US oil prices rose for a second straight week after pipeline exports from Iraq were cut off and US oil supplies fell by much more than was expected ...after rising 3.5% to $69.26 a barrel last week as oil traders refocused on supply and demand fundamentals following the prior week's bank panic induced sell-off, the contract price for the benchmark US light sweet crude for May delivery jumped over $2 in overseas trading on Monday, after a halt to oil exports from Iraqi Kurdistan via Turkey raised supply concerns, then climbed higher in early New York trading after Russia announced it would station tactical nuclear weapons in Belarus, escalating risks to European security and refocusing sentiment on the potential for disruption of Russian production and petroleum exports, and rallied to settle $3.55 or 5.1% higher at $72.81 a barrel after an acquisition of the failed Silicon Valley Bank eased concerns that financial turmoil would hurt the economy and curtail fuel demand....oil prices continued to trend higher on Tuesday on ongoing Iraqi supply concerns and on easing fears over the banking crisis, and were further supported by reports that traders believed there was some government buying of crude to refill the Strategic Petroleum Reserve, before giving up more than half of the days gains to settle 39 cents higher at $73.20 a barrel as traders continued to monitor the economic fallout from the turmoil in the banking sector, which would likely lead to a marked tightening of credit conditions in coming weeks and months...oil prices extended their gains overnight into Wednesday, after the American Petroleum Institute reported an unexpected large draw from domestic crude supplies, and continued to rise after the EIA reported an even larger draw from US oil supplies and a larger than expected drop in gasoline supplies, but then edged lower in choppy trading to settle down 23 cents on the day at $72.97 a barrel, as traders decided to pocket their profits from two straight days of gains, and as markets vacillated over supply tightness....oil prices continued to erase Wednesday’s early gains in overnight trading, but bounced off their lows and retraced all of the previous losses by mid-day Thursday, still supported by the news that producers had shut in or cut output at several oilfields in the Kurdistan region of northern Iraq following a halt to their export pipeline, and by the unexpected draw in crude stocks reported by the EIA on Wednesday morning, and rallied into the close to settle $1.40 higher at $74.37 a barrel, as brighter prospects for the Chinese and U.S. economies and tighter supplies helped lift prices to their highest finish since mid-March... oil prices climbed further in early Asian trading on Friday as sentiment was boosted by an expansion in factory activity in China, the world's largest crude importer, and as concerns grew about Middle Eastern supply, and settled the last trading day of March and the first quarter $1.30 higher at $75.67 a barrel, after U.S. inflation data showed a welcome deceleration in core services prices, signaling consumer demand was ebbing under pressure from the Fed's rate increases...oil prices thus ended 9.3% higher on the week, but were still down for the month and the quarter, after registering their fifth straight monthly decline..
natural gas prices, on the other hand, finished lower for a fourth straight week after forecasts turned warmer and gas in storage fell less than had been expected... after falling 5.2% to $2.226 per mmBTU last week as expectations of coming spring weather more than offset slightly cooler near term forecasts, the contract price of US natural gas for April delivery opened 10 cents lower on Monday following a bearish shift in weather models over the weekend, and didn't recover before settling 12.8 cents lower at $2.088 per mmBTU, on forecasts for mild enough weather to allow utilities to start injecting gas into storage at the beginning of April....gas contracts traded slightly higher early Tuesday, but then turned south again as warming forecasts had seemingly removed hope for a late-season cold surge. and settled at a 30 month low of $2.030 per mmBTU on rising output and mild weather forecasts, even though the amount of gas flowing to LNG export plants was on track to hit a monthly record high in March...natural gas prices again moved lower on the last day of trading for the April contract on Wednesday, "as the intersection of robust production and waning demand again captured traders’ attention" as the April contract expired 3.9 cents lower at $1.991 per mmBTU, the first close below $2 since September 2020, while the more widely traded natural gas contract for May delivery eked out a 3.7-cent gain and settled at $2.184 per mmBTU...now quoting the price of the May natural gas contract, prices hit their intraday high ahead of the weekly storage report early on Thursday, but pulled back in the early afternoon after the marginally bearish report hit the wire, and settled 8.0 cents lower at $2.104 per mmBTU, as rising LNG demand proved to be no match for warmer weather...natural gas prices finally moved higher on Friday on forecasts for more demand next week than had been expected, and on rising amounts of gas flowing to LNG export plants, and settled 11.2 cents higher for the day at $2.216 per mmBTU, but still ended 6% lower for the week, 19% lower for the month and a record 50% lower for the quarter...
The EIA's natural gas storage report for the week ending March 24th indicated that the amount of working natural gas held in underground storage in the US fell by 47 billion cubic feet to 1,853 billion cubic feet by the end of the week, which left our natural gas supplies 442 billion cubic feet, or 31.3% above the 1,411 billion cubic feet that were in storage on March 24th of last year, and 321 billion cubic feet, or 21.0% more than the five-year average of 1,532 billion cubic feet of natural gas that were in storage as of the 24th of March over the most recent five years….the 47 billion cubic foot withdrawal from US natural gas working storage for the cited week was somewhat less than was expected by analysts surveyed by Reuters, whose average forecast called for a 54 billion cubic feet withdrawal, but it contrasts with the 15 billion cubic feet that were added to natural gas storage during the corresponding warmer week of 2022, and was much more than the average 17 billion cubic feet of natural gas that have typically been withdrawn from our natural gas storage during the same late winter 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 March 24th indicated that after our oil imports fell sharply while our refineries took in more oil than the prior week, we had to withdraw oil from our stored commercial crude supplies for the just the 2nd time in 14 weeks, and for the 10th time in the past 30 weeks, despite the addition of 1.8 million barrels per day of new oil supplies that the EIA could not account for... Our imports of crude oil fell by an average of 847,000 barrels per day to a two year low of 5,325,000 barrels per day, after falling by an average of 45,000 barrels per day during the prior week, while our exports of crude oil fell by 348,000 barrels per day to 4,548,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 741,000 barrels of oil per day during the week ending March 24th, 499,000 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 12,200,000 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 12,941,000 barrels per day during the March 24th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,813,000 barrels of crude per day during the week ending March 24th, an average of 437,000 more 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 an average of 1,070,000 barrels of oil per day were being pulled from the supplies of oil stored in the US. So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending March 24th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,803,000 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 [+1,803,000] 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 was an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed..... However, with most everyone treating these weekly EIA reports as precise, and since these weekly 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)….(NB: there is also a more recent twitter thread from an EIA administrator addressing these errors, and what they hope to do about it)
Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,996,000 barrels per day last week, which was 5.8% less than the 6,365,000 barrel per day average that we were importing over the same four-week period last year. This week's 1,070,000 barrel per day withdrawal from our overall crude oil inventories all came out of our commercially available stocks of crude oil, while the amount of oil in our Strategic Petroleum Reserve remained unchanged.. This week’s crude oil production was reported to be 100,000 barrels per day lower at 12,200,000 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 11,800,000 barrels per day, while Alaska’s oil production was 9,000 barrels per day lower at 432,000 barrels per day but added 400,000 barrels per day to the rounded national total, same as Alaska added last week....US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was still 6.9% below that of our pre-pandemic production peak, but was 25.8% 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 90.3% of their capacity while using those 15,813,000 barrels of crude per day during the week ending March 24th, up from their 88.6% utilization rate during the prior week, as US refineries are now ramping up operations after completing their seasonal maintenance... The 15,813,000 barrels per day of oil that were refined this week were still 0.6% less than the 15,913,000 barrels of crude that were being processed daily during week ending March 25th of 2022, and 0.1% less than the 15,831,000 barrels that were being refined during the prepandemic week ending March 22nd, 2019, when our refinery utilization was 86.6%, a little low for this time of year..
With the big increase in the amount of oil being refined this week, the gasoline output from our refineries was again higher, increasing by 535,000 barrels per day to 10,038,000 barrels per day during the week ending March 24th, after our gasoline output had increased by 392,000 barrels per day during the prior week. This week’s gasoline production was 10.9% more than the 9,054,000 barrels of gasoline that were being produced daily over the same week of last year, and 3.9% more than the gasoline production of 9,657,000 barrels per day during the prepandemic week ending March 22nd, 2019. Meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 130,000 barrels per day to 4,633,000 barrels per day, after our distillates output had increased by 75,000 barrels per day during the prior week. Even with those increases, our distillates output was 9.1% less than the 5,099,000 barrels of distillates that were being produced daily during the week ending March 25th of 2022, and 5.9% less than the 4,925,000 barrels of distillates that were being produced daily during the week ending March 22nd, 2019...
Even after two big weekly increases in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the sixth consecutive week and for the 37th time in 58 weeks, decreasing by 2,904,000 barrels to 226,694,000 barrels during the week ending March 24th, after our gasoline inventories had decreased by 6,399,000 barrels during the prior week. Our gasoline supplies fell by less this week even though the amount of gasoline supplied to US users rose by 185,000 barrels per day to 9,145,000 barrels per day, because our imports of gasoline rose by 402,000 barrels per day to 873,000 barrels per day while our exports of gasoline fell by 66,000 barrels per day to 826,000 barrels per day. Following six straight gasoline inventory decreases, our gasoline supplies were 5.1% below last March 25th's gasoline inventories of 238,828,000 barrels, and about 4% below the five year average of our gasoline supplies for this time of the year…
Meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased for the 6th time in 13 weeks, and for the 28th time over the past year, rising by 281,000 barrels to 116,683,000 barrels during the week ending March 24th, after our distillates supplies had decreased by 3,313,000 barrels during the prior week. Our distillates supplies managed to increase this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, decreased by 261,000 barrels per day to 3,713,000 barrels per day, and because our exports of distillates fell by 199,000 barrels per day to 1,026,000 barrels per day, while our imports of distillates fell by 76,000 barrels per day to 146,000 barrels per day.. Even after fifty-eight inventory withdrawals over the past ninety-six weeks, our distillate supplies at the end of the week were 2.8% above the 113,530,000 barrels of distillates that we had in storage on March 25th of 2022, but still about 9% below the five year average of our distillates inventories for this time of the year...
Finally, with the drop in our oil imports and the increase in our refining, our commercial supplies of crude oil in storage fell for the 11th time in 30 weeks and for the 22nd time in the past year, decreasing by 7,489,000 barrels over the week, from 481,180,000 barrels on March 17th to 473,691,000 barrels on March 24th, after our commercial crude supplies had increased by 1,117,000 barrels over the prior week. With several large oil supply increases in the weeks following the Christmas refinery freeze offs, our commercial crude oil inventories still about 6% above the most recent five-year average of commercial oil supplies for this time of year, and also 39.2% above the average of our available crude oil stocks as of the fourth weekend of March over the 5 years at the beginning of the past decade, with the apparent disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels. And even after our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, and then jumped again after February 2021's winter storm Uri froze off US Gulf Coast refining, our commercial crude supplies as of this March 24th were 15.6% more than the 409,950,000 barrels of oil we had in commercial storage on March 25th of 2022, but 5.6% less than the 501,835,000 barrels of oil that we had in storage in the wake of winter storm Uri on March 26th of 2021, while 1.0% more than the 469,193,000 barrels of oil we had in commercial storage on March 27th of 2020…
This Week's Rig Count
The number of drilling rigs active in the US decreased for the fifth time in the past seven weeks during the week ending March 31st, and were left 4.8% below the prepandemic count, despite increasing ninety-seven times over the past 130 weeks... Baker Hughes reported that the total count of rotary rigs drilling in the US fell by 3 rigs to 755 rigs over the past week, which was still 82 more rigs than the 673 rigs that were in use as of the April 1st report of 2022, but was 1,174 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business. .
The number of rigs drilling for oil decreased by 1 to 592 oil rigs during the past week, after the number of rigs targeting oil had increased by 4 during the prior week, and there are still 59 more oil rigs active now than were running a year ago, even as they amount to just 36.8% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and while they are still down 13.3% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations was fell by 2 to 160 natural gas rigs, which was still up by 22 natural gas rigs from the 138 natural gas rigs that were drilling during the same week a year ago, even as they are now less than 10% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….
In addition to those rigs targeting oil and natural gas, Baker Hughes continues to show that three rigs they've labeled as "miscellaneous" are still drilling this week: those include a directional rig drilling to between 5,000 and 10,000 feet on the big island of Hawaii, a directional rig drilling to between 5,000 and 10,000 feet into a formation in Lake county California that Baker Hughes doesn't track, and a directional rig drilling to between 5,000 and 10,000 feet into a formation in Pershing county Nevada, also unnamed by Baker Hughes. While we haven't seen any details on any of those wells, in the past we've identified various "miscellaneous" rig activity as being for exploration rather than production, for carbon dioxide storage, and for utility scale geothermal projects....a year ago, there were two such "miscellaneous" rigs running...
The offshore rig count in the Gulf of Mexico was unchanged at 17 rigs this week, with 16 of those rigs drilling for oil in Louisiana's offshore waters, and one drilling for oil in Texas waters….that Gulf rig count is up by 3 from the 14 Gulf rigs running a year ago, when 13 Gulf rigs were drilling for oil offshore from Louisiana and one was deployed for oil offshore from Texas…in addition to rigs drilling in the Gulf of Mexico, there is also a directional rig drilling for oil at a depth between 10,000 and 15,000 feet, offshore from the Kenai Peninsula Borough of Alaska...hence, we now have a total of 18 rigs drilling offshore, up from the national offshore count of 14 a year ago..
In addition to rigs running offshore, there is also a water based directional rig drilling for oil at a depth greater than 15,000 feet through an inland body of water in Terrebonne Parish, Louisiana this week...a year ago, there were two rigs drilling on inland waters...
The count of active horizontal drilling rigs was down by one to 691 horizontal rigs this week, which was still 78 more rigs than the 613 horizontal rigs that were in use in the US on April 1st of last year, even as it was just over half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014.....at the same time, the vertical rig count was down by three to 13 vertical rigs this week, and those were also down by 12 from the 25 vertical rigs that were operating during the same week a year ago…on the other hand, the directional rig count was up by 1 to 51 directional rigs this week, and those were also up by 16 from the 35 directional rigs that were in use on April 1st of 2022…
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 March 31st, the second column shows the change in the number of working rigs between last week’s count (March 24th) and this week’s (March 31st) count, the third column shows last week’s March 24th 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 April, 2022...
we'll again start by checking the Rigs by State file at Baker Hughes for the changes in the Texas Permian...there we find that there were three rigs added in Texas Oil District 8, which overlies the core Permian Delaware, and that one rig was added in Texas Oil District 8A, which overlies the northern part of the Permian Midland, but that a rig was pulled out of Texas Oil District 7B, which includes a couple counties in the easternmost Permian Midland...since the Texas Permian rig count was thus up by a net of three rigs while the national Permian count was down by one, we can figure that all 4 rigs that were shut down in New Mexico had been drilling in the western Permian Delaware, in the southeast corner of that state....elsewhere in Texas, there was a rig added in Texas Oil District 3, which includes part of the Eagle Ford shale, but it apparently was not targeting that formation, since the Eagle Ford count remained unchanged...
in other states, a natural gas rig removed from the Cana Woodford and an oil rig pulled from the Mississippian shale account for the two rig decrease in Oklahoma, while the Louisiana count was down by one with the removal of a natural gas rig from the Haynesville shale in the northwest quadrant of that state....meanwhile, the rig removed from Colorado could have come out of the DJ Niobrara chalk if a Niobrara rig had been added in Wyoming at the same time; however that shook out, there was a rig removed from a basin not tracked by Baker Hughes from one of those two states at the same time...lastly, in checking the individual well records in the North America Rotary Rig Count Pivot Table at Baker Hughes, we find that the rig added in Kansas was a horizontal driller targeting oil in the Mississippian shale 10,000 to 15,000 feet under Sumner county...since the national Mississippian shale rig count was down by one, that means that two Mississippian oil rigs were pulled out of Oklahoma at the same time, and for that to have happened, another rig not tracked by Baker Hughes had to have been added elsewhere in Oklahoma at the same time...
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OH Lawsuit Filed Against Utica Fracker Accuses Subsurface Trespass Marcellus Drilling News - In a case initially filed last summer in Ohio, a Belmont County mineral rights owner alleges that Rice Drilling (now owned by EQT) drained natural gas from a rock layer it did not have the right to access according to the signed lease. Golden Eagle Resources says the lease allowed Rice to drill down only as far as the Utica Shale layer, which Rice did. However, Golden Eagle says fractures from Rice’s fracking of the Utica layer reached down into the adjacent Point Pleasant layer and drained some of the gas from the Point Pleasant too–and that’s a no-no according to the lease.
Ohio Democrats Introduce Bill to Ban Fracking Under Lake Erie - Marcellus Drilling News - Leave it to liberal Democrats to hype an issue that isn’t even an issue to try and scare folks for political gain. LibDems have introduced a bill in the Ohio House that would prohibit fracking for oil and gas underneath Lake Erie. The leftists of Lake Erie Waterkeeper appear to be behind the measure. When was the last time you heard about any drillers salivating over drilling and fracking under Lake Erie? That’s right. NEVER. And yet the left wants to plant the seed that drillers now have their sights set on fracking Lake Erie.
DeWine announces grants to rebuild local economies - Ohio Governor Mike DeWine, Lt Governor Jon Husted, and Ohio Department of Development Director Lydia Mihalik announced the first major development projects that will move forward with support from Ohio's $500 million Appalachian Community Grant Program. The Utica Shale Academy of Ohio will increase access to workforce training for at-risk, low-income young adults, individuals, and families impacted by substance use disorders in Columbiana, Carroll, Jefferson, and Mahoning counties. With an Appalachian Community Grant of up to $2,356,417, With an Appalachian Community Grant of up to $2,356,417, Utica Shale will create the Connecting Communities Through Workforce Training project, which will provide residents with a career pathway for in-demand jobs that allow them to earn a sustainable living wage. The project will expand workforce training services at three strategically-placed training centers that will reskill and upskill individuals to attract and retain skilled labor. The training will focus on in-demand jobs like heavy equipment operation, welding, industrial maintenance, robotics, 3D printing, broadband infrastructure, and diesel mechanics. Participants will also have access to community health workers to assist with resources to improve health.
Appalachian Community Grant Program announces grant for Utica Shale Academy of Ohio in Columbiana County, Ohio (WKBN) – A program to increase access to workforce training in Columbiana and surrounding categories has received funding from the Appalachian Community Grant Program. The Utica Shale Academy of Ohio has received over $2.3 million to create the Connecting Communities Through Workforce Training project, which will provide residents with a career pathway for in-demand jobs that allow them to earn a sustainable living wage. The program is geared toward at-risk, low-income young adults and families affected by substance use disorders. State lawmaker says East Palestine recovery is marathonThe project will expand workforce training services at three strategically-placed training centers, focusing on in-demand jobs like heavy equipment operation, welding, industrial maintenance, robotics, 3D printing, broadband infrastructure and diesel mechanics. Participants will also have access to community health workers to assist with resources to improve health. In partnership with the Ohio General Assembly, the DeWine-Husted Administration created the Appalachian Community Grant Program last year to support local initiatives to revitalize downtown districts, enhance quality of life and rebuild the economics of Ohio’s 32 Appalachian counties. A total of $50 million in development grants will be awarded in the first round of the program to launch four transformational projects impacting communities throughout Ohio, like Columbiana County. “The projects we’re announcing today are just the beginning of the long-term, impactful change that’s in store for Ohio’s 32-county Appalachian region,” said Governor Mike DeWine.
McNally announces $2356417 for Utica Shale Academy of Ohio - – State Rep. Lauren McNally (D-Youngstown) announced that on March 20 the State Controlling Board approved a $2,356,417 grant from the Ohio Department of Development’s (DOD) Governor’s Office of Appalachia for Utica Shale Academy of Ohio as part of their Appalachian Community Grant Program Development Grants.“I’m ecstatic that the workforce development efforts in our region are being noticed and funded. This is the type of attention that the Biden administration promised Appalachia Ohio, and he’s made good on his word,” said McNally.The Development Grants, made possible by $500 million in American Rescue Plan Act dollars, were awarded as part of an initial round of funding and required awardees to have partners in place and begin construction or implementation of their project within 90 days. The program activities, resulting in sustainable and transformational outcomes and include health care, infrastructure, and workforce components, are required to total at least $1 million or more in order to receive eligibility for consideration. The project must be completed by Oct. 31, 2026.According to the Ohio Controlling Board, the Utica Shale Academy of Ohio project, the Connecting Communities Through Workforce Training project, will focus on at-risk, low-income young adults and families affected by substance use disorders. It intends to reduce transportation barriers and increase the accessibility of quality workforce training equipment for residents in Carroll, Columbiana, Jefferson, and Mahoning counties by expanding their workforce training services at three strategically-placed training centers. The project will provide residents with a career pathway toward earning a sustainable living wage, with a focus on in-demand jobs, which will ideally assist with the elimination of generational poverty in the area. The project participants will also have access to Community Health Workers that assist with health improvement.
$2.3M State Grant Will Expand Regional Workforce Training - Business Journal Daily – A growing workforce-training program in Columbiana County, the Utica Shale Academy of Ohio, will be able to expand its reach. USA Superintendent Bill Watson announced Monday the school has been awarded a $2.35 million state grant to increase workforce training in the four-county area – Columbiana, Mahoning, Carroll and Jefferson. The Appalachia Community Grant Program through the governor’s office awarded $50 million in development grants in total Monday, the first step of a $500 million investment. Watson said the grant will be used to build a facility that will house both the heavy equipment operation program and adult training after school hours. USA will offer a recovery-to-work program, which includes a partnership with the Mahoning County Pathways Hub. The Utica Shale Academy began as a dropout recovery and prevention school, which focuses on career tech education for at-risk students. After sharing space at Southern Local High School for a few years, the academy set up its own location in Salineville in the Hutson Building, a former office space, which was renovated to be used for more traditional education classes and office space. Through a $300,000 Ohio capital appropriation, the academy was able to purchase the Huntington Bank building up the hill and renovate it into an industrial maintenance lab and light diesel mechanics training facility. Then the academy began expanding on the other side of the street, acquiring 3.5 acres and recently constructing an indoor-outdoor welding lab. This grant will be combined with other money and grants for the construction of a new facility on the 3.5-acre property. That will allow the Utica Shale Academy to offer more heavy equipment operating training and provide them spaces for additional classes. Additionally, it reduces the barrier for students in the region, many who cannot travel long distances, in order to get training for better jobs. In addition, the academy often partners with the Sustainable Opportunity Development Center in Salem and Youngstown State University’s Excellence Training Center to help provide additional training opportunities in areas such as industrial maintenance, 3D printing, 5G and robotics. Julie Needs, director of the SOD Center, said the grant will allow them to expand what they can offer as well, adding more equipment, more training programs and reaching additional people and businesses. “Utica has done several of our training classes,” Needs said. The USA has instructed some of the classes at the SOD Center, bringing some of its equipment to Salem to train people. With additional equipment, not only can more people receive the training, but they can also offer more hands-on time during training. .
Future growth in mind with gas pipeline project in Columbiana,Ohio - (WKBN) – Executives with Columbia Gas of Ohio say they’re trying to stay ahead of the future with potential growth.Crews have started preliminary work on a major gas line project running along Route 14 in Columbiana. It will include installation of about 10,000 feet of new, more durable pipeline to enhance service in the area for existing customers but also for those looking to expand or locate in the city.“But as a result of the project, we will have a larger capacity to support growth and development for future folks who may think about industry and things like that in Columbiana,” said Ben Cutler, a spokesperson for Columbia Gas. “We don’t want to come to Columbiana and build a plant or build a facility but then they can’t get natural gas, so if we can take any proactive steps to make sure we have good supply, good capacity, that’s prudent to do right now.”Installation of the new main should begin in early April. That’s likely to mean some traffic disruptions in the area for several months. Officials say the project, including restoring customers’ properties, should be finished late this summer.
32 New Shale Well Permits Issued for PA-OH-WV Mar 20-26 - Marcellus Drilling News - New shale permits issued for Mar. 20-26 in the Marcellus/Utica dropped by two from the prior week. There were 32 new permits issued in total last week, including 22 new permits for Pennsylvania, 8 new permits for Ohio, and 2 permits in West Virginia. (Note we recently updated last week’s report to include WV permits after the WVDEP fixed its database.) Last week the top receiver of new permits was CNX Resources with 10 new permits spread across two PA counties: Greene and Allegheny. Snyder Brothers received 8 permits in Armstrong County, PA. Allegheny County, Antero Resources, Armstrong County, Ascent Resources, Belmont County, Chesapeake Energy, CNX Resources, Doddridge County, Encino Energy, Greene County (PA), Harrison County, Lycoming County, Noble County, Range Resources Corp, Snyder Brothers, Southwestern Energy, Wetzel County, Wyoming County (PA)
Crypto Mining at Gas Wells Sparks Regulatory Headaches, Outcry in Northwestern Pennsylvania -Longhorn Pad C is located about half a mile south of a small cemetery and a little over a mile north of a Methodist church in Elk County, in northwestern Pennsylvania. With a population of around 30,000, this county sits squarely in the center of the path the Marcellus Shale formation takes as it curves through the commonwealth. The lonely well pad houses four natural gas wells that records show were initially drilled in 2011 but sat inactive for years after that. Now, it also houses infrastructure designed to mine cryptocurrency, which, according to a comment filed by the surrounding township’s Board of Supervisors, hums loudly enough to have solicited numerous noise complaints from residents. Though it has applied for them, the company behind this operation has yet to receive the permits it is required by law to construct or operate the engines to power a cryptocurrency mine. “After a recent inspection, the [Department of Environmental Protection] DEP has determined that Diversified was in violation,” said Tom Decker, community relations coordinator at the DEP’s Northwest Regional Office, “as it had installed equipment for its cryptocurrency operations prior to the issuance of a plan approval issued by the Department.“The company is required by law to obtain a plan approval from DEP prior to installation and operation of the air contamination sources,” Decker said. “Installation of the equipment without a plan approval could lead to enforcement action by the DEP.” The pad is owned by a fossil fuel operator that’s come under fire in recent years for purchasing tens of thousands of low-producing oil and gas wells without a clear business motive and for making unrealistic budget projections that minimize the true cost of plugging, critics say. In doing so, it has amassed the largest portfolio of old, low-producing wells in Appalachia. That operator is Diversified Energy Company PLC, the parent company to Diversified Production LLC, which recently applied for a permit with the Pennsylvania Department of Environmental Protection (DEP) to add five natural gas-powered engines and one generator to the well pad with the intention of mining cryptocurrency. What the operator’s permit application does not disclose is that Diversified would go on to prematurely install cryptocurrency infrastructure on the pad, and while the DEP reported that it was not operational on the day of a March 1 site visit, the department confirmed that the operator had installed one engine and two trailers holding cryptocurrency mining computers in violation of environmental law. According to the township that houses the site, it’s already showing signs of running. The engines will power what’s called wellhead mining, in which a cryptocurrency data center is powered directly by an oil or gas well. This pad appears to be the first of its kind in Pennsylvania to go through a formal permitting process for the practice, which is gaining prominence throughout the Keystone State, home to hundreds of thousands of abandoned wells and rich methane stores. It is not clear when Diversified installed cryptocurrency equipment on the pad without a permit. A DEP inspection report from June 2022 notes that “the operator is installing equipment to resume cryptocurrency mining operations using the production from four producing Marcellus shale wells on the pad.” Another one filed in August 2022 includes photos of large trailers that, according to the DEP, currently house cryptocurrency equipment. A DEP representative told Capital & Main that the department did not learn that the equipment was installed until mid-February.“Given Diversified’s history, this is not a surprise,” said Charles McPhedran, a senior attorney with Earthjustice and co-author of a comment opposing Diversified’s cryptocurrency permit application to the DEP. “The question is whether DEP can make a forceful response to rogue crypto operators.”
Appalachia continues to dominate natural gas production in United States, EIA reports - Even as natural gas production grows across the United States, Appalachia continues to dominate production. The latest report from the U.S. Energy Information Administration indicates the Appalachian region in the Northeast accounted for nearly a third (29 percent) of all natural gas production in the United States. And while U.S. natural gas production grew by 4 percent, Appalachian production growth slowed, the report said, due to no new pipeline takeaway capacity. No new pipelines came online in 2022, the report said. In 2021, Appalachian gross natural gas withdrawals grew by 1.4 billion cubic feet per day (Bcf/d), but in 2022, that growth had slowed to just 0.1 Bcf/d, less than in 2020, during the COVID-19 pandemic limited production growth. In comparison, the Permian Region in western Texas and New Mexico accounted for 18 percent of U.S. production, with gross natural gas withdrawals rising by 2.6 Bcf/d to 21 Bcf/d. While the Haynesville region in Louisiana and Texas grew by only 2.0 Bcf/d to 15.3 Bcf/d. Gross natural gas withdrawals in the Eagle Ford region in Texas rose by 18 percent (0.9 Bcf/d), the first year it saw an increase since 2019. Across the country, Appalachia, Permian, and Haynesville supply about 60 percent of all U.S. natural gas, similar to the production levels in 2021.
Protect This Place: Fracking Threatens the Allegheny Plateau and Its Biodiversity The Allegheny Plateau is a lower-lying portion of the Appalachian Mountain Range that extends from southern and central New York to northern and western Pennsylvania, eastern Ohio, northern and western West Virginia, and eastern Kentucky.Protect This Place The plateau consists of areas of gently sloping hills in the north and west of the region as well as rugged valleys in the south and east. It overlies the Marcellus Shale and Utica Shale, sedimentary rock formations. The region is rich in natural resources, including hardwoods, iron ore, silica, coal, oil and natural gas. Prior to widespread logging between 1890 and 1920, the area hosted old-growth forests containing red spruce, eastern white pine, eastern hemlock, sugar maple, black oak, white oak, yellow birch and American beech. But the forest’s makeup is now different, favoring oaks, maples, hickories, American beech and yellow birch. Though fragmented and much less mature than the old-growth forests, today’s forests continue to play a vital role in ecosystems, serving as habitats for the federally endangered Indiana bat as well as locally endangered or at-risk species such as little brown bats, northern flying squirrels and blackpoll warblers. Unconventional oil and gas development has boomed in the region over the past decade. Already more than 13,000 unconventional wells have been drilled in Pennsylvania. Fracking itself is a resource intense process, requiring between 2 and 20 million gallons of water per well. A 2014 study estimated that in Pennsylvania, 80% of the water used for fracking comes from streams, rivers, and lakes, thus potentially altering water temperature and levels of dissolved oxygen. This water is combined with sand and a mixture of hazardous chemicals, which may include methanol, ethylene glycol and propargyl alcohol. Between 20-25% of the water that is injected into the well returns to the surface. This flowback water often has higher salinity and has been known to contain barium, arsenic, benzene and radium. While recycling of flowback is becoming more common, other methods of disposal include underground injection, application to road surfaces, treatment at public waste facilities, and discharging it onto rivers, streams and lakes. Near fracking sites in West Virginia, elevated levels of barium and strontium were found in feathers of Louisiana waterthrushes, native songbirds who make their home in brooks and wooded swamps. In northwestern Pennsylvania, crayfish and brook trout living in fracked streams were found to have increased levels of mercury. Fish diversity is also reduced in streams that have been fracked. Fracking consumes land, too. Each fracking well requires 3-7 acres. In Pennsylvania over 700,000 acres of state forest land are leased or available for gas production. Well pads, pipelines and other fracking infrastructure fragment forests, alter their ecology, and reduce biodiversity. Appalachian azure butterflies and federally threatened northern wild monkshood — purple-flowering herbaceous perennials found in New York and Ohio — are both sensitive to forest fragmentation.
Investigation into deadly Pennsylvania factory blast focuses on gas pipeline - Federal safety officials are investigating the role of a natural gas pipeline in a fatal blast at a Pennsylvania chocolate factory, the National Transportation Safety Board announced Tuesday. Friday’s powerful explosion at R.M. Palmer Co. killed seven people, sent 10 to the hospital and damaged several other buildings in West Reading, a small town 60 miles northwest of Philadelphia, where the 75-year-old, family-owned company has long had a factory.The National Transportation Safety Board announced the probe late Tuesday afternoon, calling the incident a “natural gas” explosion and fire.The agency has preliminary information from local authorities and a natural gas utility that a gas pipeline was involved, an agency spokesperson, Keith Holloway, told The Associated Press.NTSB is investigating “what caused, how and why the explosion occurred,” according to Holloway.
U.S. lawmaker leads amendment to hasten completion of Mountain Valley Pipeline - Pennsylvania Business The controversial, under-construction Mountain Valley Pipeline — which upon completion will deliver natural gas from Pennsylvania, Ohio, and West Virginia to the Carolinas — would be finished “expeditiously” under an amendment introduced on Thursday by U.S. Rep. Carol Miller (R-WV). “The Mountain Valley Pipeline is crucial to American energy independence,” Miller said in a March 23 statement. “All gas from the Mountain Valley Pipeline will supply domestic energy markets, meaning lower energy prices across the country as supply will dramatically increase.” Miller’s Amendment No. 36 was made to the Republican-led Lower Energy Costs Act, H.R. 1, the energy package introduced earlier this month in the U.S. House of Representatives. If enacted, the amendment would ensure that the Mountain Valley Pipeline, which is currently 94 percent completed, would be finished in mere months to deliver natural gas to North Carolina and South Carolina, increasing domestic energy supply and decreasing energy costs for all Americans, according to a bill summary provided by the congresswoman’s office. Once completed, the pipeline is expected to provide up to two billion cubic feet per day of natural gas from the Marcellus and Utica shale formations to consumers in the Carolinas. Miller says the pipeline also would sustain about 5,800 jobs and $5.9 billion in economic activity in West Virginia and Virginia. The Mountain Valley Pipeline will be governed by the federal Natural Gas Act, which requires a Certificate of Convenience and Necessity from the Federal Energy Regulatory Commission (FERC). The pipeline received its certificate on Oct. 13, 2017 and construction activities began in early 2018. Since then, however, the delayed fracked gas pipeline has been strangled and held up by several court cases along the East Coast. To get around them and fast track construction, Miller’s amendment states that for any project that, prior to Jan. 1, 2018, has been granted a certificate of public convenience and necessity by FERC under the Natural Gas Act, and which is still in effect, “shall be constructed expeditiously in the location and form specified in such certificate of public convenience and necessity.” Additionally, such certificate of public convenience and necessity and any amendment, extension of time, or other authorization issued by a federal agency or state administrative agency for such project “shall not be subject to judicial review in any court, and any action (including any action pending in a court as of the date of enactment of this section) seeking judicial review of such an agency order or action shall not be filed or maintained in any court and shall be promptly dismissed,” the amendment says. “Numerous natural gas permitting projects are being held up by a left wing, radical court that should have no jurisdiction over our natural gas,” Miller said. “My amendment helps complete many America First projects, like the Mountain Valley Pipeline, and implements a necessary check on the liberal court who wants to stop energy production.” Her amendment is backed by 10 other Republican cosponsors, including several in Pennsylvania: U.S. Reps. Guy Reschenthaler (R-PA), Lloyd Smucker (R-PA), Daniel Meuser (R-PA), and Mike Kelly (R-PA). The larger bill, H.R. 1, which U.S. Rep. Steve Scalise (R-LA) sponsored on March 14 alongside three original cosponsors, is crafted to lower energy costs by increasing American energy production, exports, infrastructure, and critical minerals processing; by promoting transparency, accountability, permitting, and production of American resources; and by improving water quality certification and energy projects, according to the text of the bill. Currently, H.R. 1 has 42 Republican cosponsors, including Meuser and U.S. Reps. John Joyce (R-PA) and Glenn “GT” Thompson (R-PA). The bill remains under consideration in several House subcommittees. According to H.R. 1 opposition, the bill is nothing more than an attempt by the GOP to erase the Biden administration’s climate agenda and Democrats said this week that that’s not going to happen. U.S. Senate Majority Leader Chuck Schumer (D-NY) on March 21 spoke on the Senate floor regarding H.R. 1, and sent supporters of the bill a clear message from the upper chamber: “You can do all the hoopla you want in the House, it ain’t passing.” “I have been very clear about two things: Democrats want to see a bipartisan, common-sense energy proposal come together in Congress, but Republicans’ H.R. 1 proposal is dead on arrival in the Senate,” Schumer said.
Mountain Valley pipeline at a stalemate: What’s next? - — Looking out from the library and across a field, a long Appalachian mountain rises in the distance, reddish-brown, except for a strip of synthetic green. The swath marks the path of the Mountain Valley pipeline, cut into mountainsides around this community outside Roanoke. Covered with gray or green matting, the path generally marks where trees have been cleared but no pipe has been buried. This represents the most visible sign of the regulatory stalemate that has left this region in a state of suspended animation for more than a year. The pipeline’s developers say the best way to resolve the standoff is to let them finish the pipeline, pull up the matting and plant grass along the path. But determined local opponents, backed up by attorneys for well-known environmental groups, are ready to keep fighting. “It’s not a choice. It’s a responsibility,” said Roberta Bondurant, a lawyer who lives here and has fought the project for years. “We’re not going anywhere.” As another construction season looms, a number of outcomes are possible. The developers could fold and walk away, a possibility they dismiss. Or they could persuade Congress to step in, sweep aside the regulatory process and push the project across the finish line. Or the stalemate could continue playing out in courtrooms, boardrooms and hallways of bureaucracy like a game of rock, paper, scissors. There’s precedent for any of these. There’s also a narrow path for the legal fight to end quickly with a victory for the pipeline that allows completion by the end of the year, said Christine Tezak, a managing director at energy analysis firm ClearView Energy Partners LLC. The roughly 300-mile project, commonly called MVP, was conceived to move natural gas from the shale fields near northern West Virginia across the Blue Ridge Mountains to the Virginia Piedmont, where it would connect with a key gas artery that supplies the East Coast. The pipeline is a joint venture among several companies, including NextEra Energy Inc., Consolidated Edison Inc., AltaGas Ltd., RGC Resources Inc. and lead developer Equitrans Midstream Corp. It gained a bigger national profile last year when supporters such as Sen. Joe Manchin (D-W.Va.) sought to make it an example of why they believe an overhaul of the country’s infrastructure permitting is needed. Five years after construction began, no gas is moving along MVP’s path. The projected cost of the project has nearly doubled from $3.5 billion to $6.6 billion. Mountain Valley officials say they haven’t had “complete and full authorization” to work since mid-2018. David Sligh, conservation director of Wild Virginia, a leading opponent of the project, said work essentially ground to a halt in the fall of 2021, weighed down by permit cancellations. Still, much of the pipe has been buried in the ground — 272 miles of it, according to Equitrans. But many pipes sit above ground, exposed to the elements. The cylindrical segments, 3 ½ feet wide, clad with teal coating and 40 feet in length, rest on lumber in flat spots waiting to be tunneled under streams or hauled up steep slopes, some of the most difficult construction. Paths have been carved through the trees on those slopes, as wide as 175 feet and carpeted with green or gray matting that, up close, looks like the filling inside a blanket. The matting holds soil in place that’s been scraped clear in preparation for construction.
Federal court upholds stream crossing permit for the Mountain Valley Pipeline - The Mountain Valley Pipeline moved one step closer to completion Wednesday, winning approval of a stream crossing permit from an appellate court that it previously said has shown “continued hostility” to the project.A three-judge panel of the 4th U.S. Circuit Court of Appeals found no reason to disturb a water quality certification granted in December 2021 by the State Water Control Board and Department of Environmental Quality.The long-delayed natural gas pipeline needs the permit to finish work on 236 stream and wetland crossings in Virginia.“Mountain Valley continues to make significant progress in obtaining the few remaining authorizations needed to complete the MVP and continues to target a late 2023 in-service date,” company spokeswoman Natalie Cox wrote in an email.A lawsuit by environmental groups contended that the water board and DEQ acted “arbitrarily and capriciously” by failing to do three things: consider alternative water crossings for the 42-inch diameter pipe, verify whether each crossing was the least damaging option, and properly assess whether the pipeline complies with water quality standards. In rejecting all three arguments, the court held that “there is evidence in the record which indicates that the agencies did not simply ‘rubber stamp’ MVP’s proposed crossing methods.”“Rather, the agencies asked a number of clarifying questions to ensure they were satisfied” that a long and complicated regulatory process had been properly followed, the court’s opinion stated.Pipeline opponents said Wednesday that the fight is far from over.“This one decision does not weaken our resolve to stop destruction from the MVP,” said David Sligh, conservation director of Wild Virginia, which joined other environmental and community groups in challenging the permit.The water quality certification is a prerequisite to a separate permit from the U.S. Army Corps of Engineers, which has yet to be granted and could face yet another court fight.And a state approval in West Virginia, where the 303-mile pipeline begins, is still under review by the Fourth Circuit. In oral arguments held last year, the same three judges that upheld the Virginia water certification Tuesday had sharper questions about a similar decision by the state’s counterpart, the West Virginia Department of Environmental Protection.A decision in that case, expected in the coming days or weeks, could mark another setback for Mountain Valley in its on-again, off-again construction that began in early 2018.
Court Upholds Virginia’s MVP Water Permit, But Ruling Forthcoming on West Virginia Approval - The U.S. Court of Appeals for the Fourth Circuit has upheld a crucial water quality permit issued to the Mountain Valley Pipeline (MVP) by Virginia state regulators, keeping the project on track to potentially resume and complete construction later this year. However, a forthcoming ruling on a water quality permit issued by the state of West Virginia could bring fresh setbacks for the embattled 300-mile, 2 million Dth/d Appalachian natural gas export pipeline, according to analysts. In a ruling published Wednesday, the Fourth Circuit denied a petition to review the Virginia Department of Environmental Quality’s decision to approve MVP under state water quality standards. In rebuffing the petition, filed by a coalition of opposition groups, the Fourth Circuit concluded, in part, that Virginia regulators had “considered a variety of factors in determining that the construction and operation of the pipeline would comply” with state water quality standards. Still, the state-level water quality permit issued to MVP by neighboring West Virginia may also have to withstand judicial scrutiny in order to keep the project on track. The Fourth Circuit heard oral argument in a case challenging the West Virginia water quality permit back in October “but has yet to issue a ruling,” analysts at ClearView Energy Partners LLC said in a note to clients. “We explained then that we thought it is likely that the court would return the permit to West Virginia for additional work, but that the real question is whether the court remands it without vacating it, too.” Whether or not the court vacates the West Virginia permit could prove critical for the timeline of the pending Army Corps of Engineers Clean Water Act Section 404 permit, which requires the state water-quality approvals to be in place, the ClearView analysts said. Information posted to MVP’s federal permitting dashboard indicates the Army Corps plans to issue the Section 404 permit by late April. “If a court believes that the agency can resolve the shortcomings in a permit and would likely arrive at the same decision (in this case approval), the court can remand the permit” but preserve its legal validity, the ClearView analysts said. “Most of MVP’s schedule delays have arisen from judicial challenges that resulted in permits being vacated.” MVP is a joint venture of EQM Midstream Partners LP; NextEra Capital Holdings Inc.; Con Edison Transmission Inc.; WGL Midstream; and RGC Midstream LLC. Project backers have said work on the pipeline is roughly 94% complete and that they plan to bring the pipeline into service in the second half of 2023.
Court brings Mountain Valley pipeline closer to completion - The Mountain Valley pipeline inched toward completion after a three-judge panel Wednesday unanimously denied environmentalists’ challenge to a Virginia water permit for the planned natural gas project. The 4th U.S. Circuit Court of Appeals found that Virginia regulators had done an extensive review before certifying that construction of about 107 miles of pipeline across waterways in the commonwealth complied with state water standards. “Because we conclude that the Agencies’ decision to grant MVP’s application was neither arbitrary nor capricious, we deny the petition for review,” said Judge Stephanie Thacker, writing the opinion for the court.. The ruling is from the same three judges who have repeatedly rejected permits for the pipeline, contributing to construction delays and cost overruns for the $6.6 billion project. A decision from the 4th Circuit on a similar water certification from West Virginia is still pending. Once completed, the 42-inch diameter pipeline would carry natural gas 303 miles from West Virginia into southern Virginia. Natalie Cox, a spokesperson for Mountain Valley, said lead developer Equitrans Midstream Corp. was pleased with the 4th Circuit ruling. She said in an email that the company had worked closely with state and federal officials to develop construction plans that would be the least environmentally harmful. “Mountain Valley continues to make significant progress in obtaining the few remaining authorizations needed to complete the Mountain Valley Pipeline (MVP) and continues to target a late 2023 in-service date,” Cox said in a statement. Environmental groups led by the Sierra Club sued the Virginia State Water Control Board in 2021 for granting a Section 401 certification for the pipeline under the Clean Water Act, which confirms that the project is in line with state water laws. The groups claimed Virginia officials had not considered alternative water crossings and did not independently verify that the project’s selected approach was the least environmentally damaging practicable alternative. They also argued that the board did not consider the state’s narrative water quality standards, which stipulate that waters should be free of sediments and other discharges from construction sites that could harm human, animal, plant or aquatic life. Thacker, who was appointed during the Obama administration, said that Virginia law barred the board from changing project siting for pipelines larger than 36 inches in diameter, like Mountain Valley, that had been approved by the Federal Energy Regulatory Commission. “Petitioners have failed to present any evidence indicating that any crossing could be moved without altering the Pipeline’s siting elsewhere,” Thacker wrote. “Because there is nothing before the court from which we can conclude that the Agencies could have changed one crossing without altering FERC’s siting determination,” she continued, “we conclude that the Agencies correctly applied Virginia law by approving MVP’s proposed crossing locations.” Thacker also said the board had reviewed each water crossing and found that the current pipeline route was the least harmful to state waters, fish and wildlife. The 4th Circuit also rejected Mountain Valley’s claims that the federal appeals court did not have jurisdiction to review Virginia’s certification. Since the state was acting under the federal Clean Water Act, Thacker said, the issue was properly before the court. Mountain Valley’s sovereign immunity argument also failed because agencies are aware that any action they take “relative to the issuance, conditioning or denial of a water quality certification,” can be reviewed by a federal court, she added.
Equitrans Midstream, A Political Football - A prime example of the destruction of our country's infrastructure is the story of Equitrans Midstream Corporation (NYSE:ETRN) and its 94% complete Mountain Valley Pipeline. It has become one of the biggest political footballs in our country, and as a result, is one of the most expensive pipeline projects ever. The company has received all the necessary permits three times now to finish MVP, only to have them revoked by the same three Obama-Clinton-appointed judges at the 4th District Circuit Court in Virginia. Recently, Goldman Sachs downgraded Equitrans Midstream due to the MVP debacle causing the stock to deflate to the low $5's. The old saying, "three strikes and you're out", may hold some weight, but this company is going for a fourth. The Mountain Valley Pipeline will transport liquid natural gas (LNG) from remote Appalachia to the Southeast. LNG is the cleanest-burning fossil fuel. Transportation by pipeline is the safest method, especially considering the recent Chernobyl-like tragedy in East Palestine, Ohio. Sadly, MVP has been a political football since 2018, and as a result, is almost twice over-budget and 5-years overdue. When the Biden administration was installed in the White House in 2020, they immediately killed the Keystone Pipeline in favor of the Nord Stream 2 pipeline; it sure is odd that the Nord Stream 2 pipeline was destroyed most recently, so where is the LNG going to come from for Europe? After the 2020 election, one of the biggest pipeline projects in the country, the Mountain Valley Pipeline, was halted after being fast-tracked under President Trump. One of the main adversaries of MVP is the Sierra Club. If you follow the money, you'll find that millions of dollars from Russian state-owned oil and gas companies flowed into the Sierra Club's coffers, so it only makes sense that they would want to shut down America's energy infrastructure. The MVP project was supposed to have been completed in 2018 at a cost of $3.7B. Since then, it has gone through multiple permitting hurdles and ballooned to a ~$6.6B cost, making it the most expensive and possibly the last pipeline project in our country, especially if permitting is not reformed. In July 2018, the 4th District Circuit Court sided with the Sierra Club and rejected permits from the US Forest Service and Bureau of Land Management for the national forest crossing, thereby halting MVP. In early 2022, the Court again revoked permits for MVP, halting the project. Senator Joe Manchin, Democrat, from West Virginia, touted that MVP was essential for the US economy, but without favors performed, backroom deals cannot be made. The first favor which raised eyebrows was when Manchin played identity politics and voted for Ketanji Jackson for the Supreme Court. The second was Manchin's voting for the Big Green "Build Back Better" aka Inflation Reduction Act of 2022; the fast-tracking of the Mission Valley Pipeline had been added to the Act, but as payback from the RINO's for Manchin's voting for the IRA, the Senate stopped Manchin's addition. So, MVP was pushed into the NDAA for 2023, but it was blocked again by the same politicians even though it had approval from Schumer, Pelosi, and the Biden White House. The latest push to fast-track MVP came in the form of the Lower Energy Costs Act or HR-1 which was introduced last week in the Republican-controlled House. Notice it is the first bill on the dock. The Democrats balk that this bill will not pass the Senate, but that remains to be seen; McConnell and his band of RINO's should be for it this time since there is clearly no conflict of interest as there was with the IRA or NDAA. The fact that the Biden White House, along with Pelosi and Schumer, were willing to make the side-deal with Manchin to have MVP fast-tracked means that a veto from the White House is not a definite either. Even if a glorious Act does not give MVP the green light, there is always the judicial. From the permitting sidelines, MVP got its revised Biological Opinion from the US Fish & Wildlife Service (USFWS) on 2/28 just as the CEO had promised; this opinion will be instrumental in the US Army Corps of Engineers water-crossing permit due by the end of April. Then, a final permit is expected for the forest crossing from the Forest Service and Bureau of Land Management by 5/17. CEO Thomas Karam was confident this past earnings call that all of the permits would be issued and that MVP would have everything the 4th District Circuit Court had wanted. So, if a backroom deal has been struck since Manchin is owed a favor, and his seat is needed to retain a Democrat majority in the Senate, then maybe the Obama-Clinton-appointed judges will give it a pass. For MVP, this summer will be a critical time, and investors can keep track of the latest on MVP here.
Natural Gas Price Uncertainty, Federal Policies Escalating Unease for U.S. E&Ps, OFS - Plummeting natural gas prices, workforce shortages, cost inflation and frustration with federal policies are a few of the challenges giving U.S. oil and gas executives headaches, according to a new survey conducted by the Federal Reserve Bank of Dallas. The Dallas Fed, as it is better known, collected responses from 147 firms from March 15-23 for its first quarter energy survey. The quarterly survey gauges activity levels and overall sentiment in the industry. Respondents represented 95 exploration and production (E&P) companies and 52 oilfield services (OFS) firms in the Dallas Fed’s Eleventh District. The District includes Texas, northern Louisiana and southern New Mexico. “The uncertainty in oil and gas prices is making it difficult to plan for the future,” one executive said in a response to a Dallas Fed question. “Between government regulations and oil and gas prices, it is becoming more and more difficult to remain in the oil and gas business.” Another executive said, “An estimated 30-40% cost increase in field operations, increased interest charges on borrowed money, [and] a drastic collapse in natural gas prices combined with lower crude oil prices” have sharply impacted cash flow. “Service company capacity is quite limited in select basins. Outside investors seem to be losing interest in hydrocarbons.” One respondent highlighted the impact of low natural prices on gassy plays with higher breakeven costs, such as the Haynesville Shale. “Gas-directed activity, especially in the Haynesville, is being negatively impacted by takeaway limitations and significant declines in Henry Hub natural gas prices since third quarter 2022,” said the OFS executive. A fellow participant said, “We are seeing the vertical natural gas drillers drop rigs and defer projects due to low natural gas prices and high costs, especially casing and tubing. Unlike the horizontal operators, these companies can stop and start very quickly.” Executives forecast strengthening domestic natural gas prices, which have plunged to lows not seen since the height of the pandemic. Respondents on average predicted a Henry Hub natural gas price of $3.43/MMBtu and a West Texas Intermediate oil price of $80/bbl by year-end. Prices during the survey collection period averaged $2.23 natural gas and $68.51 West Texas Intermediate. “Volatility in commodity markets and recent banking turmoil continue to play into business dynamics and are leading to a reduction in spending plans,” said an E&P respondent. “The dramatic pullback in natural gas prices has also led to a decrease in appetite to target gas prospects and has also led to some optional gas-rate curtailments.” Another respondent said, “Crude oil is about to join natural gas in contango, which is highlighting a nervous macroeconomic picture. There are plenty of buyers at this calendar strip price and not a lot of sellers… “Not seeing financial distress with all of the cash accrued since last year. The only way people are in trouble is if hedges are under water or if they blew out authorization for expenditures.”
US natgas futures drop 6% to 4-week low on milder forecasts (Reuters) - U.S. natural gas futures dropped about 6% on Monday to a four-week low, on rising output and new forecasts for milder weather and lower heating demand next week that should allow utilities to start injecting gas into storage at the beginning of April. The amount of gas flowing to liquefied natural gas (LNG) export plants was on track to hit a monthly record high in March, the month after Freeport LNG's export plant in Texas exited an eight-month outage. Freeport LNG shut in June 2022 due to a fire. Front-month gas futures for April delivery fell 12.8 cents, or 5.8%, to settle at $2.088 per million British thermal units (mmBtu), their lowest since Feb. 21 when it settled at a 29-month low of $2.073. The market has been extremely volatile this month, with the contract gaining or losing more than 5% on nine of 19 trading days. So far this year, gas prices were down about 53%. Last week, gas speculators cut their net short futures and options positions on the New York Mercantile and Intercontinental Exchanges for a fourth week in a row to their lowest since August 2022, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report. The last time speculators cut their net short positions for four consecutive weeks was April 2022. Freeport LNG's export plant was on track to pull in about 1.5 billion cubic feet per day (bcfd) of gas on Monday, up from 0.6 bcfd on Sunday, according to Refinitiv data. On March 8, Freeport LNG said it anticipated feedgas flows would rise and fall as the plant returns to full production over the "next few weeks." When operating at full power, Freeport LNG can turn about 2.1 bcfd of gas into LNG for export. Total gas flows to all seven big U.S. LNG export plants rose to an average of 13.0 bcfd so far in March, up from 12.8 bcfd in February. That would top the monthly record of 12.9 bcfd in March 2022, before the Freeport LNG facility shut. The seven big U.S. LNG export plants, including Freeport LNG, can turn about 13.8 bcfd of gas into LNG.
US natgas futures fall 3% to 30-month low on mild weather forecasts (Reuters) - U.S. natural gas futures fell about 3% on Tuesday to a 30-month low on rising output and mild weather forecasts that should allow utilities to start injecting gas into storage at the beginning of April. The price decline came even though the amount of gas flowing to liquefied natural gas (LNG) export plants was on track to hit a monthly record high in March after Freeport LNG's export plant in Texas exited an eight-month outage in February. On their second to last day as the front-month, gas futures for April delivery on the New York Mercantile Exchange fell 5.8 cents, or 2.8%, to settle at $2.030 per million British thermal units (mmBtu), their lowest since September 2020. That put the front-month close to the psychologically significant $2 per mmBtu that could trigger numerous option contracts. "Stops would very likely be elected versus violation of the big whole number versus $2," With April expected to expire on Wednesday and the May contract trading about 13 cents higher than futures for April, Yawger said "there is a chance the roll can save natural gas from sliding over the $2 cliff if (it) can just hang in there until after tomorrow's expiration." Futures for May, which will soon be the front-month, fell about 7 cents to settle at $2.15 per mmBtu.. Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.5 bcfd so far in March from 98.1 bcfd in February. The monthly record is 99.9 bcfd in November 2022. Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through April 12. With warmer spring-like weather expected to reduce the amount of gas burned to heat homes and businesses, Refinitiv forecast U.S. gas demand, including exports, would drop from 110.3 bcfd this week to 103.9 bcfd next week. Those forecasts, however, were higher than Refinitiv's outlook on Monday as LNG exports rise. Mild winter weather allowed utilities to leave more gas in storage so far this year and should let them start injecting fuel into inventories at the beginning of April. Gas stockpiles were about 23% above their five-year average (2018-2022) during the week ended March 17 and were expected to end about 20% above normal during the colder-than-normal week ended March 24, according to federal data and analysts' estimates.
Expiring April Natural Gas Futures Fall Below $2 as Downward Price Pressure Endures -- The April Nymex natural gas futures contract floundered on its final day as the front month – a third consecutive loss – as the intersection of robust production and waning demand again captured traders’ attention. April futures on Wednesday fell 3.9 cents day/day to close at a monthly low of $1.991/MMBtu. It then rolled off the books. The May contract, which takes over at the front of the futures curve on Thursday, eked out a 3.7-cent gain and settled at $2.184. NGI’s Spot Gas National Avg. was flat at $2.470.Chilly conditions lingered in far northern markets Wednesday and were expected to persist into Thursday, proving doses of near-term heating demand, NatGasWeather said. However, a “mix of cool shots and warmer breaks will propagate across the U.S. March 31-April 11 for swings between light and moderate national demand.” Overall, “highs will generally be in the mid-30s to 60s across the northern U.S.,” while the South “will be nice with highs of 60s to 80s besides locally hotter 90s for very light demand.”At the same time, production has held around 100 Bcf/d this week and much of the year to date – near record levels – raising concerns that supplies could far surpass demand as spring weather arrives.The latest gas futures slump – prices have been under pressure since early 2023 – was “triggered by an extension of the recent winter season’s trend of steady gas production alongside persistent mild weather driving sustained declines in demand for heating,” said Rystad Energy’s Emily McClain, vice president of gas markets research.
May Natural Gas Futures Begin Front Month Run With Whimper - The May Nymex gas futures contract lost 8.0 cents day/day and settled at $2.104/MMBtu. June fell 9.0 cents to $2.358. NGI’s Spot Gas National Avg. advanced 11.0 cents to $2.580, fueled by gains in the West. Prices, though, remained weak in most regions. Production held above 100 Bcf/d on Thursday, as it has throughout the trading week and much of 2023. National Weather Service forecasts, meanwhile, continued to show increasingly benign conditions heading into April. Mild weather and robust output have kept inventory data in check throughout the first quarter of this year. While the latest U.S. Energy Information Administration (EIA) report Thursday showed a seasonally stout storage withdrawal, it fell shy of market expectations and left underground stocks well above average levels. EIA posted a draw of 47 Bcf for the week ended March 24. Prior to the report, polls showed median draw estimates in the 50s Bcf. NGI modeled a 57 Bcf withdrawal. The actual result easily exceeded the five-year average for the period — a 17 Bcf pull – thanks to rounds of late winter weather in the Upper Midwest during the covered period. Still, it left inventories at 1,853 Bcf, comfortably above the year-earlier level of 1,411 Bcf and the five-year average of 1,532 Bcf. “The problem you face here is that the short-term production through summer is already baked in, so any changes to rigs” are not “really going to hit your production levels until this winter,” analyst Eric McGuire of Wood Mackenzie said on the online energy platform Enelyst. “At best what you can hope for here is deferred completions. In that case, maybe you help out this summer, but then you are just kicking the can down the road and you have to worry about it again in the winter,” McGuire added. “Either way, we still need a decent supply move downward this summer to facilitate balancing this market,” barring a scorching and long summer. By region, the Midwest and East led with pulls of 24 Bcf and 12 Bcf, respectively, according to Thursday’s EIA report. The South Central decrease of 10 Bcf followed. Mountain region stocks declined by 2 Bcf. Pacific inventories increased by 1 Bcf. Looking ahead, early estimates submitted to Reuters for the week ending March 31 ranged from withdrawals of 6 Bcf to 55 Bcf, with an average decrease of 20 Bcf. The projections compare with a decrease of 24 Bcf a year earlier and a five-year average of flat balances.
Natural gas posts worst quarterly drop of 50%; Bulls count on summer demand next -- U.S. natural gas prices experienced what appeared to be their biggest plunge in a quarter, handing bulls in the space a loss of more than 50% for the December to March period, as an unusually warm winter led to a huge inventory of the fuel used for heating. Natural gas for May delivery settled at $2.216 per mmBtu, or metric million British thermal units, on the New York Mercantile Exchange’s Henry Hub — up 11.2 cents, or 5.3%, on the day. For the week, the benchmark gas contract fell 6% while for the month, it lost 19%. Worst was the quarter, where it tumbled 50%. The selloff in gas came amid weaker-than-usual demand for heating that has left 1.853 trillion cubic feet, or tcf, of gas in U.S. storage, the Energy Information Administration, or EIA, said in its latest inventory reading for the week ended March 24. The current U.S. gas storage is 31% higher from the balance at the same time a year ago and 21% up versus the five-year average for storage, the EIA said. The gas balance for 2023 is the highest in recent memory and remains the bane of bulls in the market who’ve been trying to restart a spectacular rally they enjoyed just months ago, before an unusually warm winter season led to less heating demand, sending excess gas supply into storage. The path forward for gas bulls would be to hope for outsized summer demand that would lead to higher-than-usual storage draws of the fuel for cooling, said analysts. Barring a scorching and long summer, “we still need a decent supply move downward this summer to facilitate balancing this market,” Eric McGuire, analyst at Wood Mackenzie, said in comments carried by naturalgasintel.com.
How the natural gas industry cozies up to utility regulators -- Last November, in a vast conference hall at a Marriott hotel in New Orleans, utility executive Kim Greene took the stage. Greene, the CEO of Southern Company Gas, a Georgia-based conglomerate that owns gas utilities across four states, was the first to speak on a panel titled “The Role for Natural Gas in America’s Clean Energy Future.”* “Natural gas is foundational to America’s clean energy future,” she started, before proceeding to tell the audience about the nation’s 2.6 million miles of pipelines that deliver gas to 187 million Americans and 5.5 million businesses. “These customers are depending on our energy every day,” she said. “So as we look to the clean energy future, the most practical, realistic way to achieve a sustainable future where energy is clean, safe, reliable, resilient, and affordable, is to ensure that includes natural gas.” The statement, with its head-scratching, circular logic, may sound aimed at an audience of oil and gas industry executives, or perhaps an earnings call. But the seats were filled with utility commissioners — the state-level public servants who regulate gas, electric, water, and telecommunications companies. The panel was the centerpiece event for the annual meeting of the National Association of Regulatory Utility Commissioners, or NARUC. And Greene was hardly the only industry representative there to lecture on the bright future for natural gas.The conference provided a glimpse into the collegial relationship utility regulators have with the companies they are charged with regulating on behalf of the public, and the way the natural gas industry is working that relationship to shape how the country moves toward its climate goals. Public utility commissioners hold significant sway over the storied clean energy future. They help decide what energy infrastructure gets built, and when. If a utility wants to raise rates to invest in new power plants, transmission lines, or pipelines, it’s up to these powerful panels to determine whether such multimillion-dollar, long-lived projects are necessary, and how much a company can profit off of them. That means commissioners are not only shaping the energy transition, but determining what it means for utilities and their bottom lines.
Chesapeake looks to finalize LNG deal bridging gap between US gas, global LNG markets | S&P Global Commodity Insights - US shale producer Chesapeake expects to finalize a sale and purchase agreement with global commodities trader Gunvor in just "weeks or months" amid talks with US LNG developers about purchasing up to 2 million mt/year of liquefaction capacity to source the supply, Chesapeake CEO Nick Dell'Osso said March 30. If Chesapeake succeeds in securing offtake capacity and finalizing an SPA with Gunvor, it will represent the first case of a US gas producer fully bridging the divide between the US gas market and the global LNG markets, according to S&P Global analysts. The deal could also represent a new paradigm for US producers keen to take on greater global gas exposure and a new way of commercializing US LNG projects. The heads of agreement that Chesapeake signed with Gunvor on March 6 marked an industry first in that the offtake agreement with a targeted start date in 2027 did not specify the liquefaction terminal where the LNG will be produced. Chesapeake, which does not hold any offtake capacity at a current US LNG terminal, said the facility chosen will most likely be a project that has not advanced to construction, "but it doesn't have to be," Dell'Osso said. "It's going to be about cost of liquefaction; it's going to be about surety of execution of construction and bringing the facility online," he said. "Those are really the key factors." Gunvor and Chesapeake saw announcing the preliminary deal when they did as giving them "a better ability to attract the right interest" from LNG projects, Dell'Osso said. "A lot of pieces have to come together to make these deals work, and we felt that by being clear that this part of it had been accomplished, it would facilitate the next step," he said. Many US LNG projects that have yet to reach a final investment decision could accommodate the Chesapeake-Gunvor deal, which could help some developers commercially sanction projects that have yet to get over the line after the wave of long-term contracting during the past year. The volumes under the deal would be supplied free on board for a 15-year term, with the purchase price indexed to the Platts JKM spot LNG price for delivery into Northeast Asia. Platts is part of S&P Global Commodity Insights. "Over the next several years, as much as 20% or 25% of US production will flow into international markets," Dell'Osso said. "Therefore, the price of those international markets will influence our market here domestically. We would like to be diversified into pricing that reflects that as well and have that exposure, so that we aren't disconnected from where that significant amount of production ultimately is priced. "Having a tie directly into an international market is attractive to us, and JKM being the largest international market seemed like the first right step," he said.
Worker shortage looms over LNG boom - The boom in U.S. liquefied natural gas exports could hit a new roadblock in the years ahead: workforce shortages. Since Russia invaded Ukraine last year, U.S. companies have raced to fill gaps in European natural gas markets. Eight export terminals currently operate along the Gulf Coast of Texas and Louisiana, with five more under construction. Another 11 have received approval from the Federal Energy Regulatory Commission. That many projects will require thousands of workers, both to build the terminals and then to operate them once construction is finished. LNG executives worry that today’s labor pool isn’t big enough to meet the demand. “It’s become more and more a topic of discussion in the industry as we’re getting more imbalance on this,” said Wouter Pastoor, chief operating officer of Delfin Midstream. “There’s a limited pool of labor experienced to build such megaprojects, whether it’s LNG or other types of petrochemical, and we think it will be a risk factor for those projects.” U.S. exports of LNG averaged 10.6 billion cubic feet per day in 2022, a 9 percent increase compared to 2021, according to the U.S. Energy Information Administration. The federal agency estimates that could grow to 14 billion cubic feet per day by 2024, as new LNG export projects come online. The boom has prompted debate over how increasing natural gas exports fits with Biden’s climate goals. Environmental groups — including the Sierra Club and the Natural Resources Defense Council — have fought approval of new LNG projects, arguing that they will spew more pollutants into communities already suffering from air pollution nearby petrochemical plants and refineries. But analysts expect the boom to continue. Rystad Energy, a research and business intelligence company, forecasts that construction activity for LNG projects will triple by 2025 in coastal Louisiana and Texas. That year, capital expenditures could total $15 billion, up from $5 billion in 2022, according to Rystad. At the peak of construction, 17 new projects could be underway, said Matthew Fitzsimmons, senior vice president of supply chain research for Rystad Energy. That would dwarf the 2017 boom in LNG export projects; at the time, S&P Global reported that companies struggled to hire around 30,000 workers for four projects.
‘A true toxicant’: Oil refinery dumps tons of polluted wastewater into Lake Michigan — (WOOD) — A new analysis of industry data maintained by the U.S. Environmental Protection Agency found that five of the worst wastewater polluters in the American oil refinery industry are in the Great Lakes region and one of them dumps directly into Lake Michigan.The analysis was released in January by the Environmental Integrity Project, a nonprofit organization that bills itself as a watchdog to make sure the EPA properly enforces environmental laws.In “Oil’s Unchecked Outfalls,” the EIP reports the 81 oil refineries across the country released 1.6 billion pounds of chlorides, sulfates and other dissolved solids in its wastewater in 2021. That doesn’t include the 10,000 pounds of nickel, 60,000 pounds of selenium and 15.7 million pounds of nitrogen that drew the focus of the study.While the EPA organizes the information, EIP Executive Director Eric Shaeffer told News 8 that the data is actually collected by the individual oil refineries and submitted to the agency.“Ultimately, (the EPA) is required to monitor their discharges. They report some of the pollutants that we looked at, but a lot of times (the refineries) are not required to,” Shaeffer said. “We looked at some pollutants that the EPA currently doesn’t regulate. We looked at them because they are harmful.” One of the EIP’s primary concerns is how “outdated” the EPA’s current regulations are. The nonprofit says the last pollution standards set for industrial discharges were set in 1985’s Clean Water Act.“And that was just for stormwater. Processed wastewater is generally the most toxic. Those standards were (set in) 1982,” “Our data comes from a couple of sources,” Shaeffer told News 8. “One is if the state agency, for its own reasons, requires a refinery to monitor. One of the pollutants we studied like selenium. We pick up that data and we used it. If that data doesn’t exist, we go to the permit applications because those require the companies when they come in to renew those permits to disclose what they are putting into the water.” Between the primary three pollutants — selenium, nickel and nitrogen — five facilities in the Great Lakes region were among the top 10 polluters.The Phillips 66 Wood River refinery in southern Illinois made the top 10 for all three: discharging more nickel than any other U.S. facility, the sixth-most selenium and the seventh-most nitrogen.Citgo’s refinery in Lemont, Illinois — about 25 miles southwest of Chicago — discharged the fourth-most nitrogen and fifth-most selenium.Koch Industries’ Pine bend refinery in Minnesota discharged the fourth-most selenium while ExxonMobil’s refinery in Joliet, Illinois, discharged the ninth-most selenium.While those four refineries are responsible for a substantial amount of regional pollution. They don’t flow directly into the Great Lakes. The same can’t be said for BP’s Whiting refinery that sits on the southwest shore of Lake Michigan.The Whiting refinery discharged 3,589 pounds of selenium in 2021, the third-most of any U.S refinery that year. That same year it discharged 574,008 pounds of nitrogen, fifth-most in the country.The Whiting refinery has four primary discharge points: two that dump directly into Lake Michigan and two that dump into the Lake George Canal — which flows into Lake Michigan.
Another Enbridge Line 5 Permitting Delay Pushes Construction to 2026 - Enbridge Inc. said the start of construction on its Line 5 natural gas liquids and oil pipeline could be delayed until 2026 after the U.S. Army Corps of Engineers moved to extend the permitting process for its Michigan project. The Army Corps made the decision to extend the permitting process for the four-mile Great Lakes Tunnel Project under the Straits of Mackinac by an additional two years after receiving hundreds of thousands of public comments. The agency had previously targeted this fall for completion. Representatives for Enbridge wrote that the delay of the process could mean an even longer extension of its construction timeline for the $500 million project intended to maintain the flow of volumes into Michigan and Ontario. “While we are supportive of a thorough, comprehensive and carefully considered permitting process that ensures adequate opportunity for review and comment, we are disappointed with the extended timeline for a project of this scope,” the company said. Enbridge has been pursuing its most recent quest for approval of the project since it filed an application in 2020, but plans have been ongoing since before 2018. The tunnel would house a portion of Enbridge’s 540,000 b/d dual pipeline that currently runs through the waters of the straits. Line 5 foes earlier postponed the project by protesting the 2018 tunnel agreement between Enbridge and former Republican Michigan officials. Court disputes are still ongoing between Enbridge and the current Democratic administration headed by Gov. Gretchen Whitmer. Enbridge has also faced regulatory challenges to the Line 5 leg running through Wisconsin. Lake Superior Chippewa’s Bad River Band has been pursuing action against the company in order to have the segment removed from its tribal lands.
US puts Italy-sized chunk of Gulf of Mexico up for auction for oil drilling - An enormous swathe of the Gulf of Mexico, spanning an area the size of Italy, was put up for auction on Wednesday for oil and gas drilling, in the latest blow to Joe Biden’s increasingly frayed reputation on dealing with the climate crisis.The president’s Department of the Interior offered up a vast area of the central and western Gulf, including plunging deep water reaches, for drilling projects that will stretch out over decades, despite scientists’ urgent warnings that fossil fuels must be rapidly phased out if the world is to avoid disastrous global heating. The auctions also come despite Biden’s own pre-election promise to halt all drilling on federal lands and waters.A total of 313 tracts of ocean, spanning 1.6m acres, received high bids during the auction, the administration announced on Wednesday afternoon. There were 32 fossil fuel companies involved in the auction, collectively bidding $309.7m for drilling rights. The amount offered by the federal government was much larger than this, however. The bids will be evaluated by the government in the coming months before leases are issued.In all, 73.3m acres (30m hectares), an area roughly the size of Italy, was made available to drilling companies, less than a month before the 13th anniversary of the Deepwater Horizon oil spill disaster. The sale, known as lease 259, had the potential to extract more than 1bn barrels of oil and 4.4tn cubic feet of gas over the next 50 years, according to the US federal government.The auctions come just two weeks after Biden’s administration approved the controversial Willow project, a drilling endeavor in the remote tundra of Alaska’s arctic that will remove more than 600m barrels of oil over its lifetime, and the two actions have caused major alarm among those in favor of a livable climate, including Biden’s usual allies.“For the first half of his presidency, Joe Biden led on climate with transformative vision but in the second half he seems to be signaling a disastrous climate U-turn,” Ben Jealous, executive director of the Sierra Club and a prominent progressive, said.
What Are the Biggest Health Threats Offshore Oil Workers Face? | Rigzone - There are three types of primary health threats faced by offshore oil and gas workers - natural threats, infectious disease, and personal health threats. That’s according to Lars Petersen, the Regional Medical Director of health and security services firm International SOS, who told Rigzone, “we’re seeing more natural disasters due to climate change, such as frequent and erratic tropical storms and hurricanes”. “Additionally, due to climate change infectious diseases are increasing. Outbreaks of new and existing infections becoming more regular, recent examples include Covid-19, measles, and malaria,” he added. “Personal health threats come in the form of an aging workforce, which often has a higher rate of underlying chronic disease and an increase in mental health issues (depression and anxiety) brought on by the Covid-19 pandemic,” Peterson went on to state. Speaking to Rigzone, Will Nichols, the Head of Climate and Resilience at risk intelligence company Verisk Maplecroft, said the company’s research in 2021 showed that more than 600 billion barrels equivalent of the world’s commercially recoverable oil and gas reserves are facing “high or extreme risks from physical climate threats by mid-century”. “Offshore, these mounting risk will take the form of increasingly frequent and powerful storms, which can disrupt operations, damage assets, and threaten the safety of workers,” Nichols told Rigzone. “More chronic threats, such as rising temperatures and sea levels, have the potential to force investments in resilience, whether that is maintaining operability in longer periods of extreme heat or protecting coastal infrastructure from increased risks from flooding and storm surges,” he added. “Moreover, risks of accidents and spillages in ecologically sensitive locations could also increase as pipelines are exposed to more extreme weather events – events that they may not have been designed to withstand,” Nichols continued.
New GOM Lease Sale Reflects Need for Finalized Leasing Program | Rigzone - Gulf of Mexico Lease Sale 259 reflects the need for a finalized leasing program, the National Ocean Industries Association (NOIA) said in a statement sent to Rigzone following the conclusion of the sale. “Lease Sale 259 is the first Gulf of Mexico offshore oil and gas lease sale since November 2021,” NOIA President Erik Milito said in the statement. “Mandated by the Inflation Reduction Act, which was signed into law by President Biden, Lease Sale 259 and the resumption of Gulf of Mexico oil and gas lease sales has been needlessly overdue,” he added. “The preceding gap in leasing underscores why the next federal offshore oil and gas leasing program must be finalized and implemented as quickly as possible. Policies that restrict domestic offshore development require imports to make up the shortfall, and that supplemental production comes from higher-emitting operations in other countries to the detriment of our energy security, economic wellbeing, and emissions and climate progress,” Milito continued. In the statement, Milito described Lease Sale 259 as an opportunity to strengthen national security interests and develop domestic energy supplies in the face of geopolitical uncertainty and tight global demand. “Companies need lease opportunities to explore and potentially develop domestic energy resources,” Milito said. “Our national energy needs clearly depend upon a commitment to continued U.S. offshore energy development. U.S. Gulf of Mexico offshore energy production is a key component of a national energy strategy that will ensure Americans can continue to have access to fundamental domestic energy that is produced safely, sustainably, and responsibly,” he added.
Is It Time To Refill The Strategic Petroleum Reserve? - There is a narrative that I hear from time to time that President Biden made billions of dollars for the country by selling oil from the Strategic Petroleum Reserve (SPR) last year at high prices and buying it back at low prices. The only problem is that the story is only half true. The Biden Administration did indeed sell a lot of oil from the SPR last year. Further, oil prices in 2022 were the highest they had been in years, averaging nearly $95 a barrel — the highest level since 2013. However, the Biden Administration hasn’t bought back any of the 266 million barrels of oil that have been removed from the SPR since his inauguration. If Biden wants to legitimately receive credit for successfully playing as an oil speculator, then he needs to put the oil back. Right now, all he has done is deplete oil reserves that were built up under several previous administrations (Democratic and Republican). Previously, the Biden Administration had resisted calls to refill the SPR, citing high prices. In October, with oil prices still above $80, the administration announced it would set up a process to refill the SPR when oil was priced between $67 and $72 a barrel. As Bloomberg energy and commodities columnist Javier Blas pointed out on Twitter, the entire futures curve for West Texas Intermediate (WTI) is now below that range: “The whole WTI futures curve is now below the bottom range of $67-$72 a barrel given by the White House to buy crude for the SPR. That’s the **whole curve, including the contract for immediate delivery**. Let’s see if the Biden administration pulls the trigger.” Of course, the public loves low oil prices. Last year’s massive SPR release probably helped arrest the spike in oil prices. The risk of buying back that oil is that oil prices may stop falling. But, not refilling the SPR leaves the U.S. with a significantly lower insurance policy against any oil supply disruptions. This would seem to be an opportune time to put at least some oil back into the SPR, while claiming credit for selling high and buying low.
US could buy back oil for strategic reserve late this year (Reuters) - The U.S. could start buying back crude oil for the Strategic Petroleum Reserve late this year after President Joe Biden last year directed the largest ever sale from the stockpile, Energy Secretary Jennifer Granholm said. The administration intended to repurchase crude oil for the SPR when prices were at or below about $67-$72 a barrel, after last year's 180 million barrel sale drove the level of the stockpile to its lowest since 1983, the White House said in October. Biden conducted the sale to relieve oil prices that shot up after Russia invaded Ukraine. U.S. oil prices CLc1 this month touched that range but no sales were announced. Last week, Energy Secretary Jennifer Granholm told lawmakers in a House hearing it would be tough to take advantage of this year's relatively low prices to fill the reserve back up, raising concerns about energy security. But Granholm told Reuters during a visit to Puerto Rico that purchases could begin late in 2023. "We will begin that process this year but to refill the full amount is impossible to do in one year," Granholm said. The department is conducting a 26 million barrel SPR sale mandated by Congress and two of the four SPR sites in Texas and Louisiana are down for maintenance, both of which have delayed buy-backs. Granholm said the SPR sites undergoing life extension work at Bryan Mound in Texas and Bayou Choctaw in Louisiana would be "down into the fall." "We can start the process of buying back depending on some of these exchanges in the fourth quarter," Granholm said, referring to returns of more than 25 million barrels of oil from previous exchanges with oil companies. She said any buy-backs would also depend on where the price was. The SPR currently holds about 372 million barrels, the lowest since 1983, in hollowed-out salt caverns along the Gulf Coast.
South Texas Drilling Permit Roundup: EOG plans eight wells for Atascosa - EOG Resources Inc. shows indications of high ambitions for Atascosa County, filing eight of its 11 new drill permit applications there this week. The remaining three drill sites are planned for Gonzales County, according to EOG's filings with the Texas Railroad Commission (TRC). Gonzales County also was a high-interest area last week, with three different oil and gas companies filing 10 new drilling permit applications there. EOG's plans to place its Gonzales County oil wells 14.3 miles east of Smiley, drilling them to a total depth of 12,500 feet. EOG's requested Atascosa sites are 8.2 miles southwest of Christine, and will be drilled to a total depth of 10,600 feet. The drilling sites are being mapped. Total depth refers to the length of pipeline required for the vertical and horizontal sections of a well. Next on the leaderboard is EP Energy E&P Company LLC, which was granted five new drilling permits for La Salle County — the second most popular county for drilling this week. Also, four companies, Dewbre Petroleum Corporation, Merit Energy Company, T-C Oil Company LLC and Millennium Exploration Co. LLC, filed for recompletion of their oil and gas wells. New and Noteworthy: EOG announced in February the rollout of a $6 billion capital plan, following the addition of the Ohio Utica Shale to its multi-basin portfolio. The plan, as described in EOG's Fourth Quarter 2022 Earnings Report, outlines increased activity focused on Eagle Ford and on EOG's premium plays on the Powder River Basin, South Texas Dorado and Ohio Utica Shale.
Study says companies using “forever chemicals” in Texas oil and gas wells | The Texas Tribune -- -At first, they were considered a miracle chemical: polyfluoroalkyl substances, developed by 3M in the 1930s, could keep scrambled eggs from sticking to a frying pan. They could make rainwater roll right off a jacket, and when added to fire fighting foams, put out major fires quickly. But as their use grew, researchers started to link PFAS to a range of health problems, including birth defects, cancer, and other serious diseases. The chemical doesn’t break down, and can persist in water and soil, and even human blood, and has acquired the nickname “forever chemical.”Despite scientific concern, PFAS are still used in everything from waterproof camping gear to fast food containers. And according to a new study, they are used even more in Texas.A new report by the Physicians for Social Responsibility documents the wide use of PFAS in oil and gas drilling and calls on Texas to follow the lead of some other states in restricting use of the chemicals. The group criticized state regulations that allow energy companies to withhold information on the use of chemicals they deem to be proprietary. Texas state Representative Penny Shaw Morales (D-Houston) filed a bill March 9 calling for an official, state-sponsored study on the use of PFAS in fracking and the potential public exposure through air and water, to determine whether the chemical should be restricted. “PSR’s report highlighted shortcomings in disclosure standards and accountability, particularly up the chain regarding the manufacturing of chemical products that are used in fracking fluids,” Morales Shaw said in a written statement. PFAS are used to reduce friction for drill bits as they move through the ground, said Barb Gottlieb, an author on the study. Over the last decade in Texas, oil and gas companies have pumped at least 43,000 pounds of the toxic chemical into more than a thousand fracked oil and gas wells across the state,according to the study.“What was distinctive about Texas was the staggering volume of PFAS reported in use,” Dusty Horwitt, another study author, says. “It’s far and above what we’ve found in other states.” That’s likely because of the scale of fracking in Texas compared to other states, he explained. The report on Texas’ use of PFAS in wells follows similar analyses that Physicians for Social Responsibility has conducted on the use of the forever chemical in states like Ohio andColorado, as well as nationally. The studies analyzed publicly available data from FracFocus, a national registry that tracks the chemicals used in fracking. The database is managed by the Ground Water Protection Council, a nonprofit made up of state regulatory agencies. The data that PSR was able to analyze might not reveal the full extent of PFAS contamination in Texas, the authors say. FracFocus is composed of industry-reported data, and there are major exemptions in state and federal law that allow companies to withhold certain information by labeling it a trade secret.The study found that 6.1 billion pounds of chemicals injected into Texas wells were listed as trade secrets, meaning that no one – public health researchers, local environmental regulators, and landowners who might be drinking contaminated water – knows what they’re being exposed to.
EPA cites 2 oil and gas firms over Permian Basin pollution - (AP) — Two Texas companies have resolved Clean Air Act violations with the Environmental Protection Agency by agreeing to reduce emissions of planet-warming methane and other harmful pollutants wafting from the nation’s largest oil and gas producing region.EPA announced Monday that Matador Production Company has agreed to pay $6.2 million in fines and mitigation measures related to 239 oil and gas well pads in New Mexico. Permian Resources Operating agreed earlier this month to pay $610,000 and make improvements to its equipment to settle environmental violations.The enforcement actions came after EPA flew a helicopter equipped with a special infrared camera that can detect emissions of hydrocarbon vapors that are invisible to the naked eye. EPA announced a new round of overflights in August, four days after publication of an investigation by The Associated Press that showed 533 oil and gas facilities in the region are emitting excessive amounts of methane and named the companies most responsible. Colorless and odorless, methane makes up about 95 percent of natural gas and a potent greenhouse pollutant that traps 83 times more heat in the atmosphere over a 20 year period than an equivalent amount of carbon dioxide.
Pulling Back the Curtain on North America's Crude Oil Trading Market Trading in the highly integrated US/Canadian crude oil market is undergoing a profound transformation, driven mostly by the pull of exports off the Gulf Coast. But the shifts in flows, values and even the trade structures being used today are not well understood outside a small cadre of professional traders and marketers. Consider a few examples: Domestic sweet oil traded at Cushing on NYMEX is not West Texas Intermediate — WTI at Cushing has averaged a hefty $1.80/bbl over NYMEX for the past year. Most spot Houston and Midland crudes trade as buy-sell swaps. WTI in Houston trades at a discount to Corpus Christi and sweet crudes in Louisiana. Crude in Wyoming trades at a premium to Cushing. And the Gulf Coast is the highest-value market for Canadian heavy crude. This is not your father’s (or mother’s) oil trading game. Our mission in this blog series is to pull back the curtain on physical crude trading in North America, explain how it works, what sets the price, and who is doing the deals. Crude oil markets in North America are dynamic, interdependent, and uniquely built around the mechanics of physical pipeline deliveries. At the same time, they can be convoluted, arcane and quite opaque, even while appearing to be transparent. Increasingly, the price of oil in North America drives global markets. But what determines the price of crude oils in North America? Sure, at the macro level it’s the economics of production on the supply side, refined products on the demand side, crude import/export flows, transportation costs, and crude quality specs. But markets don’t trade at the macro level. Individual deals done between buyers and sellers are the real price makers, and it’s the workings of those deals that are generally misunderstood by many market participants, even those who buy and sell large volumes of physical barrels. Most physical crude oil barrels in North America move under term contracts with formula prices, which are frequently based in part on indices from price reporters like Argus and Platts. But where do they get their prices? The spot market, of course. Oil trade data is aggregated by price reporters from a variety of market participants and is used to provide a daily market assessment of an array of crude oil grades that trade at various locations across North America.
McWhinney-Backed Fracking Project in Loveland Pulls Out - A McWhinney-owned entity in charge of a proposed fracking project in Loveland — submitted a permit request for its South Well Pad. By Monday, March 27, the application was gone. Rather than being a case of weekend regrets, MRG made an “operational and development decision" to pull the permit request after obtaining new information about local development plans, says Barb Jones of GroundFloor Media, speaking on behalf of the company.The proposed fracking pad would have been directly adjacent to a new Centerra South development that McWhinney, owned by longtime Colorado developers Chad and Troy McWhinney, is hoping Loveland City Council will greenlight in the coming weeks. “The decision to withdraw the permit request was made following increased interest in additional retail, mixed-use and residential development within the planned Centerra South community,” MRG said in a release.The South Well Pad is one of two fracking pads McWhinney was planning to install.Between the two pads, there would be over twenty wells used to access minerals under the Lakes at Centerra — a residential McWhinney development that sits at the intersection of Interstate 25 and Highway 34 in Loveland.When the fracking projects were proposed, residents of and near the Lakes at Centerra weren’t happy and questioned how it was okay for fracking to take place under the development, since it's a National Wildlife Federation-certifiedCommunity Wildlife Habitat. The area earned the designation by educating people about habitat restoration, making homes and community spaces animal-friendly, and encouraging native species in landscaping.Tamara Fairbanks, a Centerra resident since 2016 who moved there in preparation for her retirement, was one of those concerned a year ago. She tellsWestword the decision to scrap the south pad doesn’t encourage her much.“I was happy to see the withdrawal, but I wonder if it was a concession of sorts to get Centerra South approved,” she says.
Environment Groups Seek Decision in Wyoming Oil Lease Challenge -Two environmental groups filed a motion for summary judgment in a lawsuit challenging a 2022 oil and gas lease sale in Wyoming held by the Interior Department’s Bureau of Land Management. The Wilderness Society and Friends of the Earth contend the bureau violated the National Environmental Policy Act when it held the June 2022 Wyoming oil and gas lease sale with minimal environmental review. The lawsuit, Wilderness Society v. Haaland, was filed in June in US District Court for the District of Columbia. The sale was conducted alongside sales in Colorado, Montana, North Dakota, Nevada, and New Mexico after a court ordered the Biden administration to end its pause on oil and gas leasing, a key element of President Joe Biden’s climate agenda. The Wyoming auction was many times larger than the sales in the other five states, where the bureau auctioned 3,624 acres in all the states combined. Drilling rights to nearly 120,000 acres of federal land in Wyoming were auctioned to oil and gas companies during the lease sale. The bureau received bids for leases spanning much smaller area—67,627 acres. The leases were sold for $12.9 million. The Interior Department didn’t immediately respond to a request for comment Friday. “In most parts of the country, BLM exercised restraint and offered smaller amounts of acreage for lease. Not so in Wyoming: there, BLM offered for lease more than thirteen times as many acres as it offered in all other states combined,” the environmental groups say in a memo filed in their motion for summary judgment. The leases sold “jeopardize drinking water sources, threaten wildlife, and will lead to enormous social costs due to increased greenhouse gas emissions,” the memo says. The groups claim that the bureau acted arbitrarily and capriciously when it offered large acreages for lease, and are asking the court to set aside the sale because they say it violated NEPA. The case is Wilderness Society v. Haaland, D.D.C., 1:22-cv-01871, 3/23/23.
Lawsuit over harm to polar bears, walruses from oil exploration tossed - (Reuters) - An Alaska federal judge has backed a Biden administration decision allowing the fossil fuel industry to injure a limited number of polar bears and walruses during oil development and exploration. U.S. District Judge Sharon Gleason on Wednesday dismissed the lawsuit filed in 2021 by environmental groups challenging a U.S. Fish and Wildlife decision that said industrial activity in Alaska’s Beaufort Sea would have a negligible impact on the two species. The 2021 federal decision authorized nonlethal and unintentional harms to polar bears and Pacific walruses during fossil fuel exploration and development for five years. The government said then that the activity can disturb bear dens and impact walrus prey, but those harms could be avoided and minimized through strict rules. Gleason on Wednesday said the agency's decision was consistent with how the federal government has approached the issue in the past. And despite claims by the Sierra Club, the Alaska Wildlife Alliance, the Center for Biological Diversity and others that the agency’s analysis underestimated the impact to the animals, Gleason said the decision was well explained and based on a rational interpretation of data. Joanna Cahoon, an attorney who represented the groups, said in a statement Thursday the judge’s ruling was disappointing and “doubles down” on threats to the bears from an industry that is “already responsible” for the climate crisis threatening their existence. A spokesperson for the U.S. government declined to comment. An Alaska Oil and Gas Association spokesperson said the court's decision "properly rejects the meritless claims" in the lawsuit. In their complaint, the environmental groups said that oil and gas exploration in Alaska’s northern slope could harm or otherwise harass roughly half of the 907 polar bears alive in the area. The bears are protected as an endangered species. The groups said development would have a particularly serious impact on cubs. Those baby animals are weak and need time in the den with their mothers, and their survival is crucial to restore population levels to healthy levels, according to the suit. The case is Alaska Wildlife Alliance et al. V. U.S. Fish and Wildlife Service et al., U.S. District Court for the District of Alaska, case No. 3:21-cv-00209.
Supreme Court refuses appeal by lawyer jailed for contempt in $9.5 billion Chevron environmental case - The Supreme Court refused Monday to consider the appeal of a disbarred lawyer jailed for contempt of court after he won a $9.5 billion judgment against Chevron in an environmental lawsuit in Ecuador. The attorney, Steven Donziger, was sentenced to six months in jail for failing to comply with a judge's order to surrender all of his electronic devices. He had asked the Supreme Court to take the case, arguing that a federal district court judge overstepped his legal authority in appointing three lawyers as special prosecutors to handle Donziger's contempt trial after the U.S. Attorney in Manhattan declined to prosecute him. Two conservative justices, Neil Gorsuch and Brett Kavanaugh, dissented from the decision, saying they would have the Supreme Court accept the appeal by Donziger. Gorsuch, in his blunt written dissent, suggested that the appointment of special prosecutors by the judge violated the Constitution's separation of powers of branches of government, which gives the executive branch the power to file criminal cases, and the judiciary the power to interpret the laws. "In this country, judges have no more power to initiate a prosecution of those who come before them than prosecutors have to sit in judgment of those they charge," Gorsuch wrote. "Our Constitution does not tolerate what happened here," he added.
Fracking Chemicals Global Market to 2028: Rising Fracking Activities and Technological Advancements Drives Growth: Research and Markets - Global Fracking Chemicals Market is anticipated to relish a staggering growth in the forecast period due to increasing shale exploration and exploitation activities by oil and gas-producing majors.The market is growing by leaps and bounds due to the emerging demand for shale gas from developing countries. In recent years, there has been a surge in drilling activities of Wild Cat exploratory wells at oil and gas prospective regions. Fracking fluids are a necessity to extract hydrocarbons from tight reservoir fields.Fracking chemicals are well known for tapping hydrocarbon potential from tight oil-bearing formations beneath the underground. Due to the vast amount of hydrocarbon present in the tight conventional oil and gas reservoirs, it becomes important to harness the energy of this huge volume of hydrocarbon accumulated using Unconventional Hydrocarbon extraction techniques like Hydraulic Fracturing.This, consequently, requires a huge amount of fracking fluids and other chemical additives to aid in the fluidity of petroleum deposits from underground to the surface driving the demand for fracking chemicals. Unconventional wells encounter a major challenge like fluid transmissibility with ease when drilled using water-based and oil-based mud. So, they need techniques other than the usual trivial methods via which tight formations can be easily exploited. This is where the Fracking process comes into the picture. Hydraulic Fracturing or Fracking is an emerging technique where oil is taken out from tight and fine-grained source rocks. An increase in Hydraulic fracturing activities has led to a surge in the demand for Fracking chemicals over the forecast period. The frequency of horizontal fracking activity has substantially increased recently. A considerably greater quantity of fracking fluids and chemicals is required for this activity. As a result, there has been a steady rise in the need for fracking chemicals and fluids. Technological advancements in drilling activities (like the preparation of hydraulic mud) have also skyrocketed the capacity utilization of fracking chemicals. As new industries are being established in emerging economies, there is a huge surge of energy required for operating those industries. Its source of energy is primarily derived from hydrocarbon deposits which are increasingly extracted using fracking techniques.According to the BP Statistical Review of World Energy, the primary energy demand across the globe has increased by 5.8%, in 2021, while consumption of fossil fuels remained at the same levels as compared to the historic years which accounted for the growth of commodity trade market over the forecast period. Henceforth, demand for fracking chemicals is escalating in different regions seeking industrial growth over the forecast period which as result is driving the market growth.
Activists across BC call to end fracking - Environmental organizers in dozens of communities across BC are asking the government to frack off. Local activists with Frack Free BC hung banners in Stanley Park and by Waterfront Station and pasted posters across town yesterday. Similar actions took place from Surrey and Squamish to Victoria and the Comox Valley.“Everybody agrees we have got to stop burning fossil fuels, but the province doesn’t seem to accept that means we need to end fracking for gas,” said Peter McCartney, a climate campaigner with Wilderness Committee, in a press release. “If governments have one job it is to keep their citizens safe. In a climate emergency that means phasing out these polluting products, not building a brand new LNG [liquified natural gas] export industry.”Frack Free BC, a campaign organized by Stand.earth, Wilderness Committee, and Dogwood BC, are calling on the government to stop issuing fracking permits, and ultimately wind down the industry as part of the transition to a just green economy. Fracking involves injecting pressurized liquid into bedrock deep below the earth’s surface to create cracks that oil or gas can flow through. While the process makes it practical to reach oil and gas deposits deep in shale, it can cause air and water pollution—and use a large amount of fresh water—as well as produce fossil fuels that release large amounts of carbon dioxide when burned. Around 80 per cent of gas extraction in BC is done through fracking. The oil and gas industry as a whole is responsible for 19 per cent of the province’s emissions. “There are over 30,000 fracking wells in BC’s northeast, a number that could double in the next decade, if Premier Eby chooses not to stand up against LNG expansion,” said Kiki Wood, senior oil and gas campaigner with Stand.earth, in a press release. “If the B.C. government cancels fossil fuel subsidies, and puts a moratorium on new fracking wells, we can still get back on track to meeting our climate targets,” Wood said. A 2019 report found that BC had spent billions in subsidies and financial support for fracking companies in the previous two years, and 2022 research estimated that the province had given out $1.16 billion in fracking subsidies in 2021. In BC’s most recent provincial budget, the government signalled that fracking production would increase, despite diminishing profits from the sector.
Qatar takes stakes in two Exxon oil and gas projects offshore Canada - QatarEnergy said on Wednesday it signed a deal for stakes in two of ExxonMobil's offshore explorations in Canada as the Qatari state-owned firm builds up its global energy portfolio. The Qatari company first entered offshore exploration in Canada in 2021 with a 40 per cent stake in ExxonMobil's licence for EL 1165A off the coast of Newfoundland and Labrador. The latest farm-in agreement announced on Wednesday gives QatarEnergy a 28 per cent interest in licence EL 1167, with ExxonMobil Canada holding 50 per cent and Cenovus Energy 22 per cent, as well as 40 per cent in licence EL 1162, with ExxonMobil Canada holding 60 per cent. "We are pleased to sign this agreement with our strategic partner, ExxonMobil, to further grow our offshore Atlantic Canada portfolio as part of our international growth drive," QatarEnergy CEO Saad Al-Kaabi said in a statement. The company has in recent years expanded internationally, gaining stakes in oil and gas projects around the world by signing deals with major energy companies. Qatar is already one of the world's largest liquefied natural gas suppliers and aims to expand production to 126 million tonnes annually by 2027 from 77 million tonnes under its two-phase North Field expansion project.
200 barrels of oil spill into Southern England harbour -A major incident has been declared after about 200 barrels of reservoir fluid leaked into the water at Poole Harbour in Dorset, southern England, on Sunday, the BBC reported. The leak occurred at a pipeline operated by Perenco, under Owers Bay, according to the report, citing Poole Harbour Commissioners (PHC). PHC has activated its oil spill plan and the pipeline had been shut down, with booms placed on either side of the leak, the report said. "Anyone who has come into contact with the spill, they should be rinsed with water," the agency said in a statement to BBC. PHC did not immediately respond to a Reuters request for a comment.
Perenco UK says 60% of oil spill in southern England recovered – (Reuters) – Anglo-French oil company Perenco’s UK unit said on Wednesday it had recovered about 60% of the estimated oil leaked on Sunday at one of its well sites in Wytch Farm in Dorset, southern England.
The Most Important Oil Price Is About to Change for Good -After years of wrangling, the world’s most important oil price is about to be transformed for good, allowing crude supplies from west Texas to help determine the price of millions of barrels a day of petroleum transactions. The shift is because the existing benchmark, Dated Brent, is slowly running out of tradable oil for it to remain reliable. As such, its publisher S&P Global Commodity Insights — better known by traders as Platts — has been forced to make a dramatic overhaul. Its switchover was fraught with controversy and caused a lot of stress among physical oil traders. But it was necessary. BP Plc at one stage said that Dated Brent was subject to “increasingly regular dislocations.” But the future of Dated is now set. From cargoes for June onward, West Texas Intermediate Midland, oil from the Permian will become one of a handful of grades that set the Dated benchmark. Dated, as it’s commonly known by oil traders, helps to set the price of about two-thirds of the world’s oil and even defines the price of some gas deals. Oil producing states will often sell their barrels at small premiums or discounts to Dated, so the precise mechanics of how it is formed matter to them. In addition, the benchmark lies at the center of a complex web of derivatives, ultimately shaping Brent oil futures that get traded on exchanges. Dated affects a host of oil prices, so even crude in Dubai could feel the effects, according to Adi Imsirovic, a veteran oil trader and senior research fellow at the Oxford Institute for Energy Studies. Traders will be able to offer WTI Midland for sale from the US Gulf Coast. It will be delivered into Rotterdam and then price will be netted back using a freight adjustment factor as if it’s shipped from the North Sea. By following a careful process, Platts will evaluate if the oil is being offered at a higher or lower level than five existing grades that set Dated — Brent, Forties, Oseberg, Ekofisk or Troll. If Platts judges that WTI Midland is the most competitive price on offer — or actually sold — then it could set Dated. So WTI Midland might then influence the price a seller of an Atlantic Basin barrel charges a refinery in China.
North Sea oil and gas firms are struggling despite BP and Shell record profits, industry body warns --The record earnings of BP and Shell do not reflect the challenges most North Sea oil and gas producers face from the windfall tax, argued the UK’s leading offshore industry body. Ross Dornan, market intelligence manager at Offshore Energies UK, told City A.M. that the bumper profits of energy giants have been generated from global trading following Russia’s invasion of Ukraine, with the UK footprint being less than ten per cent of their businesses. This meant they could handle the impact of a windfall tax, while producers hedged in UK markets suffered huge hits to their finances – forcing them to drop projects which could boost generation and potentially ease energy bills. He said: “Some of the global profits from and Shell BP are very eye catching but I think there has been a misunderstanding out there. Just because they’re UK headquartered on the FTSE as a PLC, I think people automatically assume that they’re making that money in the UK.” Dornan also argued that the record oil and gas prices did not translate like-for-like in the UK industry, which was home to a declining continental shelf with tighter margins due to higher extraction costs and operating expenses. “We need to make sure that we’re not trying to design our fiscal system in response to global profits, because those profits just simply aren’t accessible to the UK’s tax system. The reality on the ground here in the UK can be very different. We’re a more mature basin and we’re a bit more marginal than the global basins,” he explained. The overall tax rate has risen from 40 per cent to 75 per cent in just 10 months for oil and gas companies after Rishi Sunak first unveiled the Energy Profits Levy as Chancellor last May, before it was hiked by Jeremy Hunt later that year. This means the windfall tax has increased 25 to 35 per cent and sits on top of 40 per cent special corporation tax rate North Sea operators already pay.
Russia Could Seek Compensation Over Nord Stream Sabotage - Russia could demand compensation for damages over the sabotaged Nord Stream gas pipelines in the Baltic Sea, a senior Russian diplomat told Russian news agency RIA Novosti in an interview.“We do not rule out raising the issue of compensation for damages as a result of the explosion of the Nord Stream gas pipelines,” Dmitry Birichevsky, Head of the Economic Cooperation Department at the Russian Foreign Ministry, was quoted as saying. The official did not specify with whom Russia would seek compensation.Russia will continue to insist on an investigation into the blasts that involves Russian representatives, Birichevsky said, adding that the “Western countries are actively sabotaging work” on a Russia-proposed draft UN resolution calling for an independent investigation. The Nord Stream pipelines were sabotaged in late September in still unexplained circumstances. Nord Stream 1 was carrying gas from Russia to Germany via the Baltic Sea, while Nord Stream 2 was never put into operation after Germany axed the certification process following the Russian invasion of Ukraine. Russia, for its part, shut down Nord Stream 1 indefinitely in early September, claiming an inability to repair gas turbines because of the Western sanctions. Various investigations into the Nord Stream explosions continue amid accusations from Russia that some Western intelligence services are “hiding something.” Sweden’s refusal to share information about the sabotage of Nord Stream is “puzzling,” and withholding the results of the investigation means that “Swedish authorities are hiding something,” Russia’s Foreign Ministry spokeswoman Maria Zakharova said in January.Last month, Russia called for an international investigation into the sabotage of Nord Stream after a U.S. investigative journalist wrote that the United States was behind the explosions of the gas pipelines. Russia does not expect that findings on the Nord Stream blast investigations will be made public, Russia’s Foreign Minister Sergei Lavrov said last week.
UN Security Council won't probe Nord Stream blasts - (AP) — The U.N. Security Council on Monday declined a Russian request to investigate the blasts on the pipelines that move natural gas from Russia to Europe under the Baltic Sea. Russia, China and Brazil voted in favor of the Russian request, but other Security Council members abstained or said another investigation was unnecessary. For a resolution to be adopted by the U.N. Security Council, it needs a minimum of nine “yes” votes in the 15-member council, and no veto by one of the permanent members — the United States, Russia, China, Britain and France. The U.S. deputy ambassador, Robert Wood, said there was no need for a U.N. probe when investigations by Sweden, Denmark and Germany “are proceeding in a comprehensive, transparent and impartial manner.” “It was an attempt to discredit the work of ongoing national investigations and prejudice any conclusions they reached that do not comport to Russia’s predetermined and political narrative. It was not an attempt to seek the truth,” he said. The pipelines, known as Nord Stream 1 and Nord Stream 2, are majority-owned by Russia’s state-run energy giant Gazprom. Nord Stream 1 carried Russian gas to Germany until Moscow cut off supplies at the end of August 2022. Nord Stream 2 never entered service as Germany suspended its certification process shortly before Russia invaded Ukraine on Feb. 24, 2022. The explosions on both occurred on Sept. 26. The investigations by European nations have yet to yield conclusive results, at least none made public. Both pipelines bypass existing routes that go through Ukraine, meaning that Ukraine could lose income from transit fees and be unable to directly use the gas they carry. The Nord Stream pipelines were seen as an effort by Russia to gain further control over Europe’s energy supplies. Some have said the blasts caused the worst release of methane in history. The New York Times, The Washington Post and German media have published stories citing U.S. and other officials as saying there was evidence Ukraine, or at least Ukrainians, may have been responsible. The Ukrainian government has denied involvement. Russian President Vladimir Putin has dismissed as “sheer nonsense” allegations that Ukrainians could have been behind the blasts and pointed the finger at the U.S.
European Gas Prices Extend Gains As French Strikes Block LNG Imports -Europe’s benchmark natural gas prices rose on Wednesday morning for a third consecutive day of gains amid lower LNG supply due to the nationwide strikes in France and expectations of a colder start to April than usual. The front-month futures at the TTF hub, the benchmark for Europe’s gas trading, traded up by 1.3% at $47 (43.30 euros) per megawatt-hour (MWh) at noon in Amsterdam, while the equivalent UK benchmark contract was up by nearly 1% at the same time in London.Wednesday’s trade marked the longest streak of gains for European natural gas prices in about a month, according to Bloomberg’s estimates.Three of France’s four terminals remain shut and will stay shut until at least Thursday as strikes are crippling LNG and crude oil imports, as well as refinery operations. The French strikes against President Emmanuel Macron’s pension reform have entered their fourth week.France has four LNG receiving terminals, Dunkirk, Montoir, Fos Cavaou, and Fos Tonkin. The terminals at Montoir, Fos Cavaou, and Fos Tonkin, operated by French company Elengy, are currently shut due to the strikes.Adding to the gas price rise were weather forecasts suggesting that most of Europe will see a colder-than-normal start to April, which could prolong the winter heating season and increase gas demand.Nevertheless, milder than usual winter overall helped Europe avoid a gas shortage this winter. As of March 27, the EU’s gas storage sites were nearly 56% full, per data from Gas Infrastructure Europe. That’s the highest gas stocks for the end of a winter heating season in a decade, also thanks to demand cuts from industry and households, and a steady inflow of LNG in recent months.Despite the rise in Europe’s benchmark gas prices, they are now at around a 20-month low. Signs have emerged that industries are switching back to using gas in a tentative sign that European industrial gas demand is rising.
Spain Presses Importers of Russian LNG - Spain, the biggest European buyer of liquefied natural gas from Russia, is urging importers not to sign new contracts with Moscow as it seeks to crimp revenues for the Kremlin’s war machine. LNG importers in Spain received a letter from the government asking companies not to sign up to new purchases from Russia, according to people with knowledge of the matter. The Spanish government’s request isn’t binding as there are no sanctions in place, and only refers to new contracts, according to the people, who declined to be named. Europe’s pipeline gas flows from Russia have fallen to historic lows since the invasion of Ukraine last year. But to make up for the shortfall, LNG shipments from all over the world have surged — including from Russia. Spain has almost doubled imports of Russian LNG since the outbreak of the war, highlighting how dependent Europe still is on Moscow. Naturgy Energy Group SA, Repsol SA, TotalEnergies SE, Axpo Holding AG, Pavilion Energy, Enagás SA, Met Energy, Enet Energy, Energias de Portugal SA, Compañía Española de Petroleos SA and BP Gas & Power Iberia were sent a letter on March 14 by Deputy Prime Minister Teresa Ribera, who’s in charge of Spain’s energy policy. The letter, seen by Bloomberg News, doesn’t explicitly mention spot contracts but makes a general plea to “intensify the diversification of supply of liquefied natural gas and do without those from Russia.” Ribera confirmed in an emailed response to questions that she sent the letter 10 days ago and several companies replied. Axpo, Repsol and Enagás responded to the notification saying they’re not purchasing LNG from Russia, according to a spokesperson of the ministry. “We can confirm that Axpo has not brought any Russian LNG cargoes into Spain since the start of the war in Ukraine,” a company spokesperson said. The European Union’s energy chief Kadri Simson earlier this month called for shipments to be stopped, saying companies should not renew long-term contracts once current ones end. She didn’t announce any specific measures. Spain is the EU’s top buyer of Russian LNG so far this year, ship-tracking data on Bloomberg show. The country was forced to seek additional purchases last year after shipments from longstanding gas supplier Algeria declined following a diplomatic feud between the two nations. Spain only receives Russian gas as LNG, as its utility Naturgy Energy Group SA holds a 20-year contract to purchase the fuel from Yamal LNG in the Arctic until 2038. The company declined to comment. In January the German government said it wanted to curb imports of Russian liquefied natural gas, without being specific how it would do this. So far, the EU has stopped short of discussing any ban at a regional level.
TOs hammer fracking deal governments sought to hide - Alice Springs News - “The cultural impacts associated with the development of any onshore shale gas industry must be fully explained prior to the development of that industry and that a plan be developed to manage those impacts on Aboriginal people and their communities.“Aboriginal people and their representatives must be involved in the design and implementation of any such plan.”That was a recommendation by the Independent Scientific Inquiry into Hydraulic Fracturing in the NT, set up by Chief Minister Michael Gunner and headed up by JusticeRachel Pepper. Her report was released in March 2018.The Beetaloo Sub-basin, which is estimated to have 500 trillion cubic feet of gas – about one-sixth of the nation’s reserve – gets a special mention. (See details below.)Today, five years later, an elder of the area, Samuel Janama Sandy (pictured), deputy chairman of Nurrdalinji Aboriginal Corporation, says in a media release about the planned gas development: “In terms of benefits and support from the fracking industry, it’s all talk, talk, talk and no action.“We are getting a peanut, while the white man is packing up his pocket with cash. We should own land, buy businesses, but we got nothing.“I live in Katherine in a housing commission flat, on a wheelchair, and haven’t got a car or any of the benefits they say will come from fracking.“Our people want jobs on country, but not jobs that involve drilling into our country.”Justice Pepper was reported as promising 32,000 jobs.Mr Sandy: “We want to protect our underground water, the environment, the animals and birdlife, from fracking.“We don’t want fracking, at any cost. The gas should be kept in the ground.”Under former Prime Minister Scott Morrison the National Indigenous Australians Agency (NIAA) commissioned a report about the gas project.The NIAA is an Australian Government agency and hence spending public money.Liberal Mr Morrison did not release the report, and neither did his Labor successor, Anthony Albanese.Nurrdalinji had to resort to a freedom of information process to get the report, called a Blueprint, which is mostly about the Aboriginal people affected by the gas project. Nurrdalinji’s action put the document into the public arena.Who is the author, paid from public funds? We’re not told their name which is redacted and replaced with “s22(1)” – a section of the Freedom of Information Act 1982.It permits the release of documents so long as they “would not disclose any information that would reasonably be regarded as irrelevant to the request” for disclosure, in the opinion of the agency.The executive summary of the Blueprint makes it clear that maximising regional benefits from private investment in onshore gas projects in the Beetaloo Sub-basin “is a core objective of the Australian and NT governments”.Little wonder both were keen to keep a lid on the document which has little good to say with respect to the way traditional owners figure in the exploitation of this huge Territory asset.
Proponents of fracking in the Beetaloo Basin welcome the Greens' safeguard mechanism amendments, say they create 'certainty' - ABC News -The Greens are claiming the Beetaloo Basin gas project has been "derailed" through amendments to the federal government's safeguard mechanism. But is that the case?Leader Adam Bandt claimed credit yesterday for putting "significant hurdles" in the way of new gas, including development in the basin 500 kilometres south-east of Darwin.The government is using the safeguard mechanism as its key policy to implement a 43 per cent cut in emissions by 2030, with the new laws to take effect in July.The mechanism will capture Australia's top 215 biggest polluters. They will have to reduce their emissions by 4.9 per cent each year to 2030, with a hard cap on Australia's total emissions also introduced.In announcing the amendments, Mr Bandt singled out the Beetaloo Basin.He said all scope one Beetaloo emissions — which come through the direct production of gas — would need to be offset. Amendments secured by Greens leader Adam Bandt will see scope one Beetaloo Basin emissions offset by gas companies. Scope two and three emissions will also now be "referred" to a forum of state and territory energy ministers."The Beetaloo gas field will be required from day one to offset all of its emissions — scope one, scope two and scope three — for domestic use," Mr Bandt said.But that has actually been the case for five years, as per the Pepper report.The 2018 report was the result of a 15-month scientific inquiry led by Justice Rachel Pepper. It determined that the risks associated with an industry could be "appropriately managed" if 135 recommendations were implemented. The NT Labor government promised to do so and concurrently lifted a ban on fracking.Thirty-five of those recommendations are still yet to be implemented, including "9.8", which states that there be no net increase in Australia's life cycle emissions from fracked gas produced in the territory.Life cycle emissions include scope one, two and three.Scope two emissions are indirect emissions from power generated to run a company's activities, while scope three result from the use of gas after it is sold.
Chairman says Gazprom close to maximum gas supply to China - (AP) — Russia's Gazprom is increasing gas supplies to China and expects soon to reach the maximum planned level through a Siberian pipeline, its chairman said Wednesday, highlighting Beijing's importance as his country's top export market in the face of Western sanctions over its invasion of Ukraine. Gazprom is negotiating with China over a possible additional supply project across neighboring Mongolia, Viktor Zubkov said at a government-organized economic forum. He said the company is open to serving other Asian markets. Chinese leader Xi Jinping’s government sees Moscow as a diplomatic partner in opposing U.S. domination of global affairs and has refused to criticized its invasion of Ukraine. Beijing has called for a cease-fire and negotiations but not a Russian withdrawal. China's imports from Russia, mostly oil and gas, surged 31.3% over a year ago in January and February to $18.6 billion. That helps President Vladimir Putin offset lost revenue after the United States, Europe and Japan blocked or limited imports. “Russia is increasing its gas supply to China,” Zubkov said at the Boao Forum for Asia. “The gas supply through the Power of Siberia pipeline will soon reach the contracted annual volume of 38 billion cubic meters,” or 1.3 trillion cubic feet. Gazprom is negotiating with state-owned China National Petroleum Corp. on a gas supply project through Mongolia that is designed to carry 50 billion cubic meters (1.8 trillion cubic feet), according to Zubkov. “Russia is open to cooperation with other Asian countries in clean energy supplies," Zubkov said. Also at the forum, the deputy chairman of the Chinese Cabinet's planning agency said Beijing will balance its plans to reduce carbon emissions with its need for energy security. China is the biggest emitter of climate-changing industrial gases.
Spain calls for tougher enforcement of oil transfers at sea – (Reuters) – Spain has called for tighter scrutiny of oil transfers involving tankers at sea as the number of unregulated ships hit by sanctions grows and raises pollution risks, a U.N. agency session heard this week. Hundreds of extra “ghost” tankers have joined this opaque parallel trade over the past few years as a result of rising Iranian oil exports as well as restrictions imposed on Russian energy sales over the war in Ukraine. The number of incidents last year including groundings, collisions and near misses involving these ships reached the highest in years, a Reuters investigation showed. Spain raised the issue this week at the legal committee of the United Nations’ shipping agency, the International Maritime Organization (IMO), and submitted a resolution to “address the consequences and concerns” over the increase in such operations, a Spanish transport ministry source told Reuters on Friday. Spain’s Mediterranean and Atlantic coastlines have become hubs for shipping activity including the transfer of oil known as ship-to-ship (STS) operations. Madrid, which has already tightened its rules for STS transfers around its coastline, has called for flag states to step up scrutiny and enforcement of such activity, the source added. “We express our willingness to support any international initiative aimed at resolving this problem and, to this end, we are urging at the international level initiatives against such STS operations outside our waters,” the source said. A paper submitted to the IMO committee by Australia, the United States and Canada said illicit transfers “undermine the rules-based international order”.
US Coast Guard, air assets to aid PH in oil spill response - Philippine Canadian Inquirer Nationwide Filipino Newspaper - The United States Coast Guard (USCG) and some of its air assets will assist in the ongoing cleanup operations on the massive oil spill in Mindoro. Senior Undersecretary Carlito Galvez Jr., Officer-in-Charge of the Department of National Defense, has already informed President Ferdinand R. Marcos Jr. that USCG and the US Air Force’s largest strategic airlifter will be arriving in the country in the following days, according to a news release of the Presidential Communications Office on Sunday. “We are looking forward to the arrival of the entire US Coast Guard contingent for the additional technical support in our disaster response operations. Although one US C-17 with equipment (60K loader) already arrived this morning and is now at Subic Air Base, another C-5 is expected to arrive,” Galvez said. On Saturday morning, Galvez, also the chair of the National Disaster Risk Reduction and Management Council, conducted an aerial inspection of the affected areas along with the Office of the Civil Defense Undersecretary Ariel Nepomuceno, Philippine Coast Guard chief Admiral Artemio Abu, and other Armed Forces and local government officials. “We will immediately employ these assets and integrate them into our response operations. In addition, we continue to closely monitor the ROV’s (remotelyoperated vehicle) operations for significant updates and to further determine the extent of the oil spill,” he added. Galvez likewise noted that the presence of the US National Oceanic and Atmospheric Administration (NOAA) has considerably helped in the cleanup operations by providing rapid environmental assessments of the affected areas, identification of priority areas at risk of environmental damage, and assessment of the needs for ecosystem restoration. “They (NOAA) provide support for scientific modeling to estimate the trajectory of the oil spill and satellite imagery to boost assessment efforts,” Galvez said. The Japanese ROV found out that the oil tanker, M/T Princess Empress, “suffered extensive structural damage after sinking,” according to Galvez. Citing findings of the Japanese team, he said there was no visible consumption fuel leak coming from the damaged vessel. Oil leaks were observed from all eight compartments (tanks). Through ballast tanks, the volume of remaining oil inside the compartments cannot be estimated at this point. The oil spillage rate from the source is likewise yet to be determined.
Over 170k now affected by MT Princess Empress oil spill in Philippines - The National Disaster Risk Reducation and Management Center (NDRRMC) on Sunday said the oil spill in Oriental Mindoro now has affected 172,928 individuals nearly a month after the oil tanker submerged in waters off Naukan, Oriental Mindoro. The sinking of Princess Empress, which carried around 800,000 liters of industrial fuel, caused an oil spill that has affected the livelihoods of fisherfolk and caused harm to marine life in the area. It sank off the waters of Naujan, Oriental Mindoro on February 28 and was finally located by authorities on March 21. According to the NDRRMC's situational report, majority of the affected individuals are from the MIMAROPA region at 138,043, followed by 27,145 from Western Visayas, and 7,740 from Calabarzon. The oil spill also caused injuries or illnesses among 206 residents, with some experiencing chest pain, dizziness, abdominal pain, fever, coughs and colds, ingestion, as well as inhalation. Over P136.542-million worth of assistance has since been provided to affected communities. Meanwhile, the Philippine Coast Guard on Sunday also reported positive developments in their clean-up efforts from March 23 in Pola, Oriental Mindoro. The agency said traces of oil has since been cleared - with oil no longer visible on water or on boats, no subsurface oil layers in pits dug into the shore, and no oil debris. The PCG also collected water samples from shorelines of nine barangays in Pola and two in Naujan to measure contamination levels and to assess the condition of the shoreline. A hydrogen sulfide test resulted in a negative, while waters passed the water quality standards set by the Philippine Clean Water Act of 2004.
Over 9,000 liters of oily water collected from Oriental Mindoro oil spill - Coast Guard — The Philippine Coast Guard (PCG) has collected over 9,000 liters of oily water during its offshore oil leak response following the massive oil spill due to the sinking of the MT Princess Empress off Oriental Mindoro last month. In a statement on Monday, the PCG reported that it collected 900 liters of oily water mixture on March 26, bringing the total oily water mixture collection to 9,463 liters. The total oil-contaminated materials collected offshore is now at 115 sacks. For shoreline response, no oily water mixture was amassed on Sunday. The PCG, however, said that it piled up 137 sacks of oil-contaminated materials along the shore, raising the total to 3,514.5 sacks. Twenty-two drums of waste were previously collected in 13 affected barangays in the towns of Naujan, Bulalacao, and Pola in Oriental Mindoro, the PCG added. MT Princess Empress, was carrying 800,000 liters of industrial fuel when its sank off Oriental Mindoro on February 28, causing a huge oil spill. Seventy coastline villages in the province have since been placed under a state of calamity. The oil spill has likewise reached parts of Western Visayas and Palawan.
Caluya oil spill aid reaches P33M– The Department of Social Welfare and Development (DSWD) has so far extended over P33-million worth of assistance to oil spill-affected families in Caluya, Antique. DSWD Region 6’s Disaster Response Management Division chief Judith Tañate Barredo said the department had provided P33,350,144 worth of assistance as of March 21 right after the oil spill from the M/T Princess Empress reached the island barangays of Caluya town. “There were 7,195 families with 27,145 persons affected by the oil spill and provided with assistance,” said Barredo. The assistance provided was in the form of emergency cash transfers (ECT) amounting to P25,979,694, cash-for-work (CFW) — P1,093,500, and aid to individuals in crisis situation (AICS) — P1,707,000. Aside from the financial assistance, 8,300 family food packs worth P4,380,8000 were also distributed in the barangays of Alegria, Semirara, Sibolo, and Tinogboc. There were non-food items, too, including 50 pairs of boots, 20 units of modular tents, and 25 rolls of sakoline, amounting to P189,150 released to the local government of Caluya for those joining the coastal cleanup. “We are just waiting for the availability of the Philippine Coast Guard vessel that would transport an additional 8,300 family food packs to Caluya,” added Barredo. Each family food pack, now available at the DSWD Regional Warehouse in Oton, Iloilo, contains rice, cereals, canned sardines and corned beef. Barredo said there are now Sustainable Livelihood Program personnel in Caluya doing an assessment for the livelihood projects to be undertaken to assist the oil spill-affected families further.
Claims from Oriental Mindoro oil spill seen to reach ₱1.1 billion – lawmaker— Compensation claims resulting from the massive oil spill in Oriental Mindoro caused by the sunken MT Princess Empress may exceed those filed following the sinking of another oil tanker in Guimaras in 2006, House tourism committee vice chair Rep. Marvin Rillo said Sunday. “If we look back at the MT Solar incident, a total of ₱1.1 billion was paid to settle 26,872 compensation claims, including those filed by owners of beach resorts, tour boat operators, and other tourism service providers hit by the 2006 oil spill,” Rillo said. Given that the MT Solar incident occurred 17 years ago, Rillo said the inflation-adjusted claims for the damage caused by the MT Princess Empress leakage may likely exceed ₱1.1 billion. "Apart from tourism-related claimants, we expect property owners hit by the oil spill to file compensation claims for damages to beachfront properties, fishing boats, and fishing gear,” Rillo said. “Those who suffered economic losses, including fisherfolk, seaweed farmers, and fishpond operators, are likewise expected to file claims.” He said local governments that had to pay their workers more as a result of the oil spill disaster are also expected to make claims, along with clean-up contractors and the Philippine Coast Guard (PCG). The province of Oriental Mindoro will set up a claims office in its capitol on Monday to assist residents affected by the oil spill, according to Governor Humerlito “Bonz” Dolor. Dolor explained that the province establish the claims office first before announcing the procedure for submitting a claim.
Puerto Galera remains oil slick free, officials say | The Manila Times - The tourist town of Puerto Galera remains free from the oil slick that is advancing in many areas in the province, parts of the Visayas and Batangas, including the marine protected area, the Verde Island Passage. This was confirmed after the province, through the Sangguniang Panlalawigan (SP or Provincial Board), passed a resolution during a special session on Friday placing some areas under a state of calamity but did not include Puerto Galera. Gov. Humerlito Dolor, during a briefing at the provincial capitol, cited Socorro and Victoria which although not coastal towns, were placed under a state of calamity because the lack of fish sold in their public markets caused by the oil spill has resulted in a loss of income for vendors in these areas. The resolution came after the provincial government had confirmed the presence of grease and oil in the marine protected areas in Baco and San Teodoro towns on Thursday, prompting the governor to ask from the national government additional assistance and the Bureau of Fisheries and Aquatic Resources to help in identifying alternative fishing grounds for the affected fisher folks. Puerto Galera Mayor Rocky Ilagan had been encouraging tourists to come to their town and admonished those who are posting false information on social media that the oil spill had reached the beaches. He even reprimanded the University of the Philippines Marine Science Institute in their presentation of the oil spill trajectory. Resort owners reported many cancellations of reservations amid reports that the oil slick was moving northwards in the direction of Puerto Galera. Meanwhile, Dolor, in a post on his social media page on Friday, said that the claims caravan is accepting forms inside the capitol complex. He clarified that there is no need for claimants to come to Calapan City because similar claim caravans would be set up in all the towns affected and in far-flung barangay (villages). The governor also stressed that the filing of the claim forms is voluntary.
Shell oil spill: 30k Nigerians seek compensation - Judges at the Supreme Court in London have started hearing a case which will determine whether nearly 30,000 Nigerians can seek compensation from the oil giant Shell for damage to land caused by a 2011 oil spill. The communities from coastal areas in Bayelsa and Delta State said their land was badly damaged by the spill. An earlier ruling by London’s Court of Appeal said the case had been brought too long after the leak had happened. Under English law a complainant can sue for damages to property no longer than six years after an alleged incident. The spill was about 120km (75 miles) off the coast of Nigeria and lasted several hours before the pipeline was closed and oil stopped. At least 40,000 barrels leaked into the sea, making it one of the largest spills ever in Nigeria. The Nigerian communities argue that the oil devastated their shoreline and has continued to cause widespread damage to their land and water supply and so they should be allowed to seek compensation. A ruling is not expected for months.
Oil tanker off Yemeni coast will ‘sink or explode at any moment’: UN -The FSO Safer supertanker — moored off the Yemeni coast and containing over a million barrels of oil — will “sink or explode at any moment,” wreaking devastation, the UN has warned. “We don’t want the Red Sea to become the Black Sea. That’s what’s going to happen. It’s an ancient vessel from 1976 that’s unmaintained and likely to sink or explode at any moment,” David Gressly, UN humanitarian coordinator for Yemen, told Sky News. “Those who know the vessel, including the captain who used to command the vessel, tell me that it’s a certainty. It’s not a question of ‘if,’ it’s only a question of ‘when’.” Given the million-plus barrels of oil on the Safer, Gressly said it is vital that action is taken quickly, with scientific modeling suggesting that an oil spill would hit Yemen’s Red Sea ports of Hodeidah and Salif “within days,” abruptly ending food aid relied on by 6 million people. Furthermore, it would lead to a cessation of “most” fuel imports essential for the functioning of pumps and trucks supplying fresh water to some 8 million people. While the catastrophe can be impeded at a cost of $130 million — a figure dwarfed by the potential $20 billion clean-up cost — the UN finds itself some $34 million short, and has even resorted to using crowdfunding to purchase a rescue tanker for the hoped-for salvage operation. “There are complexities, but for most member states the difficulty — and it’s ironic — is there’s plenty of money available in state budgets for a response to an emergency, but nobody seems to have budget lines for avoiding a catastrophe,” said Gressly. Nor is Yemen the only country at risk, with the modeling suggesting that the oil spill would hit the coasts of Saudi Arabia, Eritrea and Djibouti within two to three weeks, leading to profound environmental impacts for coral reefs and protected coastal mangrove forests. With the entirety of Yemen’s Red Sea fishing stock facing extinction, the concern is the upending impact on the millions of people reliant on the ocean for their food and livelihoods. “The oil tanker is unfortunately located near a very, very healthy coral reef and clean habitat, and it has a lot of species of marine organisms. “Biodiversity is high in that area, so if the oil spill finds its way to the water column, so many marine sensitive habitats are going to be damaged severely because of that.”
Chinese Oil Giant CNOOC Books Record-High Profit For 2022 - CNOOC, the Chinese state-owned oil and gas giant, reported on Wednesday a record-high profit for 2022, thanks to the high oil and gas prices. CNOOC also boosted its net oil and gas production to 623.8 million barrels of oil equivalent (boe), which was a new record high for the company. The Chinese giant saw its net profit double to $20.6 billion (141.7 billion Chinese yuan) last year as it "maximized its profit during the high oil price cycle." Total revenues jumped by 71.6% year over year to $61.3 billion (422.2 billion yuan) in 2022. CNOOC's average realized oil price for the year stood at $96.59 per barrel, up by 42.3% from 2021, while the average realized natural gas price jumped by up 23.5% annually to $8.58 per thousand cubic feet. All-in cost was $30.39 per boe, "which effectively alleviated the pressure of rising commodity prices and continued to consolidate the company's cost competitiveness," CNOOC said. The company's net proved reserves increased to 6.24 billion boe, with the reserve replacement ratio standing at 182% and the reserve life remaining at 10 years. While CNOOC followed the international majors who posted record-breaking profits for 2022, another giant in China, state-controlled Sinopec, reported earlier this week lower-than-expected net figures for 2022, citing the impact of Covid lockdowns that stifled China's economy last year. The company reported a net profit of around $9.64 billion, or 66.2 billion yuan, for 2022, which compared with a record result of $10.47 billion, or 72 billion yuan, a year earlier. The main impact on Sinopec's performance came from lower fuel demand amid the lockdowns. At the same time, chemicals prices were down, affecting refiners' performance. Sinopec booked a loss at its chemicals department for the last quarter of the year, Bloomberg noted in a report on the news.
In "Huge" Chinese Push By Aramco, World's Biggest Oil Producer Will Build $10BN Petrochemical Complex, Buy 10% Stake In Top Chinese Refinery - In what has been dubbed a "HUGE push" by the Saudi state-owned petrochemical giant into China's economy, Saudi Aramco surprised the world with a double-header of pro-China news: first, Aramco said it will build a $10 billion refinery in China and, just hours later, it revealed that it would acquire a stake a 10% stake in a Top Chinese oil refinery. The news come as Saudi Arabia is on the verge of dethroning the petrodollar and accepting payment in Yuan for Chinese oil sales.Over the weekend, Saudi Aramco - world’s biggest oil producer - announced plans to build a $10-billion refining and petrochemical complex in China’s northeast over the next three years, accelerating a development that was paused during the pandemic, and taking advantage of the country’s growing demand for energy. According to the Aramco news release, the complex will have a capacity of 300,000 barrels of crude daily, and OilPrice adds that the Saudi major will supply 201,000 barrels per day to the facility. The project will be carried out in partnership between Aramco and two Chinese companies. Construction works should begin in the second half of this year, with the project scheduled for completion in 2026.“This important project will support China’s growing demand across fuel and chemical products. It also represents a major milestone in our ongoing downstream expansion strategy in China and the wider region, which is an increasingly significant driver of global petrochemical demand,” said Aramco’s head of downstream, Mohammed Al Qahtani.The news follows a report from December last year according to which Aramco had struck a deal with China’s Sinopec to build a 320,000-bpd refinery and petrochemical cracker in China, highlighting the latter’s major role in global oil consumption yet again.Then, one day later, Aramco also unveiled that it has agreed to buy a 10% stake in a giant oil complex in China for 24.6 billion yuan ($3.6 billion), in exchange for securing sales to one of the country’s largest refineries.
Russia announces deal to boost oil supplies to India - The Hindu - Russian energy giant Rosneft announced a deal on Wednesday to ramp up oil sales to India, as Moscow seeks new buyers in the wake of tensions with the West over the Ukraine conflict. The Kremlin's decision to deploy its military to Ukraine last February saw Russia's share of the European market collapse as Kyiv's allies levied sanctions on the Russian oil sector. Rosneft said in a statement that its CEO Igor Sechin had travelled to India and brokered an agreement with the head of the Indian Oil Corporation. "Rosneft Oil Company and Indian Oil Company signed a term agreement to substantially increase oil supplies as well (as) diversify the grades to India," Rosneft said in a statement. Rosneft however did not specify the volumes stipulated in the agreement nor its value. The announcement comes one day after Russian Deputy Prime Minister Alexander Novak said Moscow's oil sales to India had surged more than twentyfold last year. Rosneft said that representatives of the two oil companies also discussed the "possibilities of making payments in national currencies," pointing to Russia's efforts to de-dollarise its economy. Russia, a major producer and key ally of the OPEC oil cartel, cut crude production by 500,000 barrels per day this month in response to the Western sanctions. Rosneft earlier this month posted a sharp drop in annual profit in the wake of Western sanctions against Russia.
Fearing Credit Crunch, Hedge Funds Flee Petroleum - By John Kemp, Reuters - Portfolio investors sold oil-related futures and options contracts at the fastest rate for almost six years as traders prepared for the onset of a recession driven by tighter credit conditions in the aftermath of the banking crisis. Hedge funds and other money managers sold the equivalent of 142 million barrels in the six most important contracts in the seven days ending on March 21, after selling 139 million barrels in the week to March 14. Total sales over the two weeks were the fastest for any fortnight since May 2017, according to records published by ICE Futures Europe and the U.S. Commodity Futures Trading Commission. Fund managers have slashed their combined position to just 289 million barrels (6th percentile for all weeks since 2013) from 570 million (46th percentile) on March 7. The fund community liquidated 163 million barrels of previous bullish long positions in the two most recent weeks, while establishing 115 million barrels of new bearish short ones. As a result, the ratio of bullish longs to bearish shorts slumped to 2.16:1 (16th percentile) on March 21 from 5.38:1 (71st percentile) on March 7. The most recent week saw heavy sales across the board, including Brent (-63 million barrels), NYMEX and ICE WTI (-48 million), U.S. gasoline (-15 million), U.S. diesel (-6 million) and European gas oil (-10 million). In absolute terms, the change in positions over the two most recent weeks is one of the largest to occur in either direction in the last decade, three times more than average, implying a fundamental change in the outlook. The banking crisis, which has resulted in the failure of several U.S. regional banks and the enforced rescue of Credit Suisse by UBS, is expected to result in a marked tightening of credit conditions. Even before the crisis, economic growth in North America and Europe was expected to slow in response to persistent inflation, rising interest rates, and the squeeze on household and business spending. But credit creation and loan growth is now expected to decelerate more abruptly as financial institutions, especially smaller ones, attempt to fortify their balance sheets hurriedly to reduce the risk of runs. At the same time, Russia’s crude and diesel exports have continued uninterrupted, despite sanctions imposed by the United States and its allies, contributing to near-term supply in crude and product markets. Doubts have also emerged about the speed of China’s rebound as the country’s manufacturers and service suppliers deal with cautious consumers following the lifting of coronavirus controls. Crude has been hit hardest while contracts for refined fuels have held up more strongly because of the current low level of inventories and limits on refining capacity. The previously expected tightening of the production-consumption balance has been pushed further back into the second half of 2023. Funds now anticipate a much larger surplus in the meantime, leading many to abandon bullish positions and create bearish ones, at least for the short term. .
Brent Gains on Renewed Risk of Russian Supply Disruption -- West Texas Intermediate futures traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange advanced Monday, with the international benchmark climbing above $75 barrel (bbl) after Russia announced it would station tactical nuclear weapons in Belarus, escalating risks to European security and refocusing sentiment on potential disruption of Russian production and petroleum exports. "Belarus hosting Russian nuclear weapons would mean an irresponsible escalation and threat to European security. The EU stands ready to respond with further sanctions," said EU High Representative for Foreign Affairs and Security Policy Joseph Borrel. On Sunday, Russian President Vladimir Putin announced he will move an arsenal of tactical nuclear weapons to Belarus -- a landlocked country in Eastern Europe governed by the authoritarian regime of Aleksandr Lukashenko. Putin said the move is a response to the UK's agreement to provide Ukraine with ammunitions containing depleted uranium -- a byproduct of the uranium-enrichment process needed to create nuclear weapons. While depleted uranium ammunitions are not considered nuclear weapons, their emission of low levels of radiation has led the International Atomic Energy Agency to warn of possible dangers of exposure. Meanwhile, White House National Security Council spokesman John Kirby said the United States had seen no sign that Putin had moved any nuclear weapons. Regardless of the motive, Russia's announcement to station nuclear weapons closer to the NATO borders marks an escalation in the Ukrainian conflict and risks further disruptions to Russian oil exports. The Kremlin said last week it would extend the unilateral 500,000-barrels-per-day (bpd) production cut, first announced on Feb. 14, until the end of June after the European Union and the G-7 imposed price caps on Russian oil and petroleum products. The decision to cut production could be driven by Moscow's concerns about the deeply discounted prices that willing buyers such as India and China have been paying for its Urals crude. This has eroded the government's oil and gas revenues and could make it more difficult to fund the war in Ukraine. The production cut could support global oil prices but it's unclear how they might affect the large discounts on Russian oil barrels. Monday's move higher also follows last week's steep selloff in financial markets that was triggered by turmoil in the banking sector. Shares of Germany's largest lender, Deutsche Bank, sank over 10% Friday after insurance costs against default on its bond portfolio surged to a multi-year high. Traders also fled stocks of other major European banks heading into the weekend, including France's Societe Generale and Spain's Banco de Sabadell that are believed to be systemically important to global finances. Hence, the oil complex was once again pressured by a crisis of confidence in the banking sector and bearish macroeconomic data. Near 7:30 a.m. ED, NYMEX WTI futures advanced $0.84 to $70.09 bbl, and the international benchmark Brent contract gained to $75.87 bbl, up by $0.88 bbl in overnight trade. NYMEX RBOB added $0.0075 to $2.5960 gallon and ULSD futures for April delivery gained to $2.7123 gallon.
The Oil Market on Monday Continued to Retrace Friday's Early Losses The oil market on Monday continued to retrace Friday’s early losses. The market was supported by the news that Iraq was forced to halt about 450,000 bpd of crude exports from the Iraqi Kurdistan region on Saturday after a victory in an arbitration case confirmed Baghdad's consent was needed to ship the oil from Turkey. The market was also supported on new concerns over Russian supplies. Over the weekend, Russia said it would station tactical nuclear weapons in Belarus, refocusing the market on the threats to Russian supplies from geopolitical tensions. The crude market posted a low of $69.13 in overnight trading before it bounced off that level and never looked back. The market retraced more than 50% of its move from a high of $81.04 to a low of $64.36 as it rallied to a high of $73.10 ahead of the close. The May WTI contract settled up $3.55 at $72.81 and the May Brent contract settled up $3.13 at $78.12. The product markets ended the session sharply higher, with the heating oil market settling up 7.52 cents at $2.7704 and the RB market settling up 9.57 cents at $2.6156. Oil production in Iraq's semi-autonomous Kurdistan region is at risk after a halt in northern exports has forced firms operating there to divert crude to storage, where capacity is limited. Iraq was forced to halt around 450,000 bpd of crude exports from the KRI on Saturday through an export pipeline that runs from its northern Kirkuk oil fields to the Turkish port of Ceyhan. Turkey halted the pumping of Iraqi crude from the pipeline after Iraq won an arbitration case in which it said Turkey had violated a joint agreement by allowing the Kurdistan Regional Government to export oil to Ceyhan without Baghdad's consent.According to an annual forecast by a research unit of China National Petroleum Corp, China's crude oil imports in 2023 are expected to increase by 6.2% on the year to 540 million tons or 10.8 million bpd. China’s crude oil throughput is seen increasing by 7.8% to 733 million tons or 14.66 million bpd. Its refining utilization rate is seen at 79.4% in 2023, up from 73.6% last year. The CNPC think tank predicted that China’s gasoline output will increase by 7.6% this year to 156.4 million tons, its diesel output will increase by 6.1% to 202.9 million tons and its jet fuel output will increase by 18.4% to 34.9 million tons. Meanwhile, China’s crude oil consumption is seen increasing 4.5% in 2023 to 743 million tons. China’s refined fuel consumption is estimated to increase by 9.1% in 2023 to 398 million tons.IIR Energy reported that U.S. oil refiners are expected to shut in about 1,106,000 bpd of capacity in the week ending March 31st, increasing available refining capacity by 163,000 bpd. Offline capacity is expected to increase to 1,208,000 bpd in the week ending April 7th.The industrial action against the French government's pension reforms stretched into its 20th day on Monday, as at least six out of seven refineries in France were shut or functioning at reduced capacity and liquefied natural gas terminals were blocked. According to data compiled by Bloomberg, about 900,000 bpd of crude processing capacity is being taken out of service or has already been halted. Production has been shut at TotalEnergies' 240,000 bpd Gonfreville refinery and Exxon Mobil subsidiary Esso's Port Jerome-Gravenchon refinery due to the strikes, while two others are operating at reduced capacity and two more are offline for repairs. The CGT union said the industrial action disrupting the 240,000 bpd Port Jerome refinery has been extended until March 29th.
Oil rises over $3 on Kurdistan export halt, banking optimism (Reuters) - Oil prices rose more than $3 on Monday as a halt to some exports from Iraq's Kurdistan region added to worries about oil supplies while a U.S. banking acquisition eased worries that financial turmoil could hurt the economy and curtail fuel demand. Brent crude futures settled up $3.13, or 4.2%, at $78.12 a barrel. West Texas Intermediate U.S. crude closed $3.55, or 5.1%, higher at $72.81. Brent gained 2.8% last week while WTI rebounded by 3.8% as jitters in the banking sector eased. Prices received a lift as Turkey stopped pumping crude from Kurdistan via a pipeline following an arbitration decision that confirmed Baghdad's consent was needed to ship the oil. The exports amount to about half a percent of global oil supply, or 450,000 barrels per day (bpd). Loss of oil supplies from Kurdistan could offset the impact of Russian production and supplies finding their way to market, said John Kilduff, partner at Again Capital LLC in New York. It also could force production cuts in the Kurdistan region. "Now we have this new wrinkle here.... It's production that we really can't afford to lose," Kilduff said, adding that the loss of supply would amplify any other future force majeure or production outages. First Citizens BancShares Inc said it will acquire deposits and loans of failed Silicon Valley Bank, closing one chapter in the crisis of confidence that has roiled financial markets. "Oil prices are edging higher extending gains from the previous week as investors weighed up efforts by the authorities to calm concerns regarding the global banking system," said Fiona Cincotta, senior financial markets analyst at City Index. There are also hopes for extra support for bank funding after reports that U.S. authorities were in early deliberations about expanding emergency lending facilities. Wall Street equities gained as the banking deal offered a respite after weeks of turmoil. Oil prices also drew support from worries of geopolitical turmoil after Russian President Vladimir Putin's plans to station tactical nuclear weapons in Belarus, one of Russia's most pronounced nuclear signals yet. Russian Deputy Prime Minister Alexander Novak has said Moscow is close to achieving its target of cutting crude output by 500,000 barrels per day (bpd) to about 9.5 million bpd. Still, Russia's crude exports are expected to remain steady as it cuts refinery output in April, data from industry sources and Reuters calculations showed on Friday. On the demand side, China's crude oil imports are expected to rise 6.2% in 2023 from last year's level to 540 million tonnes, according to an annual forecast by a research unit of China National Petroleum Corp on Monday.
Oil Climbs on Iraqi Supply Halt as Banking Fears Ease-- After notching the largest one-day gain in over three months, West Texas Intermediate futures on the New York Mercantile Exchange and Brent crude traded on Intercontinental Exchange advanced again Tuesday as traders shifted focus to supply disruption in Iraq after Baghdad halted oil exports from the semiautonomous region of Kurdistan, while investors in broader markets continue to monitor the economic fallout from the recent turmoil in the banking sector as concerns over financial stability ease. The banking crisis, which has resulted in the failure of several U.S. regional banks and enforced rescue of Credit Suisse AG, will likely lead to a marked tightening of credit conditions in coming weeks and months. It's still unknown, however, whether the so-called "credit crunch" would result in significant pressure on businesses and the economy. Some economists estimate that the turmoil in the banking sector could equate to a 75-basis-point rate hike from the Federal Reserve, but others are more conservative in their estimates. Even before the crisis, economic growth in the U.S. and Europe was expected to slow in response to persistent inflation, rising interest rates, and the squeeze on household and business spending. Today, as banks attempt to fortify their balance sheets to reduce the risk of runs, the expected downturn in economic conditions is likely to be more abrupt than previously thought. With that in mind, investors are awaiting the release of U.S. consumer confidence data for fresh clues on deeper contraction in consumer spending and financial conditions. On Monday, investors parsed through the latest report on Texas industrial activity released by the Federal Reserve Bank of Dallas that showed factory output rose modestly in March but the outlook for business conditions remained deeply negative. The survey offers some clues on the business outlook for Texas oil operators that have struggled in recent months with high labor and equipment costs amid the Federal Reserve's aggressive campaign to raise interest rates. On the supply side, traders await fresh clues on the restart of oil exports from the Kurdistan region in Northern Iraq after Baghdad halted around 450,000 barrels per day (bpd) of crude exports through the Kirkuk-Ceyhan pipeline. On Saturday, Iraq won a longstanding case against Turkey concerning revenues derived from the sales of Kurdistan oil exports. Iraq's oil ministry "will discuss new mechanisms for exporting Iraqi oil through Turkey's Ceyhan port in a manner that guarantees exports will be sustained and international commitments met," according to a statement from the ministry. Over 1 million bpd passed through Turkey's Ceyhan terminal in January, or 1% of global supplies, with 400,000 bpd of that volume shipped from the Kurdistan region and only 75,000 bpd from Baghdad. It remains unclear when and under what agreement oil shipments would resume. Near 7:30 a.m. EDT, NYMEX WTI futures advanced $0.31 to $73.11 barrel (bbl) and the Brent contract increased to $78.44 bbl. NYMEX RBOB declined $0.0142 to $2.6700 gallon and ULSD futures for April delivery moved down $0.0085 to $2.7619 gallon.
The Crude Market Continued to Trend Higher on Tuesday Following Monday's Sharp Gains - The crude oil market continued to trend higher on Tuesday following Monday’s sharp gains on supply disruption risk from the Iraqi Kurdistan region. Iraq has been forced to halt about 450,000 bpd of its exports from its northern Kurdistan region through Turkey after an arbitration decision confirmed Iraq’s consent was needed to ship the oil. The oil market opened relatively unchanged and posted a low of $72.19 early in the session. However, the market bounced off that level and continued to extend its previous gains. The market was further supported amid reports that traders believe there is some buying of crude to refill the Strategic Petroleum Reserve. The market rallied to a high of $73.93 by mid-day before it erased some of those gains ahead of the close. The May WTI contract settled up 39 cents at $73.20, while the May Brent contract settled up 53 cents at $78.65. The product markets ended the session mixed, with the heating oil market settling down 8 points at $2.7696 and the RB market settling up 2.79 cents at $2.7121. Analysts said French strike action has led to record amounts of crude and condensate sitting idly offshore while the country's crude stocks have plummeted. According to Kpler crude analyst Johannes Rauball, around 17 cargoes carrying crude oil, oil products or chemical products have been floating in French waters for the past week. Bloomberg reported that vessels holding at least 14 million barrels of crude are currently floating off the country’s shores. It reported that of the crude currently floating, about 11 million barrels is near Fos, a port on the country’s southern coast where key oil terminals are not expected to carry out any tanker cargo operations until at least the end of the month. According to consultancy OilX, France's crude oil stocks have fallen to 40.3 million barrels in March, the lowest since the firm's records began in January 2010. France's refinery intake has fallen to its lowest level since October at 764,000 bpd. Union officials representing workers at TotalEnergies SE and ExxonMobil Corp said there is currently no end date for the strikes. Barclays said it remains constructive on oil and notes potential upside risk from a protracted disruption in Iraqi Kurdistan region oil exports. It said a disruption in oil exports from the Kurdistan region through the year-end will imply a $3/barrel upside to its $92/barrel 2023 price forecast for Brent crude. Russia's Energy Minister, Nikolai Shulginov, said that the country had managed to successfully re-direct its oil exports to new markets, but added that oil and gas production was expected to decline in 2023. Colonial Pipeline Co is allocating space for Cycle 20 on Line 1, its main gasoline line from Houston, Texas to Greensboro, North Carolina. The current allocation is for the pipeline segment north of Collins, Mississippi. Exxon Mobil Corp reported operations require flaring at its 369,024 bpd Beaumont, Texas refinery. Valero Energy Corp issued an all clear after concluding maintenance at its 205,000 bpd Houston, Texas refinery.
Barclays warns of upside oil price risk from protracted Kurdish supply halt - Barclays on Tuesday warned that a disruption in oil exports by the Kurdistan Regional Government (KRG) through the year-end would imply a $3 upside to their $92 per barrel 2023 Brent crude price forecast and might lead to some output loss. Brent crude futures gained 27 cents to $78.39 a barrel by 1458 GMT, while US WTI crude futures were up 28 cents at $73.09, rising on the back of supply disruption risks from Iraqi Kurdistan and hopes that turmoil in banking is being contained. Iraq was forced to halt around 450,000 barrels per day (bpd) of crude exports, or half a percent of global oil supply, from the semi-autonomous Kurdistan region on Saturday through an export pipeline that runs from its northern Kirkuk oil fields to the Turkish port of Ceyhan. It is unclear how long the disruption might last and a protracted disruption might lead to some output loss, Amarpreet Singh, an energy analyst at Barclays, wrote a note. “However, a sustained recovery in flows might be contingent on a resetting of oil revenue sharing terms between the federal government and KRG, which might be a complicated process,” Singh highlighted.
WTI Extends Gains After Unexpected Large Crude Draw - Oil prices extended gains today with WTI up near $74 as a disagreement between Iraq and Kurdish officials curtailed exports and fears of a banking meltdown receded somewhat.A recent international ruling has resulted in at least a temporary halt of Kurdish oil exports through Turkey and the Ceyhan pipeline network, said Robbie Fraser, manager, global research & analytics at Schneider Electric, in a daily note. That's impacting around 400,000 barrels per day or around 0.4% to 0.5% of global supply, he said. "The ruling determined Iraq's semi-autonomous Kurdish region could not export crude directly, but most do so with Baghdad's approval and under the authority of the Iraqi central government," said Fraser.In the short-term all eyes will be back on crude stocks (after last week's modest build while products saw big draws). API
- Crude -6.076mm (+300k exp) - biggest draw since 11/25/22
- Cushing -2.388mm - biggest draw since Feb 2022
- Gasoline -5.891mm (-1.6mm exp)
- Distillates +548k (-1.1mm exp)
Against expectations of another small build, API reported a significant crude draw og over 6mm barrels. Cushing saw stocks fall and Gasoline inventories also drew-down significantly... WTI was hovering around $73.40 ahead of the API print and is higher after... Finally, as Bloomberg notes, while oil has rallied from recent lows as the banking sector stabilizes, it remains on track for a fifth monthly decline amid concerns over a potential US recession and resilient Russian energy flows. Most market watchers are still betting that China’s recovery will accelerate and boost prices later this year as demand rebounds.Meanwhile, OPEC+ is showing no signs of adjusting oil production when it meets next week, staying the course amid turbulence in financial markets, delegates said. We also note that there is the 'Biden Call' sitting under the market as at some point he will have to start refilling the SPR.
WTI Extends Gains After Large Surprise Crude Draw, 'Adjustment' Factor Remains High - Oil prices extended recent gains overnight (but have trodden water for the last couple of hours) after a surprise crude draw reported by API last night and the ongoing dispute over Iragi crude exports via Turkey (disrupting supply) “Supply concerns continue to support oil prices,” . One of the biggest oil producers in Iraqi Kurdistan, Norway’s DNO ASA, has started to lower production as the dispute drags on.However, despite the support for oil prices coming from supply concerns, oil prices are likely to remain volatile in the near term, led by the financial market turmoil, according to UBS strategist Giovanni Staunovo.And if official inventory, supply, and demand data matches API's that upside vol may continue as positioning is very short. DOE
- Crude -7.49mm (+300k exp)- biggest draw since 11/25/22
- Cushing -1.632mm
- Gasoline -2.904mm (-1.6mm exp)
- Distillates +281k (-1.1mm exp)
The official DOE data shows an even bigger crude draw than API reported along with a draw in gasoline stocks (6th week in a row). Cushing stocks fell for the 4th straight week while Distillates saw a small build... The infamous "adjustment factor" dropped last week but remains extremely high historically speaking...
Oil dips on profit taking, markets debate supply tightness (Reuters) - Oil edged lower on Wednesday in choppy trading as investors looked to pocket profits from two straight days of gains, and as markets debated supply tightness. Brent crude closed 37 cents, or 0.5%, lower at $78.28 a barrel, while West Texas Intermediate crude fell 23 cents, or 0.3%, to $72.97. “The markets are trying to find equilibrium,” said Dennis Kissler, senior vice president of trading at BOK Financial, noting heavy fund buying over the last two days. On the supply side, worries of tightness after an unexpected draw in U.S. oil stockpiles and a halt to some Iraqi Kurdistan oil exports were partially offset by a smaller-than-expected output cut in Russia. U.S. crude oil stockpiles fell unexpectedly last week, the Energy Information Administration said, as refineries ramped up operations after maintenance season and U.S. imports fell to a two-year low. EIA data also showed a larger-than-expected draw in gasoline stocks, implying strong demand heading into the summer season. “Today’s EIA report was bullish, but the broader story is much more challenged right now,” said John Kilduff, partner at Again Capital LLC in New York, citing economic fears and supply concerns. News of the surprise drop in inventories came on top of a 450,000 barrels per day (bpd) of crude export halt on Saturday from Iraq’s semi-autonomous northern Kurdistan region following an arbitration decision. Norwegian oil firm DNO said it had begun shutting down production at its fields in Kurdistan. The company’s Tawke and Peshkabir fields averaged output of 107,000 bpd in 2022, a quarter of total Kurdish exports. U.S. oil and gas activity stalled in the first quarter as production gains slowed and drillers’ outlooks turned negative, a survey released by the Federal Reserve Bank of Dallas showed. Supply concern were, however, eased by reports that Russian oil production fell by around 300,000 bpd in the first three weeks of March, less than the targeted cuts of 500,000 bpd. Meanwhile, markets also awaited clarity on the banking crisis and U.S. Federal Reserve’s plans for rate hike. Oil prices had plunged to a 15-month low on March 20 after global financial markets were roiled as investors balked at the collapse of two U.S. lenders and the rescue of Credit Suisse. The dollar edged higher against most major peers, pausing its recent declines. A stronger greenback hurts oil demand as crude becomes more expensive for buyers who hold foreign currencies.
The Oil Market on Thursday Posted an Outside Trading Day as it Continued to Erase Wednesday's Early Gain - The oil market on Thursday posted an outside trading day as it continued to erase Wednesday’s early gains in overnight trading and later bounced higher. The market extended its previous losses as it posted a low of $72.61 in overnight trading. However, the market bounced off its lows and retraced all of its previous losses by mid-day. The market rallied to a high of $74.63 as it remained supported by the news that producers have shut in or cut output at several oilfields in the Kurdistan region of northern Iraq following a halt to the northern export pipeline to the Turkish port of Ceyhan. The market also remained supported by the unexpected draw in crude stocks reported by the EIA on Wednesday morning. These factors offset the bearish sentiment seen on Wednesday following reports of a lower than expected cut to Russian crude oil output. The May WTI contract settled up $1.40 at $74.37 and the May Brent contract settled up 99 cents at $79.27. The product markets ended the session in negative territory ahead of the April product expirations on Friday. The April heating oil contract settled down 3.44 cents at $2.6237 and the April RB contract settled down 67 points at $2.6614. Technical Analysis: The crude market on Friday will be driven by the U.S. spending and inflation data due out in the morning and the resulting impact on the value of the U.S. dollar. The market will also position itself ahead of the OPEC+ meeting on Monday, when the producer group is likely to stick to its existing output cut agreement. Technically, the crude market is seen finding resistance at its high of $74.39, $74.67, $75.02 and $75.61. More distant upside is seen at $77.56 and $78.17. Meanwhile, support is seen at its low of $72.61, $72.19, $71.05, $70.15 and $69.89. Further support is seen at $69.13, $66.82 and $64.36. Fundamental News: Barclays forecast Brent crude prices at $89/barrel in the second quarter of this year, $96/barrel in the third quarter and $98/barrel in the fourth quarter. It also forecast Brent crude prices in the first quarter of 2024 at $92/barrel, while the price of Brent crude is expected to increase to $94/barrel, $100/barrel and $103/barrel in the second, third and fourth quarters of 2024, respectively. The price of WTI is seen at $83/barrel in the second quarter of this year, $91/barrel in the third quarter and $93/barrel in the fourth quarter. The price of WTI crude in the first quarter of 2024 is seen at $86/barrel, while the price of WTI is expected to increase to $88/barrel, $95/barrel and $98/barrel in the second, third and fourth quarters of 2024, respectively. Five OPEC+ delegates said the producer group is likely to stick to its existing deal to cut oil output at a meeting on Monday. OPEC+, which comprises OPEC and allies led by Russia, is due to hold a virtual meeting of its ministerial monitoring panel, which includes Russia and Saudi Arabia, on Monday. A delegate said the Kurdistan curbs and recent price drops were not sufficiently important to affect the overall OPEC+ policy path for 2023. Three other OPEC+ delegates also said any policy changes were unlikely on Monday. Colonial Pipeline Co is allocating space for Cycle 20 shipments on Line 20, which carries distillates from Atlanta, Georgia to Nashville, Tennessee.
Oil posts its highest finish since mid-March on stronger demand expectations, tighter supplies Oil futures finished higher on Thursday as brighter prospects for the Chinese and U.S. economy and tighter supplies helped lift prices to their highest finish since mid-March. Oil prices may continue to climb if the global economic outlook improves, analysts said. "Until the U.S. data tolls the recession bell, if broader markets remain in risk-on mode, oil could stay in relief rally mode supported by the same less threatening [Federal Reserve], a slightly weaker U.S. dollar, and hopes for the China recovery," U.S. government data released Thursday was slightly downbeat, showing the growth rate of the U.S. economy at the end of 2022 was reduced to 2.6% due to weaker consumer spending. Separately, the number of Americans who applied for unemployment benefits last week rose to a three-week high of 198,000. Read:Biden energy officials release strategy to boost offshore wind and cut its cost by 30% The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, will hold a committee meeting Monday to review the oil market, against a backdrop of a potential recession and concerns over the banking crisis. Read:OPEC+ committee is set to review an oil market plagued by concerns over the banking crisis and a recession Oil prices, for now, also likely found some support from a 7.5 million-barrel weekly decline in U.S. crude supplies reported by the Energy Information Administration on Wednesday. That was the largest weekly fall year to date. Oil refiners are coming out of maintenance season and "demand for fossil fuels around the globe is surging," He believes those factors will contribute to what he refers to as a "new season of big petroleum supply draws in the coming weeks." Natural-gas futures on Nymex extended their decline to finish nearly 4% lower, after the EIA reported on Thursday a weekly decline in supplies of the commodity that was a bit lower than some market forecasts. Domestic natural-gas supplies fell by 47 billion cubic feet for the week ended March 24, the EIA said. That compared with expectations for a decline of 56 billion cubic feet, according to a survey of analysts by The Wall Street Journal. Meanwhile, the Freeport LNG export plant in Texas is on track to achieve full processing power Thursday after regulators indefinitely closed the facility last June after an explosion, StoneX's Kansas City energy team, lead by Alex Hodes, wrote in Thursday's newsletter. They said natural-gas flows into the facility reached 1.8 bcf Wednesday and were on pace to reach 2.1 bcf Thursday.
Oil Prices Gain As China Factory Activity Expansion Lifts Demand Hopes - Oil prices climbed in early Asian trade on Friday as sentiment was boosted by an expansion in factory activity in China, the world's second largest crude consumer, and as concerns grew about Middle Eastern supply.Brent futures, which have risen nearly 6 percent this week, were up 15 cents, or 0.19 percent, at $79.42 a barrel at 0146 GMT. US West Texas Intermediate (WTI) crude rose 17 cents, or 0.23 percent, to $74.54, having gained about 8 percent this week. China's manufacturing activity rose in March at a slower pace compared with a record breaking expansion in February, but still exceeded expectations by economists in a Reuters poll. Industrial activity in China has become a key determinant of prices in recent weeks following its ending of coronavirus-related restrictions, amid weaker global demand. Oil prices are set to cap a second straight week of gains after the largest bank failure after the 2008 financial crisis spooked traders and roiled markets. Worries about a full-blown global banking crisis have abated after two banks, in the U.S. and Europe, were rescued. Prices rose more than 1 percent on Thursday due to lower US crude stockpiles and a halt to exports from Iraq's Kurdistan region, offsetting pressure from a smaller-than-expected cut to Russian supplies. Producers have shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline. More outages are on the horizon. The US Energy Information Administration said US crude oil stockpiles fell unexpectedly in the week to March 24 to a two-year low. Markets are now waiting for US spending and inflation data due on Friday and the resulting impact on the value of the US dollar.
Oil Ticks Up As U.S. Inflation Cools, But Prices Set For Monthly Drop -(Reuters) -Oil prices ticked up on Friday with U.S. inflation data showing some signs of slowing price rises, but on the month oil was on course for its weakest performance since November. Brent futures, which have risen nearly 6% this week, were up 22 cents or 0.3% at $79.49 a barrel by 1309 GMT. West Texas Intermediate (WTI) U.S. crude was up 45 cents or 0.6% to $74.82, having gained about 8% so far this week. But the contracts were set for 5% and 3% monthly drops respectively after hitting their lowest since 2021 earlier in the month in the wake of large bank failures. Oil prices have broadly recouped these losses as worries about a global banking crisis have abated after banks in the U.S. and Europe were rescued. The U.S. Personal Consumption Expenditure (PCE) index, which is the Fed’s preferred inflation gauge, rose 0.3% in February on a monthly basis, compared with a 0.6% rise in January and an expectation of a 0.4% rise in a Reuters poll. On an annual basis the gauge stood at 4.6%, below an expected 4.7%. While the inflation data showed signs of cooling, it remained elevated, which could lead to the Federal Reserve raising interest rates one more time this year. Oil prices were buoyed after producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline. Also sending a bullish signal was data showing U.S. crude oil stockpiles fell to a two-year low. [EIA/S] Prices have also found support from a rise in China’s manufacturing activity in March. With oil prices recovering from recent lows, the Organization of the Petroleum Exporting Countries and allies led by Russia are likely to stick to their existing output deal at a meeting on Monday, sources said. OPEC pumped 28.90 million barrels per day (bpd) this month, a Reuters survey found, down 70,000 bpd from February. Output is down more than 700,000 bpd from September.
Oil futures settle higher, but U.S. prices register a 5th straight monthly decline --Oil futures settled at their highest in about three weeks on Friday, but U.S. prices posted a fifth consecutive monthly decline, pressured by concerns over a potential recession and decline in energy demand. U.S. crude prices rallied by more than 9% this week, helped by such factors as supply problems out of Northern Iraq, U.S. dollar weakness, a hefty weekly drop in U.S. crude inventories and improved risk sentiment, along with signs of China's economic recovery, Ole Hansen, head of commodity strategy at Saxo Bank, said in a note to clients. Concerns about the banking crisis in the U.S. and Europe have also eased, allowing oil prices to recover somewhat, as fears of a financial crisis that could have a major impact on the economy and oil demand subsided, said Matthew Sherwood, senior Europe and lead commodities analyst at The Economist Intelligence Unit (EIU). That prompted prices for WTI to trade more than 8% higher for the week, and Brent to move up 6% from the week-ago settlement. Still, U.S. crude benchmark prices saw a fifth monthly loss in a row. "Investors continue to assess the long-term implications of turmoil in Western banking systems," said Sherwood, adding that EIU believes that "recession risks have increased, as banking lending standards will tighten further in the wake of SVB and Credit Suisse." Even so, the oil market still remains tight and we expect Brent to head above $80 a barrel and even approach $90 by the middle of the year as "demand continues to recover in China and the supply response remains muted," especially in the Organization of the Petroleum Exporting Countries, he said. OPEC and its allies, a group known as OPEC+, will hold a committee meeting Monday, as it does every two months, to review the oil market. Read:OPEC+ committee is set to review an oil market plagued by concerns over the banking crisis and a recession Meanwhile, natural-gas futures ended higher Friday, but the rise did little to offset the significant price losses for the month and quarter, after recently dropping to their lowest in two-and-a-half years. Read:Natural gas is among the worst-performing commodities in the first quarter, while steel, iron ore strengthen "Europe is the big story here. European natural gas storage is currently at about 56% of capacity, a historically high level for this time of year," said EIU's Sherwood. "An unseasonably warm 2022/23 winter means that European stocks remained much higher than expected through the winter and reduced the amount that needs to be topped up over the summer as Europe prepares for the 2023/24 winter." The developments in Europe have had a knock-on impact on U.S. Henry Hub natural-gas prices, and a "weather-related slump in U.S. natural-gas demand also played a major role in the sharp fall for U.S. prices in the first quarter, he said.
Oil Futures End Session On Firm Note, But Post Losses For Month, Quarter - Crude oil prices climbed higher on Friday on falling supplies in certain parts of the world, and optimism about the outlook for energy demand. The outlook for oil demand improved after data showed an expansion in manufacturing activity in China in March. Chinese services activity expanded at the fastest pace in nearly 12 years, and construction activity remained strong, boosting the outlook for growth this year. West Texas Intermediate Crude oil futures for May ended higher by $1.30 or about 1.8% at $75.67 a barrel. WTI crude futures gained about 9.2% in the week, but dropped 1.8% in May, and lost about 6% in the January-March quarter. Brent crude futures settled at $79.77 a barrel today, gaining $0.50 or about 0.6%. Oil prices were also supported by data showing a drop in U.S. consumer prices in February that raised hopes the Federal Reserve will be less aggressive with interest rate hikes. Data from the Commerce Department showed the U.S. Personal Consumption Expenditure index, the Federal Reserve's preferred inflation gauge, rose 0.3% in February on a monthly basis, compared with a 0.6% rise in January. The Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+ is likely to stick to their output deal at the meeting scheduled to take place on Monday (April 3).
Senate votes to repeal decades-old authorizations for Iraq, Gulf wars - The Senate on Wednesday passed a bill that would repeal decades-old authorizations for use of military force for the Iraq and Persian Gulf wars, a move by Congress to reassert its constitutional authority to declare war. The bill passed on a 66-30 vote with strong bipartisan support, as it did in procedural votes this month that brought together an unusual coalition of lawmakers. As the final vote was announced in the chamber, senators on both sides of the aisle applauded. The White House has signaled it will back the legislation, which now moves to the House.How each senator voted on the repeal of the Iraq War authorization If signed into law, the bill would repeal the 1991 Gulf War authorization and the 2002 Iraq War authorization. A bipartisan group of lawmakers who support the new legislation argue that it is necessary to prevent abuse by presidential administrations that could use the old authorizations for use of military force, or AUMFs, to launch unrelated combat operations without congressional approval on where and when to send troops.
As Longterm Partnership With Us Fades, Saudi Arabia Seeks to Diversify Its Diplomacy – And Recent Deals With China, Iran and Russia Fit This Strategy - The fact that Saudi Arabia entered a rapprochement deal with Iran and chose China to broker it came as a surprise to many international observers.The agreement, officially called the Joint Trilateral Statement, was signed in Beijing on March 11 and begins the process of restoring diplomatic ties between Riyadh and Tehran. Those ties were severed in January 2016 after protesters stormed the Saudi Embassy in Iran in the aftermath of the execution of Nimr al-Nimr, a prominent Saudi Shiite cleric who had criticized Saudi treatment of its Shiite minority. As an analyst of Saudi foreign policy, I’ve seen how the kingdom’s decision to engage in this way with Iran and China is part of a broader diversification of the kingdom’s international relationships that has unfolded over the past decade. To close observers of geopolitical trends in Saudi Arabia and other Gulf states, the China-brokered deal fits into a pattern.From being firmly a part of the anti-communist camp during the Cold War and closely tied into U.S.-led regional security networks in the Persian Gulf, Saudi foreign policy is now taking anonaligned stance that has become increasingly consequential for how Saudi Arabia pursues its interests.The relationship between the U.S. and Saudi Arabia is often said to revolve around an oil-for-security dynamic in which the Saudis provide the former and the U.S. the latter.In reality, ties have spanned a far wider spectrum than that and have been more complicated, with periods of high tension – stemming from events such as Saudi participation in the Arab oil embargo in 1973, or the involvement of Saudi citizens in the Sept. 11 terrorism attacks in 2001.But since the Arab Spring protests in the early 2010s, U.S.-Saudi relations have frayed, both in Riyadh and in Washington. The perception among Gulf leaders that the Obama administrationabandoned former Egyptian President Hosni Mubarak during the Egyptian revolution in 2011 left them deeply rattled. They feared that the U.S. could abandon them just as it had done Mubarak, a longtime partner of 30 years.This was compounded by the Gulf states’ exclusion from U.S. negotiations with Iran, initially in secret bilateral talks in 2013 and subsequently as part of the P5+1 framework of the U.N. Security Council permanent members, plus Germany, which culminated in the Iran nuclear dealin 2015. And then in 2019, a missile and drone attack on Saudi oil infrastructure temporarily knocked out half the kingdom’s production. The attacks were linked, but never formally attributed, to Iran. President Donald Trump responded by declaring it had been an attack on Saudi Arabia, not on the U.S., drawing a distinction between their interests. Trump’s remarks, and subsequent inaction,caused shockwaves in Riyadh and other Gulf capitals as leaders began to question U.S. credibility as a reliable regional partner.Finally, in 2021, the chaotic nature of the U.S. withdrawal from Kabul, Afghanistan, served to reinforce deeply-rooted perceptions about U.S. disengagement from the Middle East, irrespective of the situation in reality.It is against this backdrop of pragmatic acknowledgment of its own vulnerabilities to regional and global tensions – and entrenched uncertainty about the role of the U.S. as a long-term partner – that Saudi Arabia began to broaden its international relationships, with particular attention on China.Officials across the Gulf believe China will replace the U.S. as the dominant economic and energy superpower in the 21st century. For more than a decade, a majority of oil and gas from the six Gulf monarchies has flowed east to Asia in quantities that far exceed the cargoes heading west to Europe and North America.In a further sign of deepening bilateral ties, in December 2022, Chinese President Xi Jinping visited Saudi Arabia to sign investment agreements across 34 sectors, ranging from green energy and information technology to construction and logistics.
More US Airstrikes in Syria Kill at Least 19, Multiple American Bases Attacked - Three American bases in Eastern Syria were targeted with rockets and drones on Friday. One American soldier was injured in the attack. The American bases came under fire after the US carried out airstrikes in eastern Syria.The violence in Syria escalated on Thursday when a US outpost was attacked. One contractor was killed by a drone strike. Additionally, five soldiers and one contractor were wounded. The Pentagon claimed it had intelligence that the drones used in the attack were of "Iranian origin."Biden responded by authorizing airstrikes against groups affiliated with Iran in the regions. Secretary of Defense Lloyd Austin said American forces conducted "airstrikes tonight in eastern Syria against facilities used by groups affiliated with Iran’s Islamic Revolutionary Guards Corps (IRGC)." It is estimated that 19 soldiers were killed by the American bombs.Tehran said there would be a "counter-response" to the airstrikes. “Any pretext to attack bases created at the request of the Syrian government to deal with terrorism and Islamic State elements in this country will be met with an immediate counter-response,” Keyvan Khosravi, spokesperson for the Supreme National Security Council of Iran warned.The Pentagon also warned it would respond to further attacks. "We are postured for scalable options in the face of any additional Iranian attacks," a statement from CENTCOM Commander, General Michael "Erik" Kurillasaid.On Friday, National Security Council Spokesperson John Kirby stated Biden immediately authorized the airstrikes after learning about Thursday’s attack. “He made the decision very, very shortly in that discussion to authorize the strikes against these particular targets,” He added, “We are not seeking a conflict with Iran.”Three additional attacks against American outposts occurred on Friday. The first incident occurred around 8 am and resulted in some civilian casualties. “March 24th, at approximately 8:05 am local time, 10 rockets targeted coalition forces at the Green Village in northeast Syria.” According to a statement from Central Command, “The attack resulted in no injuries to US or coalition personnel and no damage to equipment or facilities. One of the rockets missed the facility by almost five kilometers, striking a civilian house, causing significant damage and causing minor injuries to two women and two children."Later in the day, the US military bases at the Al-Omar and Conoco oil fields were hit with rockets and drones. Fewer details have been reported for these attacks. Fox News national security correspondent Jennifer Griffin tweeted that a US official said "one involved Iranian proxy forces firing rockets. A second involved multiple Iranian drones."Tehran entered the Syrian war at the request of Damascus. Iranian support forces have helped to push back jihadist groups. However, the Syrian government and its partner forces, including ones backed by Iran, have come into conflict with American forces as well. As part of its economic war against Damascus, Washington occupies the eastern third of Syria, including where most of the country’s oil and wheat resources are located. Damascus views the American forces as illegally occupying Syrian territory.
Imagine If All Officials Were Interrogated By Reporters Like This – Caitlin Johnstone --A fascinating exchange took place at a UN press briefing the other day between China Global Television Network’s Xu Dezhi and the UN’s Deputy Spokesperson for the Secretary-General Farhan Haq about the US military occupation of Syria. The exchange is interesting both for the wild pro-US bias shown by a UN official, and for the way it illustrates how much truth can be exposed when journalists do what they’re supposed to do in the press gallery. Xu, who has done on-the-ground reporting in Syria in the past, asked Haq some challenging questions about an attack on a US military base in eastern Syria last week which injured multiple American troops and killed an American contractor. In his response, Haq made the extremelyincorrect claim that there are no US armed forces in Syria, and refused to say whether the US military occupation of part of the country is illegal. Here’s the UN’s transcript of the key part of this exchange (emphasis added by me):
- Xu: Do you not urge everyone to respect the sovereignty and territorial integrity of Syria?
- Haq: Well of course, that’s a given, and obviously it’s important that the sovereignty and territorial integrity of Syria is respected. At the same time you are aware of the complexity of the situation of foreign forces, but we call for them to exercise restraint.
- Xu: But, do you think the presence of the US military in Syria is illegal or not?
- Haq: That’s not an issue that we’re dealing with at this stage. There’s been a war.
- Xu: What’s the difference between the situation in Syria and the situation in Ukraine?
- Haq: There’s no US armed forces inside of Syria. And so I don’t have a… It’s not a parallel situation to some of the others.
- Xu: You’re sure there’s no US military personnel in Syria?
- Haq: I believe there’s military activity. But, in terms of a ground presence in Syria, I’m not aware of that.
- Xu: Okay. Five US service members were injured in that attack. If there were no US service members in Syria, how could they got injured? That’s weird, right? And by the way, the international law here is the resolution from Security Council 2254 (2015), that says in its PA [preambular] paragraph, “reaffirming its strong commitment to the sovereignty, independence, unity and territorial integrity of the Syrian Arab Republic and to the purposes and principles of the Charter of the United Nations”.
- Haq: Yes. I’m aware of that. And as you see, that is accepted by the members of the Security Council itself.
- Xu: Yeah. So, again, back to my question, is that illegal to have presence in Syria for the US base, according to the relevant resolution that I just read out?
- Haq: The relevant resolution does call for that and we call on all countries to respect that. I wouldn’t go beyond that at this stage.
To be absolutely clear, this is a UN official. Haq has been in his current position as deputy spokesperson for almost a decade, and routinely answers questions about Syria as part of his capacity in that position.It is not some obscure esoteric secret that there are US military personnel in Syria; it’s in the mainstream news constantly. Just the other day The New York Times reported that “America still has more than 900 troops, and hundreds more contractors, in Syria.”Haq was either ignorant of this extremely important and relevant piece of common knowledge, or was dishonestly pretending to be. The most charitable interpretation of his actions at this press conference is that he sincerely did not know the US has armed forces in Syria.To put it into perspective, this is like being a UN official and routinely taking questions about Ukraine from the press, but not knowing that Russia invaded Ukraine and has been fighting a war there since last year.
After Escalation, White House Says US Troops in Syria are There to Stay -White House National Security Council spokesman John Kirby said Sundaythat President Biden is committed to staying in Syria following a series of attacks on US bases and US airstrikes in the country. “Here’s what’s not going to change … the mission and ISIS is not going to change. We have under 1,000 troops in Syria that are going after that network, which is, while greatly diminished, still viable and still critical. So we’re going to stay at that task,” Kirby said on CBS News’s Face the Nation.When asked if President Biden was committed to keeping US troops in Syria, Kirby replied, “That’s right. Absolutely.”While Kirby says the US mission in Syria is about fighting ISIS, the presence is part of the US effort against the government of Syrian President Bashar al-Assad. The Syrian government opposes the occupation of the eastern portion of Syria, which allows the US to control most of Syria’s oil resources. On top of the occupation, the US maintains crippling economic sanctions on Syria.The US occupation always risks sparking a wider war, as demonstrated by the recent airstrikes. The escalation started on Thursday when a US base in eastern Syria came under a drone attack that killed a US contractor and wounded five US troops. The Pentagon claimed the drone was of “Iranian origin” but offered no evidence to back up the assertion. President Biden responded by ordering airstrikes that hit targets in Syria early Friday against facilities the Pentagon said were “used by groups affiliated with Iran’s Islamic Revolutionary Guards Corps,” likely referring to the Shia militias that operate in Syria.According to the pro-opposition UK-based Syrian Observatory for Human Rights (SOHR), the US airstrikes killed 19 fighters, including three Syrian troops, 11 Syrian fighters in pro-government militias, and five non-Syrian fighters who were aligned with the government.The SOHR numbers aren’t confirmed, and both Iran and Syria issued statements accusing the US of lying about who they targeted. Tehran claimed the strikes hit civilian targets.The US airstrikes provoked more attacks on multiple US bases in Syria on Friday night that wounded at least one US soldier.
Israeli Airstrikes Hit Damascus, Two Syrian Soldiers Wounded - Israeli airstrikes hit Damascus early Thursday morning and wounded two Syrian soldiers, Syria’s SANA news agency has reported.The report said explosions were heard in Damascus at 1:30 am, and a Syrian military source said Syrian air defenses were “confronting hostile targets.” Besides the two wounded soldiers, material damage was reported as well.The Israeli warplanes launched the airstrikes from the direction of the Golan Heights. Israel hasn’t commented on the news and typically does not take credit for individual airstrikes in Syria.The incident marks the fourth time this month that Israel launched airstrikes in Syria. Two of the operations targeted the Aleppo International Airport and temporarily shut it downThe city of Aleppo was devastated by the earthquake that hit Syria and Turkey on February 6, and the airport has become a vital channel for aid deliveries. Israel began frequently targeting Syria’s airports last year.Israeli officials claim that their airstrikes in Syria are operations against Iran or Iranian weapons shipments, but they often kill Syrians and damage civilian infrastructure.
General strike and mass protests stagger Israeli regime - Late Monday, Jerusalem time, Israeli Prime Minister Benjamin Netanyahu announced he was temporarily suspending action by the Knesset, the Israeli parliament, on his plan to carry out what amounts to a coup against the country’s judicial system, the only arm of the state that his ultra-right coalition does not control. Netanyahu made this tactical retreat in the face of the largest outpouring of popular opposition in the history of Israel, with massive street protests Sunday culminating in a full-scale walkout Monday by vast sections of the Israeli working class. Airports, shipping, transport, manufacturing, utilities, schools, day care centers, universities and virtually all government operations were affected. Israeli embassies all over the world were closed, and the Israeli consul general in New York City resigned. The immediate trigger for this political explosion was Netanyahu’s firing of his defense minister, Yoav Gallant, who on Saturday called on him to abandon the plan to straitjacket the judiciary because the political conflict over it was splitting the Israel Defense Forces (IDF). Gallant, a top leader of Netanyahu’s own Likud Party, cited statements by thousands of reservists that they would refuse their regular call-ups because they did not want to serve under a government that was destroying democracy. The crisis in the military is only one expression of a conflict that has profoundly shaken Israel and blown up the fundamental myth of Zionism, that Israel represents the unity of all Jews against the world. Instead, Israel is riven by enormous social, political and class conflicts. As Netanyahu himself admitted, the country is on the brink of “civil war.” The self-proclaimed leaders of the protest movement, mostly officials of the previous government that gave way to Netanyahu after elections last year, like Benny Gantz and Yair Lapid, are themselves committed defenders of the Zionist state and its oppression of the Palestinian people, as is the judicial system which they defend. They do not represent a “progressive” alternative, objecting to Netanyahu’s measures only because they fear that he will destroy the democratic fig leaf of the state of Israel. Nonetheless, the massive popular movement shows that far deeper issues are involved. Long suppressed social contradictions are exploding through the opening provided by the conflict in the ruling elite, bringing broad masses of the Israeli population and, above all, the working class onto the political stage. The postponement or even the resolution of the conflict over the Supreme Court will not suppress the further development of this social movement, fueled by immense economic inequality within Israel and the impact of the global capitalist crisis. Despite its enormous scale, however, this mass movement has a weakness that will prove fatal if not combatted: It has not so far embraced in any way the struggles of the Palestinian people. There has been a sea of Israeli flags, with not one attempt to mobilize support from Israeli Arabs, let alone the Palestinian population of the occupied territories.
Yellen Says US Sanctions Have Created a 'Real Economic Crisis' in Iran - Treasury Secretary Janet Yellen has acknowledged that US sanctions on Iran have created a “real economic crisis” in Iran but haven’t changed the behavior of the government.“Our sanctions on Iran have created real economic crisis in the country, and Iran is greatly suffering economically because of the sanctions … Has that forced a change in behavior? The answer is much less than we would ideally like,” Yellen said at a congressional hearing on Thursday.History shows that sanctions do little to change the governments they target but always hurt ordinary people in the targeted country. For example, UN experts said last month that more Iranians are dying from thalassemia, a congenital blood disorder, due to Western sanctions that deprive them of specialized medicines and the ingredients to make them.Despite the failed policy in Iran, Yellen said the US was looking for ways to strengthen the sanctions even more. The Biden administration has followed the Trump administration’s so-called “maximum pressure campaign” against Iran and has imposed a large number of new sanctions. Iran has found some relief by increasing oil sales to Asia, and the US has been trying to target those deals in some of its new sanctions. The US has also ramped up sanctions on Iran over Tehran’s growing military relationship with Moscow, which is a natural result of both countries facing similar Western pressure.
Iran expects long-term strategic pact with Russia to be finalized ‘in a month’ -- Iran's foreign minister Hossein Amir-Abdollahian has expressed hope that the long-term strategic cooperation agreement with Russia will be finalized in “less than a month.” The remarks were made by Iran's top diplomat at a joint press conference with his Russian counterpart Sergei Lavrov in Moscow on Wednesday following the delegation-level talks between the two sides. “Reviews on the long-term strategic cooperation agreement between the two countries have been finalized in Russia. Iran has also examined it. I hope that in less than a month, the final revision of the agreement will be carried out by Iran’s Foreign Ministry,” Amir-Abdollahian said. “High-ranking Iranian and Russian delegations at different levels are exchanging views, and the presidents of the two countries are in constant contact with each other.” In 2001, Tehran and Moscow signed a 10-year cooperation deal that was lengthened to 20 years through two five-year extensions. Now, the two capitals are seeking to ink a document on bilateral strategic cooperation, which may determine their future relations for the next twenty years.
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