US oil supplies are at a new 19½ year low; SPR is at a new 38 year low; gasoline supplies are at a 10 month low; total oil + oil products supplies are lowest in nearly 14 years…
oil prices finished higher for the first time in five weeks as Hurricane Ian disrupted Gulf of Mexico production and the EIA reported across the board inventory drawdowns....after falling 7.1% to an eight month low of $78.74 a barrel last week as oil traders began to price in the effects of a monetary policy induced recession, the contract price for the benchmark US light sweet crude for November delivery fell in Asian trading on Monday on fears of lower fuel demand from an expected global recession sparked by rising global interest rates, and as a surging US dollar would limit the ability of non-dollar consumers to purchase crude, and then slid $2.03, or more than 2% in the New York session to settle at a nine month low of $76.71 a barrel, pressured by a strengthening dollar as traders awaited details on new sanctions on Russia...however, oil prices bounced off that low early Tuesday amid a sharp pullback in the U.S. Dollar, while Hurricane Ian was forecast enter the eastern Gulf of Mexico and potentially disrupt at least some oil operations in offshore Gulf waters, and settled $1.79 or 2% higher at $78.50 a barrel, supported by new production curbs in the Gulf of Mexico ahead of Hurricane Ian and on a softening in the U.S. dollar index....oil prices moved higher still in evening trading after the American Petroleum Institute reported an unexpected draw on gasoline inventories over the prior week, and were up modestly in early trading Wednesday as traders assessed limited disruption to Gulf of Mexico oil production as Hurricane Ian drew closer to a Florida landfall, even as the U.S. dollar strengthened...oil then extended its gains after the EIA reported a surprise draw on crude supplies and then rallied in Wednesday afternoon trading as Hurricane Ian led to a slowdown in production in the Gulf of Mexico and ended up $3.65, or 4.7% higher, at $82.15 a barrel as the U.S. dollar weakened and fuel inventory figures showed larger-than-expected drawdowns amid a rebound in demand...oil prices continued higher in mid-morning trading Thursday as traders assessed new geopolitical risks stemming from a suspected sabotage attack on the Nord Stream 1 and 2 pipelines that had triggered a military warning from NATO, but then turned lower in afternoon trading on a stronger dollar and settled 92 cents lower at $81.23 a barrel as equities also fell after several Fed officials signaled the central bank would continue raising interest rates until clear evidence emerges that inflation was abating, despite the growing risks of that policy causing a deep downturn for the economy in the process...oil prices moved lower in early trading on Friday, after new data showed China's factory activity was contracting at a sharper pace than in previous months amid concerns over rapidly deteriorating global demand growth, hammered by both high inflation and by aggressive rate hikes from several central banks. and then dropped on the news that OPEC's oil output rose in September to its highest since 2020, surpassing their pledged hike for the month to settle $1.74, or 2.1% lower at $79.49 barrel....while that closing price still left oil prices 1.0% higher for the week, they still finished 11% lower for the month and 25% lower for the 3rd quarter...
Meanwhile, natural gas prices finished lower for a sixth consecutive week on hurricane related demand destruction and on another above normal addition to storage...after falling 12.1% to $6.828 per mmBTU last week on the largest inventory increase of the year, the contract price of US natural gas for October delivery clawed back into the green Monday amid estimates of record output and potential threats to production in the form of a hurricane en route to Florida, and settled 7.5 cents higher at $6.903 per mmBTU, while the November contract price inched 2.2 cents higher to $7.014 per mmBTU....however, natural gas tumbled nearly 4% on Tuesday on forecasts for milder weather over the next two weeks, and as analysts noted storms were more likely to cut demand than supply, since they knock out power and can also cause export terminals to be shut down, and settled 25.2 cents lower at $6.651 per mmBTU... natural gas prices retreated further in early trading Wednesday as Hurricane Ian bore down on Florida, but turned higher as global gas prices surged following a series of undersea explosions on the Nord Stream pipelines delivering Russian gas to Europe, as the gas contract for October expired 21.7 cents, or 3.3% higher at $6.868 per mmBTU while the contract price of US natural gas for November delivery gained 19.5 cents to settle at $6.955 per mmBTU....with the markets now quoting the price of November gas, natural gas prices fell on Thursday after the EIA reported the second straight injection of 103 billion cubic feet of natural gas into storage, matching the prior week's largest build of the season, and settled 8.1 cents lower at $6.874 per mmBTU, as power outages in the wake Hurricane Ian reduced the amount of gas needed to produce electricity...natural gas prices gave up another 10.8 cents on Friday to settle at $6.766 per mmBTU, as Hurricane Ian hit the Carolinas after knocking out power to over 2.6 million in Florida, and thus finished 0.9% lower on the week, while the natural gas contract for November delivery, which had closed last week at $6.992 per mmBTU, finished the week 3.2% lower...
The EIA's natural gas storage report for the week ending September 23rd indicated that the amount of working natural gas held in underground storage in the US rose by 103 billion cubic feet to 2,977 billion cubic feet by the end of the week, which still left our gas supplies 180 billion cubic feet, or 5.7% below the 3,157 billion cubic feet that were in storage on September 23rd of last year, and 306 billion cubic feet, or 9.3% below the five-year average of 3,283 billion cubic feet of natural gas that were in storage as of the 23rd of September over the most recent five years....the 103 billion cubic foot injection into US natural gas working storage for the cited week was above the forecast for an injection of 94 billion cubic feet from a Reuters poll of analysts, and was more than the 86 billion cubic feet that were added to natural gas storage during the corresponding week of 2021, and also well more than the average injection of 77 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 September 23rd indicated that after a big jump in our oil exports, a decrease in our oil imports, and smaller withdrawal of oil from our SPR than last week, we needed to pull oil out of our stored commercial crude supplies for the 4th time time in 9 weeks, and for the 25th time in the past 44 weeks, despite a drop in our oil refining and a big jump in oil supplies that could not be accounted for....Our imports of crude oil fell by an average of 498,000 barrels per day to average 6,449,000 barrels per day, after rising by an average of 1,155,000 barrels per day during the prior week, while our exports of crude oil rose by 1,106,000 barrels per day to average 4,646,000 barrels per day, which together meant that the net of our trade in oil worked out to an import average of 1,803,000 barrels of oil per day during the week ending September 23rd, 1,604,000 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 100,000 barrels per day lower 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 13,803,000 barrels per day during the September 23rd reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,751,000 barrels of crude per day during the week ending September 23rd, an average of 604,000 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 684,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US. So, based on that reported & estimated data, the crude oil figures from the EIA for the week ending September 23rd appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,264,000 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 (+1,264,000) 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 (+26,000) barrels per day, that means there was a 1,237,000 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 them useless...but 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 684,000 barrel per day decrease in our overall crude oil inventories left our oil supplies at 853,142,000 barrels at the end of the week, which was our lowest total oil inventory level since March 14st, 2003, and therefore at a new 19 1/2 year low.….Our oil inventories decreased this week as an average of 31,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while 654,000 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 up to the midterm elections in November, in the hope of keeping gasoline and diesel fuel prices from rising, at least up until then, and was apparently down by 548,000 barrels per day from two weeks ago because the administration is now attempting to use the Strategic Petroleum Reserve to manipulate prices on a weekly basis....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 233,564,000 barrels of oil have now been removed from the Strategic Petroleum Reserve over the past 26 months, and as a result the 422,583,000 barrels of oil still remaining in our Strategic Petroleum Reserve is now the lowest since July 27th, 1984, or at a 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 November, 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 rose to an average of 6,492,000 barrels per day last week, which was 5.6% more than the 6,147,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day lower at 12,000,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 11,600,000 barrels per day, while Alaska’s oil production was 3,000 barrels per day higher at 434,000 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 90.6% of their capacity while using those 15,751,000 barrels of crude per day during the week ending September 23rd, down from their 93.6% utilization rate during the prior week, and a refinery utilization rate that's a bit below the normal range for mid-September. The 15,751,000 barrels per day of oil that were refined this week were still 2.2% more than the 15,415,000 barrels of crude that were being processed daily during week ending September 24th of 2021 (after Hurricane Ida), but 1.7% less than the 16,017,000 barrels that were being refined during the prepandemic week ending September 27th, 2019, when our refinery utilization was at 86.4%, also below the normal range for mid September...
Even with the decrease in the amount of oil being refined this week, the gasoline output from our refineries was still higher, increasing by 166,000 barrels per day to 9,625,000 barrels per day during the week ending September 23rd, after our gasoline output had increased by 6,000 barrels per day during the prior week. This week’s gasoline production was still 2.7% less than the 9,889,000 barrels of gasoline that were being produced daily over the same week of last year, and 4.5% below the gasoline production of 10,081,000 barrels per day during the week ending September 27th, 2019, ie, during the year before the pandemic impacted US gasoline output. On the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 278,000 barrels per day to 4,958,000 barrels per day, after our distillates output had increased by 217,000 barrels per day during the prior week. Even with that decrease, our distillates output was 6.7% more than the hurricane impacted 4,648,000 barrels of distillates that were being produced daily during the week ending September 24th of 2021, and 3.0% more than the 4,813,000 barrels of distillates that were being produced daily during the week ending September 27th 2019...
Even with the increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the 6th time in 8 weeks; and for the 26th time out of the past thirty-four weeks, decreasing by 2,422,000 barrels to a 10 month low of 212,188,000 barrels during the week ending September 23rd, after our gasoline inventories had increased by 1,570,000 barrels during the prior week. Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose by 503,000 barrels per day to 8,825,000 barrels per day, while our imports of gasoline fell by 250,000 barrels per day to 525,000 barrels per day and while our exports of gasoline fell by 204,000 barrels per day to 985,000 barrels per day. After 26 gasoline inventory drawdowns over the past 33 weeks, our gasoline supplies were 4.3% lower than last September 24th's gasoline inventories of 221,809,000 barrels, and about 6% below the five year average of our gasoline supplies for this time of the year…
After the decrease in our distillates production, our supplies of distillate fuels decreased for the 7th time in 19 weeks and for the 31st time in the past year, falling by 2,891,000 barrels to 114,359,000 barrels during the week ending September 23rd, after our distillates supplies had increased by 1,230,000 barrels during the prior week. Our distillates supplies fell this week on the production decrease and because the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 769,000 barrels per day to 4,178,000 barrels per day, while our exports of distillates fell by 471,000 barrels per day to 1,287,000 barrels per day, and while our imports of distillates fell by 13,000 barrels per day to 94,000 barrels per day.. After forty-nine inventory withdrawals over the past seventy-five weeks, our distillate supplies at the end of the week were 11.8% below the 129,727,000 barrels of distillates that we had in storage on September 24th of 2021, and about 20% below the five year average of distillates inventories for this time of the year...
Meanwhile, after the big jump in our oil exports and the decrease in our oil imports, our commercial supplies of crude oil in storage fell for the 11th time in 23 weeks and for the 30th time in the past year, decreasing by 215,000 barrels over the week, from 430,774,000 barrels on September 16th to 430,559,000 barrels on September 23rd, after our commercial crude supplies had increased by 1,141,000 barrels over the prior week. After that small decrease, our commercial crude oil inventories were still only about 2% below the most recent five-year average of crude oil supplies for this time of year, but about 30% above the average of our crude oil stocks as of the fourth weekend of September 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 September 23rd were 2.9% more than the 418,542,000 barrels of oil we had in commercial storage on September 24th of 2021, while 12.6% less than the 492,426,000 barrels of oil that we had in storage on September 25th of 2020, and 1.9% more than the 422,642,000 barrels of oil we had in commercial storage on September 27th of 2019…
Lastly, 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 continuing to watch the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR. With the across the board 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 13 468,000 barrels this week, from 1,667,020,000 barrels on September 16th to 1,653,552,000 barrels on September 23rd, after our total inventories had risen by 2,344,000 barrels during the prior week. That left our total liquids inventories down by 134,881,000 barrels over the first 35 weeks of this year, and at the lowest level since October 3rd, 2008, or virtually at a 14 year low...
This Week's Rig Count
The number of drilling rigs running in the US rose for the fourth time in nine weeks, and for the 85th time over the past 105 weeks during the week ending September 30th, but they're still 3.5% below the prepandemic rig count....Baker Hughes reported that the total count of rotary rigs drilling in the US increased by 1 rig to 765 rigs this past week, which was also 237 more rigs than the 528 rigs that were in use as of the October 1st report of 2021, but was 1,164 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business….
The number of rigs drilling for oil increased by 2 to 604 oil rigs during the past week, after the number of rigs targeting oil had increased by 3 during the prior week, and there are 176 more oil rigs active now than were running a year ago, even as they amount to just 37.5% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and as they are still down 11.6% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations decreased by 1 to 159 natural gas rigs, which was still up by 60 natural gas rigs from the 99 natural gas rigs that were drilling during the same week a year ago, even as they were only 9.9% 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 reports that two "miscellaneous" rigs continued drilling this week: a directional rig drilling to between 5,000 and 10,000 feet on the big island of Hawaii, and a vertical rig drilling more than 15,000 feet into a formation in Humboldt county Nevada that Baker Hughes doesn't track....in the past, we've identified various "miscellaneous" as being exploratory, for carbon dioxide storage, and for utility scale geothermal projects...a year ago, there were was only one such "miscellaneous" rig running...
The offshore rig count in the Gulf of Mexico was unchanged at 15 rigs this week, with all of this week's Gulf rigs drilling for oil in Louisiana's offshore waters....that's higher than the 11 Gulf rigs running a year ago in the wake of Hurricane Ida...in addition to rigs drilling in the Gulf, we still have an offshore directional rigs drilling to between 5,000 and 10,000 feet for natural gas in the Cook Inlet of Alaska, while a year ago, there were two rigs drilling offshore from Alaska...
In addition to rigs running offshore, there are also four water based rigs still drilling through inland bodies of water this week; those include a directional rig drilling to between 10,000 and 15,000 feet, inland in Galveston Bay, Texas, a directional rig drilling for oil to between 5,000 and 10,000 feet in Cameron Parish, Louisiana; a directional rig targeting oil at a depth greater than 15,000 feet drilling through a lake on Grand Isle, Louisiana, and a directional rig drilling for oil in Terrebonne Parish, Louisiana, also at a depth greater than 15,000 feet...a year ago, there were two rigs drilling on inland waters...
The count of active horizontal drilling rigs was up by 3 to 696 horizontal rigs this week, which was also 222 more rigs than the 474 horizontal rigs that were in use in the US on October 1st of last year, but just over half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014....on the other hand, the vertical rig count was down by 2 to 23 vertical rigs this week, which was also down by 9 from the 32 vertical rigs that were operating during the same week a year ago…meanwhile, the directional rig count was unchanged at 46 directional rigs this week, and those were up by 24 from the 22 directional rigs that were in use on October 1st 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 September 30th, the second column shows the change in the number of working rigs between last week’s count (September 23rd) and this week’s (September 30th) count, the third column shows last week’s September 23rd 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 1st of October, 2021...
let's look at the natural gas changes first this week, since drilling in the Marcellus shale was up by three rigs, even as the national natural gas rig count was down by one...that 3 rig Marcellus increase came as 4 natural gas rigs were added in West Virginia's Marcellus, while a natural gas rig was pulled out of Pennsylvania's Marcellus at the same time...elsewhere, another natural gas rig was removed from the Utica shale in Ohio, while 3 natural gas rigs were pulled out of Oklahoma's Arkoma Woodford at the same time...Oklahoma also accounts for the oil rig pulled out of the Mississippian shale, but the state's overall rig count was only down by one with the addition of an oil rig in the Cana Woodford, another oil rig added in the Ardmore Woodford, and the addition of an oil rig in a basin elsewhere in Oklahoma that Baker Hughes doesn't track at the same time...
next, to figure out what happened in New Mexico, we'll first check the Rigs by State file at Baker Hughes for the changes in Texas Permian...there we find that there were three oil rigs removed from Texas Oil District 8, which covers the core Permian Delaware, but that there was an oil rig added inTexas Oil District 7B, which includes the easternmost county of the Permian Midland...hence, those changes indicate a 2 rig decrease in the Texas Permian, and since the national Permian basin rig count was unchanged, we can conclude that the two rigs added in New Mexico were set up to drill in the far west Permian Delaware....
elsewhere in Texas, there was a rig removed from Texas Oil District 1, while there was rig added in Texas Oil District 4, which were most likely offsetting changes in the Eagle Ford shale, where the rig count remained at 72, while there was an oil rig added in North Dakota's Williston basin, but the Williston rig count remained unchanged as a Williston oil rig was removed from Montana at the same time...
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Windfall Profits Tax on Ohio Oil & Gas Discussed by Economists - Marcellus Drilling News - Earlier this year, one of the biggest nutjobs in Congress, Sen. Sheldon Whitehouse (Democrat-RI), introduced an excise tax, which he erroneously called a windfall profits tax, targeted at oil company profits. The bill would impose a 50% tax on the difference between the current sale price of a barrel of oil and the average price of a barrel of oil from 2015 to 2019, which was roughly $66 per barrel. It would apply to sales by companies that produce or import at least 300,000 barrels of oil per day (or did so in 2019). Whitehouse later revised his plan to a proposed 21% windfall profits tax on oil company profits over 10%. Believe it or not, Ohio appears to be debating whether or not to apply such a windfall profits tax to its energy producers.
BP refinery in Ohio, where two workers were killed, has long record of safety violations - Family and friends are holding funeral services this week for two young workers who were tragically killed in a massive fire at the BP-Husky oil refinery in Oregon, Ohio, on September 20. Ben, 32, and Max, 34, Morrissey were brothers, and both left behind wives and small children. BP has not explained what caused last Tuesday’s fire at the refinery, where more than 580 workers process up to 160,000 barrels of crude oil each day for gasoline, diesel, jet fuel, propane, asphalt and other products for the US Midwest. It took company and local fire crews four hours to put out the huge blaze, which lit up the sky around the surrounding community. The severely burned workers were first taken to Mercy Health St. Vincent Medical Center in Toledo and then transported to a University of Michigan medical facility. By the next morning, however, they had succumbed to their injuries. Both brothers graduated from Clay High School where they excelled in wrestling, a very popular sport in the working class community. Ben got an apprenticeship as an iron worker and worked on construction projects for several years in the New York City area, including on the Tappan Zee Bridge, before getting the job at the BP refinery in March 2022. After graduating high school, Max enlisted in the US Navy before getting at job at BP. Max is survived by his wife Darah and small sons, Wilde and Recker. Ben is survived by his wife Kaddie and small son Weslee. “Both were the best dads in the world,” Workers at the refinery have long complained that repeated job cuts, outsourcing, exhausting work schedules of 12 hours or more, and other cost-cutting measures by management have undermined safety. The BP refinery has a record of repeated serious and life-threatening safety violations:
- In 2010, OSHA cited BP North American Inc. and BP-Husky refinery in Oregon, Ohio, with 42 alleged willful violations, after repeated inspections of BP facilities following the 2005 explosion at BP’s Texas City Refinery which killed 15 workers and injured 170. This include 20 alleged serious violations for exposing workers to a variety of hazards, including failure to provide adequate pressure relief for process units. \
- In 2016, BP-Husky was fined $35,632 for violations at the Oregon refinery, including five “serious” category violations related to the use and working condition of fire hydrants at the refinery.
- In March 2022, OSHA issued a serious violation and $3,874 fine when employees were exposed to methanol, OSHA records show.
An unnamed source told Reuters the day of last week’s fire that leaking fumes from a crude unit may have caused the ignition in another unit at the facility. The refinery, a very old facility which originally started production in 1919, had just completed a once in five years “turnaround,” when production is shut down for inspection, cleaning and major maintenance and repairs. The process had reportedly been completed and production resumed.During the last strike at the Oregon facility in 2015, a BP worker told the WSWS the refinery was supposed to implement scheduled turnarounds every four years, but the last one had been in 2007, that is eight years before. “We are constantly putting on band-aids,” he said.Earlier this year, a BP worker at the company’s facility in Whiting, Indiana, told the WSWS, “They preach safety, but it is meaningless. They expect you to do your job, no matter what.” During turnarounds, he said, “safety just goes out the window because the managers are paid bonuses based on metrics of how far ahead of schedule they are and under budget.
BP layoffs at Ohio refinery after fire indicate prolonged shutdown - (Reuters) – BP Plc fired most of the contractors at the roughly 160,000 bpd Toledo, Ohio refinery it co-owns with Cenovus Energy (NYSE:) Inc. on Wednesday, according to sources familiar with the matter that the plant will experience an extended shutdown after last week’s explosion and fire. The blast killed two members of the United Steelworkers, identified as brothers Max and Ben Morrissey. The more than 100-year-old refinery has been off the grid since the middle of last week after the explosion and could be shut down for several months. At least one contractor is on site and assesses the damage. The US Chemical Safety Board is also investigating the incident, which reportedly resulted in the release of sulfur dioxide and hydrogen sulfide and significant property damage. Cenovus forwarded the comment to BP (NYSE:), which declined to comment further. The outage caused gasoline cash differentials in Chicago to hit new highs on Wednesday. Chicago CBOB gasoline is up 7.75 cents and trading 80 cents a gallon via futures on the New York Mercantile Exchange, traders said, more than 700% higher than prices a year ago. The official cause of the explosion was not reported. Fumes escaping from one crude oil unit could have caused the ignition in another unit at the plant, a source told Reuters. Several units were engulfed in flames, the source said. Workers have completed a maintenance break at the facility in recent weeks and the facility has been brought back into service. In August, Cenovus announced it would buy the remaining 50% interest in the BP-Husky Toledo refinery that it does not already own. The deal is expected to close by the end of 2022.
Hurricane Ian, refinery fire impacting Ohio gas prices - An unexpected one-two punch continues to move gas prices higher for Ohioans at least in the short term before the switch to winter blends may provide some relief. A fire at an oil refinery in Toledo last week shut down the plant’s operations and is impacting prices in the Midwest. At the same time, Hurricane Ian’s path through the Gulf of Mexico and impact in Florida is also expected to affect distribution, according to experts at AAA. While still below the national average of $3.76, Ohio’s average price of $3.68 on Wednesday was 3 cents higher than Tuesday and more than 20 cents above last week’s average. A year ago, Ohioans paid an average of $3 a gallon. Hurricane Ian made landfall Wednesday afternoon on Florida’s west coast before beginning its move over central Florida late Wednesday and Thursday. In preparation, BP and Chevron announced Monday night they shut-in production of offshore platforms in the Gulf, while Occidental Petroleum and Hess also took measurers at their facilities, according to AAA Cincinnati Public and Government Affairs Manager Kara Hitchens. “Hurricane approaches spur some increases in local demand for gasoline, and indeed many counties in the country have only a few days of supply on hand at downstream terminals. After the initial surge in demand, a period of lower-than-normal consumption can haunt a region for a much longer period,” Hitchens said. “Arteries of distribution can hemorrhage with storm impacts, whether it be via washed out pipelines or power outages. Ian looks like it might impact real estate that has pumping stations for Colonial Pipeline, for example.” Adding to the gasoline issue was a fire at a Toledo refinery last week that killed two people and left the plant shutdown. Hitchens said experts initially believed the fire would not have much of an impact, but those thoughts have changed. “Initially experts didn’t think the fire would have much impact but the longer the refinery is offline, the greater the impact. And now couple that with the storm’s impact, there is bound to be some impact,” Hitchens said.
Ascent Resources Using Methane Detection Lasers for MiQ Certification --Ascent Resources – Utica, LLC announced that nearly all of its natural gas production had achieved the top Grade A certification under the MiQ methane emissions standard. As part of its certification, Ascent has partnered with Bridger Photonics ("Bridger"), a Montana-based company that utilizes aerial methane detecting technology, Gas Mapping LiDAR™, to detect, locate, and quantify methane emissions.Ascent is one of the largest privately held exploration and production companies in the United States in terms of asset size and net production and is the largest producer of natural gas in the state of Ohio. The company places a strong emphasis on responsible operations, and participated in Cheniere Energy’s quantification, monitoring, reporting, and verification (QMRV) research and development project to more thoroughly understand emissions and detection technologies associated with the upstream natural gas and oil production sector. Ascent also participates in other responsibly sourced gas (RSG) opportunities in addition to certifying its production with MiQ. Aerial methane detecting technologies like Gas Mapping LiDAR have grown in popularity with operators due to their ability to detect emissions more efficiently than alternative methodologies. After each scan, Bridger provides Ascent with a digital map that includes methane plume imagery, emission size and concentration, and GPS coordinates of every detected emission. "Ascent is committed to providing clean, reliable, and affordable energy that is responsibly sourced. That foundational principle enabled us to achieve multiple top-tier third party certifications and we expect that our work with Bridger will further enhance our existing emissions detection and elimination efforts in a cost-effective way," said Keith Yankowsky, Chief Operating Officer at Ascent.
Duke Energy applies for natural gas distribution rate increase - Duke Energy, the largest natural gas provider in southwest Ohio, recently asked state regulators to allow for measures that would bring the company an additional $48.8 million in yearly natural gas revenue.The company’s filing initiates a long, regulatory process between the utility provider and the Public Utilities Commission of Ohio (PUCO), the state’s sole utility regulator. Casey Kroger, a spokesperson for Duke Energy, said the company is looking to recoup investments that had previously been made.Any time a utility provider wants to change its distribution rates, it has to get permission through PUCO. For Duke Energy’s natural gas operations, the company hasn’t requested an update of its distribution rates since 2012. Now that Duke Energy’s proposal is in, PUCO’s technical staff will look over the relevant data and make its own recommendation of how much the utility provider’s revenue should be allowed to increase.Public hearings, possible settlements and a final, formal evidentiary hearing are set to follow. Matt Schilling, a spokesperson for PUCO, said folks could expect this rate case to take nearly a year until it’s finally decided.If PUCO were to grant the company’s proposal in full, which is technically possible but rare, it would result in a bill increase of about $6.08 per month for residential customers on average, or about a 6.7% increase, said Kroger.Kroger said Duke Energy has about 450,000 natural gas customers in nine southwest Ohio counties, including all or most of Hamilton, Butler, Warren, Clermont and Brown counties. In comparison, Duke Energy has about 700,000 electric customers in the same area.Schilling said Duke Energy is the only utility in the state to provide both natural gas and electric distribution.There are two main components that go into a resident’s natural gas bill: the price of the gas itself and the price of the distribution of that gas.Legally, the state’s utility providers are not allowed to make any profit on the charge of the gas itself. Essentially, what a resident pays for the gas itself is equivalent to what the provider paid; no markups.However, utility providers are allowed to make a profit off of the distribution of that gas, so long as PUCO deems the profit to be “reasonable.”
Appalachian Basin Engineers Studying Hydrogen Transport in Natural Gas Pipelines - How to safely and securely transport hydrogen through natural gas infrastructure is the focus of a new research partnership between the University of Pittsburgh (Pitt) Swanson School of Engineering and utility Peoples Natural Gas. “Hydrogen has the potential to transform the way we heat our homes and power our businesses, using the existing natural gas distribution system,” said Peoples’ Mike Huwar, president. “Pitt and the Swanson School have the expertise we need to test and study its feasibility as a transformative energy resource.” Natural gas also is used to produce so-called blue hydrogen. Peoples and Pitt engineers initially plan to benchmark and research existing information and data on hydrogen distribution, focusing on technical issues tied to shipping hydrogen or hydrogen-natural gas blends in gas pipelines. Afterward, they would likely collaborate on a pilot project to test hydrogen’s impacts on Peoples’ natural gas distribution infrastructure. The collaborators noted that Western Pennsylvania, a natural gas hub in the Marcellus and Utica shale formations, could “become a leader in the development and commercialization of hydrogen.” They said hydrogen’s distinct physical and chemical properties “require answers to technical questions, such as its effects on pipeline materials, to determine whether natural gas utilities can safely and effectively transport it through existing infrastructure.”The Pitt and Peoples team said hydrogen could “serve as a source of energy when used in combustion appliances of fuel cells that produce clean electricity. Its potential use as a supplement to natural gas could have an important role in future energy transition strategies in our region to significantly reduce emissions.” Nearby, in West Virginia, researchers are studying how to keep natural gas turbine blades at power plants intact when using hydrogen to produce electricity.
EIA: US LNG imports reach historic lows in 1H22 - In the first six months of 2022, US LNG imports reached their lowest level in at least 15 years, averaging 77 million ft3/d, compared with the five-year (2017 – 2021) average for the same period of 174 million ft3/d. LNG imports are usually at their highest level in the winter months of October through March. This past winter, LNG imports averaged 93 million ft3/d, which is significantly lower than in the winter of 2006 – 2007, when LNG imports averaged 1.8 billion ft3/d. As a share of US total natural gas imports, LNG imports accounted for less than 1% in 2021, down from almost 17% in 2007. LNG imports peaked in April 2007 at 3.3 billion ft3/d, and they accounted for almost 26% of total natural gas imports. Over the past five years, LNG imports were at their highest level in January 2018 averaging 0.5 billion ft3/d, or almost 6% of total natural gas imports that month. Before 2010, the US was expanding its LNG import infrastructure. Eight LNG import terminals were built between 2005 and 2011, increasing the number of US terminals to 12. Domestic dry natural gas production began to grow rapidly around the same time and eventually many of those LNG import terminals were reconfigured into LNG export terminals. US dry natural gas production grew by nearly 80% from 2007 to 2021, displacing LNG imports, which declined rapidly during this period. Natural gas production has increased primarily in three production regions — Appalachia, Permian, and Haynesville. Production from the Appalachian Basin, which includes the Marcellus and Utica shale formations in the Northeast, accounted for 31% of total US natural gas production in 2021. With the growth in natural gas production, several pipeline projects were completed, improving the delivery of natural gas supplies from producing regions to consumption centres across most of the country. However, even after the completion of some projects, such as the Algonquin Incremental Market (AIM) project, supplies by pipeline into the New England market can be constrained during periods of peak demand. As a result, New England continues to rely on LNG imports, particularly during the winter when demand for natural gas is high. On peak demand days, imported LNG can contribute up to 35% of New England’s natural gas supply. LNG imports can be a key marginal source of supply during times of high demand and help moderate natural gas prices. Almost all LNG imported into the US today is delivered into the New England market at the import terminals in the Boston, Massachusetts, area— Constellation Energy’s Everett LNG Facility in Boston Harbor and Excelerate Energy’s Northeast Gateway in Massachusetts Bay. From November 2021 through March 2022, nine vessels carrying LNG from Trinidad and Tobago delivered 16.8 billion ft3 of LNG to the two terminals.
A Blizzard of LNG - The winter energy situation in New England has led to a blizzard of meetings, including an all-day meeting sponsored by FERC and held in Vermont, the New England Winter Gas-Electric Forum. The last time FERC held a meeting of this kind in New England was ten years ago. Quoting Utility Dive on the conclusion from this meeting:“We’re going into this winter basically crossing our fingers and hoping,” FERC Commission James Danly said. The best explanation for all these meetings is the graph at the head of this post. This slide was part of a slide deck that ISO-NE staff presented to the NEPOOL Markets Committee on July 8, 2022: “Considerations for Winter 2022-2023 ISO Presentation.” I discussed this presentation before, in my blog post LNG for the Winter in the Northeast. I am discussing it again because all the recent meetings (the FERC meeting was 9 hours!), presentations, and discussions are people explaining their opinions of this situation in the Northeast for this winter. They have informed opinions, interesting opinions, and so forth. But the actual situation is described in that slide deck.The slide at the head of this post shows what the Northeast can expect, The chart shows projected forward prices for several types of energy, based on S&P research. The highest line is for the future wholesale price of electricity at the Mass Hub in New England. The electricity price rises to almost $300 per MWh, which is 30 cents per kWh (price on the left side of the chart). The other prices are for different types of hydrocarbon fuel: those prices are shown by energy value: $ per MMBtu. The natural gas price, for pipeline gas at the Algonquin Hub in New York, goes up to around $35 MMBTU. For context, about natural gas. At the Henry Hub in Louisiana, natural gas has spent most of the last twenty yearsbetween $2 and $6 per MMBtu. and is now over $8. (It reached prices higher than $8 in 2008. It has never been higher than $14.) What about other fuels? The chart in the slide contains two more lines: the cost per MMBTU of distillate (think diesel fuel) and residual oil (think heating oil). Neither of these prices shows any dramatic change. Both prices fall below the natural gas prices, starting in December of this year. With sky-high prices for electricity and high prices for natural gas, power plants will buy oil as the economically reasonable thing to do. This assumes of course, that enough power plants can burn oil. My recent post on this subject started with a graphic of the MW of power plants with stored fuel that have shut down since 2013. Five thousand MW of power plants with fuel on site have shut, and three thousand MW have opened. Unfortunately, the new plants (dual-fueled) can store far less fuel on-site. The closed plants (including nuclear plants) kept much more fuel on-site. We need LNG in the Northeast. Slide 11 (of the slide deck described above) says that the average LNG use in New England has been 32 BCF per year. That is about eleven 3 BCF LNG tankers. Assuming we use the same amount this year, we will be using more BTUs of LNG than fuel oil. Many of these tankers unload cargo at the Everett LNG port in Massachusetts. The Everett LNG port is scheduled to be shut down in two years. It would be shut down because Mystic Station (located conveniently near the LNG port) would no longer be operating. As quoted in RTO Insider, FERC Chairman Richard Glick said: “If we spend all our time thinking about how we’re going to keep the Everett LNG facility open … today will be a failure,”
Manchin's permitting-reform bill splits Dems - The Energy Independence and Security Act of 2022, the permitting-reform bill introduced by Senator Joe Manchin and Senate Majority Leader Chuck Schumer on Wednesday, has split clean-energy advocates and Democrats in Congress over a fundamental question: whether to support a law that could make it easier to build harmful fossil fuel infrastructure — but would also make it easier to build the clean energy infrastructure needed to prevent the worst impacts of climate change. It’s a debate that’s been brewing since last month, when Schumer (D-New York) promised to support permitting reforms demanded by Manchin in exchange for the West Virginia Democrat’s support of the Inflation Reduction Act. The resulting bill, which includes rules for streamlining fossil fuel pipeline projects and special dispensation for the Mountain Valley fossil gas pipeline running through Manchin’s home state, has come under fire from environmental and conservation groups as a giveaway to fossil fuel interests — a view that’s shared by a number of Democratic members of Congress.But groups representing clean energy manufacturers, developers and corporate buyers have joined Schumer, House Speaker Nancy Pelosi (D-California) and President Joe Biden in backing the bill. They say it could dramatically streamline and speed the development of solar and wind power, energy storage projects and other key carbon-free resources. In particular, the bill could significantly lower the barriers to building a key piece of that low-carbon electricity infrastructure: new high-voltage transmission lines to carry solar and wind power from where it’s most cheaply produced to where it’s in greatest demand.The U.S. will need to double or triple its already record-setting growth rates for solar and wind power to cut carbon at the pace needed to meet its emissions-reduction targets. And for that to happen, thousands of miles of new transmission infrastructure will need to be built, say studies on zero-carbon scenarios from the U.S. National Renewable Energy Laboratory, the Massachusetts Institute of Technology and Princeton University.But currently, transmission projects take up to a decade or more to build — if they can get built at all. In the past two decades, a number of high-profile transmission projects from thewindy Midwest plains to the forests of Maine and the Pacific Northwest have faltered in the face of opposition from states, counties, private landowners and conservation groups that have used regulatory or legal means to block permits to build them. At the same time, many transmission projects proposed by utilities and grid operators to state regulators have run aground on disputes over how to share project costs between the utilities involved, and by extension, their customers, who bear those costs via increased rates. Transmission policy reform could thus be “one of the single best ways to ensure that we have clean, renewable energy and that it’s not stranded — that it reaches where it needs to reach,” said Allison Nyholm, vice president of policy at the American Council on Renewable Energy, which is supporting the permitting-reform bill. “We need streamlining for transmission to happen, without a doubt,” she said.
Permitting reform faces big test in Senate this week - The Senate will take a vote Tuesday evening that could decide the immediate fate of Senate Energy and Natural Resources Chair Joe Manchin’s permitting bill and set the stage for a last-minute fight about government spending. The West Virginia Democrat has been lobbying fellow lawmakers publicly and in private conversations to support his energy permitting overhaul. He popped up on Sunday shows and published an op-ed in The Wall Street Journal over the weekend blaming “extreme politics” for the current impasse on the legislation.“What else could possibly explain why any Republican would even consider supporting the same position as [Sen. Bernie Sanders (I-Vt.)] when it comes to energy?” Manchin wrote.But it’s not clear he’s made much headway whipping the 60 votes he’ll need to clear it in the divided Senate. That’s not to mention the House, where dozens of Democrats say they are staunchly opposed.One climate hawk, Rep. Sean Casten (D-Ill.), announced Monday night he would support the effort, saying “there is more good than bad in this bill,” while citing transmission deployment.Government funding expires Friday, so Congress is racing to pass a stopgap bill to keep the government open. The Senate Appropriations Committee released the text of that bill overnight with the latest version of permitting reform attached.Manchin and Senate Majority Leader Chuck Schumer (D-N.Y.) struck a deal to couple the permitting bill with the spending bill, known as a continuing resolution, as a condition of Manchin’s support in August for the Inflation Reduction Act, Democrats’ massive new climate and tax law.If the test vote fails Tuesday evening, Democrats may be forced to proceed with a CR that extends government spending until December and includes a handful of supplemental spending requests.The text released overnight would run through Dec. 16 and includes billions of dollars for wildfire and disaster relief, and $1 billion in new dollars for the Low Income Home Energy Assistance Program, according to a summary.Most Senate Democrats are likely to back Manchin, but there are a few key holdouts.Sanders has voiced his displeasure with the permitting bill for weeks. Other progressives, including Sen. Elizabeth Warren (D-Mass.), say they are wary of voting on it as an attachment to the CR.Sen. Tim Kaine (D-Va.) is vehemently opposed to a provision of the bill that would authorize the Mountain Valley pipeline, a contentious project that would transport natural gas between West Virginia and Virginia (E&E Daily, Sept. 16).Manchin is a longtime backer of the project, and it’s a major impetus for the permitting bill, which includes provisions to shorten environmental reviews, centralize permitting for transmission and limit judicial scrutiny (E&E Daily, Sept. 22).“I was not consulted about it,” Kaine said last week. “I will do everything I can to oppose it.”The latest permitting language does not include reforms to the Clean Water Act Section 401 certification process after members from both sides of the aisle expressed concerns. That dynamic leaves Manchin in need of more than 10 Republican votes. While the GOP traditionally supports permitting reform, Republicans were furious with Manchin after he helped Democrats pass the Inflation Reduction Act.Manchin picked up a key ally last week in fellow West Virginia Sen. Shelley Moore Capito, the top Republican on the Environment and Public Works Committee and a supporter of the Mountain Valley pipeline (E&E Daily, Sept. 23).Capito introduced her own permitting measure earlier in September, with harder-line provisions codifying Trump-era regulations and support from nearly every other Senate Republican (E&E Daily, Sept. 13).Many GOP lawmakers are using it as a benchmark, arguing that Manchin’s bill is incremental and not worth voting for in comparison.Senate Minority Leader Mitch McConnell (R-Ky.) is whipping his party against Manchin’s legislation, according to POLITICO. McConnell last week referred to it as “reform in name only.”“If our colleagues across the aisle want real permitting reform, Sen. Capito’s fantastic bill only needs Sen. Manchin plus nine more Democrats to clear this chamber,” McConnell said on the floor recently.“Otherwise,” he said, “it would appear the senior senator from West Virginia traded his vote on a massive liberal boondoggle in exchange for nothing.”
Manchin's pitch to energy leaders: IRA without permitting reform a missed opportunity— Sen. Joe Manchin pitched his permitting reform legislation to a crowd of global energy leaders and private sector executives as essential to achieving the full goals of the Inflation Reduction Act he helped craft. The West Virginia Democrat also told the crowd at the Global Clean Energy Action Forum in Pittsburgh that the Senate would start voting on the permitting legislation next week, likely on Tuesday. But the legislation faces stiff opposition in both parties. Manchin’s appearance was disrupted by a handful of protesters seemingly opposed to the bill’s provisions aimed to help spur completion of the Mountain Valley Pipeline, which the senator is a staunch advocate of. This followed a protest Thursday against permitting of natural gas infrastructure at the Federal Energy Regulatory Commission by opponents of efforts to build new fossil fuel infrastructure in the United States. Most of the developed world can build and permit infrastructure in a few years, but the U.S. permitting process can take as long as a decade, Manchin said. “Why should we be at a disadvantage and can’t compete?” he said. “We know what needs to be done. Why can’t we be able to do it?” In the Inflation Reduction Act, “everything’s based on a 10-year window,” Manchin added. “If it takes seven to eight years or longer to permit something, we’re going to miss the window for having those investments come to fruition and you miss that window, then you’re going to have money stranded out there.” Democrats’ party-line climate and clean energy spending bill was enacted earlier this year after more than a year of negotiations that were halted more than once by Manchin. The ultimate legislation that took the form of the Inflation Reduction Act included long-term investments in traditional clean energy sources like wind and solar through expanded tax credits, as well as new incentives for energy storage, domestic manufacturing, clean hydrogen and advanced nuclear. As part of a deal struck with Democratic leadership to pass the climate bill, Manchin introduced legislation this week attached to a must-pass continuing resolution to reform the federal permitting process. The permitting bill would set limits on environmental reviews and require the president to identify energy projects of critical national importance. The legislation also directed agencies to “take all necessary actions” to issue new permits for the Mountain Valley Pipeline, a delayed project that would deliver natural gas from West Virginia to Virginia and North Carolina. But the legislation still faces tough odds with opposition from both progressive Democrats and staunch Republicans. “By next week, we’ll either have a permitting process that accelerates and lets us compete on a global basis of how we do things and bring things to market or not,” Manchin said. He added it will “take an awful lot of heavy lifting” in the next two or three days, but said he is hopeful the legislation will overcome opposition. “Everyone wins from this if they’ll look at it,” he said. “It’s not about one person. It should not be about one person. It should be about, ‘Is this good for our country?’”
Senate Reaches a Deal to Avoid a Shutdown, Punts Threat for 10 Weeks - The Senate on Tuesday reached an agreement to keep agencies afloat through Dec. 16, dropping controversial provisions from a stopgap funding bill in order to win bipartisan support. The continuing resolution, which would keep the government open past the Friday evening expiration of current appropriations, was originally set to include a measure to speed up the permitting process for some major energy projects. After Republican leaders and some Democrats came out against the provision on Tuesday, Democratic leadership agreed to drop the provision to ensure the CR could pass. The Senate on Tuesday evening, by a 72-23 margin, approved the first in a series of votes to move the measure forward. Sen. Joe Manchin, D-W.Va., who authored the permitting changes, said just before a scheduled preliminary vote on the spending bill Tuesday evening that he did not want to put his permitting reforms up for a vote just to see them fail. "For that reason, and my firmly held belief that we should never come to the brink of a government shutdown over politics, I have asked Majority Leader Schumer to remove the permitting language from the continuing resolution we will vote on this evening." Senate Majority Leader Chuck Schumer, D-N.Y., who had promised to put the energy project changes into the CR as part of an agreement he struck this summer with Manchin to win is support for the Inflation Reduction Act, said minutes later on the Senate floor he agreed to strip the energy-related measure from the CR. Senate Minority Leader Mitch McConnell, R-Ky., put the death knell into the reform earlier in the day when he called it a “poison pill” and announced he would be voting against any CR that included it. He called on Democrats to put forward a spending measure without the energy provisions, saying such a bill would have bipartisan support. Many Republican lawmakers throughout the day Tuesday echoed that call for a CR vote without the permitting reforms—which they said did not go far enough—and offered their support for the rest of the stopgap bill. The roughly 10-week spending bill would keep agencies funded at their current levels into the lame duck session of Congress, punting on appropriations until after the midterm elections but creating a new deadline before the new Congress is seated. The measure includes "anomalies" to provide funding increases for certain programs, such as $400 million to increase hiring at the Social Security Administration; $20 million for the Army Corps of Engineers to assist with the water crisis in Jackson, Mississippi; and $1 billion for the Health and Human Services Department's Low Income Home Energy Assistance Program. It also includes more than $12 billion for Ukraine aid, matching the White House’s request, and new funding for disaster relief. It would not provide the requested funds to address monkeypox and COVID-19.
Gas Pipeline Dealt a Blow as Manchin Withdraws Bill - A US government funding bill was stripped of an effort to speed up the federal approval process for energy projects, dealing a major setback to efforts to fast-track the approval of energy infrastructure including a stalled $6.6 billion natural gas pipeline. Senate Majority Leader Chuck Schumer said Tuesday he agreed to a request by Senator Joe Manchin to remove permitting reform language from the stopgap government spending bill after it became clear the measure didn’t have the votes needed to advance. In a vote immediately after the decision was announced, the bill had enough support to advance in the Senate. “It is unfortunate that members of the United States Senate are allowing politics to put the energy security of our nation at risk,” Manchin, a Democrat from West Virginia who had proposed the energy provision, said in a statement. “A failed vote on something as critical as comprehensive permitting reform only serves to embolden leaders like Putin who wish to see America fail.” Talks on how to advance the measure before the end of the year will continue, Schumer said in remarks on the Senate floor. Manchin’s proposal would have required federal agencies to approve and issue all permits necessary for the construction of Equitrans Midstream Corp.’s stalled Mountain Valley pipeline within 30 days. Construction on the 303-mile (488-kilometer) conduit, which crosses Manchin’s home state, has been stalled after a federal court in January rejected a permit to cross a national forest following a challenge by environmentalists. Shares of Equitrans dropped 4.2% in after-market trading in New York. Manchin’s bill would also have put a two-year time goal on environmental reviews for large energy projects and one year for smaller ones. In addition, the legislation would be allow the president to designate a list of at least 25 “high-priority energy infrastructure projects” for which permitting would be prioritized and expected the approval process for electricity transmission projects for far flung renewable energy projects that benefited from Democrats recently passed climate package. The bill received pushback from Republicans, who saw the proposed permitting reform as political payback for the senator’s vote on the spending bill, and from Democrats who said it would roll back key environmental protections. Environmental groups also cheered the withdrawal. “While the campaign against polluting oil and gas is far from over, this repudiation of Senator Manchin’s so-called permitting reform bill marks a huge victory against dirty energy – and also against dirty backroom Washington dealmaking,” Wenonah Hauter, the executive director of Food & Water Watch said.
Senate advances stopgap funding bill minus Manchin language - The Senate on Tuesday voted overwhelmingly to start debate on a stopgap government funding bill without Sen. Joe Manchin’s (D-W.Va.) permitting reform language. The stopgap bill, known as a continuing resolution, would keep the government’s lights on through Dec. 16 and include $12.4 billion in aid for Ukraine against Russia, $4.5 billion for natural disaster assistance, $1 billion to help with heating homes this coming winter and $20 million to deal with the water crisis in Jackson, Miss., among other things. The deadline to pass the measure and avert a government shutdown is Friday at midnight. Passage of the bill 72-23 came after its biggest hurdle was removed less than an hour before the planned vote. Senate Majority Leader Charles Schumer (D-N.Y.) announced that he would heed Manchin’s wish to strip language that would have changed the approval process for energy infrastructure — and help greenlight the 303-mile Mountain Valley Pipeline — from the bill. The funding bill needed 60 votes to advance to debate and permitting reform had been opposed by Senate Republicans and House Democrats. All 23 “no” votes came from Republicans. Sens. John Barrasso (R-Wyo.), Richard Burr (R-N.C.), Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.) and Marco Rubio (R-Fla.) did not vote. “Senate Republicans have made clear they will block legislation to fund the government if it includes bipartisan permitting reform, because they’ve chosen to obstruct instead of work in a bipartisan way to achieve something they’ve long claimed they want to do,” Schumer said in a floor speech, according to a transcript of his remarks. “Because American families should not be subjected to a Republican-manufactured government shutdown, Senator Manchin has requested, and I have agreed, to move forward and pass the recently-filed Continuing Resolution legislation without the Energy Independence and Security Act of 2022.” Manchin, in his own statement, declined to criticize either party tanking his legislation. “It is unfortunate that members of the United States Senate are allowing politics to put the energy security of our nation at risk,” he said. “A failed vote on something as critical as comprehensive permitting reform only serves to embolden leaders like Putin who wish to see America fail. For that reason and my firmly held belief that we should never come to the brink of a government shutdown over politics, I have asked Majority Leader Schumer to remove the permitting language from the Continuing Resolution we will vote on this evening,” he added.
Why Manchin backed off on his top priority - Minutes before he would have crashed and burned, Joe Manchin found an escape hatch.After 20 months as the focal point of the 50-50 Senate, the West Virginia Democrat found himself with only one good option as Republicans were set to defeat his signature energy permitting legislation: yank it from government funding legislation. The move kept alive Manchin’s top priority of speeding approval for energy projects, yet he has no guarantee that it will find a more welcome reception later this year.Manchin’s permitting bill began as a coda to his outsized leverage in a Congress that found him playing decisive roles in everything from a bipartisan infrastructure law to post-Jan. 6 presidential certification reform to two massive Democratic-only bills. The centrist hatched a two-part deal with Senate Majority Leader Chuck Schumer this summer: First Manchin would help pass a party-line climate, health care and tax bill, then Schumer would take up a plan to expedite big energy projects including West Virginia’s own Mountain Valley Pipeline.But Manchin’s final major priority after a stretch in which everything broke his way needed the support of Republicans. And there were simply too many problems for him to solve in too short a time after releasing his legislation just last week. His home-state GOP colleague Sen. Shelley Moore Capito has her own permitting bill, and Republicans who want to defeat Manchin in 2024 largely have no desire to help him out of a jam.“He thought he was going to pass a bill and get it signed into law. He miscalculated, is the nicest way I could put it,” said Sen. John Cornyn (R-Texas), a close ally of Senate Minority Leader Mitch McConnell, who whipped against Manchin’s effort behind the scenes and publicly pushed for its defeat on Tuesday.Manchin won't 'second guess' McConnell's motives on energy billDemocrats saw Alanis-level irony in Republicans taking down a policy priority so many of them have talked for years about enacting. “If Senator Manchin thought they were going to agree to something that he knew that they wanted, then I guess you could call this a miscalculation,” retorted Sen. Tina Smith (D-Minn.), who supports Manchin’s permitting bill. “Or you could say that they’re playing politics.”
White House hits GOP over removal of Manchin permitting reform --The White House on Tuesday said it supported Sen. Joe Manchin’s (D-W.Va.) decision to have permitting reform language removed from a stopgap government funding bill, blaming Republicans for opposing the plan. “We support Senator Manchin’s decision not to press for a floor vote given the misguided Republican decision to put politics over progress by opposing his permitting reform plan,” White House press secretary Karine Jean-Pierre said in a statement. Manchin asked Senate Majority Leader Charles Schumer (D-N.Y.) to remove the language earlier on Tuesday after Republicans in the Senate and Democrats in the House voiced opposition to it. Senate Democrats did not appear to have the 60 votes necessary to proceed. When Manchin had the language removed, he did not explicitly blame either party, but said “It is unfortunate that members of the United States Senate are allowing politics to put the energy security of our nation at risk.” In her statement, Jean-Pierre reiterated that the White House supported Manchin’s plan. She said permitting reform “is necessary for our energy security, and to make more clean energy available to the American people.” Additionally, Jean-Pierre said the White House will work to find a way to get Manchin’s permitting plan passed. “We will continue to work with him to find a vehicle to bring this bill to the floor and get it passed and to the President’s desk,” she said. After Schumer removed Manchin’s permitting reform language, the Senate voted overwhelmingly to start debate on the government funding measure. The deadline to pass the measure and avert a government shutdown is Friday at midnight and this measure will fund the government through Dec. 16.
The unlikely allies who sank Joe Manchin’s energy deal --In a surprising team-up, progressives and Republicans banded together to oppose a bill backed by Sen. Joe Manchin (D-WV) that would have loosened oil and gas permitting regulations, forcing lawmakers to drop the measure from a must-pass government funding package. Following growing pressure from both groups, Manchin called for Senate Majority Leader Chuck Schumer to cut the permitting reforms from a short-term funding bill just before it was scheduled to go up for a vote on Tuesday.Manchin said in a statement he didn’t want to put government funding at risk and added that “a failed vote on something as critical as comprehensive permitting reform only serves to embolden leaders like Putin who wish to see America fail.” Because of the collective pushback from progressives and Republicans, the bill wouldn’t have had the 60 votes it needed to advance if permitting reform were left in the package. By removing it, lawmakers cleared the way for the funding bill to pass the Senate as well as the House, where many Democrats had also spoken out against the inclusion of this proposal. This outcome is ultimately the result of both policy disagreements and personal grudges. While progressives were staunchly against the permitting measure due to environmental concerns, Republicans opposed it because they felt the bill didn’t relax restrictions enough. And in the wake of Manchin’s support for Democrats’ Inflation Reduction Act — which passed along party lines — Republicans were eager to prevent him from getting a win, despite their own interest in the same reforms. Manchin’s permitting reforms were part of an agreement he originally made with Schumer earlier this year. In that deal, Manchin agreed to support the Inflation Reduction Act — a landmark health care and climate bill — and Schumer agreed to hold a vote on permitting reforms, which the West Virginia senator has long pushed for. Because the short-term funding bill must pass for the government to pay its bills, the plan was to attach the permitting reforms to this measure.The reforms that Manchin wanted, however, quickly garnered progressive pushback.In particular, progressives argued that setting a two-year target for the completion of environmental reviews and reducing the time community members have to file legal challenges would have significantly weakened residents’ ability to protect their communities.Manchin’s measure would have also guaranteed permit approvals for the Mountain Valley Pipeline, a natural gas pipeline running through West Virginia and Virginia, which has been blocked by the courts due to environmental impacts. This provision in particular was concerning for a number of Democrats, who saw the move as circumventing the courts’ decision to slow the development of the pipeline to the benefit of the energy companies involved in the project.“Allowing a corporation that is unhappy about losing a case to strip jurisdiction away from the entire court that is handled the case is [unprecedented],” Sen. Tim Kaine (D-VA) previously told E&E News. “It would open the door for massive abuse and corruption, so I can’t support it.” The Democratic senators opposing the plan joined more than 70 House members, led by Rep. Raúl Grijalva, who pushed House leadership to separate the permitting reforms legislation from the CR earlier this month. That message was echoed by Sen. Bernie Sanders (I-VT), who denounced the Manchin deal as a “giveaway to the fossil fuel industry.” Separately, Republicans have expressed their own issues with Manchin’s legislation. Since multiple Democrats in addition to Sanders opposed the bill, Manchin would have needed more than 10 Republicans to support it for it to hit the 60-vote threshold required for passage. The GOP backing he received ultimately fell short, with just Sen. Shelley Moore Capito (R-WV) saying publicly that she would vote for the legislation.As Politico reported, Senate Minority Leader Mitch McConnell was actively whipping lawmakers against voting for the Manchin bill, even though Republicans have long been eager to advance permitting reforms. Depriving Manchin of a win he’s sought for years, especially after he joined with Democrats for the party-line passage of the IRA, was a central issue at play.
Schumer Is Getting More Mountain Valley Pipeline Money From NextEra Than Manchin Is | The New Republic -At the center of the ongoing debate over permitting reform—now encapsulated in Senator Joe Manchin’s Energy Independence and Security Act—lies a single unfinished piece of energy infrastructure: theMountain Valley Pipeline. Stretching from northern West Virginia through to southern Virginia, the 300-plus-mile-long project is slated to transport two billion cubic feet of fracked gas per day, much of that bound for export. Manchin’s bill would speed along the project’s construction, fast-tracking permits and redirecting extensive and ongoing court challenges against it. If completed, the pipeline is estimated to pour 26 coal plants’ worth of carbon dioxide emissions into the atmosphere. Manchin’s enthusiasm for the project, which has faced fierce opposition along its route, is predictable. He’s long tried to promote his state’s fossil fuel industry and has accepted generous donations from backers of the pipeline. Gas pipeline companies have ratcheted up their spending on Manchin this year, from $20,000 in 2020 to $331,000 in 2022 so far. He’s the industry’s largest recipient of campaign funds overall. The deal to green-light the Mountain Valley Pipeline, then, has been portrayed in the media as a necessary and savvy bit of politicking to guarantee Manchin’s vote on the Inflation Reduction Act: Democrats, including Senate Majority Leader Chuck Schumer, who brokered the deal, may not have wanted to fast-track the Mountain Valley Pipeline, but it’s a small price to pay for the IRA’s climate policies.This is the dominant media narrative right now. But it doesn’t quite tell the whole story. Schumer, not Manchin, is the single largest recipient of donations from one of the pipeline’s backers this year, NextEra. Schumer has received four times as many donations from employees and the company’s PAC this year as Manchin has.The Mountain Valley Pipeline is a joint venture between EQM Midstream Partners, NextEra Capital Holdings, Con Edison Transmission, WGL Midstream, and RGC Midstream. By far the biggest spender in Washington has been NextEra, which owns a number of utilities and energy infrastructure projects around the country. Over the last year, Manchin has received $59,350 from NextEra, including $55,850 from individuals and $3,500 from the company’s PAC, according tocampaign finance data compiled by the Center for Responsive Politics. Schumer has received $283,200, including $278,200 from individuals and $5,000 from the company’s PAC. ConEd has given Schumer $500 this year, and $2,500 since the 2017–18 campaign cycle. Over the same time period, Manchin’s campaign committees have received $15,500 from NextEra, while Schumer’s has gotten $10,000. Schumer’s office did not respond to a request for comment in time for publication.NextEra has been Schumer’s second-largest donor this year overall, despite never having breached his top-five list of donors previously. The utility holding company, whose subsidiaries include Florida Power and Light and Gulf Power, hasn’t historically had a major footprint in New York. Earlier this year, NextEra Energy Transmission—the subsidiary backing the Mountain Valley Pipeline and with plenty to gain from the permitting reform package’s transmission-related elements—finishedwork on a transmission line through New York. Schumer’s campaign donations from NextEra this year are three times the amount he’s received from the company in total since joining the Senate in 2018. All but 12 of the 144 donations Friends of Schumer PAC received from NextEra employees between 2021 and 2022 have been $1,000 or more, according to the Federal Election Commission.The Mountain Valley Pipeline has accumulated more than 350 water quality violations and other environmental infractions since construction began in 2018. The permitting reform bill would go to remarkable lengths to protect the project from local and national scrutiny, mandating that any future legal challenges to either the pipeline or any of the bill’s provisions be brought in the D.C. District Court. It would mandate that judicial review panels more generally be compiled by random selection, seen as a potential reaction to the Mountain Valley Pipeline getting repeatedly rejected for permits by the Fourth U.S. Circuit Court of Appeals.
U.S. Congress to vote on continuing resolution to fund government through midterm elections - On September 26, Senate Appropriation Committee Chairman Patrick Leahy (D-Vt.) unveiled a continuing resolution (CR) that would fund the federal government at current Fiscal Year (FY) 2022 spending levels through December 16, 2022. With current government spending set to expire at midnight on September 30, the U.S. Congress is slated to consider the stopgap funding measure this week. The U.S. Senate began consideration of the measure on September 27 and the U.S. House of Representatives should consider the CR later in the week. Of particular note to counties, the CR does not include legislation such as the bipartisan State, Local, Tribal and Territorial Fiscal Recovery, Infrastructure and Disaster Relief Flexibility Act (S. 3011/H.R. 5735) that would provide counties with additional flexibilities in investing American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds. The bill was approved by unanimous consent in the U.S. Senate in October 2021 and would also provide the U.S. Department of the Treasury with flexibility in its use of administrative funds to support counties in carrying out crucial programs and invest ARPA Recovery Funds. Without this flexibility, we are concerned that Treasury’s diminished capacity to administer these programs will hamper counties’ efforts to spend funds effectively and meet the most pressing needs in our communities. NACo urges Congress to include S. 3011/H.R. 5735 in the next legislative or spending vehicle so counties can continue to respond to and recover from the unprecedented COVID-19 pandemic.Beyond the exclusion of S. 3011, the CR does not include any additional emergency supplemental funding to address COVID-19 or the monkeypox outbreak. The CR also includes several provisions beyond a direct extension of funding enacted for FY 2022, including supplemental and emergency spending and expiring program extensions through the duration the CR. The stopgap measure includes:
- $2 billion for the Community Development Block Grant Disaster Relief (CDBG-DR) program
- $62 million to support operation of the 988 National Suicide Prevention Lifeline and provide services to 988 callers through FY 2023
- An extension of the Federal Communication Commission’s authority to manage non-governmental use of spectrum
- $1 billion in funding for the Low Income Home Energy Assistance (LIHEAP) program
- An extension of the Maternal, Infant and Early Childhood Home Visiting Program (MIECHV)
- An extension of the Temporary Assistance for Needy Families (TANF) program
- An extension of the National Flood Insurance Program (NFIP)
- A provision allowing FEMA to access over $18 billion up front to respond to current and future disasters
- An extension of child welfare programs authorized under Title IV-B of the Social Security Act, which support states, territories and tribes with funds to protect children; support, preserve and reunite families; and promote and support adoption
- An extension of authorization for several veterans homelessness programs under the U.S. Department of Veterans Affairs (VA) through September 2024.
House GOP calls for ‘no’ vote on CR --House Republican leadership is urging its members to oppose a stopgap funding bill to avoid a shutdown in Washington.Minority Whip Steve Scalise (R-La.) sent a memo to House GOP offices Tuesday night recommending that members vote against the continuing resolution (CR), which would keep the government funded at last year’s fiscal levels until Dec. 16.The measure also includes roughly $12.3 billion to aid Ukraine amid its conflict with Russia.In its memo, GOP leadership encouraged members of the conference to vote “no” on the CR as a rebuke for Democrats allegedly not negotiating with Republicans on key issues, including inflation, the border and the opioid crisis.They also took issue with the length of the CR — the Dec. 16 expiration date gives the Democratic House majority an opportunity to craft a funding plan during the lame-duck session after Election Day.“The Majority has refused to negotiate with Ranking Member Granger or any other House Republican leader on pressing issues relating to our government funding priorities, including runaway inflation, the supply chain crisis, the border crisis, or the opioid deaths associated with drugs like fentanyl coming across our open southern border, and have instead decided to kick the can to December, setting up another government funding showdown during the unaccountable lame duck period,” the memo reads, referring to House Appropriations Committee ranking member Kay Granger (R-Texas).The Senate is currently considering the stopgap, which is expected to pass the upper chamber and head to the House on Thursday ahead of a Friday deadline. The measure cleared its first procedural vote on Tuesday night after Sen. Joe Manchin (D-W.Va.) asked Senate Majority Leader Charles Schumer (D-N.Y.) to strip his controversial permitting reform from it.Over the summer, Schumer promised Manchin that his legislation reforming permitting for energy projects would be tacked onto the spending bill in exchange for the West Virginia Democrat’s support of the Inflation Reduction Act, which Congress narrowly passed and President Biden signed into law last month.Democrats and Republicans in both chambers lined up against Manchin’s legislation, putting the CR in jeopardy and increasing the chances of a government shutdown. Manchin asked Schumer to nix his provision roughly 30 minutes before the first procedural vote.Even before the permitting reform issue had been hashed out, House Minority Leader Kevin McCarthy (R-Calif.) made clear his opposition to the continuing resolution.In a statement last week, McCarthy said he would vote against the funding bill because of the December expiration date and because it does not address issues at the border.“President Biden is asking for a government funding bill that simply kicks the can to an unaccountable lame-duck Congress that does nothing to actually address the nation’s problems — especially the crisis at our southern border,” McCarthy wrote.“If Biden & Democrats don’t use this government funding bill to address the border crisis immediately, I’m voting NO on this bill, and I urge my colleagues to do the same,” he added.
Most House Republicans oppose stopgap spending bill - The House approved stopgap spending legislation this afternoon to avert a government shutdown at midnight. The continuing resolution passed 230-201, with only 10 Republicans backing it. President Joe Biden is poised to sign the bill. None of the 16 House Republicans from Florida backed the legislation, which could deliver billions of dollars in relief to their state in the aftermath of Hurricane Ian this week. The CR contains a provision that would allow the Federal Emergency Management Agency to tap $18.8 billion to cover the cost of current and future national disasters. Florida Republican Reps. Byron Donalds, Gus Bilirakis and Vern Buchanan, who represent Gulf Coast districts hard hit by Ian, did not immediately return calls explaining why they opposed the bill. All pressed the Biden administration to declare the state a major disaster area, a move the president backed this week that paves the way for federal support. “We are talking about hurricane relief for God’s sake. I’m begging my Republican friends: Can we at least come together to agree on relief for communities devastated by hurricanes?” said House Rules Chair Jim McGovern (D-Mass.) during floor debate. Republicans countered they opposed the stopgap to protest Democrats locking them out of crafting the annual spending bills. Rep. Tom Cole (R-Okla.), a senior appropriator and ranking member on the Rules Committee, said Democrats need to “get serious” so the parties can finalize spending in an omnibus package before the CR expires on Dec. 16. Lawmakers from both parties said it seems likely Congress at some point will need to pass a supplemental emergency funding bill to cover damage and recovery costs associated with Ian. “Hurricane Ian will be remembered and studied as one of the most devastating hurricanes to hit the United States,” Florida Republican Sens. Rick Scott and Marco Rubio wrote top appropriators this week, stressing a “timely” and “robust” federal response. Scott was one of 25 Republicans who opposed the CR when it passed the Senate earlier this week. Rubio missed the vote to remain in Florida to prepare for the storm.
Senate passes funding bill to likely thwart weekend shutdown - The Senate approved a stopgap spending bill on Thursday afternoon that funds the government through mid-December, sending it to the House and likely averting a government shutdown that would hit in less than 48 hours. The stopgap would fund the government through Dec. 16, granting congressional appropriators more time for talks on a broader funding package before the end of the year. After passing the Senate 72-25 the measure now heads to the House, where top Democrats told members Thursday morning that they could pass the bill as soon as Thursday evening. A vote could easily spill into Friday, however, sending it to President Joe Biden’s desk before the midnight deadline. Senate leaders reached an agreement to speed passage of the short-term funding fix on Thursday after Biden signed off on a temporary 100 percent federal cost-share waiver for typhoon aid in Alaska, appeasing the state’s GOP senators. Republican Sen. Mike Braun of Indiana also backed off an effort to delay the vote after he secured floor time to expound on the benefits of balanced budgets. Republican Sen. Lisa Murkowski of Alaska said her disaster relief request, which would allow the federal government to shoulder more of the cost burden for typhoon recovery in the state for the next 30 days, was resolved by Biden’s decision to amend the state’s disaster declaration. “So we’re in a better position,” she told reporters. Braun also said digging in on his budget-related amendment to hold up a vote on the stopgap would be “counterproductive.” “I’m reasonable as a rule. That’s why I got 10 minutes of floor time to talk about it,” he said. The relatively smooth path to final passage comes after Sen. Joe Manchin (D-W.Va.) pulled his controversial proposal to ease energy permitting from the bill, amid broad opposition from Senate Republicans and a handful of Senate Democrats. The temporary funding patch, Congress’ last major to-do item before the midterm elections, provides more than $12 billion in emergency military and economic funding to respond to the war in Ukraine. It also includes $1 billion in heating assistance for low-income families, $20 million for the water crisis in Jackson, Miss., billions in disaster aid and more than $112 million for federal court security. The measure also includes a five-year reauthorization of the user fee programs that fund much of the FDA’s work, and it would allow FEMA to spend billions of dollars through the Disaster Relief Fund at a higher rate, while federal officials rush to respond to devastating hurricanes that have slammed into Florida and Puerto Rico. Members of Congress are eager to return home ahead of the midterms, particularly in the House, where lawmakers are not scheduled to return until November. House Democrats’ top appropriator confirmed Thursday morning that they were waiting on Senate passage before setting any votes in the lower chamber. “So much depends on when they’re going to get this over to us. That’s what we’re waiting for,” Rep. Rosa DeLauro (D-Conn.) said, adding: “We could do this tomorrow, it’s gonna get done.”
US Would Trade SPR Oil for Profit, Invest in EVs Under Democrats’ Bill -
- Legislation also would create US gasoline and diesel stockpile
- DOE would have flexibility over Strategic Petroleum Reserve
Democrats are pitching a plan that would allow the US government to buy and sell crude from its emergency reserves for a profit and use that money to fund electric-car charging infrastructure. Under the so-called Buy Low and Sell High Act introduced Monday, the Energy Department would be allotted more freedom to make sales and purchases of as many as 350 million barrels for the nation’s Strategic Petroleum Reserve to maximize profits. The amount -- equivalent to almost half the stockpile’s current physical capacity -- would be earmarked for swift transactions and designated a new “Economic Petroleum Reserve.”
Why Joe Manchin is obsessed with the Mountain Valley Pipeline - This week is a big deal for Sen. Joe Manchin (D-W.Va.), who has thrown his significant weight in the Senate behind getting Congress to smooth the way for the Mountain Valley Pipeline. West Virginia sits on the Marcellus Shale and could export significantly more natural gas than it currently does, but it needs to be able to export that gas via pipelines in order to build up industry, which proponents believe could help the state’s bleak economy. Manchin’s grand plan was to offer his support for the Inflation Reduction Act, Democrats’ signature legislative achievement this year, in return for passing a pipeline permitting bill. That bill is now poised to fail a test vote in the Senate on Tuesday afternoon. Progressive Democrats oppose the pipeline measure for environmental reasons, and Senate Minority Leader Mitch McConnell (R-Ky.) has been encouraging Republican senators to vote no, too. The Senate needs to pass a spending bill by this Friday or the government will run out of money — placing big pressure on congressional leaders to get something done, with or without Manchin’s pipeline. “Coal production is still significant in West Virginia, but it’s not what it once was,” said Hoppy Kercheval, radio host of Morgantown, W.Va.,-based MetroNews Talkline. “Gas has become a more significant player in the state with hydraulic fracturing, and there could be a lot more production if you could ship more of it.” Kercheval has been reporting on West Virginia for more than 40 years, and Manchin has been a politician in West Virginia for much of that time. Kercheval estimates he’s interviewed Manchin “a thousand times,” and Manchin is a frequent guest on Kercheval’s radio show where, on more than one occasion, Kercheval has been the first to hear Manchin’s position on major legislation. “It’s going to reflect poorly on Manchin” in deep red West Virginia if he can’t get the pipeline deal passed, Kercheval said. He spoke to Grid about why the pipeline has become so critical to some West Virginians and how Manchin approaches being a Democrat from an increasingly deep red state. This interview has been edited for length and clarity.
Gas Pipeline Dealt a Blow as Manchin Withdraws Energy-Permitting Bill - (Bloomberg) — A US government funding bill was stripped of an effort to speed up the federal approval process for energy projects, dealing a major setback to efforts to fast-track the approval of energy infrastructure including a stalled $6.6 billion natural gas pipeline. Senate Majority Leader Chuck Schumer said Tuesday he agreed to a request by Senator Joe Manchin to remove permitting reform language from the stopgap government spending bill after it became clear the measure didn’t have the votes needed to advance. The Senate is likely to advance the bill in a vote later Tuesday now that the energy provision has been removed. “It is unfortunate that members of the United States Senate are allowing politics to put the energy security of our nation at risk,” Manchin, a Democrat from West Virginia who had proposed the energy provision, said in a statement. “A failed vote on something as critical as comprehensive permitting reform only serves to embolden leaders like Putin who wish to see America fail.” The now-withdrawn proposals would have required federal agencies to approve and issue all permits necessary for the construction of Equitrans Midstream Corp.’s stalled Mountain Valley pipeline within 30 days. Construction on the 303-mile (488-kilometer) conduit, which crosses Manchin’s home state, has been stalled after a federal court in January rejected a permit to cross a national forest following a challenge by environmentalists. Manchin’s bill would also have put a two-year time goal on environmental reviews for large energy projects and one year for smaller ones. In addition, the legislation would be allow the president to designate a list of at least 25 “high-priority energy infrastructure projects” for which permitting would be prioritized and expected the approval process for electricity transmission projects for far flung renewable energy projects that benefited from Democrats recently passed climate package. Shares of Equitrans dropped 2.2% in after-market trading in New York.
OP-ED | Invest In The Future, Not A Dirty Deal - CT News Junkie - There has been a lot in the news lately about the “Dirty Deal” struck in Congress by legislators working to get the Inflation Reduction Act passed. Thefollow on bill was negotiated by Democratic Senator Joe Manchin from West Virginia, who had been blocking the passage of the larger bill. The bill would fast-track several fossil-fuel projects including the Mountain Valley Pipeline in West Virginia. While bicycle touring through this region and the stunning Ohio River Valley, I was struck by the economic woes of the cities and towns. Extractive oil and coal industries are at the same time surging (fracking for fossil gas) and waning (coal plants shutting down). Finding restaurants, drug stores, and grocery stores was difficult, even though I was passing through once bustling river towns and rail depots. The town of Cheshire, Ohio, in the shadow of the Gavin power plant’s towering chimneys, is a literal ghost town that was bought out by the power company for $20 million to address persistent pollution and future liability. That plant is now facing closure for long violating regulations that coal ash storage ponds be lined to prevent groundwater pollution.This shift away from fossil fuels is a real and important change happening to regions in Southeast Ohio, Kentucky, West Virginia, and Pennsylvania. Longtime residents are rightfully worried and upset by mandates and environmental laws that reduce employment, shutter power plants, and leave sad shells of once vibrant towns. Those residents are looking for solutions, politically and legislatively, that maintain jobs and bring prosperity (and people) back to their communities. A focus on paying rent, a job to do today, and economic stability for their family and friends often outweighs the less focused and complicated task of maintaining a survivable and productive climate on Earth. These areas are teetering near the edge of viability. State and local leaders, along with representative in Congress, must look for sustainable policy, green energy investments, infrastructure projects, and tourism opportunities that provide the jobs, pride, and quality of life that these communities deserve. As I mentioned, the Ohio River Valley and surrounding hills are beautiful. Riverside hotels, boating tours, hiking trails, and walkable town centers should be jointly marketed to those in nearby cities and land-locked towns looking to get away for a relaxing weekend with a river view.Gallipolis, Ohio seems to have figured out the day trip and tourism market with an inviting town center, riverfront park, nearby trails, and natural areas.
Kinder Morgan divests $565m stake in Elba Liquefaction Company - US-based pipeline operator Kinder Morgan has completed the divestment of a 25.5% interest in Elba Liquefaction Company (ELC) to an undisclosed financial buyer in a deal worth approximately $565m.ELC owns and operates the Elba liquefied natural gas (LNG) export facility, located on Elba Island in Chatham County, Georgia. The stake sale comes amid surging demand for US LNG from European nations, which are facing fuel cuts from Russia, reported Reuters. “Recent geopolitical events have proven how critical liquefied natural gas infrastructure is to meeting global energy demand. We believe this investment further shows the value of LNG and demonstrates the important role it will play for decades to come.” The proceeds from the sale will be used by Kinder for investments, including share repurchases, and reducing short-term debt.
U.S. Shale Drillers Try To Capitalize On Record Gas Prices In Europe - Just a few short years ago, the gas that escaped with the oil trapped in shale formations was considered basically a waste. Associated gas was flared—and it still is in some parts of the shale patch—but the idea of using it was expensive and difficult to realize. There were neither enough pipelines to carry the gas to the liquefaction plants already built along the Gulf Coast, nor was there great demand for it, with virtually every forecast seeing the global supply of natural gas at ample levels for the observable future. And then Russia invaded Ukraine, and everything changed. Now, the price of gas in Europe is about $90 per million British thermal units, which would be equal to a price of $550 per barrel of oil, Bloomberg noted in a recent report. It’s hardly a surprise, then, that shale drillers are switching from oil to gas drilling, with gas drilling up by 50 percent since the start of the year.Natural gas production in the U.S. has risen to an all-time high this year, with the average daily reaching 2.89 trillion cu ft, industry expert Robert Rapier pointed out in a recent story for Forbes. He then went on to add that this would not lead to lower gas bills for consumers. The rush to drill for gas was certainly prompted by Europe’s gas shortage, for which U.S. liquefied natural gas turned out to be the easiest, if not cheapest, solution. Yet while LNG exports were growing, so was local gas consumption as coal power plants continued to be retired, replaced by natural gas-fired facilities.Indeed, the supply and demand balance is so fragile that, as Reuters’ columnist John Kemp reportedearlier this month, U.S. gas drillers were already having to rush to catch up with demand, both local and international.“The commodities folks have somewhat ignored the big growth that we’ve seen in the gas-rig count versus last year,”. “It seems like oil’s gotten hit hard over concerns over the economy recently and gas has quietly just done really well on a relative basis this year.”The other, potentially more important thing that has been happening relatively quietly is the fact that U.S. shale drillers are switching from oil to gas drilling. In other words, they are reducing their oil operations in favor of gas operations. In a tight supply environment in oil, too, this trend could eventually end up having significant implications for the security of supply and prices.The outlook is not much brighter for gas, either. The recent collapse of Tellurian-led Driftwood LNG means it might not be all that easy for U.S. LNG companies to raise the funding they need to expand capacity fast enough. And this means the tight supply situation will extend.Ironically, as the FT suggested in a report on Tellurian’s woes, doubts about the longevity of gas demand could be at the root of the funding problems that Tellurian ran into. “What I see is an end to the euphoria and a grounding of the hype about US LNG and a re-evaluation of which of these projects is really going to be financially viable for the next 20 years,” Clark Williams-Derry, analyst at the Institute for Energy Economics and Finance, a think-tank, told the FT.This is bad news for Europe, certainly, as it seems it plans to almost completely turn to LNG as a replacement for as much Russian pipeline supply as possible, to top it off with Norwegian imports.Yet it might be good news for the U.S. The less gas is exported in liquefied form, the more there is for the domestic market and the more affordable it would be. Still, a return to the prices from a couple of years ago is, at this point, rather unlikely.
Momentum Midstream Takes FID on 1.7 Bcf/d Haynesville Natural Gas Gathering, Carbon Capture Project - Private equity-backed Momentum Midstream LLC said Thursday it is moving forward with the New Generation Gas Gathering (NG3) project in the Haynesville Shale. The project, which is meant to supply growing Gulf Coast and LNG export demand, is to have initial capacity of 1.7 Bcf/d, expandable to 2.2 Bcf/d. Momentum is a subsidiary of Encap Flatrock Midstream and other financial partners. The NG3 project also would include a carbon capture and sequestration (CCS) component that will remove and permanently store underground 100% of the project’s carbon dioxide (CO2) emissions, creating a “net negative carbon footprint,” Momentum said. NG3 is slated to begin operating in the second half of 2024. [Client Collaboration: What type of additional content / information / data would you like to see more of in NGI? Tell us now.] Increasingly, U.S. producers and midstreamers are pursuing measures to reduce the emissions footprint of natural gas bound for the global liquefied natural gas market. Long-term volume commitments for NG3 have been secured from several leading Haynesville producers, including anchor shipper Chesapeake Energy Corp., said Momentum CEO Frank Tsuru. In addition to the final investment decision on NG3, Momentum has closed on the acquisition of Midcoast Energy LLC’s East Texas business (Midcoast ETX) from an affiliate of ArcLight Capital Partners LLC. The Midcoast ETX system comprises a gathering and transportation system with 1.5 Bcf/d of current volume and 1.0 Bcf/d of existing deliverability to the Gulf Coast and LNG markets, Momentum said. Momentum also closed the acquisition of Align Midstream from Tailwater Capital LLC. Align owns several gathering systems adjacent to Midcoast with current volumes of 600 MMcf/d. NG3, “combined with our existing capacity on the Midcoast system, will serve to address bottlenecks in the Haynesville Shale and provide much-needed capacity to the growing LNG markets on the Gulf Coast,” Tsuru said.
Natural Gas Futures Eke Out Gain as Production Hits Record High and Hurricane Looms - Coming off a 12% slump last week, natural gas futures clawed back into the green Monday amid estimates of record output and potential threats to production in the form of a hurricane en route to Florida. The October Nymex gas futures contract gained 7.5 cents day/day and settled at $6.903/MMBtu. November added 2.2 cents to $7.014. NGI’s Spot Gas National Avg., which also gave up substantial ground over the past week, recovered Monday and increased 11.5 cents to $5.240. Lower 48 dry gas production reached 101.1 Bcf/d over the weekend – a record in Bloomberg’s data set. Output held near that level on Monday – at 100 Bcf/d. Supply has strengthened through much of September, while demand has started to recede with the arrival of fall weather. National Weather Service forecasts Monday pointed to mild conditions across much of the Lower 48 this week and into the first half of October. All of this put pressure on Nymex futures last week and through most of trading Monday. But the prompt month recovered late in the day and posted gains as news of a powerful hurricane raised concerns about possible damage and production interruptions. Hurricane Ian, churning southeast of Cuba on Monday, was expected to undergo “additional rapid strengthening” and “emerge over the southeastern Gulf of Mexico on Tuesday,” according to the National Hurricane Center (NHC). The storm could then “pass west of the Florida Keys late Tuesday, and approach the west coast of Florida on Wednesday,” the forecaster said. Ian, combined with the looming expiration of the October contract on Wednesday, could make for a volatile week for natural gas prices, according to NatGasWeather. The firm expects Ian’s cooling rains and winds to dampen demand, but impacts on production emerged as a substantial wildcard. “The track of Ian shifted slightly westward over the weekend and a little closer to oil and gas platforms in the Gulf of Mexico,” NatGasWeather said. “We are expecting production in the Gulf of Mexico to drop 1-2 Bcf/d as they evacuate platforms, regardless of if it hits any or not.”
U.S. natgas down 4% to 10-week low as Hurricane Ian approaches Florida (Reuters) - U.S. natural gas futures fell about 4% on Tuesday to a 10-week low as Hurricane Ian advanced toward Florida and on forecasts for milder weather over the next two weeks that will likely cut gas demand and allow utilities to inject more fuel into storage. The U.S. National Hurricane Center (NHC) projected Ian, after battering Cuba, would cross the Gulf of Mexico and slam southwest Florida on Wednesday as a major storm with winds of up to 125 miles (201 kilometers) per hour. Only about 2% of U.S. gas production comes from the federal offshore Gulf of Mexico, with most coming from shale basins like the Permian in West Texas and the Marcellus in Pennsylvania. Analysts said storms were more likely to cut demand than supply since they knock out power and can cause liquefied natural , gas (LNG) export terminals to shut. There were still about 487,800 customers in Puerto Rico and 127,000 in Nova Scotia without power after Hurricane Fiona battered the U.S. island on Sept. 18 and the Canadian province on Sept. 24. Also weighing on gas prices, demand was expected to decline in October when the Cove Point LNG plant in Maryland shuts for a couple weeks of maintenance. Cove Point consumes about 0.8 billion cubic feet per day (bcfd) of gas. U.S. gas use has already been reduced for months by the ongoing outage at the Freeport LNG export plant in Texas, leaving more gas for U.S. utilities to inject into stockpiles for next winter. Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 bcfd of gas before it shut on June 8. Freeport LNG expects the facility to return to at least partial service in early to mid-November. On its second to last day as the front-month, gas futures for October delivery fell 25.2 cents, or 3.7%, to settle at $6.651 per million British thermal units (mmBtu), their lowest close since July 14. The front-month remained technically oversold, with a relative strength index (RSI) below 30 for a fourth straight day for the first time since early July. Year-to-date, gas futures remained up about 79% as global gas prices have soared, feeding demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading around $54 per mmBtu in Europe and $42 in Asia. That was an 11% gain for prices in Europe due to leaks on the Nord Stream pipelines from Russia to Germany. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 98.8 bcfd so far in September from a monthly record of 98.0 bcfd in August. With cooler autumn weather coming, Refinitiv projected average U.S. gas demand, including exports, would slip from 90.3 bcfd this week to 88.3 bcfd next week. The forecast for next week was lower than Refinitiv's outlook on Monday.
October Natural Gas Futures Probe Higher into Expiration as ‘Awful’ Hurricane Strikes, Russia Antagonizes - Natural gas futures seesawed as a powerful hurricane hammered Florida Wednesday, curbing demand but raising the specter of production interruptions. Market participants also weighed expectations for another stout storage print amid thin trading heading into contract expiration. The October Nymex gas futures contract lost ground in the morning but recovered late and settled at $6.868/MMBtu on Wednesday, up 21.7 cents on its final day as the prompt month. It had lost 25.2 cents a day earlier. November, which takes over at the front of the curve Thursday, gained 19.5 cents to $6.955. NGI’s Spot Gas National Avg. lost 26.5 cents to $5.305. During trading Wednesday, Hurricane Ian pummeled the west coast of Florida, threatening “catastrophic storm surge, winds and flooding in the Florida peninsula,” the National Hurricane Center (NHC) warned. Ian was carrying maximum sustained winds of 155 mph at midday. NHC predicted rainfall totals of 12-18 inches in some parts of Florida. The forecaster said two feet of rain was possible in the heart of the storm. Ian was moving at only a few mph. The hurricane also spawned tornadoes at sea and threatened to do so as it crossed over Florida, into the Atlantic and up the Southeast coast in coming days. The path of the storm looked to bypass the vast majority of major Gulf of Mexico production facilities. Still, markets mulled the possibility of precautionary shut-ins trimming output near term against expected demand drops in Ian’s wake, NatGasWeather said Wednesday. Global demand, meanwhile, remains robust amid European supply uncertainties linked to Russia’s invasion of Ukraine. Countries across the continent have stocked up on LNG – largely from the United States – to fortify storage ahead of winter. But several European countries may need at least some Russian gas to weather a harsh winter – and such fuel could prove elusive. Russia this week reported damage to three lines on its Nord Stream natural gas pipeline system that connects to Europe, creating further doubts about already reduced flows of gas to the continent because of geopolitical standoffs. U.S. officials said sabotage was the likely culprit. Russian state-run Gazprom PJSC this week also warned it may halt all supplies to Western Europe via Ukraine. This propelled European prices higher and signaled that demand for U.S. shipments of liquefied natural gas is all but sure to remain near record levels through the coming winter, maintaining an important undercurrent for U.S. natural gas bulls. All of that followed Russian President Vladimir Putin’s threats last week of a nuclear weapon attack on Ukraine. “Just when you thought the prospects for this winter in Europe could not get dimmer comes news that the Nord Stream pipeline system may never again deliver a molecule of Russian gas into Europe,” analysts at The Schork Report said Wednesday.
U.S. natgas eases 1% as storm cuts power use, big storage build (Reuters) - U.S. natural gas futures eased about 1% on Thursday on a bigger-than-expected storage build and after Hurricane Ian knocked out power to over 2.6 million customers in Florida, reducing the amount of gas needed to produce electricity. The U.S. Energy Information Administration (EIA) said utilities added 103 billion cubic feet (bcf) of gas to storage during the week ended Sept. 23. That was much bigger than the 94-bcf build analysts forecast in a Reuters poll and compares with an increase of 77 bcf in the same week last year and a five-year (2017-2021) average increase of 86 bcf. Analysts said the build was bigger than usual due in part to an increase in wind power last week that allowed generators to cut back on the amount of gas they burned to produce electricity. Wind power produced about 10% of the nation's electricity last week, up from as little as 6% earlier in the month, according to federal energy data. Analysts said storms like Ian tend to cut demand for gas rather than supplies of the fuel since they usually knock out power and can cause liquefied natural gas (LNG) export terminals to shut. Only about 2% of U.S. gas production comes from the federal offshore Gulf of Mexico - none of it in Florida - with most coming from shale basins like the Permian in West Texas and the Marcellus in Pennsylvania. In its latest advisory, the U.S. National Hurricane Center (NHC) said Ian, now a tropical storm, was in the Atlantic Ocean after crossing Florida. The NHC expects the storm to strengthen back into a Category 1 hurricane with maximum sustained winds of 75 miles per hour (121 km per hour) before it slams into the South Carolina coast on Friday. In other hurricane news, about 280,000 customers in Puerto Rico still lacked power, as did 70,900 in Nova Scotia after Hurricane Fiona battered the U.S. island on Sept. 18 and the Canadian province on Sept. 24. Despite recent declines, U.S. futures were still up about 85% so far this year as global gas prices have soared, feeding demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading around $53 per mmBtu in Europe and $39 in Asia. That was an 8% decline for prices in Europe.
U.S. Upstream Activity Steady as Oil Tally Rises, Natural Gas Drilling Slows - The U.S. rig count inched higher during the week ended Friday (Sept. 30), picking up one unit to end at 765 thanks to a small overall gain in the oil patch, according to the latest figures from Baker Hughes Co. (BKR). Two oil-directed rigs were added in the United States for the week. Partially offsetting was a one-rig decline in natural gas-directed drilling. The 765 active U.S. rigs as of Friday compares with 528 rigs running in the year-earlier period, according to the BKR numbers, which are partly based on data from Enverus. One rig was added on land week/week, while the Gulf of Mexico tally went unchanged at 15. Three horizontal rigs were added domestically, while total vertical rigs declined by two. The Canadian rig count fell two units to 213 for the week. Changes there included a four-rig decline in oil-directed rigs, partially offset by a two-rig increase in natural gas drilling. Counting by major drilling region, the Marcellus Shale led with an increase of three rigs for the period, while three rigs exited in the Arkoma Woodford, the BKR data show. The Ardmore Woodford and Cana Woodford each added one rig, while the Mississippian Lime and Utica Shale each saw one rig exit for the period. Counting by state, West Virginia saw a net increase of four rigs, while New Mexico added two and North Dakota added one. Texas dropped two rigs week/week, while Ohio, Oklahoma and Pennsylvania each dropped one, according to BKR.
Energy Analyst Flags Dislocated Shoulder Season -September is normally a ‘shoulder’ season in the oil and gas markets, but this year is different. That’s according to energy and environmental geo-analytics company Kayrros, which highlighted the effects of the conflict in Ukraine on the markets. “A shoulder season [is] a relatively subdued transition period between the twin demand peaks of the Northern hemisphere, on the one hand the summer driving season, with its cyclical spike in cooling, recreational driving, and air travel, and on the other hand the winter heating season and its surge in distillate burn, including heating oil,” Kayrros noted in the report. “This year is different, though, as the effects of Russia’s invasion of Ukraine and its steep reduction in gas exports to Europe overshadow seasonal factors,” Karros added. In the report, Kayrros outlined that LNG has been in high demand ever since the invasion of Ukraine and said liquefaction plants have been running flat out through the summer, which the company highlighted is normally a maintenance season. “This suggests record gas prices may have led some plants to defer routine maintenance - potentially a recipe for unplanned outages as we head into the peak heating season when the shutdown of the Nord Stream pipeline from Russia to Europe is expected to boost demand for LNG even further,” Kayrros warned. In a statement on its Twitter page on September 2, Gazprom revealed that gas transmission via the Nord Stream gas pipeline had been fully shut down. In a separate report sent to Rigzone earlier this month, Kayrros outlined that the driving season in the U.S. was “uncharacteristically tepid”, with gasoline demand “significantly below last year”. “But while the summer demand bump was modest, so too was the late-August decline … Demand eased back seasonally but narrowed its year-on-year deficit, starting September back at last year’s level,” Kayrros added in that report.
20,000 gallons of oil spilled in St. Bernard Parish waters — Entergy Louisiana has reported that 20,000 gallons of oil were spilled in St. Bernard waters. According to Entergy, the oil was released at the de-energized Arabi Substation. The substation has been de-energized since a tornado impacted the area in March of 2022. A portion of the released oil entered adjacent open water, the marsh of Bayou Bienvenue, and is present along the shoreline. The resultant oil sheen appears to be consolidated, intact, and contained within a floating containment boom. Entergy reports that the cause of the spill appears to be because of criminal activity as the valves to two large oil-filled transformers were discovered to have been removed. It is believed that the spill occurred one or two days before being discovered on Sunday. St. Bernard police are currently investigating the incident.
20,000 gallons of oil spilled into Arabi waters after 'criminal activity' at Entergy substation - Entergy says some of the the oil has entered nearby open water, the marsh of Bayou Bienvenue, and is present along the shoreline. — Thousands of gallons of oil were released in Arabi after someone may have vandalized or stolen parts from a de-energized Entergy substation. According to a spokesperson from Entergy, about 20,000 gallons of oil was released from a de-energized substation in Arabi on Sunday and it has now seeped into the marshes of Bayou Bienvenue. The substation, located near Benjamin Street, has been de-energized since an EF-3 tornado hit in March. Entergy says some of the oil has entered adjacent open water and is also present along the shoreline. “The released oil does not contain PCBs…the resultant oil sheen appears to be consolidated, intact, and contained within a floating containment boom,” Brandon Scardigli, Communications Manager of Entergy Louisiana, said. The valves to two large oil-filled transformers are missing, leading them to suspect criminal activity to be the cause of the oil spill. The spill is estimated to have occurred on Friday or Saturday. St. Bernard Parish Police are investigating the incident.Scardigli says Entergy immediately notified Louisiana State Police, Louisiana Department of Environmental Quality, St. Bernard Parish Local Emergency Planning Committee, and the U.S. National Response Center.Entergy’s Environmental Management team is working to clean up the spill. The American Pollution Control Corp. (AMPOL) is the spill response contractor for onsite remediation.
New report: Oil spills from offshore transportation way down - (AP) — Oil and natural gas spills from tankers and pipelines in U.S. waters dropped dramatically from the last decade of the 1990s to the one from 2010 through 2019, according to a federal report Wednesday. The amounts spilled and dumped in wastewater from drilling rigs and production platforms rose, but — if the disastrous 2010 Gulf of Mexico spill isn't counted — the increase is mainly because there is more work offshore, said the National Academies of Sciences, Engineering, and Medicine. “It is evident that regulatory changes, advances in science and technology, and (for the most part) attention to safety would have helped to make North American waters less polluted with oil” without the Deepwater Horizon spill, the report said. But the BP well blew, killing 11 people and spewing millions of gallons (kiloliters) of oil into the Gulf of Mexico off Louisiana over months. Another big contributor during the past decade was the nation's longest-running oil spill, also off Louisiana. The 497-page report was written by an international committee of academic and industry experts and reviewed by many others. “Overall, I think they have done a very comprehensive job,” said Anthony Knap, director of the Geochemical and Environmental Research Group at Texas A&M University, who was not an author or reviewer. Like a report released in 2003, this one — “Oil in the Sea IV: Inputs, Fates, and Effects” — said that oil in runoff, largely from cars and cities, is the biggest source of ocean oil pollution, with natural seeps second and spills in third place. But hard data on oil in rivers is so scarce and the range of possible amounts so huge that — although the report put the figure from the U.S. about 20 times the earlier estimate — it couldn’t say whether there was an actual increase. Increases in urban land area, population and vehicle ownership make an increase “plausible ... but it is unclear by how much,” the report said.
Majors Shut-In Production Due to Hurricane Ian --Chevron and BP have revealed that they are shutting in production in response to Hurricane Ian. “Both offshore and onshore, Chevron is following our storm plans and paying close attention to the forecast and track of Hurricane Ian,” Chevron said in a company statement posted on its website. “In preparation for the tropical weather, we have begun transporting all personnel from our Petronius and Blind Faith platforms and are shutting-in the facilities,” Chevron added. Production at other Chevron-operated Gulf of Mexico assets remains at normal levels, the company highlighted. Chevron noted that it will continue to closely monitor the storm and remains focused on the safety of its workforce, the integrity of its facilities and the protection of the environment. In a statement posted on its site, BP said it is closely monitoring Hurricane Ian to protect its personnel and operations in the deepwater Gulf of Mexico. “With forecasts indicating the hurricane will strengthen and move across the Northeastern Gulf of Mexico in the next few days, we have taken steps to respond. BP has shut in production and evacuated all personnel from our Na Kika platform. BP is also shutting in production and evacuating all essential personnel from our Thunder Horse platform,” the company added in the statement. “Safety is our top priority and we will continue to monitor weather conditions closely to determine next steps,” BP continued. At the time of writing, the Bureau of Safety and Environmental Enforcement (BSEE) has not published a hurricane monitoring report on Hurricane Ian. As of 5am EDT on September 27, Hurricane Ian had maximum sustained winds of 125 miles per hour and a 12 mile per hour northern movement, according to the National Oceanic and Atmospheric Administration’s National Hurricane Center (NHC). “There is a danger of life-threatening storm surge along much of the Florida West Coast where a storm surge warning has been issued, with the highest risk from Fort Myers to the Tampa Bay region,” the NHC stated on its website. “Hurricane force winds are expected in the hurricane warning area in west central Florida beginning Wednesday morning with tropical storm conditions expected by late today,” the NHC added.
12 Gulf of Mexico Platforms Evacuated as Ian Rages On - The Bureau of Safety and Environmental Enforcement (BSEE) revealed Tuesday that it has activated its hurricane response team and that it is monitoring offshore oil and gas operators in the Gulf of Mexico as they evacuate platforms and rigs in response to Hurricane Ian. Based on data from offshore operator reports submitted as of 11:30am CDT on September 27, personnel have been evacuated from a total of 12 production platforms, BSEE outlined. The figure represents 2.3 percent of the 521 manned platforms in the Gulf of Mexico, the organization highlighted. The BSEE also pointed out that personnel have been evacuated from two non-dynamically positioned rigs, which it said is equivalent to 15.38 percent of the 13 rigs of this type currently operating in the Gulf, and revealed that a total of four dynamically positioned rigs have moved off location out of the storm’s path as a precaution, which it said represents 21 percent of the 19 DP rigs currently operating in the Gulf. From operator reports, BSEE estimates that approximately 11 percent of the current oil production and 8.56 percent of the natural gas production in the Gulf of Mexico has been shut-in. The production percentages are calculated using information submitted by offshore operators in daily reports, the organization noted, adding that shut-in production information included in these reports is based on the amount of oil and gas the operator expected to produce that day. “As part of the evacuation process, personnel activate the applicable shut-in procedure, which can frequently be accomplished from a remote location,” BSEE said in a statement posted on its website. “This involves closing safety valves located below the surface of the ocean floor to prevent the release of oil or gas, effectively shutting in production from wells in the Gulf and protecting the marine and coastal environments. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons,” BSEE added. “After the storm has passed, facilities will be inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back online immediately. Facilities sustaining damage may take longer to bring back online,” BSEE went on to note.
Biden Draining SPR Like "Campaign Credit Card" For Midterms - President Biden's reckless draining of the US Strategic Petroleum Reserve is nothing more than an election-year gimmick akin to using a 'credit card' to buy votes, according to Tim Stewart, president of the US Oil and Gas Association.According to data from the Department of Energy, stocks of crude oil in the SPR hit their lowest levels since 1984 for the week ending Sept. 16. "This is the first time in history, honestly, that the Strategic Petroleum Reserve has been used as a campaign credit card to buy down political risk for the midterms," Stewart told Just the News."Let me put it in perspective if I could," he continued. "At the current rate, the U.S. is selling more oil out of its emergency reserves than the production of most medium-sized OPEC countries like Algeria or Angola. We're selling twice as much per day than we're producing out of Alaska. That puts us somewhere between Exxon and Conoco in terms of ... the impact we're having on the daily supply — and this is happening without new oil going into replace it."The conversation then turned to 'energy expert' Hunter Biden, who host John Solomon asked for Stewart's reaction to "the idea that the president's son ... could be working behind the scenes quietly to take our great energy wealth, send it over to China, while the boss, the president, the 'Big Guy' that they refer to in the documents, he's trying to lower our reliance [on fossil fuels] and keep us from using our energy wealth here."Stewart, who noted that the oil and gas trading industry is "very, very complex," replied: "I've been in this business for 25 years or so. And I can tell you, I am no more qualified to be a trader or a broker than an influence-peddling son of a former vice president. [Hunter Biden] had nothing to offer except for access, and access to his father, who in turn could make a call. And that's really what's wrong with Washington right now. And that is why this story is so so troubling to many of us."Stewart decried the "sheer hypocrisy" of Joe Biden "spending decades beating up on the oil and gas industry, profiting by it for that four years when he's not in public office, and then coming back in and trying to to hamstring and to kneecap our industry again." –JTN Watch:
U.S. E&P, OFS Execs Report Steady Activity, but ‘Inexpensive Natural Gas’ at End -- Oil and natural gas activity in the Permian Basin, Eagle Ford and Haynesville shales expanded at a steady clip during the third quarter, but the pace decelerated from the record-breaking second quarter, the Federal Reserve Bank of Dallas said. The Dallas Fed, as it is known, collected 3Q2022 data from Sept. 14-22 from 163 energy firms headquartered in Louisiana, New Mexico and Texas. The quarterly polls for the Dallas Fed’s Eleventh District gauge activity trends and price forecasts from oilfield services (OFS) and exploration and production (E&P) executives. “The business activity index – the survey’s broadest measure of conditions facing Eleventh District energy firms – remained elevated at 46.0 but below the 57.7 record-breaking reading last quarter,” energy economists said. “This suggests the pace of the expansion decelerated slightly but remains solid.” On average, respondents expect Henry Hub natural gas prices to average $7.97/MMBtu at year’s end. Henry spot averaged $8.16 when the survey was taken. For West Texas Intermediate (WTI) oil, executives predicted a price of $89/bbl at the end of December; WTI spot averaged $85.49 during the survey period. Asked if the “age of inexpensive U.S. natural gas” may come to an end as LNG exports to Europe expand, executives had varying views. “Most executives (69%) expect the age of inexpensive U.S. natural gas to end by year-end 2025,” the survey noted. “An additional 12% of executives think it will happen by year-end 2030 and 3% expect it to occur after 2030. The remaining 16% don’t expect the age of inexpensive U.S. natural gas to end.” One E&P executive said, “The price of natural gas has increased solely due to the reduction of Russian supplies. The price we have received the past several years has been below replacement cost since the market was flooded with new supply from ‘growth’ companies. “I would assume the price will drop very quickly if the Russia-Ukraine situation is ever resolved.” Another E&P executive said “inexpensive” was “a subjective view relative to natural gas prices. Over the past five-plus years, natural gas commodity pricing has materially impacted supply much greater than demand in the U.S. This has resulted in abnormally low natural gas pricing over this period. “As liquefied natural gas exports grow and natural gas volume growth in the U.S. moderates, natural gas pricing has increased and a new higher-floor pricing has emerged. While this pricing is higher in the U.S. relative to nearly all other areas around the world, U.S. gas consumers (individual and commercial) still enjoy the benefit of lower fuel cost inputs than others.” Even using a “hypothetical $7/MMBtu price, U.S. power generation still provides a material cost advantage to U.S. manufacturers,” the E&P executive said. “So, yes, it is more apparent that very low natural gas pricing is unlikely to return. However, the U.S. natural gas price for consumers is still highly competitive and in many ways advantageous relative to other western countries. Our supply assurance is materially higher at this still-competitive price.” Eighty-five percent of executives said they also expect a “significant tightening of the oil market by the end of 2024,” the survey noted. “Oil and gas industry activity has flatlined,” an E&P executive said. “We should incentivize equipment and material manufacturers and suppliers to increase supplies. According to E&P executives surveyed, oil and gas production increased at a similar pace compared with 2Q2022. The oil production index held fairly steady at 31.7 while the natural gas production index was “essentially unchanged at 35.6.” Costs increased for a seventh straight quarter, with the indexes near historical highs, according to the energy economists. The index for OFS input costs “remained elevated but slipped from its series high to 83.9. None of the 58 responding OFS firms reported lower input costs.” For the E&Ps, the index for finding and development costs was 64.7, down slightly from 2Q2022’s 70.6. The index for lease operating expenses was 70.2, slightly down from 74.1 in the previous three months. “It is taking longer for firms to receive materials and equipment,” the survey found. “The supplier delivery time index remained elevated at 28.4 in the third quarter, down slightly from a series high of 31.9 in the second quarter. Among OFS firms, the measure of lag time in delivery of services declined from 36.0 to 21.1 but remained well above average.”
Oil export terminal plan exposes energy rift in Texas - Transportation Secretary Pete Buttigieg looked up from a stage in Texas last week and saw a banner hanging from the balcony. Its message: stop an oil shipping project.“Please Pete! … No Fossil Fuel Exports,” the banner read as Buttigieg continued a policy discussion.The demonstration in Austin, Texas, was part of a campaign to block the Sea Port Oil Terminal, one of four deepwater crude export facilities proposed for the U.S. Gulf of Mexico. Buttigieg’s federal Transportation Department has approval authority over the projects through its Maritime Administration. The debate over Sea Port and other developments shows the tension between two Biden administration goals — addressing climate change and maintaining a stable energy supply amid Russia’s war in Ukraine.Buttigieg, speaking during a question-and-answer session Thursday at the Texas Tribune Festival, said he’s familiar with the project, which has been the subject of thousands of written comments during environmental reviews. He said he couldn’t comment much because of “where it sits in the legal process,” but he said feedback would be considered.“We’re going take all of that input very seriously,” Buttigieg said, adding that “any outcome is going to be one that upholds the law.”Offshore terminals would solve one of the oil industry’s main problems on the Gulf Coast — virtually all of the harbors in the region are too shallow to handle the largest class of tankers, known as Very Large Crude Carriers (VLCC), when the ships are fully loaded. Federal permitting decisions are important because the first new terminal to start operating would have a competitive advantage (Energywire, March 25, 2019).VLCC-class ships are more than 1,000 feet long and require a channel at least 60 feet deep. Loading one off the Texas coast typically requires “reverse lightering,” in which a smaller tanker shuttles the crude from the shore to the larger ship.The Sea Port project would pump oil from storage tanks located inland to a platform about 30 miles off the coast of Surfside Beach, Texas, which is about 65 miles south of Houston. It would have a capacity of 2 million barrels of crude a day, according to an online presentation by Enterprise Products Partners LP, the terminal’s main developer.Sea Port is the farthest along of the four proposed terminals; the Maritime Administration completed its final environmental impact statement in August and could issue the permit in a few months.The developers of another project, Texas GulfLink, are expecting a final environmental impact statement soon and could receive a permit by the first quarter of 2023, Jeff Ballard, chief executive of parent company Sentinel Midstream, said in an email.
Dregs of US Oil Patch Are More in Demand Than Crude Itself – Bloomberg - In the hydrocarbon-rich fields of Texas, natural gas was always treated like the dregs that crews had to deal with as they pulled oil out of the ground. The two often emerge from wellheads together, and so for decades drillers would simply burn off the gas or sell it at cost. Oil, and all the riches that came with it, was always the big prize.Now, in a sign of just how much Russia’s invasion of Ukraine has thrown global energy markets into disarray, it’s natural gas, not oil, that’s becoming more coveted in US shale fields. With Europe desperately seeking alternatives to Russian gas that powered furnaces and electricity grids, prices are skyrocketing and US drillers are scrambling to extract, liquefy and ship more of it overseas.
Exxon orders shale stand-down over rash of oilfield worker injuries (Reuters) - Exxon Mobil issued a temporary "stand-down" across its U.S. shale operations last week following back-to-back worker injuries, including one fatality, according to people familiar with the matter. The incidents, one of which marked the second death this year of a contractor, comes at a turning point for oilfield service firms straining to hire workers to restart some operations. Job cuts two years ago related to the COVID-19 pandemic have led to a shortage of experienced oilfield employees. The stand-down follows two worker accidents within days at production sites run by Exxon's shale unit and comes as Exxon is facing multiple negligence lawsuits. A worker was injured in West Texas this month and an Axis Energy Services workman performing repair work was killed last Tuesday in east Texas. In March, a woman was crushed to death at another West Texas site operated by Exxon. "The safety and health of our workforce is always our top priority. Whenever there is an incident, we double our efforts to reinforce safety," Exxon said in response to questions about the stand-down. The top U.S. oil producer also said it was actively working with contractors to improve safety. The stand-down did not affect oil production, Exxon said, but activity was halted during maintenance work at a site following last week's fatality, Reuters reported last week. Oil and gas executives have pointed to the lack of skilled workers affecting their operations in a Dallas Federal Reserve Bank survey released this week. "We're seeing a greater percentage of hires who are new to the industry," said one executive said, lamenting the availability of qualified people. Exxon or its shale subsidiary XTO Energy this year have faced at least six negligence lawsuits resulting from injuries in west Texas, according to complaints filed in Harris County District Court in Houston. Each lawsuit seeks damages exceeding $1 million.
A Petroleum PR Blitz in New Mexico - In the past seven months, oil and gas companies have dramatically stepped up their outreach and public relations spending at some of New Mexico’s best-known, best-loved events. The industry also picked up an additional public relations bump from the not unexpected news that oil and gas revenues will add an additional $2.5 billion to next year’s state government budget. This record breaking funding comes on the heels of last year’s record breaking budget, both of them courtesy of record breaking oil and gas production and record breaking oil and gas prices.All of this money sloshing around the state raises the positive public profile of the petroleum industry. Meanwhile, the public sees little of its state Legislature — but that doesn’t mean it’s not busy. After work at their day jobs and on weekends, legislators are defining and refining the measures — many dealing directly or indirectly with the oil and gas industry — that they plan to bring before the next legislative session. And when the state’s volunteer Legislature eventually returns to session in January, it will have to contend with an industry that spent the previous 11 months burnishing its image in ways that unpaid, part-time public servants simply can’t.“That PR piece has always been a center of the work of extractive industries,” says Angelica Rubio, state representative from Doña Ana County. She grew up in the Permian Basin, home to the largest oil and gas play on the planet, and she remembers how companies paid for scholarships and sports fields at her high school. “It’s kind of like, ‘OK, while we’re poisoning your water, we’re gonna go ahead and pay for this football field,’” she says.The scope and tone of the current PR blitz covers the gamut from — literally — hot air to cold cash. Early in the year, ExxonMobil became the prime sponsor of the Albuquerque International Balloon Fiesta, one of the state’s signature tourist draws. The company also ponied up to be a corporate backer of New Mexico United, the state’s wildly popular soccer team. (ExxonMobil’s subsidiary XTO was already a sponsor.) The deal is likely smaller than its sponsorship agreements with the NBA and WNBA, but it brings ExxonMobil name recognition in the stadium and company-branded soccer training camps for kids around the state. Not everyone is happy with the deal. A United fan club began a campaign to get the team todump ExxonMobil as a sponsor. The company didn’t respond to calls about its sponsorships, and NM United wouldn’t say how much the company paid for its high visibility patronage, but ExxonMobil does want to highlight its “renewable efforts,” according to United’s Chief Business Officer Ron Patel, “as that becomes more mainstream.” In the spring, Chevron became the top sponsor of the New Mexico State Fair, another of the state’s biggest draws, to the tune of $250,000 a year for the next three years. By comparison, a single Chevron lobbyist spent over $1 million on political donations around the state since 2020. This summer, Chevron, Oxy and ConocoPhillips donated hundreds of thousands of dollars to relief funds in the aftermath of the Calf Canyon/Hermits Peak wildfire — the largest in state history. While the fire started as a prescribed burn intentionally ignited by the U.S. Forest Service, the federal government’s own study concluded that fossil fuel-driven climate change made it historically catastrophic. In that report, the Forest Service chief also said that climate change had rendered the agency’s firefighting playbook obsolete. The local promotional and governmental windfalls burnish the reputation of an industry whose global image took a beating over the same period. World gas and other fuel prices spiked following the Russian invasion of Ukraine, and have remained elevated even as some underlying supply issues ease and individual energy companies post quarterly profits largerthan New Mexico’s annual budget. And then there’s the constant global drumbeat of climate catastrophes, from heat waves tofloods to drought to hurricanes. All the while, industry money puts pressure on the state’s unpaid, part-time legislators, who once again will be proposing and debating bills to further supervise and regulate these same companies.
Crude oil spill south of Tioga — Workers have now recovered most of the oil after a crude oil spill near Tioga that happened around last Tuesday, September 20. About 8,400 gallons of oil was released after the line was stuck by third-party contractor Stealth Oilwell Services. The line is operated by Enable Bakken Crude and is about 14 miles south of Tioga. The oil spill impacted agricultural land. “This one’s gonna be, it’s all going to be dig and haul. The slow part was getting around the pipeline and then most of it, like I said, tracked along their borehole so they’ll just dig that up. Luckily there’s no other pipeline in there right now so it should be a pretty quick and straightforward cleanup,” said Bill Suess, the spill investigation program manager for the North Dakota Department of Environmental Quality. Personnel from the North Dakota Department of Environmental Quality are inspecting the site and monitoring the cleanup.
Judge approves $230M settlement in California oil spill case -(AP) — A judge has approved a $230 million lawsuit settlement by the owners of a pipeline that spilled more than 140,000 gallons of crude oil into the ocean off California in 2015, lawyers announced Thursday. A federal judge in Los Angeles gave final approval on Tuesday to a settlement of a class-action suit that blamed All American Pipeline, L.P. and Plains Pipeline, L.P. for the May 2015 spill off the Santa Barbara coast. The corroded undersea pipeline ruptured north of Refugio State Beach in Santa Barbara County, northwest of Los Angeles. All American Pipeline later estimated that 142,800 gallons spilled. It was the worst California coastal oil spill since 1969. It blackened popular beaches for miles, killing or fouling hundred of seabirds, seals and other wildlife and hurting tourism and fishing. “Due to failed maintenance and extensive pipeline corrosion, the pipeline ruptured and spilled, devastating the fishing industry and soiling coastal properties from Santa Barbara County to Los Angeles County,” said a press statement from the law firms that filed the suit. People who believe they may be entitled to some of the money have until Oct. 31 to submit claims.
California To Ban Natural Gas Heaters By 2030 - California has made yet another step on its way to complete reliance on renewable energy by banning the use of gas-powered water heaters and furnaces from 2030. The proposal to ban these products was approved unilaterally by the California Air Resources Board yesterday, Bloomberg reports. “We’re really hopeful that this is the beginning of a domino effect and other states will follow California’s lead,” said Leah Louis-Prescott, an associate at RMI, a clean energy non-profit.The ban does not cover gas stoves for now but many cities in California are seeking to discourage the use of gas stoves and a switch to electric-only appliances.Now, with the gas furnace ban, Californians will have to familiarize themselves with heat pumps: all-electric heating appliances that are gaining popularity in Europe as an alternative to traditional heating methods.Touted as the way forward in heating technology, heat pumps are praised for efficiency and emission footprint but they do have constraints such as temperature and they add to electricity consumption, which could strain a grid designed for a certain—lower—level of consumption.Earlier this month California moved to ban the sales of internal-combustion engine cars from 2035. While climate activists have welcomed the news, there are some issues, such as the fact that EVs in California, which is the biggest EV market in the States, only make up 15 percent of new car sales, per figures from the California New Car Dealers' Association.Going from 15 percent to 100 percent in 11 years would be challenging for a car industry that is already struggling to find enough raw materials for the millions of EVs companies have committed to manufacture.Meanwhile, California continues to get some 40 percent of its power from fossil fuels. This needs to change if the state is to hit its own target of a zero-emission grid by 2045
Hammerhead Looks to Attack Montney for Natural Gas, Liquids Using CCS - Strong Montney Shale drilling results have prompted private equity giant Riverstone Holdings LLC to combine Hammerhead Resources Inc. and Decarbonization Plus Acquisition Corp. (DCRD) into an Alberta-based growth firm. The deal primes Hammerhead with C$240 million ($180 million) for greenhouse gas (GHG) reductions using carbon capture and storage (CCS) while doubling production by 2030. “We aim to be a leader in redefining public expectations around how companies like ours can contribute to the advancement of global net zero goals,” said Hammerhead CEO Scott Sobie. “Not only does Hammerhead stand poised to harvest what we consider to be among the most attractive rates of return well locations in Western Canada, but Hammerhead’s current emissions profile is already advantaged through its investment of over C$400 million in modern, technically optimized facilities that are being utilized across its properties. “We believe an energy transformation is underway where conventional energy and power sources will continue to play an important role in the world energy mix for some time to come. The current global profile of both energy security and resource intermittency are demonstrating the need for continued reliance on conventional sources.” Hammerhead set a goal to cut Scope One and Two (direct and indirect) GHG emissions from its operations and those of suppliers by 79% as of 2029 and down to net zero in 2030, executives said. DCRD, a special purpose acquisition company, raised C$275 million ($206 million) last year. DCRD’s lead independent director Jim McDermott weighed in on the combination. “I believe the world must scale zero or low‑carbon replacements to fossil fuels quickly, and I celebrate consequential policy decisions that seek to accelerate the rollout of technologies such as direct air capture, hydro, modular nuclear, solar and wind.
Political Will, Supply Chain Said Essential for UK Shale Gas Industry with Staying Power - Despite recent action by the UK government to encourage unconventional natural gas extraction in England, a lasting domestic shale industry would need a dedicated supply chain and reliable support through changing political winds, according to prominent energy prognosticators. “I would just be shocked if anything could happen,” RBN Energy LLC CEO Rusty Braziel said last week during a webinar. “I mean, let’s face it, the entire European community has been totally paranoid about hydraulic fracturing for years and years now.” Noting that the UK government “all of a sudden” dropped the moratorium on fracturing amid tight natural gas supplies, Braziel predicted that political pressure to reinstate the ban would likely grow “as soon as things get back to something that resembles normal…” As a result, he expects exploration and production (E&P) companies to be reluctant to invest in shale drilling and fracturing operations that could be shut down by a new government. He said “maybe someone’s got enough courage to do that. I sure wouldn’t.” After UK Prime Minister Liz Truss unveiled plans earlier this month to lift the fracturing moratorium, industry officials applauded the move. Rystad Energy’s Artem Abramov, head of global energy systems, told NGI that the UK shale industry’s growth hinges largely on the future regulatory environment and local community attitudes. “It is also not easy for dedicated E&Ps to attract new capital to finance early stages of shale gas in the country these days,” he said. The investor community, particularly in Europe, “remains very decarbonization-focused despite” the current preoccupation with the short-term energy crisis. A new supply chain would be needed to develop a lasting domestic shale gas industry in the UK, Kenneth Medlock III, senior director of the Center for Energy Studies at Rice University’s Baker Institute for Public Policy, told NGI. “There is no shale infrastructure really to speak of,” he said. Medlock explained that E&Ps need a steady supply pipeline of fracture sand, or proppant, as well as water to support shale operations. Shale developments demand “massive investments in human capital and supply chain infrastructure,” he said.
OIL SPILL: Cleanup teams remove oil from Gibraltar waters over weekend after discovering leak - Environmentalists helped government workers clean up the worst aéected area of Seven Sisters beach By John Culatto - 26 Sep, 2022 @ 15:45 OIL is disappearing from Gibraltar waters after salvage teams started to patch up the leak from the shipwreck stranded oé Catalan Bay. Cleanup crews have worked hard to clear the oil from the coast too, with the main focus being the remote Seven Sisters beach during the weekend. Divers discovered the source of the ship’s oil leak on Friday and made eéorts to patch it up on Saturday. “The oil that is escaping the vessel is likely to be unpumpable residues that remained in Tank 1 or the surrounding pipework,” the Gibraltar Government said in a statement. The OS 35 has caused widespread environmental damage to the Rock’s coastal areas since sinking after a collision at the end of August. Gibraltar government workers and environmentalist volunteers worked together to clean the Seven Sisters beach throughout the weekend. “The remainder of Gibraltar’s coastline remains largely oil-free, and cleanup teams are eéectively managing the limited amount of tar balls that are discovered during the daily shoreline assessments,” the government conêrmed. As the urgency of the situation subsided, the Port from Friday returned to normal operations, including refuelling
The Rising Risk Of Russian Oil Spills In Scandinavia - The narrow waterway between Denmark and Sweden – a key chokepoint for oil supply from Russia’s western ports – will see the risk of oil spills increase when the EU sanctions against Russian oil exports by sea enter into force at the end of this year. The UN agency International Maritime Organization (IMO) and the Danish maritime authorities strongly recommend the use of a specialized pilot on ships passing through the Danish straits with its many islands. Although not obligatory, the recommendation is widely followed by the industry, with pilots being used on 95% of all 196 oil tankers that crossed the Great Belt, the main channel in the straits, last month, per data from the Danish Maritime Authority cited by the Financial Times. However, the EU sanctions against Russian oil exports by sea would in theory ban the provision of EU maritime transportation services to vessels carrying Russian oil, including specialized pilots from Denmark to help navigate the Danish straits. This, if not addressed, could raise the risk of dangerous and environmentally-disastrous oil spills from ships that would not use a specialized pilot or try to go dark and circumvent the sanctions. “Failure to comply with the rules and recommendations of the IMO will not only pose an environmental risk to Danish territorial waters. It will also pose a risk to the safety of navigation and the crew members on board the ships,” the Danish Maritime Authority told FT. The authority and the IMO “highly recommend” the usage of pilots on ships traveling through the Danish straits, but still, the Danish Maritime Authority told Bloomberg Opinion columnist Javier Blas earlier this month: “In conclusion, Denmark cannot prevent oil tankers from passing from the Baltic Sea to the high seas.” Analysts believe that there could be a compromise or some sort of solution to this situation because it’s estimated that around 1.5 million barrels per day (bpd) of Russian crude passes through the Danish straits from Russia’s Baltic Sea ports en route to the Atlantic.
Russia's ramped-up gas squeeze means an even deeper recession for Europe — and a sharp winter will pile on the pain, Deutsche Bank warns - The recession facing Europe will be more severe and drawn-out than previously feared, thanks to Moscow ratcheting up the pressure in energy supplies, Deutsche Bank has warned. That means European households and businesses should brace for a cold winter of rationing and organized power cuts, as countries struggle with to replace missing Russian gas imports. "We now foresee a longer and deeper recession than we did in July," the Wall Street bank's strategists said in a research note this week. While the EU has asked its members to store more gas, Deutsche Bank expects the trading bloc's members to suffer a recession this winter heating season due to higher levels of gas consumption. In July, Russia's Gazprom slashed its natural gas deliveries to Europe via the Nord Stream 1 pipeline to 20% of capacity. The state-run energy giant completely cut off all the flows at the start of September. "This escalated the energy supply shock, adding further potential upside to inflation and downside to growth," said the bank's team, led by senior economist Peter Sidorov. The EU has made policy changes meant to help the 27 countries ease the impact of soaring energy prices, the bank noted. "However, demand for energy needs to decline, and the baseline call we made in July for a mild recession this winter is now too benign," its team said. Lower gas supply has sent European natural gas prices soaring, with benchmark Dutch TTF futures up 128% since the start of June. The euro has slid 8.6% to below $0.98 in the same time span. Deutsche Bank said Europe will need to impose cuts to gas consumption as a result of Moscow's shutoff, and that will lead to significant losses in industrial output. It will also drive up economic uncertainty and have a knock-on impact via trade. It also expects soaring energy bills to hit Europeans' incomes, leading to a fall in consumer spending. All told, that could lead to the eurozone's GDP falling by 3% from July to the same month next year, according to the strategists. That would represent a top-to-bottom drop in growth about 50% bigger than the fall during 2009's European sovereign debt crisis.
LNG regasification capacity more critical than supply for Europe-Vitol --LNG regasification capacity and the availability of slots for discharging LNG cargoes are more important for Europe at this point in time than to build supply projects, which can happen later, Russell Hardy, Vitol’s chief executive said at the Asia Pacific Petroleum Conference in Singapore Sept. 26. Hardy said US gas production continues to increase and there is more gas available in the US than it needs, so it is sensible for them to export as the political environment in the last 12 months is focused on supporting Europe with those LNG exports. “But an LNG plant takes four or five years to develop,” Hardy said. “So, a lot of the requirements, a lot of the investment effort, is on the receiving end at the moment with people trying to build receiving capacity so that Europe has an alternative to the Russian gas supply that’s been lost.” He added that Europe needed such infrastructure, and subsequently, it needed to backfill the supply to fill that infrastructure. “Today, European infrastructure is basically full. Every slot there is to discharge LNG has a cargo attached to it and so at this point really we need more slots,” Hardy said, adding that the slots are more important at the moment because there is immediate need for regasification. Two of the three offtake agreements tied to US-based project developer Tellurian’s proposed Driftwood LNG export terminal in Louisiana — one with Shell and the other with Vitol — were terminated Sept. 23, the developer said in a US regulatory filing. In August, Tellurian had amended the offtake agreements with Vitol and Shell to revise language about notice of termination after a deadline for the developer of the export project to meet certain conditions passed. Tellurian has said in a statement it would now prioritize securing equity partners to support the construction of Driftwood and that it believes the termination of the two offtake deals would provide flexibility in its efforts. “Driftwood remains an interesting project for Vitol and I think the Tellurian guys are just reassessing the best way to find the equity to build that project because each of those projects need a huge amount of money,” Vitol’s Hardy said. “It’s much more expensive to build an LNG liquefaction plant than it is to build a receiving terminal. And so they need to find the equity investors and push forward with their project, which I think is what they’re focused on,” Hardy added. He added that Europe has built gas inventories over summer to a level that is about normal for this time of year, which will give some supply security for the winter. “But the reality is we’ve just got a lot less daily supply coming into Europe, and so we’re very dependent on those inventories to get us through winter. So the price continues to try to ration demand,” Hardy said. He added that high prices are really trying to scare industrial demand away, which is not a great thing, because it has economic consequences. “We’re beginning to see a bit of a slump now in gas demand. And obviously, that’s going to help rebalance the market, but it’s going to come up come at a pretty severe economic cost,” Hardy added. The priority in the power sector is to use what remaining capacity there is for other fuels, he added, which means burning a little bit more coal this winter. “I don’t think anybody’s happy about it, but it’s just the simple reality of a difficult situation that we’re in,”
Pressure Mysteriously Plunges in Nord Stream 1, 2 -- Reuters reported that the Russian-owned Nord Stream 2 pipeline experienced a sudden loss in pressure, and a leak was detected in Danish waters on Monday. "A leak today occurred on the Nord Stream 2 pipeline in the Danish area," said Denmark's energy agency.Danish authorities said the leak occurred in the exclusive economic zone southeast of Bornholm island. Danish Maritime Authority announced all vessels must avoid the area:"Mariners are advised not to navigate within a five nautical miles area of the mentioned position." Russian energy giant Gazprom, NS2's operator, released a statement that said "marine authorities of Germany, Denmark, Sweden, Finland, and Russia have been notified immediately" about the pressure drop, adding an "investigation is ongoing." "Overnight the Nord Stream 2 landfall dispatcher registered a rapid gas pressure drop on Line A of the Nord Stream 2 natural gas pipeline," NS2's operator said. NS2 spokesman Ulrich Lissek told AFP a "large bubble field near Bornholm" was spotted. He noted, "pipeline was never in use, just prepared for technical operation, and therefore filled with gas." Lissek said pressure inside NS2 usually is about 105 bars. It is now only 7 bars on the German side... A spokeswoman for the German economy ministry said there's "no clarity" on what caused the NS2's pressure drop: "We are currently in contact with the authorities concerned in order to clarify the situation. We still have no clarity about the causes and the exact facts." Update: It's not just NS2: according to Reuters, Nord Stream AG, the operator of the Nord Stream 1 undersea gas pipeline from Russia to Germany, said Monday it was looking into causes of a drop in pressure in the pipeline. "Tonight, dispatchers from the Nord Stream 1 control centre recorded a pressure drop on both branches of the gas pipeline," it said in a statement. "The reasons are being clarified."
Denmark reports leak in gas pipeline in Baltic Sea - (AP) — Denmark's maritime authority said Monday that a gas leak had been observed in a pipeline leading from Russia to Europe underneath the Baltic Sea and that there is a danger to ship traffic. The operator of Nord Stream 2 confirmed that a leak in the pipeline had been detected southeast of the Danish island Bornholm in the Baltic Sea. The pipeline runs 1,230 kilometers (764 miles) from Russia through the Baltic Sea to Germany. It is completed and filled with gas, but gas has never been imported through it, dpa reported. The cause of the detected leak wasn't immediately clear. The Danish energy agency said in a statement that the country’s maritime authority has issued a navigation warning and established a five-nautical mile prohibition zone around the pipeline “as it is dangerous for ship traffic.” The relevant authorities are currently coordinating the effort, and the Danish energy agency added that “outside the exclusion zone, there are no security risks associated with the leak.” The incident is not expected to have consequences for the security of the supply of Danish gas, the country’s energy agency said. A spokesman for the operator of Nord Stream 2 said a loss of pressure was detected in a tube early Monday, and the responsible marine authorities in Germany, Denmark, Sweden, Finland and Russia were immediately informed, dpa reported. While the pressure inside the pipeline is normally 105 bar, it is now only 7 bar on the German side, spokesman Ulrich Lissek said. He fears that the pipeline, filled with 177 million cubic meters of gas, could run dry in the coming days, dpa reported.
Unprecedented, simultaneous damage to both Nord Stream pipelines; Norway warns of threats from unidentified drones flying over gas and oil platforms - A sharp drop in pressure has been detected on Nord Stream 1 and 2 gas pipelines on September 26, 2022. The investigation into the cause is in progress. On the same day, Norway’s oil safety regulator warned of threats from unidentified drones seen flying near their offshore oil and gas platforms. Nord Stream AG – a Switzerland-based consortium for the construction and operation of the Nord Stream (Nord Stream 1) submarine pipeline between Vyborg in Russia and Greifswald in Germany, a key factor in securing energy security in Europe – announced on September 27 that the harm that occurred on the same day simultaneously on three lines of the Nord Stream 1 and Nord Stream 2 offshore gas pipelines was unprecedented, adding that it is not yet possible to estimate the recovery time frame.1 According to Reuters, Danish authorities on Monday, September 26, asked ships to steer clear of a five nautical mile radius southeast off Bornholm after a gas leak from the defunct Nord Stream 2 pipeline drained into the Baltic Sea. “There are two leaks on Nord Stream 1 – one in Swedish economic zone and one in Danish economic zone. They are very near each other,” a Swedish Maritime Administration (SMA) spokesperson told Reuters.2 Later the same day, the operator of the Nord Stream 1 pipeline, which ran at reduced capacity from mid-June before shutting down completely in August, also disclosed a pressure drop on both lines of the Nord Stream 1 gas pipeline. The Danish Defense Command released an image of Nord Stream 2 gas leak detected by their F-16 interceptor on Bornholm: The largest gas leak creates turbulence on the surface of 1 km (0.62 miles) in diameter. The smallest makes a circle of approximately 200 m (656 feet). According to the SVT TV channel, the Swedish seismic center recorded 2 underwater explosions on the Nord Stream routes. Following the three gas leaks on the Nord Stream gas pipelines in the Baltic Sea, prohibition zones have been established around the leaks for the sake of the safety of ship and air traffic, the Danish Defence Command said.5 Nord Stream 1 has two leaks northeast of Bornholm, Nord Stream 2 has one leak south of Dueodde, it added. “The defense is supporting in connection with the authorities’ efforts regarding the leaks on the Nord Stream gas pipelines in the Baltic Sea. The frigate Absalon and the pollution control vessel ship Gunnar Thorson are on their way to carry out water monitoring at the exclusion zones, and the Danish Defence are also supporting with a helicopter capacity. In addition, the patrol ship Rota was in the area last night.”
Several Leaks Found in Nord Stream Pipelines - On September 27, several leaks were found in the Nord Steam 1 and 2 (NS1 and NS2) pipelines in Danish and Swedish territory, Rystad Energy Senior Analyst Fabian Ronningen highlighted in a market note sent to Rigzone late Tuesday. “The leaks were described as very large, and the operator Nord Steam AG described the damage as ‘unprecedented’,” Ronningen said in the note. Ronningen outlined that NS1 has not been transporting gas since late August but added that there is still gas in the system to maintain pressure, “causing the large leak of natural gas into the ocean in Swedish and Danish territory”. “NS1 will not come back to normal operation until at least October 26, the operator said in a statement,” Ronningen stated in the note. “Since gas has not been flowing through NS1 anyway, the short-term impact on gas prices and fundamentals are expected to be limited, however, the long-term implications are highly uncertain as to when flows will return if they return at all,” Ronningen added. In a statement posted on its website on Tuesday, Nord Stream AG outlined that the “significant” pressure drop caused by the gas leak on both lines of the gas pipeline leads to a “strong assumption” of “physical damage”. “Nord Stream AG immediately informed the relevant coast guards about the incident. The positions of two assumed damages have been identified and are located north-east from Bornholm in Swedish and Danish EEZ, respectively,” the company said in the statement. “Nord Stream AG has started mobilization of all necessary resources for a survey campaign to assess the damages in cooperation exchange with relevant local authorities,” the company added. In a statement posted on its website on Tuesday, the Danish Defence Command (DDC) revealed that prohibition zones had been established around three gas leaks on the Nord Stream pipelines “for the sake of the safety of ship and air traffic”. “The defense is supporting in connection with the authorities’ efforts regarding the leaks on the Nord Stream gas pipelines in the Baltic Sea,” the DDC said.
Danish Prime Minister says her government views Nord Stream natural pipeline leaks as 'deliberate actions' (AP) — Danish Prime Minister says her government views Nord Stream natural gas pipeline leaks as 'deliberate actions.'
Sabotage suspected as gas leaks from Nord Stream 1 and 2, gas prices turn volatile -- The Danish and Swedish officials report that the Nord Stream pipelines connecting Russia and Germany, which are currently out of operation owing to the conflict in Ukraine, suffered abrupt and unexplainable losses in the Baltic Sea. Nord Stream AG, the network operator, reported “unprecedented” damage to three offshore lines of the Nord Stream 1 and 2 pipeline systems, saying that it is hard to predict when the system’s functioning capacity will be restored. Swedish officials spoke of two Nord Stream 1 breaches, one in the Danish marine economic zone and the other in the Swedish one. According to reports, the two leaks are fairly close to one another. The Swedish side said that the leak sites in its special economic zone and the same area in Denmark are located not far from each other – to the northeast of the island of Bornholm. Earlier, a sharp pressure drop occurred in the Nord Stream 2 gas pipeline for an unknown reason. According to the latest information, the incident happened on the gas pipeline segment located in Danish territorial waters. Nord Stream 2 was full of gas and ready to begin pumping from Russia to Germany. Even if Germany were to authorise gas pumping, this “option” is becoming more improbable since the issue must be removed.
Germany Suspects Sabotage Hit Nord Stream Pipelines --Germany suspects the Nord Stream gas pipeline system was damaged by an act of sabotage, in what would amount to a major escalation in the standoff between Russia and Europe. According to a German security official, the evidence points to a violent act rather than a technical issue. Swedish seismologists detected two explosions in the area on Monday, when leaks appeared almost simultaneously in the Baltic Sea. It’s the clearest signal yet that Europe will have to survive this winter without any significant Russian gas flows, and potentially marks a major escalation in the broader conflict between Moscow and Ukraine’s allies. The pipelines were already out of action, but any hope that the Kremlin might have turned the taps back on at some point have now been dashed. Gas prices jumped, and Denmark moved to bolster security around its energy assets. “It’s hard to imagine that these are coincidences,” Mette Frederiksen, Denmark’s prime minister, told reporters Tuesday. “We can’t rule out sabotage.” The leaks on the Nord Stream pipelines are forming an area of natural gas bubbles in the Baltic Sea, a video released by the Danish army on its website showed. Se video og fotos af gaslækagerne på Nord Stream 1 og 2-gasledningerne i Østersøen påhttps://t.co/pj96CN7CDB: https://t.co/7bgt8TljaH #dkforsvar pic.twitter.com/I1zEPaBLYO — Forsvaret (@forsvaretdk) September 27, 2022 Kremlin spokesman Dmitry Peskov said that before the results of an investigation, it was premature to speculate on possible sabotage. “Nothing can be ruled out,” he said. Russia has been squeezing energy supplies to Europe for months, engaging in a cat-and-mouse game as it tries to exert maximum pressure on Ukraine’s allies. Europe has responded by filling up gas stores and trying to source alternative supplies. For now, it looks like those efforts will be enough to get Europe through this winter, though questions remain over the following one. The bloc got about 40% of its pipeline gas from Russia before the war, a figure that now stands at about 9%.
EU Chief Calls Nord Stream Attack "Sabotage", Warns Of "Strongest Possible Response" - European Commission chief Ursula von der Leyen confirmed the Nord Stream pipeline system leaks were caused by "sabotage," and warned of the "strongest possible response" should active European energy infrastructure be attacked. Paramount to now investigate the incidents, get full clarity on events & why.Any deliberate disruption of active European energy infrastructure is unacceptable & will lead to the strongest possible response. September 27, 2022 Earlier, Danish Prime Minister Mette Frederiksen described the three separate leaks on NS1 and NS2 as "deliberate acts," adding: "It’s hard to imagine that it’s accidental."On Monday, Swedish seismologists reported the detection of underwater explosions - shortly after which large patches of roiling gas could be seen on the surface in the same area.As rumors swirl over who is responsible for the incident, one message it sent was clear - vital systems are vulnerable to attack."The most important message that somebody wants to send, is what one is capable of doing with an offline pipeline can also be done with active pipelines, or undersea cables, or other infrastructure," said Julian Pawlak, a researcher at the German Institute for Defense and Strategic Studies, in a statement to the NY Times.In response, Denmark and Norway announced increased security around their energy infrastructure, and Norway, now Europe’s most important producer of gas and oil, called for “increased vigilance by all operators and vessel owners.” In a statement, Norway’s energy minister, Terje Aasland, cited “reports of increased drone activity” around its coast, and said that much of what he had learned of the Nord Stream incidents “indicates acts of sabotage.” -NY Times And while Poland's former Defense Minister appeared to thank the United States for the attack (a perfectly good explanation for which we're sure is will be offered), Poland's PM, Mateusz Morawiecki, laid the blame on Russia for targeting the pipelines - suggesting that the attack was an attempt to escalate the Ukraine conflict."We do not know the details of what happened yet, but we can clearly see that it is an act of sabotage," said Morawiecki, adding "An act that probably marks the next stage in the escalation of this situation in Ukraine."
Methane blast in Baltic Sea highlights global problem - (AP) — Scientists have been measuring the scale of the massive methane leak from damaged pipelines in the Baltic Sea, with the latest figures equating the levels of gas escaping to the annual emissions of some whole countries. It is believed to be the single biggest recorded gas leak over a short period of time.But as serious as the methane escaping from ruptured pipelines may be, there are alarming incidents of massive methane releases around the world frequently.Climate scientists have found that methane emissions from the oil and gas industry are far worse than what companies are reporting, despite claims by some major firms that they’ve reduced their emissions. That matters because natural gas, a fossil fuel widely used to heat homes and provide electricity, is made up of methane, a potent climate warming gas. It escapes into the atmosphere from well sites and across the natural gas distribution network, from pipelines and compressor stations, to theexport terminals that liquefy gas to ship it overseas.Scientists measuring methane from satellites in space have found that methane emissions from oil and gas operations are usually at least twice what companies reported, said Thomas Lauvaux, a scientist at University of Reims in France. In the Permian Basin, the largest oil and gas field in the United States, methane emissions were two to three times higher than what companies reported, he said. “Everybody claims they have reduced their emissions, but it’s not true,” Lauvaux said. Globally, Turkmenistan is among the worst offenders for releasing methane into the atmosphere, while Saudi Arabia is among the best at capturing it based on satellite observations, Lauvaux said. The U.S. falls somewhere in the middle with some companies capturing methane pretty well and others performing terribly.Lauvaux and other scientists have observed more than 1,500 major methane leaks globally, and potentially tens of thousands of smaller leaks, using satellites, he said.
U.S. Blew Up Russian Gas Pipelines Nord Stream 1 & 2, Says Former Polish Defense Minister - A former Polish Defense Minister, Radek Sikorski, has attributed to the United States the sabotage of two pipelines, Nord Stream 1 and 2, which carry natural gas from Russia to Germany. “Thank you, USA,” Sikorski wrote on Twitter. Sikorski was Minister of National Defense from 2005 - 2007 and served as Deputy Minister of National Defense and Deputy Minister of Foreign Affairs, previously. He is currently an elected member of the European parliament. Nord Stream 1 and 2 lie on the bed of the Baltic Sea. Nord Stream 2 was finished last year but Germany never opened it because Russia invaded Ukraine on February 24. Thank you, USA. pic.twitter.com/nALlYQ1Crb — Radek Sikorski MEP (@radeksikorski) September 27, 2022 Poland’s Secretary of State, Stanisław Żaryn, denounced Sikorki’s claim on Twitter as “Russian #propaganda,” calling it “a smear campaign against Poland, the US, and Ukraine, accusing the West of aggression against #NS1 and #NS2. Authenticating the Russian lies at this particular moment jeopardizes the security of Poland. What an act of gross irresponsibility!” Russian #propaganda instantly launched a smear campaign against Poland, the US and Ukraine, accusing the West of aggression against #NS1 and #NS2. Authenticating the Russian lies at this particular moment jeopardizes the security of Poland. What an act of gross irresponsibility! pic.twitter.com/S9YJKRCv9B — Stanisław Żaryn (@StZaryn) September 27, 2022But it’s not out of the realm of the possible that the U.S. is indeed behind the attack. President Joe Biden promised on February 7 to prevent Nord Stream 2 from becoming operational if Russia invaded Ukraine. "If Russia invades,” said Biden, “then there will be no longer a Nord Stream 2. We will bring an end to it." Reporter: "But how will you do that, exactly, since...the project is in Germany's control?" Biden: "I promise you, we will be able to do that." Pres. Biden: "If Russia invades...then there will be no longer a Nord Stream 2. We will bring an end to it."
The Mysterious Attack on Two Major Gas Pipelines for Europe - If European officials were ever holding out hope that diplomatic relations with Russia would soon get back to normal, and that natural gas could once again flow throughout the continent, that appears to have been blown up — four times, in fact. On Thursday, a fourth natural-gas leak was detected from two gas pipelines running through international waters that connected Germany with Russia, after officials previously thought that there were only three. These pipelines, the Nord Stream 1 and 2, had been turned off or were never fully operational since the start of Russia’s invasion of Ukraine in March, but had held tons of idled pressurized natural gas. That has since been spewing into the Baltic Sea, with one of the largest explosions off the Danish Coast. The sea borders Poland, Germany, and the Scandinavian and Baltic countries, in plumes that are reportedly about a kilometer wide: This was sabotage, according NATO officials, echoing earlier comments made by German and Polish officials. “We can’t imagine a scenario that isn’t a targeted attack. Everything speaks against a coincidence,” a German official told the newspaper Tagesspiegel. Vladimir Putin called it an act of “international terrorism,” without saying who exactly was behind it. Underground oil pipelines like these — which hug the floor of the sea — don’t typically leak, as each segment of pipe is coated in concrete andweighs about 24 tons. The operator of the pipelines initially said there was “a pressure drop on both strings of the gas pipeline” and that it was investigating; then later added that the leaks lead them to “a strong assumption” that the pipeline was physically damaged, and that a perimeter of five nautical miles has been established around the leaks. As Bloomberg columnist and energy expert Javier Blas points out, natural or more prosaic explanations for the leaks are unlikely.The evidence so far is pointing toward some kind of deliberate explosion. The Swedish National Seismic Network said that it detected blasts in the Baltic Sea. “There is no doubt that these are blasts or explosions,” Björn Lund, a seismologist with the Network, told SVT, a Swedish news site. On Thursday, German newspaper Der Spiegel reported that German officials believe that an underwater explosion equivalent to 500 kilograms of TNT were used to destroy the pipelines. European officials are still investigating the blast, however, and it could take as long as a week to stop the gas leak.The environmental impact is complicated. The Baltic Sea has been hostileto marine life since around the 1950s, when it was a dumping ground, and has suffered from a process called eutrophication, which leads to reduced oxygen levels in the water. The estimated amount of gas that was sitting in the pipeline would make it the largest known leak ever — around 1 percent of what Germany produces annually — but still a small amount compared to the overall world emissions, according to Politico.So why is this happening now? That is still unclear. Late on Tuesday, Der Spiegel reported, and the New York Times confirmed, that the C.I.A. had given some non-specific warnings to a few countries, including Germany, that the pipeline could be a target. The Nord Stream 1 had the capacity to deliver 550 billion cubic meters of gas a year to Europe, but it had essentially been turned off for months as part of Europe’s sanctions against Russia — one of the main reasons for soaring gas prices in Europe. The Nord Stream 2 was never operational, with Germany opting out of activating it to punish Russia. Despite the accusations from European officials, it’s still unclear who might have blown it up. White House spokeswoman Karine Jean-Pierre said the administration would not speculate as to who was behind it. “Our partners are investigating this, so we stand ready to provide support to their efforts once they have completed their investigation,” she said. The Russians denied responsibility, and have tried to pin this as a false-flag operation by the U.S. or Ukraine. This was happily taken up by Tucker Carlson, who went on his show to suggest that the U.S. was responsible for the explosions as a way to get more people to buy electric vehicles. This was immediately co-opted by Russian propaganda outlets.
West rejects Putin's claim it sabotaged Baltic gas pipelines - (AP) — Russian President Vladimir Putin on Friday accused the West of sabotaging Russia-built natural gas pipelines under the Baltic Sea to Germany, a charge vehemently denied by the United States and its allies.Nordic nations said the undersea blasts that damaged the pipelines this week and have led to huge methane leaks involved several hundred pounds of explosives.The U.S.-Russia clashes continued later at an emergency meeting of the U.N. Security Council in New York called by Russia on the attacks on the Nord Stream 1 and 2 pipelines, and as Norwegian researchers published a map projecting that a huge plume of methane from the damaged pipelines will travel over large swaths of the Nordic region.Speaking Friday in Moscow at a ceremony to annex four regions of Ukraine into Russia, Putin claimed that “Anglo-Saxons” in the West have turned from imposing sanctions on Russia to “terror attacks,” sabotaging the Nord Stream 1 and 2 pipelines in what he described as an attempt to “destroy the European energy infrastructure.”He added that “those who profit from it have done it,” without naming a specific country.In Washington, U.S. President Joe Biden dismissed Putin’s pipeline claims as outlandish.“It was a deliberate act of sabotage. And now the Russians are pumping out disinformation and lies. We will work with our allies to get to the bottom (of) precisely what happened,” Biden promised, adding that divers would be sent down to inspect the pipelines. "Just don’t listen to what Putin’s saying. What he’s saying we know is not true.”U.S. officials said the Putin claim was trying to shift attention from his annexation Friday of parts of Ukraine.“We’re not going to let Russia’s disinformation distract us or the world from its transparently fraudulent attempt to annex sovereign Ukrainian territory,” White House National Security Council spokeswoman Adrienne Watson said Friday.At the United Nations, Sergey Kupriyanov, spokesman for the Russian state-owned company Gazprom, which is the majority stakeholder in Nord Stream, told the council that data regarding the sudden drop in pressure in the pipeline and the gas leakage “make it possible to say with certainty that the leaks in the pipelines was caused by physical damage.” Kupriyanov said in a video briefing that Gazprom has begun searching for possible solutions to make the Nord Stream system operational again. There is no estimate of how long it will take, he said, “but we can say with certainty that the task will be very daunting from a technical standpoint.”
German Authorities Fear Nord Stream Pipelines May Be Permanently Unusable Following Sabotage - German security officials believe that both Nord Stream 1 and 2 could be damaged beyond repair as large amounts of corrosive saltwater flowed into pipelines following multiple leaks that were discovered on Tuesday, The Telegraph reported on Wednesday. European countries found significant gas leaks at three separate locations in the Baltic Sea which caused the pipelines’ pressure to drop, forcing the pipelines to go offline. German authorities are concerned that the saltwater’s damage to the pipelines could make them permanently inoperable which would further cut fuel supplies to an energy-starved Germany, according to The Telegraph, which cited the German outlet Tagesspiegel.Both the German government and the European Union believe that the leaks were caused by an intentional act of sabotage. Sweden detected underwater explosions in the pipeline’s area before the damage was detected, according to The New York Times.Germany is currently embroiled in an energy crisis that is being exacerbated by the reduction of Russian gas deliveries through the Nord Stream 1 pipeline. The German government is planning to place price caps on natural gas and electricity to bring down the crippling energy bills that are forcing businesses to shut down, according to The Wall Street Journal.Russia, which delivered 45% of Europe’s natural gas before the invasion of Ukraine, has also been previously accused of cutting off gas deliveries to punish Europe for its support of Ukraine. However, the Russian government on Wednesday claimed that it had nothing to do with the pipeline leaks, according to Reuters.
European Energy Security Faces New Risks With Nord Stream Explosions - The temporary optimism among European politicians and governments about a less volatile natural gas market during the winter of 2022-2023 has come to an end. Just as market fundamentals seemed to be strengthening as a result of rising storage volumes and lower demand, there are a number of new risks. First of all, the Dutch government announced this week that Europe’s largest onshore gas field Groningen will be put on the back burner, with gas production of less than 2 BCM, as predictions showed no extra volumes are needed anymore. The reality, however, might be more difficult to predict. With a longer duration of the Ukraine war, possibly even with a nuclear scenario at play, and EU sanctions on Russian oil on the horizon, the market is potentially heading for a dark scenario. In all existing scenarios, even those of the Dutch government, Russian natural gas would be still flowing in the next couple of months, albeit at very low levels. At the same time, new supply has been studied, not only LNG imports but also the potential of the new Baltic gas pipeline which has now been opened in Poland. Optimism however is a bad advisor, as we can see today. Nord Stream 1 and 2 have been hit by leakages and explosions on Tuesday. Danish authorities already have warned vessels to steer away from the island of Bornholm, as a gas leak has been reported at the Russian-owned Nord Stream 2 gas pipeline. Nord Stream AG, the operator, also said that Nord Stream 1 has operational issues, including a power drop in both lines. On Monday, the German regulator had already stated that the pressure in Nord Stream 2 had dropped from 105 to 7 bars. Both gas pipelines are currently already empty, as Russia has cut off gas supplies before. Analysts are worried that the leakages and explosions on both lines are not an incident but linked to the launch of the Baltic Pipe, which carries Norwegian gas to Poland. It is rather coincidental that both Russian offshore gas pipelines are hit at the same time, or even just before the opening of another pipeline. Last week, Norway has also reported increased activity of unknown and unidentified drones close to crucial offshore oil and gas infrastructure. Norway’s Petroleum Safety Authority (PSA) has now openly warned about the presence of unidentified drones near offshore oil and gas facilities. The PSA stated that operators have reported the presence of drones during the last couple of months, highlighting the potential of “deliberate attacks”. As the PSA said “we urge increased vigilance, revised emergency preparedness and incident response measures, and information sharing.” Even though no official connection has been made with state actors, the current situation could become very volatile in case of further escalation on the Ukrainian front. The security of offshore energy production, especially in the North Sea, is still very weak. A potential aggressor could without any doubt take advantage of the situation and deal significant damage to Europe’s energy market during the coming months. Norway’s offshore oil and gas infrastructure is a highly strategic target for Moscow. Putin could, and most probably, will exploit additional energy infrastructure weaknesses this winter. Not only other Russian oil and gas pipelines will be seeing unexpected technical issues or sabotage, but third parties could also become a target. A disruption of Norwegian energy supplies to the European Union or the UK could lead to faster depletion of natural gas storage facilities in Europe a potentially add to the already existing chaos in the energy market.
In Dramatic Escalation, European Nat Gas Prices Soar After Gazprom Warns Ukraine Flows At Risk - In a day of constant news surrounding European gas flows, including the potential sabotage of the Nord Stream pipeline, moments ago, Russia state-owned gas giant Gazprom PJSC warned that another major source of gas flows to Europe was at risk, just hours after three massive gas pipelines were hit by suspected sabotage. As Bloomberg reports, in a dramatic escalation of the energy standoff between Russia and Europe in little over 24 hours, the Nord Stream pipeline was knocked out by what German officials said looked like sabotage. Gazprom then said that one of two remaining routes bringing gas to Europe - via Ukraine - was at risk because of a legal spat. Specifically, as Reuters notes, Gazprom rejected all claims from Ukraine's energy firm Naftogaz in arbitration proceedings over Russian gas transit, and had notified the arbitration court. It also said that Russia may introduce sanctions against Naftogaz in case it further pursues the arbitration case, meaning Gazprom would be prohibited by the sanctions from paying Ukraine the transit fees. Naftogaz had initiated a new arbitration proceeding against Gazprom earlier this month, saying the Russian company did not pay for the rendered service of gas transportation through Ukraine. The company had said "funds were not paid by Gazprom, neither on time nor in full" for the gas transit. Gazprom said on Tuesday that Naftogaz had no "appropriate reasons" to reject its obligations on transit via the Sokhranovka point, a key route for Russian gas exports to Europe. In May, Ukraine suspended the flow of gas through Sokhranovka, which it said delivers almost a third of the fuel piped from Russia to Europe through Ukraine, blaming Moscow for the move and saying it would move the flows elsewhere. Following the report that Russia may soon halt natgas transit via Ukraine, gas prices quickly jumped almost 20% as traders factored in the prospect that Europe will have to live without Russian gas this winter - and beyond. Gazprom said that a legal dispute risks prompting Moscow to sanction Ukraine’s Naftogaz. If that happened, then Gazprom would be unable to pay transit fees, the company said on Telegram, putting at risk flows. “In practice, this will mean a ban on Gazprom from fulfilling obligations to sanctioned bodies under completed transactions, including financial transactions,” the company said. If, or rather when, supplies through Ukraine are shut down, it would leave Gazprom sending gas only via the TurkStream pipeline to Turkey and a handful of European countries that haven't severed business ties with Russia.
Fourth leak found in Nord Stream pipelines - (video) The Swedish Coast Guard (SCG) said they found a fourth leak in Nord Stream pipelines on September 29, 2022, just 3 days after underwater explosions severely damaged two Nord Stream 1 pipes and one Nord Stream 2.1 NS 1 and 2 are key underwater pipelines built to deliver Russian natural gas to Germany. Nord Stream AG – a Switzerland-based consortium for the construction and operation of the Nord Stream (Nord Stream 1) said earlier this week the damage is unprecedented. Due to the severity of the damage, the repairs would take several months or more. The fourth leak was detected on the Nord Stream 2 pipeline, in close proximity to a larger hole found on the nearby Nord Stream 1, the Swedish coast guard said today.2 Two of the four leaks are in Sweden’s exclusive economic zone and the other two are in the Danish exclusive economic zone. On Wednesday, September 28, SCG said they are working on the ongoing environmental rescue operation and assisting the police and prosecutors in their work with the investigations. The situation has not changed since the gas leak was discovered, SCG said, adding the gas leak in the Swedish economic zone is constant. On the same day, the European Union promised a robust response to any intentional disruption of its energy infrastructure. “The European Union is deeply concerned about damage to the Nord Stream 1 and 2 pipelines that has resulted in leaks in the international waters of the Baltic Sea,” Joseph Borrell, a High Representative of the Union for Foreign Affairs and Security Policy (HR/VP), said in a statement.3 “Safety and environmental concerns are of utmost priority. These incidents are not a coincidence and affect us all. “All available information indicates those leaks are the result of a deliberate act. We will support any investigation aimed at getting full clarity on what happened and why, and will take further steps to increase our resilience in energy security. “Any deliberate disruption of European energy infrastructure is utterly unacceptable and will be met with a robust and united response.” On Thursday, September 29, Russian Foreign Ministry Spokeswoman Maria Zakharova told the Soloviev Live TV that pipeline incidents took place in ‘an area that is fully controlled by US intelligence agencies.’4 Commenting on the Nord Stream 1 and 2 gas pipeline leaks, Zakharova recalled that officials in Washington had asserted early this year that Nord Stream 2 would never go into service. The Russian Foreign Ministry’s spokeswoman demanded, among other things, that US President Joe Biden issue a reply as to whether Washington had carried out its threat over the pipelines on September 25 and 26. What Zakharova was referring to was the US president’s statement made in February 2022: “If Russia invades, that means tanks or troops crossing the border of Ukraine again, then there will be no longer a Nord Stream 2. We will bring an end to it.” When asked how exactly, the president said, “I promise you, we will be able do that.” Former US President Donald Trump warned on Wednesday this [the sabotage] could lead to major escalation or war. Referring to theories alleging that Russia was involved in the Nord Stream incidents, Kremlin Spokesman Dmitry Pesokov said it is ‘predictably stupid to voice such versions.’ “This is a big problem for us. Both lines of Nord Stream 2 are filled with gas, the entire system is ready to pump gas, and this gas is very expensive,” Peskov specified.
Russia Gas Pipelines Now Have Four Leaks, Blamed by Some on Sabotage - Another leak on the Nord Stream 1 and 2 natural gas pipelines in the Baltic Sea has been disclosed, bringing the total number of ruptures to four, according to the Swedish Coast Guard’s Command Center. Sweden’s Coast Guard became aware of two leaks in the pipelines in the country’s exclusive economic zone on Monday, at the same time they learned of two in Denmark, a spokesman said by phone. Officials put the information on their website, but were “surprised” that it wasn’t known broadly, with just one leak near Sweden talked about in the past days, the spokesman said. Local media in the Nordic country began reporting on the fourth leak late Wednesday. It isn’t known where exactly the leaks are located on the pipes’ structures, according to the spokesman. The Coast Guard is monitoring the site, and has a remote-controlled underwater robot on location. Gas has been bubbling up from the pipelines since earlier this week, with Denmark estimating that the links would empty by Sunday. Several governments have called the actions “deliberate” and “sabotage,” with Finland on Wednesday noting that only a state actor could be capable of acts on such a scale. The incident has prompted increased security on energy infrastructure across Europe, with some, such as Poland, pointing the finger at Russia, which is waging war in Ukraine and has curbed gas flows to Europe. Norway is now Europe’s biggest gas exporter and its largest energy companies said Wednesday that they are boosting security around their offshore assets. The Nord Stream pipelines traverse the Baltic Sea to Germany from Russia, running on the seabed in international waters. Two leaks are in Sweden’s economic zone, and two in Denmark’s. The bubbling areas above the leaks in Sweden’s zone measure about 800 meters (2,600 feet) in diameter above pipeline 1 and about 150 meters above pipeline 2, respectively, according to the Coast Guard. The pipelines were already out of action, but any hope that the Kremlin might have turned the taps back on at some point have now been dashed. Police in Denmark and Sweden are investigating the events. Russia has been squeezing energy supplies to Europe for months, engaging in a cat-and-mouse game as it tries to exert maximum pressure on Ukraine’s allies. Europe has responded by filling up gas stores and trying to source alternative supplies. For now, it looks like those efforts will be enough to get Europe through this winter, though questions remain over the following one. The bloc got about 40% of its pipeline gas from Russia before the war, a figure that now stands at about 9%.
Science | The mystery of Russian gas -At the end of August, the Finns saw a huge flame rising in the sky from a Russian methane station near Saint Petersburg. Then, Canadian satellites reported an increase in natural gas leaks in Russia. Is Pushkin’s homeland wasting the gas it no longer wants to sell to Europe? An “environmental disaster”. That’s how Norway’s energy information firm Rystad called flaring — a practice of burning the natural gas waste associated with oil extraction, according to the World Bank — in Portovaya, Russia, near from the border with Finland. This unusual flaring would produce 9000 tonnes of carbon dioxide (CO2) per day, or the annual emissions of two cars. The media immediately linked this massive methane incineration, which lasted all summer, to the end of Russian methane deliveries to Europe through the Nord Stream 1 gas pipeline – the head of which is also located in Portovaya. “Flaring at Portovaya was down a bit in September, but it’s still much higher than June,” says Jessica McCarty, a fire greenhouse gas (GHG) emissions specialist at the University of Miami. in Ohio. It is lucky that there are few forest fires this year in Russia because we would have had the perfect storm. It’s the army that puts out the forest fires, and they’re busy in Ukraine. According to Mark Davis, CEO of UK flare management firm Capterio, the unusually intense flames at Portovaya originated from a liquefied natural gas (LNG) plant adjacent to the Nord Stream 1 compressor. will be transformed into LNG, but the capacity is much less, 25 to 30 times less. That said, Portovaya is just one of thousands of flare sites in Russia. The most important are linked to oil production in Siberia. » Montreal-based methane leak detection firm GHGSat also noted a “significant” increase in leaks at compressor stations in Russia’s gas pipeline network in August, according to GHGSat president Stephane Germain. There was a five to tenfold increase in the volume of leaks at 16 locations between late July and late August. An increase of this magnitude is normally deliberate. According to Mr. Davis, it is likely that the methane which is no longer exported to Europe will be released into the atmosphere. “We can lower well production, but only up to a point. Reducing production too much can damage a tank. The World Bank reported this week that Gazprom’s methane production has fallen by 13% this year, while exports have fallen by 35%. Gazprom did not explicitly specify the reasons for the unusual flaring at Portovaya, limiting itself to telling the magazine Upstream that these were LNG plant commissioning procedures. Gazprom had previously claimed that the interruption of flow in the Nord Stream gas pipeline was linked to Western sanctions, including problems with Siemens turbines. The German company has denied these allegations. But sanctions could well be at issue in both cases, according to Mark Davis. “Flaring is normal before an LNG plant is commissioned, but at these levels it is likely a reflection of the lack of expertise in Russia for these technical operations. It may technically be the same for Nord Stream’s compressor station. » But Jessica McCarty points out that even if the sanctions make it difficult to access foreign expertise, Russia is not above suspicion. “I worked for several years in Russia, and lies are very common, says Mr.me McCarty. So it’s hard to believe the Russians when they tell the truth. The Portovaya LNG plant was built to supply the Russian enclave of Kaliningrad, currently served by Ukrainian pipelines. But its first load of LNG left in September for Greece, according to the magazine Bloomberg Business Week. Methane is a much more powerful GHG than CO2, but it persists for a shorter time in the atmosphere. This means that in 20 years, methane warms the Earth 84 times more than CO2, but in 100 years, only 28 times more. During flaring, methane is burned and partially transformed into CO2. Initially, this was a safety measure – methane being explosive – but oil companies are increasingly using flaring to limit the impact of their GHG emissions. “With effective flaring, you burn 98% to 99% of the methane,” says Davis. When the flaring is not well done, we drop to 60-70%. » Is Russia a pro at flaring? “Probably not,” says Mr. Davis. Methane leaks occur at network compressor stations, but the majority of leaks worldwide are either natural or linked to the exploitation of oil reservoirs, which also contain gas. As CO emissions2 are much larger, the total CO balance2 as GHG is two to three times higher than methane.
Russia Keeping Unsold Gas Underground - The economic impact of Russia’s gas shutoff is dominating European politics, but there are also concerns about the environmental consequences. Officials from the bloc fear that Gazprom PJSC could be burning off fuel at its fields instead of exporting it to Europe. The evidence indicates those concerns are unfounded. Surplus Russian gas is staying below the Siberian permafrost because the country’s fields have the flexibility that allows Gazprom to turn flows up or down as required, according to satellite data, industry analysts and the company’s historical figures. As the rift between the Kremlin and the west deepened after the invasion of Ukraine, Gazprom slashed its total deliveries to key foreign markets by 39% between January and mid-September. The deliberate rupturing by persons unknown of three halted pipelines that used to deliver Russian gas to Germany suggests the reduction in exports could be long lasting. The amount of gas observed being flared -- burned off into the atmosphere -- at Gazprom’s key production area in the Yamal peninsula between Aug. 10 and Sept. 21 averaged 1.18 million cubic meters a day, according to Bloomberg calculations based on satellite data analyzed by the Earth Observation Group at the Payne Institute for Public Policy, of the Colorado School of Mines. That’s nearly 28% below flaring levels observed in the area over the same period a year ago, the calculations show. It is above the average from the same timeframe in 2020, which was slightly more than 1 million cubic meters a day. Gazprom’s Yamal flaring “trend has not changed in the past several months,” said Dr. Mikhail Zhizhin, researcher at Payne Institute for Public Policy, who analyzed the data. The observed flaring volumes are just a tiny fraction of Gazprom’s daily production, which averaged 838 million cubic meters from August through to mid-September. Output was down by 473 million cubic meters per day from the same period a year ago as exports to Europe were squeezed, Bloomberg calculations show. The producer’s daily shipments to key markets dropped by 302 million cubic meters compared to August-September 2021. The flaring figures are based on night-time data from satellites measuring high radiant emissions associated with gas flares. The night-time detections are validated against daytime satellite images, as well as geographical and geological meta-data published by Russian oil and gas producers and governmental agencies. Cloudy nights limit detection of flares. Even with the relative stability of flaring at Gazprom’s key gas production areas, Russia is still indisputably the worst offender when it comes to burning off gas into the atmosphere, according to data from the World Bank. The nation flared a total of 25.4 billion cubic meters of gas last year, the data show.
France's Top Oil Refinery Halting -France’s top oil refinery is set to halt because of a workers’ strike over pay, the latest hit to the nation’s fuelmaking capacity from the weeklong industrial action. TotalEnergies SE is halting its refinery in Normandy, according to a union official. The step means almost two-thirds of the nation’s oil processing is now either fully offline or severely impacted by strikes or a recent fire. Exxon Mobil Corp., whose plants are also affected, said it’s limiting fuel supplies. The dispute underscores the tensions that have been bubbling up in the wake of a cost-of-living crisis that stretches far beyond France’s borders. The unions are seeking a bigger share of profits that oil companies made from soaring energy prices. The Normandy shutdown means France’s two biggest refineries, both located near the port of Le Havre, will be out of service due to strikes. Exxon already halted its nearby Gravenchon, as well as a smaller refinery in the south. It means there will almost no refining capacity working in northern France, although the region can also take in cargoes by sea. “I confirm limitation in place, we are working with our independent distributors and wholesale fuels customers to help meet consumer demand for fuel,” Exxon France said in response to questions about whether it was curbing fuel supplies. “Efforts are under way to supply products from unaffected sources.” The process of shutting down Normandy will last a few days, according to Thierry Defresne, secretary of the European workers’ committee at Total, and an official at CGT. Online alerts to local residents also said refinery and petrochemical units at Normandy were being taken offline. Total didn’t immediately respond to an email seeking comment on the Normandy plant, also known as Gonfreville. The longer the action endures, the greater the potential damage it can do to France as it grapples with a wider surge in energy costs. The nation’s nuclear reactors are set to undergo more work this winter than previously planned, and Russia has cut gas flows to Europe sharply. Both developments have led to a spike in energy prices across the continent. A prolonged strike could also have implications for France’s retail fuel prices, which have fallen sharply from their peaks earlier this year, tracking declines in oil prices and fuel markets elsewhere in the world.
France Wants Traders to Return Millions of Barrels of Diesel - France is looking to replenish its stockpiles of diesel in coming months, another move by a European country to shore up supplies as winter approaches. The French government wants companies to replenish fuel inventories that were released around June as part of a globally co-ordinated stock-draw. The idea is to refill during October and November, a person familiar with the matter said, without specifying a volume. A spokeswoman for France’s Ministry for Energy Transition confirmed the request. France was a significant contributor to oil releases agreed back in March and April by member countries of the International Energy Agency. It pledged 7.88 million barrels of oil products -- all from public stockpiles -- of which the vast majority was diesel-type fuel. The timing of the restock is important because the European Union is preparing to cut off almost all seaborne deliveries of diesel-type fuel -- as well as other refined petroleum products -- early next year from its single biggest external supplier: Russia. It’s also a reminder that strategic fuel releases aren’t necessarily as bearish as the market can sometimes initially perceive -- since they must ultimately be returned. For France, the EU’s upcoming sanctions are significant -- the nation is a major diesel importer and Russia was still its second biggest supplier of seaborne cargoes in August, having surrendered the top position to Saudi Arabia, according to data from Vortexa Ltd, compiled by Bloomberg. Workers’ strikes at multiple French refineries, along with a recent fire at TotalEnergies SE’s Feyzin plant, are also curtailing France’s domestic fuel production, compounding the supply challenge. The company’s trading arm bought at least eight cargoes of ultra low-sulfur diesel and one of 0.1% sulfur gasoil since September 20 in oil trading windows, according to information from brokers compiled by Bloomberg. The ministry spokeswoman said that the refill was normal, adding that the government anticipates -- and replenishes -- its stocks. According to an IEA breakdown from the earlier this year, France said it would contribute more than 6.1 million barrels of diesel-type fuel to the two collective releases that were agreed in March and April. That’s roughly enough to meet the country’s demand for a week. The IEA’s breakdown is incomplete, suggesting the actual figure for diesel-type fuel could be slightly higher. Like France, the Netherlands is also stocking-up on diesel before the winter. It wants to go further than only replenishing what it earlier sold through the coordinated release by IEA member countries. So far, the Dutch petroleum stockpiling agency, COVA, has issued tenders totaling as much as about 590,000 tons of diesel. Germany’s stockpiling agency has also recently issued a tender to import diesel, though the amount is far smaller.
Europe Faces An Exodus Of Energy-Intensive Industries -- Soaring energy costs in Europe are shutting down businesses and threatening a bloc-wide recession. Yet not everyone accepts this fate. Some companies are moving to cheaper locations: the U.S.Steel giant ArcelorMittal earlier this month that it would slash by half production at a steel mill in Germany and a unit at another plant, also in Germany. The company said it had based the decision on high gas prices.Separately, ArcelorMittal more recently warned it expected its steel output for the fourth quarter of the year to be 1.5 million tons lower than it was in the final quarter of 2023, again citing excessive prices along with slumping demand.At the same time, ArcelorMittal earlier this year announced it had plans to expand a Texas operation, describing the state as a “region that offers highly competitive energy and, ultimately, competitive hydrogen.” It is just one of the Europe-based companies that are beginning to see the benefits of growing in the United States, according to a report by the Wall Street Journal’s David Uberti.Uberti cites industry executives as saying that it has not exactly been a difficult decision to make. Basically, according to the report, it comes to a simple dilemma between folding in the face of exorbitant energy bills and moving to a much cheaper energy environment, complete with fresh incentives for certain industries.Chemicals, batteries, green energy—these are all areas set to benefit substantially from the Inflation Reduction Act passed last month. No wonder, then, that companies active in these areas see it as a good idea to either move or expand in the United States.Meanwhile, in Europe, more and more companies are switching into survival mode. That’s because, for a lot of them, the time is coming to renew their electricity supply contracts with utilities. Thanks to energy inflation, these are set to be much higher than the contracts for the current year, with front-year prices reaching over $1,000 in France and Germany.The New York Times’ Liz Alderman wrote in a recent story that energy-intensive industries such as manufacturing and fertilizer production were especially vulnerable precisely because of their higher energy needs. She cited the case of a glass-making major, Arc International, which is also shutting down production units to cope with higher energy costs.The European Commission has promised to help by capping the revenues of electricity generators that use a primary source of energy other than gas, and taxing the “excessive” profits of oil, gas, and coal companies. According to the EC, raking in cash under the current circumstances was wrong, even though profits in themselves were something good. Plans are to collect some 140 billion euros—almost equal to the same sum in dollars—to distribute among households and struggling businesses. Critics, however, note that this will not be enough to save companies from going under. European Aluminium, the industry association, even said energy costs could result in the breakdown of the aluminum industry in Europe. “I think we’ll muddle through two winters,” the chief executive of refractory products maker RHI Magnesita told the Wall Street Journal. However, if gas doesn’t get cheaper, Stefan Borgas said, “companies will start to look elsewhere.” It looks like businesses packing and leaving for cheaper jurisdictions is yet another unintended consequence of the policies favored by European governments, especially in the energy department. It is also one more risk for the survival of the bloc as a competitive industrialized formation in the future. And this risk presents one more conundrum for governments and the administration in Brussels to solve in short order.
Qatar to supply more LNG --World's leading LNG producer Qatargas will supply additional liquefied natural gas amounting to around a million tonne per year (MTPA) to cater Bangladesh's growing gas demand. "Qatargas has confirmed us providing at least 1.0 MTPA of LNG from 2025," Petrobangla chairman Nazmul Ahsan told the FE Sunday, as the country is on the lookout for foreign supplies to make up for domestic gas shortages. Bangladesh sought to import around 2.0 MTPA additional LNG but Qatargas of the gulf-state Qatar confirmed decision to provide around half the additional requirement yet, he said. The company has assured of looking into the matter of supplying 1.0MTPA more LNG in future, said the Petrobangla top brass. He, however, could not say about the buying price of LNG. "We had discussions with Qatargas last week and a deal regarding the additional import of LNG will be inked soon," says Mr Ahsan. Currently, Qatargas supplies LNG to Bangladesh under a long-term deal with Petrobangla. The state corporation also has sale and purchase agreement (SPA) with Qatar's RasGas to buy annually up to 2.5 MTPA lean LNG for over 15 years. During the initial five years of the deal, RasGas will supply annually around 1.8 MTPA of LNG, which will increase up to 2.5 Mtpa in next 10 years, as per the agreement. The purchase price has been set at around 12.65 per cent of the three-month average price of Brent crude oil plus $0.50 constant per million British thermal unit (MMBTU). Should Petrobangla have greater demand during the first five years, it can increase the import volume annually to 2.5 Mtpa, and during the next 10 years, it reserves the option to reduce the amount by 10 per cent per annum. If Bangladesh takes less than the base amount of LNG, in any year, it will have to pay the price on a take-or-pay basis. Under the annual delivery programme Qatargas will supply a total of 40 LNG cargoes to Bangladesh during 2022. It supplied one cargo less, or 39 LNG cargoes, during 2021. The regular size of an LNG cargo is 138,000 cubic metres. Bangladesh is currently struggling to cope with a mounting natural-gas demand due to dwindling natural gas production from local gas-fields and higher price of LNG on the wayward international market. Gas-guzzling power plants, industries, households, compressed natural gas (CNG) filling stations, and commercial consumers are getting less gas compared to their actual demand, consumers allege. Its current buying price of LNG from long-term suppliers ranges around $12 per MMBTU, considering the current Brent crude price of around $90 per barrel.
Egypt’s natural gas exports value increases 13-fold in eight years -The value of Egypt’s natural gas exports has increased 13-fold in the last eight years, a new government report has found. The country exported $8 billion worth of natural and liquefied gas in the 2021-2022 fiscal year, which ended on June 30. This compared with $600 million of exports in 2013-2014, said the report published by the Egyptian Cabinet’s media centre.About 7.2 million tonnes of natural and liquefied gas were exported in the eight-year period, compared with 1.9 million tonnes in 2013-2014. Over the same period, Egypt signed 108 agreements with international companies for the excavation of gas and petrol with at least $22bn in investment value. The growth comes as Egypt is seeking to maximise the benefits of its natural gas wealth. The North African is also seeking to boost much-needed foreign currency reserves through expanding exploration projects, developing liquefaction stations, increasing exports, signing partnerships and rationing domestic electricity consumption. “The Egyptian state is moving forward towards achieving its vision of becoming a regional centre for gas production and exports, in light of its wealth and capabilities that qualify it to achieve this goal,” the Ministry of Petroleum and Mineral Resources said on Sunday. Egypt was a natural gas importer between 2015 and 2017, as domestic demand outweighed supply, before the discovery and start of production at the Zohr gasfield. Considered the largest field in the Eastern Mediterranean region, Zohr was estimated in August 2015 to hold 850 bcm of gas, Italian energy company Eni said. The country returned to exporter status in September 2018, the government report said, after achieving self-sufficiency in natural gas.Egypt’s gas production reached a record 69.2 billion cubic metres in 2021-2022, growing by more than 65 per cent from the 2015-2016 period.Production at the Zohr gasfield jumped to 2.7 billion cubic metres per day in 2021-2022 and $741m in investments were made. This brought the total investments in the gasfield to $12bn, the petroleum ministry said.Last year, Egypt ranked 13th in the world in natural gas production and second in Africa, BP said.Egypt also reported a fivefold year-on-year increase in liquefied natural gas (LNG) exports in 2021, supported by the resumption of operations at the Damietta plant after nine years.Europe’s gas crisis, caused by supply disruptions triggered by the Russia-Ukraine war, has boosted Egypt’s LNG exports this year.In the first six months of 2022, more than 72 per cent of Egypt’s LNG exports went to Europe, compared with 29 per cent in all of last year, Refinitiv LNG flows data shows.To benefit from record energy prices, Prime Minister Mostafa Madbouly said the country would start rationing electricity consumption in an effort to further increase natural gas exports and foreign currency reserves.
German oil imports up 13.5% in January-July period; bill more than doubles - German crude oil import volumes rose 13.5% in the first seven months of 2022 on a year-on-year basis as the economy recovered from the COVID-19 pandemic, while the bill more than doubled due to higher prices, official data showed on Friday. Russia remained the top supplier, holding a 30.5% share of Germany’s oil imports in the period, monthly statistics from the BAFA foreign trade office showed. The German government is resolved to eliminate imports of oil from Russia by the end of the year under European Union sanctions imposed in the wake of the Russia’s Feb. 24 invasion of Ukraine. A week ago, it took control of a major Russian-owned oil refinery at Schwedt in eastern Germany. Some 23.6% of imports in the January-July period came from the British and Norwegian North Sea, while imports from members of the Organization of the Petroleum Exporting Countries (OPEC) contributed 16.0%. The rest was shared among other sources, including Kazakhstan and the United States. BAFA releases import data with a two-month delay. The impact of the invasion of Ukraine, which has led to economic sanctions on Russia and counter actions in energy flows, is appearing only gradually. Oil imports in January through July from all origins increased to 51.0 million tonnes, from 44.9 million in the same months of 2021, BAFA said. Germany spent 35.9 billion euros ($35.07 billion) on crude oil imports in the first seven months of 2022, 100.6% more than the comparable year-earlier period. The average price paid per tonne on the border rose 76.4% over the same period a year earlier, standing at 702.95 euros, BAFA said.
Huge expansion of oil pipelines endangering climate, says report - More than 24,000km of new oil pipelines are under development around the world, a distance equivalent to almost twice the Earth’s diameter, a report has revealed. The projects, led by the US, Russia, China and India, are “dramatically at odds with plans to limit global warming to 1.5C or 2C”, the researchers said.The oil pumped through the pipelines would produce at least 5bn tonnes of CO2 a year if completed, equivalent to the emissions of the US, the world’s second largest polluter. About 40% of the pipelines are already under construction, with the rest in planning. Global carbon emissions must drop by 50% by 2030 to keep on track with internationally agreed targets for limiting global heating. The developers of the 10,000km of pipelines in construction stand to lose up to $75bn (£70bn) if action on the climate crisis prevents the new pipelines being fully used, according to the analysts at Global Energy Monitor (GEM) who produced the report.Russia, which is facing oil and gas boycotts from the west over the war in Ukraine and wants to increase exports to India and China, is developing 2,000km of new pipelines.Regionally, sub-Saharan Africa is leading the world in pipeline development, with 2,000km of oil pipelines already under construction and an additional 4,500km proposed. The projects include the controversial East African crude oil pipeline, which will transport oil drilled from a national park in Uganda to an export terminal on the coast of Tanzania.“For governments endorsing these new pipelines, the report shows an almost deliberate failure to meet climate goals,” said Baird Langenbrunner at GEM. “Despite climate targets threatening to render fossil fuel infrastructure as stranded assets, the world’s biggest consumers of fossil fuels, led by the US and China, are doubling down on oil pipeline expansion.”The oil industry enjoyed record profits in the last year, the report said, and “is using this moment of chaos and crisis to push ahead with massive expansions of oil pipeline networks”.The UN secretary-general, António Guterres, told world leaders gathered in New York on Wednesday: “The fossil fuel industry is killing us, and leaders are out of step with their people, who are crying out for urgent climate action.” The Guardian revealed in May that the world’s biggest fossil fuel firms are planning scores of “carbon bomb” oil and gas projects that would drive the climate past the temperature targets with catastrophic global impacts. In May 2021, the International Energy Agency said new oil and gas fields were incompatible with the world remaining within relatively safe limits of global heating.
Russia At The Forefront Of Development Of Huge Iranian Oil Fields - The ramping up of production from its hugely oil-rich West Karoun cluster of oil fields to at least 1 million barrels per day (bpd) remains one of Iran’s core strategic economic priorities, along with maintaining gas production of at least 1 billion cubic metres per day, and continuing to build out its value-added petrochemicals production to at least 100 million metric tons per year. Two of these West Karoun fields – North Azadegan, and South Azadegan – are now the focus of a concerted US$7 billion fast-track development plan, involving Russian oil firms at the forefront, with some support from China. Both fields are shared fields with neighbouring Iraq, in which it forms the supergiant Majnoon oil field, which means that the provenance of the oil coming from them can be obfuscated, allowing for transport to any destination. At the signing ceremony for the new US$7 billion development program, Iran’s Petroleum Minister, Javad Owji, outlined that the project would be undertaken by a consortium of Iranian banks and exploration and production companies, including the Khatam al-Anbia Construction Headquarters (KAA). According to the U.S. Department of the Treasury, Khatam is: “The engineering arm of the IRGC [Islamic Revolutionary Guard Corps] that serves to help the IRGC generate income and fund its operations. Khatam al-Anbiya is controlled by the IRGC and is involved in the construction of streets, highways, tunnels, water conveyance projects, agricultural restoration projects, and pipelines.” As part of the IRGC, according to several sources spoken to byOilPrice.com, and to the U.S.’s FDD, the KAA has a specific disbursement line in the country’s annual budget and helps finance Iran’s nuclear program, ballistic missile development, and terrorist activities. In short, the inclusion of the KAA, and several other companies named in the roster of those that will work on the Azadegan development program, appears to be another clear sign that Iran does not see a new iteration of the Joint Comprehensive Plan of Action (JCPOA) being agreed anytime soon, as OilPrice.com has posited for some time.For Russia, though, the oil and gas opportunities in Iran have always been seen as enormous, and rightly so, as, despite its already high levels of oil (and gas) production, Iran can still be seen as an extremely under-developed oil (and gas) power. In crude oil terms alone, the Islamic Republic has an estimated 157 billion barrels of proven crude oil reserves, nearly 10 percent of the world’s total and 13 percent of those held by OPEC. The North and South Azadegan oil fields alone have a combined 32 billion barrels of oil in place, according to the very latest figures from Iran’s Petroleum Ministry, ranking as Iran’s largest joint oil field and the 10th largest oil field in the world. The lifting cost of crude oil at both North and South fields is also exceptionally advantageous for developers, rating on a par with Saudi Arabia’s and Iraq’s best fields as the lowest in the world, at just US$1-2 per barrel. The ultimate production aim for the two Azadegan fields, as announced by Owji, is for a combined 570,000 bpd within the next seven years, up from the current 190,000 bpd. “During the 20-year operation period of the Azadegan field, if we consider the base price of oil per barrel to be 80 dollars, it will generate more than US$115 billion in revenue and income for the country and create employment for 24,000 people,” he added.
Oil Prices Are About To Reverse Course - “That would be the road to hell for America,” JP Morgan’s CEO Jamie Dimon said last week, referring to a suggestion that all big banks divest from the oil and gas industry. In the same week, Aramco’s chief executive warned that years of underinvestment in new oil production are beginning to bear fruit, which is an undersupplied market. Despite these statements that suggested oil prices should move higher, oil fell for much of the week. Yet it wasn’t dragged down by fundamentals. Oil prices are down because many traders and investors are bracing for a recession. The bad news is that even in a recession, oil prices can go higher, and this is exactly what some of those banks that kept JP Morgan company at last week’s Congress hearing expected. Actually, JP Morgan was one of the bullish forecasters. Last week, the banking major’s analysts wrote in a note that they expected Brent crude to rebound to $101 in the fourth quarter. The analysts cited tighter supply as the reason for their forecast.Goldman Sachs is even more bullish. Three weeks ago, the bank’s analysts said Brent could hit $125 next year despite the oil price cap touted by the G7 as a tool both for keeping the market supplied with Russian oil and for lowering prices. They remain bullish to date. Morgan Stanley is a little more modest in its price expectations, seeking Brent crude at $95 per barrel in the last quarter of the year. It’s worth noting that this is a downward revision of the bank’s price outlook for the fourth quarter, which happened two weeks ago, prompted by growing recession fears. UBS also revised down its price expectations earlier this month, again citing recession concerns as well as the continued flow of Russian oil to Asian importers. That downward revision, however, brought Brent to $110, with analysts noting it could rise to $125 by the end of the third quarter of 2023. The reasons that the Swiss bank gave for the expected rebound are as interesting as they are worrying. According to UBS, oil prices wouldn’t rebound because of a recovering global economy. They would rebound because of the greater demand for oil products for electricity generation and because of tighter overall markets as the U.S. ends its SPR oil sale program.
Oil prices fall on fears of less fuel demand - - Oil prices fell for a second day on Monday on fears of lower fuel demand from an expected global recession sparked by rising worldwide interest rates and as a surging US dollar limits the ability of non-dollar consumers to purchase crude. Brent crude futures for November settlement slipped 54 cents, or 0.63%, to $85.61 a barrel at 0511 GMT. US West Texas Intermediate (WTI) crude futures for November delivery dropped 48 cents, or 0.61%, to $78.26. Both contracts slumped around 5% on Friday to their lowest since January. The dollar index that measures the greenback against a basket of major currencies climbed to a 20-year high on Monday. A stronger greenback tends to curtail demand for dollar-denominated oil since buyers using other currencies must spend more to buy crude. Central banks in numerous oil-consuming countries, including the United States, the world’s biggest crude user, have raised interest rates to fight surging inflation which has led to concerns the tightening could trigger an economic slowdown. The disruptions in the oil market from the Russia-Ukraine war, with European Union sanctions banning Russian crude set to start in December, have lent some support to prices. The chief executive officer of energy trader Vitol, Russell Hardy, said that fuel shipments are being affected with Russian oil products expected to flow to Asia and the Middle East while supplies from there go to Europe. Additionally, Hardy told an oil conference in Singapore that more than a million barrels per day (bpd) of US crude is expected to go to Europe to fill the gap in Russian supplies. The head of Colombian state energy company Ecopetrol said at the same conference that it has been selling more oil to Europe, replacing Russian supplies, while it sees growing competition for market share in Asia. Attention is turning to what the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together called OPEC+, may do when they meet on October 5, after agreeing to cut output modestly at their last meeting. But, since OPEC+ is producing well below its targeted output, any announced cut may not have much impact on supply. Data last week showed OPEC+ missed its target by 3.58 million bpd in August, a bigger shortfall than in July. – Agencies
Brent crude slides below $85 a barrel as dollar surges - Brent crude fell below $85 a barrel Monday, as recession fears weighed and the U.S. dollar surged. Brent futures for November settlement shed 2.1% to trade at $84.32 per barrel around 1:20 p.m. on Wall Street. West Texas Intermediate futures fell 2.3% to trade at $76.97 per barrel, a price last seen in early January. The U.S. dollar surged to a high not seen since 2002 Monday, while sterling tumbled to a record low against the currency. On Friday, both Brent and WTI futures fell around 5%. The drop in oil prices is a "macro move led by a stronger dollar," which is triggering fears of a recession, according to Amrita Sen, co-founder and director of research at Energy Aspects. The surge against other currencies means dollar-denominated assets such as oil have grown more expensive for investors holding foreign currencies and "have weighed on futures prices," according to John Morley, associate editorial director for EMEA crude and fuel oil at S&P Global. It comes as central banks around the world — including the U.S. and the U.K. — continue to hike interest rates in an effort to tackle inflation. Investment bank Saxo's strategy team said market sentiment was continuing to deteriorate. "The unrelenting pressure on commodities, including crude oil, continues following Friday's gloomy session which saw accelerated dollar strength and growth pessimism cause a ripple through markets," Ole Hansen, Head of Commodity Strategy at Saxo said. "WTI trades below $80 per barrel while a return to the mid-80's in Brent may soon see OPEC+ action to support prices," he said. As Russia warned it will not supply commodities to nations agreeing to cap prices for its crude and markets anticipate a recession, "the energy sector could be the first to find support once the dollar stabilises," Hansen said. Fears around an economic slowdown continue to mount, with Steve Hanke, professor of applied economics at Johns Hopkins University, putting the chance that the U.S. will fall into recession at 80%. "If [the Fed] continue[s] the quantitative tightening and move that growth rate and M2 (money supply) into negative territory, it'll be severe," Hanke told CNBC's "Street Signs Asia" on Friday.
Oil Prices Slide $2/bbl; Settle at 9-Month Lows on Dollar Strength (Reuters) - Oil prices fell $2 a barrel on Monday, settling at nine-month lows in choppy trade, pressured by a strengthening dollar as market participants awaited details on new sanctions on Russia. Brent crude futures for November settled down $2.09, or 2.4%, to $84.06 a barrel, plunging below levels reached on January 14. U.S. West Texas Intermediate (WTI) crude for November delivery dropped by $2.06, or 2.3% to $76.71, the lowest since Jan. 6. Both contracts had risen early in the session after slumping about 5% on Friday. The dollar index hit a two-decade high, pressuring demand for oil which is priced in the U.S. currency. The impact of a strong dollar on oil prices is at its most pronounced in more than a year, Refinitiv Eikon data shows. Disruption from the Russia-Ukraine war also hit the oil market, with European Union sanctions banning Russian crude set to start in December along with a plan by G7 countries for a Russian oil price cap looking set to tighten supply. Interest rate increases by central banks in numerous oil-consuming countries have raised fears of an economic slowdown that could squeeze oil demand. "With more and more central banks being forced to take extraordinary measures no matter the cost to the economy, demand is going to take a hit which could help rebalance the oil market," Attention is turning to what the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, together known as OPEC+, will do when they meet on Oct. 5, having agreed at their previous meeting to cut output modestly. However, OPEC+ is producing well below its targeted output, meaning that a further cut may not have much impact on supply. "Odds would appear quite high for a downward adjustment in production by the OPEC + organization," Data last week showed OPEC+ missed its target by 3.58 million barrels per day in August, a bigger shortfall than in July.
Oil Prices Give Up Nearly All 2022 Gains - Oil prices have given up nearly all their 2022 gains, analysts at Standard Chartered highlighted in a new market report sent to Rigzone late Tuesday. “We see the Q3 oil surplus - unanticipated by overly-bullish U.S. investment bank and consultant consensus - as the main reason for the recent fall,” the analysts stated in the report. “Our global oil supply and demand model implies a surplus of 1.7 million barrels per day (mb/d) in October, the fourth consecutive month with a surplus of more than 1 mb/d. However, we forecast that the surplus will narrow significantly in November and become a small deficit in December,” the analysts added. “We expect the Q4 surplus to average 0.6 mb/d, one-third of the Q3 surplus. With OECD inventories still well below both the five-year average and the low of the five-year range, we see the reduced Q4 surplus as evidence that there is no fundamental reason for OPEC to rush to make immediate supply cuts,” the Standard Chartered analysts continued. In the report, the analysts also noted that there seems little urgency for OPEC to make cuts in 2023. The analysts did warn, however, that a cut is likely if substantial Iranian volumes return earlier than in Standard Chartered’s model (Q3), Russian output falls by less year on year than the company’s 1.46 mb/d forecast, or global demand grows by less year on year than Standard Chartered’s 1.5 mb/d forecast. “While both supply and demand risks are currently elevated, the argument for significant OPEC cuts in 2023 is weak in our current base case,” the Standard Chartered analysts said in the report. At its latest OPEC+ meeting, which was held on September 5, the group decided to revert to the production level of August 2022 for the month of October 2022, outlining that the upward adjustment of 100,000 barrels per day to the production level was only intended for the month of September 2022. OPEC+’s next meeting is currently scheduled to be held on October 5. Oil soared past $100 per barrel for the first time in years in February as Russian forces escalated a conflict with Ukraine. Brent prices, which started the year at under $80 per barrel, climbed to a 2022 high, so far, of $127.98 per barrel on March 8 and closed over $120 per barrel on several occasions from March to June this year. From around the middle of June, however, Brent prices have steadily dropped from over $122 per barrel to under $90 per barrel. At the time of writing, the price of Brent crude oil stood at $89.24 per barrel.
OPEC+ Discusses Cutting Oil Output - OPEC+ has begun discussions about cutting oil output when it meets next week, as a fragile global economy continues to pressure crude prices. The size of the potential supply reduction is still under consideration, said a delegate, asking not to be identified as the talks are private. The Organization of Petroleum Exporting Countries and its allies will meet to decide November output levels on Oct. 5. Oil prices have slumped by a fifth since early August on fears over the global economy, trading near $88 a barrel in London on Thursday. The losses threaten the spectacular revenue windfall being enjoyed this year by Saudi Arabia and its partners. The OPEC+ alliance showed its readiness to stabilize markets with a symbolic cut at its last meeting. Saudi Energy Minister Prince Abdulaziz bin Salman has vowed to remain “preemptive and pro-active,” while Nigerian Oil Minister Timipre Sylva said last week the group may be “forced” to make additional cuts if crude prices keep falling. Market observers such as UBS Group AG and JPMorgan Chase & Co. have said OPEC+ may need to cut at least 500,000 barrels a day to staunch the oil price slide. All but one of 16 traders and analysts in a Bloomberg survey predicted the alliance will agree a cutback. “We certainly see a significant chance that the producer group will opt for a substantial cut to try to signal that there is indeed an effective circuit breaker in the market,” said Helima Croft, chief commodities strategist at RBC Capital Markets LLC. The cutback could be as much a 1 million barrels a day, she said. At its last meeting on Sept. 5, the group agreed a token reduction of 100,000 barrels a day for October, despite calls from consuming nations to help tame rampant inflation by keeping the taps open. With gasoline prices retreating in the US, some of that external pressure may now be easing. Saudi Crown Prince Mohammed bin Salman met with US government officials including White House Middle East Coordinator Brett McGurk last week.
WTI Bounces Off 9-Month Low on Hurricane Watch, USD Pullback -- After a two-session sell-off triggered by concerns over global recession, Brent crude and West Texas Intermediate futures advanced early Tuesday amid a sharp pullback in the U.S. Dollar Index as investors positioned ahead of the release of fresh U.S. economic data, including durable goods orders and the consumer confidence index, while Hurricane Ian, now over Cuba, is forecast to reenter the eastern Gulf of Mexico, with its current path expected to disrupt at least some oil operations in offshore Gulf waters. Chevron and British Petroleum said Monday they would move oil workers to safety and halt production at some offshore oil platforms as Hurricane Ian is expected to make landfall on the coast of Florida late Wednesday. DTN WeatherOps forecasts that once Ian enters the eastern Gulf, it is forecasted to strengthen further to a peak strength of around 120 knots. Wire services indicated Chevron would close two platforms with combined production capacity of around 120,000 barrels per day (bpd), while BP will close two platforms, each with a capacity of more than 100,000 bpd. In foreign exchange markets, the U.S. dollar weakened 0.5% against a basket of foreign currencies to trade near 113.430, lending support for the U.S. crude benchmark. West Texas Intermediate November futures traded on the New York Mercantile Exchange advanced $1.07 barrel (bbl) to $77.79 bbl, reversing higher from Monday's $76.42 nine-month low on the spot continuous chart. Brent, the international crude benchmark listed on the Intercontinental Exchange, gained $1.33 bbl to trade above $85 bbl. NYMEX RBOB October futures added 5.06 cents to $2.4348 gallon, and the front-month ULSD contract rallied 8.54 cents to $3.2145 gallon. Internationally, the Organization for Economic Cooperation and Development lowered its economic growth projection for the reminder of the year and for 2023, citing debilitating effects of Russia's war in Ukraine on supply chains and inflation. In "Paying the Price of War" released Monday, OECD downgraded global GDP growth next year to 2.2% from 2.8% seen in the prior outlook, with inflation spreading faster and deeper than previously estimated. Inflationary pressures are now seen broadening beyond food and energy almost everywhere, with businesses throughout the global economy passing through higher costs for energy, transportation, and labor. "A risk to the Outlook is that reductions in energy supplies from Russia to the European Union prove much more disruptive than assumed in the projections," warned OECD in its September report, adding that "taken together, these shocks could reduce growth in the European economies by over 1.25% in 2023, relative to baseline, and raise inflation by over 1.5%."
Oil rises from 9-month low on U.S. Gulf supply cuts, softer dollar - Oil rose Tuesday from a nine-month low a day earlier, supported by supply curbs in the U.S. Gulf of Mexico ahead of Hurricane Ian and a slight softening in the U.S. dollar. Analyst expectations that the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, may take action to stem the drop in prices by cutting supply also lent support. OPEC+ meets to set policy on Oct. 5. Brent crude ended the day at $86.27 per barrel for a gain of 2.6%. On Monday it fell as low as $83.65, the lowest since January. U.S. West Texas Intermediate (WTI) crude ended the day 2.33% higher at $78.50 per barrel. Crude soared in early 2022, with Brent coming close to its all-time high of $147 in March after Russia invaded Ukraine, adding to supply concerns. Worries about recession, high interest rates and dollar strength have since weighed. "Oil is currently under the influence of financial forces," "In the meantime, relief rallies, like the one this morning caused by Hurricane Ian in the U.S. Gulf, are viewed as temporary phenomena." A lull in the strength of the U.S. dollar, which earlier hit a 20-year high, provided some support. A strong dollar makes crude more expensive for buyer using other currencies and tends to weigh on risk assets. Supply cuts were back in focus on Tuesday lending some support. BP and Chevron said on Monday they shut production at offshore platforms in the Gulf of Mexico as Hurricane Ian approached the region. The price drop has raised speculation that OPEC+ could intervene. Iraq's oil minister on Monday said the group was monitoring prices and didn't want a sharp increase or a collapse. "Only a production cut by OPEC+ can break the negative momentum in the short run,"
Gasoline Draw Sends Oil Prices Higher - The American Petroleum Institute (API) reported a build this week for crude oil of 4.150 million barrels, while analysts predicted a build of 333,000 barrels. According to API data, U.S. crude inventories have now gained 23 million barrels so far this year—a build made possible only by releasing 166 million barrels from the nation’s Strategic Petroleum Reserve.The build comes as the Department of Energy released 4.6 million barrels from the Strategic Petroleum Reserves in the week ending September 23, leaving the SPR with 422.6 million barrels.In the week prior, the API reported a build in crude oil inventories of 1.035 million barrels after analysts had predicted a build of 2.321 million barrels.WTI rose on Tuesday prior to the data release. At 12:17 p.m. ET, WTI was trading up $1.15 (+1.50%) on the day at $77.86 per barrel—down nearly $7 per barrel on the week. Brent crude was trading up $1.49 (+1.77%) on the day at $85.55—a $5 decrease on the week. Crude oil prices continued to rise throughout the afternoon, with producers cutting supply ahead of Hurricane Ian and rumors that OPEC+ could move to cut production targets for November at its next monthly meeting. U.S. crude oil production data for the week ending September 16 stayed at 12.1 million bpd for the fourth week in a row, according to the latest weekly EIA data. The API reported a draw in gasoline inventories this week of 1.048 million barrels for the week ending September 23, compared to the previous week's 3.225 million-barrel build. Distillate stocks saw a build of 1,438,000 barrels for the week, compared to last week's 1.538-million-barrel increase. Cushing inventories were up by 357,000 barrels this week. Last week, the API saw a Cushing increase of 510,000 barrels. Official EIA Cushing inventory for the week ending September 16 was 24.991 million barrels, up from 24.648 million barrels in the prior week. WTI was trading at $78.46 moments after the release, up 2.28% on the day
Oil Prices Set To Spike Again Due To Struggling Global Supply Chain -A short respite from rising oil and gasoline prices is about to end as 2022 comes to a close. The reasons are numerous, but almost all of them relate directly to the supply chain. Mainstream estimates suggest a return to $100 per barrel for the Brent which would inflate gasoline prices back to around $5 per gallon on average in the US. These projections are likely conservative. It should be noted that it's unusual for the mainstream financial media or mainstream analysts to suggest the idea of a renewed energy price spike. With mid-term elections closing in, higher gas prices would put a damper on any chances democrats might have in maintaining a political majority. Stagflationary pressures already top the list of public concerns in the US, far above social issues and geopolitical conflicts. Higher energy costs would be more than unwelcome going into winter. This is the reason why Joe Biden has been so exuberant about releasing oil supplies from the US strategic reserves for the past several months. Biden's plan unleashed 1 million barrels per day into the supply chain and is set to end in October. The reserves are now depleted to the lowest levels since 1984, with gas prices STILL nearly double what they were when Biden entered the White House. It is essentially market manipulation at the expense of US strategic readiness and for the express purpose of political gain. That said, Biden's ability to continue pouring oil onto the markets to keep gas prices down is dwindling, and even if he is able to continue the strategy past October, a red sweep in November would bring challenges and a freeze on reserves anyway. Another factor is the failing attempts at a nuclear deal with Iran and the lifting of sanctions by the west. The free flow of Iranian oil will not be happening anytime soon, leaving western access to a major oil pool off the table. The next issue is the ever changing situation in the Ukraine war. Russia is already receiving the brunt of the blame for global inflation, but this is clearly nonsense when we take into account the fact that inflation hit 40 year highs months before Russian invaded Ukraine and gas prices were rising well in advance of the conflict. The accusation may become true in certain respects, though, as Russia cuts natural gas supplies to Europe and the EU flails around this winter looking for replacement energy sources. Europe's desperate search for oil, coal and gas will siphon supplies away from the global markets leaving all other countries with less. The obvious result will be much higher prices for everyone. Barring a sudden crisis event such as an expansion of the war in Ukraine or a Chinese invasion of Taiwan, oil prices are still set to rise as supply chain issues multiply. The Department if Energy plans to replenish strategic reserves by purchasing oil stocks into the future at prices set today. The argument is that this will increase domestic oil production. The problem is that this discounts inflation in production costs for shale oil drillers. Set prices would only work as long as drillers can continue to make a reasonable profit. If they can't, they will simply shut down. By extension, the plan also assumes that drillers will be able to produce excess beyond market demand to sell to the government.
Trafigura Wary of Oil Price Spike --There’s downward pressure on oil prices in the short term, but further out the market is vulnerable to sudden price spikes, according to the world’s biggest commodity trader. Sustained under-investment and very little spare capacity will be tested if demand comes back rapidly, said Saad Rahim, chief economist at Trafigura Group. The loosening of China’s Covid Zero policy could quickly lift consumption, prompting a rush for supplies that the market won’t be able to meet, he said. “We’re potentially moving from a world of commodity cycles to a world of commodity spikes because of the under-investment that has taken place in the last decade,” he said in an interview on the sidelines of the APPEC 2022 conference hosted by S&P Global Commodity Insights in Singapore. Global benchmark Brent crude has fallen around 40% from a high in early March on a combination of monetary tightening, recession fears and a surge in the dollar. Saudi Arabia and others, however, have complained that extreme volatility and a lack of liquidity mean the futures market is increasingly disconnected from fundamentals. The macroecnomic headwinds will keep oil prices under pressure in the short term, according to Rahim. For the moment, that’s outweighing supply risks including the threat of a sharp curtailment in barrels from Russia due to the European Union embargo and the longer-term consequences of under-investment, he said. If, for example, the world needed an additional 2 to 3 million barrels a day of oil supply due to recoveries in China or the US, producers would struggle to find those supplies as there’s very little spare capacity, Rahim said. “My view is that people who were not investing at $100 to $120 a barrel this year aren’t going to be investing when it’s $70 to $90,” he said, adding that the extreme volatility in prices also complicates investment decisions. Other events that could prompt a sudden rebound in demand include the Federal Reserve pausing tightening, a post-winter recovery in Europe and the US summer driving season next year, he said.
Goldman Slashes Oil Price Forecasts --Goldman Sachs Group Inc. sharply lowered its oil price forecasts amid increasing signs of a global economic slowdown, but said that crude would probably climb from current levels because the market is still “critically tight.” “A strong US dollar and falling demand expectations will remain powerful headwinds to prices into year-end,” Goldman analysts including Damien Courvalin and Callum Bruce said in a note on Tuesday. “Yet, the structural bullish supply set-up -- due to the lack of investment, low spare capacity and inventories -- has only grown stronger, inevitably requiring much higher prices.” The Wall Street bank predicts Brent will average $100 a barrel in the last three months of the year. That’s above today’s price of around $85, but below its prior forecast of $125. The benchmark will probably average $108 in 2023, according to the analysts. They previously predicted $125. Oil prices soared to more than $120 a barrel in the wake of Russia’s invasion of Ukraine in February. They’ve slumped 30% since early June as central banks turn more hawkish and as coronavirus lockdowns in China crimp demand in the world’s biggest crude importer. Still, oil markets seem to be assuming there will be no real economic growth outside of China next year, according to Goldman. That’s below the consensus among economists and Goldman’s own projection of 1% growth. “It would take an economic hard-landing to justify sustained lower prices,” the Goldman said. The bank says China will likely maintain its Covid Zero strategy until the middle of 2023. “A ‘China reopening’ is not so much bullish oil demand as it is a removal of a significant downside risk to global balances and price expectations,” it said. Goldman recommended that investors buy Brent futures contracts expiring in December 2024, which trade around $71 a barrel. “While we acknowledge that the short-term path to prices is likely to remain volatile, we find the opportunity most compelling to position for higher prices than for lower prices,” the bank said. The Saudi Arabia-led OPEC cartel will probably keep its production near today’s levels for the rest of the year, said Goldman. A “large cut” from the group -- scheduled to meet on Oct. 5 along with its partners including Russia -- would contribute to a rebound in prices, it said.
Oil Gains Ahead of EIA Data as Hurricane Ian Nears Florida - Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange advanced in early trade Wednesday, with West Texas Intermediate up modestly as traders assess limited disruption to Gulf of Mexico oil production as Hurricane Ian draws closer to a Florida landfall later Wednesday and the U.S. dollar strengthened. The Bureau of Safety and Environmental Enforcement Tuesday afternoon reported approximately 190,358 barrels per day (bpd) or 11% of current oil production and 8.56% of natural gas production in the Gulf of Mexico has been shut-in in preparation for Hurricane Ian. Based on available data, personnel have been evacuated from a total of 12 production platforms, which represents 2.3% of the 521 manned platforms in the Gulf. British Petroleum, meanwhile, said Tuesday the company was working to redeploy offshore personnel to at least two offshore platforms, Na Kika and Thunder Horse, after determining conditions were safe. The company said Hurricane Ian "no longer poses a significant threat to our Gulf of Mexico assets." Early morning gains for the oil complex came despite American Petroleum Institute data released late Tuesday that showed commercial crude and distillate fuel stocks increased last week, offsetting a surprise draw in gasoline inventories. Further details of the report showed commercial crude oil stocks posted a build of 4.150 million barrels (bbl) compared with an estimate for a 300,000-bbl decline. Stocks at the Cushing, Oklahoma, tank farm -- the NYMEX delivery point for WTI futures -- increased 357,000 bbl. Gasoline stocks dropped 1.048 million bbl in the week profiled, missing estimates for a build of 900,000 bbl. API reported distillate inventories increased 438,000 bbl in the week ended Sept. 23 versus calls for a 100,000-bbl draw. Underpinning gains in the oil complex Wednesday morning are reports suggesting Russia is lobbying for a 1 million bpd cut in OPEC+ production when officials meet on Oct. 5. With an EU embargo on Russian oil exports set to come into force later this year, and Russia significantly underproducing its quota, Moscow has every incentive to implement a steep production cut. Saudi Arabia, the de-facto leader of the group, has indicated on multiple occasions that the kingdom stands ready to cut output to defend prices despite pleas from Western governments to release more supply into the market. Last month, OPEC+ agreed to cut oil production by 100,000 bpd in October, reversing a 100,000-bpd increase agreed upon for September. Near 7:45 a.m. EDT, WTI November futures added $0.22 to trade near $78.72 bbl, reversing higher from Monday's $76.42 nine-month low on the spot continuous chart. Brent, the international crude benchmark listed on ICE, traded little changed near $86.32 bbl. NYMEX RBOB October futures added 0.37 cents to $2.4977 gallon, and the front-month ULSD contract rallied 3.84 cents to $3.2983 gallon.
WTI Extends Gains After Surprise Crude Draw -- Oil prices are up this morning, with WTI back at $80, as Hurricane Ian shuts in Gulf of Mexico production. That was enough to overcome the strong dollar headwind. Another factor putting upward pressure on prices is the upcoming meeting of OPEC+ on Oct. 5. Russia is reported to be pushing for an output cut of around 1 million barrels a day. DOE:
- Crude -215k (API +4.2mm)
- Cushing +692k
- Gasoline -2.42mm - biggest draw since August
- Distillates -2.89mm - biggest draw since April
Following API's reported 4.2mm barrel build, the official data showed a complete opposite with a small 215k draw and while Cushing stocks rose for the second week, products also saw major draws (perhaps driven by pre-emptive shifts before Hurricane Ian)... Source: Bloomberg. Continued US emergency oil releases (4.6mm last week) brought Strategic Petroleum Reserve supplies down to 422.6 million barrels, according to preliminary Energy Department data. That means the stockpile could dip below commercial inventories for the first time since it was created in the 1980s. US Crude production slipped a little last week, as rig counts rebounded... WTI was hovering just below $80 ahead of the official data and spiked above $81 after... Finally, we note that regular gas prices at the pump are up 8 days in a row... Is that still the Putin Price Hike? Or are we back to blaming the gas station owners for gouging?
Oil prices rise on surprise drop in U.S. crude, fuel stocks- Oil prices rose on Wednesday following unexpected drawdowns in U.S. crude and fuel stocks, outweighing downward pressure from the continued strength in the U.S. dollar. Brent crude futures were up $1.69, or 2%, at $87.96 per barrel by 10:41 a.m. EST (1441 GMT), while U.S. West Texas Intermediate (WTI) crude futures rose $2.14, or 2.7%, to $80.64 a barrel. U.S. crude stocks fell by 215,000 barrels in the most recent week, while gasoline and distillate inventories declined by 2.4 million and 2.9 million barrels respectively, as refining activity declined following several outages. In the Gulf of Mexico, about 190,000 barrels per day of oil production, or 11% of the Gulf's total, was shut-in due to Hurricane Ian, according to U.S. government figures. Wholesale gasoline prices have been on the rise in the United States as well after refiners in the Midwest and West Coast shut. Global equities pulled off two-year lows on Wednesday, after the Bank of England said it would step into the bond market to stem a damaging rise in borrowing costs, thereby dampening investor fears of contagion across the financial system. The dollar hit a fresh two-decade peak against a basket of currencies on Wednesday as rising global interest rates fed recession concerns. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies. Goldman Sachs cut its 2023 oil price forecast on Tuesday, due to expectations of weaker demand and a stronger U.S. dollar but said global supply disappointments only reinforced its long-term bullish outlook. Producer group OPEC+ meets on Oct. 5, where Russia is likely to propose an output cut of around 1 million barrels per day, a source familiar with Russian thinking said on Tuesday.
Oil prices jump after U.S. crude, fuel stocks drop, dollar weakens (Reuters) - Oil prices rose on Wednesday for a second day, rebounding from recent losses as the U.S. dollar eased off recent gains and U.S. fuel inventory figures showed larger-than-expected drawdowns and a rebound in consumer demand. Brent crude futures settled up $3.05, or 3.5%, at $89.32 per barrel. U.S. West Texas Intermediate (WTI) crude futures ended up $3.65, or 4.7%, to $82.15 a barrel. Analysts said oil prices, down more than 22% during the third quarter, may be bottoming out as Chinese demand shows signs of rebounding and the U.S. sales of strategic reserves come to a close. U.S. inventory figures showed consumer demand rebounded, though refining product supplied remained 3% lower over the last four weeks than the year-ago period. U.S. crude stocks fell by 215,000 barrels in the most recent week, while gasoline inventories declined by 2.4 million barrels and distillate inventories by 2.9 million barrels, as refining activity declined following several outages. Refining activity dipped, but refiners are still running at 90.6% of overall capacity in the United States, the highest for this time of year since 2014, on both domestic and export demand. The dollar hit a fresh two-decade peak against a basket of currencies on Wednesday before pulling back. A strong dollar reduces demand for oil by making it more expensive for buyers using other currencies. In early afternoon U.S. hours, the dollar index was down 0.9%. "These are all dollar-driven rallies across the board," . "All raw material dominated currencies are up - crude is not just moving in isolation here." Goldman Sachs (NYSE:GS) cut its 2023 oil price forecast on Tuesday, due to expectations of weaker demand and a stronger U.S. dollar but said global supply disappointments only reinforced its long-term bullish outlook. Global equities pulled off two-year lows on Wednesday, after the Bank of England said it would step into the bond market to stem a damaging rise in borrowing costs, dampening investor fears of contagion across the financial system.
Oil Gains on EU-Russia Gas Standoff, NATO Warnings - New York Mercantile Exchange oil futures and Brent crude traded on the Intercontinental Exchange advanced mid-morning trade Thursday as investors assessed new geopolitical risks steaming from a suspected sabotage attack on Nord Stream 1 and 2 pipelines that have already triggered a military warning from the North Atlantic Treaty Organization to all parties responsible for the attack. NATO officially blamed sabotage for the series of blasts that severely damaged Nord Stream pipelines, leading to the leaks on three separate locations. Sudden and unexplained leaks from the undersea Nord Stream pipelines from Russia to Germany appear "not a coincidence" the European Union said on Thursday, a statement that adds weight to fears of sabotage. While no evidence has been provided, speculations are swirling that Russia itself might be behind the attack on this critical infrastructure. On Wednesday, Kremlin's spokesperson Dimitry Peskov dismissed those suggestions as "quite predictable and also predictably stupid." The attack adds news risks to the EU-Russia gas standoff that escalated earlier this month when Gazprom halted gas deliveries through Nord Stream 1, blaming the debilitating impact of the Western sanctions. Nord Stream 1 is the single biggest pipeline for gas from Russia to Europe and has the capacity to deliver 55 billion cubic meters (bcm) of gas a year. Continued supplies through the pipeline have been seen as crucial to prevent a deepening of the energy crisis. Further lending support to the oil complex, U.S. Energy Information Administration reported on Wednesday total refined product supplied to the U.S. market, a measure of demand, jumped 1.8 million barrels per day (bpd) last week to 20.77 million bpd, the third-highest weekly implied demand rate during the third quarter, according to EIA data. U.S. demand for distillate fuels, which correlates closely with economic activity, unexpectedly spiked 768,000 bpd to 4.178 million bpd -- the highest weekly consumption rate since early July. For gasoline, demand rose 504,000 bpd from the previous week to 8.825 million bpd, and gasoline stocks were drawn down by a hefty 2.4 million barrels (bbl) to 212.2 million bbl, a nearly 11-month low. Near 9:30 a.m. EDT, November WTI futures slipped $0.30 to $81.83 per bbl, while ICE November Brent futures declined $0.20 to $89.14 per bbl ahead of expiration Friday afternoon, with the December contract expanding its discount to November delivery to $1.42 per bbl. NYMEX October RBOB futures fell 4.16 cents to $2.5363 per gallon, with the November contract traded near $2.5350 per gallon. The October ULSD contract declined 3.95 cents to $3.4116 per gallon, widening its premium to the November contract to 11.46 cents. October products futures also expire Friday afternoon.
Oil slips after hitting $90/bbl as OPEC+ considers output cut -Oil prices dropped after touching the $90 per barrel mark on Thursday as traders awaited clarity on potential OPEC+ cuts next week and as the dollar eased off 20-year highs. Brent crude futures settled at $88.49 per barrel for a loss of 0.9%, after earlier rising as high as $90.12. U.S. crude futures for November ended the day 1.1% lower at $81.23 per barrel. Leading members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have begun discussions about an oil output cut at their next meeting on Oct. 5, three sources told Reuters. One OPEC source told Reuters a cut was "likely", while two other OPEC+ sources said key members had spoken about the topic. Reuters reported this week that Russia is likely to propose that OPEC+ reduce oil output by about 1 million barrels per day(bpd). "Seesaw trade may be common over the next week, unless we get more clarity from OPEC+ sources on the likely size of any adjustment and what it means for previous missed quotas," The market also eased as the threat of Hurricane Ian receded with U.S. oil production expected to return in coming days after about 158,000 bpd was shut in the Gulf of Mexico as of Wednesday, according to federal data. Crude benchmarks have rebounded from nine-month lows earlier this week, buoyed by a dip in the U.S. dollar index and a larger than expected U.S. fuel inventory drawdown. The dollar index dropped again on Thursday, easing off 20-year highs, indicating some more risk appetite from investors. "Inflation fears and the Feds determination to deal with them had risk assets on the ropes for much of the session, but the dollar slide to negative territory has put a bid in crude oil," Further support for oil prices could come from the United States announcing new sanctions against entities that facilitated Iranian oil sales. "I think traders have almost given up on a nuclear deal being agreed and this announcement from the U.S. appears to be a make or break move," In China, the world's biggest crude oil importer, travel during the forthcoming week-long national holiday is set to hit its lowest level in years as Beijing's zero-COVID rules keep people at home while economic woes curb spending.
Oil Futures Head for Quarterly Loss Amid Global Slowdown -- Oil futures moved mixed in early trade on the last session in September and the third quarter, although all petroleum contracts are on track for their first quarterly losses since 2020 amid concerns over rapidly deteriorating global demand growth hammered by high inflation and aggressive rate hikes from several central banks. Manufacturing data out of China, released overnight, revealed the world's second largest economy struggled to rebound at the end of the third quarter, with factory activity contracting at a sharper pace in September than in the prior two months. China's Caixin manufacturing index fell 1.4 points from late August to 48.1, down for the second consecutive month and well below the 50-point threshold that separates growth from contraction. With central banks around the world rushing to restrict the flow of credit and raise interest rates, the demand for Chinese manufacturing goods is unlikely to improve markedly in the fourth quarter. September's data suggest the European economy has already fallen into recession, while the Federal Reserve is unlikely to manage a soft landing for the U.S. economy as it steps up its fight against broadening inflation. Federal Reserve Bank of Cleveland President Loretta Mester reiterated on Thursday that the central bank, which has raised the benchmark federal funds rate 3% this year, must continue aggressively in lifting rates even if that sends the economy into a downturn. The same sentiment has been echoed in comments from St. Louis Federal Reserve Bank President James Bullard who believes the market has finally gotten the message of the central bank's resolve to fight inflation. Near 8 a.m. EDT, November West Texas Intermediate futures slipped $0.29 to $80.92 barrel (bbl). ICE November Brent futures traded little changed near $88.50 bbl ahead of expiration Friday afternoon, with the December contract expanding its discount to November delivery to $1.67 bbl. NYMEX October RBOB futures fell 3.26 cents to $2.4750 gallon, with the November contract trading near $2.3696 gallon. The October ULSD contract declined 7.11 cents to $3.3435 gallon, widening its premium to the November contract to 10.93 cents. October products futures also expire Friday afternoon.
Oil Falls but Notches Weekly Gain as OPEC+ Considers Output Cut (Reuters) -Oil prices dipped on Friday in choppy trading but notched their first weekly gain in five on Friday, underpinned by the possibility that OPEC+ will agree to cut crude output when it meets on Oct. 5. Brent crude futures for November, which expire on Friday, fell 53 cents, or 0.6%, to $87.96 a barrel. The more active December contract was down $2.07 at $85.11. U.S. West Texas Intermediate (WTI) crude futures fell $1.74, or 2.1%, to $79.49. Both contracts rose by more than $1 during the session but dropped on news that OPEC's oil output rose in September to its highest since 2020, surpassing a pledged hike for the month, according to a Reuters survey on Friday. "There is definitely some profit taking from the gains we saw earlier in the week. $80 is sort of the pivot point these days," "Increased worries about financial stability in the UK ... are undermining the demand outlook once again," Brent and WTI gained 2% and 1% on a weekly basis, marking the first weekly rise since August and following nine-month lows hit this week. Money managers cut their net long U.S. crude futures and options positions in the week to September 27, the U.S. Commodity Futures Trading Commission (CFTC) said. While the dollar has dropped from 20-year highs earlier in the week, it gained through the day. A stronger greenback makes dollar-denominated oil more expensive for buyers holding other currencies, reducing demand for the commodity. The market has seen support from the prospect of the Organization of the Petroleum Exporting Countries (OPEC) and its allies considering cutting production quotas by between 500,000 and 1 million barrels per day (bpd) at their Oct. 5 meeting. "A deteriorating crude demand outlook won't allow oil to rally until energy traders are confident that OPEC+ will slash output," Analysts expect a production cut because demand fears linked to a possible global economic slowdown and rising interest rates have weighed on crude prices. U.S. energy firms this week added two oil rigs for a third week in a row, but growth in the third quarter slowed due to recession fears and nagging supply shortages. Top White House officials are also set to meet with oil executives on Friday to discuss Hurricane Ian and low gasoline inventories as President Joe Biden warns the industry not to price-gouge consumers, according to two sources familiar with the matter. Brent and WTI prices finished the third quarter with chunky 23% and 25% declines respectively.
Oil futures end lower for the session, month and quarter - Oil futures declined Friday, contributing to their losses for the month and quarter as concerns over a potential recession raised expectations for a slowdown in demand. Still, oil supply will get tighter in the winter and "now that most of the crude demand destruction has been priced in, prices should stabilize going into the year-end," said Edward Moya, senior market analyst at OANDA. November WTI crude fell $1.74, or 2.1%, to settle at $79.49 barrel on the New York Mercantile Exchange, with front-month prices still up nearly 1% for the week. For the month, prices lost 11%, and ended the quarter down almost 25%, according to Dow Jones Market Data.
Saudi Oil Driller IPO Covered Within Hours - Arabian Drilling Co., a Saudi Arabian oilfield-services company partly owned by Schlumberger NV, took only hours to garner enough investor orders to fully cover an initial public offering that could raise as much as 2.67 billion riyals ($710 million). Books are covered across the price range, according to a message sent to investors and seen by Bloomberg News. Arabian Drilling set the range at 90 riyals to 100 riyals per share, valuing the company at as much as 8.9 billion riyals, according to a statement on Wednesday. Investors snapping up all shares on offer shows demand for Saudi IPOs remains strong even after its stocks became the first in the Gulf to fall into a bear market this week, dragged lower by the recent plunge in oil prices. Arabian Drilling’s IPO is the largest in the kingdom since pharmacy chain Nahdi Medical Co. raised $1.4 billion, and joins a steady flow of Gulf companies that are tapping markets amid high oil prices. There have already been 22 listings in Saudi Arabia this year, more than any other full-year total, data compiled by Bloomberg show. Investor demand for listings in the Gulf has been strong, with the region emerging as a bright spot in a quiet IPO market globally. Still, the outlook is darkening with oil falling almost 40% since June on fears that a global economic slowdown caused by central banks’ aggressive policy tightening will hurt energy consumption. Schlumberger and Industrialization & Energy Services Co., majority controlled by the Saudi wealth fund, the Public Investment Fund, will sell 17.7 million shares in the IPO. Arabian Drilling will sell 9 million shares, using the proceeds to scale up its onshore and offshore fleet and expand operations in the Gulf Cooperation Council region. It counts Saudi oil giant Aramco as one of its main customers, and is looking to capitalize on the state energy producer’s plans to boost oil and gas production. The bookbuilding period for institutional investors will run to Oct. 5, with the final offer price announced on Oct. 11.
Taliban Sign Deal With Russia to Buy Cheap Oil and Gas - Afghanistan’s ruling Taliban have signed an agreement with Russia to import fuel and wheat at a discount as the country struggles to feed its population and seeks to boost regional trade a year after regaining power. Items like gasoline, diesel, gas and wheat will be purchased in Russian rubles and at a “special discount,” said Abdul Salam Jawad Akhundzada, a spokesman of the Ministry of Commerce and Industry, by phone from Kabul on Wednesday. Preparations are underway to start importing the products “within days or weeks,” he said. The deal, the largest such agreement the Taliban has signed since they returned to power, includes one million tons each of petrol and diesel, half a million tons of liquefied petroleum gas, and two million tons of wheat to be supplied annually until an unspecified date, Akhundzada said. More longer-term deals with Moscow are expected in the future, he added. The agreement follows a visit to Russia last month by Afghanistan’s Minister of Commerce and Industry Nooruddin Azizi. In June, the Taliban struck a deal with Iran to purchase 350,000 tons of petroleum products to ease fuel prices. No country has formally recognized the Taliban government however, Russia is one of a few to have kept its embassy in Kabul open. Moscow has also approached several Asian countries to discuss possible long-term oil contracts at steep discounts as US officials continue to try and push a plan that would cap the price of the country’s oil, a Western official told Bloomberg last month. Afghanistan consumes 1.3 million tons of fuel annually, imported mostly from Uzbekistan, Turkmenistan, and Iran, according to the ministry.
Syria Demands Compensation For Oil Losses In UN Speech - In a rare plea before the U.N. General Assembly in New York, Syria's top diplomat demanded compensation for oil and gas stolen by the United States, as well as its monumental energy losses over the course of the 11-year long war."The war against Syria, ultimately, was an attempt by the West to maintain control over the world," Syrian Foreign Minister Faisal Mekdad told the assembly on Monday, demanding further that the continuing US military occupation in the oil and gas rich northeast "should end immediately, without conditions."He informed UN leaders that "direct and indirect" oil and gas sector losses over the course of the conflict have reached $107 billion, stressing further that Damascus is demanding compensation."Fighting terrorism does not happen through an illegitimate international coalition that violates Syria’s sovereignty and destroys towns and villages," Mekdad asserted. He said that any 'counterterror' campaign or foreign presence on sovereign Syrian soil must be done in direct coordination with President Bashar al-Assad. While during the Trump administration years the hundreds of American troops stationed in eastern parts of Syria were there to "secure the oil" - as Trump had often repeated, the Biden administration has chosen to stress a continued counter-terrorism mission. And yet, US forces and their Kurdish SDF proxies continue to occupy the largest and most important oil and gas fields in the region. Russia too has long called for the immediate exit of American forces, and has of late appeared to step up its air campaign against anti-government jihadist elements in Idlib, which has put Turkey on edge. Pro-Iranian militias have reportedly launched sporadic attacks on US bases, meanwhile.Ironically, just last week in President Joe Biden's address to the UNGA, he declared "you cannot seize another country’s territory by force. The only country doing that is Russia."
US troops kill 15-year-old girl in Iraq - The Iraqi Security Media Cell promised an investigation into the murder, which it initially described as a “random shooting.” However a statement given by Iraq’s security forces, quoted by The Cradle, confirmed the culpability of the US military: “The killing of Zainab Essam Majed coincided with the presence of training operations for the American forces … the bullet that was taken out of the girl’s head confirms that it is from one of the weapons used by the American forces in the embassy and airport.” The shooting has provoked widespread outrage, with locals demanding to know why American soldiers were holding live-fire exercises near residential areas. On September 22, Iraqi legislator Ahmed Taha al-Rubaie, from the Basra province, called upon the Baghdad government to summon the American ambassador and present her with a formal note of protest, along with taking legal measures to hold those responsible for the murder accountable. In a post on Twitter, Rubaie wrote, “Even though two days have passed since the teenage girl was killed by a bullet fired during US military exercises near the Victoria base northwest of Baghdad, the US Embassy has not bothered to issue any official apology for the unjust incident.” He went on, “The death, which occurred as a result of the use of live rounds during military drills near residential neighborhoods, exhibits an outrageous disregard for the Iraqi blood and a blatant disrespect for the country's sovereignty.”
Women in Iran Take Center Stage in Antigovernment Protests - Women have been casting off their legally required head scarves, forming the primary image of the protests. But grievances against a repressive regime go far beyond the hijab. For Yasi, the news felt too close to ignore: A young woman, Mahsa Amini, had died in the custody of Iran’s morality police, days after being arrested for failing to cover her hair modestly enough.When protests broke out after Ms. Amini’s death, 20-year-old Yasi — the first woman in her immediate family to reject the hijab — ran into the streets, waving the thin shawl she usually wears over her blond hair in public, in a grudging concession to the law of the land.“I keep thinking Mahsa could be me; it could be my friends, my cousins,” she said in an interview from Tehran, where protests have since raged every night outside her family’s apartment complex. “You don’t know what they will do to you.”The nationwide protests challenging Iran’s authoritarian leadership, now in their 10th day, have fed on a range of grievances: a collapsing economy, brazen corruption, suffocating repression and social restrictions handed down by a handful of elderly clerics. On Monday, they showed no sign of abating, and neither did the harsh government effort to suppress them despite international condemnation.But their catalyst was the death of Ms. Amini, 22, on Sept. 16 and its connection to the hijab law, the most visible manifestation of a theocracy that makes women second to men in politics, in parenting, in the office and at home.Tossing head scarves into bonfires, dancing bareheaded before security agents, young women have been at the forefront of these demonstrations, supplying the defining images of defiance.Iranian women had participated in protests against the clerical establishment before, but never before had they been spark, leaders and foot soldiers all at once. More than two dozen have been arrested so far, and several female protesters have been killed.It was a female journalist, Niloufar Hamedi of Shargh, an Iranian daily, who first brought Ms. Amini’s story to light. Ms. Hamedi was arrested last week and is being held in solitary confinement at Evin prison, according to her colleagues. Two years after ultraconservative Muslim clerics seized power in the 1979 revolution, they required women in government offices to wear the head scarf, then all women and girls over age 9, justifying it with Shariah law. The hijab, they proclaimed, would protect female chastity and honor. But it has also become a weak point for the regime, symbolizing social restrictions that men and women alike chafe at — and flout behind closed doors.
Tehran Summons Western Ambassadors For "Meddling" As Protest Death Toll Climbs To Over 40 - Iran’s foreign ministry has blamed Western "meddling" for the outbreak and growth of raging protests inside the country, which have now reached a full week, and have left at least 35 dead, according to the government's official death toll. From Friday to Saturday this figure had more than doubled, with Tehran officials initially citing 17 dead, and then revising it upwards. This includes five security officers, according to state media, which has painted the "anti-hijab" demonstrations as violent. By Saturday evening, state media counted 41 among the deceased. On Sunday Iran summoned the ambassadors of the UK and Norway to condemn their governments for allegedly fueling the unrest, as reported in The Hill: The director-general of Western Europe within Iran’s foreign ministry called out Norway’s Parliament speaker for allegedly "prejudicing and unrealistic comments" about recent protests in Iran, according to Iran’s official news agency, IRNA. The U.K. ambassador, meanwhile, was chastised for a London-based, Persian-language "hosting of the media" that Iran believes has produced "put provocation and invitation to turbulence and expansion of riots in Iran on top of their agenda," according to a second report from IRNA. The protests across dozens of cities began following the death in policy custody of 22-year old Mahsa Amini. She had been reportedly detained for improper attire, or failing to properly wear an Islamic head-covering, after which she turned up dead.Her supporters say she was beaten to death, while Iranian authorities have said she collapsed from a heart-related incident. The US has since sanctioned Iran's notorious 'morality police' and the heads of multiple security agences.The UN has meanwhile condemned the harsh police crackdown, which a statement has said includes sending paramilitary forces and at times live ammunition interspersed with riot control measures. But it's clear that in many instances the demonstrators are "fighting back"...
‘Huge problem’: Iranian drones pose new threat to Ukraine - It was a little over a week ago that Iranian drones first began appearing in the skies over Ukraine. Andriana Arekhta, a junior sergeant with the Ukrainian Armed Forces, said the drones flew from Crimea to attack her special forces unit fighting near the southern city of Kherson. The drones evaded the soldiers’ defenses and dropped bombs on their position, destroying two tanks with their crews inside. “It’s very difficult to see these drones on radars,” said Arekhta, who traveled to Washington, D.C., last week as part of a delegation of female Ukrainian soldiers. “It’s a huge problem.” Over the past week, Russia has deployed Shahed and Mohajer combat drones imported from Iran in greater numbers across Ukraine, with devastating results. Some hit combat positions, smashing tanks and armored vehicles, while others struck civilian infrastructure, including in the port city of Odesa. In his nightly address on Friday, Ukrainian President Volodymyr Zelenskyy said his country’s anti-aircraft forces had shot down more than a dozen drones in the eastern Dnipropetrovsk region and Odesa. The Ukrainian Air Force identified them as Shahed-136 kamikaze drones and Mohajer-6 drones that carry munitions and can also be used for reconnaissance. But in interviews, a Ukrainian activist and three soldiers said the Iranian drones pose a major threat to both fighters and civilians. Their arrival on the battlefield makes the need for the West to send additional modern weaponry even more urgent, as Kyiv tries to seize on recent gains to retake as much territory as possible before winter sets in, they said. The Iranian drones appear to be a potential game-changer for the Russians. They are relatively small and fly at low altitude, evading Ukrainian radars. Arekhta said she could shoot them down with Stinger anti-aircraft missiles, but only during the day because the U.S.-provided weapons do not come with a night-vision system.
8th EU Sanctions, Oil Price Cap Will "Make Kremlin Pay" For 'Sham' Referendums: Von Der Leyen -European Commission president Ursula von der Leyen on Wednesday touted that newly prepared EU sanctions will "make the Kremlin pay" for conducting its "sham" referendums in occupied Ukraine. Russian media the evening prior declared a sweep in favor of four regions joining the Russian Federation - including Donetsk, Luhansk, Kherson and Zaporizhzhia. President Putin is expected to announce their integration into Russia in a Friday speech."We do not accept the sham referenda and any kind of annexation in Ukraine, and we are determined to make the Kremlin pay for this further escalation," von der Leyen told a scheduled press briefing in Brussels.She announced a proposed eighth round of sanctions in a package that includes an expanded ban on Russian products and key technology, particularly out of Russia's aviation, electronics, and chemical products sectors. The new package when implemented is "expected to deprive Moscow of an additional 7 billion euros ($6.7 billion) in revenues," according to the EC chief's announcement.The new package also includes a range of targeted sanctions on Russian ministry and military officials, including officials responsible for organizing the Ukraine referendums. Additionally, EU nationals will be barred from having high-paying roles in Russian state-owned companies.Perhaps more important, and controversial given the fresh sanctions would need unanimous approval by the EU’s 27 member states before implementation, is the oil price cap. Currently, partial prohibitions targeting Russian crude will kick in on December 5th. Though it doesn't extend directly to shipping, a June sanctions package saw EU countries agree to block European companies from providing insurance and financial services for Russia's seaborne oil. In the Wednesday announcement, von der Leyen previewed, "We are laying the legal basis for this oil price cap." This as Bloomberg is confirming this would include "a price cap for Russian oil sold to third countries." But therein lies the biggest hurdle towards its passage as member states like Hungary have long warned that dramatic changes in its predictable energy supply levels received from Gazprom would put Hungary's entire economy at risk.
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