillate stocks in New England PADD 1A and Central Atlantic PADD 1B fell again last week to the lowest level on record for the months just before the winter, and to a 10-year low in Lower Atlantic PADD 1C, exacerbating fears over potential fuel rationing this heating season which begins Nov. 1. Historically low distillate inventory along the East Coast is realized despite full pipelines delivering to the region, with the Colonial Pipeline on Wednesday extending a freeze on nominations on its main distillate line that originates in Houston because demand by shippers to move fuel on the pipeline exceeds its 1.16 million-barrel-per-day throughput capacity. At settlement, December West Texas Intermediate futures advanced $1.17 to $89.08 per barrel (bbl), and ICE December Brent gained to $96.96 per bbl, up $1.27 per bbl on the session. ULSD futures for November delivery surged 21.38 cents to a fresh four-month high $4.3339 per gallon settlement, and November RBOB futures advanced 11.22 cents to $3.0116 per gallon.
Oil Rallies on Renewed Demand Outlook -Oil clung to gains on expectation that a US economic rebound would bolster demand even as the possibility of interest rate hikes weighed on other markets. West Texas Intermediate futures settled at a two-week high after US government estimates showed gross domestic product rose at a 2.6% annualized rate last quarter after falling in the first half of the year. The uptick eases recession concerns and brightens the demand outlook for crude. “This GDP number is solid, just solid,” “A lot of folks were trying to make a recession call and it’s obvious that we’re not in it.” Still, Wall Street remained unconvinced by the backward-looking numbers. Equity markets dropped Thursday amid lackluster company earnings and anticipated Federal Reserve interest rate hikes. Crude, dragged down by recessionary fears during the second half of the year, had racked up four consecutive monthly losses. The market remained choppy in October as traders weighed a weaker demand outlook against expected supply tightness following the announcement of a major OPEC+ output cut. Now, the oil market is looking more bullish. Total US petroleum exports hit a record 11.4 million barrels a day last week while domestic fuel inventories are at historic seasonal lows. WTI for December delivery added $1.17 to $89.08 a barrel. Brent for December settlement climbed $1.27 to $96.96 a barrel. Investors have also been gauging the impact of upcoming European Union sanctions on Russia. The EU and US have proposed capping prices on Russian oil, but US officials have been forced to scale back the price-cap plan ahead of its potential implementation this quarter, according to people familiar with the matter. Instead of strangling the Kremlin’s oil revenues by imposing a strict lid on prices, the US and EU are now likely to settle for a more loosely policed limit that’s imposed at a higher price than once envisioned.
Record U.S. Crude Exports Push Oil Prices Higher - December WTI crude oil futures finished higher on Thursday, putting the market in a position to close higher for the week. The bullish price action was fueled by a number of factors including optimism over record U.S. crude exports, signs that recession fears are fading and a weaker U.S. Dollar. Helping to put a cap on gains were worries over demand from China. Longer-term traders noted that the start of OPEC+ production cuts and the European Union’s embargo on Russian crude oil were also underpinning prices all week. US Crude Exports Surge to Record – EIA U.S. crude oil stockpiles rose in the most recent week, even as the volume of exports hit an all-time record, the Energy Information Administration reported on Wednesday. Crude inventories rose by 2.6 million barrels in the week to Oct 21 to 439.9 million barrels, nearly triple analysts’ forecasts in a Reuters poll for a 1-million-barrel rise. The big surprise that drove prices higher, however, was the news that crude exports surged to a weekly record of 5.1 million barrels per day, cutting net crude imports to just over 1 million bpd, also a record. Crude Supported after GDP Report Showed Some Signs of Inflation Easing Crude oil was also underpinned on Thursday after the latest U.S. GDP report showed some signs that inflationary pressures could be easing. The report for U.S. Gross Domestic Product showed 2.6% economic growth in the third quarter.
Oil Futures Ease 1% as China Widens COVID Curbs (Reuters) -Oil prices eased about 1% on Friday after top crude importer China widened its COVID-19 curbs, though the crude benchmarks were poised for a weekly gain on supply concerns and surprisingly strong economic data. Brent futures fell $1.19, or 1.2%, to settle at $95.77 a barrel. U.S. West Texas Intermediate (WTI) crude fell $1.18, or 1.3%, to $87.90. U.S. gasoline futures dropped about 3%, while U.S. diesel futures rose about 5% to their highest since mid June. "Diesel (was) still (the) strongest component of complex (with) shorts being squeezed out of the November contract ahead of Monday expiry," analysts at energy consulting firm Ritterbusch and Associates said. For the week, Brent rose about 2% and WTI was up about 3%. Chinese cities ramped up COVID-19 curbs on Thursday, sealing up buildings and locking down districts after China registered 1,506 new COVID infections on Oct. 27, the National Health Commission said, up from 1,264 new cases a day earlier. The International Monetary Fund expects China's growth to slow to 3.2% this year, a downgrade of 1.2 points from its April projection, after an 8.1% rise in 2021. "It's hard to make a case for a rebound in China’s crude purchases given the backdrop of uncertainty over its zero-COVID policy," PetroChina said China's demand for refined fuel and natural gas was set to grow year-on-year in the fourth quarter in tandem with an expected economic recovery as Beijing rolls out more stimulus policy. Economic strength in two major economies limited oil's losses. Data on Thursday showed a strong rebound in U.S. gross domestic product (GDP) in the third quarter, demonstrating resilience in the world's largest economy and oil consumer. The German economy also grew unexpectedly in the third quarter, data showed on Friday, as Europe's largest economy kept recession at bay despite high inflation and energy supply worries ahead of a looming European ban on Russian crude imports. "The market remains wary of the impending deadlines for European purchases of Russian crude before the sanctions kick in on 5 December," ANZ Research analysts said in a note. Global oil-and-gas giants including Exxon Mobil, Chevron and Equinor posted huge third-quarter profits, feeding criticism from consumer groups in the United States and Europe. U.S. President Joe Biden has told oil companies they are not doing enough to bring down energy costs. U.S. oil and natural gas rigs fell this week, but in October nothed their first monthly increase since July, according to energy service firm Baker Hughes Co. [RIG/U] The Organization of the Petroleum Exporting Countries (OPEC) is likely to maintain its view world oil demand will rise for another decade.
Oil Settled Up for the Week | Rigzone -- Oil rallied as US fuel stockpiles dropped and exports rose to a record, signaling robust demand despite recent bearish economic trends. West Texas Intermediate futures settled near $88 a barrel after posting a 3.4% weekly gain. The US exported a record amount of fuel last week while East Coast diesel inventories dropped to precariously low levels, according to government data. Tight fuel inventories heading into winter bolstered crude markets even as Wall Street digested uneven corporate earnings. Earlier on Friday, crude slipped as a stronger dollar made commodities priced in the currency less attractive. China’s economic growth outlook is darkening as investors bet Beijing will be slow to abandon its Covid-zero policy, while in Europe the French and Spanish economies slowed. “Crude prices posted a weekly gain as diesel supplies approach dangerously low levels and on hopes China’s economy could rebound before the end of the year,” said Ed Moya, senior market analyst at Oanda Corp, Oil is on course to end the month higher, following a four-month decline. A decision by the Organization of Petroleum Exporting Countries and its allies to cut production in November and looming European Union sanctions on Russia have tightened the supply outlook. In addition, refiners in top importer China have snapped up millions of barrels as they plan to ramp up fuel exports. WTI for December delivery fell $1.18 to settle at $87.90 in New York. Brent for December settlement lost $1.18 to settle at $95.77. Widely-watched time spreads continue to hold in backwardation, a bullish pattern signaling tightness. Brent’s prompt spread -- the difference between the two nearest contracts -- was $2 a barrel, up from $1.27 a month ago. Meanwhile, Exxon Mobil Corp. and Chevron Corp. amassed more than $30 billion in combined net income as politicians blast Big Oil for raking in massive profits at a time when consumers are struggling with soaring inflation and energy shortages worldwide.
Energy Prices To Fall 11% In 2023 As Economies Slow Down: World Bank Study -- Global energy prices will ease in the next couple of years but "remain considerably" higher than the historic average, said a report on Wednesday. In many economies, prices in domestic-currency terms remain elevated because of depreciation and this could deepen food and energy crises. "As the global growth slowdown intensifies, commodity prices are expected to ease in the next two years, but they will remain considerably above their average over the past five years. Energy prices are expected to fall by 11 per cent in 2023 and 12 per cent in 2024," said the Commodity Markets Outlook report for October 2022 released by the World Bank. However, "prices will remain more than 50 per cent above their five-year average through 2024." Brent crude oil is expected to average at $92 per barrel in 2023, over $30 per barrel higher than the average of the last five years of $60 per barrel, said the report. In 2024, the average Brent crude oil is expected to cost $80 per barrel. Natural gas and coal prices will become cheaper in 2023, but Australian coal and US natural gas are expected to double their average of the last five years. Separately, low grain supplies in 2023 could result in high inflation. "First, export disruptions by Ukraine or Russia could again interrupt global grain supplies. Second, additional increases in energy prices could exert upward pressure on grain and edible oil prices. Third, adverse weather patterns can reduce yields; 2023 is likely to be the third La Niña year in a row, potentially reducing yields of key crops in South America and Southern Africa," said John Baffes, senior economist at the World Bank’s Prospects Group. "Higher-than-expected energy prices could pass through to non-energy prices, especially food, prolonging challenges associated with food insecurity," the report said. Almost all regions in the world saw double-digit food inflation in the first three quarters of 2022. India's food inflation in September was recorded at 8.6 per cent year-on-year (YoY) with vegetable and spice prices rising 18.5 per cent and 16.88 per cent respectively. "A further spike in world food prices could prolong the challenges of food insecurity across developing countries. An array of policies is needed to foster supply, facilitate distribution, and support real incomes," said Pablo Saavedra, the World Bank’s vice president for Equitable Growth, Finance, and Institutions in the report's press release. "Policymakers in emerging markets and developing economies have limited room to manage the most pronounced global inflation cycle in decades. They need to carefully calibrate monetary and fiscal policies, clearly communicate their plans, and get ready for a period of even higher volatility in global financial and commodity markets," said Ayhan Kose, director of the World Bank’s Prospects Group and chief economist at EFI, which produces the Outlook report.
Iranian teachers hold two-day sit-down strike against state repression of nationwide protests - Teachers in Iran are in the midst of a two-day sit-down strike protest against the brutal state repression meted out against young people participating in anti-regime demonstrations over the past six weeks. The protests began following the death in police custody September 16 of 22-year-old Mahsa Amini, who was detained by the Islamic Republic’s morality police for “improperly” wearing the hijab. The protests have been fuelled by a disastrous social and economic crisis, which is the product above all of the Western imperialist powers’ imposition of crippling sanctions on Tehran. While they were initiated in areas of the country with Kurdish majorities, the ethnic group to which Amini belonged, the protests have involved people from all the country’s ethnic and religious groups. The protests have been predominantly led by young people and have retained a heterogeneous social character. Initially, the protests were centred on university campuses, but in recent weeks high school students have joined them in significant numbers. The teachers’ strike is the largest organised intervention of the working class in the anti-government protest movement to date, following a brief strike earlier this month by oil workers at a facility in southwestern Iran. Iran’s bourgeois-clerical regime has launched a vicious crackdown on the protests, with unofficial sources placing the death toll at around 200. According to Amnesty International, 23 of those deaths were children. The deputy to the commander-in-chief of the Iranian Revolutionary Guard Corps, Rear Admiral Ali Fadavi, commented, “The average age of most detainees is 15 years.” The Iran-based Asia newspaper reported that 42 percent of detained protesters are under 20; 48 percent are aged between 20 and 35; and 10 percent are over 35. In a statement announcing the teachers’ strike, the Coordinating Council of Teachers Syndicates, a union independent of the regime-aligned shoora (“workers councils”), cited the brutal treatment of children and young people as its motivation for the job action. The Coordinating Council emerged from the repeated strikes and protests teachers have mounted since 2018 against low-wages and poor working conditions. The statement declared, “We teachers will be present at schools but will refrain from being present in classes.” It continued, “The rulers must know that ... Iran’s teachers do not tolerate these atrocities and tyranny and proclaims that we are for the people, and these bullets and pellets you shoot at the people target our lives and souls.” It pledged to “continue our protest until the people’s right to protest is recognised, all pupils are unconditionally freed and return to schools, the system stops killing the people and children, and stops answering the people’s rightful demands with bullets.”
U.S. issues fresh sanctions against Iranian officials for 'brutal' crackdown on peaceful protestors following Mahsa Amini's death continue - The U.S. Treasury announced a fresh round of sanctions Wednesday against Iranian officials for brutal violence against peaceful demonstrators as protests following the death of Kurdish Iranian woman Mahsa Amini continue.The new sanctions come 40 days after the 22-year-old Amini's death in the custody of Iran's morality police. Iranian officials have continued their crackdown on protesters while limiting access to internet services."Forty days after the tragic death of Mahsa Amini, Iranians continue to bravely protest in the face of brutal suppression and disruption of internet access," Brian E. Nelson, under secretary of the Treasury said in a statement. "The United States is imposing new sanctions on Iranian officials overseeing organizations involved in violent crackdowns and killings, including of children, as part of our commitment to hold all levels of the Iranian government accountable for its repression."Amini died under suspicious circumstances at a hospital in the Iranian capital Tehran on Sept. 16 after being detained by its so-called morality police for wearing her hijab head wrap too loosely. Eyewitnesses claim she was beaten by police while Iranian authorities said Amini died of a heart attack.Protests following her death have spread to more than 50 cities. The government has tried to conceal strikes against protesters with widespread internet outages beginning at 4 p.m. local time and continuing into the night. Tehran also blocked access to WhatsApp and Instagram, two of the last remaining uncensored social media services in Iran.Wednesday saw a fresh wave of violence in Amini's hometown of Saqqez assecurity forces clashed with about 10,000 mourners at her gravesite. Internet access in the region was also cut off.Large numbers of riot police were also deployed to Tehran Wednesday, according to a witness account. More than 180 people have been killedsince the protests began.Treasury designated 10 Iranian officials, two Iranian intelligence actors and two Iranian entities involved in the Iranian government's efforts to interfere with internet access:
Wall Street Journal on “U.S.-Saudi Relations Buckle” Focuses on Personalities Over End of Unipolar Era by Yves Smith --The Wall Street Journal has a new story, U.S.-Saudi Relations Buckle, Driven by Animosity Between Biden and Mohammed bin Salman, which is as good as you can expect from the US media, which means extremely good in many respects, yet with important omissions and blind spots. Even though this account is appearing in the Journal, as opposed to say the New York Times or Washington Post, it comes off as a concerned but still orthodox account of why a key relationship is going off the rails.However, the headline demonstrates its core flaw, that the authors, no doubt mirroring conventional wisdom, depict the big reason for the breakdown as personalities, that Biden and Mohammed bin Salman can’t abide each other. The article contends that because the Saudi kingdom is a small place, administratively speaking, the US-Riyadh relationship has always been conducted on a personal basis, to a significant degree between the President and the King or Crown Prince, as appropriate.Now it is true that both sides have made the deteriorating relationship pretty personal. Reading between the lines, just the same way the Biden Administration deliberately goaded China in its Alaska summit, so to Team Biden appeared to try to set out to put the Saudis in their place:When Mr. Biden was elected, Prince Mohammed huddled with advisers at a seaside palace to complete a plan to woo the new president, according to people familiar with the matter.The Saudis delivered a few concessions on a topic Mr. Biden had campaigned on—human rights—including the eventual release of Loujain al-Hathloul, a prominent women’s-rights campaigner who says she was tortured in detention, and two Saudi-American prisoners. And they quickly patched up a feud with neighboring Qatar after leading an economic boycott against it which Mr. Trump had initially supported.Mr. Biden’s response shocked Prince Mohammed, the people said. In his first weeks in office, the president froze Saudi arms sales, reversed a last-minute Trump administration decision to label Yemen’s Houthi rebels a foreign terrorist organization, and published the intelligence report on Mr. Khashoggi’s killing which Mr. Trump had previously dismissed.For the Biden administration, these steps were a necessary correction. To the Saudis, Mr. Biden’s early moves were a slap in the face. Admittedly, the fact the Saudis have also made responses that look petty has made it easy to focus on the poor dynamics. As we recounted, the US was incandescent when OPEC+ cut production by 2 million barrels. The Saudis would have none of the US chiding accusing them of being Rooskie stooges and they released details intended to put the Biden administration in a bad light, that they had effectively conceded the necessity of the output cut but has pressed the Saudis to put it off for a month, clearly to help Biden at the midterms.Nowhere does the article acknowledge that the US and EU are trying to break OPEC+ with their oil price cap scheme. Nor does it acknowledge that other Middle Eastern OPEC members cleared their throats to say they supported the cuts (as in denied the US charge that the went along because the Saudis insisted).The Saudis have continued goading the US by not inviting it to the new, so-called Davos in the Desert. Moon of Alabama describes how the US press is covering for this diss in Some Media Won’t Tell You When The Saudis Snub Biden.If you read the article carefully so to not be distracted by the (intriguing) backstory of how the US historically dealt with the Saudi royals for decades, which has the effect of turning the tale into a bit of a celebrity drama, it does contain what is the underlying driver of the breakdown: the Saudis want to redefine the relationship in light of different power dynamics and needs and the US wants none of it.
Turkey backs Saudi Arabia in clash with U.S. over OPEC+ oil production cuts — Turkey has sided with Saudi Arabia in its deepening standoff with the US over OPEC+’s decision to cut oil production. “We see that a country stands up and threatens Saudi Arabia,” Turkey’s Foreign Minister Mevlut Cavusoglu said in the Mediterranean port city of Mersin on Friday. “This bullying is not right.” As an oil importer, higher prices have hit Turkey’s trade balance and fueled already sky-high inflation. Yet the government is eyeing financial support from the Gulf states and Russia to alleviate a cost-of-living crisis ahead of next year’s elections, and has grown closer to Saudi Arabia and other regional countries as it hedges its position with the West. The Organization of Petroleum Exporting Countries and its partners, a 23-nation alliance led by Saudi Arabia and Russia, on Oct. 5 opted to lower their output targets by 2 million barrels a day from next month. Cavusoglu spoke just days after White House National Security Adviser Jake Sullivan said the US would consider changes to the security and military support it provides to Riyadh in response to the decision. Middle East oil producers have publicly backed Saudi Arabia and Turkey adds another regional political heavyweight to the ranks of its supporters. “If you want the prices to go down then lift these sanctions,” Cavusoglu said, referring to curbs imposed on oil producers Iran and Venezuela. “You can’t solve the problem by threatening one country.” The US has said OPEC+’s decision will hurt the global economy and add to inflationary pressures. President Joe Biden -- who’s popularity has been hit by soaring pump prices -- said there would be “consequences” for Saudi Arabia. Saudi Arabia and other OPEC+ producers have denied they’re lowering supply for political reasons and said they needed to re-balance the crude market because a weakening global economy was slowing the growth of oil demand. “Turkey is not happy with the rising prices, but we’re not using a language of threat,” Cavusoglu said. “The whole world needs Venezuela’s oil and natural gas. There is an embargo on Iranian oil.”
Still Allies: US and Saudi Arabia Will Work Out Oil Spat - Riyadh and Washington will work through the recent tensions in their relationship and remain allies, a senior Saudi official and JPMorgan Chase & Co.’s chief executive said at the Future Investment Initiative conference. An escalating dispute over an OPEC+ decision to cut oil production risks causing lasting damage to political relations between the US and Saudi Arabia. Wall Street seems unfazed, with a big turnout for the start of the kingdom’s FII event on Tuesday. “It’s a blip,” Saudi Arabia’s Investment Minister Khalid Al-Falih told global executives, investors and Saudi government officials at the conference. “In the long term we’re solid allies,” said Falih, a former energy minister and ex-chairman of oil giant Aramco. “We’re close and we’re going to get over this recent spat that I think was unwarranted and it was a misunderstanding hopefully.” He cited strong ties in the corporate world, in education and in terms of people-to-people relations. Falih’s remarks were echoed by JPMorgan Chief Executive Officer Jamie Dimon, who also warned against what he referred to as America’s “everything our way” policy.
Israel Attacks Syrian Capital For 3rd Time Since Friday After Zelensky Claims It's Soft On Terror - On Wednesday Israel launched yet another missile attack on Damascus, which notably marks the third one against Damascus since Friday. Significantly Friday's attack had been the first major strike in a month - though prior to this the aerial assaults had come semi-regularly."Four people collaborating with Hezbollah, including one Syrian fighter, were killed in an attack attributed to Israel on Damascus' outskirts on Wednesday overnight, in the third such strike in less than a week, according to a human rights group in Syria," Haaretz reports. However the Syrian government didn't confirm any casualties. Despite the prior lull in such brazen attacks from Israeli forces, it seem clear they are now re-escalating again, but no specific reason from Israel has been provided. "At around 00:30 AM (21:30 GMT), the Israeli enemy carried out an aerial aggression from the direction of the occupied Palestinian territories targeting several positions in the vicinity of Damascus," Syria's defense ministry said in a statement.Similar strikes had been launched Friday and Monday, with Monday's being a rare daytime attack that wounded a Syrian soldier. Damascus says of the Wednesday aggression that anti-air defenses were deployed and "confronted the missile aggression and downed most of them."Of broader geopolitical importance, which might provide context to the stepped-up attacks, is Ukraine's essentially begging Israel to transfer its Iron Dome defense system and "close the skies" - as President Zelensky said this week.
Can the ‘Butcher of Syria’ save Russia from another rout? – Russia’s General Sergei Surovikin is no stranger to mass murder and spreading terror. In Chechnya, the shaven-headed veteran officer, who has the physique of a wrestler and an expression to match, vowed to “destroy three Chechen fighters for every Russian soldier killed.” And he’s remembered bitterly in northern Syria for reducing much of the city of Aleppo to ruins. The 56-year-old air force general also oversaw the relentless targeting of clinics, hospitals and civilian infrastructure in rebel-held Idlib in 2019, an effort to break opponents’ will and send refugees fleeing to Europe via neighboring Turkey. The 11-month campaign “showed callous disregard for the lives of the roughly 3 million civilians in the area,” noted Human Rights Watch in a scathing report. Now he is repeating his Syrian playbook in Ukraine. Two weeks ago, Vladimir Putin appointed Surovikin as the overall commander of Russia’s so-called “special military operation,” to the delight of Moscow’s hawks. Chechen leader Ramzan Kadyrov praised Surovikin as “a real general and a warrior.” He will “improve the situation,” Kadyrov added in a social media post. But reversing a series of stunning battlefield Ukrainian victories and shifting the tide of the war may be beyond even the ruthless Surovikin. Ukrainians have shown throughout the year they’re made of stern stuff and aren’t going to be intimidated by war crimes — and they’ve endured bombing and bombardments before by equally unscrupulous Russian generals. But Western military officials and analysts note there are already signs of more tactical coherence than was seen under his predecessor General Alexander Dvornikov. “His war tactics totally breach the rules of war but unfortunately they proved effective in Syria,” a senior British military intelligence officer told POLITICO. “As a war strategist he has a record of effectiveness — however vicious,” the officer added. Surovikin and other officials point to the targeting of Ukraine’s energy infrastructure with a massive wave of attacks the past week. Strikes at the weekend resulted in power outages across the country leaving more than a million households without electricity, the deputy head of the Ukrainian presidency, Kyrylo Tymoshenko, said Saturday.
Russia Cuts Expectations For Taxable Oil Production - Russia’s finance ministry has slashed its forecast for taxable oil production for next year, a draft budget seen by Reuters showed on Friday. The draft budget covers the next three years and forecasts a decline in crude oil production and refining as Western sanctions bite. The finance ministry sees Russian oil and gas condensate production at 490 million tonnes next year, or 9.84 million bpd. This is a 7% - 8% decline from the 10.54 million bpd to 10.64 million bpd that the ministry anticipated this year, the budget showed. Its outlook for oil production for 2022 was reduced to 515 million tonnes. After the drop off to 490 million tonnes next year, the finance ministry expects oil production to increase to 500 million tonnes for 2024 and 2025. Oil refining and export volumes that are subject to tax have been revised downward to 8.20 million bpd next year, from the previously expected 10.15 million bpd. Expected oil refining volumes were cut by nearly 20% to 230 million tonnes, while oil exports subject to exports duty were revised down 19.4% to 178.2 million tonnes. “The economy ministry’s forecast is based on overall oil exports increase, including an increase of exports eligible for tax relief, which is related to an expected rise of production at fields, which have exports duty relief,” the finance ministry told Reuters. The refusal of some countries to work with Russia in the oil markets and having to discount Russia’s main exports triggered the revised forecast with regard to oil production. The data release comes as U.S. and Western officials hash out their plan to cap the price of Russian oil. Russia has threatened to stop oil deliveries to any buyer engaging in price capping.
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