record drop in US oil exports; Strategic Petroleum Reserve at a 39 year low; global oil production exceeded demand by 350,000 barrels per day during March, despite Russian cuts and OPEC production that was 1,024,000 barrels per day below their reduced quota
US oil prices rose for a fourth consecutive week after US reports showed that inflation was moderating, and as international agencies forecast record demand amid tight supplies later this year...after rising 6.6% to $80.70 a barrel last week after key members of OPEC agreed to cut their production by another 1.16 million barrels per day from May until the end of the year, the contract price for the benchmark US light sweet crude for May delivery opened 15 cents lower on Monday but quickly rallied to an intraday high of $81.22, as looming supply cuts from Saudi Arabia and other OPEC+ producers offset concern about weakening global growth that could dampen fuel demand, then steadied as traders assessed the challenges to supply in the wake of OPEC's planned output cuts, and in anticipation of news that Iraq would resume exports from its northern fields and then slid to settle 96 cents lower at $79.74 a barrel, with prices under pressure from a rallying U.S. dollar index, while traders hedged their bets against expectations of another interest rate increase from the Fed....oil prices moved lower again in early trading Tuesday, as traders awaited the release of US inflation data, which was expected to be a determining factor in the Fed's next decision on interest rates, but then rallied more than 2% on hopes that the Fed might ease up on its policy tightening, after the U.S. EIA downgraded its global oil production forecast this year, citing production cuts from the OPEC+ coalition and output losses in Russia and settled $1.79 higher at $81.53 a barrel, as the dollar eased on hopes that the Fed was getting closer to ending its rate hike cycle...oil prices were mixed in early trading Wednesday, as a late Tuesday report by the American Petroleum Institute of an unexpected build in commercial crude oil stockpiles limited buying interest for the US crude benchmark, but then jumped on exuberance over a dovish inflation report and broke out of the recent trading range to settle $1.73 higher at a five month high of $83.26 a barrel, after the U.S. consumer price index showed inflation eased more than expected last month, suggesting consumers might have more left to spend this coming summer travel season, boosting fuel demand...oil prices slipped in overseas trading on Thursday as the prospect of a possible recession in the United States, the world's largest consumer, offset concerns of tight supply, but steadied in early New York trading after the monthly report from OPEC showed crude production from the cartel declined by about 280,000 barrels per day over the first quarter of this year, led by output losses in Angola, Iraq, and Nigeria, and then tumbled in afternoon trading to settle $1.10 lower at $82.16 a barrel after the International Monetary Fund forecast global economic growth is likely to decelerate sharply this year, with advanced economies expected to see an especially pronounced slowdown, weighing on the demand outlook for OECD fuel consumption...however, oil prices rose in Asian trading on Friday on signs of lower Russian output and tighter global supplies, as traders waited for the International Energy Agency's (IEA) monthly report later in the day to clarify the global demand outlook, then headed for a fourth straight weekly gain, supported by signs of a tightening global market after the International Energy Agency warned of higher prices, and settled 36 cents higher at $82.52 a barrel, for a weekly gain of 2.3% after the IEA projected that the world's demand for oil would surge by 2 million to a record high this year on the back of a recovery by Chinese consumers, but warned that the output cuts announced by OPEC+’s producers would exacerbate an oil supply deficit...
Meanwhile, natural gas prices moved higher for the first time in six weeks, as forecasts shifted cooler and shortsellers took profits...after falling 9.3% to $2.011 per mmBTU last week, as weather forecasts suggested there'd be little demand for heating or cooling by mid April, the contract price of US natural gas for May delivery opened 12 cents higher on Monday, as the latest weather data showed cool weather returning to the Lower 48 in about a week’s time, and rallied to settle 16.1 cents or 8% higher at $2.172 per mmBTU, as traders covered short positions following a slide to a one-week low last week...natural gas prices opened higher again on Tuesday, supported by traders squaring their positions following the previous session’s rally, but failed to sustain the day's high in settling at $2.186 per mmBTU for a 1.4 cent gain on day, despite uninspiring weather forecasts, as LNG demand continued to rise....gas prices moved lower through Wednesday morning, as comfortable temperatures covered the key demand areas, and settled down 9.3 cents or 4%, as prices continued to soften ahead of was expected to be the first injection into storage of the season...gas prices fell again on Thursday, after the EIA reported that gas-in-storage in the United States rose for the first time this year, but recovered from below $2 to settle down 8.6 cents at $2.007 per mmBTU, as traders looked ahead to hot summer months, wherein increased cooling demand drives up consumption...natural gas prices climbed more than 5% on Friday, on short covering after prices held the $2 mark, and settled 10.7 cents higher at $2.114 per mmBTU, and thus managed to post a 5.1% gain on the week...
The EIA's natural gas storage report for the week ending April 7th indicated that the amount of working natural gas held in underground storage in the US rose by 25 billion cubic feet to 1,855 billion cubic feet by the end of the week, which lifted our natural gas supplies to 460 billion cubic feet, or 33.0% above the 1,395 billion cubic feet that were in storage on April 7th of last year, and to 298 billion cubic feet, or 18.9% more than the five-year average of 1,560 billion cubic feet of natural gas that were in storage as of the 7th of April over the most recent five years….the 25 billion cubic foot injection into US natural gas working storage for the cited week was a little less than the 28 billion cubic feet addition that was expected by industry analysts surveyed by Reuters, and compares with the 8 billion cubic feet that were added to natural gas storage during the corresponding week of 2022, and the average 28 billion cubic feet addition to natural gas storage that has been typical for the same early Spring 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 April 7th indicated that because of a record decrease in our oil exports and a draw from the SPR, we had a bit of surplus oil to add to our stored commercial crude supplies for the 13th time in 16 weeks, and for the 11th time in the past 32 weeks, even as there were no new oil supplies that the EIA could not account for this week,... Our imports of crude oil fell by an average of 951,000 barrels per day to 6,193,000 barrels per day, after rising by an average of 1,819,000 barrels per day to an eight month high the prior week, while our exports of crude oil fell by a record 2,512,000 barrels per day to 2,727,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 3,466,000 barrels of oil per day during the week ending April 7th, 1,905,000 more 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 higher at 12,300,000 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 15,766,000 barrels per day during the April 7th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 15,585,000 barrels of crude per day during the week ending April 7th, an average of 30,000 fewer barrels per day than the amount of oil that our refineries processed during the prior week, while over the same period the EIA’s surveys indicated that an average of 143,000 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 April 7th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 342,000 barrels per day more 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 [-324,000] 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.....Moreover, since last week’s “unaccounted for crude oil” was at (+918,000) barrels per day, that means there was a 1,243,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, thus rendering those comparisons completely meaningless....However, since most oil traders treat these weekly EIA reports as reliable, 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)
This week's 143,000 barrel per day decrease in our overall crude oil inventories came even as an average of 85,000 barrels per day were being added to our commercially available stocks of crude oil, because 229,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve at the same time, the second draw on the SPR in 13 weeks, and as a result the 369,575,000 barrels of oil that still remain in our Strategic Petroleum Reserve is now the lowest since November 11th, 1983, or at a new 39 year low, as repeated tapping of our emergency supplies for non-emergencies or to pay for other programs had already drained those supplies considerably over the past dozen years, even before the Biden administration's big SPR releases. The Biden administration releases have amounted to about 42% of what was left when he took office, and left us with what is less than a 20 day supply of oil at the current consumption rate.
Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 6,397,000 barrels per day last week, which was 1.0% more than the 6,336,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day higher at 12,300,000 barrels per day as the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 11,900,000 barrels per day, while Alaska’s oil production was 7,000 barrels per day higher at 440,000 barrels per day but only added 400,000 barrels per day to the rounded national total....US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was still 6.1% below that of our pre-pandemic production peak, but was 26.8% 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 89.3% of their capacity while using those 15,585,000 barrels of crude per day during the week ending April 7th, down from their 89.6% utilization rate during the prior week, but still close to a normal rate for early Spring... The 15,585,000 barrels per day of oil that were refined this week were 0.4% less than the 15,523,000 barrels of crude that were being processed daily during week ending April 8th of 2022, but 3.2% less than the 16,100,000 barrels that were being refined during the prepandemic week ending April 8th, 2019, when our refinery utilization rate was at 87.5%, a little low for this time of year..
With the modest decrease in the amount of oil being refined this week, the gasoline output from our refineries was also a bit lower, decreasing by 33,000 barrels per day to 9,818,000 barrels per day during the week ending April 7th after our gasoline output had decreased by 187,000 barrels per day during the prior week. This week’s gasoline production was still 3.3% more than the 9,501,000 barrels of gasoline that were being produced daily over the same week of last year, while 3.5% less than the gasoline production of 10,169,000 barrels per day during the prepandemic week ending April 5th, 2019. Meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 157,000 barrels per day to 4,583,000 barrels per day, after our distillates output had increased by 107,000 barrels per day during the prior week. With that decrease, our distillates output was 1.5% less than the 4,654,000 barrels of distillates that were being produced daily during the week ending April 8th of 2022, and 9.0% less than the 5,038,000 barrels of distillates that were being produced daily during the week ending April 5th, 2019...
After this week's decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the eighth consecutive week and for the 39th time in 60 weeks, decreasing by 330,000 barrels to 222,245,000 barrels during the week ending April 7th, after our gasoline inventories had decreased by 4,119,000 barrels during the prior week. Our gasoline supplies fell by that much less this week because the amount of gasoline supplied to US users fell by 359,000 barrels per day to 8,936,000 barrels per day, and because our imports of gasoline rose by 100,000 barrels per day to 813,000 barrels per day, and because our exports of gasoline fell by 74,000 barrels per day to 785,000 barrels per day. Following eight straight gasoline inventory decreases, our gasoline supplies were 6.0% below last April 8th's gasoline inventories of 236,787,000 barrels, and about 7% below the five year average of our gasoline supplies for this time of the year…
Meanwhile, with the decrease in our distillates production, our supplies of distillate fuels decreased for the 9th time in 15 weeks, falling by 606,000 barrels to 112,445,000 barrels during the week ending April 7th, after our distillates supplies had decreased by 3,632,000 barrels during the prior week. Our distillates supplies also decreased by much less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, decreased by 477,000 barrels per day to 3,763,000 barrels per day, and because our imports of distillates rose by 118,000 barrels per day to 233,000 barrels per day, while our exports of distillates rose by 6,000 barrels per day to 1,140,000 barrels per day.... But even after 60 inventory withdrawals over the past ninety-eight weeks, our distillate supplies at the end of the week were 0.9% above the 111,399,000 barrels of distillates that we had in storage on April 8th of 2022, but are about 11% below the five year average of our distillates inventories for this time of the year...
Finally, with the drop in our oil exports and the withdrawal from the SPR, our commercial supplies of crude oil in storage rose for the 20th time in 31 weeks and for the 29th time in the past year, increasing by 597,000 barrels over the week, from 469 952,000 barrels on March 31st to 470,549,000 barrels on April 7th, after our commercial crude supplies had decreased by 3,739,000 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 are still about 3% above the most recent five-year average of commercial oil supplies for this time of year, and also about 37% above the average of our available crude oil stocks as of the second weekend of April 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 31st were 11.6% more than the 421,753,000 barrels of oil we had in commercial storage on April 8th of 2022, but 4.4% less than the 492,423,000 barrels of oil that we had in storage in the wake of winter storm Uri on April 9th of 2021, and 6.6% less than the 503,618,000 barrels of oil we had in commercial storage on April 10th of 2020…
OPEC's Report on Global Oil for March
Thursday of this past week saw the release of OPEC's April Oil Market Report, which includes the details on OPEC's & global oil data for March, and hence it gives us a picture of the global oil supply & demand situation during a period when demand for oil was increasing during the third month after China had reopened to foreign travelers and removed the Covid-related restrictions on its citizens, while oil supplies from Russia were further reduced by their independent cut of 500,000 barrels per day, in response to the European Union's ban of Russian oil imports by sea, and by the G7's Russian oil price cap....March was also the fifth month that OPEC and aligned oil producers were operating under a 2 million barrel per day production cut, meant to take roughly 2% of global oil supplies off the market, in response to a perceived global surplus and related lower prices...the production cut announced two weeks ago that'd been in the news will take an additional 1.16 million barrels per day of the market starting in May, but that was planned and announced before the data in this report was available, & hence this report has no relationship with those cuts..
The first table from this month's report that we'll review is from the page numbered 48 of this month's report (pdf page 58), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings below indicate...for all their official production measurements, OPEC has used an average of production estimates by as many as eight "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA), the industry newsletter Petroleum Intelligence Weekly, the energy consultancy Wood Mackenzie and the research and intelligence firm Rystad Energy, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures….
As we can see in the bottom right hand corner of the above table, OPEC's oil output decreased by a rounded 86,000 barrels per day to 28,797,000 barrels per day during March, down from their revised February production total that averaged 28,883,000 barrels per day....however, that February output figure was originally reported as 28,924,000 barrels per day, which therefore means that OPEC's February production was revised 41,000 barrels per day lower with this report, and hence OPEC's March production was, in effect, 127,000 barrels per day less than the previously reported OPEC production figure (for your reference, here is a copy of the table of the official February OPEC output figures as reported a month ago, before this month's revision)...
while OPEC and other aligned oil producers agreed to reduce production by 2,000,000 barrels per day beginning in November, and while the net 732,000 barrel per day they've cut since were well short of that, OPEC's production was already running 1,585,000 barrels per day below what they were expected to produce when this policy was initiated in October, so the 28,797,000 barrels per day they produced in March still leaves them short of what they were expected to produce during the month, as we'll see in the next table...
The above table was originally included as a downloadable attachment to the press release following the 33rd OPEC and non-OPEC Ministerial Meeting on October 5th, 2022, which set OPEC's and other aligned oil producers' production quotas for November and the following months through the end of 2023, and the quotas shown above were reaffirmed by the cartel for the first 6 months of 2023 in during the 34th OPEC and non-OPEC Ministerial Meeting on December 4th, 2022....the first column above, labeled "August 2022 required production", actually matches the October 2018 baseline production level on which OPEC and aligned producers have based all of their quotas since the onset of the pandemic, and the "Voluntary adjustment" is the production cut each country is expected to make from that level to achieve a 2 million barrel per day cut for the group, leaving each country with a Volunary Production level they're expected to hit during 2023, whether they've produced that much recently or not....since war torn Libya and US sanctioned producers Iran and Venezuela have been exempt from the production cuts imposed by the joint agreement that has governed the output of the other OPEC producers since May 2020, they are not shown on the above list, and OPEC's quota excluding them is aggregated under the total listed for the 'OPEC 10', which you can see was expected to be at 25,416,000 barrels per day from November 2022 through December 2023...therefore, the 24,374,000 barrels those 10 OPEC members actually produced in March were 1,024,000 barrels per day short of what they were expected to produce during the month, with Nigeria, Angola, Saudi Arabia and Iraq accounting for the majority of this month's production shortfall...
The next graphic from this month's report that we'll look at shows us both OPEC's and worldwide oil production monthly on the same graph, over the period from April 2021 thru March 2023, and it comes from page 49 (pdf page 59) of OPEC's April Oil Market Report....on this graph, the cerulean blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale....
Including this month's 86,000 barrel per day decrease in OPEC's production from their revised production of a month earlier, OPEC's preliminary estimate is that total global liquids production decreased by a rounded 200,000 barrels per day to average 101.90 million barrels per day in March, a reported increase which came after February's total global output figure was apparently revised up by a rounded 200,000 barrels per day from the 101.90 million barrels per day of global oil output that was reported for February a month ago, as non-OPEC oil production fell by a rounded 100,000 barrels per day in February after that downward revision, with most of February's production reduction due to lower oil output from Russia, which offset production increases in other Eurasian countries and the OECD Americas...
After that 200,000 barrel per day decrease in global output, the 101.90 million barrels of oil per day that were produced globally during March were still 2.39 million barrels per day, or 2.4% more than the revised 99.51 million barrels per day that were being produced globally in March a year ago, which was the eighth month of the series of 400 million barrel per day production increases that OPEC and their allied producers implemented as their fourth output policy reset in response to the global demand recovery, following the early pandemic lockdowns (see the April 2022 OPEC report for the originally reported March 2022 details)…with this month's decrease in OPEC's output about a third of the reported global decrease, their March oil production of 28,797,000 barrels per day was 28.3% of what was produced globally during the month, down from from the 28.4% share reported last month, with both month's incorrectly reported at 28.8% of the global total in this month's report….OPEC's March 2022 production was ultimately revised to 28,495,000 barrels per day with the May 2022 OPEC report, which means that the same 13 OPEC members who were part of OPEC last year produced 302,000 barrels per day, or 1.1% more barrels per day of oil this March than what they produced last March, when they accounted for 28.6% of a smaller global output total…
Even with the decrease in global oil output that we've seen in this report, the amount of oil being produced globally during the month was still above the expected global demand, as this next table from the OPEC report will show us...
The above table came from page 28 of the April Oil Market Report (pdf page 38), and it shows regional and total oil demand estimates in millions of barrels per day for 2022 in the first column, and then OPEC's estimate of oil demand by region and globally, quarterly over 2023 over the rest of the table…on the "Total world" line in the second column, we've circled in blue the figure that's relevant for March, which is their estimate of global oil demand during the first quarter of 2023….OPEC has estimated that during the 1st quarter of this year, all oil consuming regions of the globe were using an average of 101.55 million barrels of oil per day, which is an upward revision of 270,000 barrels per day from their estimate 101.28 million barrels per day for 1st quarter demand of 2023 a month ago (the revisions to 2023 demand estimates have been circled in green)…but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were producing 101.90 million barrels per day during March, which would imply that there was surplus of around 350,000 barrels per day of global oil production in March, when compared to the demand estimated for the month...
In addition to figuring March's global oil supply surplus that's evident in this report, the upward revision of 200,000 barrels per day to February's global oil output that's implied in this report, which was more than offset by the 270,000 barrels per day upward revision to first quarter demand noted above, means that the 620,000 barrels per day global oil output surplus we had previously figured for February would now be revised to a surplus of 550,000 barrels per day for that month...similarly, the oil surplus of 60,000 barrels per day we had previously figured for January would be revised to a shortage of 210,000 barrels per day for that month, in light of the 270,000 barrel per day upward revision to first quarter demand...
Also note that in orange we've also circled a downward revision of 30,000 barrels per day to 2022's demand, which also means that the supply surpluses and shortfalls that we previously reported over last year would have to be revised....a separate table on page 27 of the April Oil Market Report (pdf page 37) indicates the revisions to 2022 demand included an a downward revision of 80,000 barrels per day to 4th quarter demand, an upward revision of 20,000 barrels per day to 3rd quarter demand, and an upward revision of 20,000 barrels per day to 2nd quarter demand...that comes after the February report indicated a downward revision of 70,000 barrels per day to 4th quarter demand, an upward revision of 50,000 barrels per day to 3rd quarter demand, an upward revision of 70,000 barrels per day to 2nd quarter demand, and an upward revision of 70,000 barrels per day to 1st quarter demand...we're not inclined to go back and recompute all 12 months of 2022, but we have totals for each month of last year accompanying our review of OPEC's December report, should anyone want to review how 2022's oil supply & demand shook out..
This Week's Rig Count
The number of drilling rigs active in the US decreased for the seventh time in the past nine weeks during the 8 days ending April 14th, and were left 5.7% below the prepandemic count, despite increasing ninety-seven times over the past 132 weeks... Baker Hughes reported that the total count of rotary rigs drilling in the US fell by 3 rigs to 748 rigs over the past week, which was still 55 more rigs than the 693 rigs that were in use as of the April 15th report of 2022, but was 1,181 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business. .
The number of rigs drilling for oil decreased by 2 to 588 oil rigs during the past week, after the number of rigs targeting oil had decreased by 2 during the prior week, but there are still 40 more oil rigs active now than were running a year ago, even as they amount to just 36.5% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and while they are now down 13.9% from the prepandemic oil rig count….at the same time, the number of drilling rigs targeting natural gas bearing formations was fell by 1 to 157 natural gas rigs, which was still up by 14 natural gas rigs from the 143 natural gas rigs that were drilling during the same week a year ago, even as they are now just 9.8% 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 up by 2 to 18 rigs this week, with 17 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 6 from the 12 Gulf rigs running a year ago, when all 12 Gulf rigs were drilling for oil offshore from Louisiana…in addition to rigs drilling in the Gulf of Mexico, there are now two directional rigs drilling for oil at a depth between 10,000 and 15,000 feet, offshore from the Kenai Peninsula Borough of Alaska...hence, there are now a total of 20 rigs drilling offshore, up from the national offshore count of 12 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 was also one rig drilling on inland waters...
The count of active horizontal drilling rigs was down by three to 683 horizontal rigs this week, which was still 47 more rigs than the 636 horizontal rigs that were in use in the US on April 15th of last year, even as it was less than half of the record 1,374 horizontal rigs that were drilling on November 21st of 2014…at the same time, the directional rig count was down by five to 46 directional rigs this week, while those were up by 14 from the 32 directional rigs that were operating during the same week a year ago....on the other hand, the vertical rig count was up by five to 19 vertical rigs this week, but those were still down by 6 from the 25 vertical rigs that were in use on April 15h 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 April 14th, the second column shows the change in the number of working rigs between last week’s count (April 6th) and this week’s (April 14th) count, the third column shows last week’s April 6th 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 15th of April, 2022...
we'll start by checking the Rigs by State file at Baker Hughes for the changes in the Texas Permian... it shows that that there were five rigs added in Texas Oil District 7B, which includes a county or two over the easternmost part of the Permian Midland, but that there were two rigs pulled out of Texas Oil District 8A, which overlies the northern part of the Permian Midland....however, since there was also a rig added in the Barnett shale in the north central part of the state not shown in any other district, one of those District 7B rigs must have been in the Barnett...hence, since the Texas Permian rig count appears to be up by a net of two rigs rigs, while the national Permian count was up by three, we can figure that the rig that was added in New Mexico was set up to drill for oil in the western Permian Delaware, in the southeast corner of that state......
elsewhere in Texas, there were two rigs pulled out of Texas Oil District 1, another rig pulled out of Texas Oil District 3, and two more rigs pulled out of Texas Oil District 4, but there were two rig rigs added in Texas Oil District 2, four districts which all include parts of the Eagle Ford shale...since the Eagle Ford saw a decrease of two oil rigs, we know that accounts for two of the removals; the others could have been offsetting changes, wherein an Eagle Ford addition replaces an Eagle Ford removal, or they could have simply involved changes in a basin that Baker Hughes doesn't track..
meanwhile, there was also pulled out of Texas Oil District 6, which accounts for one of the natural gas rigs pulled out of the Haynesville shale, with the other removed from adjacent northwest Louisiana, and there was a rig pulled out of Texas Oil District 10, with that accounting for one of the Granite Wash oil rig removals, while the other Granite Wash rig came from an adjacent area in Oklahoma...Oklahoma also saw two oil rigs removed from the Cana Woodford, and an oil rig added in the Ardmore Woodford, while the Louisiana rig count was still up by one with the addition of two oil rigs in the state's Gulf of Mexico waters...
among natural gas rigs, we have the two removed from the Haynesville, one each from Texas and Louisiana, and a natural gas rig pulled out of Ohio's Utica shale, while natural gas rigs were added in Pennsylvania's Marcellus and an "other" a basin that Baker Hughes does not track...meanwhile, the Alaska rig count remained unchanged despite the addition of an oil rigoffshore from the Kenai Peninsula, because an oil rig was shut down on Alaska's North Slope at the same time..
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A Meeting of the Minds Over Fracking in Ohio - – It's a first-of-its-kind meeting of the minds when it comes to fracking in the Buckeye State. Today and Saturday, scientists, doctors, attorneys, researchers and other experts are gathering in eastern Ohio to present and discuss the impacts of hydraulic fracturing, or fracking. The process involves injecting water and chemicals into deep underground wells to break up rock and release natural gas, which some experts say poses risks to the environment and public health. Alison Auciello, an organizer in Ohio for the advocacy group Food and Water Watch, claims Ohio has forged ahead with fracking without fully investigating the impacts. "We're rolling out the red carpet for the oil and gas industry, galvanized by promises of riches,” she says. “But we're not really thinking about what the long-term legacy of this industry is going to be, and addressing those issues before we just go head-on into it." Meanwhile, the oil and gas industry says the process is safe, will reduce dependence on foreign oil and will be a boost for the economy. According to the website fracktracker.org, as of the end of March 2012, there were 160 permitted Utica wells and 13 Marcellus wells in Ohio. Since then, there have been an additional 453 Utica and an additional seven Marcellus wells permitted. At the start of this month, nearly 50 were reported as producing. Vanessa Pesec, president of Network for Oil Accountability and Protection, says the detrimental effects of fracking on the land, water and human health are often downplayed or disregarded. She says the industry needs to be held more accountable. "The people of Ohio have been only told half-truths by the industry,” she adds. “And I think it's critical that people understand the full impacts upfront, at the back-end, long-term, before they even lease their land." The conference in downtown Warren features guest speakers from across the country, discussing matters including the history and known effects of unconventional shale drilling, as well as the local impacts, policy implications, required protections and projected future costs to Ohioans.
Green groups sue to stop Ohio from leasing state parks for oil and gas drilling -Environmental groups have launched a last-minute effort to halt an extraordinary new law in Ohio that requires government agencies to lease state parks and other public state lands to the oil and gas industry.A temporary injunction filed on Thursday seeks to put the brakes on legislation that requires state parks to be leased for fracking and which redefines the potent greenhouse gas methane as “green energy”. The law was due to go into effect on 7 April, but the court has not yet responded to the injunction.The law, which began life as an agricultural bill about the number of poultry chicks that can be sold at one time, quickly grew in scope and size to grant wins for agriculture corporate giants, and the fossil fuel and petrochemical industries.In addition to giving carte blanche to the fossil fuel industry to frack Ohio’s 75, very popular, state parks, the sweeping bill also includes new provisions for agriculture and electric utilities, as well as a ban on the sale of dyed chicks, rabbits and ducklings.The lawsuit, filed on behalf of campaign groups Buckeye Environmental Network, Ohio Valley Allies, the Sierra Club and the Ohio Environmental Council, alleges that the law is unconstitutional. The groups say it violates the state constitution’s one-subject rule, which requires laws to contain one subject that is clearly expressed in the title, and the three-consideration rule, which requires the legislature to consider every bill on three separate days.“This law is nothing more than an illegitimate giveaway to the oil and gas industry,” said Megan Hunter, an attorney for Earthjustice, the legal non-profit representing some of the appellants. “We will defend Ohio’s public lands from this unconstitutional attack.”
Environmental Groups Sue to Block 'Unconstitutional' New Law Allowing Fracking in Ohio State Parks - Environmental and community groups in Ohio have filed a preliminary injunction to stop the leasing of public lands— including state parks — to the oil and gas industry. Ohio HB 507, which redefines methane gas as “green energy” and requires state parks to lease their lands forfracking, went into effect on April 7. Originally an agricultural bill with its focus on poultry, the law was quickly expanded to include granting petrochemical, agricultural and fracking rights to industry. The groups oppose the law on a constitutional basis, in addition to their objection to the obligatory leasing of public lands for fracking, a press release from Earthjustice and the Sierra Club said.Earthjustice is representing Sierra Club, Ohio Valley Allies and Buckeye Environmental Network in the lawsuit. Attorneys from Earthjustice and Case Western Reserve University Environmental Law Clinic are representing the Ohio Environmental Council, along with the organization’s own attorneys. “It is because of the grassroots efforts of Ohioans who were shocked at the underhanded way the legislators passed an illegal amendment during the last weeks of the General Assembly in 2022, that we are filing this lawsuit today,” said Cheryl Johncox, board chairperson of the Buckeye Environmental Network, according to the press release. “Ohioans love their parks and forest lands and will not tolerate lawmakers turning blind eyes to what will happen to the beauty and integrity of the lands that belong to the people. Oil and gas extraction will irrevocably and permanently harm our most treasured places in Ohio. We, the people, will not stand by and allow this to happen.” The unrelated, eleventh-hour additions to what was originally a poultry bill made their way through the chambers of the Ohio State Senate without discussion during a lame duck session. Over demands to veto the controversial bill, it was signed into law by Ohio Governor Mike DeWine on January 6, 2023. “This law is nothing more than an illegitimate giveaway to the oil and gas industry,” said Earthjustice attorney Megan Hunter in the press release. “We will defend Ohio’s public lands from this unconstitutional attack. We will see the state in court.”State parks in Ohio are already being staked out by oil and gas companies, who have requested leases, which the bill takes away the state’s right to deny. The law doesn’t even have any requirements for an auction to take place or for the leases to be given to the highest bidder. It just requires that the state grant the leases to any interested party that has financial assurances, insurance and has registered with the Ohio Department of Natural Resources. Under the bill, residents of Ohio will not receive public notice on the specific lands that will be leased and will be denied opportunity for public comment.
Radicals Sue to Block Ohio Law re Drilling Under State Land - In January, Ohio House Bill (HB) 507 became law with the signature of Gov. Mike DeWine (see OH Gov. Signs Bill Expanding Drilling in State Parks, NatGas “Green”). The new law allows shale drilling under (but not on top of) Ohio state-owned land. In fact, it encourages (pushes for) more drilling under state-owned land. Predictably, the left has attacked the bill (seeCleveland Plain Dealer Attacks OH Law re Drilling Under State Land). Four leftwing “environmental” groups–Ohio Environmental Council, Ohio Valley Allies, Buckeye Environmental Network, and Sierra Club–filed a lawsuit last week hoping to overturn the law.
Judge denies request to pause law expanding fracking in state parks - cleveland.com – A Franklin County judge on Monday denied a request to temporarily block a new law that enables and, at least temporarily, compels state agencies to accept applications to drill for oil and gas under state parks.Common Pleas Judge Kimberly Cocroft denied a request for a temporary restraining order sought by environmental advocates, who say lawmakers skipped over constitutional requirements in their rush to amend the bill into unrelated legislation in the dying moments of the previous, two-year legislative session.In her ruling, Cocroft cited several factors she said indicate there’s no risk of imminent and irreparable harm if she allows the law to stand as the case proceeds. She noted public comments from Gov. Mike DeWine and other state officials that no leases would be signed in the immediate future, and that the plaintiffs only just filed suit even though DeWine signed the law in January.“Finally, because no leases, ‘in good faith,’ have been signed under the new legislation and because it has been represented that only a few more have been signed in more than a decade that this provision [allowing gas leasing on state lands] has existed, the Court finds that any reference regarding injury to the recreational, culture, and aesthetic interests in the lands to the plaintiffs’ members is speculative, at best, and does not constitute an immediate and irreparable injury, loss, or damage,” she said.Cocroft’s ruling does not terminate the case but marks an early win for the state. Chris Tavenor, associate general counsel for the Ohio Environmental Council, one of the plaintiffs, called the decision “unfavorable” but said he’ll keep fighting to ensure Ohioans have a voice as to what happens with their public lands. “Not only do Ohioans deserve healthy state parks free from pollution, they also deserve fair representation and due process in decision-making. But in the late hours of Dec. 15, 2022, the Ohio General Assembly robbed Ohioans of their Constitutional right to the legislative process and their ability to advocate for safe enjoyment of the public lands we all call home,” he said. “We’re hopeful the Court will see this opaque move for what it is: a sneaky cash-grab by the fossil fuel industry at Ohioans’ expense.” In December, lawmakers amended a bill originally focused on poultry sales to address the parks issue and quickly passed it without any public hearings. Instead of giving agencies the discretion to accept oil and gas leases, the new law says they “shall” accept lease proposals to explore for oil and gas on state lands that meet certain standards. This remains true until the Oil and Gas Land Management Commission, newly formed and now under pressure by the new law, enacts new rules controlling the leasing system. The new law took effect Friday, one day after the plaintiffs filed their lawsuit. Several gas companies and affiliates lobbied on the 2022 bill. Cleveland.com and The Plain Dealer previously reported that Encino Energy, a Texas driller that owns leasing rights to more than 1 million acres of Ohio, offered the state a “potential” of up to $2 billion in royalties and signing bonuses for the rights to drill for gas under Salt Fork State Park, which spans about 21,000 acres of Southeast Ohio. Cocroft’s order makes reference to comments in the media from DeWine and other state officals that “no leases would be signed in the immediate future.” She didn’t cite any specific examples. Ohio Department of Natural Resources spokesman Andy Chow said last week when the law took effect that the office doesn’t expect any “drilling” in the immediate future, but didn’t reference leasing. He also said besides Encino, no companies have proposed leases since December seeking to frack state lands.Dan Tierney, a DeWine spokesman, said in an interview that took place before Monday’s ruling that he expects gas companies will collaborate with the state and allow the commission to finish its work rather than the more combative approach of trying to strongarm leasing rights.“It is possible somebody could act adversarially, but the nature of people applying for mineral rights in this timeline, there’s a higher likelihood they’ll act collaboratively and not adversarially,” he said.Given that “only a few leases have been granted in the more than twelve years since the provision was passed prior to the recent legislative change,” Cocroft said there’s no likelihood of irreversible damage to necessitate an immediate pause on the law.Her ruling calls for parties to file arguments within a week on a preliminary injunction, another kind of ruling that could temporarily freeze the law in question until a final ruling.
Texas driller offers Ohio 'potential' of nearly $2 billion to frack Salt Fork State Park – Encino Energy offered the state a signing bonus and royalties that it claims could tally nearly $2 billion over a period of more than 15 years as it sought to be the first to frack Ohio’s largest state park, records show.The Texas-based driller’s offer included a $115 million signing bonus for leasing rights to drill for oil and gas under Salt Fork State Park in Southeast Ohio. The proposal, which was ultimately rejected, also called for a 20% royalty payment for oil and gas sales of minerals found under the park.Supporting documents the company provided to the state claim the combination would amount to “potential” payments of up to $1.8 billion through 2041.“I’m pleased to deliver this indication of interest of [Encino] to lease from the Department of Natural Resources the oil and gas rights located under Salt Fork State Park,” the letter, signed by Encino CEO Hardy Murchison, states.Cleveland.com and The Plain Dealer obtained those documents via a public records request as the state prepares to open its state parks to drilling for oil and natural gas for the first time.While Encino’s offer was rejected, it’s likely a foreshadowing of more to come after a new state law effectively forced opened the door for companies seeking to drill under Ohio’s state parks, some of which sit on Marcellus and Utica shale formations. It’s also a sign of the money and power behind a policy that leaves some of Ohio’s most pristine swaths of undeveloped land in the crosshairs of the extraction industry.Encino made its offer Dec. 14, 2022, one day after GOP lawmakers passed legislation that forces state agencies to accept lease proposals to explore for oil and gas made by qualifying energy companies. Gov. Mike DeWine signed the bill into law in January, and it took effect last week. (Most laws take 90 days from a governor’s signing to kick in.)would add 21,000 acres and, extrapolating from the company’s royalty projections, billions in value to its inventory. The company claims it would produce 69 million barrels of oil and 375 billion cubic feet of natural gas over 18 years from the park.“The drilling program is estimated to last six years,” an economic analysis Encino provided to the state claims.“Following that period, Encino would continue spending money in the Ohio economy to support production and ongoing maintenance of the relevant equipment.”Lawmakers tucked the proposal to expand drilling rights in state parks into unrelated legislation late last year and quickly passed it without ever holding public hearings on the idea. That process prompted a lawsuit last week from environmental advocates seeking to block the bill from taking effect, claiming lawmakers skipped over constitutional requirements while passing the bill.The materials Encino submitted to the state suggest a plan already was in motion well before the legislation was unveiled. For instance, one document is dated October 2022, months before the state parks idea was shared publicly. The offer letter says the company has “already begun securing surface locations outside of the Park.”Cleveland.com and The Plain Dealer previously reported on Encino’s interest in capturing oil and gas under Salt Fork, although DeWine, the Ohio Department of Natural Resources (ODNR) and Encino declined to directly confirm as much. ODNR released the offer letter and supporting documents Friday.While the new state law effectively forces state agencies to accept lease proposals from qualifying drillers, this is only true until the Oil and Gas Land Management Commission establishes permanent rules governing how to execute a 2011 state law passed with the aim of allowing for drilling in state parks. That law was never implemented, and the commission only just began to form and draft rules in earnest. As of Friday, Encino had made the only offer to date to drill under a state park since the law passed, ODNR spokesman Andy Chow said. Mike Chadsey, a spokesman for the Ohio Oil and Gas Association, said companies the association represents are waiting for the commission to draft rules before submitting offers.
Questions remain as Ohio’s fracking law goes into effect - — It is now officially legal for oil and gas companies to frack from state parks, as a new state law goes into effect.However, the state’s Oil and Gas Management Commission still needs to finalize a lease agreement for those companies, and the president of the Ohio Oil and Gas Association, Rob Brundrett, said he is not happy with the current draft.“Several items in the draft lease remain as obstacles to the responsible development of the state’s oil and natural gas resources,” he said.The current draft is 17 pages long, provides a primary lease of the state land for three years, and allows it to continue if oil and gas are being produced in paying quantities or if operations are conducted in the search for oil and gas.Brundrett said one concern of the three-year lease is that it allows for the state to terminate the lease at any time if the premises are needed for public use. “This termination can occur regardless of how much investment a producer made into developing the related unit without any concern for producers related contractual obligations,” Brundrett said. “That amount could easily be in the tens of millions of dollars and this provision will discourage most, if not all, investment in state lands.”On Monday, the commission also heard from several Ohioans who said they’re not happy with the way this bill was passed, and they don’t want to see it go any further.“This law will not stand,” Jenny Morgan said. “Do you hear me, big gas and oil? This law will not stand.”“I will leave this state if fracking begins on our public lands,” Dr. Joseph Blanda said.Some, like Bladna, said they are worried about the health effects fracking could have on Ohioans who live near state parks or visit them.“Are you willing to support the fossil fuel industry and ignore the public health concerns of the citizens of Ohio?” he said. “Exposing their families and kids to harmful toxins that have been proven to be associated with multiple medical conditions such as asthma or as deadly as cancer?”“Our children and families need our parks, and they need our parks to be safe and clean,” Morgan said. The commission said it will spend the next week considering all the public testimony heard Monday and will meet in one week to vote on the lease agreement.
U.S. district court denies lessor motion for class certification in subsurface trespass case In J&R Passmore, LLC v. Rice Drilling D, LLC, the United States District Court for the Southern District of Ohio denied the lessors’ motion for class certification in the context of subsurface mineral trespass claims. Lessors assert that the lessees committed the subsurface trespass by drilling outside the terms of their leases when they developed the Point Pleasant interval even though, according to the lessors, the lessees only had the right to develop the formation commonly known as the Utica Shale. The district court denied lessors’ motion for class certification, finding, in part, that the individualized elements of the lessors’ tort claims (trespass, conversion, and unjust enrichment) predominate over the issues otherwise common to the putative class. “Defendants cannot be held liable for trespass, conversion, nor unjust enrichment unless they acted in a way that impacted each class members’ specific tracts of land. … This individualized inquiry is particularly important given the pooling unit structure in which the leases at issue are held.” You can review the case here.
Utica Shale Academy receives grant for expansion - – Utica Shale Academy Superintendent Bill Watson said his school services 9th through 12th grade students up to the age of 21 who are credit deficient but interested in learning a skilled trade. “So many options for kids in the trades or you know people re-careering themselves and refining themselves,” said Watson. Watson said for a long time there was a negative connotation when it comes to welding and trade careers, but attitudes are changing. “The truth of the matter is, is that these men and women could make great family-sustaining wages, and to me,” said Watson. “The thing that really appealed to me about it was working with my hands. I knew that I was gonna be able to do that,” said senior Levi Bryarley. At the Utica Shale Academy, he’s learned pneumatics, hydraulics, programming and welding and currently works as an assistantship at WD Foundry in Wellsville. Bryarley said he’ll continue to send out job applications. “I’d say probably being an electrician or full-time welding,” said Bryarley about potential future careers. Watson, who spent more than a decade in power generation, said he’s excited about the school’s future, a $2.35 million grant received through the Ohio DOD Governor’s Office of Appalachia — part of the Appalachia Community grant program. That funds a portion of a $4.8 million building on East Main Street, with more than five-thousand square feet of classrooms for heavy equipment operation expected to be complete next summer.
Strs Ohio Increases Stock Position in The Williams Companies, Inc. --Strs Ohio (State Teachers Retirement System of Ohio) lifted its holdings in The Williams Companies, Inc. by 10.1% during the fourth quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm owned 56,508 shares of the pipeline company’s stock after buying an additional 5,182 shares during the quarter. Strs Ohio’s holdings in Williams Companies were worth $1,859,000 as of its most recent SEC filing. Other institutional investors also recently modified their holdings of the company…
Strs Ohio Boosts Holdings in DT Midstream: A Strategic Move in the Natural Gas Sector. --In the ever-changing world of finance, where investors and companies are constantly vying for a competitive edge, Strs Ohio has made a strategic move that is both bold and calculated. According to its most recent filing with the SEC, the firm has boosted its holdings in shares of DT Midstream, Inc by 17.0% in the fourth quarter alone, adding 6,269 shares to its portfolio. This move begs several questions that delve into the underlying motivations behind Strs Ohio’s decision. Was this an impulse buy or a well-calculated strategic shift? What factors led to their investment in DT Midstream? And most importantly, what does this signify for both businesses moving forward?For starters, it should be noted that DT Midstream last announced its quarterly earnings data on February 16th. The company reported earnings per share (EPS) of $0.93 for the quarter, missing analysts’ consensus estimate by ($0.02). While the company still had a net margin of 40.22% and a return on equity of 8.27%, there was clearly an opportunity for growth.DT Midstream provides integrated natural gas services in the United States through two segments; Pipeline and Gathering. Its portfolio includes interstate pipelines, intrastate pipelines, storage systems, lateral pipelines, gathering systems, related treatment plants, compression and surface facilities – all critical components of America’s natural gas infrastructure.So why exactly did Strs Ohio invest so heavily in DT Midstream? The answer lies in the potential synergy between these two firms; as the largest public pension fund system in Ohio with over 497 thousand active members and retirees combined worth billions of dollars invested across various asset classes including public equities and private equity funds – dovetailing nicely with DT Midstream’s core operations.Furthermore, it stands to reason that Strs Ohio recognizes the need for continued growth within America’s natural gas sector – which has seen remarkable growth and expansion in recent years due to technological advances in hydraulic fracking, allowing access to previously untapped shale reserves.In conclusion, Strs Ohio’s decision to increase its holdings in DT Midstream is both a strategic and calculated move. As America’s natural gas infrastructure continues to grow, there is ample potential for increased profits and shareholder value. With analysts predicting that DT Midstream will post 4.01 earnings per share for the current fiscal year, it seems that both firms stand to benefit greatly from this newfound partnership. Time will tell if this investment bears fruit – but for now, Strs Ohio’s actions speak louder than words.
Infocast's Utica & Marcellus Infrastructure Development Summit Comes to Pittsburgh this May - Infocast, the leading producer of oil and gas events, is proud to present the "3rd Utica & Marcellus Infrastructure Development Summit," on May 8-10, 2013 in Pittsburgh. This Summit was created to meet Ohio's needs in midstream and infrastructure developments in the Utica and Marcellus plays.Because of the Utica, Ohio is now going through what Pennsylvania went through just a few short years ago in terms of rapidly developing shale resources. Midstream companies are staking out their positions now, competing to build the many new infrastructure projects needed across the entire region to get the gas processed, fractionated, and out to the best available markets.This timely event brings together midstream companies, rail & trucking firms, E&P and field service companies, the financial community, consultants and other leading gas players and experts, including representatives from Access Midstream, Chesapeake Energy Corporation, Caiman Energy LLC, Magnum Hunter Resources Corporation and many more. Attend to get up-to-the-minute information and establish key relationships.Don’t miss this valuable opportunity to obtain briefings on current and planned infrastructure projects and learn how to maximize your existing opportunities to grow in these rapidly-expanding, adjacent plays.For more information, to register for the summit, or to join us as a sponsor, visit the event website at infocastinc.com/events/utica13 or contact Infocast at 818-888-4444.
Another lawsuit in pipeline to stop Mountain Valley Pipeline - One month after a federal agency said in a biological opinion that construction of the Mountain Valley Pipeline would not jeopardize protected species of bats, fish and a plant, environmental groups are seeking a second opinion. A petition filed Monday asks a federal appeals court to review the finding by the U.S. Fish and Wildlife Service. “Construction of this fossil fuel nightmare has already harmed imperiled wildlife, but the Fish and Wildlife Service continues to ignore its duty to ensure that waterways and the species that rely on them are protected,” said Jared Margolis, a senior attorney with the Center for Biological Diversity, one of 11 environmental and community groups that filed the petition. “It’s reckless and unlawful to allow this project to decimate more essential habitats and harm our climate,” Margolis said. The filing with the 4th U.S. Circuit Court of Appeals follows a familiar pattern in the nearly decade-long controversy over the natural gas pipeline: Government permits for the project are granted, challenged in court, struck down, re-granted, and then challenged again. Two earlier opinions by the Fish and Wildlife Service — set aside in 2019 and 2022 by a three-judge panel of the Fourth Circuit — reached the same conclusion as the most recent one. “We are carefully reviewing the request and will respond accordingly,” David Eisenhauer a spokesman for the Fish and Wildlife Service, wrote in an email late Monday. The brief did not state the grounds for challenging the latest finding. A 297-page opinion from the service came after nearly a year of research and consideration that followed a 2022 decision by the Fourth Circuit, which cited “serious errors” with an earlier conclusion that threatened and endangered species would not be jeopardized. A more detailed argument is expected in future filings. The latest document from the Fish and Wildlife Service provides additional data and analysis to support the federal government’s finding of no significant harm to five species: the endangered Indiana bat, the threatened northern long-eared bat, the endangered Roanoke logperch, the endangered candy darter and the threatened Virginia spiraea, a flowering shrub native to southern Appalachia. The finding was derided by opponents, who say building a 303-mile buried pipeline through pristine woodlands and across clear-running streams has already had dire environmental consequences that will only continue if work resumes. Although Mountain Valley is largely completed, there has been no active construction since the fall of 2021. Construction of the $6.6 billion project has been stalled by legal action on multiple fronts: over the Fish and Wildlife Service’s endangered species finding, the U.S. Forest Service’s permit for the pipeline to pass through the Jefferson National Forest, and authorizations from several agencies for the 42-inch diameter pipe to cross through streams and wetlands.
Sisters of Loretto permanently preserve 650 acres of 'Holy Land' in Kentucky - The region in central Kentucky where the Sisters of Loretto have resided for 200 years is often described as “holy land.” Now, more than 650 acres of that land surrounding their motherhouse will be protected and preserved permanently under the terms of a new conservation easement. The arrangement, signed Jan. 18 with the Bluegrass Land Conservancy, will place more than 80% of the congregation’s nearly 800 acres of land in Nerinx, Kentucky, under an easement, a legally binding and voluntary agreement that restricts development for conservation purposes and mandates current and future owners to abide by the outlined terms. Approximately 654 acres in all, the newly preserved area of farm fields, forest, native grasses, lakes, and creeks is more than six times larger than the Vatican City State.“The Loretto Community has long been committed to caring for Earth,” Sr. Barbara Nicholas, Loretto president, said in a statement. The decision, decades in the making, is part of the Loretto Sisters’ participation in the Laudato Si’ Action Platform, a Vatican initiative that lays out steps for individual Catholics and institutions to implement the sustainable lifestyles and integral ecology articulated in Pope Francis’ 2015 encyclical, “Laudato Si’, on Care for Our Common Home.” At a signing ceremony on Jan. 18, Nicholas noted that Laudato Si’ reminds us that humans are a part of nature, not separate from it. “Our commitment to peace and justice, to learning and teaching, extends not only to Earth but is rooted in our understanding that we are of Earth.” Attention to the future of the sisters’ land ramped up in2013 after fossil fuel companies sought to build the Bluegrass Pipeline across their property, including the possible use of eminent domain. The Loretto Sisters, alongside the Dominican Sisters of Peace in St. Catherine and Sisters of Charity at Nazareth, joined others in their community to resist the project, at times with musical protests, and in 2014 successfully blocked the pipeline, which sought to transport liquefied gasses extracted through hydraulic fracturing, or fracking, from Pennsylvania, Ohio, and West Virginia through Kentucky and eventually to the Gulf Coast. “It was at that point that people really started thinking again about what can we do to protect our lands,”
55-mile natural gas pipeline will pass through nature areas in Washtenaw County - mlive.com- A $550-million Consumers Energy project to replace 1940s-era natural gas pipeline is getting underway in April, with its path passing through several large Washtenaw County natural areas.Construction on the mid-Michigan pipeline replacement project that will last much of the year is set to get underway April 17, according to Consumers Energy spokesperson Tracy Wimmer.
U.S. natgas futures jump 8% on short covering (Reuters) - U.S. natural gas futures rose 8% on Monday as traders covered short positions following a slide to a one-week low in the last session, while analysts expect high price volatility in the near term. Front-month gas futures for May delivery on the New York Mercantile Exchange (NYMEX) rose 16.1 cents, or 8%, to settle at $2.172 per million British thermal units (mmBtu). Gary Cunningham, director of market research at Tradition Energy, attributed the rebound in prices to traders covering their short positions, adding that elevated cooling demand into summer should be supportive for the market. "We don't expect to have the same summer heat that we had last year, but we certainly think there will be enough heat to support cooling demand and power sector demand for gas, which is well above normal." However, analysts said the market could see high volatility in the near term, given the lack of clear catalysts. "The market may get edgy as we transition into the summertime. Uncertainty is always a recipe for a price increase," said Zhen Zhu, managing consultant at C.H. Guernsey and Co in Oklahoma City. Prices declined more than 9% last week, which was the largest decline since early March, on milder weather and increased output. Refinitiv said average gas output in the U.S. Lower 48 states has risen to 100 billion cubic feet per day (bcfd) so far in April, up from 98.7 bcfd in March and compared with a monthly record of 100.4 bcfd in January. "In the U.S. gas markets, mild weather, lackluster industrial activity and concerns about a potential glut in LNG markets due to seasonally elevated storage in Europe have coincided amid relatively resilient supply and led to a sharp sell-off since the beginning of the year," Barclays said in a note. U.S. energy firms last week cut the number of oil and natural gas rigs operating for a second week in a row, energy services firm Baker Hughes Co said in its closely followed report on Thursday.
Natural Gas Futures Up Slightly, but Balances Seen Still Too Loose; Cash Mostly Steady - Natural gas futures prices bounced around Tuesday, with the prompt-month Nymex contract trading in a relatively tight range before ultimately settling modestly higher day/day. With LNG demand continuing to rise and weather forecasts rather uninspiring, the May Nymex contract edged up 1.4 cents to $2.186/MMBtu. Cash prices shifted a dime or less at the vast majority of North American locations. NGI’s Spot Gas National Avg. slipped 7.5 cents to $2.400. Feed gas deliveries to U.S. liquefied natural gas facilities are ramping up toward all-time highs, setting the stage for incremental gains later this year as Freeport LNG returns to full capacity and Calcasieu Pass comes fully online. NGI data showed feed gas volumes climbing to 14.61 Dth on Tuesday, up from 13.78 Dth a day earlier. Though the increasing LNG demand is occurring in the early days of the spring shoulder season – rather than the peak of winter – the uptrend is lending much-needed support to the market. After slipping below $2.00 in recent weeks, futures on Tuesday swung either side of $2.150. EBW Analytics Group noted that with strong LNG feed gas demand and decelerating production growth, fundamentals may soon strengthen. Coal-to-gas switching and the steady rise in cooling demand in the coming months may result in an early inflection point for natural gas prices as soon as next month. In the immediate term, though, the May Nymex contract faces an enhanced risk of a relapse lower thanks in large part to mild weather. EBW said the near-term outlook this month’s “very meager” heating demand could lead to the third largest monthly injection of natural gas into storage over the past decade. What’s more, the robust injections would come amid historically low pricing. Already, stocks are sitting more than 50% above both last year and five-year average levels, according to the latest government inventory report. What’s more, the April increase in gas storage is projected to be 95 Bcf above the five-year average, according to EBW. While weather plays a predominant role, a post-winter bounce in natural gas production as Permian pipeline maintenance concludes also could weigh on storage balances.
U.S. natgas falls 4% on expectations for lower heating demand (Reuters) - U.S. natural gas futures fell more than 4% on Wednesday on expectations that milder weather would reduce heating demand and with near-record production for the month pressuring prices. Front-month gas futures for May delivery on the New York Mercantile Exchange (NYMEX) slipped 9.3 cents, or 4.3%, to settle at $2.093 per million British thermal units (mmBtu). Prices continue to hold above $2 but aren't gaining, as there is low demand, said Thomas Saal, senior vice president for energy at StoneX Financial Inc. 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 97.4 bcfd this week to 95.3 bcfd next week. The U.S. Energy Information Administration (EIA) said on Tuesday that U.S. power consumption is expected to slip about 1% in 2023 from the previous year as milder weather slows usage from the record high hit in 2022 "We will likely see higher demand in July and August as homes and businesses will use air conditioners to escape heat," Saal added. Analysts have highlighted that there is strong support around the $2 level. Prices gained 8% on Monday after they slipped to $1.99 late last week. Refinitiv said average gas output in the U.S. Lower 48 states has risen to 100.1 billion cubic feet per day (bcfd) so far in April, up from 98.7 bcfd in March and compared with a monthly record of 100.4 bcfd in January. Meanwhile, Russian gas giant Gazprom said that Europe's ability to maintain ample gas stocks in the 2023/2024 winter hinges on Asia's demand given "critically low" supplies from Russia.
U.S. natural gas tests $2 support after first spring season storage build -- Natural gas futures closed down a second straight day on Thursday after briefly breaking below the key $2 support as the U.S. government reported the first spring season injection of gas into storage tanks already bloated from underutilization of the fuel for heating during the winter. Natural gas for May delivery settled down 8.6 cents, or 4%, at $2.007 per mmBtu, or metric million British thermal units, adding to the prior 4% slide from Wednesday. Thursday’s session low was $1.996. The latest drop in gas prices came after the U.S. Energy Information Administration, or EIA, reported that gas-in-storage in the United States rose by 25 billion cubic feet, or bcf, last week in the first series of injections for the spring season. While that build was smaller than the 28-bcf injection forecast for industry analysts, what weighed on market sentiment was the size of gas inventories as a whole. Last week’s injection took the balance in gas storage to 1.855 trillion cubic feet, or tcf, the EIA said. That was 33% above the year-ago storage level and nearly 19% higher than the five-year average for gas inventories. The 2023 pre-summer injection season is starting with one of the most bloated gas storages, courtesy of a winter that ran mostly warm, with one of the fewest snow storms ever. Typically, this is a time when storage is at seasonal lows after large and consistent withdrawals during winter, when gas is burned for heating. “Future builds are also expected to be slightly larger than normal due to warmer average temperatures across the US and could put surpluses back above 350 bcf,”
Natural Gas Futures Bounce on Balance Tightening, but Modest Near-Term Demand Sinks Cash - Natural gas futures ended the week on higher ground as traders digested the latest storage data, which reflected some potentially bullish signals for the market. With some short-covering likely in play ahead of the weekend, the May Nymex gas futures contract settled Friday at $2.114/MMBtu, up 10.7 cents on the day. June futures closed out the week at $2.305, up 10.8 cents. Spot gas prices, however, nosedived for the three-day gas delivery period. Losses were most pronounced on the West Coast, though California prices remained at a stout premium to the rest of the country. NGI’s Spot Gas National Avg. dropped 12.0 cents to $1.860. With weather-driven demand rather uninspiring in April, the market has been attuned to other changes in the supply/demand balance. Production has offered little support to prices in recent weeks. Although output has fluctuated and fallen back to the high 90s Bcf/d over the past month, that reduction was tied to pipeline work. As those maintenance events have ended, output has soared. On Friday, U.S. production was back at 101 Bcf/d, not far off late-winter highs. However, another look at the supply side of the equation offers some hope that prices may soon swing to the upside. Thursday’s Energy Information Administration (EIA) weekly inventory report showed a net 25 Bcf increase in overall stocks, resulting in an expansion of the year/year surplus to 460 Bcf. The overhang to the five-year average, meanwhile, held relatively steady at 295 Bcf. However, taking a more granular approach to the storage data, Mobius Risk Group noted that the 25 Bcf injection – while meeting market expectations – also implied flat year/year supply/demand. This is a material divergence from what came to be the norm late last summer and through most of the 2022-2023 withdrawal season, according to the firm.
Great Lakes tribes send report to United Nations to fight Line 5 — Native American tribes from Michigan, Wisconsin and Ontario have come together to call for an end to the Line 5 pipeline. The Enbridge Line 5 crude oil pipeline, first constructed in 1953, stretches from Wisconsin through 645 miles of Michigan and ends in Sarnia, Ontario. Part of the pipeline travels underwater through the Straits of Mackinac. In recent years, the pipeline's continued operation has become a source of controversy. Many tribal nations and communities claim that the pipeline goes through their traditional territories. The Straits area in particular is considered a place of significant cultural and historical importance to many native groups, including the Anishinaabe. According to tribal leaders, the pipeline poses a major and direct threat to the ecosystems along its path. “The Straits of Mackinac are central to the Anishinaabe creation story, which makes this location sacred from both a cultural and historical perspective in the formation of the Anishinaabe people,” said Austin Lowes, chairperson of the Sault Ste. Marie Tribe of Chippewa Indians, in a statement. “Protecting the Straits is also a matter of the utmost environmental and economic importance — both to our people and the state of Michigan.” Tribal leaders and other environmental groups have publicly opposed the pipeline for many years and have called for the pipeline to be shut down. Supporters of the pipeline point out that it transports 540,000 barrels of light crude oil and natural gas liquids through Line 5 on a daily basis. Shutting it down could impact jobs, fuel transport and property taxes paid by Enbridge. In an effort to address safety concerns, Enbridge has proposed an underwater tunnel to house the portion of Line 5 that runs under the Straits of Mackinac. However, the U.S. Army Corps of Engineers recently pushed the permitting timeline for the tunnel project back to spring 2025. Critics of the tunnel project say no oil should be transported through the Straits at all, as a spill could have a devastating impact on more than 700 miles of Great Lakes shoreline. “The rights of Indigenous people, of my people, are rights that should be respected by all sovereigns, both domestic and abroad,” said President Whitney Gravelle of the Bay Mills Indian Community in a statement. “Canada’s support of Line 5 is a disaster in the making for the entire Great Lakes region because an oil spill will poison our fish, harm our sacred sites, contaminate our drinking water — and ultimately destroy our Indigenous way of life.” Previous attempts to shut down the pipeline have been stopped through various means, mostly the 1977 Transit Pipeline Treaty between Canada and the United States. The latest attempt saw 51 tribal organizations from Wisconsin, Michigan and Ontario submit a report to the United Nations Human Rights Council. This report, dated April 4, claims that the Government of Canada is violating the human rights of Indigenous peoples through its continuous support for Line 5. The report was submitted to be considered during Canada's upcoming Universal Periodic Review, conducted by the United Nations. As a United Nations member state, Canada is required to be evaluated for its human rights record on a regular basis. (report embedded below)
There could be millions of abandoned wells in the US. Plugging them is a monumental task - Congress set aside an unprecedented $4.7 billion to plug hundreds of thousands of abandoned oil and gas wells in late 2021, and by last fall the Interior Department began sending an initial $25 million to two dozen states to stamp out wells from Alabama to Alaska that were contaminating groundwater and leaking planet-warming gases. Louisiana, home to more than 4,500 “orphan” wells — named so because often no viable owner exists — was among those to receive the infusion of federal money. The state hired outside contractors, who sought out local crews with the equipment and experience needed to do the difficult work of dismantling a long-festering environmental scourge, one well at a time. That’s how, on a gray morning in northwest Louisiana, in an area known as the Caddo Pine Island Oil Field, Joe Tolbert and his three sons were once again among the cypress swamps and tall pines, pouring a half-mile’s worth of concrete that would officially end the life of Well #173054. Since January, his small business had found reliable work plugging dozens of rusty, leaking wells that litter this rugged landscape. The push from the federal government to wrangle a problem that historically has received little attention marks a historic shift that could have profound impacts. Dedicating billions of dollars to target the most troublesome wells around the country has the potential to result in significantly fewer toxic substances, such as arsenic and benzene, polluting groundwater. Also, while individual orphan wells don’t typically leak large amounts of methane, collectively they account for a significant source of the potent greenhouse gas. So plugging the worst offenders has a clear climate benefit, scientists say. “The more we plug and the faster we plug, the more methane we are capturing,” said Ben Diebold, executive vice president for disaster services at Lemoine, one of the two firms with which Louisiana has contracted. Still, a daunting task lies ahead. Merely locating orphan wells can be arduous, and plugging them is tedious, time-consuming and expensive. To follow a crew like Tolbert’s is to understand how the work is a mixture of sweat, science and improvisation. They must navigate swampy roads or thick forests with heavy equipment to access the wells, remove miles of steel piping, set underground plugs to prevent fluid from flowing, fill strawlike holes with cement and remove the well head, and restore the land to something resembling normal. The whole endeavor takes days, and can cost $30,000 to plug a single well — and sometimes far more. Multiply that times the staggering number of wells around the country, and it’s clear that the current funding, while monumental compared to anything in the past, will only begin to chip away at the problem. The money pouring into states to do this work is “supercharging” the modest efforts that previously existed, said Adam Peltz, a director and senior attorney at the Environmental Defense Fund who has worked on the issue for years. But, he added, “We are only scratching the surface on this.”‘We really only know where a fraction of them are’
Natural gas exporters skirt Washington’s scrutiny of China - The United States’ booming natural gas export industry is trying to stay out of the fray of rising tensions between the U.S. and China. And it’s getting cover from an unusual quarter: some of Beijing’s critics in the GOP. U.S. lawmakers of both parties are pursuing tough-on-China bills after a spate of conflicts involving spy balloons, TikTok and Chinese President Xi Jinping’s recent visit to Russia. But executives at companies that sell liquefied natural gas are going to Congress with a contrary message: If the United States wants more of its gas to flow overseas, Chinese yuan will have to be part of the equation. One reason is that contracts with Chinese buyers are critical to the gas industry’s hopes of securing billions of dollars in bank financing for planned export facilities, industry analysts said. Lack of financing led to delays in construction of new gas projects that could export as much as 21 billion cubic feet a day, a volume that if completely built would triple current U.S. capacity, according to figures from the Energy Information Administration. “Is China still critically important in signing long-term agreements to help secure funding for those projects?” said Charlie Riedl, executive director for the Center for Liquefied Natural Gas trade association. “The answer is absolutely yes.” Representatives from the group have met with senators to make the case that China is a crucial market for U.S. energy shipments, Riedl said. Some of the GOP’s biggest China hawks, like Sen. Ted Cruz (R-Texas), are holding their fire when it comes to the LNG trade. Cruz told POLITICO that “China poses the greatest geopolitical threat” to the U.S. and touted the dozens of bills he’s filed to address the risks. On LNG trade, though, the Texas Republican sees less of an issue. “Individuals and companies can do business with China. We are not boycotting the nation as a whole,” Cruz said.
Experts See Below-Average Atlantic Hurricane Season in 2023 -- Researchers at Colorado State University (CSU) anticipate a slightly below-average Atlantic hurricane season in 2023. This is principally due to the likely development of the El Niño weather phenomenon. However, “Given the conflicting signals between a potentially robust El Niño and an anomalously warm tropical and subtropical Atlantic, the team stresses that there is more uncertainty than normal with this outlook,” according to the CSU report released on Thursday (April 13). The CSU Tropical Meteorology Project team is predicting 13 named storms during the Atlantic hurricane season, which runs from June 1 to November 30. Of those, researchers expect six to become hurricanes and two to reach major hurricane strength with sustained winds of 111 miles per hour or greater. CSU predicts that the 2023 hurricane activity will be about 80% of the average season from 1991–2020. By comparison, 2022’s hurricane activity was about 75% of the average season. The 2022 hurricane season had two major hurricanes: Fiona and Ian. Fiona brought devastating flooding to Puerto Rico before causing significant surge, wind and rain impacts in the Atlantic provinces of Canada as a post-tropical cyclone. Ian made landfall as a Category 4 hurricane in southwest Florida, causing over 150 fatalities and $113 billion dollars in damage. Natural gas and crude pipelines, petroleum product terminals and refineries, as well as countless wells and LNG export facilities concentrated along the Gulf Coast have long made hurricane preparedness a top priority for the industry. In 2021, Hurricane Ida knocked out natural gas supply from the Gulf of Mexico for weeks, while Hurricane Laura shuttered the Cameron LNG facilityfor more than a month in 2020. Hurricanes can also impact natural gas demand and market dynamics. Last year’s Hurricane Ian for example hit demand in the Southeast, and impacted prices.
Why SPOT Will Change Everything In The U.S. Crude Oil Export Market - If you think, as we do, that (1) U.S. crude oil production is likely to increase by 1.5 to 2 MMb/d over the next five years, (2) almost all those barrels will be light-sweet crude that needs to be exported, and (3) exporters will overwhelmingly favor the marine terminals that can accommodate Very Large Crude Carriers (VLCCs), it would be hard to ignore the game-changing impacts that Enterprise Products Partners’ planned Sea Port Oil Terminal could have. SPOT, which could be completed as soon as 2026, will have robust pipeline connections from the Permian and other shale plays and be capable of fully loading a 2-MMbbl VLCC in one day, enough to handle virtually all the incremental exports we’re likely to see over the next five years. In today’s RBN blog, we discuss the fast-increasing role of VLCCs in U.S. crude oil exports and the potentially seismic impacts of the SPOT project. RBN’s middle-of-the-road “Mid” forecast sees U.S. crude oil production increasing to 14 MMb/d by 2028, about 2 MMb/d higher than the 2022 average, with three-quarters of that incremental output coming from the Permian and most of the rest from other shale plays that also produce high-API-gravity, low-sulfur oil — see The Price You Payfor more (and a downloadable MS Excel version of that forecast). Given that U.S. refineries’ ability to economically process light-sweet crude is essentially maxed out, it’s a good bet that almost all those incremental barrels will be bound for export terminals along the Gulf Coast. And, as we said in Calling the Shots, it’s just as likely that, on their way to overseas refineries, as many of those barrels as physically possible will be headed through terminals like the Enbridge Ingleside Energy Center (EIEC) and South Texas Gateway (STG) — both in the Corpus Christi area — whose docks can receive and load VLCCs with minimal reverse lightering, the most cost-effective way to move massive volumes of oil to Europe and Asia.But crude oil pipelines from the Permian to Corpus are nearing capacity, more oil is being diverted toward Houston-area export terminals across Magellan’s pipelines, the Midland-to-ECHO pipeline system and other pipes — see Sooner or Later and Houston Bound for more on that — and Enterprise (in partnership with Enbridge) continues to advance its plan to build SPOT in 115-feet-deep waters about 30 miles off the coast of Freeport. InWhat It Takes, we explained that SPOT will have two single-point mooring buoys (purple-and-white-striped diamonds in Figure 1) and the ability to simultaneously moor two VLCCs and load one per day — providing an extraordinary level of cost- and time-efficiency. Crude will flow to SPOT on a pair of 36-inch-diameter pipelines from two Enterprise storage-and-distribution terminals: the existing ECHO Terminal (orange tank icon southeast of Houston; 8.3 MMbbl of tank storage) and the proposed Oyster Creek Terminal (orange tank icon north of Freeport; 4.6 MMbbl of planned capacity) in south-central Brazoria County. But crude oil pipelines from the Permian to Corpus are nearing capacity, more oil is being diverted toward Houston-area export terminals across Magellan’s pipelines, the Midland-to-ECHO pipeline system and other pipes — see Sooner or Later and Houston Bound for more on that — and Enterprise continues to advance its plan to build SPOT in 115-feet-deep waters about 30 nautical miles off the coast of Freeport. Enterprise has estimated that it will have a full license for the project in hand by September 2023, and that it will take about 30 months to build the facility. In What It Takes, we explained that SPOT will have two single-point mooring buoys (purple-and-white-striped diamonds in Figure 1) and the ability to simultaneously moor two VLCCs and load one per day — providing an extraordinary level of cost- and time-efficiency. Crude will flow to SPOT on a pair of 36-inch-diameter pipelines from two Enterprise storage-and-distribution terminals: the existing ECHO Terminal (orange tank icon southeast of Houston; 8.4 MMbbl of tank storage) and the proposed Oyster Creek Terminal (orange-and-white-striped tank icon north of Freeport; 4.8 MMbbl of planned capacity) in south-central Brazoria County.
Matador Boosts Permian Opportunities with $1.6B Advance Takeover - Matador Resources Co. has completed its largest transaction in the Permian Basin with the purchase of Advance Energy Partners Holdings LLC, which has assets in New Mexico and West Texas. Matador paid an initial $1.6 billion for the company. In addition, the independent agreed to pay $7.5 million monthly this year if the average West Texas Intermediate (WTI) oil price exceeds $85/bbl. At the end of March, WTI was trading at $75.68, and it has averaged around $80. “These properties are a unique, value-creating opportunity for Matador and all of its stakeholders,” said CEO Joseph Foran. “Closing this transaction sets Matador up nicely for a great 2023 and an even better 2024.” Houston-based Advance was a portfolio company of private equity giant Encap Investments LP. The deal gives Matador about 18,500 net acres in the northern portion of the Permian’s Delaware subbasin, 99% of which are held by production. Most of the leasehold is near “some of Matador’s best acreage,” where an estimated ultimate recovery of 1 million boe has been drilled, the company said. The acreage also provides a “significant increase” in Matador’s primary development zones, including the Avalon, Bone Spring and Wolfcamp formations. In core target formations, Matador gained 174 net operated locations. In the Wolfcamp D, Matador added 35 net. Matador has said it expects Advance to add around 24,500-25,500 boe/d in production, 74% weighted to oil. Advance’s total proved reserves last year were estimated at around 106 million boe, 73% oil-weighted. With Advance, Pronto gained about 35 miles of infield gas and water gathering lines. In addition, Matador is acquiring three compressor stations. Pronto, whose operations are centered in Lea County, NM, would gain access with the Advance assets to about 50 MMcf/d of natural gas takeaway capacity to the Waha Hub in the Permian through the Double E Pipeline operated by Summit Midstream Partners LP. Dallas-based Matador also works in the Eagle Ford Shale in South Texas, as well as the Haynesville Shale and Cotton Valley in northwestern Louisiana. In addition, it operates Pronto Midstream LLC.
Exxon in talks to buy Pioneer Natural Resources - Exxon Mobil has held initial talks to buy US shale oil giant Pioneer Natural Resources, reported The Wall Street Journal citing unnamed sources. The talks between the two companies for a potential deal have been informal, the sources added. Exxon, which reported record profits in 2022, is loaded with cash and, according to those familiar with the company’s plans, has been looking for a mega deal.People with knowledge of the situation told the publication that Exxon executives have explored a prospective alliance with at least one other corporation.Any transaction, if it materialises, is unlikely to happen until later this year or next year, the sources said, adding that, talks may not go to formal negotiations at all, or Exxon may pursue a different company.However, they stated that Exxon is seeking a major transaction to use its windfall earnings and viewsPioneer as a top candidate.If Exxon buys Pioneer, which has a market cap of about $49bn, it would probably be Exxon’s largest deal since its megamerger with Mobil in 1999.The deal is expected to bolster Exxon’s position in the oil-rich Permian Basin of West Texas and New Mexico.It would bring together the top Western oil business, which is more than 140 years old and worth more than $468bn, with a driller who owns substantial oil reserves in America’s most sought-after fracking hotspot.Texas-based Pioneer is claimed to be the leading oil producer in the Permian Basin and generated $8.4bn in cash surplus last year.Exxon has been looking for a deal in the Permian for months, according to sources with knowledge of the situation. In a separate development last week, The WSJ reported that Exxon has stopped drilling off the coast of Brazil after failing to find oil.
Toxic 'forever chemicals' found in New Mexico oil and gas wells -- Modern oil and gas drilling techniques used in New Mexico could leach toxic chemicals underground and into the environment, according to a recent study published Wednesday by Physicians for Social Responsibility. The report studied the presence of per- and polyfluoroalkyl substances (PFAS) during hydraulic fracturing, or fracking, a drilling technique that pumps a mixture of water, chemicals, and sand underground to break up shale rock so crude oil and natural gas can be extracted. Fracking, along with horizontal drilling, led to expanded oil and gas production in New Mexico, chiefly in the southeast Permian Basin region, as the technological advancements allowed operators to target deeper and harder-to-reach fossil fuel deposits. The fracking boom also brought a wealth of environmental impacts and could expose residents to dangerous health impacts from PFAS, the study read. They’re known as “forever chemicals” in the environmental community, generated or used by myriad industrial operations in the U.S., and known to not naturally degrade once released into the air, land or water. Manmade PFAS were originally sold as Teflon in 1949, used for non-stick pans, and subsequently were included in thousands of products. “Fracking brings wealth and jobs to New Mexico,” said Barbara Gottlieb with Physicians for Social Responsibility. “It also brings a witch’s brew of chemicals.” During a Tuesday presentation on the study, lead author Dusty Horwitt said state reporting requirements failed to convey the extent of PFAS in fracking fluids and thus its threat to groundwater in New Mexico. “They don’t breakdown in the environment, and they’ve been associated with a number of health impacts,” he said. “The health impacts disproportionately affect people who live near oil and gas operations.” Those include high cholesterol, various cancers and reproductive impacts in women, the study showed.
Organization calls for greater scrutiny of oil and gas operations amid PFAS concerns -- A new report released by Physicians for Social Responsibility claims that PFAS chemicals, or Per- and Polyfluorinated Substances, are used in oil and gas operations in New Mexico and this use has the potential to contaminate soil, air and water resources in the state.The newly released report builds upon information PSR released in 2021 regarding the use of PFAS in oil and gas production in the state.PSR relied on information from FracFocus, an independent database where companies voluntarily report the chemicals that they are using in oil and gas production.According to the report, PFAS has been used in the oil and gas industry in New Mexico since 2013, but the extent of the PFAS use is unknown because the companies do not have to disclose all of the chemicals they use in extraction of oil and gas. “These findings raise concerns that New Mexicans may unknowingly be exposed to highly hazardous substances that are toxic in minuscule amounts,” the report states. Exposure to PFAS chemicals has been linked to reproductive effects such as decreased fertility in women, developmental effects and delays in children, increased risk of certain cancers, reduced ability to fight infections, increased obesity, increased cholesterol and interference with the body’s natural hormones.PFAS chemicals include thousands of types of manufactured chemicals that are common in fire suppression foam, household goods such as cookware and space heaters, water-resistant fabrics such as rain jackets and personal care products such as shampoos.These chemicals are sometimes called forever chemicals because they take a long time to deteriorate in the environment.The use of PFAS chemicals has been so widespread that the U.S. Environmental Protection Agencysays the chemicals can be found in the blood of people and animals around the world.
“How to Blow Up a Pipeline” Movie Poses Terror Threat, Kansas City Intel Agency Claims --IN 2021, a Texas intelligence command center disseminated a bulletin warning its law enforcement partners about activists interested in sabotaging fossil fuel infrastructure. The report detailed no specific threat, but instead linked to an interview with Andreas Malm, a Swedish professor of human ecology, on a New Yorker podcast in which he advocated for the destroying or “neutralizing” new fossil fuel projects like pipelines using nonviolent methods. Now, Malm’s work is once again drawing the attention of a fusion center. “How to Blow Up a Pipeline,” a new movie dramatizing Malm’s 2021 nonfiction book of the same name, sympathetically depicts the infrastructure sabotage by environmentalists. The film’s fictional protagonist, Theo, contracts leukemia after growing up in a Long Beach neighborhood with heavy pollution. She joins several others to strap a homemade bomb to an oil pipeline in West Texas. In a report disseminated last week, another intelligence command center — this time in Kansas City, Missouri — quietly warned of a “developing threat” related to the movie. It was obtained by The Intercept via a source with access to law enforcement reporting, and the Kansas City Regional Fusion Center did not reply to a request for comment. Again, however, this new report conceded that the intelligence center could not identify any specific threat — a contradiction that experts say speaks to the overbroad authority of state intelligence entities and the make-work required by these centers. “The performance metric is the number of reports you write, rather than the accuracy of them,” Mike German, a retired FBI agent who is now a fellow at the Brennan Center for Justice, said of fusion centers. “What do you do after you write reports on realistic threats? Pretty soon you have to start writing about imaginary ones. Lots come straight from the fever swamps of social media.” The Missouri report goes a step further than Texas’s, since the film “How to Blow Up a Pipeline” is fictional. Another fusion center, the Colorado Information Analysis Center, recently issued a similar bulletin in anticipation of a student walkout to protest legislative inaction on gun violence, as The Intercept reported last week. The report did not identify any potential crime that might arise in relation to the protest. Defending its report, CIAC said that it was not monitoring the protesters and that the report was merely distributed for situational awareness. “Fusion center leaders often say this type of reporting is for ‘situational awareness’ but then why send this type of report out broadly to the law enforcement community,” German said. “I am surprised how many of the fusion center products we see focus on protest activity, where the analysts acknowledge in the report itself that they have no indication that any criminal activity might take place.” “THE KANSAS CITY Regional Fusion Center (KCRFC) has prepared the following Situational Awareness Bulletin,” the report, dated April 4, reads, “to provide information to partners concerning a developing threat targeting Critical Infrastructure and Key Resources (CIKR), especially oil and natural gas pipelines.” But in a separate caption, it notes “The KCRFC has no information on specific threats directed at the energy sector in this area.” KCRFC is one of 80 fusion centers across the country, which were established in the wake of the 9/11 attacks to combat terrorism by sharing intelligence with law enforcement partners. But fusion centers lack the traditional law enforcement requirement for a criminal predicate to exist in order to investigate something, German told The Intercept.
The next act in the fight against Line 3? A museum on treaty rights - Minnesota Reformer - A treaty between the United States government and the Ojibwe (or Anishinaabeg) signed in Washington, DC, nearly 170 years ago will be the main focus of a new museum set to open this summer in Park Rapids.But far from being a history museum, the organizers behind Giiwedinong: The Museum and Cultural Center of the North say it will teach Minnesotans, both Indigenous and non-Indigenous, about the rights guaranteed to tribal members today, starting with those established in the 1855 Treaty which applies to land that includes Park Rapids.The museum was co-founded by Winona LaDuke, who recently stepped down as the executive director of the nonprofit Honor the Earth following a sexual harassment lawsuit against the organization.The new museum is partly an extension of the movement against the Line 3 replacement project. Indigenous pipeline opponents, who call themselves water protectors, argued the pipeline violates their rights to hunt, fish and gather on their ancestral land — rights guaranteed in most treaties in exchange for selling the land. Many Minnesotans, however, don’t know these rights exist in the first place.“Most people do not know about the reservations that were created in the (1855 Treaty), the history of the ‘55, or the history of the land and the people of that territory,” said LaDuke, who is a member of the White Earth Nation. “Part of our obligation to the community is to tell our story of the land, of our ancestors and of the present people who are there.”In addition to archival materials related to the 1855 Treaty, the museum will also feature exhibits from Standing Rock and other Indigenous-led movements to protect water as well as showcase the stories of Native Minnesotans who have been arrested or fined for exercising their treaty rights.In a jab at Enbridge, the Canadian company that built the pipeline, the museum will be housed in a former Enbridge office. Before that, it was a Carnegie library. LaDuke hopes the museum will restore the building to its former reputation as a place of enlightenment.In the 18th and 19th centuries, the U.S. government signed nearly 400 treaties with Native American tribes outlining mutual obligations between nations. These treaties established things like boundaries, rights to mineral uses, guarantees of peace, and the right to hunt, fish, and gather on ceded land. More than 10% of the treaties were with Ojibwe tribes. Tribal attorney Frank Bibeau has donated copies of maps related to the treaties — about 100 in all, he guesses — to the museum.“A lot of times telling this story is about showing maps,” said Bibeau, a member of the White Earth Nation. “It shows how the people were moved and how the land was taken.”
Oil and gas-related spills increased 16% in Colorado in 2022, report finds -- A report from a Denver-based environmental group shows that Colorado’s oil and gas industry is trending in the wrong direction on drilling-related spills.The Center for Western Priorities’ annual Western Oil and Gas Spills Tracker report counted 473 spills reported by operators to state regulators in 2022, a 16% jump from 2021. It was the second year in a row that that figure has risen, as drillers continue to rebound from the sharp decline in production that followed the onset of the COVID-19 pandemic in early 2020.“Oil and gas companies in both New Mexico and Colorado appear to be polluting more than ever, while posting record profits,” Kate Groetzinger, the Center for Western Priorities’ communications manager and the report’s author, said in a statement. “The number of drilling-related spills and amount of methane wasted by the oil and gas industry should be going down each year, not up.”Colorado producers pumped over 157 million barrels of crude oil in 2022, according to datareleased last month by the U.S. Energy Information Administration. That’s a slight uptick from 2021, but still well below the state’s peak production of over 192 million barrels in 2019. Most of the material spilled by producers in Colorado and other Western states, the report found, is “produced water” — the muddy, brackish byproduct of oil and gas extraction, often as a result of hydraulic fracturing. Produced water may contain a wide variety of contaminants. Reported volumes of produced water spills were up 163% in Colorado in 2022, which “could indicate an increase in fracking activity,” the analysis said.Colorado regulators have enacted a sweeping set of changes to oil and gas rules in the wake of landmark environmental legislation passed by Democratic lawmakers in 2019, including increased setback distances between new wells and buildings and more authority for local governments to restrict drilling sites. Environmental advocates, however, say the state still isn’t doing enough to address the “cumulative impacts” of its nearly 49,000 active oil and gas wells. Five companies were responsible for nearly half of Colorado’s oil and gas spills in 2022, the Center for Western Priorities report found. They include operators controlled by the state’s largest producers, including Occidental Petroleum and PDC Energy, as well as troubled producers like K.P. Kauffman.A Denver-based operator of over 1,200 wells statewide, K.P. Kauffman has been the target of an escalating series of enforcement actions by state regulators over its failure to clean up its spills and comply with environmental rules. In February, the Colorado Oil and Gas Conservation Commission ordered K.P. Kauffman to shut down its wells and halt sales of oil and gas for at least six months, but the company has sued the agency over that decision.
Arapahoe County considers 6-month drilling moratorium as Aurora residents worry about fracking near reservoir - The Denver Post - Although it’s been a while since local officials in Colorado placed a halt on oil and gas drilling, commissioners in Arapahoe County on Tuesday will consider passing a six-month moratorium on new well permits in one of the state’s most robust places for energy extraction. The potential drilling delay, which would give the county time to refine recent oil and gas regulations, comes as Denver-based Civitas Resources is planning 174 new wells on land owned by Colorado State Land Board just east of Aurora city line.
Oil leak near Crowheart spills crude oil into Wind River tributary -- In the early morning hours of Monday, April 10, a break occurred in a crude oil pipeline near Crowheart, spilling oil into an unnamed tributary of the Wind River. The pipe, owned by the Wind River Energy Commission, was reported to have been fixed the same day, but the company’s initial report to the Wyoming Department of Environmental Quality (DEQ) said that 1,428 gallons or roughly 34 barrels of oil was released before the leak was fixed. The DEQ is waiting to finalize the total amount of oil until it investigates further, as different numbers have been reported on social media. While the leak was on the Wind River Reservation, the DEQ reported that it has affected both tribal and non-tribal land. “Efforts to contain the spill have been successful,” stated DEQ Public Information Supervisor Kimberly Mazza; however, the DEQ’s response remains ongoing. “Resources have been mobilized to collect drinking water samples from homes in the area that may have been impacted,” Mazza said. The DEQ reported that it was on site as soon as the incident was reported, and has been working hand-in-hand with the Wind River Energy Commission as well as tribal, state, and federal agencies to address the spill.
Montana Judge Cancels Gas Power Plant Permit Over Climate Concern - Climate concerns motivated a Montana judge to cancel the air quality permit for a controversial natural gas power plant. The 175-megawatt NorthWestern Energy plant would have emitted more than 23 million tons of greenhouse gases over its 30-year or more lifespan — the equivalent of adding 167,327 new cars to the roads each year — something that the Montana Department of Environmental Quality (DEQ) did not fully consider when it issued the permit, Montana 13th Judicial District Court Judge Michael Moses ruled Thursday.“DEQ’s failure to analyze this issue violated the clear and unambiguous language of MEPA [the Montana Environmental Policy Act],” Moses wrote. “Failure to analyze this issue was arbitrary and capricious and a clear violation of MEPA.”The Sioux Falls, South Dakota-based NorthWestern Energy is building the $250 million plant along the banks of the Yellowstone River, AP News reported. However, it is controversial with the people who would live near the plant in Laurel, Montana, who have joined together to oppose it as the “Thiel Road Coalition,” according to aMontana Environmental Information Center (MEIC) press release. “We are very concerned that this project will harm people who live near the proposed plant,” Laurel resident and retired refinery worker Steve Krum said in the press release. “Every time we have raised concerns about the impacts this plant will have on the quality of life of the neighbors and the Yellowstone River, those concerns have been dismissed. We appreciate that our concerns finally got a fair shake in court.”MEIC filed the lawsuit to block the permit alongside the Sierra Club in 2021, AP News reported. In response, the DEQ argued that state law did not give it the authority to make decisions based on global climate impacts, but Moses said it should consider how additional emissions would impact Montana.
Pipeline connected to 2021 oil spill set to restart off Huntington Beach – Orange County Register -- The pipeline that ruptured and spewed about 25,000 gallons of oil into the ocean off Huntington Beach in October 2021 is being refilled with oil and is expected to be in use again sometime this month, pipeline operator Amplify Energy said Monday, April 10.Though resumption of production off the Orange County coast figures to end one part of a saga that has involved national media, a spree of lawsuits and countersuits, and a criminal plea by Houston-based Amplify, at least some environmentalists hope the local spill still could lead to tougher new rules for all offshore oil operators.“I would hope that, given the Biden administration’s stated intentions to do more on climate, that we will see a little more attention paid to these old platforms and other operations off the Pacific coast that are ripe for decommissioning,” said Brady Bradshaw, senior oceans campaigner for the Center for Biological Diversity, an Arizona-based environmental group with offices in California.Bradshaw’s organization mentioned the Huntington Beach spill in a federal lawsuit it filed late last year, seeking tougher rules on everything from offshore oil equipment to inspection schedules to the financial rules of closing operations.Like others who want to see an end to offshore drilling, Bradshaw noted that federal rules currently don’t take into account the fact that the equipment used off the Orange County coast – which leads to platforms in federal waters – is nearly a half-century old, far older than its intended lifespan. He also said regulations do little to monitor increased shipping in the area, which played a role in the local spill.
In the Shadow of Big Oil: Neighborhood Drilling in California - When the oil rigs looming over Diego Martinez’s backyard start drilling into the earth, his house shakes so violently that the noise of the keys hanging in the hallway echoes through the house.“Literally all my life, I’ve been hearing it,” says Martinez. “We always wonder why an oil company is allowed to drill right next to our house. The well is only about 20 feet from my bedroom window. Whenever people visited us they would ask, ‘What’s that noise? Why does everything shake?’”Martinez’s experience is not unique in California’s rural Central Valley, which contains 70% of the state’s oil operations. It may seem surprising for a state often heralded as a leader in environmental progress; yet for over a century, California has failed to adequately regulate its own oil and gas industry — with devastating health effects for the people forced to live near it. Californians living near oil and gas wells are exposed to a mix of air pollutants that are linked to asthma, cancers, pregnancy complications, preterm births, and increased risk of dying from COVID-19 because of long-term exposure to air pollution. Though the industry tries to obscure the chemical contents of their slurries and methods, drilling is known to spread harmful chemical byproducts such as benzene (a known carcinogen) and hydrogen sulfide. And as oil reserves diminish after decades of extraction, companies resort to even more polluting techniques, using a slew of toxic chemicals to extract the last dregs of crude oil. A growing body of research shows that babies born near oil and gas wells are more likely than average to experience health threats including premature birth, heart defects, and low birthweight. Between 2006 and 2015, more than a million babies were born in California to mothers who live within one kilometer (roughly 3,200 feet) of an oil or gas well. Nalleli Cobo moved into the Esperanza Apartments, near the AllenCo Energy drill site in Los Angeles, when she was 4 years old. Her family stayed for 10 years. “The nosebleeds started when I was 9 years old,” says Cobo, who was diagnosed with cancer. “They weren’t your typical nosebleeds. If they happened at night, I would sleep upright in a chair to stop from choking on my own blood. I couldn’t sleep lying down.” “Neighborhood oil drilling shouldn’t exist. It’s inhumane to drill next to where someone’s living. The science shows that this is affecting us.” “Neighborhood oil drilling shouldn’t exist,” she says. “It’s inhumane to drill next to where someone’s living. People of color have been ignored on this issue, but we’re not guinea pigs, and we’re more than statistics.” Cobo, now 21, has gone on to win the Goldman Environmental Prize for her advocacy and was a Time 100 Next recipient in 2022 — and, she is a cancer survivor. “In my heart, I think the cancer is connected to the oil and gas drilling I grew up with,” she says. A movement to change the state’s outdated rules spurred environmental advocates into action. Organizations likeVISIÓN, a coalition of grassroots environmental justice groups across Kern County and Los Angeles, organized under the powerful rallying cry, “No Drilling Where We’re Living.”“How has California fallen so far behind?” Cesar Aguirre wonders. Aguirre, a Kern County organizer with VISIÓN and theCentral California Environmental Justice Network, has helped community members share their stories to urge California officials to end neighborhood oil drilling.“These oil companies never should have been able to make a profit drilling next to someone’s backyard at the expense of people’s health. What’s happening in our state is not normal.”
How TigerSwan pitched its pipeline playbook after Standing Rock – A new business model for breaking down environmental movements was being hatched in real time. On Labor Day weekend of 2016, private security dogs in North Dakota attacked pipeline opponents led by members of the Standing Rock Sioux Tribe as they approached earth-moving equipment. The tribal members considered the land sacred, and the heavy equipment was breaking ground to build the Dakota Access Pipeline. With a major public relations crisis on its hands, the pipeline’s parent company, Energy Transfer, hired the firm TigerSwan to revamp its security strategy. By October, TigerSwan, founded by James Reese, a retired commander of the elite special operations Army unit Delta Force, had established a military-style pipeline security strategy. There was one nagging problem that threatened to unravel it all: Reese hadn’t acquired a security license from the North Dakota Private Investigation and Security Board. Although Reese claimed TigerSwan wasn’t conducting security services at all, the state regulator insisted that its operations were unlawful without a license. TigerSwan turned to Jonathan Thompson, the head of the National Sheriffs’ Association, a trade group representing sheriffs, for help. The security board “has a problem understanding and staying within their charter,” Shawn Sweeney, TigerSwan’s senior vice president, wrote to Thompson. If he could “discuss possible political measures to apply pressure it will assist in the entire project success [sic],” the employee appealed. Thompson was enthused to work with TigerSwan. “We are keen to be a strong partner where we can help keep the message narrative supportive,” he wrote back. “[C]all if ever need anything.”Despite Thompson’s offer of assistance, TigerSwan continued to operate in North Dakota with no license for months. The company managed dozens of on-the-ground security guards, surveilled and infiltrated protesters, and passed along profiles of so-called “persons of interest” to one of the largest midstream energy companies in North America. The revelation of TigerSwan’s close working relationship with the National Sheriffs’ Association is drawn from more than 50,000 pages of documents obtained by The Intercept through a public records request to the North Dakota Private Investigation and Security Board. In 2017, the board sued TigerSwan for providing security services without a license. The state eventually sought a $2 million dollar fine through the administrative process, but Tigerswan negotiated a $175,000 fine instead — well below standard fines for such activities. A discovery request filed as part of the case forced thousands of new internal TigerSwan documents into the public record. Energy Transfer’s lawyers fought for nearly two years to keep the documents secret, until North Dakota’s Supreme Court ruled in 2022 that the material falls under the state’s open records statute. Because an arrangement between North Dakota and Energy Transfer allows the fossil fuel company to weigh in on which documents should be redacted, the state has yet to release over 9,000 disputed pages containing material that Energy Transfer is, for now at least, fighting to keep out of the public eye. The released documents provide startling new details about how TigerSwan used social media monitoring, aerial surveillance,radio eavesdropping, undercover personnel, and subscription-based records databases to build watch lists and dossiers on Indigenous activists and environmental organizations. At times the pipeline security company shared this information with law enforcement. In other cases, WhatsApp chats and emails confirm Tigerswan used what it gathered to follow pipeline opponents in their cars and develop propaganda campaigns online. The documents contain records of TigerSwan attempting to help Energy Transfer build a legal case against pipeline opponents, known as water protectors, using the Racketeer Influenced and Corrupt Organizations Act, or RICO, a law that was passed to prosecute the mob.
BLM delays Trump midnight orders opening Alaska lands - The Bureau of Land Management is delaying until next year a decision on a series of Trump-era orders that would open 28 million acres of federal lands in Alaska to energy development and mining. BLM, in a notice published in Friday’s Federal Register, announced it needs until at least August 2024 to complete an environmental impact statement for the five public land orders issued in the closing weeks of Donald Trump’s presidency that would have lifted restrictions on the use of the lands. The Interior Department in April 2021 deferred opening the land covered in the public land orders signed by former Interior Secretary David Bernhardt for two years while it evaluated legal “deficiencies” in them. The two-year deferral was set to end on April 16. “Due to the scope and complexity of the issues being analyzed in the EIS, the BLM will not be ready to reach a decision” by April 16, and “as a result, will defer the opening order to Aug. 31, 2024 to allow the BLM to complete the analysis and consultation required to address the legal defects identified in the decision-making processes,” according to the Federal Register notice, which will take effect on Monday. The issue has sparked tension between BLM and Alaska’s congressional delegation, particularly Republican Sen. Lisa Murkowski, who has argued that it’s long past time to lift the land use restrictions originally implemented decades ago through the Alaska Native Claims Settlement Act of 1971. The Bernhardt public land orders under review in the EIS collectively cover an enormous area of the state that includes portions of the “Bay, Bering Sea-Western Interior, East Alaska, Kobuk-Seward Peninsula, and Ring of Fire planning areas,” according to the Federal Register notice. Issues being studied include “insufficient analysis” of the impacts of opening the lands to potential mining and oil and gas drilling, particularly as it relates to the Endangered Species Act, as well as “failure to secure consent from the Department of Defense (DOD) with regard to lands under DOD administration,” according to the notice.Tribal governments demand Canada abandon Line 5 support Leaders from 51 tribal nations, including some in Michigan, blastedCanada’s support of Enbridge’s Line 5 pipeline last week.In a report sent to the United Nations Human Rights Council, the group demanded tribes from around the Great Lakes have a say in the matter.The report comes months before Canada will have its human rights record scrutinized by the U.N. in a routine event known as the Universal Periodic Review (UPR).Line 5 transports crude oil and natural gas liquids across the U.S.-Canada border and under the environmentally and culturally significant Straits of Mackinac.“The rights of Indigenous people, of my people, are rights that should be respected by all sovereigns both domestic and abroad,” said President Whitney Gravelle of the Bay Mills Indian Community, in a statement. “Canada’s support of Line 5 is a disaster in the making for the entire Great Lakes region because an oil spill will poison our fish, harm our sacred sites, contaminate our drinking water – and ultimately destroy our Indigenous way of life.”In 2021, Canada invoked the 1977 Transit Pipeline Treaty with the U.S. for the first time which sets forth agreements related to the transit of oil across the border.It's not the first time the Canadian government has attempted to stall legal proceedings. Michigan and Enbridge are waiting for a federal judge to decide if Gov. Gretchen Whitmer’s Line 5 shutdown order will stand in a state or federal court.Meanwhile, Tribal Nations called on Canada to withdraw its invocation of the Pipeline Treaty among other demands. They include the following text:
- Ensure that affected Indigenous Nations, who are sovereigns and human rights holders, are invited to participate in discussions regarding Line 5’s future, including any negotiations under the Pipeline Treaty, so long as they continue.
- Interpret all international treaties, including the Pipeline Treaty, consistently with Canada’s human rights obligations.
- Ensure affected Indigenous Peoples’ Free, Prior, Informed Consent (FPIC) before providing support for extractive sector projects and withdraw support from projects that do not have affected Indigenous Peoples’ FPIC.
- Ensure that corporations under Canadian jurisdiction do not cause or contribute to foreseeable threats to human rights.
Read the full report from the coalition of tribal governments here. David Arroyo, Chairman of the Grand Traverse Band of Ottawa and Chippewa Indians told IPR News that he continues to worry about the environmental damage the 70-year-old pipeline could cause to the Straits of Mackinac.
AOC, Bowman Call for Biden Administration to Reverse Willow Oil Project Approval – A group of 33 House Democrats is urging Biden administration officials to heed calls from numerous climate and Indigenous groups to suspend a permit that would allow fossil fuel giant ConocoPhillips to construct a massive drilling operation on pristine Alaskan land.The lawmakers, led by Representatives Jamaal Bowman (D-New York), Jared Huffman (D-California) and Alexandria Ocasio-Cortez (D-New York), said that the administration should suspend the permit while the $8 billion project is in litigation, and reject future permits that the company may file to pursue the project.“Given the permanent damage ConocoPhillips’ preliminary construction efforts will inflict on the surrounding ecosystem and community, necessary steps must be taken to mitigate harm as it undergoes comprehensive review,” the group wrote in a letter to Interior Secretary Deb Haaland on Thursday. “Suspending the Right of Way Permit and rejecting future filings by ConocoPhillips … would ensure we take the right steps for our future and grant all stakeholders the chance to be heard.” Numerous groups are in the midst of suing the Biden administration for its approval of the massive oil and gas drilling undertaking known as the Willow project, alleging that administration officials are running afoul of their duties to properly assess the climate impacts of the project, in violation of the National Environmental Policy Act (NEPA), Endangered Species Act, Naval Petroleum Reserves Production Act, and others. In a separate lawsuit, plaintiffs say that officials are failing their duty to protect the land and wildlife in approving the project.President Joe Biden’s approval of Willow last month enraged climate and Indigenous groups, who say that the project would release a “carbon bomb.” It would not only push the world further into the climate crisis, they say, but also result in pollution and other effects that would endanger the local community. The lawmakers expressed support of the climate groups’ arguments. “DOI has not provided sufficient time to comprehensively review the well-grounded litigation against Willow’s approval,” they wrote. “Given the extensive claims, DOI should halt any advancement of the Project until the litigation is decided in the courts.”They further said that the White House should not fear legal repercussions in suspending the project, and that federal laws allow officials to levy restrictions on the drilling in the area.Democrats, along with hundreds of climate and Indigenous groups, have been urging Biden to stop the Willow project for months, pointing out that moving forward goes against Biden’s campaign promise for “no more drilling on federal lands, period, period, period.”“Young people are our future. When @POTUS approved the Willow Project after over a million people sent letters to him asking him not to, I knew we couldn’t end our fight there,” Bowman said of the letter on Thursday.
Biden admin greenlights LNG exports from Alaska project | Reuters - The Biden administration on Thursday approved exports of liquefied natural gas from the Alaska LNG project, a document showed, as the United States competes with Russia to ship natural gas from the Arctic to Asia. The Department of Energy approved Alaska Gasline Development Corp’s (AGDC) project to export gas to countries with which the United States does not have a free trade agreement. Backers of the roughly $39 billion project expect it to be operational by 2030 if it gets all the required permits. The LNG would be exported mainly to countries in Asia. The Alaska LNG project includes a liquefaction facility on the Kenai Peninsula in southern Alaska and a proposed 807-mile (1,300-km) pipeline to move gas stranded in northern Alaska across the state. The project, for which exports were first approved by the administration of Donald Trump, has been opposed by environmental groups. The Biden administration undertook an environmental review of the project, concluding it has economic and international security benefits and that opponents had failed to show the exports were not in the “public interest.” The Biden administration modified the previous approval to prohibit venting of the greenhouse gas carbon dioxide associated with the project into the atmosphere.29dk2902l Still, the decision was decried by an environmental group. “Joe Biden’s climate presidency is flying off the rails,” said Lukas Ross at Friends of the Earth. Ross said it was the second U.S. approval of a “fossil fuel mega-project” in as many months. The Biden administration last month approved the ConocoPhillips $7 billion Willow oil and gas drilling project on Alaska’s North Slope. Russia plans to start at end-2023 the first of three lines at its Arctic LNG-2 project, which is among the world’s largest LNG facilities. The Biden administration is trying to approve more U.S. LNG exports as it competes with Russia, traditionally one of the world’s largest energy exporters.
Biden approves Alaska gas exports as critics condemn another ‘carbon bomb’ The Biden administration on Thursday approved exports of liquefied natural gas from the Alaska liquefied natural gas (LNG) project, a document showed, prompting criticism from environmental groups over the approval of another “carbon bomb”.The US energy department approved Alaska Gasline Development Corp’s (AGDC) project to export LNG to countries with which the United States does not have a free trade agreement, mainly in Asia. Backers of the roughly $39bn project expect it to be operational by 2030 if it receives the required permits.The project, for which exports were first approved by the administration of Donald Trump, has been strongly opposed by environmental groups.“Joe Biden’s climate presidency is flying off the rails,” said Lukas Ross of Friends of the Earth. Ross pointed out this was the second US approval of a “fossil-fuel mega-project” in as many months.The Biden administration last month approved the ConocoPhillips $7bn Willow oil and gas drilling project on Alaska’s North Slope, prompting criticism of Biden’s record on the climate crisis.Alaska LNG includes a liquefaction facility on the Kenai peninsula in southern Alaska and a proposed 807-mile (1,300-km) pipeline to move gas stranded in northern Alaska across the state.Frank Richards, the president of Alaska-owned AGDC, said the company will review the 51-page decision as it develops the project, which he said will “provide Alaskans and US allies with a significant source of low-emissions, responsibly produced energy consistent with international environmental priorities”.The Biden administration undertook an environmental review of Alaska LNG, concluding it has economic and international security benefits and that opponents had failed to show the exports were not in the “public interest”.The Biden administration modified the previous approval to prohibit venting of the greenhouse gas carbon dioxide associated with the project into the atmosphere.Earthjustice, an environmental law firm, said the approval of the project cleared the way for dditional lawsuits seeking to stop the project.The Biden administration is trying to approve more US LNG exports as it competes with Russia, traditionally one of the world’s largest energy exporters. Critics say the Ukraine conflict is a “false justification” for a rush to natural gas.An expansion of LNG terminals on the Gulf coast would double or even triple current capacity to deliver natural gas, which a report by Climate Action Tracker researchers said would keep carbon emissions above levels needed for net zero.
DOE Orders Alaska LNG Project to Limit CO2 Emissions – The U.S. Department of Energy (DOE) reaffirmed its decision authorizing the Alaska LNG project to export the super-chilled fuel, but will require the facility to limit carbon dioxide (CO2) emissions. The DOE ordered the condition after a challenge from the Sierra Club and other environmental groups that oppose the project. As part of the export authorization issued in 2020, the agency will now require the project to certify in its monthly report that no CO2 is vented during the production of liquefied natural gas. CO2 could only be vented in the event of an emergency, maintenance or operational issues that would require it. “DOE believes that this venting prohibition will reduce emissions of greenhouse gasses from the Alaska LNG Project beyond what may have occurred under the Alaska LNG order,” the agency said in its order amending the authorization. The amendment was recommended by the Sierra Club, but the group, along with the Center for Biological Diversity and Earthjustice, decried the DOE’s decision to let the facility’s export authorization stand. In a statement, the groups said the project is unnecessary, would threaten wildlife and exacerbate climate change. The Sierra Club said it “would pursue every available avenue to ensure that this ill-advised project is never built.”State-owned Alaska Gasline Development Corp. (AGDC) is developing the 2.6 Bcf/d export project that would be located in Nikiski on the Kenai Peninsula in southcentral Alaska. The estimated $39 billion project is still unsanctioned and has been under development for more than a decade. AGDC took over as sponsor in 2016 after affiliates of BP plc, ConocoPhillips and ExxonMobil dropped out. Alaska LNG said DOE’s latest order adds to “the record of support” for the project.“Alaska LNG will provide Alaskans and U.S. allies with a significant source of low-emissions, responsibly produced energy consistent with international environmental priorities,” the company said in a statement on social media. The project also includes a natural gas treatment plant and a proposed 800-mile pipeline to transport gas from the North Slope to the liquefaction facility in Nikiski. If built, the project would be far closer to end markets in Asia than other U.S. LNG terminals on the Gulf Coast. AGDC spokesperson Tim Fitzpatrick said the Arctic Carbon Capture Plant, already in the project design on the North Slope, was designed to segregate CO2 from the gas stream and make it available for enhanced oil recovery or sequestration. AGDC also signed an agreement last year with Mitsubishi Corp., Toyo Engineering Corp. and Hilcorp Alaska to study the feasibility of storing CO2 in the state’s Cook Inlet basin.
G-7 meeting set to shape future of natural gas - A meeting of Group of 7 Cabinet-level officials this weekend is setting up a geopolitical battle that could play a major role in driving the future of U.S. natural gas — and determining the emissions of the fuel globally. The meeting in Sapporo, Japan, is a precursor to a G-7 head-of-state summit next month that could influence the trajectory of energy markets for years and help determine the international money flow toward gas projects. On one side are developing countries that are ratcheting up calls for more global natural gas production and imports to pare down emissions from coal and bring billions of people out of poverty. On the other side are the United Nations and environmentalists, who say that new fossil fuel projects should not be built to avoid catastrophic consequences of climate change. In the middle is the United States, which has yet to detail its full position and is under dueling pressure to both promote natural gas and cut emissions. “Obviously, the Biden administration has been walking a bit of a balance beam in regards to navigating its role as a driver of energy security through its own natural gas exports but also [maintaining] the tone of climate ambition that the Biden administration came in with two years ago.” Blakemore predicted a G-7 process in coming weeks that delivers at least modest wins for LNG. Central to the debate is the Global South, a term used to describe poorer countries that are largely located south of the historically industrialized north. From Brazil to Bangladesh, political leaders and fossil fuel executives in the region are arguing it’s now their time to capitalize on the same fossil fuel resources that propelled affluent countries in past generations to their current elevated status. Those calls, which are applauded by the U.S. gas industry, took center stage in late March at an event in Accra, Ghana, featuring U.S. Vice President Kamala Harris and Ghanaian President Nana Akufo-Addo. “I’ve made it known to [Harris] that Ghana is endowed with abundant natural resources, which my government is seeking to use as the basis to transform its economy,” Akufo-Addo said. “It is this transformation that will give us the best opportunity to derive maximum benefit from our abundant natural resources,” he said, standing next to the vice president. The fight over the future of natural gas hits on fundamental questions of equity and access as poor countries try to find the fuel to provide electricity and modern amenities. Roughly 775 million people currently live without electricity, according to an International Energy Agency (IEA) report in November 2022. It also comes as the U.S. gas industry is eying a massive new market in the Global South, U.S. oil and gas majors such as Chevron Corp. and Exxon Mobil Corp. are expanding in Africa, with gas projects in countries like Angola, Equatorial Guinea, Nigeria, Mozambique and elsewhere. Secretary of State Antony Blinken and Energy Secretary Jennifer Granholm will be attending the Sapporo talks. Touted by the Japanese as an opportunity to advance the “green transformation,” the ministerial event taking place April 15-16 is a key stepping stone for the G-7 summit next month in Hiroshima, Japan, where leaders are expected to endorse the communiqué outlining G-7 strategy over the coming year.According to a Reuters report last week, a draft statement to follow the Sapporo event includes language to “recognize the need for necessary upstream investments in LNG (liquified natural gas) and natural gas in line with our climate objectives.”For months, the U.S. natural gas industry, led by the trade groups American Petroleum Institute and LNG Allies, have been pushing for similar language (Energywire, April 4). The Japanese government, meanwhile, has been publicly tight-lipped about its stance on G-7 LNG policy. But in private settings, Japanese officials say they need LNG to power factories and homes. The officials also argue they’re representing the needs of the Global South.
Turkey Says Its Black Sea Natural Gas Discoveries Are Worth Over $500 Billion - The volumes of natural gas that Turkey has found so far in the Black Sea are worth in excess of $500 billion, Turkish Energy and Natural Resources Minister Fatih Dönmez told broadcaster CNN Türk.The huge gas finds would be enough to supply all households in the country for 35 years, or to cover total Turkish natural gas consumption, including from industry, for 15 to 20 years, the minister added. Last week, Turkish Petroleum (TPAO) said on Twitter that the installation of the pipes connecting the energy base in the Black Sea to the Sakarya Gas Field Land Facility had been successfully completed. The company said the inauguration of the start of the gas transmission from the field is expected to take place on April 20 in the presence of Turkish President Recep Tayyip Erdogan.The Sakarya gas field is set to initially produce around 10 million cubic meters per day, before reaching a peak within three years to pump some 40 million cubic meters per day in 2025, Dönmez told CNN Türk.The field inauguration could be the beginning of the Turkish plan to become less dependent on imports of natural gas, which account for 99% of consumption at present.At the end of last year, Turkey announced a new natural gas discovery in the Black Sea and upgraded estimates for an already discovered field in the basin, in what could be a major step for the country in slashing gas imports and diversifying its energy sources. Turkey’s natural gas reserves in the Black Sea have now increased to 710 billion cubic meters (bcm), Erdogan said at the end of December.The newly developed gas fields are set to go a long way toward Turkey’s energy diversification. So far, the country has mostly relied on imports to procure energy supply. The Russian invasion of Ukraine has hit Turkey’s economy and energy prices hard and has made energy imports much more expensive for Ankara.
Oil and gas industry blamed for discharging 22k tonnes of oil into UK waters - In the past five years, the oil and gas industry has discharged more than 22,000 tonnes of oil into the waters of the UK. A new report published earlier today by international organisation Oceana and campaigning group Uplift suggests that these spills are equivalent to almost 165,000 barrels of oil. Data obtained by the groups who conducted the research reveal that more than half of this oil was sanctioned by the government. The “In Deep Water” report highlights the dangers of routine oil spills and the damage caused by toxic chemicals, microplastics and noise pollution. The report shows that a major oil spill from the proposed oil fields of Cambo and Rosebank could seriously impact at least 16 UK Marine Protected Areas. Oceana and Uplift have called for an end to new exploration licences or production approvals for offshore oil and gas developments. Hugo Tagholm, Executive Director and Vice President of Oceana in the UK, said: “From oil spills to toxic chemicals, we can now see as clear as day the devastating path of destruction caused to our marine environment.”
Russian oil gets backdoor entry to Europe via India - India has enabled indirect trade of oil from Russia to Europe, Reuters reports. India’s refiners have seen a boost in exports of diesel and jet fuel to Europe after importing record quantities of Russian oil last year.Access to cheap Russian crude oil, a result of EU sanctions on Russian oil and oil products, has boosted outputs and profits from Indian refineries. This has in turn enabled them to export refined products competitively to Europe and take a larger market share.Before Russia’s invasion of Ukraine, Europe imported an average of 154,000 bpd of diesel and jet fuel from India. Since the EU’s ban on oil products came into effect last month, this has risen to 200,000 bpd.India’s diesel exports to Europe rose 12-16% in the last fiscal year, reaching 150,000-167,000 bpd. The main European buyers of Indian diesel are France, Turkey, Belgium and the Netherlands. Approximately 50% of India’s jet fuel exports in fiscal year 2022-2023, or 70,000-75,000 bpd, were sent to Europe. This is up from 40,000-42,000 bpd in the previous year, Reuters’ analysis of data found.India’s imports of Russian crude oil rose for the seventh straight month in March, ending this fiscal year with Russia as India’s largest supplier. Since the beginning of sanctions, Russian oil exports to India have increased by 2200%, according to deputy Prime Minister Alexander Novak.While Russia’s flagship grade Urals oil makes up the bulk of India’s purchases, refiners are also importing lighter grades. These have come from Russia’s Far East and Arctic, with grades such as Sokol, Arco, Novy Port and ESPO blend.India has also boosted its vacuum gas oil shipments to the US. In 2022-2023, the US took approximately 11,000-12,000 bpd of the refined fuel, totally 65-81% of India’s overall exports.However, India’s total annual refined fuel exports in 2022-2023 were lower than the previous year, due largely to refiners closing for maintenance in the latter half of last year.
NT government should charge fracking companies more for groundwater use, economists say - ABC News --The Northern Territory government is about to make fracking companies pay for groundwater use, but water economists say the fee is far too cheap and will leave taxpayers out of pocket. For decades, water had been free for major industries operating in the NT, unlike elsewhere in Australia where charges apply. That changed in October when the NT government announced it would start charging the oil and gas industry for its water use from this year. The NT government has amended water legislation to introduce an annual flat fee of $3,000 for groundwater extraction licences used for "petroleum activity that includes hydraulic fracturing", or fracking. The fixed cost means gas companies will all pay the same amount, regardless of whether they are taking a massive amount of water or only a few megalitres. It's the latest step by the NT government to make way for a fracking industry in the Beetaloo Basin, about 500 kilometres south-east of Darwin. But Jeff Connor, a water economics professor at the University of South Australia, said the NT government's water charge was so cheap that it was essentially "gifting" a public asset to private companies. Under the draft Georgina Wiso water allocation plan, the NT government says more than 262 gigalitres of water can be taken "sustainably" each year within the Daly, Roper and Beetaloo district "I would say that the $3,000 charge is not anywhere near the recommended pricing level," he said. "There will be costs experienced locally — there'll be degradation of waterholes, groundwater-dependent ecosystems … and that cost will be borne by people who depend on water locally."Erin O'Donnell, a senior lecturer and water policy specialist at the University of Melbourne, said the flat fee could also incentivise companies to use more water than they needed."If you're a very small body user, you're still paying $3,000, which could be substantial if you're not using very much," Dr O'Donnell said. "But if you're using a lot, then that's vanishingly cheap."
US experts join oil spill response - Eight experts from the United States government have been continuously supporting the oil spill response operations of the Philippine Coast Guard (PCG) in Pola, Oriental Mindoro at the request of the Philippine government, the US Embassy said in a statement. Five members of the US Coast Guard's (USCG) National Strike Force assessed the affected areas to determine the most effective method and equipment to contain and clean up the oil spill from the sunken tanker MT Princess Empress, the embassy added. Through funding from the US Agency for International Development (USAid), two members of the US National Oceanic and Atmospheric Administration (NOAA) have been working closely with the Department of Environment and Natural Resources to conduct rapid environmental assessment of affected areas, identify priority areas at risk of environmental damage, and assess needs for ecosystem restoration. NOAA has already provided the PCG with satellite imagery to boost assessment efforts. It also provided the University of the Philippines-Marine Sciences Institute with support for scientific modeling to estimate the trajectory of the spill. A US Navy supervisor of salvage and diving will evaluate the technical parameters required to support the possible deployment of a remotely operated vehicle. Prior to their deployment to Pola, the American experts received a briefing on March 20 in Manila from the PCG and the Japan Disaster Relief Expert Team about oil-spill mitigation actions taken so far. "When vessels are in deep water, as in this case, cleaning up the remaining oil becomes a complicated issue. Through our incident management professionals' wealth of experience and strong expertise in oil spill response, we will assist the PCG in developing safe and efficient methods to contain and recover the oil and minimize damage to the environment," said Cmdr. Stacey Crecy, commanding officer of the USCG Pacific Strike Team.
French mission assists Mindoro oil spill response - France has financed the visit of a French expert to support the Philippines in the ongoing pollution response operations linked to the sinking of the oil tanker MT Princess Empress. Mikaël Laurent conducted a mission in the Philippines from March 16 to 29 on behalf of Cedre (Center for Documentation, Research and Experimentation on Accidental Water Pollution), based in Brest, France. He was supported in his mission by Emeric Faure, Maritime Security Advisor working for the Philippine Maritime Industry Authority (Marina) since November 2022, on behalf of the French government. Laurent participated in planning meetings with the Philippine Coast Guard, the Department of Environment, local authorities, as well as private operators (including the French company Le Floch Depollution). He participated in reconnaissance operations and observed coastal clean-up worksites, polluted sites, with a view to identifying clean-up techniques adapted to the different substrates, and anticipating the parameters for the closure of worksites. He provided advice on selective collection to limit the quantity of waste generated during clean-up operations.Laurent from Cedre was involved as an observer and technical advisor during response operations at sea, particularly during the deployment of oil containment booms and the recovery of pollutants. In particular, this cooperation enabled a significant improvement in the speed of pumping pollutants onboard the tug Titan 1, accompanied by the tug Ladagat. This field cooperation was also followed by exchanges at institutional level, in particular with the Marine Environment Protection Training Institute of the Philippine Coast Guard. This mission is part of France's long-term support for the protection of the environment and biodiversity in the Philippines, particularly in the maritime field. It was made possible thanks to funding from the French Development Agency and Expertise France, in the framework of technical cooperation on disaster risk management.
Mindoro oil spill: DSWD says over 178,000 affected by disaster — More than 178,000 people so far have been affected by the oil spill in Oriental Mindoro and nearby areas, after authorities on Wednesday announced the leakage from the sunken vessel was already "significantly controlled." Data from the Department of Social Welfare and Development (DSWD) on Wednesday showed 37,871 families or 178,306 individuals were hit by the oil spill in the areas of Calabarzon, Mimaropa, and a portion of Western Visayas. Alternative fishing sites too far, may be dangerous for small boats - Pola mayor To help those affected, DSWD Assistant Secretary Rommel Lopez said they already released P217 million worth of financial and other assistance. "Kabilang po dito iyong mga family food packs o iyong ating mga relief goods ganundin po iyong mga non-food items," said Lopez during a televised briefing. "At sa mga financial assistance naman po natin, iyong atin pong Assistance to Individuals in Crisis Situation ay gumagana na rin po maging iyong ating emergency cash transfer at cash for work," he added. Around P58.5 million, meanwhile, have also been distributed under the government's cash-for-work program, he said. Governor Humerlito “Bonz” Dolor had said 17,071 families are employed under this scheme. Based on a Palace release in March, the DSWD allotted P116 million for 18,762 affected fisherfolk who availed of its "cash-for-work" program. It has been 7 weeks since the oil spill first spread, after MT Princess Empress went down in rough seas near Oriental Mindoro while carrying 800,000 liters of industrial fuel oil on Feb. 28. The Department of Tourism, however, said 64 tourism sites and 1,400 tourism workers in Oriental Mindoro are affected by the ecological disaster. The province estimated losing around P250 million so far in their tourism sector because of this.
BFAR estimates P388M in income loss due to Oriental Mindoro oil spill | The Bureau of Fisheries and Aquatic Resources (BFAR) on Wednesday said there is an estimated income loss amounting to P388 million in Oriental Mindoro due to the oil spill. "As of April 3, ‘yung sa estimated income losses is around P388.7 million for Oriental Mindoro," Marc Lawrence Romero of BFAR said during the oil spill inter-agency committee meeting at the Department of Justice. Romero, however, said they are still waiting for the completion of the analysis for contaminants in fish and other aquaculture species. He said the first batch of the analysis showed traces of polycyclic aromatic hydrocarbons in the species collected, described by the Center for Disease Control and Prevention as a "class of chemicals that occur naturally in coal, crude oil, and gasoline." "So isa din ‘yun sa reason kung bakit may fishing ban. So we are still waiting for the rest of the analysis to get the bigger picture kasi ‘yung first batch collected was in the early part of the oil spill,” he said. "So we don't know if the results will go up or will remain,” he added. Meanwhile, Atty. Janice Regoso Pamit of the Department of Environment and Natural Resources and the Pollution Adjudication Board said 92 out of 131 sampling stations still exceeded the water quality guidelines. She said the DENR is still awaiting results for Region 4-A, specifically for Tinloy, Lobo, and Mabini in Batangas. "Although for 4-B and Region 6, there are already identified violations and they were issued already the notice of violations and we are only awaiting for their — the submission of position papers. Tomorrow is the deadline of the filing of the position paper of the ship owner," Pamit said. "And then after that, it will be formally endorsed to the Pollution Adjudication Board for the adjudication of the administrative penalties,” she added. According to Pamit, an initial P20 million may be imposed as penalties against the owner of the sunken MT Princess Empress.
Singapore Oil Tanker Missing After Pirates Board Off Africa -A Singapore-registered oil tanker is missing after it was boarded earlier this week off the coast of Africa in what authorities are calling an act of piracy. Owners of Success 9 have been unable to contact the ship since it was boarded Monday night off Ivory Coast, according to a statement from the government of Singapore, where the vessel is registered. The incident is being treated as an act of piracy, according to General Boniface Konan, director of the maritime security center for West Africa, known as Cresmao.
OPEC+ surprise squeezed oil shorts: John Kemp - Investors bought petroleum futures and options at the fastest rate for more than three years after Saudi Arabia and other OPEC+ producer group members announced voluntary cuts in oil output. Hedge funds and other money managers bought the equivalent of 128 million barrels in the six most important petroleum futures and options contracts over the seven days to April 4. The buying came as OPEC+ announced cuts totalling more than 1 million barrels per day on April 2 and after fund managers had already purchased 61 million barrels the previous week. Purchases centered on crude, in both Brent (+73 million barrels) and NYMEX and ICE WTI (+60 million barrels), with small sales of European gas oil (-2 million) and U.S. diesel (-3 million) and no change in U.S. gasoline. With its surprise announcement, OPEC+ successfully squeezed the shorts in crude petroleum, with bearish positions reduced to the lowest for 11 weeks since late January. Since March 21, funds have purchased a total of 174 million barrels of crude, the fastest rate since December 2019 and before that September 2017. Bearish short positions were cut by 113 million barrels while fund managers added 61 million barrels of new bullish long positions. The net long position was boosted to 400 million barrels (28th percentile for all weeks since 2013) from 226 million (1st percentile) on March 21. And the ratio of bullish long positions to bearish short ones surged to 5.39:1 (64th percentile) from 2.11:1 (8th percentile) two weeks earlier. As a result, production cuts have returned hedge fund positions to where they were in late January, before turmoil in the banking sector in March sparked a wave of selling. Hedge funds reduced their position in Henry Hub futures and options in the seven days ending on April 4 for the first time in six weeks. Positions were trimmed by 55 billion cubic feet after being raised by 1,151 billion cubic feet over the previous five weeks. Fund managers have generally become less bearish about gas prices as Freeport LNG’s terminal has resumed exporting. Freeport’s resumption should stabilize then gradually erase some of the surplus inventories accumulated since the third quarter of 2022. Portfolio managers still have a small overall short position of -105 billion cubic feet (28th percentile for all weeks since 2010) but it has been sharply reduced from -1,061 billion cubic feet (7th percentile) at the end of January.
Looming Supply cuts from Saudi Arabia and Other OPEC+ Producers Offset Concern about Weakening Global Growth -- On Monday, the oil market continued to trend sideways following the long Easter holiday weekend as it continued to trade within last Tuesday’s trading range from $79.61 to $81.81. The market opened 15 cents lower and quickly rallied to a high of $81.22 as looming supply cuts from Saudi Arabia and other OPEC+ producers offset concern about weakening global growth that may dampen fuel demand. However, the market erased some of its gains and sold off to $79.71 early in the session. The market, which held support at its previous lows traded in a yo-yo fashion as it traded back towards its high before selling off to a low of $79.61 ahead of the close. The market’s gains may have been limited by the news of Saudi Arabia supplying full crude contract volumes in May to several North Asian buyers despite its pledge to cut output by 500,000 bpd. The May WTI contract settled below the $80 level, down 96 cents at $79.74 and the June Brent contract settled down 94 cents at $84.18. The product markets ended the session mixed, with the heating oil market settling up 2.09 cents at $2.6814 and the RB market settling down 54 points at $2.8079. Genscape reported that crude oil stocks held in Cushing, Oklahoma in the week ending Friday, April 7th stood at 35,955,008 barrels, down 288,531 barrels on the week and by 336,486 barrels from Tuesday, April 4th. RBC Capital Markets cut its Brent price forecast for 2023 to $88.84/barrel from a previous estimate of $95.56/barrel and its WTI forecast for 2023 to $84.45/barrel from a previous estimate of $92.06/barrel. RBC said that while China's recovery post COVID remains in focus, recessionary fears loom in the background as commodity markets await further signals surrounding global demand strength. Several sources said Saudi Aramco will supply full crude contract volumes in May to several North Asian buyers despite its pledge to cut output by 500,000 bpd. This comes after the OPEC and allies, known as OPEC+, surprised markets last week by announcing an extra output cut of 1.16 million bpd from May for the rest of the year. Saudi Aramco's monthly allocation was being keenly watched by investors as an indicator of whether planned output cuts could tighten supplies in Asia. People are wondering whether the additional voluntary cut will actually affect supply or whether it is designed just to shore up oil prices. Asia's oil demand had been expected to weaken in the second quarter as several refiners in Asia, namely Sinopec, South Korea's third largest refiner and Aramco affiliate S-Oil Corp, Japan's Fuji Oil and Idemitsu Kosan are shutting a combined 1.15 million bpd of crude distillation capacity in May. Meanwhile, the Abu Dhabi National Oil Company has informed at least three buyers in Asia that it will supply full contractual volumes of crude in June. The UAE plans to cut 144,000 bpd from May as part of the OPEC+ cuts.IIR Energy reported that U.S. oil refiners are expected to shut in about 1.1 million bpd of capacity in the week ending April 14th, increasing available refining capacity by 179,000 bpd. Offline capacity is expected to fall to 939,000 bpd in the week ending April 21st.
WTI Eases on Firmer USD as Markets Reprice May Rate Hike- New York Mercantile Exchange oil futures and Brent crude traded on the Intercontinental Exchange settled Monday's session mixed, with the U.S. crude benchmark slipping back below $80 per barrel (bbl) under pressure from a rallying U.S. dollar index as investors hedged their bets against another expected interest rate increase at the Federal Reserve's next meeting in May amid still strong job growth and ongoing momentum in the service sector of the economy. West Texas Intermediate futures settled below $80 per bbl on Monday for the first time since the April 2nd decision by OPEC+ to cut oil production by 1.6 million barrels per day (bpd) as traders grew more uncertain ahead of a busy week for macroeconomic data. U.S. consumer price index and producer price index, to be released Wednesday and Thursday, respectively, will be important determining factors on whether the Fed will pause its rate hiking campaign next month. As of Monday, more than 70% of investors expect the central bank will raise rates again by 0.25% at the May 3 Federal Open Market Committee meeting, which would lift the federal funds rate to a 5%-to-5.25% target range. The chorus of central bank officials have long promised to take the fed funds rate above 5%, and March's employment report gave little reason for them to reconsider. U.S. employers added a hefty 236,000 new jobs in March, with leisure and hospitality being the key driver behind overall employment growth. The U.S. unemployment rate ticked lower to 3.5% amid an increase in the labor participation rate that ran contrary to expectations that it would hold at 3.6%. Separately, International Monetary Fund said in its spring economic report that the next five years will see the slowest growth since 1990, and it could be a "severe blow" to the world economy. IMF expects the world economy to grow less than 3% this year, down from 3.4% last year, and well below the average of 3.8% over the past two decades. "Persistently high interest rates, a series of bank failures in the U.S. and Europe, and deepening geopolitical divisions are threatening global financial stability," said IMF head Kristina Georgieva. "Advanced economies face the challenges of high inflation and poorer nations are burdened by debt, all as the United States, the European Union and others are rethinking their trade relationships with China," Georgieva added. At settlement, the U.S. dollar rallied 0.72% against a basket of foreign currencies to finish at 102.249, pressuring WTI futures for May delivery below $80 per bbl at $79.74 per bbl, down $0.96 on the session. International benchmark Brent contract fell back $0.94 to $84.18 per bbl. NYMEX May RBOB futures eased $0.0054 to $2.8079 per gallon, while May ULSD futures gained $0.0209 to $2.6814 per gallon.
Oil Prices Return To Recent Highs --- The price of crude oil returned on Tuesday to the recent highs seen after OPEC+ announced it would cut production by another 1.6 million barrels per day.On April 2, OPEC+ announced that it would cut its crude oil production by another 1.66 million barrels per day (including the 500,000 bpd Russian production cut) on top of its 2 million bpd cut. Naturally, oil prices spiked following the news, reaching gains of 8% at the Monday open. Brent was trading at more than $86 per barrel, with WTI trading at nearly $81. Further gains were made after opening, with WTI reaching $81.69Today, the price of WTI has climbed by more than 2% on the day to $81.37, with Brent climbing 1.50% to $85.44. And prices were still rising at the time of writing.A Tuesday report by Energy Intelligence showed that OPEC+’s total March production was 680,000 fewer barrels per day than the month prior, falling to 37.64 million bpd. Most of the production drop was attributed to Nigeria and Russia, which together accounted for 440,000 bpd of the production decline.Fears of tighter supply as a result of the ever-elusive but always-present China reopening schtick clashing with OPEC+’s supply decreases are most likely behind the Tuesday price moves.U.S. gasoline prices continue to tick upward as well, along with the price of oil. Tuesday’s national average gasoline prices were $3.608 per gallon, according to AAA—an increase of more than $0.10 from a week ago, accounting for most of the $0.134 per gallon rise over the last month.While Brent and WTI prices were climbing on Tuesday, WCS prices were falling, losing 1.61% and reaching $58.49.Citigroup said on Tuesday that it is estimating that prices will fall below $80 on China’s slower-than-expected recovery.
Oil rises about 2% with U.S. and China inflation in focus - Oil prices rose about 2% on Tuesday on hopes that the Federal Reserve might ease up on its policy tightening after a key U.S. inflation report this week, though concerns remain over Chinese demand. Brent crude futures settled up $1.73 or 2.1%, to $85.57 a barrel. U.S. West Texas Intermediate futures rose $1.74 or 2.1%, to $81.48 a barrel. Investors were more optimistic that the U.S. Federal Reserve is getting closer to ending its cycle of interest rate hikes, making dollar-priced oil cheaper for buyers holding other currencies. The prospect of the Fed raising its benchmark interest rate only once more and in a 25 basis point increment is a useful starting point but the central bank's policy path will depend on incoming data, New York Fed President John Williams said on Tuesday. A U.S inflation report to be released on Wednesday is expected to help investors gauge the near-term trajectory for interest rates. "The short-term crude demand outlook will soon be clearer. This week we will find out if the U.S. economy is taking steps into the recession pool or if it is going to do a cannonball into it," Data from China, however, showed consumer inflation in March rose at its slowest pace since September 2021, suggesting demand weakness persists in an uneven economic recovery. "China's March CPI is lower than expected, which may promote the Chinese government to further stimulate the economy," Oil futures have climbed around 7% since the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia surprised the market last week with further cuts to production targets from May. OPEC output will fall by 500,000 bpd in 2023, then rise by 1 million bpd in 2024, after the group's output agreement expires, the Energy Information Administration forecast on Tuesday. Total non-OPEC liquid fuels production is expected to grow by 1.9 million barrels per day (bpd) in 2023 and by 1 million bpd in 2024, the EIA said. In France, the restart of the last of the four domestic refineries shuttered by a month-long strike signaled a likely boost to demand for oil. On the U.S. supply front, industry data on U.S. crude stockpiles was due on Tuesday. The average estimate from five analysts polled by Reuters was that crude inventories fell by about 1.3 million barrels in the week to April 7.
Oil Steadies Ahead of US Inflation, EIA Stock Data -- Oil futures moved mixed in pre-inventory trade Wednesday as investors awaited the release of key inflation data in the U.S. that is expected to show the Consumer Price Index retreated for the sixth consecutive month in March, while an unexpected build in commercial crude oil stockpiles reported late Tuesday by the American Petroleum Institute limited buying interest for the U.S. crude benchmark. Further details of the API report revealed commercial crude oil stockpiles increased by 377,000 barrels (bbl) for the week-ended April 7, missing an expected 600,000-bbl decline. Stocks at the Cushing, Oklahoma, tank farm, the New York Mercantile Exchange delivery point for West Texas Intermediate futures, continued lower with a 1.36-million-bbl draw. Meanwhile, gasoline inventory added 450,000 bbl versus calls for a drop of 1.7 million bbl. Distillate inventories declined by 1.98 million bbl, according to the API figures, nearly four times an expected 500,000-bbl decrease. The U.S. Energy Information Administration is scheduled to release its weekly inventory report at 10:30 a.m. EDT. The focus of Wednesday trading will likely be March inflation data scheduled for 8:30 a.m. EDT release by the U.S. Bureau of Labor Statistics. Economists expect the headline CPI index to ease 0.1% from February's 0.4%, driven by lower costs for energy and food. On an annualized basis, the CPI is seen posting a 5.2% gain after increasing 6% in February. The index for core services (excluding energy and food prices) is still seen advancing 0.4% month-over-month, lifting the annualized index to 5.6%. Such an increase for the core CPI would be higher than the 5.5% reading recorded in February and would match the September-February average. This will likely tip the scales toward another interest rate increase at the Fed's May 2-3 meeting, despite the recent stress in the banking sector and signs of a sharper slowdown in the broader economy. CME's FedWatch Tool shows nearly 70% of investors expect the Federal Open Market Committee to raise the federal funds rate by another 25 basis points at their next meeting in early May, up from 44% seen just a week ago. Separately, the U.S. Energy Information Administration in its Short-Term Energy Outlook released Tuesday forecast lower global oil production this year, citing output cuts from the OPEC+ coalition and sanctions-related supply losses in Russia. The Washington-based energy watchdog reduced its outlook for OPEC production by around 500,000 barrels per day (bpd) for the second half of the year, forecasting an average fall of about 400,000 bpd compared with 2022 levels. Near 7:30 a.m. EDT, West Texas Intermediate futures for May delivery traded unchanged near $81.49 bbl, and the international benchmark Brent was near $85.66 bbl. NYMEX May RBOB futures declined $0.0444 to $2.8201 gallon, and the May ULSD contract slipped to $2.6656 gallon.
Biden Admin Drains SPR For 2nd Week In A Row As Granholm Confirms Refilling Plan -Oil prices jumped this morning after a quiet overnight session thanks to the dovish CPI print exuberance. “The petro-nations’ somewhat surprising supply cut last week triggered a shift in sentiment,” said Norbert Ruecker, head of economics at Julius Baer Group Ltd. in Zurich. “Beyond the geopolitical noise, the ongoing fundamental trends seem robust.” But all eyes remain on inventories for signs of trouble as recession anxiety grows. API
- Crude +377k (-1.3mm exp)
- Cushing -1.4mm
- Gasoline +500k
- Distillates -2mm
DOE
- Crude +597k (-1.3mm exp)
- Cushing -409k
- Gasoline -330k
- Distillates -606k
After API's reported small build, analysts still expected a draw in crude stocks (extending the recent trend) but they were wrong as the official data showed a small 597k build. Stocks at the Cushing hub slipped for the 6th straight week and products saw very small draws... The so-called 'adjustment factor' actually turned red this week... Crude stocks remain seasonally high... US Crude production rebounded to cycle highs despite he slowing rig count... Graphs Source: Bloomberg WTI was hovering around $82.50 ahead of the official data, and held steady after... Finally, after last week's OPEC+ 'rebellion', Energy Secretary Jennifer Granholm confirmed that the US plans to refill the Strategic Petroleum Reserve to levels seen prior to President Joe Biden’s historic release last year following Russia’s invasion of Ukraine. The Energy Department “will look to take advantage of prices if it is advantageous to the taxpayer in the rest of the year, but it’s a lot to refill,” Granholm said during remarks at an energy forum held by Columbia University. But she appears to be full of shit as the Biden admin actually drained the SPR for the second week in a row (the 1.6mm barrel draw more than offset the 600k build in commercial stocks)... WTF Jenny? WTI’s prompt spread - the difference between its two nearest contracts - affirms that the oil market is tightening. It has swung to 8 cents a barrel in backwardation, the widest this year on a closing basis.
Oil Futures Jump 2% to 5-Month High After Inflation Retreat -- Oil futures settled Wednesday's session higher after U.S. consumer price index showed inflation eased more than expected last month, meaning consumers might have more money to spend for road trips and airplane tickets this summer travel season, boosting fuel demand in the service sector of the economy. U.S. inflation fell to the lowest level since May 2021, with prices paid for groceries falling for the first time since September 2020, providing welcome relief for many American families. What's more, prices paid for energy, including gasoline and fuel oil, decreased by more than 4% from the prior month, sending overall energy index tumbling 6.4% against a year earlier. March's CPI report, however, also revealed the core consumer price index -- which excludes food and energy and is closely watched by the Fed -- still rose 0.4% following a 0.5% gain, reflecting the sticky nature of services inflation. The core CPI was up 5.6% from a year ago. It's the first time in over two years that the core came in above headline measure, which was up 5%. U.S. dollar declined more than 0.7% against a basket of foreign currencies on Wednesday, spurring gains for West Texas Intermediate futures that settled the session $1.73 bbl higher at $83.26 per barrel (bbl). International crude benchmark Brent contract for June delivery added $1.72 per bbl for a $87.33-per-bbl settlement. NYMEX May RBOB futures gained $0.0075 to $2.8727 per gallon, and the May ULSD contract rallied to $2.7031 per gallon, up $0.0349 per gallon. Further spurring gains for the oil complex, U.S. Energy Information Administration midmorning reported gasoline inventories declined for the eighth straight week through April 7, down a modest 330,000 bbl to a 13-week low 222.2 million bbl. The draw was well below estimates for a 1.7-million-bbl decline but somewhat in line with a 450,000-bbl build reported by the American Petroleum Institute. Demand for gasoline declined 359,000 barrels per day (bpd) from the previous week to 8.936 million bpd after jumping to the highest weekly rate this year at 9.295 million bpd in the prior week. Over the four-week period ended April 7, implied gasoline demand averaged 9.1 million bpd, 5.5% higher than the comparable four-week consumption rate last year. The U.S. refinery run rate continued lower for a second week through the reviewed period, down 0.3% to an 89.3% utilization rate. U.S. crude oil refinery inputs averaged 15.6 million bpd during the week ending March 31, 30,000 bpd less than the previous week's average. In distillate fuels, inventories fell 606,000 bbl from the previous week to 112.4 million bbl, and are now about 12% below the five-year average, the EIA said. EIA data shows distillate fuel oil, overwhelmingly diesel, supplied to the U.S. market decreased by 477,000 bpd to 3.763 million bpd during the week-ended April 7. Commercial crude inventory in the United States unexpectedly increased by 597,000 bpd to 470.5 million bbl. The build was contrary to analyst expectations for a 600,000 bbl drawdown.
The Producer Price Index Report Released on Thursday Morning and Wednesday’s Consumer Price Index Report Both Showed that Inflation Was Easing - The oil market on Thursday posted an inside trading day after failing to breach its previous trading range. The market traded sideways and posted a high of $83.44 in overnight trading as it attempted to test its previous high of $83.53. However, the market erased some of its gains as it traded to $82.65 early in the session, where it found some support in light of the latest economic data. The Producer Price Index report released on Thursday morning and Wednesday’s Consumer Price Index report both showed that inflation was easing, possibly reducing the likelihood of the Fed increasing rates much higher. The market was also supported by OPEC suggesting that it still expects relatively strong global demand this year in its monthly oil report, despite its members recently deciding to cut its output further. Despite the supportive data, the crude market erased its gains and sold off during the remainder of the session. The May WTI contract posted a low of $82.11 ahead of the close and settled down $1.10 at $82.16. The June Brent contract settled down $1.24 at $86.09. The product markets also ended the session lower, with the heating oil market settling down 3.03 cents at $2.6728 and the RB market settling down 4.1 cents at $2.8317.OPEC noted downside risks to summer oil demand as part of the reason for the unexpected output target cuts announced by OPEC+ producers on April 2nd, although the producer group maintained its forecast for global oil demand growth in 2023. In its monthly report, OPEC said demand will increase by 2.32 million bpd or 2.3%. This was unchanged from last month's forecast. OPEC said China’s oil demand is expected to increase by 760,000 bpd in 2023, up from a previous estimate of an increase of 710,000 bpd. OPEC said the usual U.S. seasonal demand uptick during the summer could take a hit from any economic weakness due to interest rate hikes and the reopening of China had yet to stop a decline in global refining intake of crude. It said OECD inventories have been building in recent months, leaving oil product balances less tight than at the same time last year. The report also showed OPEC's oil production fell in March, reflecting the impact of earlier output cuts pledged by OPEC+ to support the market as well as some unplanned outages. OPEC said its March output fell by 86,000 bpd to 28.80 million bpd. Colonial Pipeline Co is allocating space for Cycle 23 shipments on Line 20, which carries distillates from Atlanta, Georgia to Nashville, Tennessee.BP PLC said it started oil production at Argos, its first platform launch in the U.S. Gulf of Mexico since 2008 and its fifth operating in the basin. The new platform integrates the Mad Dog 2 oil project and is part of BP's plan to reach 400,000 bpd of oil and gas in the United States by mid-decade. Argos is expected to reach its 140,000 bpd of oil equivalent capacity later this year. According to data from the General Administration of Customs, China's crude oil imports in March increased by 22.5% from a year earlier to the highest since June 2020, as refiners stepped up runs to capture fuel export demand and in anticipation of a domestic economic recovery. China’s crude imports in March totaled 52.3 million tons or 12.3 million bpd. This compares with 10.1 million bpd of crude imported in March last year.
Oil Falls After IMF Downgrades 2023 Global Growth Forecast -- Oil futures declined Thursday after the International Monetary Fund forecasted global economic growth is likely to decelerate sharply this year, with advanced economies expected to see an especially pronounced slowdown, weighing on the demand outlook for OECD fuel consumption. In its World Economic Outlook, IMF said global economic growth will fall from 3.4% in 2022 to 2.8% this year before settling at 3% for the next five years -- the lowest median growth in decades. "Risks to the outlook are heavily skewed to the downside, with the chances of a hard landing having risen sharply," said IMF. "Advanced economies in North America and European Union will likely to suffer the sharpest slowdown from 2.7% in 2022 to 1.3% this year, reflecting tight policy stances needed to bring down inflation, the fallout from the recent deterioration in financial conditions and growing geoeconomic fragmentation." Looking into details of the report, Germany and the United Kingdon are expected to post the lowest growth among advanced economies at a negative 0.1% and 0.3%, respectively. For the United States, the economy is expected to expand by 1.6% this year before slowing to 1.1% in 2024. In contrast, emerging markets and developing economies will perform comparatively better this year, growing at an annualized rate of 3.9% and 4.2% in 2024. China and India both expected to record above 5% growth this year. Despite those headwinds, Organization of the Petroleum Exporting Countries left its global demand projections largely unchanged at 2.3 million barrels per day (bpd), with only minor downward adjustments made to the OECD region, which have been offset by stronger-than-expected demand seen in non-OECD countries in January and February. Oil demand in the OECD is forecast to increase a modest 100,000 bpd this year, while non-OECD demand is forecast to grow by 2.2 million bpd. OPEC left its global economic growth forecast unchanged at 2.6%. On the supply side, OPEC estimates that oil production from the 13-member cartel declined by about 280,000 bpd during the first quarter, led by output losses in Angola, Iraq, and Nigeria. In March, OPEC's total oil production dropped by an additional 86,000 bpd month-over-month to average 28.9 million bpd, according to secondary sources cited in the report. The decline was realized before OPEC announced a 1.2 million bpd production cut effective from May until the end of the year. It's worth noting that the U.S. Energy Information Administration pegged the actual decline in OPEC's targets this year well below the promised cut due to underproduction in the prior months. The EIA now expects OPEC oil production to fall by 400,000 bpd this year compared to their 2022 output rate. For countries outside OPEC, the cartel forecasts production would grow by 1.4 million bpd year-on-year to average 67.2 million bpd, broadly unchanged from last month. U.S. oil production is expected to recover gradually after the considerable drop in December 2022. However, the supply growth forecast for 2023 was revised down slightly to an average of 1 million bpd, citing lower-than-expected drilling and completion activities in the first quarter. At settlement, West Texas Intermediate futures for May delivery declined $1.10 to $82.16 barrel (bbl). The international crude benchmark Brent for June delivery fell to $86.09 bbl, down $1.24. NYMEX May RBOB futures dropped back $0.0410 to $2.8317 gallon, and the May ULSD contract declined to $2.6728 gallon, down $0.0303.
Oil Notches Gains after IEA, OPEC See Deeper Supply Deficit -- West Texas Intermediate and Brent crude settled Friday's session with modest gains, while all petroleum contracts notched their fourth consecutive weekly advance after International Energy Agency and Organization of the Petroleum Exporting Countries said the world oil market will slide into a deeper deficit in the second half of the year as demand growth propelled by China's reopening is seen outpacing gains in global oil production. At settlement, WTI futures for May delivery added $0.36 to $82.52 bbl and international crude benchmark Brent for June delivery advanced to $86.31 bbl, gaining $0.22 on the session. NYMEX May RBOB futures edged higher by $0.0042 to $2.8359 gallon, while the May ULSD contract fell $0.0336 for a $2.6392 gallon settlement. Global oil demand will climb by about 2 million bpd this year to a record 101.9 million bpd, with 90% of that growth realized in developing and emerging economies led by China, said IEA in its Monthly Oil Market Report Friday morning. "Our oil market balances were already set to tighten in the second half of 2023, with the potential for a substantial supply deficit to emerge," said IEA. Despite a sizable fall in fuel consumption by countries in the Organization for Economic Cooperation and Development in the first quarter, a solid Chinese rebound already lifted worldwide consumption 810,000 bpd above year-ago levels to 100.4 million bpd, said IEA. The agency expects a further increase of 2.7 million bpd in global oil demand through year-end, propelled by a continued recovery in the Asian region. For advanced economies, IEA acknowledged that weakness in industrial activity is impacting diesel demand, whereas the services sector and personal consumption are driving gasoline and jet uptake. "Consumers confronted by inflated prices for basic necessities will now have to spread their budgets even more thinly. This augurs badly for the economic recovery and growth," said the IEA. Similar sentiment was echoed by OPEC in their Monthly Oil Market Report on Thursday, where the cartel left 2023 demand projections unchanged at 101.9 million bpd despite acknowledging risks tied to the banking stress in the United States and Eurozone. OPEC and its allies, known as OPEC+, earlier this month announced more than 1.2 million bpd in production cuts from May through the end of the year. IEA warned that OPEC+ cuts would press world oil production lower by 400,000 bpd towards the end of the year. From March to December, expected gains of 1 million bpd from non-OPEC+ countries will fail to offset a 1.4 million bpd decline from the producer bloc. For the year, global oil production growth slows to 1.2 million bpd versus 4.6 million bpd in 2022. Separately, International Monetary Fund earlier this week downgraded its global growth forecast to 2.8% for this year from 3.4% in 2022, while forecasting a median of 3% expansion over the next five years -- the lowest growth rate since the 1990s. Advanced economies in North America and the European Union will likely suffer the sharpest slowdown from 2.7% in 2022 to 1.3% this year, reflecting tight policy stances needed to bring down inflation, the fallout from the recent deterioration in financial conditions and growing geoeconomic fragmentation. "Risks to the outlook are heavily skewed to the downside, with the chances of a hard landing having risen sharply," said the IMF.
Oil rises, logs weekly gains after IEA predicts record demand - - Oil prices were up on Friday and secured a fourth straight week of gains after the West's energy watchdog said global demand will hit a record high this year on the back of a recovery in Chinese consumption. The International Energy Agency (IEA) also warned that deep output cuts announced by the Organization of the Petroleum Exporting Countries (OPEC) and other producers led by Russia - a group known as OPEC+ - could exacerbate an oil supply deficit and hurt consumers. Brent crude futures settled at $86.31 a barrel, rising 22 cents, or 0.3%. West Texas Intermediate crude futures (WTI) settled at $82.52 a barrel, gaining 36 cents, or 0.4%. Both contracts posted a fourth consecutive week of gains amid easing concerns over a banking crisis that struck last month and the surprise decision last week by OPEC+ to further cut output. Brent is set to post a 1.5% weekly gain, while WTI was up 2.4% on the week. Four weeks of increases would be the longest such streak since June 2022. In its monthly report on Friday, the IEA said world oil demand is set to grow by 2 million barrels per day (bpd) in 2023 to a record 101.9 million bpd, driven mostly by stronger consumption in China after the lifting of COVID restrictions there. Jet fuel demand accounts for 57% of the 2023 gains, it said. But OPEC on Thursday flagged downside risks to summer oil demand as part of the backdrop for its decision to cut output by a further 1.16 million bpd. The IEA said the OPEC+ decision could hurt consumers and global economic recovery. "Consumers confronted by inflated prices for basic necessities will now have to spread their budgets even more thinly," it said in its monthly oil report. "This augurs badly for the economic recovery and growth." The IEA said it expected global oil supply to fall by 400,000 bpd by the end of the year, citing an expected production increase of 1 million bpd from outside of OPEC+ beginning in March versus a 1.4 million bpd decline from the producer bloc. "The narrative has taken hold again of rising demand and relative supply tightness, and that's what's keeping oil buoyed," Also helping to boost prices was the U.S. oil and gas rig count, an indicator of future supply, which fell for the third week in a row, according to Baker Hughes data. U.S. oil rigs fell by two to 588 this week, their lowest since June 2022, while gas rigs fell by one to 157. The U.S. dollar index was trading at roughly a one-year low, after U.S. consumer and producer price data releases raised expectations that the Fed was approaching the end of its rate-hiking cycle. Still, the greenback edged up on Friday, making dollar-denominated oil more expensive for investors holding other currencies and limiting oil price growth.
US Deploys Guided-Missile Sub To Gulf Region Amid Iran Tensions, Heightened Russia Presence --Amid ongoing fears that Iranian forces could target foreign oil tankers and commercial ships in the Persian Gulf area, the US Navy has sent a guided-missile submarine armed with Tomahawk missiles to waters near the Middle East, a Pentagon spokesman said Saturday. The nuclear-powered submarine which is currently en route is based out of Kings Bay, Georgia. The US Navy acknowledged that it passed through the Suez Canal this week, with 5th Fleet spokesman Cmdr. Timothy Hawkins describing that "It is capable of carrying up to 154 Tomahawk land-attack cruise missiles and is deployed to U.S. 5th Fleet to help ensure regional maritime security and stability."It remains rare that the US Navy would publicly disclose the location or deployment of submarines wherever they are globally. Likely the submarine could patrol the vital Strait of Hormuz waterway, frequented by international oil tankers, which also has a heavy IRGC Navy presence given some of it comprises Iranian territorial waters near the coast.The Associated Press notes that "The U.S. Navy has also reported a series of tense encounters at sea with Iranian forces that it said were being recklessly aggressive."But this new submarine deployment could also be part of US muscle-flexing as both Russia and China have been increasing their naval presence in the gulf.Just last month, Russia, China and Iran held multiple days of joint drills in the Gulf of Oman, dubbed "Security Belt 2023". Additionally, this past week saw a Russian warship dock at a Saudi Arabian port for the first time in a decade.
Israel ramps up provocations against Palestinians neighbouring states - There is no let-up in the incendiary provocations by Prime Minister Benjamin Netanyahu’s far-right government against the Palestinians in East Jerusalem and the West Bank and Israel’s neighbours in the region. On Sunday and Monday, police in East Jerusalem allowed thousands of Jewish visitors to the al-Aqsa Mosque compound, the third holiest site in Islam, far more than last year. This deliberate provocation and breach of the international arrangements governing the Mosque, agreed with Jordan, followed the police storming of the compound on Tuesday and Wednesday last week when worshippers were beaten inside the Mosque. On Friday, police arrested 15 worshippers for waving Palestinian flags, which they described as “terrorist flags” and “incitement” amid the deployment of a massive 2,300 officers in and around Jerusalem’s Old City ahead of early afternoon prayers. With al-Aqsa at the heart of escalating tensions in the region, there are fears that allowing non-Muslims to enter the compound during the last 10 days of Ramadan will provoke further attacks on worshippers, prompting more rocket fire from Lebanon and Gaza and potentially triggering a wider conflagration within the West Bank and Israel itself. On Monday, an Israeli army battalion of 1,000 troops escorted a mass march of several thousand far-right activists on the settlement outpost of Evyatar, near the West Bank town of Huwara near Nablus, recently subjected to a pogrom-like attack by settlers. Thirteen border police companies were deployed to assist the regional police forces, with another 14 companies on standby. The march was led by seven government ministers, including Finance Minister and Religious Zionism party leader Bezalel Smotrich; National Security Minister and Jewish Power leader Itamar Ben Gvir and National Missions Minister and Religious Zionism member Orit Strock; along with around 20 legislators and religious and settlement leaders. Israeli settlers were forced to evacuate the outpost—illegal even under Israeli law—in July 2021 under a rotten deal that allowed them to retain about 50 caravan houses pending the designation of the land as “state-owned”, legalising the theft of Palestinian property. Netanyahu promised to legalise the outpost as part of his deal to secure a far-right coalition government. Ben Gvir said of the march, 'This statement, that we are here, and we are marching toward the future—and that today, ministers in the Israeli government are saying this—is a clear statement.' In February, Smotrich, who was given responsibility for Israel's civil administration in the West Bank—tantamount to annexation—announced his intention to declare the land as state-owned land and turn it into an official settlement.
Israel Strikes Syria After Rare Rocket Attack On Golan Heights -- On the heels of the most intense exchange of fire across the Israel-Lebanon border since 2006, violence erupted on a different front over Saturday night, as a rare rocket attack on the Israel-occupied Golan Heights was carried out by Palestinian militants in Syria. The Al Quds Brigade claimed responsibility, according to a Beirut television station. The Palestinian militia headquartered in Damascus said the volley of rockets was an act of retaliation for a brutal Israeli police raid on the Al Aqsa Mosque in Jerusalem earlier in the week. Israeli responded with waves of artillery fire, drone strikes and apparent missile strikes in Syria. The initial counter-strikes targeted rocket launchers, while later attacks hit an area near the Syrian capital, Damascus. Syria said its air defenses intercepted some Israeli missiles, but acknowledged that others caused unspecified damage. Israel said it also targeted a compound of Syria's 4th Division, and Syrian Army radar and artillery sites. The IDF said it “views the Syrian state as responsible for everything happening in its territory and will not enable attempts to violate Israel’s sovereignty,” according to the Times of Israel. Of six rockets fired, two fell short and landed in Syrian territory, one landed in nearby Jordan three landed in Israel, according to the IDF. There were no reports of damage or casualties. While it's not clear what kind of rockets were used, the poor performance suggests they were crude Qassam rockets -- often derisively likened to bottle rockets -- that are the principal weapon used by Palestinian militias in cross-border strikes. Here's how the head of the team that developed Israel's Iron Dome anti-rocket system once described them: “Qassam rockets are comprised of make-shift components, and their trajectories are very ‘wobbly’ rather than smooth. Imagine a Coke bottle flying several times faster than the speed of sound on an irregular course."
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