SPR at a 39 year low; gasoline demand at a 16 month high after the greatest jump in 22 years

Strategic Petroleum Reserve at another 39 year low, US gasoline demand at a 16 month high after the greatest one week jump in 22 years

US oil prices finished lower for a second straight week, and completely reversed the prior four week​ price​ runup following the recent surprise OPEC ​output ​cut announcement, as recession fears continued to offset bullish fundamentals...​ ​after falling 5.4% to $77.87 a barrel last week as rate hike and recession fears outweighed falling oil supplies and stronger than expected economic reports, the contract price for the benchmark US light sweet crude for June delivery fell more than 1% in overseas trading early on Monday as concern over rising interest rates, the global economy and the outlook for fuel demand outweighed the prospect of tightening supplies, but bounced off a low open in New York and rallied higher throughout the session, supported by the lack of signs of an imminent restart of Iraq’s northern oil exports after a month's standoff and settled 89 cents or 1.1% higher at $78.76 a barrel, as traders grew optimistic that holiday travel in China would boost fuel demand in the world’s largest oil importer...however, after moving higher in overnight trading, oil prices erased their gains and sold off more than $2 to ​the day's​ low of $76.50 by mid-morning Tuesday, weighed down by the strength in the dollar​,​ amid worries about corporate earnings and the global economy, then bounced off ​that low and retraced some of their losses to close down $1.69 at a three week low of $77.07 a barrel on fresh signs that U.S. consumers were pulling back on spending ahead of the summer travel season...oil prices dropped further early on Wednesday after California​'s First Republic ​Bank ​spooked the financial markets, saying it had lost 40% of its deposits in the first quarter, then sold off sharply to a low of $74.05 ahead of the close​,​ as demand concerns and renewed recessionary fears overshadowed a supportive EIA report that showed larger than expected draws across the board, and settled $2.77 cents lower at $74.30 a barrel as traders looked to deterioration in refining margins that had prompted some refiners in Asia and Europe to lower processing rates....oil prices rose slightly in overseas trading ​early ​on Thursday, finding some support in an increase in Russian oil exports, which had dulled the impact of OPEC production cuts, then retraced some of Wednesday’s sharp losses and remained mostly rangebound during the New York session as traders assessed economic data showing that U.S. economic growth slowed more than expected in the first quarter, but that new jobless claims fell, before settling 46 cents higher at $74.76 a barrel after Russian oil minister Novak said global oil markets were balanced and that the OPEC+ group does not see the need for further oil output cuts...oil prices were little changed in Asian trading on Friday as ​the ​disappointing economic data from the US and uncertainty on further interest rate hikes raised concerns about future fuel demand, but rallied through the New York session to settle $2.02 higher at $76.78 a barrel after major energy firms reported positive earnings and U.S. data showed crude output was declining while fuel demand was growing, but still finished with a 1.4% loss on the week, even as Friday's rally was enough to leave oil prices 1.5% higher for the month, the first monthly increase since October...

Meanwhile, US natural gas prices finished higher for the third week in a row, mostly on the market's rollover to the higher priced June contract....after rising 5.6% to $2.233 per mmBTU last week on colder near term forecasts, declining production, and a record pace of LNG exports, the contract price of US natural gas for May delivery opened lower & slid to an intraday low of $2.193 by 9:30AM on Monday, as traders positioned themselves heading into the mid-week contract expiration, but recovered from that dip to settle 4.0 cents higher at $2.273 per mmBTU, as cooler weather ushered in by a strong spring storm over the weekend had set the table for strong heating demand across the northern US for most of the week...with the May contract expiration looming, natural gas prices opened 5 cents lower and retreated further early Tuesday, as analysts observed bearish production and export trends, but recovered to finish 3.4 cents higher at $2.307 per mmBTU as gas flowing to U.S. LNG export plants remained on track for a second monthly record high in April....prices for both the May and June gas contracts opened 9 cents lower on Wednesday and retreated throughout the day, as gas production held strong, mostly benign weather prevailed in forecasts, and analysts forecast an injection that would sustain storage surpluses, and May gas prices fell 19.0 cents​ on the day​ to roll of the books priced at $2.117 per mmBTU, while June gas settled 13.2 cents lower at $2.305 per mmBTU...now citing the contract price for June gas delivery, natural gas traded slightly lower Thursday morning until the weekly storage publication hit the wire, but rose following the report to settle 5.0 cents higher on the day at $2.355 per mmBTU amid little change in bearish near-term supply/demand balances...natural gas prices moved lower early Friday, but soared 7% after a compressor station in Mississippi moving gas from Appalachia to the Gulf Coast shut down due to a fire from a suspected lighting strike, and settled 5.5 cents at a six week high of $2.410 per mmBTU, thus apparently rising 7.9% on the week, even as the quoted June contract, which had closed the prior week at $2.408 per mmbTU, was actually less than 0.1% higher...

The EIA's natural gas storage report for the week ending April 21st indicated that the amount of working natural gas held in underground storage in the US rose by 79 billion cubic feet to 2,009 billion cubic feet by the end of the week, which lifted our natural gas supplies to 525 billion cubic feet, or to 35.4% above the 1,484 billion cubic feet that were in storage on April 21st of last year, and to 365 billion cubic feet, or 22.2% more than the five-year average of 1,644 billion cubic feet of natural gas that were in storage as of the 21st of April over the most recent five years…we ​should note, however, that the​ oft quoted​ national average obscures the fact that supplies are 51.1% below normal in the West, while 36.4% and 36.0% above normal in the East and Midwest regions of the country....the 79 billion cubic foot injection into US natural gas working storage for the cited week was more than the 75 billion cubic feet addition that was expected by industry analysts surveyed by Reuters, and quite a bit more than the 42 billion cubic feet that were added to natural gas storage during the corresponding week of 2022, as well as the average 43 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 21st  indicated that after an increase in our oil exports was covered by an increase in new oil supplies that the EIA could not account for, we had to pull oil out of our stored commercial crude supplies for the 4th time in 5 weeks, and for the 13th time in the past 34 weeks, and at roughly the same rate as during the prior week... Our imports of crude oil rose by an average of 81,000 barrels per day to 6,376,000 barrels per day, after rising by an average of 101,000 barrels per day the prior week, while our exports of crude oil rose by an average of 248,000 barrels per day to 4,819,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 1,557,000 barrels of oil per day during the week ending April 21st, 167,000 fewer barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly 100,000 barrels per day lower at 12,200,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 13,757,000 barrels per day during the April 21st reporting week…

Meanwhile, US oil refineries reported they were processing an average of 15,833,000 barrels of crude per day during the week ending April 21st, an average of 11,000 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 868,000 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 21st appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,209,000 barrels per day less than what our oil refineries reported they used during the week. To account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a [+1,209,000] 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 (+936,000) barrels per day, that means there was a 272,000 barrel per day difference between this week's oil 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....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 868,000 barrel per day decrease in our overall crude oil inventories came as an average of 722,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while 146,000 barrels per day of oil were being pulled out of our Strategic Petroleum Reserve at the same time, the fourth consecutive draw on the SPR this year, now being pulled out & sold as part of an earlier budget balancing withdrawal mandated by congress, and as a result the 366,942,000 barrels of oil that still remain in our Strategic Petroleum Reserve is now the lowest since October 28th, 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 of last year. However, those Biden administration releases amounted to about 42% of what was left in the SPR when they took office, and left us with what is now less than a 19 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 6,502,000 barrels per day last week, which was 8.1% more than the 6,017,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day lower at 12,200,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 11,800,000 barrels per day, while Alaska’s oil production was 17,000 barrels per day higher at 441,000 barrels per day but still added the same 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 6.9% below that of our pre-pandemic production peak, but was 25.8% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 91.3% of their capacity while using those 15,833,000 barrels of crude per day during the week ending April 21st, up from their 91.0% utilization rate during the prior week, but still close to a normal rate for early Spring... The 15,833,000 barrels per day of oil that were refined this week were 1.0% more than the 15,684,000 barrels of crude that were being processed daily during week ending April 22nd of 2022, but 4.5% less than the 16,583,000 barrels that were being refined during the prepandemic week ending April 19th, 2019, when our refinery utilization rate was at 90.1%, also near normal for this time of year...

After an increase in the amount of oil being refined during the prior week, the gasoline output from our refineries was also higher, increasing by 541,000 barrels per day to 10,016,000 barrels per day during the week ending April 21st, after our gasoline output had decreased by 343,000 barrels per day during the prior week. This week’s gasoline production was 5.3% more than the 9,514,000 barrels of gasoline that were being produced daily over the same week of last year, and 2.4% more than the gasoline production of 9,781,000 barrels per day during the prepandemic week ending April 19th, 2019.  Meanwhile, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 81,000 barrels per day to 4,669,000 barrels per day, after our distillates output had increased by 167,000 barrels per day during the prior week.  With that decrease, our distillates output was 2.4% less than the 4,782,000 barrels of distillates that were being produced daily during the week ending April 22nd of 2022, and 7.8% less than the 5,064,000 barrels of distillates that were being produced daily during the week ending April 19th, 2019...

Even after this week's increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the ninth time in ten weeks, and for the 40th time in 62 weeks, decreasing by 2,408,000 barrels to 221,136,000 barrels during the week ending April 21st, after our gasoline inventories had increased by 1,299,000 barrels during the prior week. Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose by 992,000 barrels per day, the greatest jump since February 2001, to a 16 month high of 9,511,000 barrels per day, even as our imports of gasoline rose by 322,000 barrels per day to 1,022,000 barrels per day while our exports of gasoline fell by 209,000 barrels per day to 734,000 barrels per day. Following nine gasoline inventory decreases in ten weeks, our gasoline supplies were 4.2% below last April 22nd's gasoline inventories of 230,805,000 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 6th time in 7 weeks, falling by 577,000 barrels to 111,513,000 barrels during the week ending April 21st, after our distillates supplies had decreased by 355,000 barrels during the prior week. Our distillates supplies decreased again this week as the amount of distillates supplied to US markets, an indicator of our domestic demand, decreased by 37,000 barrels per day to 3,728,000 barrels per day, and as our imports of distillates fell by 20,000 barrels per day to 91,000 barrels per day, while our exports of distillates fell by 33,000 barrels per day to 1,116,000 barrels per day.... Even after 62 inventory withdrawals over the past one hundred weeks, our distillate supplies at the end of the week were 3.9% above the 107,286,000 barrels of distillates that we had in storage on April 22nd of 2022, but are now about 12% below the five year average of our distillates inventories for this time of the year...

Finally, with the modest increase in our oil exports and the decrease in our oil production, our commercial supplies of crude oil in storage fell for the 5th time in 18 weeks and for the 24th time in the past year, decreasing by 5,054,000 barrels over the week, from 465,968,000 barrels on April 14th to 460,914,000 barrels on April 21st, after our commercial crude supplies had decreased by 4,581,000 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 1% above the most recent five-year average of commercial oil supplies for this time of year, and also about 33% above the average of our available crude oil stocks as of the third week 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. After our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, \then jumped again after February 2021's winter storm Uri froze off US Gulf Coast refining, but fell in the wake of the Ukraine war, our commercial crude supplies as of this April 21st were 11.2% more than the 414,424,000 barrels of oil we had in commercial storage on April 22nd of 2022, but were 6.5% less than the 493,107,000 barrels of oil that we had in storage in the wake of winter storm Uri on April 23rd of 2021, and 12.6% less than the 527,631,000 barrels of oil we had in commercial storage as the pandemic took hold on April 24th of 2020… 

This Week's Rig Count

The number of drilling rigs active in the US increased for the fourth time time in the past eleven weeks during the week ending April 28th, and were still 4.8% below the prepandemic count, despite increasing ninety-nine times over the past 134 weeks... Baker Hughes reported that the total count of rotary rigs drilling in the US rose by 2 rigs to 755 rigs over the past week, which was also 57 more rigs than the 698 rigs that were in use as of the April 29th report of 2022, but was still 1,174 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business. .

The number of rigs drilling for oil remained unchanged at 591 oil rigs during the past week, after the number of rigs targeting oil had increased by 3 during the prior week, and there are still 39 more oil rigs active now than were running a year ago, even as they amount to just 36.7% of the shale era high of 1609 rigs that were drilling for oil on October 10th, 2014, and while they are still down 13.5% from the prepandemic oil rig count of 683….at the same time, the number of drilling rigs targeting natural gas bearing formations increased by 2 to 161 natural gas rigs, which was also up by 17 natural gas rigs from the 144 natural gas rigs that were drilling during the same week a year ago, even as they are still just 10.0% of the modern high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008….

In addition to those rigs specifically 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 into a formation 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 one to 19 rigs this week, with 18 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 13 Gulf rigs running a year ago, when all 13 Gulf rigs were drilling for oil offshore from Louisiana…in addition to rigs drilling in the Gulf of Mexico, there is also a directional rig still drilling for oil at a depth between 10,000 and 15,000 feet, offshore from the Kenai Peninsula Borough of Alaska...since there was also a rig drilling offshore from Alaska a year ago, the national total of 20 rigs drilling offshore is up from the national offshore count of 14 a year ago..

In addition to rigs running offshore, there are now two inland water based deployed this week...the new one is a vertical rig drilling for natural gas to between 10,000 and 15,000 feet on a lake in Jefferson Parish Louisiana, while the legacy rig is a directional rig drilling for oil at a depth greater than 15,000 feet through an inland body of water in Terrebonne Parish, Louisiana...a year ago, there were also two such rigs drilling on inland waters...

The count of active horizontal drilling rigs was down by two to 685 horizontal rigs this week, which was still 39 more rigs than the 643 horizontal rigs that were in use in the US on April 29th 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 1 to 47 directional rigs this week, while those were up by 17 from the 30 directional rigs that were operating during the same week a year ago....on the other hand, the vertical rig count was up by 5 to 23 vertical rigs this week, but those were still down by 2 from the 25 vertical rigs that were in use on April 29th 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 28th, the second column shows the change in the number of working rigs between last week’s count (April 21st) and this week’s (April 28th) count, the third column shows last week’s April 21st active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 29th of April, 2022...

Louisiana managed to see a three rig increase even after a Haynesville shale natural gas rig was shut down in the northwest corner of the state with the addition of the rig offshore, the aforementioned inland waters natural gas rig addition in Jefferson Parish, and two more ​new ​rigs in the southern part of the state targeting a basin that Baker Hughes doesn't track...on the other hand, Oklahoma ended down three rigs after an oil rig was pulled out of the Ardmore Woodford, two more rigs were pulled out of the Cana Woodford, and a fourth oil rig was removed from the Granite Wash, indicating that a rig was added elsewhere in the state in a basin not ​covered by Baker Hughes...​next, ​checking the Rigs by State file at Baker Hughes for the changes in the Texas Permian, we find that there were two rigs added in Texas Oil District 8, which overlies the core Permian Delaware, while a rig was pulled out of Texas Oil District 7C, which includes the counties over the southern Permian Midland, and that rig counts in other Texas Permian Districts were unchanged....since the Texas Permian count is thus up by just one while the national Permian count was up by three oil rigs, we can therefore figure that the 2 rigs added in New Mexico were deployed in the western Permian Delaware, in the southeast corner of that state...

elsewhere in Texas, two rigs were pulled out of Texas Oil District 2, which accounts for the oil rig pulled out of the Eagle Ford shale, while a rig was added in Texas Oil District 4, which was also likely an Eagle Ford rig, offsetting the other District 2 removal...other changes nationally include the removal of an oil rig from North Dakota's Williston basin, the removal of an oil rig from Alaska's offshore waters, the addition of a natural gas rig in Pennsylvania's Marcellus, and the addition of a natural gas rig in Columbiana county, Ohio, in the Utica shale....th​e latter ​two account for the natural gas rig increase nationally, since the Louisiana inland waters gas rig addition in Jefferson Parish south of New Orleans was offset by the removal of a gas rig from the Haynesville shale in the northwest corner of the state...

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Ohio Groups Want More Public Feedback on Leasing State Lands for Oil, Gas Drilling -- Residents and environmental groups say they're concerned about public notice and comment processes for leasing state lands for oil and gas extraction. Next month, Ohio's Joint Committee on Agency Rule Review holds a hearing on regulating the leasing process. Under House Bill 507, which just went into effect, any state agency that receives a request for fracking or drilling on land in a state park or forest must approve the request. Cathy Cowan Becker - an organizer with Buckeye Environmental Network - explained that as the state's Oil and Gas Land Management Commission weighs new rules for the leasing process, communities want their voices heard. "When people find out this is happening, they have very strong feelings about this," said Becker. "And I really hope the commission and the state will listen to this, because the people are who own the public land. We're the ones who own and use our state parks." Her group and others want the state to strengthen the rules for notifying the public - including allowing 60 days for public comments instead of the current 21 - and assurances that Ohio will consider the health and environmental impacts of fracking. The hearing is May 8. Becker pointed out that, while fracking generates short-term revenue, studies show preserving state lands brings in billions of dollars in revenue, year after year. She added that having access to wilderness and outdoor recreation helps drive Ohio's tourism economy. "So that people can hike and camp, and birdwatch and hunt, and fish, you know," said Becker, "they're not going to want to do that if a state park is surrounded by fracking rigs that are flaring methane all the time." The Environmental Protection Agency says the burning off or flaring of natural gas, the heavy equipment at well sites, and the use of diesel trucks to transport materials to and from the sites all contribute to increased air pollution.

Oil and gas drilling in state parks set to expand, while some say taxes on it are too low -- Energy companies, lawmakers and environmental groups are again arguing over the companies’ ability to drill for oil and gas in Ohio state parks.And as they battle over the firms’ ability to drill for profits on taxpayer-owned land intended for recreation and conservation, it raises another question that isn’t exactly new: Are the companies paying their fair share in taxes?State law already allowed energy producers to drill on state parklands. But during last year’s lame-duck session of the legislature, without hearings the Ohio Senate amended an agricultural bill focused on poultry to add a provision that would require state officials to grant drilling leases so long as the applicants met certain requirements.The Ohio Environmental Council and other groups have sued, claiming the law, signed by Gov. Mike DeWine, violates a constitutional requirement that bills address a single subject. That might be a winnable argument, given that it both sets the “number of poultry chicks that may be sold in lots” and makes it easier to drill for oil and gas in state parks. But a Franklin County judge last week denied a request to temporarily block the law, saying that the environmental groups failed to show imminent harm, the Cleveland Plain Dealer reported. The groups, however, fear that state agencies might be forced to sign leases before a newly formed Oil and Gas Management Commission is up and running later this year and they plan to pursue the case, the paper reported. As lawmakers grant energy producers greater freedom to exploit Ohio’s taxpayer-owned lands, there have been long-standing complaints that the companies don’t do right by those same taxpayers. Critics say that Ohio’s “severance” taxes — what energy companies pay to extract oil and gas — are among the lowest of any state.“Ohio’s severance taxes are pitiful, and they have meant a severe missed opportunity for Appalachia and for Ohio as a whole,” Guillermo Bervejillo, state policy fellow at Policy Matters Ohio, said in an email Tuesday. “Ohio drilling operators pay a dime per barrel of crude oil and half a nickel per thousand cubic feet of natural gas. This is one of the lowest severance taxes in the country and it means that years of gas and oil production have enriched corporations and drillers but not the communities that host them nor the state that supports them.”

Lawsuit Puts Belmont County Injection Well Site’s Future in Question — The future of an injection well site at the intersection of U.S. 40 and Ohio 331 is in question due to a lawsuit filed by the drilling company that worked on the site.The Belmont County Sheriff’s Office confirmed that an online foreclosure sale of the property is scheduled for May 11, but a further hearing is set for May 1 with owner Omni Energy requesting a stay of sale. According to court documents, Omni has been ordered to pay $463,551.52 to Falcon Drilling Company. Michael McCormick, the attorney representing Falcon Drilling, said his client was not paid for their work. “They drilled the initial well,” he said. “(Falcon) filed a mechanic’s lien on the property, and we filed a foreclosure action of the mechanic’s lien.” McCormick said Omni then tried to remove the case to the federal court level, but it was referred back to Belmont County Common Pleas and Falcon was awarded associated attorney’s fees. He added that the original lien and lawsuit were filed in 2021, the removal continued into 2022 and was returned to the county, where judge John Vavra had made a default judgment in July 2022. McCormick said the Ohio Department of Natural Resources, which monitors the well site, was not involved in the court action. He said he believes Omni would remain responsible for the well until someone else takes it over, and ODNR would have to approve any transfer of well management. Chris Gagin, the attorney representing Omni, submitted a motion for entry of a final appealable order and stay of the foreclosure sale. He indicated an appeal is likely. “The completion of the foreclosure sale on May 11, 2023, is not a necessary prerequisite for the issuance of a final appealable order in this case. Indeed, it defies both logic and due process to order the sale of property to satisfy a judgment prior to the determination of the efficacy of that judgment on appeal,” he wrote in the motion. He added that the entirety of the property is a “highly regulated property with two fully permitted Class 2 injection wells on them. Transfer of the property at a sheriff’s sale will not automatically transfer the permits to (operate) the injection wells.” He added that Omni has no intention of transferring the two permits to any buyer via sheriff’s sale. “Thus a ‘buyer’ would acquire land that cannot be used or operated,” he wrote. He added that Omni is engaged in litigation in Franklin County to secure a maximum allowable injection pressure sufficient to reopen the facility. He also said the valuation of the property is inaccurate and based on a $1 million appraisal prior to its sale to Omni and the company’s investment of $7 million. There has been considerable local opposition to an injection well at this location for several years. Local residents, businesses, the Richland Township trustees and others, including Belmont County commissioners, have voiced concerns about potential health and environmental damage and the expected heavy traffic, with many pointing out the presence of residences, businesses and county agencies in the area.

Ohio Court Sides With Preserved Farm Owners | Conservation and Renewable Energy News -Lancaster Farming - An Ohio appeals court has asked a lower court to reconsider the public benefits of a natural gas pipeline proposed to cut through a preserved farm. Columbia Gas of Ohio wants to use eminent domain to acquire an easement for the part of a 5-mile pipeline that would cross a preserved farm in Marysville, northwest of Columbus.But the use of eminent domain to take land for a private purpose can be blocked if doing so would destroy an existing public use, such as preserving land for farming, the Third District Court of Appeals said in an April 17 ruling written by Judge William R. Zimmerman.The court remanded the case to the Union County Court of Common Pleas to see if Columbia Gas can show that it won’t destroy the existing public use.As a public utility, the gas company sought to use eminent domain to obtain the easement after negotiations with the landowners failed.Ohio Farm Bureau said the decision is a positive step in upholding farm preservation and highlights a need to reform the state’s eminent domain rules.

Appeals court halts plans for pipeline through preserved Union Co. farm - The Ohio Third District Court of Appeals is blocking construction of a natural gas pipeline across Union County farmland preserved with agricultural easements. The decision was handed down April 17. For Don Bailey and his family, the ruling means they can plant this spring without wondering if their crops will be dug up. The ruling may also benefit other farmers who have land protected by ag easements, he said.“We’re hopeful that it will have long-term effects, and reinforce the farmland preservation program,” Bailey said. Laura Curliss, an attorney who represented the Bailey family in the case, said the opinion is notable because the appellate court thoroughly discussed whether the ag easement prevented taking of the pipeline easement by eminent domain. The court looked at the terms of the ag easement, the fact that the ag easement established a prior public use for the property, and federal tax implications. “It’s important. There are still some unanswered questions and we will see how it proceeds,” she said. The Ohio Farm Bureau, which submitted a brief to the appeals court in support of the Baileys’ position, issued a statement on the appeals court ruling. “This is a very important outcome for not only the Bailey family and the Arno Renner Trust, but anyone who enters into agricultural easements with the intention for their land to remain in agriculture and not just for their family, but for future generations. Ohio Farm Bureau got involved to not only highlight the significance of the state’s farmland preservation program in this case, but also to emphasize the need for broader eminent domain reform that our organization is currently advocating for on behalf of landowners across the state.” The district court ruling comes more than three years after the Bailey family first heard of plans by Columbia Gas of Ohio to bury a natural gas pipeline through their land just south of Marysville. The land has been protected from non-farm development since 2003, when Arno Renner, donated an agricultural easement to the Ohio Department of Agriculture. Renner died in 2007 and, now, part of the land is held in a family trust, with Arno’s nephew, Don Bailey, as trustee. Another parcel of the preserved farm is now owned by Don’s son, Patrick, and Patrick’s wife, Whitney. Over the years, the Ohio Department of Agriculture had defended the Renner/Bailey family ag easements by opposing construction of water and sewer pipelines across the land, and those pipelines were routed around the farm. The department did not oppose the construction of the Columbia Gas pipeline, however. “When these landowners gave up property rights to ODA, they believed they entered a certain kind of a deal. And, basically, ODA is reneging on that deal,” Curliss said.

Ohio Federal Court Considers Subsurface Trespass | Gray Reed – Golden Eagle Resources II LLC v. Rice Drilling D LLC. presents a small step in the development of subsurface trespass law in Ohio. The federal court considered a motion to dismiss, in which it evaluated the sufficiency of the complaint to state a cause of action. Golden Eagle owns mineral rights in two tracts in Belmont County, 11.456 acres and 7.47 acres. Rice owns leasehold rights in the Marcellus Shale and Utica Shale. Minerals from the surface to the top of the Marcellus, between the bottom of the Marcellus and the top of the Utica, and below the base of the Utica were excluded from the lease. Rice drilled the “Big Tex” well, which is in the Big Tex 6 drilling unit. The unit overlaps with the entirety of the 7.47 acres and 9.05 of the 11.456 acres. Rice produces gas from the “Utica/Point Pleasant formations”. The Point Pleasant is below the Utica and not covered by the lease. Under Ohio law a trespass is an interference or invasion of a possessory interest in property. An entity is liable for trespass if it intentionally enters upon land in the possession of another or causes a thing or third person to do so. Landowners’ rights include the right to exclude invasions that actually interfere with their reasonable and foreseeable use of the subsurface. The interest at issue was the Point Pleasant formation. How Rice invaded the property was the question. The Big Tex wellbore did not pass under Golden Eagle’s tracts, so there was no physical trespass with the drill bit. Golden Eagle alleged trespass by Rice’s improper pooling. The court concluded that Ohio law does not hold that improper pooling into a drilling unit constitutes a trespass. The central question was whether Ohio law recognizes a trespass by subsurface injection of frac fluids into the Point Pleasant formation. Rice relied on the so-called “negative rule of capture” allowing a landowner to inject into a formation substances which then migrate through the structure of the land to the land of others even if it results in displacement under such land. Ohio courts have not accepted that doctrine, said the court. Rice also argued that even if a claim for subsurface injectate is cognizable, it will fall short without allegations of physical damage or interference with use, assertions that were not in the complaint. Golden Eagle admitted that it did not specify the nature of the alleged physical invasion. The trespass claim fell short of the federal pleading standard and Golden Eagle was given 14 days to amend its complaint. Golden Eagle alleged that Rice wrongfully converted oil and gas produced from the Point Pleasant formation that should belong to Golden Eagle. Ohio courts have held that the rule of capture does not apply to drainage or seepage of natural gas caused by the injection of frac fluids onto into another’s property. The court cited Briggs v. Southwestern Energy. The court concluded that the sparse Ohio case law on this topic recognizes a conversion claim predicated on natural resources that have been acquired by fracking that invades the plaintiff’s property. That is what Golden Eagle alleged and thus it adequately stated a claim for conversion.

Ohio Oil & Gas Generated $57M in Property Tax Revenue in 2021 --- Marcellus Drilling News --According to data recently compiled and shared by the Ohio Oil & Gas Association (OOGA), during 2021 (the most recent year available), the oil and gas industry in Ohio paid a cumulative $57.6 million in ad valorem property taxes to the state. That is separate from a severance tax also paid by drillers in the Buckeye State. The O&G industry not only provides millions in tax revenue, but it also employs “more than 200,000” people in Ohio, and of course, all of those workers pay state income tax too. The economic impact of oil and gas (largely shale) in Ohio is enormous.

Ohio Shale Counties Receive Nearly $350 Million in Property Taxes from Oil and Natural Gas -- Ohio’s top producing Utica Shale counties have collected more than $349 million in real estate property taxes on oil and natural gas activity since 2010, according to the latest data from county auditors compiled by the Ohio Oil and Gas Association. As OOGA and EID previouslyhighlighted, these revenues have empowered Ohio communities to fund local schools, new infrastructure, and other projects to increase the well-being of county constituents.The most recent data from 2021 show the oil and natural gas industry paid a total of $57.6 million to county governments, the second highest annual payment in the last 12 years behind only 2020 ($62.2 million). While many counties maintained stable tax revenue compared to record-setting 2020, Jefferson County, in particular, continued to experience robust growth.Jefferson’s oil and natural gas-derived tax revenue grew by a whopping $2.7 million over a record-setting 2020, receiving nearly $11.2 million. Compared to 2019, the county received an additional $6.3 million in 2021. Harrison County also saw increased tax revenue in 2021, bringing in an additional $1.1 compared to the prior year.The substantial tax revenue generated by the oil and natural gas industry has a significant impact on the economic health of Ohio counties. All the revenue collected is allocated directly to support counties, villages, townships, cities, and, of course, local schools. Reflecting on the benefits that the industry provides to many Ohioans, Rob Brundett, the President of the Ohio Oil & Gas Association, stated:“The latest tax numbers again reinforce the positive impact our industry has in the communities where we operate. Not only does the industry employ more than 200,000 Ohioans and provide abundant and affordable energy, but we also provide millions of dollars for local governments and infrastructure projects.”These numbers come on the heels of a report from the Ohio Natural Energy (ONE) Institute finding that the state’s oil and natural gas industry paid a combined $755 million in severance and Ad Valorem tax revenues from 2010 to 2021.

M-U April NatGas Production Falls 400 MMcf/d in Ohio, SW Pa. | Marcellus Drilling News -- S&P Global Commodity Insights reports that natural gas production in the Marcellus/Utica has fallen this month, in April, by some 400 million cubic feet per day (MMcf/d) from the average production seen during the first quarter. The most notable declines are in eastern Ohio and southwestern Pennsylvania. Why is production down? Falling demand (from mild weather) and high rates of storage (extra supply) are crashing the spot price for natural gas traded at the region’s defacto benchmark trading hub–Eastern Gas South.

$8 Billion in Free Cash Flow for Shale Gas Drillers “Off the Table” | Marcellus Drilling News - Free cash flow (FCF) refers to a company’s available cash repaid to creditors and as dividends and interest to investors. Companies typically use FCF to buy back shares of stock, pay fatter dividends, or pay off creditors. When the price of natural gas went through the roof last year, natural gas drillers were rolling in the FCF. Now with natgas commodity prices in the basement, FCF money has been wiped off the table. How much? For six large natural gas-focused drillers (five of them focused on the Marcellus/Utica, one on the Haynesville), some $8 billion of FCF is “now off the table” according to an article by Bloomberg.

New Study Claims Utica Shale Fracking in Ohio Causes Earthquakes -- Marcellus Drilling News -- If we’ve heard it once, we’ve heard it a thousand times–the claim that fracking causes earthquakes. We’ve talked about this issue almost from the beginning of writing the MDN blog site in 2009. A quick summary of our own observations is that frack wastewater disposed of via injection wells (not fracking itself) is the culprit in causing low-grade earthquakes in some areas. However, the wastewater doesn’t cause an earthquake unless the injection well is located on or near a natural underground fault in the rock layer. Rarely (we can count it on one hand) have we read of fracking itself causing an earthquake. Yet a researcher from Ohio’s University of Miami claims research shows fracking itself can cause an increase in earthquakes.

Biden DOJ, EPA Announce $25M “Settlement” with Williams, Others -- Marcellus Drilling News --Yesterday the Bidenistas at the Dept. of (In)Justice (DOJ) and the Environmental Protection Agency (EPA) announced a “settlement” (i.e. bullying) with three pipeline companies–Williams, MPLX, and Kerr-McGee Gathering. The settlement requires the three to pay a combined $9.25 million in civil penalties and make improvements at 25 gas processing plants and 91 compressor stations in 12 states, including Ohio and West Virginia, worth another $16 million. The two federal agencies claimed the pipeline companies were violating federal and state clean air laws related to leak detection and repair (LDAR) requirements for natural gas processing plants at various facilities they own and operate across the country.

20 New Shale Well Permits Issued for PA-OH-WV Apr 10-16 -- Marcellus Drilling News --New shale permits issued for Apr. 10-16 in the Marcellus/Utica picked up two from the prior week. There were 20 new permits issued in total last week, up from 18 in the prior week. Last week’s tally included 13 new permits for Pennsylvania, 4 new permits for Ohio, and 3 new permits in West Virginia. Last week the top receiver of new permits was Coterra Energy, with 6 new permits issued in Susquehanna County, PA. EQT was number two with 5 new permits, all of them issued in Greene County, PA. Arsenal Resources, Ascent Resources, Belmont County, Carroll County, CNX Resources, Coterra Energy (Cabot O&G), Energy Companies, EQT Corp, Greene County (PA), INR, Lycoming County, Ohio County, Pennsylvania General Energy, Southwestern Energy, Susquehanna County, Taylor County, Washington County

Appalachian Oil, Gas Production Expected to Rise in May - – Oil and natural gas production from the Utica/Point Pleasant and Marcellus shale formations in the Appalachian basin is expected to increase in May. The U.S. Energy Information Administration’s most recent Drilling Productivity Report shows that the Appalachian basin – comprised of the Utica in eastern Ohio and the Marcellus in western Pennsylvania and West Virginia – is on track to produce an additional 48 million cubic feet of natural gas per day next month compared with April. The report shows natural gas output is projected to increase from 35.233 billion cubic feet per day in April to 35.281 billion cubic feet per day next month. Oil production is also expected to increase, but just slightly, the report shows. Horizontal wells across Ohio, Pennsylvania and West Virginia are projected to boost oil output by 1,000 barrels per day, according to the report. In April, these wells collectively produced 149,000 barrels per day. That number is expected to average 150,000 barrels of oil next month, EIA reports. All seven major shale plays across the country expect to boost natural gas production next month, EIA reports. Collectively, these shale formations produced an average 96.835 billion cubic feet of natural gas daily in April. In May, these shale plays are expected to produce 97.167 billion cubic feet of gas per day. Horizontal wells across the country’s major shale areas are expected to boost oil production by 49,000 barrels per day in May, EIA reported. In April, these wells produced 9.279 million barrels per day and are expected to boost production to 9.328 million barrels per day next month.

State should account for fracking waste - Lawmakers were so eager to accommodate the natural gas industry nearly two decades ago that they opened the rich Marcellus Shale gas field without an adequate regulatory regime. Now, the state continues to play catch-up. It still does not require drillers to disclose all of the chemicals that they use to drill and hydraulically fracture gas wells, for example. Now the U.S. Environmental Protection Agency has raised the question of long-term fracking-waste disposal, three years after a statewide grand jury identified major regulatory failures and recommended significant reforms to better inform and protect the public. That grand jury was convened by Attorney General Josh Shapiro. It followed up its findings of criminal wrongdoing against two drillers with a report on which the governor — the very same Josh Shapiro — and the Legislature now should act. According to the EPA, the industry nationally produces about 1 trillion gallons of contaminated wastewater each year, about 2.6 billion gallons of which comes from deep wells in Pennsylvania. To the industry’s credit, it reuses most of the wastewater. But according to the state Department of Environmental Protection, the industry still permanently disposed about 234 million gallons of the wastewater in deep injection wells in 2022. The industry also holds about 90 million gallons above ground at any given time, pending its reuse.

Granholm backs Mountain Valley pipeline -The Biden administration has thrown its weight behind the Mountain Valley pipeline, a major natural gas project favored by West Virginia Democratic Sen. Joe Manchin and opposed by environmental advocates.The 303-mile pipeline and other natural gas projects like it will “play an important role” in supporting the transition to clean energy and in safeguarding the energy system, Energy Secretary Jennifer Granholmsaid in a letter Friday evening to the Federal Energy Regulatory Commission.“Energy infrastructure, like the MVP project, can help ensure the reliable delivery of energy that heats homes and businesses, and powers electric generators that support the reliability of the electric system,” Granholm said in the letter.The letter comes as the administration is planning to release new rules to curb greenhouse gas emissions from power plants. Those rules are expected to require coal and natural gas generators to include technologies to capture most of their planet-warming emissions (Climatewire, April 24).“I think the timing is interesting in that it’s ahead of the release of the new power plant rules, in the sense that it’s an indication that the administration is still supportive of the role of natural gas,” said Paul Bledsoe, a strategic adviser at the Progressive Policy Institute and a former White House climate aide.First proposed in 2015, the $6.6 billion pipeline has faced a number of legal setbacks over the years and opposition from hundreds of landowners in West Virginia and Virginia.The lead developer, Equitrans Midstream Corp., says the project is intended to address congestion on the natural gas pipeline system by delivering needed gas to mid-Atlantic and Southeastern states.Manchin, chair of the Senate Energy and Natural Resources Committee, has repeatedly called on federal agencies such as FERC to support Mountain Valley. Last fall, his office included language in an energy permitting package to direct agencies to issue all outstanding permits.That permitting package did not advance in Congress, although lawmakers are currently debating permitting issues again. Manchin has vowed to reintroduce his bill.

Biden Admin Further Endorses Disastrous MVP While Claiming to Support Environmental Justice --Climate advocates on Monday denounced the "hypocrisy" of the Biden administration, which doubled down on the White House's push for the completion of the Mountain Valley Pipeline late last week, just as President Joe Biden was pledging a renewed commitment to environmental justice. U.S. Energy Secretary Jennifer Granholm sent a letter to the Federal Energy Regulatory Commission (FERC) on Friday, reiterating the administration's support for the 303-mile natural gas pipeline stretching across West Virginia and Virginia. The $6.6 billion project by Equitrans Midstream Corporation was first proposed in 2015 and approved by FERC in 2017, but a number of legal challenges have kept it from being completed. The energy secretary wrote to the four FERC commissioners that while the panel has already "completed its regulatory authorizations for the MVP project," the White House requests that "if there is any further commission-related action on this project, it proceeds expeditiously." "Natural gas—and the infrastructure, such as MVP, that supports its delivery and use—can play an important role as part of the clean energy transition," added Granholm. "As extreme weather events continue to strain the U.S. energy system, adequate pipeline and transmission capacity is critical to maintaining energy reliability, availability, and security." "Secretary Granholm's letter is an environmental justice disgrace that arrived hand-in-hand with Biden's environmental justice executive order." While Granholm presented the quick completion of the project as part of the solution to "extreme weather events" that scientists have linked to the climate crisis, advocates across the Appalachian region and the U.S. have for years warned that the MVP will only contribute to the climate emergency as it would likely cause leakage of methane, a potent greenhouse gas that can trap about 87 times more heat than carbon dioxide in its first two decades in the atmosphere. The companies behind the pipeline construction have also committed"at least 46 narrative water quality standards violations," Bloomberg Law reported earlier this month, and have violated its construction permit at least 139 times in two years. The local grassroots group Appalachian Voices has warned that in addition to exacerbating the climate emergency through methane emissions, the MVP would endanger nearby communities, as the "steep, unstable slopes" it's being built on make it susceptible to landslides and pipe ruptures. "Explosions happened on two separate pipelines in similar terrain in 2018," said the group, adding, "The MVP would disproportionately impact low-income communities, elderly residents, and Indigenous sites." Granholm sent the letter to FERC on the same day that Biden signed an executive order at the White House pledging to coordinate "the implementation of environmental justice policy across the federal government." He also opened the Office of Environmental Justice, tasked with ensuring the government recognizes and mitigates the disproportionate impacts that pollution and the climate emergency have on low-income communities, Indigenous tribes, and people of color. The irony of Granholm's timing was not lost on environmental justice advocates, who had reacted to Friday's announcement with cautious optimism.

Why is Biden backing Manchin's pet pipeline? - The Biden administration is supporting an embattled natural gas project championed by Democratic Sen. Joe Manchin — angering climate advocates and prompting some Capitol Hill Democrats to question the president’s motives. Energy Secretary Jennifer Granholm voiced support in a letter to regulators this week for the $6.6 billion Mountain Valley pipeline, which would carry gas 303 miles through West Virginia and Virginia to mid-Atlantic and Southeastern markets. It’s not sitting well with progressive lawmakers and environmentalists, who are still burning after the administration approved a massive oil project in Alaska. They call Mountain Valley a climate and health hazard. The project, which would cross hundreds of bodies of water and private land parcels, would release roughly 40 million metric tons of planet-warming pollution — the equivalent of more than 10 coal plants’ annual emissions. Some lawmakers smell chicanery. “This has all the hallmarks of a backroom, Faustian deal with Joe Manchin,” Rep. Jared Huffman of California, a senior Democrat on the House Natural Resources Committee, told Emma Dumain and Miranda Willson. The Energy Department declined to comment on Granholm’s letter. Because the Federal Energy Regulatory Commission has already approved Mountain Valley (though it’s held up in legal proceedings), critics say Granholm’s letter of support could be an olive branch to Manchin. The West Virginia Democrat, who chairs the Senate energy committee, has stalled the confirmation process for FERC’s fifth commissioner, leaving the agency vulnerable to political stalemates on critical decisions. Additionally, President Joe Biden needs all Democrats — including Manchin — to stand united against Republican attempts to extract concessions in exchange for raising the debt ceiling. On the GOP wish list: repealing key sections of Biden’s landmark climate law. Manchin has repeatedly trashed the administration’s implementation of the Inflation Reduction Act. He agreed to vote for the climate bill last year only after Democratic leaders promised to pursue a permitting overhaul to fast-track energy projects, including Mountain Valley. But the deal quickly fell apart after opposition from Republicans and progressive Democrats. Granholm’s support for the pipeline doesn’t appear to be persuading Manchin, who has continued to disparage the administration’s rollout of the Inflation Reduction Act. On Monday, he said he would vote in favor of its repeal if the White House continues its “radical climate agenda.”

Granholm’s Mountain Valley pipeline support creates firestorm - Energy Secretary Jennifer Granholm’s endorsement of the controversial Mountain Valley pipeline on Monday is putting environmentalists on high alert and stirring speculation about how the move will affect the project and congressional permitting negotiations. “This has all the hallmarks of a backroom, Faustian deal with Joe Manchin,” Rep. Jared Huffman of California, a senior Democrat on the House Natural Resources Committee, said Monday. Widespread confusion — and anxiety — over what might be the motivation behind the letter Granholm sent to the Federal Energy Regulatory Commission in support of the project comes as congressional Republicans are eager to pressure Democrats into a deal on overhauling the energy permitting process as part of an agreement to raise the debt ceiling. Any such agreement would likely need to pass muster with Manchin, a West Virginia Democrat and chair of the Senate Energy and Natural Resources Committee. He is also a swing vote in a closely divided Senate looking for any vehicle to approve the 303-mile Mountain Valley pipeline, which would carry natural through his state and has been held up by litigation. Efforts in the previous Congress to pass his vision for permitting reform — and green-light completion of the pipeline — fell short amid opposition from progressives like Huffman and Republicans loath to give Manchin a political victory. Manchin has also been delaying confirmation proceedings for the fifth commission seat at FERC, which has been vacant since January. The commission currently has two Republican and two Democratic members, which climate advocates say will hinder FERC’s ability to address grid bottlenecks stifling clean energy projects. Huffman, who is leading a new Climate Action, Energy and Environment Task Force within the Congressional Progressive Caucus, wondered if Granholm’s letter was designed to compel Manchin to “release the hostage” of that fifth FERC commissioner. “She sounds like a cheerleader for the fossil fuel industry; it’s really quite pathetic,” said Huffman to E&E News, who added that he was a “big fan” of Granholm. “But if this is what it takes for Manchin to release his hold on the FERC nominee so we can move forward with FERC reform and streamlining of electricity transmission projects, maybe that’s a necessary evil.”

N.C. House Democrats introduce bill to ban fracking, 11 years after it was made legal - The Daily Tar Heel - House Bill 676, filed on April 18 by N.C. Rep. John Autry (D-Mecklenburg), proposes a statewide ban on hydraulic fracturing, commonly referred to as “fracking.” There are many potential negative health effects associated with fracking, such as exposure to hazardous materials, contamination of local drinking water, air pollution and an increased possibility of industrial accidents, according to a PubMed article. Fracking was legalized in North Carolina with the passing of the Clean Energy and Economic Security Act in 2012. N.C. Rep. Pricey Harrison (D-Guilford) said the decision to legalize fracking was made during a time when other states were pursuing fracking as an opportunity for profit and officials in North Carolina were interested in following suit. “But at the same time, we as a state had been having conversations about climate change and greenhouse gas emissions, and pursuing more fossil fuel-based energy did not make any sense to us,” Harrison said. “But the GOP was very interested in more offshore drilling and the potential for price gas in North Carolina. So, efforts are made to remove any limitations on both of those exploration opportunities.” This is the third legislative session in a row that Autry has filed this bill. Autry said environmental causes are one of his main advocacy platforms, as he first ran for elected office with the goal of positively impacting his community. He served on the Charlotte City Council from 2011 to 2016 and has since served in the General Assembly. “Since that time, since serving on the Charlotte City Council, I've become a grandfather,” Autry said. “And my concern for what sort of environment in the world I'm going to be leaving behind for my grandchildren is paramount for me right now.”

U.S. E&Ps Not Banking on Strong Natural Gas Prices in ‘23, but Will Rig Count Decline? - Weak natural gas prices and inflation are likely to be big topics as North American producers and midstream operators unveil their quarterly results in the coming weeks. SLB Ltd., which has its fingers on the pulse of exploration and production (E&P) customers, has revised its North American outlook for 2023 because of languishing natural gas prices. No big LNG infrastructure is set to ramp this year in the United States either, which may have a negative impact on development. NGI spoke with analysts and culled various notes to clients to provide a window into what investors are expecting in this round of quarterly results. Analysts noted that the gyrations in the natural gas market would be of particular interest. Are E&Ps going to continue to reward shareholders at a quick pace as they did last year? Is merger and acquisition (M&A) activity likely to expand beyond bolt-ons in the Lower 48? Are there any more liquefied natural gas projects likely to reach a positive final investment decision (FID) this year? And where are gas prices headed? All of the above, said NGI’s Patrick Rau, director of Strategy & Research. “LNG continues to be the driving force behind both global and domestic natural gas demand, so naturally investors want to know which projects are going to reach FID and when,” Rau said. “I’m particularly looking forward to hearing updates on the various North American projects, including and maybe especially those LNG projects in Mexico. “Developments in Mexico could very well affect natural gas activity in the U.S., and several of these proposed Mexico projects have an excellent chance at being greenlighted.”Producers are “sitting on cash,” he noted, “and investors have been concerned about future drilling inventory for a good number of publicly traded E&Ps. M&A is certainly one way to address that.”SLB has reduced its view on North America this year, but the services giant “actually reported an increase in international exploration spending, so it sounds like some are addressing the inventory equation via the drillbit as well,” Rau said. Expect to hear about how E&P and pipeline permitting delays can be alleviated too. Congressional Republicans and Democrats, along with the industry trade groups, are wrangling to reduce the red tape they claim has stalled oil and gas infrastructure.

Delfin LNG Project Said on Track for FID by Mid-2023 After Hartree SPA - Delfin Midstream Inc. on Monday announced another binding agreement to sell LNG to an affiliate of commodity trader Hartree Partners LP and said it expects to sanction its floating offshore production facility in the Gulf of Mexico (GOM) by the middle of the year. Delfin Under the sales and purchase agreement (SPA), Delfin would sell 0.6 million metric tons/year of liquefied natural gas to Hartree on a free-on-board basis for a 20-year period. Hartree would pay prices indexed to Henry Hub. The Delfin floating LNG (FLNG) project would consist of four vessels offshore Louisiana with a nameplate capacity of 3.5 mmty each. The company signed another binding agreement with commodity trader Vitol Inc. last year to supply 0.5 mmty. It also has up to 3 mmty committed in tentative deals with UK utility Centrica plc and U.S. onshore producer Devon Energy Corp. that still need to be finalized. But Delfin said Monday that those heads of agreements, along with the SPAs it now has in place with Vitol and Hartree, are sufficient to make a final investment decision (FID) in the coming months. Vitol and Devon would also make equity investments in the Delfin project under the agreements. “The Delfin project’s ability to make FID one vessel at a time is attracting significant interest from buyers, and Delfin is already in advanced discussions for marketing LNG for its second FLNG vessel,” said CEO Dudley Poston. The company has appointed Citi as its financial structuring adviser and “is well advanced in securing project level equity and debt for the first FLNG vessel,” management said. COO Wouter Pastoor added that the company is finalizing construction contracts for multiple identical liquefier vessels, “which will offer material cost savings and position us to make FID on our second FLNG vessel by the end of this year.” For Hartree, which already has an outsized role in the U.S. natural gas market, the deal allows it to tap into the growing export market. Hartree’s Stephen Hendel, a founding managing director, said the SPA would “support our wider strategy of delivering low cost, tailor-made and reliable LNG supply chain solutions that meet the specific requirements of our customers.” The Delfin project has been in the works for years, but it was slowed down by the regulatory process and the Covid-19 pandemic. An FID on the project has slipped more than once. The company purchased the UTOS pipeline, the largest in the GOM in 2014, to feed the project. It also owns the Grand Cheniere pipeline system, which could ultimately be used to feed its Avocet LNG project that would add another two FLNG vessels offshore Louisiana.

DOE Denies Lake Charles LNG Request to Extend Start of Exports --The U.S. Department of Energy (DOE) has denied an Energy Transfer LP affiliate’s request to again extend the deadline for starting exports from its proposed Lake Charles LNG facility in Louisiana. In an order denying the application for an “unprecedented second extension,” DOE said Friday that the project had failed to show good cause for it. The agency sided with environmental groups that oppose the plant, finding the company’s arguments for the project’s stalled development were generalized. In a policy statement issued the same day, DOE reaffirmed its expectations that LNG projects should be able to start exporting the super-chilled fuel within seven years of receiving export authorization. DOE also said it would not consider applications for extending the seven-year deadline unless a project has both started construction and can demonstrate that “extenuating circumstances outside of its control” are to blame for delays. Projects with export licenses that are unable to demonstrate such circumstances could apply for a new authorization. DOE said the policy would increase transparency for license holders and “pending applicants who have not yet commenced exports, while providing greater certainty about DOE’s approvals for the LNG export market.” ClearView Energy Partners LLC said the policy would prevent license holders from deferring construction indefinitely. “As such, we consider this to be a positive policy move for projects that may be coming to market later, but with stronger commercial prospects.” Lake Charles was first granted an export extension in 2020 that expires in December 2025. It had requested another extension to start exports by December 2028. Earlier this year, Energy Transfer Co-CEO Marshall McCrea said management was “disappointed” in the pace of contracting activity for the Lake Charles project. Slow progress signing up project offtakers has delayed a final investment decision, McCrea said during the company’s year-end earnings call.

Haliburton moves three fracking fleets from gas to oil basins - Halliburton is moving three hydraulic fracturing fleets from natural gas basins to oil basins to help meet customer demands, the company said. During its first-quarter 2023 earnings call, the US oilfield services giant said customers told the company to move three of its fleets to oil basins amid a softer natural gas market. “Clearly, gas economics are challenged today, and I don’t think it’s something that service prices solve,” Halliburton chief executive Jeff Miller said during the earnings call. “I think gas is incredibly important and I suspect that it continues, and even gets stronger as we build into the [liquefied natural gas] capacity being built in the US. But along the way, we see opportunities for unmet demand in oil,” Miller said, adding that gas is forecast to recover. He added that the additional 6 billion cubic feet being added in the LNG sector within the next 24 months is expected to solve the softness of the market. In the meantime, Miller said the movement of fleets is not one sided, and that one of Halliburton’s e-fleets was just placed into a gas basin with an operator. E-fleets are hydraulic fracturing fleets that are electrically powered, usually with gas turbines, instead of being powered by diesel. Halliburton has plans to increase its total percentage of e-fleets, which will require the company to retire diesel fleets over time, Miller said. Miller said he is bullish about continued domestic an international growth, saying he forecasts 15% growth in North America year on year in 2023. “We’re even doing deep planning today for 2024 activities that we expect to ramp up,”

Halliburton Moving Some U.S. Natural Gas Fleets to Oil Basins as E&Ps Await More LNG Export Capacity - Wobbly natural gas prices did not deter Halliburton Co. from delivering a solid first quarter performance, as customers cranked up their activity in the oil basins, offshore and overseas, CEO Jeff Miller said Tuesday. Halliburton is the No. 1 pressure pumping company in North America, and as it goes, so goes U.S. exploration and production (E&P) activity. The Houston-based oilfield services giant delivered strong results during the first quarter, including in North America. However, the gains were not in the continent’s natural gas fields. They were in overseas markets and the offshore during the first quarter. Natural gas and additional LNG export capacity are top of mind for U.S. E&P customers, the CEO said. While activity may be a bit slow, it’s only going to get better as more U.S. liquefied natural gas capacity comes online, he told investors.“I firmly believe that the gas market softness will be resolved when 6 Bcf/d of additional LNG export capacity comes online in the next 24 months,” Miller said. For now, though, market conditions have led Halliburton to move three fleets from gas basins to oil basins “to satisfy specific customer demands.” One diesel hydraulic fracturing fleet also has been retired in the Lower 48 to “reduce our near-term maintenance costs and accelerate Halliburton’s transition to e-fleets,” i.e. electric hydraulic fracturing equipment.“These actions reduce our gas market exposure by about 30% and maintain financial returns,” Miller said. North American capital spending this year by the E&P customers still is forecast to “grow at least 15% in 2023.” Most of the capital is being directed to U.S. oil basins and the offshore.“At today’s oil prices, I believe that our customers will execute their activity plans,” the CEO said. “The market for highly efficient equipment and quality services will remain tight.”To be “crystal clear,” he said, Halliburton is not sitting still waiting for business to develop. It is instead improving the “performance and utilization of our existing fleet…” Investments are expanding in “new technologies, crew training and process improvements,”Miller said. “As a result, today we have seen a 60% improvement in pumping utilization across our entire North America land fleet since 2019.”

Bank Failures Add Another Wrinkle for LNG Projects Already Facing Soaring Costs -While a global banking crisis doesn’t appear to be crashing a wave of new LNG infrastructure projects just yet, finance experts say it’s adding pressure to an already tight development cycle.Through most of March, the collapse of institutions like Silicon Valley Bank (SVB) and Switzerland’s Credit Suisse captured headlines and dimmed market outlooks. During the same month, two U.S. companies reached a final investment decision (FID) on respective Gulf Coast liquefied natural gas projects with a combined $15 billion in financing.Rapidan Energy Group’s Alex Munton, director of global gas service, told NGI the latest FIDs show massive LNG projects can still receive financing under the right conditions, but the bar for those conditions could be moving as banks adjust to increasing risk.“Putting together financing for one of these projects is already very complex, and I think you’ll see trends that are further complicating the process will be reinforced in the wake of the crisis,” Munton said.Munton said the recent financial backing secured by Venture Global LNG Inc. for the second phase of its Plaquemines LNG project in Louisiana serves as an example of where project financing could be heading.When the Virginia based company reached FID on the 13.33 million metric ton/year (mmty) first phase of Plaquemines last year, it secured $13 billion from18 banks. With the FID for the 6.67 mmty second phase 10 months later, Venture Global secured $7.8 billion from 23 banks.When measured on a dollar-per-ton basis, financing for both phases of Plaquemines LNG equals about $1,050/ton, according to data from Rapidan. It is a more than 48% increase over Venture Global’s Calcasieu Pass project, also in Louisiana, sanctioned in 2019. The 10 mmty first phase of the project was financed at around $710/ton.Munton said the comparison highlights both the precipitous rise in construction costs developers have had to adapt to since the Covid-19 pandemic and how banks have adapted to governmental efforts to fight inflation. As federal interest rates have been ratcheted upward, banks have looked to reduce their individual exposure, resulting in syndicated loan packages with more participants.While the fallout from the collapse of SVB has rattled some regional banks and likely increased caution around future big-ticket investments, it doesn’t appear to be slowing down LNG projects.

Spring Storm Drives Higher Natural Gas Demand, Nymex Futures Prices -Cooler weather ushered in by a strong spring storm over the weekend set the table for strong heating demand most of this week across the northern United States. That was enough to drive a modest increase for natural gas futures on Monday, with the May Nymex contract settling at $2.273/MMBtu, up 4.0 cents from Friday’s close. June futures tacked on 6.3 cents to $2.471. Spot gas prices also strengthened amid the near-term spike in demand. NGI’s Spot Gas National Avg. rose 13.5 cents to $2.265. After a mild winter, the continuation of chilly weather into early May is providing support to the gas market, which is awash in supply – both in terms of production and underground storage. There continue to be fluctuations in the weather models day to day, but the pattern of cool weather on most days this week and next week remains intact. NatGasWeather said while the northern stretches of the country should see overnight lows dip into the 30s and 40s, the cooler weather only prolongs the need to crank up air conditioners across the southern states. “We believe the natural gas markets prefer hotter patterns over cooler patterns to suggest an impressively hot summer is nearly upon us,” the forecaster said. “Essentially, for mid-late May, hotter weather patterns are going to be needed or surpluses won’t improve much.” After a high-side storage injection last week that expanded the surplus to historical norms, the gas market expects the overhang to widen further in the next government inventory report. Expectations ahead of Thursday’s Energy Information Administration (EIA) report ranged widely on Monday, but the majority of estimates clustered around an injection in the 70s to low 80s. NGI modeled a 77 Bcf build for the week ending April 21. This compares with the year-earlier injection of 42 Bcf and the 43 Bcf five-year average. The EIA said total working gas in storage as of April 14 stood at 1,930 Bcf, which is 488 Bcf above year-earlier levels and 329 Bcf above the five-year average.

Natural Gas Futures Up Slightly After EIA Storage Data Shows Ballooning Surplus - Natural gas futures continued to teeter-totter early Thursday amid little change in bearish near-term supply/demand balances. The June Nymex gas futures contract, marking its debut at the front of the curve, eventually settled 5.0 cents higher day/day at $2.355/MMBtu. Spot gas, which traded Thursday for gas deliveries through Sunday, declined as national demand was expected to soften through the weekend before a series of weather systems hits the Lower 48 beginning Sunday to drive up heating loads. NGI’s Spot Gas National Avg. fell 16.5 cents to $1.990. With no major changes in physical balances expected over the next two weeks, futures traders took their cue from the latest government inventory data. As expected, the Energy Information Administration’s (EIA) report showed an expansion in storage surpluses. The EIA said stocks for the week ending April 21 rose by a slightly higher-than-expected 79 Bcf to 2,009 Bcf, which lifted the surplus over last year to 525 Bcf. The surplus to the five-year average swelled to 365 Bcf. However, a closer look at the data showed continued tightening in the important South Central region. Stocks there increased by a net 22 Bcf, which included an 11 Bcf build in nonsalt facilities and a 9 Bcf build in salts, according to EIA. The agency noted that totals may not equal the sum of components because of independent rounding. The net injection lifted regional inventories to 971 Bcf, which is about 32% above the five-year average. While still stout, South Central stocks were more than 38% higher than five-year average levels at the end of March. Notably, the latest EIA report was the sixth in a row in which the surplus in the South Central contracted. Although 70-degree high temperatures have done little to bolster cooling demand in the region, robust LNG demand and a continued pull on natural gas for power generation in the low price environment have quickly tightened the balances. That said, maintenance events may keep flows to U.S. export terminals in check this spring.

US natgas up 2% to 6-week high on Mississippi compressor shutdown (Reuters) - U.S. natural gas futures rose 2% to a six-week high on Friday after a fire caused the shutdown of a pipeline compressor in Mississippi that had been moving gas from Appalachia to the Gulf Coast. Before Columbia Gulf Transmission told customers that it had stopped gas flows through the Corinth compressor station in Mississippi due to a fire from a suspected lighting strike, gas futures were trading down about 2% early Friday. After the news, prices soared as much as 7%. Prices were lower before the fire on forecasts for mild weather in mid May and rising output. Front-month gas futures for June delivery on the New York Mercantile Exchange rose 5.5 cents, or 2.3%, to settle at $2.410 per million British thermal units (mmBtu), their highest close since March 16. For the week, the contract was up about 8%, putting it up for a third week in a row for the first time since July 2022. That was its biggest one-week percentage gain since it rose 23% in early March. For the month, the front-month was up about 8.8% after falling about 19% in March. That was its biggest one-month percentage gain since it rose 9.0% in November. Data provider Refinitiv said average gas flows to the seven big U.S. LNG export plants rose to 14.0 billion cubic feet per day (bcfd) so far in April, up from a record 13.2 bcfd in March. That is higher than the 13.8 bcfd of gas the seven plants can turn into LNG since the facilities use some of the fuel to power equipment used to produce LNG. Some analysts have begun to question whether the recent collapse of gas prices in Europe and Asia could force U.S. exporters to cancel LNG cargoes this summer after mostly mild weather over the winter left massive amounts of gas in storage. In 2020, at least 175 LNG shipments were canceled due to oversupply and weak demand. Gas was trading at a 21-month low of around $12 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and at a 22-month low of $12 at the Japan Korea Marker (JKM) in Asia. That puts TTF down about 49% and JKM down about 61% so far this year, which is similar to the 46% drop in futures at the U.S. Henry Hub benchmark in Louisiana. For now, however, most analysts say energy security concerns following Russia's invasion of Ukraine in February 2022 should keep global gas prices high enough to sustain record U.S. LNG exports in 2023. Gas stockpiles in northwest Europe - Belgium, France, Germany and the Netherlands - were currently at about 59% of capacity, keeping the amount of gas in storage about 59% above its five-year (2018-2022) average for the time of year, according to Refinitiv. That is much more gas in storage than in U.S. inventories, which are currently about 22% above their five-year norm again due to mostly mild weather last winter.

Mitsui Snaps Up Gassy Eagle Ford Hawkville Leasehold, Touts LNG Export Potential - Japan’s Mitsui & Co. Ltd. has added an upstream foothold in the Eagle Ford Shale of South Texas, with plans to serve LNG export demand, as well as low-carbon ammonia and methanol production on the Gulf Coast. The Tokyo-based conglomerate said Thursday it has completed the acquisition of a roughly 92% working interest in an unconventional natural gas-rich asset within the Eagle Ford’s Hawkville field. Mitsui purchased the asset from operator Silver Hill Eagle Ford E&P LLC, a subsidiary of Silver Hill Energy Partners LP. Mitsui is aiming for “stable gas production” of more than 200 MMcf/d from the unconventional onshore acreage, with subsidiary Mitsui E&P USA LLC as operator. “Mitsui is also promoting liquefaction and export of U.S. natural gas to global markets, and methanol production businesses using natural gas as feedstock,” management said. “In addition to proactively pursuing upstream development projects, we will strengthen the natural gas value chain, including adjacent businesses, and work toward achieving further low-carbon solutions and decarbonization” by using carbon capture and storage, or CCS, and other measures. “Mitsui believes that natural gas and LNG will play an important role as a ‘pragmatic solution’ for energy transition, and we will continue to contribute to stable energy supply, enhanced quality of life, and sustainable development of society by further promoting our global natural gas and LNG businesses.” The Eagle Ford has been attracting merger and acquisition interest among large upstream players seeking to shore up drilling inventory and secure access to Gulf Coast export markets. Canada’s Baytex Energy Corp., Houston-based Marathon Oil Corp. and Lower 48 heavyweight Devon Energy Corp. each have announced Eagle Ford acquisitions over the past year. The South Texas play saw a surge in drilling permits issued last month, according to data from Evercore ISI. The Energy Information Administration, meanwhile, is forecasting Eagle Ford gas output to rise by 55 MMcf/d in May versus April.

FERC clears way for Texas LNG projects -A recent decision from federal regulators clears the path for two massive LNG projects that could reshape the South Texas communities they plan to call home.As energy reporter Amanda Drane writes, last week the Federal Energy Regulatory Commission approved certificates for two multibillion-dollar Brownsville-area liquefied natural gas facilities planned by Houston companies. One commissioner argued local residents should have been given more time to express opposition.Analysts say the approval could help move Houston-based NextDecade a step closer to getting the financial backing needed to construct the Rio Grande LNG. It could help give momentum to another project, the energy developer Glenfarne’s South Texas LNG project, which hasn’t seen as much financial traction as Rio Grande LNG. Meanwhile, the projects have created rifts in the South Texas community. Proponents say the projects could infuse the region with jobs, while critics say it could cause environmental impacts that in turn would impact local fisherman and tourism businesses. “We're selling nature,” Port Isabel City Manager Jared Hockema, who opposes the LNG developments, told the Chronicle last year. “That's what we're in the business of selling. If you drive to Corpus Christi, it doesn't look like that. Unfortunately, you see a bunch of smokestacks, you see ugly industrial development, and so we don't want that type of development on the way to our city.”

Texas Natural Gas, Oil Employment Advances as Robust Production Drives Hiring -- Upstream oil and natural gas employment in Texas totaled 198,700 jobs in March, up by 1,500 positions from the prior month and up by 20,000 year/year, the Texas Independent Producers and Royalty Owners Association (TIPRO) said in a new report. The gain from a year earlier included an increase of 1,100 jobs in oil and natural gas extraction and 18,900 jobs in the services sector, TIPRO said. Despite lower commodity prices – notably including weak natural gas prices so far this year amid light weather-driven demand – gas production held at elevated levels around 101.6 Bcf/d in the first quarter, according to the Energy Information Administration (EIA). That was up 1.4% over 4Q2022 output and was close to record levels just above 102 Bcf/d reached last year. Petroleum output throughout the first quarter hovered around a two-year high of 12.3 million b/d in the first quarter, EIA has reported. Natural gas exited the recent injection season with an estimated 1,856 Bcf in storage, a 19% surplus to the five-year average, according to EIA. In its latest Short-Term Energy Outlook, EIA modeled average natural gas domestic production of 100.9 Bcf/d for full-year 2023, a 3% increase over 2022 output. Benchmark Henry Hub natural gas prices recently held close to $2.00/MMBtu – less than half the level of late 2022. However, the robust production levels are in response to strong global demand for U.S. exports of both crude and LNG, with the latter bolstered by Europe’s thirst for liquefied natural gas since the onset of Russia’s war in Ukraine. Strong production has fueled upstream activity and bolstered hiring levels. The oil and gas industry “continues to ramp up employment and production in line with growing demand for our product here and abroad,” said Ed Longanecker, president of TIPRO. TIPRO crunches federal data in tandem with the Texas Oil & Gas Association to arrive at the monthly state employment figures. According to TIPRO, there were 14,491 active unique job postings for the Texas oil and natural gas industry in March – up 21% from February and up 35% from a year earlier — including 6,193 new job postings added in the month.

Sand in your backyard, natural gas in your kitchen - In a recent interview with Douglas Haynes on A Public Affair on WORT 89.9 FM, biologist and writer Sandra Steingraber discussed her essay, “Gas Stoves: The Fracking Tailpipe In Your Kitchen.” As Steingraber argues, not only do gas stoves produce toxic chemicals like nitrogen dioxide, but, as the title asserts, they link the intimate space of the kitchen—the anchor of US domesticity—with larger national, and even international, networks of resource extraction. To put it plainly, gas stoves function by burning fossil fuel inside your home, causing the same chemical reactions that occur in the smokestacks of power plants inside your home. Steingraber wants you to know that the dangers of gas stoves are undeniable, contributing to childhood asthma and other respiratory ailments. The fact that gas stoves have any popularity—enough now to put them at the center of the culture wars—is due to aggressive advertising by the gas industry, a tactic that dates back to the 1930s. Listening to Steingraber list the harmful effects of nitrogen dioxide, I thought, “Thank god, my apartment doesn’t have a gas stove.” I briefly felt good about my situation until Steingraber clarified that even if I do not own or use a gas stove, I nevertheless live in a state that plays a special role in the natural gas industry. Folks who have lived in Wisconsin longer than I can probably guess why: frac sand mining. Mined from sandstone formations in central and western areas of the state, Wisconsin frac sand is excavated, crushed, washed, dried, sorted, and then shipped away to be used in hydraulic fracturing. Along with a melange of chemicals and water, it is then pressurized and pumped below ground in order to break up bedrock and release natural gas and petroleum. As of 2014, Wisconsin was a leading producer of frac sand in the US, and in 2016 was home to 128 mining operations and processing plants. Though the frac sand mining industry has been in a downward trend since 2016 (about the time that I moved to the state), it is again on the rise, according to a November 2022 report on Wisconsin Public Radio. But where does all this frac sand go? And, since Wisconsin has to import the natural gas it consumes, where does that natural gas come from? It turns out that the answer to both these questions is my home state of Texas. This means that for Wisconsinites, gas stoves are not only “the fracking tailpipe in your kitchen,” they are the terminus of a circuit of resource extraction and redistribution that loops across the continental U.S. And this circuit feels very personal. When I moved from Texas to Wisconsin, I thought I had left behind the Bible Belt and big oil. There is no escaping the fossil fuel industry. But this is less a story about me than a story of how energy and resources travel, often in ways that consumers are not meant to understand.

Refinery in Superior, Wis., restarts 5 years after explosion — The Superior, Wis., oil refinery, site of an explosion that shook the city five years ago this week, has restarted operations. New owner Cenovus Energy said in an earnings call Wednesday the refinery was already producing about 24,000 barrels a day with crude oil introduced in March, and will ramp up to full production of nearly 50,000 barrels daily this quarter. Earlier this week, Cenovus shared new safety measures it will use as it produces asphalt and gasoline products. "Every step of the way we are looking to ensure a safe, responsible and reliable startup of the facility," said Doreen Cole, senior vice president of downstream manufacturing for Calgary, Alberta-based Cenovus. At the time of the explosion, the refinery, owned then by Husky Energy, was shutting down its fluid catalytic cracking unit for planned maintenance. The unit is a common piece of equipment at oil refineries used to refine crude oil into higher octane fuels. A worn valve inside the unit allowed air to mix with hydrocarbons, leading to the explosion of two outdated vessels, spraying metal fragments up to 1,200 feet and puncturing a nearby asphalt storage tank. About 17,000 barrels of hot asphalt spilled and ignited, causing multiple fires. Although it did not happen, the release of highly toxic hydrogen fluoride, also known as hydrofluoric acid, was a potential danger, with tanks full of the chemical stored near enough to the explosion to have also been punctured by debris. In a final report, the U.S. Chemical Safety and Hazard Investigation Board said the accident — which caused $550 million in damage and injured nearly 40 workers — was avoidable. The board laid out several safety recommendations for the new plant, which Cenovus said it will follow. The cost to rebuild the refinery grew from an initial estimate of $400 million to $1.2 billion. Cole said that number may be revised later in the year. It took five years to complete because of the sheer scope of the rebuild, with some units needing full reconstruction. The pandemic also slowed efforts, said Cole, noting the restart's economic impact would be "substantial." Cole said the Superior refinery, one of three that the company fully owns and operates in the United States, was a "key contributor" to its portfolio. Cenovus also owns a refinery near Toledo, Ohio, where an explosion in 2022 killed two workers. At the time, it was only partial owner of the refinery, operated then by BP.

Precision Drilling reports $95.8M Q1 profit, revenue up nearly 60% from year ago - Precision Drilling Corp. reported a first-quarter profit compared with a loss a year ago as its revenue rose nearly 60 per cent, helped by stronger drilling activity and price increases in the U.S. and Canada. The oilfield services company says it earned $95.8 million or $5.57 per diluted share for the quarter ended March 31, up from a loss of $43.8 million or $3.25 per diluted share a year earlier. Revenue totalled $558.6 million, up from $351.3 million in the first three months of 2022. Precision said the increase in revenue came as drilling rig utilization days in the U.S. rose 17 per cent compared with a year ago, while in Canada they gained nine per cent. International drilling rig utilization days were down nearly 20 per cent compared with the same quarter last year. Precision also said it has reduced its 2023 capital spending budget to $195 million compared with its initial plan for $235 million due to fewer drilling rig upgrades and lower maintenance costs.

US crude inventories fall on steady refinery runs, export surge | S&P Global Commodity Insights - US crude inventories fell 5.1 million barrels to 460.9 million barrels the week ended April 21 as refinery runs were steady and exports climbed, US Energy Information Administration data showed April 26. Crude stocks have fallen 20.3 million barrels since the middle of March as refiners have exited maintenance. While net refinery crude inputs at 15.8 million b/d the week ended April 21 were roughly unchanged, they were up 866,000 b/d from early March. S&P Global analysts on April 21 said they expect US refinery outages to decrease by another 470,000 b/d for the week ended April 28. However, crude runs could decline as over the weekend as several Texas refineries were impacted by power outages, including three Corpus Christi plants, and TotalEnergies' Port Arthur plant. The crude stock draw left US inventories at a slight deficit to the five-year average, down from a 9% surplus in mid-February, the EIA data showed. The bulk of the crude stock draw was seen in the US Gulf Coast, where inventories fell 5.4 million barrels to 259.9 million barrels. The draw would likely have been larger were it not for the release of another 1 million barrels of crude from the US Strategic Petroleum Reserve, as SPR crude is either run through refineries, exported or placed into commercial storage. SPR stocks have fallen 4.6 million barrels since the week ended March 24 as part of the US Department of Energy's plan to draw 26 million barrels between April 1 and the end of June. US Energy Secretary Jennifer Granholm has said that refilling of the SPR could begin in the second half of the year, following a record 180-million barrel release last year to combat high energy prices. A rise in US crude exports also contributed to the crude stock draw last week. Exports jumped 248,000 b/d to 4.8 million b/d, the EIA data showed. Exports on four-week moving average at 4.3 million b/d were up nearly 900,000 b/d on the year. S&P Global Commodities at Sea shows the US exporting 4.9 million b/d the week ended April 21, with increased flows seen to Northwest Europe, South Korea and China. The spot arbitrage remains open for US crudes into Europe, with WTI MEH fetching a roughly $3/b premium to Forties, S&P Global refining margins data shows. In refined products, US gasoline inventories fell 2.4 million barrels to 221.1 million barrels last week, the EIA data showed. Stocks on the US Atlantic Coast fell 1.1 million barrels to 51.4 million barrels, causing the deficit to the five-year average to widen to 17%. The USAC draw was supportive for the New York-delivered NYMEX RBOB contract. While the outright RBOB price fell April 26, the NYMEX RBOB crack spread against WTI crude settled 85 cents higher at $31.23/b. US gasoline stocks fell despite a 541,000 b/d increase in production to 10 million b/d, a 209,000 b/d decrease in exports to 734,000 b/d, and a 316,000 b/d increase in imports to 838,000 b/d.

The Keystone operator says design and construction flaws led to the Kansas oil spill - Stress put on the Keystone pipeline during construction, its operator said Friday, contributed significantly to it bursting in north-central Kansas. TC Energy says an independent review shows the sequence of factors that led to the Keystone’s rupture in December that fouled a creek and spewed oil over cropland and prairie.The ill-fated segment experienced “inadvertent bending stresses sufficient to initiate a crack” during its construction in 2011, the company said in a press release about the findings.The Washington County spill was the biggest in the Keystone’s history, and the second-biggest spill on U.S. soil of dilbit, a Canadian tar sands product that presents particular environmental risks and cleanup challenges when it spills into bodies of water.The company didn’t release the document, but outlined its version of “the key findings” in it. Federal officials ordered TC Energy to commission the pipeline failure analysis. The government told the Canadian company to hire an independent contractor to help with the analysis and to “document the decision-making process and all factors contributing to the failure.”The federal agency — the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration — also received the report on Friday, but it hasn’t commented publicly yet on the conclusions.TC Energy says the report found that “a progressive fatigue crack” was the main cause of the oil spill.The crack started at a welded spot in the pipeline that connected an elbow fitting to the pipe segment across a creek. “Bending stresses during construction also led to a deformation in the elbow fitting and a wrinkle in the adjacent piping,” the company said. “Further, the design of the weld transition created a stress concentration point, making the pipe at this location more susceptible to bending stresses.”

Massive pipeline spill caused by crack created during installation, third-party review concludes | Nebraska Examiner -- A third-party review of a pipeline spill that released 500,000 gallons of crude oil onto Kansas farmland and a nearby stream was caused by a crack in the metal pipe that eventually ruptured under pressure.That was the conclusion of a third-party review that was ordered by a federal pipeline safety agency to investigate the December failure of the 36-inch Keystone pipeline, just south of the Nebraska border near Washington, Kansas.It was the largest oil pipeline spill in the U.S. in nine years.The “Root Cause Failure Analysis” for the so-called “Milepost 14 incident” reached the same conclusion as an independent analysis of the metal pipeline released in February.“The primary cause of the rupture was a progressive fatigue crack that originated at a girth weld connecting a manufactured elbow fitting to the pipe constructed across Mill Creek (in Kansas),” the operator of the pipeline, TC Energy, said in a press release Friday.The company said that during construction of this segment of the Keystone pipeline, which as completed in 2011, “inadvertent bending stresses sufficient to initiate a crack” occurred on the elbow fitting.Over time, and under the high pressure needed to push the oil down the pipeline, the crack worsened, eventually resulting in the leak.The pipeline, which carries tar sands oil from Canada to refineries on the U.S. Gulf Coast, was operating at a pressure of 1,153 pounds per square gauge at the time of the Dec. 7 rupture, according to the federal Pipeline and Hazardous Materials Safety Administration. Since 2009, the Keystone pipeline has experienced three failures on similar girth welds, according to PHMSA.In March, the agency ordered TC Energy to reduce the operating pressure to 923 ppsg on the segment of the Keystone pipeline from Steele City, Neb., to Cushing, Okla., due to a “repetitious pattern of failures related to the original design, manufacture, and construction.”On Friday, TC Energy, in a press release, said it had recovered 98% of the released product and cleaned up 90% of the shoreline of Mill Creek, where the failure occurred. Previously, the company has estimated its cost of responding and cleaning up the leak at $480 million.Thousands of cubic yards of oil-soaked soil and other materials removed from the spill site were trucked to a landfill just outside Omaha.

More New Mexico land must be saved from oil and gas to prevent climate crisis, study says -New Mexico lagged behind the rest of the U.S. in protected public land, according to a recent study, meaning oil and gas operations on federal land were a key contributor to worsening pollution and climate change. The study on the state of biodiversity in New Mexico and environmental impacts, published by the New Mexico Wilderness Alliance in partnership with national climate change advocacy group EcoAdapt, reported only 6.1 percent of lands in the state was protected for wildlife management. That’s less than half the 12.6 percent of lands protected nationally, even as New Mexico and federal officials worked toward the “30x30” initiative to conserve 30 percent of public land from development by 2030. That would mean New Mexico must conserve another 18 million acres to meet the target, the study read. At stake if the lands go unprotected, the report read, was air quality and other environmental aspects of the land in New Mexico, more than a third of which is managed by federal agencies like the Bureau of Land Management within the U.S. Department of the Interior. The study analyzed 6 million acres of federally managed land in New Mexico identified as having the most benefit from conservation via biodiversity, connectivity, site resilience, carbon sequestration and storage, or potential greenhouse gases from fossil fuels yet to be extracted. Priority areas for conservation the study read, included Carlsbad Caverns, the Gila and Aldo Leopold wilderness areas and unprotected BLM lands in the Otero Mesa and Bootheel region. “Most of these public lands are vulnerable to threats like oil and gas development, hardrock mining, commercial logging, and road fragmentation,” the report read. “Additional federal public lands protections could substantially increase overall land protections statewide.”

'Extreme risk' posed by Utah oil train proposal, Colorado AG Weiser warns feds - Colorado Attorney General Phil Weiser is the latest state official to decry a proposed Utah rail project that could result in a daily procession of trains carrying crude oil through sensitive Colorado River watersheds and the Denver metro area.In an April 21 letter to U.S. Transportation Secretary Pete Buttigieg, Weiser wrote that the 88-mile Uinta Basin Railway “poses an extreme risk to Colorado’s most important water source and the surrounding environment.”The multibillion-dollar project would connect Utah’s oil-producing Uinta Basin region to the national rail network, allowing 350,000 barrels of crude oil per day to be transported to refineries along the Gulf Coast — a route that would run directly through mountain communities in central Colorado and the densely populated Front Range.Backers of the project, led by a partnership between seven Utah county governments, applied earlier this year for $1.9 billion in “private activity bonds,” tax-exempt financing mechanisms whose issuance must be authorized by the Department of Transportation.“Federal Private Activity Bonds should benefit the public and prioritize moving people, not goods for a private industry actor,” Weiser wrote to Buttigieg. “Furthermore, if approved, tax-exempt bonds devoted to the Uinta Basin Railway would have taxpayers subsidize a private venture, and one with significant community opposition. Such an approval would erode confidence in an important USDOT program that has aided so many critical projects and benefited the public.”Several key permits for the new railway have already been approved by President Joe Biden’s administration, but Colorado lawmakers including U.S. Sen. Michael Bennet and Rep. Joe Neguse, both Democrats, havelodged complaints against the project with at least four different federal agencies, including the DOT and the Environmental Protection Agency.More than a hundred local governments and advocacy organizations across the state have announced their opposition to the railway, and Colorado’s Eagle County has joined five environmental groups in suing the U.S. Surface Transportation Board over its 4-1 vote to approve the project in December 2021.At least 21 oil train derailments have occurred in the U.S. and Canada since 2013, according to a 2021 report from the nonprofit Sightline Institute. Such incidents frequently result in fires and spills, including the 2016 derailment of an oil train in Oregon’s Columbia River Gorge, in which an estimated 42,000 gallons of crude oil were spilled.“This rail project to transport waxy crude oil through Colorado poses significant risk to our State, our communities, and our natural resources,” wrote Weiser in his letter to Buttigieg. “I ask that the Department reject any use of tax-exempt Private Activity Bonds — or any other source of federal funds — for this project.”

Colorado Lawmakers Looking for Consumer Relief from High Winter Natural Gas Prices -Following a costly winter for Colorado’s natural gas utility customers, two state legislators are calling to limit investor-owned utilities (IOU) from recovering certain costs and mandating utilities better plan to protect against natural gas price volatility. Democratic state Sens. Lisa Cutter (Jefferson) and Steve Fenberg (Boulder) earlier this month introduced Senate Bill (SB) 23-291. The legislation, if enacted, would require regulated utilities to remove incentives offered to applicants seeking natural gas services from rate tariffs. IOUs would also be prevented from charging customers to cut gas services. “Colorado families were hit hard this winter by unexpected and severe price shocks, which is why we convened the Joint Select Committee on Rising Utility Rates to investigate the causes and find solutions,” said Fenberg, who chairs the committee. SB 23-291 would also direct the Colorado Energy Office to contract with a third party to investigate stranded or underutilized natural gas infrastructure investments and their impacts on rates. The Colorado Public Utilities Commission would also investigate which geographical service areas drive natural gas costs for any gas utility serving more than 500,000 customers in the state. In addition, the bill would require utilities to file a gas price risk management plan with the CPUC before the start of the winter heating season. The plan would be required to address ways the utility could protect customers from volatile fuel costs. The Rockies, as with most of the country, began the winter heating season with working natural gas in storage about 10 Bcf below the five-year average. The region was also hit with an early start to winter. Natural gas prices were as high as $45.385/MMBtu near the end of December, according to NGI’s Daily Price Index for the Rocky Mountain Regional Average.

Wyoming oil and gas production saw a decrease in spills for 2022 - Out of the three top-producing oil and gas states in our region, Wyoming was the only one to report a decrease in spills in 2022. But, some say there is still room for improvement.The Center for Western Priorities, a conservation advocacy non-profit group, recently released an analysis of spill report data for the oil and gas industry in three states – Colorado, New Mexico and Wyoming. Wyoming saw a decrease in liquid spilled by about 40 percent from 2021, with just over a million spills in 2022. The spills include everything from oil to produced water.But, Kate Groetzinger, the Center of Western Priorities communications manager, said there is a caveat.“Although the number of spills per barrel of oil produced in Wyoming has gone down in the past couple of years, the overall number of spills per barrel of oil produced compared to other states is still really high,” Groetzinger said.While the amount of liquid spilled did decrease, the rate at which it happens compared to the number of barrels of oil produced is still high compared to the other two states. For example, New Mexico produces more oil than Wyoming, but the rate at which the spills happen per barrel of oil produced is higher in Wyoming.That is why Ryan McConnaughey, the Petroleum Association of Wyoming (PAW) vice president, said it does not show the whole picture. The actual amount of liquid spilled is still much lower in Wyoming.“All of the spills that occurred last year total less than one-one hundredth of a percent of all of the production in Wyoming,” he said. “So we're talking about a very minute amount of spill, when compared to the total amount of production in Wyoming.”Groetzinger said Wyoming still has room for improvement. For example, in Wyoming, industry self-reports spills, and she would like to see more oversight. She added that she would like to see Wyoming have to report the distance of spills to water sources, which some other states require.“So Colorado is a great example,” she said. “They collect information on the distance of surface water and well water from these spills. So when you've got an oil spill, or toxic produced water spill, near a well or near a place where people are pulling water for livestock, or even human drinking, this can really impact the health of people, livestock and wild animals.

Huntington Beach oil spill settlement wins final approval - A federal judge in Santa Ana signed off final approval of a $50 million settlement of a lawsuit involving the pipeline oil leak that gushed thousands of gallons of crude into the ocean off Huntington Beach in 2021. U.S. District Judge David O. Carter gave final approval to the lawsuit against Amplify Energy. The agreement won preliminary approval in September, but the attorneys and judge waited for any objections before final approval and there were none. Aitken told Carter during the hearing that while they couldn't solve all of the issues that led up to the rupture of the pipeline -- such as where cargo ships are allowed to park off the coast -- but, he added, "We can heighten awareness" to the authorities who can do something about it. Another significant improvement was that when a leak is observed a notice will go out to everyone involved all at once instead of relying on a chain of people, Aitken said. Another key to the settlement is the way claims will be paid out, Aitken said. A system was worked out so that the fishers and other merchants affected by the oil spill will get checks directly without having to fill out a claim form, Aitken said. He said that it was easy to do with the fisheries because "they keep such detailed records." But it will be more challenging in the tourism industry. For hotels it was easier because they can count rooms not rented, but for other small businesses they will have to fill out some sort of claim form and the deadline for that is June 9, so more notices will go out again soon, he said.

Supreme Court deals blow to oil companies by turning away climate cases — The Supreme Court on Monday allowed lawsuits brought by municipalities seeking to hold energy companies accountable for climate change to move forward in a loss for business interests.The court turned away oil company appeals in five cases involving claims brought by cities and municipalities in Colorado, Maryland, California, Hawaii and Rhode Island as part of efforts to hold businesses accountable for the effects of climate change.The relatively narrow legal issue is whether the lawsuits should be heard in state court instead of federal court. Litigants care because of the widely held view that plaintiffs have better chances of winning damage awards in state courts."Big Oil companies have been desperate to avoid trials in state courts, where they will be forced to defend their climate lies in front of juries, and today the Supreme Court declined to bail them out," said Richard Wiles, the president of the Center for Climate Integrity, an environmental group.Business groups expressed disappointment, with Phil Goldberg, a lawyer with the National Association of Manufacturers' legal arm, saying climate issues should be dealt with at the national or international levels."The challenge of our time is developing technologies and public policies so that the world can produce and use energy in ways that are affordable for people and sustainable for the planet. It should not be figuring out how to creatively plead lawsuits that seek to monetize climate change and provide no solutions," he said.The Biden administration urged the court not to hear the case, and in a change to the legal position taken by the Trump administration, it said the lawsuit and others like it should be heard in state courts.Justice Brett Kavanaugh noted in the brief order that he would have taken up one of the cases. Justice Samuel Alito did not participate, most likely because he owns stock in oil companies.

‘Like a dam breaking’: experts hail decision to let US climate lawsuits advance --Cities bringing climate litigation against oil majors welcome US supreme court’s decision to rebuff appeal to move cases to federal courtsThe decision, climate experts and advocates said, felt “like a dam breaking” after years of legal delays to the growing wave of climate lawsuits facing major oil companies.Without weighing in on the merits of the cases, the supreme court on Monday rebuffed an appeal by major oil companies that want to face the litigation in federal courts, rather than in state courts, which are seen as more favorable to plaintiffs.ExxonMobil Corp, Suncor Energy Inc and Chevron Corp had asked for the change of venue in lawsuits by the state of Rhode Island and municipalities in Colorado, Maryland, California and Hawaii.Six years have passed since the first climate cases were filed in the US, and courts have not yet heard the merits of the cases as fossil fuel companies have succeeded in delaying them. In March, the Biden administration had argued that the cases belonged in state court, marking a reversal of the position taken by the Trump administration when the supreme court last considered the issue.The Rhode Island attorney general, Peter Neronha, said his state was now finally preparing for trial after “nearly half a decade of delay tactics” by the industry. A joint statement from the California cities of Santa Cruz, San Mateo and Richmond and Marin county said the oil companies knew the dangers of fossil fuels but “deceived and failed to warn consumers about it even as they carried on pocketing trillions of dollars in profits”.The cases have been compared to tobacco lawsuits in the 1990s that resulted in a settlement of more than $200bn and changed how cigarettes are advertised and sold in the US.“It was a really amazing feeling to see that the supreme court was ruling in a very logical way by continuing with the unanimous decisions that have been made in the previous courts to not [grant petitions for review] and to allow these cases to move forward,” said Delta Merner, lead scientist at the Science Hub for Climate Litigation.“It removes this dam that industry has been building to prevent these cases from being heard on their merits,” she said. “We can finally have the real conversations about what the industry knew and what their actions were despite that knowledge.”

For Many Young Voters, Biden’s Support of Drilling in Alaska Casts Pall - The New York Times — In the past three weeks, President Biden’s administration has proposed regulations to speed the transition to electric vehicles, committed $1 billion to help poor countries fight climate change and prepared what could be the first limits on greenhouse gas emissions from power plants. And yet, many young voters alarmed by climate change remain angry with Mr. Biden’s decision last month to approve Willow, an $8 billion oil drilling project on pristine federal land in Alaska. As the president prepares to announce his bid for re-election, it’s not at all clear that those voters who helped him win in 2020 because of his commitment to climate action will turn out again. Alex Haraus, 25, said he and other young people felt betrayed by the Willow decision, after Mr. Biden had pledged as a candidate that he would end new oil drilling on public lands “period, period, period.” Mr. Haraus, whose videos on TikTok opposing the Willow project amassed hundreds of thousands of views, described his reaction as “mad and frustrated and disappointed.” About a dozen young climate activists interviewed said they were not assuaged by the other actions by the Biden administration, even if they significantly draw down greenhouse gas emissions that are dangerously heating the planet, Mr. Haraus said. What they want, he said, is for the president to rein in oil and gas companies, which enjoyed record profits last year. “I don’t think any of those things encourage people to forgive the Biden administration for projects like Willow,” said Mr. Haraus, who lives outside Chicago. “Young voters see our future getting thrown out the window. We need Biden to take on the industry, otherwise there’s not much for us to hope for.” Young voters overwhelmingly — about 62 percent — support phasing out fossil fuels entirely, said Alec Tyson, an associate director of research at Pew Research Center. There is broad support among registered voters of both parties for a transition to a future in which the United States is no longer pumping carbon emissions into the atmosphere, Mr. Tyson said. But most are not willing to break with fossil fuels altogether, he said.

Private Equity Funds, Sensing Profit in Tumult, Are Propping Up Oil - These secretive investment companies have pumped billions of dollars into fossil fuel projects, buying up offshore platforms, building new pipelines and extending lifelines to coal power plants. As the oil and gas industry faces upheaval amid global price gyrations and catastrophic climate change, private equity firms — a class of investors with a hyper focus on maximizing profits — have stepped into the fray.Since 2010, the private equity industry has invested at least $1.1 trillion into the energy sector — double the combined market value of three of the world’s largest energy companies, Exxon, Chevron and Royal Dutch Shell — according to new research. The overwhelming majority of those investments was in fossil fuels, according to data from Pitchbook, a company that tracks investment, and a new analysis by the Private Equity Stakeholder Project, a nonprofit that pushes for more disclosure about private equity deals.Only about 12 percent of investment in the energy sector by private equity firms went into renewable power, like solar or wind, since 2010, though those investments have grown at a faster rate, according to Pitchbook data.Private equity investors are taking advantage of an oil industry facing heat from environmental groups, courts, and even their own shareholders to start shifting away from fossil fuels, the major force behind climate change. As a result, many oil companies have begun shedding some of their dirtiest assets, which have oftenended up in the hands of private equity-backed firms.By bottom-fishing for bargain prices — looking to pick up riskier, less desirable assets on the cheap — the buyers are keeping some of the most polluting wells, coal-burning plants and other inefficient properties in operation. That keeps greenhouse gases pumping into the atmosphere.At the same time banks, facing their own pressure to cut back on fossil fuel investments, have started to pull back from financing the industry, elevating the role of private equity.The fossil fuel investments have come at a time when climate experts, as well as the world’s most influential energy organization, the International Energy Agency, say that nations need to more aggressively move away from burning fossil fuels, said Alyssa Giachino of the Private Equity Stakeholder Project.“You see oil majors feeling the heat,” she said. “But private equity is quietly picking up the dregs, perpetuating operations of the least desirable assets.”

Exxon scrambles to save investments before Colombia bans fracking (Reuters) - Exxon Mobil Corp is in talks with Colombia's government in hopes of recovering its investment in a fracking pilot project as the U.S. oil major prepares to ditch upstream operations in the Andean country where the government is pushing through a fracking ban, two sources close to the discussions told Reuters.The company had planned to develop the Platero pilot project for hydraulic fracturing, or fracking, eyeing an investment of $53 million, under a contract awarded two years ago. Colombia's congress has been preparing to pass a fracking ban backed by leftist President Gustavo Petro, who took office nearly nine months ago. The proposed bill would ban development of non-conventional energy projects including fracking. It has already passed the Senate and is expected to get final congressional approval in the coming months. The law would leave companies with few options to recoup investments, according to the text of the proposal, including options such as the chance to transfer their investments elsewhere or be awarded rights over other conventional blocks. Exxon is "reviewing the mechanisms to reach a solution regarding the investments for exploring unconventional" energy resources it has in the country, an Exxon source in Colombia told Reuters. "We will continue to have constructive dialogue with the Colombian government on a comprehensive assessment of our unconventional investments," Exxon spokesperson Michelle Gray told Reuters. The term "compensation" does not exist in technical or legal terminology used by the ANH in its processes, the agency said, but Exxon is advancing an "accreditation" process regarding the Platero pilot project. Exxon has held eight exploration and production contracts in Colombia, including the fracking pilot. All either have been or are being ended, suspended or liquidated, Colombia's National Hydrocarbon Agency (ANH) told Reuters.

Transandino Oil Pipeline Bombed In Colombia -The Transandino oil pipeline was bombed on Sunday, Ecopetrol has announced, noting that the 85,000-bpd piece of infrastructure was not carrying oil at the time.Per a Reuters report, the attack on the pipeline has yet to be attributed to any one group but the area where the blast occurred is known for activity from the National Liberation Army, a guerilla group, and FARC—another guerilla army that has rejected a peace deal with the Colombian government.FARC is the biggest guerilla formation in Colombia and although a certain percentage of its members demilitarized after the 2016 deal with the government, the majority remained active.Guerilla activity has had a devastating effect on Colombia’s oil industry, with the head of the country’s industry association estimating back in 2016 that it would take $70 billion to keep the industry going over the ten years to 2026.Meanwhile, the current president of Colombia wants to shrink the country’s oil production in anticipation of peak oil demand and the energy transition. As things stand today, Colombia’s oil industry does not have a very long life anyway, even at current rates of production, which average about 700,000 bpd.Even so, the new chief executive of Ecopetrol said this week that the company plans to improve exploration results by using the latest technology available, including AI. This, according to Ricardo Roa, could boost Colombia’s oil output to 1 million barrels daily, Reuters reported. Recovery rates could improve by at least 2 percent, Roa also said, from the current unimpressive 19 percent.Meanwhile, however, the challenges that guerilla groups pose to infrastructure remain. Ecopetrol loses thousands of barrels of crude from thieves who siphon off crude from the Transandino pipeline to use in the production of cocaine or as fuel for illegal mining, Reuters reported after the latest spill caused by oil theft..

Is Argentina Poised to Become a Regional, Even Global, Natural Gas Energy Hub? - Argentina’s natural gas segment has been transformed by the Vaca Muerta shale formation and the country might well again become a net energy exporter. The country is undergoing a massive natural gas infrastructure buildout in an attempt to make that the case. Vaca Muerta is the second largest shale gas resource on the planet, with an estimated 308 Tcf of dry, wet, and associated shale gas resources, according to the U.S. Energy Information Administration. Executives who spoke at the Latin America Energy Summit in Santiago, Chile, last week, estimated that the first phase of the Nestór Kirchner natural gas pipeline in Argentina is set to come online by late June or early July. It will stretch from the town of Tratayén in Neuquén province to Salliqueló in Buenos Aires province. A second phase should be online by December and would increase takeaway capacity from Vaca Muerta on the line by 22 MMm3/d. A future phase of the project would reverse pipeline flows on the Gasoducto del Norte and allow the country to start supplying the fuel to Bolivia, long the region’s main exporter of natural gas. Bolivia’s resources are dwindling and the country will need to import gas by 2028, according to Alvaro Ríos, director of consultancy Gas Energy Latin America. “There is infrastructure for regional integration and Argentina is going to be the provider,” Ríos said. “The demand is there.” He said that he saw a need for 62-73 MMm3/d of Vaca Muerta pipeline gas in places like Bolivia, the north of Argentina, Brazil and Chile. Argentina would be able to meet Bolivia’s current contractual supplies to Brazil through existing pipelines that are already showing capacity openings, Ríos said. “It’s a very complex situation in Bolivia,” he said. Executives said natural gas production growth in Argentina was being driven by the contract scheme known as Plan Gas which guarantees producers long-term price stability. Javier Di Prisco, regional oil and gas sales manager at Pampa Energía SA, said Plan Gas has been “the principal driver of the Argentine market.” Pampa produces 64,000 boe/d, of which 92% is gas. He said that since the Plan Gas program was instituted in 2021, his company’s production has doubled. “It provides mid-term certainty,” with 60% of Argentine internal demand now under contract. Vaca Muerta production meanwhile keeps breaking records. Natural gas output from Vaca Muerta was 52.4 MMm3/d in February compared to 43 MMm3/d in the same month last year. It now accounts for about 40% of total gas production in Argentina. Overall, natural gas output in Argentina was 129.9 MMm3/d in February compared to 127.3 MMm3/d in February of last year.

Councillors vote for new Lincolnshire oil site – A new oil site got the go-ahead from Lincolnshire councillors, despite local opposition. The site, proposed by IGas near the small village of Glentworth, was granted planning permission to operate for up to 21 years. Seven members of the county council’s planning committee voted in favour, with two abstentions and no opposition. The scheme, for one vertical appraisal well and up to seven production wells, has been opposed by the parish council, local county councillor and villagers. The chairman of Glentworth Parish Council, John Latham, told the meeting in Lincoln: “There is no support whatsoever for this development in the village.” The construction and drilling phases of the scheme, lasting nearly five years, are expected to generate up to 100 lorry movements day, or an average of one every 6 and a half minutes. Cllr Latham described the impact on the village of the 24-hour-a-day drilling phases: “This is nothing less than industrialisation of the countryside with no direct benefit to the village or its residents. Once it is lost it is gone forever and we urge you to refuse [the application].” He said Kexby Road, on the proposed lorry route, was a “quiet country residential road”. It was not a heavily trafficked street that experienced heavy goods vehicles on a regular basis or an industrial area, he said. “We are concerned about the noise, air pollution, vibration and safety. The mental health impact of these 100 lorry movements a day on the residents living on Kexby Road cannot be lightly dismissed.” The increased traffic would have an impact on pedestrians, dog walkers, horse riders and cyclists, he said. The road also had school bus pick-up points. Mr Latham said the IGas proposal contravened two policies in the National Planning Policy Framework: paragraph 152 on supporting the transition to a low carbon future and paragraph 185 on protecting tranquil areas. The meeting heard that 62 people had objected to the proposal. But it was supported by county council planners. The council’s highways department had been concerned about the proposed lorry route. But the meeting heard that IGas had agreed to a legal agreement requiring four new passing places, widening an existing passing place and improvements to the road surface.

Brexit row erupts as Marina Purkiss and Jacob Rees-Mogg clash in fiery exchange on fracking -- Marina Purkiss has clashed with Jacob Rees-Mogg during a fiery debate on culture wars in the UK.Purkiss joined Rees-Mogg on GB News to discuss Oxford University’s LGBTQ+ society calling for feminist Kathleen Stock to be deplatformed, but the debate quickly turned to the larger issue of Brexit and the Government’s delivery of it.Purkiss accused Rees-Mogg and the Conservatives of “lying to people” about what the outcome of Brexit would be, adding “what you lot are doing in government is disgusting”.Rees-Mogg pointed out that Brexit had happened as a result of a democratic vote by the British public. Purkiss asked: “Why are energy bills the highest on the planet?” Rees-Mogg responded: “The energy bills in the UK have gone up because of our green policies, that has led to a very significant increase. It's nothing to do with Brexit.“I was trying to reduce prices by by fracking. By shale gas fracking, using our resources.”Purkiss pushed Rees-Mogg to “tell people how long it would take to get any sort of benefit from fracking” to which he pointed out that the UK is “potentially sitting on trillions of cubic feet of gas underneath us”Rees-Mogg called Purkiss out for not putting forward a “proper political argument”, exclaiming: “All you say when you disagree is that somebody is lying, but this isn't a proper political argument.“You disagree with me, but that's not the same as somebody lying, disagreement is perfectly reasonable.” Watch the debate in full above.

Dutch government confirms plan to halt gas production in Groningen -- The Dutch government said on Tuesday that it will invest 22 billion euros ($24.24 billion) in the earthquake-stricken Groningen region while confirming plans to halt gas production there no later than 2024."This is the last chance to make things right for the people (who live in) the earthquake zone," Netherlands Prime Minister Mark Rutte said at a press conference. "We cannot reverse what went wrong, but we are determined to do things differently." The Groningen field, operated by a joint venture of Shell and Exxon Mobil, still holds massive reserves of natural gas but production has been wound down in the past decade as quakes caused by extraction caused widespread damage and mental anguish.

'Europe may need to cut gas demand by 55bcm to mitigate supply risks' - Europe could be at considerable risk if it fails to immediately cut gas demand by 55 billion cubic metres (bcm) of natural gas. That’s according to new analysis from McKinsey, which suggests there could be a rebound in Asian demand or a further reduction in Russian imports, which could potentially exacerbate the situation. The authors of the report estimate that in the wake of the Ukraine war, a total cease of Russian imports could lead to a 25 bcm reduction in Europe’s supply. Additionally, an increase in Asian LNG demand could lead to a 35bcm reduction while a colder winter could boost European gas demand by 15 bcm. The research also shows that nearly 57% of EU manufacturers would not be able to reduce gas consumption further while maintaining output over the next two years. This could indicate that further gas rationing measures could have a substantial impact on the EU economy. According to the McKinsey report “A balancing act: Securing European gas and power markets,” even if Europe meets its RePowerEU targets to reduce gas consumption and improves energy efficiency across buildings and industry, volatile gas prices and potential supply disruptions still pose a risk to many economic sectors. Namit Sharma, Senior Partner at McKinsey suggests that businesses may need to consider diversifying their energy sourcing and managing demand, investing in natural gas substitutes or storage, and closely monitoring movements in the energy market to mitigate risks. Thomas Vahlenkamp, Senior Partner at McKinsey, added that “If Europe can sustain and accelerate several gas-demand reduction measures, the market is likely to remain balanced without significant price spikes in the coming years.”

Steady Stream of LNG in Europe, Muted Demand in Asia Keeping Lid on Prices – LNG Recap - Sendout at French LNG terminals has returned to normal levels as labor strikes that started early last month have for now ended, boosting European import capacity and helping to keep the lid on natural gas prices there. Eleven cargoes have unloaded at France’s four import terminals over the last week, according to Kpler vessel-tracking data. That’s helped keep a steady stream of liquefied natural gas flowing to the continent, which has also limited the impact of cold weather across much of the continent on natural gas prices. Cold is expected to continue throughout the week, but LNG arrivals are maintaining a record pace at the same time as Russian, Norwegian and Algerian pipeline supplies are steady and storage inventories are strong. Kpler data shows LNG imports are on track to reach 47.72 million tons (Mt) through the first four months of the year, up from 42.94 Mt over the same time in 2022. “Summer is approaching and Europe is in a healthy, safe position as injection season begins, boasting storage levels in the top range of the five-year average,” said Rystad Energy analyst Nikoline Bromander. The May Title Transfer Facility (TTF) contract shed three cents Tuesday, while June inched upward slightly, but both contracts continue to trade below $13/MMBtu. Meanwhile, the glut of cargoes arriving in Northwest Europe has pushed delivered ex-ship (DES) prices there to $1.93 below TTF, according to the latest assessments from Spark Commodities. Similar discounts were seen in Southwest Europe, where Spark assessed DES LNG cargoes at $1.86 below TTF. European natural gas prices still remain high compared to historical averages. As a result, the European Union’s (EU) statistical office said last week that natural gas consumption dropped 17.7% between August 2022 and March, compared with the same period over the previous five years.While EU storage inventories are at 58% of capacity, compared to the five-year average of 38% for this time of year, the pace of injections remains below historical averages. Tudor, Pickering, Holt & Co. said Friday that inventories built by roughly 24 Bcf over the prior week, compared to the five-year average build of 42 Bcf. At this point, the pace would need to accelerate to meet the bloc’s target of filling storage to 90% of capacity by winter. Fears of Asian buyers returning to the market to compete more strongly for cargoes also have the market on edge. The EU’s new tool for aggregating natural gas purchases opened on Tuesday, allowing buyers to submit gas demand projections for the next year that can be met by sellers. The EU is aiming to start joint gas purchases to help fill storage before the summer starts, but it’s targeting just a fraction of the bloc’s overall demand.

Planned LNG terminals could cause 32% of EU CO2 emissions - – A major new study by Greenpeace International finds that EU governments are planning to build so much liquefied fossil gas (LNG) import capacity that, if constructed, it would increase the bloc’s greenhouse gas emissions by up to the equivalent of 950 million tonnes of carbon dioxide (CO2) each year, or 32% of the EU’s total CO2 emissions in 2019. In the report “Who Profits From War – How Gas Corporations Capitalise from War in Ukraine” [1], Greenpeace International tells the entire story of a broken energy system that serves the interests of polluters, not people. The report shows all parts of the system, from the communities that suffer because of fracking in the USA, to the middle-men of the gas industry (the European Network of Transmission System Operators, ENTSO-G) who manipulate and undermine climate and energy policies, to the households who will once again have to pay for it all while fossil fuel companies rake in record profits.The report analyses developments in US-EU trade in LNG. It shows that the USA has plans to double its export capacity while the EU is more than doubling the amount it can- collectively import. Eight new LNG import terminals have already been approved in the EU and 38 more are pending. These developments threaten to create a massive structural over-supply of fossil gas in Europe which will accelerate the climate crisis, create dependencies which weaken European energy security, and create billions of euro worth of stranded assets. Greenpeace EU climate and energy campaigner Silvia Pastorelli said: “The fossil fuel industry has cynically capitalised on the invasion of Ukraine. The middle-men of the gas industry use their scandalous proximity to decision-makers to push for favourable treatment. And politicians go along with them. Is it any wonder that there’s still no phase-out date for fossil gas, or that the EU’s gas demand reduction targets are merely optional? Governments must lead in the climate fight, not be puppeteered by gas operators who sacrifice the health and safety of communities simply to boost their profits.” European countries have banned the controversial gas drilling method of hydraulic fracturing, or “fracking”, at home, yet many EU governments and banks encourage these methods in the USA to satiate European demand for gas. The extraction and transport of LNG in Texas, Louisiana and New Mexico has resulted in worsening air quality, contaminated water, respiratory diseases, birth issues, and elevated cancer rates for communities living near the gas fields and export terminals. Many of the affected communities are predominantly Black, Brown, Indigenous, and have low incomes. John Beard, a community advocate who lives within 10 km of the biggest US export terminal (Sabine Pass LNG), another terminal under construction (Golden Pass LNG), and the Port Arthur LNG project said: “These LNG projects will result in a massive increase of CO2 emissions. This would lead to disastrous consequences for the planet and for people. There is no such thing as ‘freedom’ gas. It comes with a cost. That cost is the lives and health of people in the Gulf South and deadly climate consequences worldwide.”

Greenpeace slams plan to abandon wreckage of offshore rig in Adriatic – Croatia’s national oil and gas company INA announced their plan to permanently abandon the site of the sunken gas platform Ivana D-1 in the northern Adriatic on Monday, leading to opposition from environmentalists. The unmanned platform, located some 50 kilometres off the coast of Pula, sank in an unusually strong storm in December 2020. INA’s largest single shareholder is Hungary’s oil and gas firm MOL which owns 49% of the company, with the Croatian government retaining a 44% stake. The company operates several offshore gas rigs in at least eight gas fields in the northern Adriatic. Ivana D launched operations in January 2001, and the incident which sank the platform in 2020 was the first recorded incident of its kind. According to INA’s press release, an Italian company called CNS was hired to shut down the drilling site and make the wreckage “permanently safe.” This will include nearly 30 divers spending some two months working at a depth of 41 metres to secure the remains of the sunken oil platform and permanently seal off the drill shaft by pouring layers of concrete into it. According to the plan, the wreckage of the sunken 500-tonne rig would be converted into an artificial underwater reef. Although it is not unusual for derelict rigs and ships to serve as artificial reefs providing a habitat for marine life, experts say this is normally done at depths of 50 metres or more. However, Greenpeace Croatia issued a press release in response, questioning the decision’s legality and slamming the plan as “merely a cosmetic solution which allows INA to avoid its obligations,” which they say includes the complete removal of the wreckage. Although INA claims that an automatically activated emergency shutdown has successfully prevented environmental damage or potential gas leakage into the open sea, environmentalist groups and at least some regulators remained unconvinced. According to Greenpeace, at least three Croatian state agencies dealing with maritime affairs have issued opinions arguing for removing the sunken rig, citing “safety, human health, and protection of the marine environment” as key concerns. INA does not seem to have received permission to leave the wreckage at the accident site, Greenpeace added. The group also voiced concern that the case of Ivana D might set a precedent for industrial-scale littering of the Adriatic seafloor.

Deal struck to make sustainable jet fuels mandatory for all EU flights --Every plane departing from an EU airport will have to partially run on green jet fuel from 2025, according to a deal reached by the European Parliament and EU member states late on Tuesday (25 April). The regulation will reduce the carbon footprint of flying by replacing kerosene with cleaner alternatives, according to an announcement by Parliament and the Council of the EU, representing the bloc’s 27 member states. A compromise was reached on issues that had divided the two sides since the so-called ReFuelEU Aviation law was first tabled by the European Commission in July 2021: the percentage of green jet fuel that must be uplifted and the type of feedstocks permissible for the production of sustainable aviation fuels (SAF). Under the final agreement, the percentage of SAF that must be blended with kerosene will start at 2% by 2025, moving to 6% by 2030, 20% by 2035, 34% by 2040, and reaching 70% by 2050. A dedicated sub-target for synthetic fuels derived from green hydrogen will also come into force from 2030. Starting at 1.2%, this will be scaled up to 5% by 2035, reaching 35% by 2050. Parliament had originally pushed for an 85% share of SAF by 2050, while the Council stuck with the Commission’s proposal of 63%. As of 2025, an EU “eco label” will also be added to flights, outlining the carbon footprint of the journey. Revenues from fines for non-compliance with the new rules will be funnelled into researching the production of innovative forms of SAF. The European Commission is also required to prepare a report by 2027, and then every four years, examining the impact of the regulation on the fuel market, and the competitiveness and connectivity of the EU’s aviation sector.

Faroe Islands warns Denmark not to probe Russian ships’ presence --It is up to the Faroe Islands to react to the presence of Russian fishing ships in its harbours, Faroese Foreign Minister Høgni Hoydal warned Copenhagen following accusations that Russian fishing ships docking there were being used for espionage. The Faroe Islands are an autonomous territory of Denmark, with its own government and legal system, but are still part of Denmark. Copenhagen is responsible for the Faroe Islands’ foreign affairs and defence, but they have the right to negotiate international agreements in areas of their competence, namely regarding trade and fishing. “The Faroe Islands are fully capable of assessing what is happening in their territory,” said Faroese Foreign Minister Høgni Hoydal. Hoydal’s statement came after a group of Nordic media reported that two Russian fishing vessels with military radio equipment on board were discovered to have docked more than 200 times in Faroese harbours between 2015 and 2022. These ships are suspected of having been used for espionage. Søren Pape Poulsen, leader of the opposition Danish Conservative Party, declared that the ships carrying Russian military equipment fall under the foreign and security policy areas and are, therefore, a matter to be dealt with by Copenhagen. In his own words, he is “completely indifferent” to the fisheries agreements the Faroe Islands have with Russia and wants the Faroe Islands to put an immediate stop to the docking and presence of all Russian ships. However, the Faroese chair of the Faroese government’s foreign affairs committee disagreed and declared that statements like Søren Pape’s could be seen as an attempt to disable democracy in the Faroe Islands by trying to make Russian ships in the Faroese seas a Danish matter. “I would say to Søren Pape that we know this automatic reaction, where you play the imperial card, and I can’t quite see what good it does,” he told P1 Morgen Monday morning, adding that “the rumours about the Faroe Islands’ naivety in major political matters and in the world situation we are in are greatly exaggerated.”

With Russia's role in the global energy system falling, a select few nations are set to benefit -Russia's role as a global energy player is set to diminish, and the U.S. and Qatar are among a slew of nations ready to fill its shoes, analysts told CNBC. "Russia's global LNG supply share will almost certainly decline this decade," Henning Gloystein, a director for energy, climate, and natural resources at political consultancy Eurasia Group told CNBC. He noted that its role in the liquefied natural gas space was retreating even before the country's invasion of Ukraine last year. Western sanctions, which resulted from the onslaught of its neighbor, further sapped most foreign investment out of Russia's LNG sector. Russia's inability to purchase liquefaction modules (which enable natural gas to be converted into LNG) will hamper its ambitions, said the Director of South and Southeast Asia Gas of S&P Global Commodity Insights, Zhi Xin Chong. "In this decade, it will be extremely challenging for Russia to expand its liquefaction capacity given the broad sanctions that have been imposed on the country," Chong said in an e-mail. He added that the total capacity for Russia's LNG facilities to produce natural gas will remain flat at 37 million tons over the next few years. By 2030, the total global LNG capacity will grow by 50% to 671 million tons per year — and Russia's share of this pie is expected to fall to 5% from the current 6.7%, S&P further projects. In 2021 before its invasion of Ukraine, Russia was the world's largest gas exporter, as well as the fourth largest LNG exporter after Australia, Qatar and the U.S. And these countries are expected to fill the gas gap — alongside others. "We're going to see much more emphasis on other places like the U.S., Mozambique and Australia," Chong said. In the first half of 2022, the U.S. overtook Qatar and Australia to become the world's largest LNG exporter, according to the Energy Information Administration, citing data from not-for-profit organization Cedigaz. By 2030, Chong expects the U.S. to take up 25% of global LNG capacity, and Qatar to make up 19%. Eurasia's Henning also cited the U.S. and Qatar as being the "main beneficiaries" as Russia falls back from the world's LNG ecosystem. "New projects and expansions to existing facilities in the U.S. as well as Qatar's massive North Field expansion have been significantly accelerated as Europe piled into the LNG market last year," he said. Asides from the U.S. and Qatar, the Eastern Mediterranean is also on his list as the region is geographically well suited to replace Russian pipeline gas to southern European countries, especially Italy, Greece and Croatia.

Global refinery margins lose steam as Russian oil finds new outlets --Global diesel margins have slumped by about half since February, dragging on refiners' profits, as Russian exports continue despite sanctions, helping output from China and India reach all-time highs in March. Western sanctions and price caps on Russian crude and oil products introduced in December and February had been expected to tighten oil supplies globally. However, Russia continues to ship out low-cost oil, enabling its biggest clients - India and China - to boost their refining output and exports. Russian oil products, meanwhile, are being sent in high volumes to oil hubs to be stored and re-exported worldwide. In addition, several new refining complexes are coming online this year in the Middle East and China, churning out more oil products for export and further depressing refining margins. India's Reliance Industries, operator of the world's largest refining complex, said in its earnings call on Friday gasoil margins dropped as Russian diesel supplies have remained firm, while an unusually mild winter in Europe led to a build-up in inventories. Demand for gasoil to replace natural gas in power generation has also fallen after spot liquefied natural gas (LNG) prices eased from all-time highs, the company said.

India Accounted For 70% Of Urals Shipments In April India's oil importers sometimes experience delays in paying for the Russian crude when it's above the $60 a barrel price cap set by the G7, but most of the current Indian imports from Russia are priced below that cap, a senior Indian official said on Monday. "Nobody stops us from buying Russian oil at above the price cap level provided. We are not using western service," India's oil secretary Pankaj Jain said at an event as carried by Reuters. The EU and G7 banned on December 5 maritime transportation services, including insurance and funding, from shipping Russia's crude oil to third countries if the oil is bought above the price cap of $60 per barrel. India and the other key Russian oil buyer, China, haven't joined the so-called Price Cap Coalition of mostly Western nations that imposed the price cap on Russia's crude oil if the cargoes are using Western insurance, shipping, and financing. In case of purchases above the $60 price cap, Indian importers are arranging themselves the payment settlements, the Indian oil secretary said. India will buy the oil it consumes from "wherever we have to" if the economics are beneficial for the country, Indian Oil Minister Hardeep Singh Puri told CNBC earlier this year."Today we feel confident that we'll be able to use our market to source from wherever we have to, from wherever we get beneficial terms," the minister said. So far this month, India and China have snapped up Russian cargoes at prices above the price cap, according to Reuters estimates on trading source data. India is estimated to account for over 70% of the Urals shipments in April, and China is receiving 20% of those shipments so far this month, according to Reuters estimates.

Russian oil slashes OPEC's share of Indian market to 22-year low -OPEC's share of India's oil imports fell at the fastest pace in 2022/23 to the lowest in at least 22 years, as intake of cheaper Russian oil surged, data obtained from industry sources show, and the major producers' share could shrink further this year. Members of the Organization of the Petroleum Exporting Countries (OPEC), mainly from the Middle East and Africa, saw their share of India's oil market slide to 59 per cent in the fiscal year to March 2023, from about 72 per cent in 2021/22, a Reuters analysis of the data that dates back to 2001/02 showed. Russia overtook Iraq for the first time to emerge as the top oil supplier to India, pushing Saudi Arabia down to No. 3 in the last fiscal year, the data showed. OPEC's share shrank as India, which in the past rarely bought Russian oil due to high freight costs, is now the top oil client for Russian seaborne oil, rejected by Western nations following Moscow's invasion of Ukraine in February 2022. India shipped in about 1.6 million barrels per day (bpd) of Russian oil in 2022/23, the data showed, about 23 per cent of its overall 4.65 million bpd imports. The decision by OPEC and their allies, a group known as OPEC+ to cut production in May could further squeeze OPEC's share in India, the world's third largest oil importer, later this year if Russian supplies stay elevated. "Russian crude is already cheaper than the similar Middle Eastern grades and it seems OPEC is harming itself by a reduction in output," said Refinitiv analyst Ehsan Ul Haq. "It will further erode its market share in Asia." Higher intake of Russian oil boosted the share of Commonwealth of Independent States (C.I.S.) countries to a record 26.3 per cent, and reduced that of Middle Eastern and African nations to a 22-year low of 55 per cent and 7.6 per cent, respectively. In 2021/22, Middle East's share was 64 per cent while Africa's was 13.4 per cent, the data showed. Latin America's share declined to a 15-year low of 4.9 per cent in 2022/23. India's oil imports in 2022/23 rose 9 per cent from a year earlier, as state refiners cranked up runs to meet rising local fuel demand after private refiners turned to exports instead of selling fuel at below-market rates domestically, the data showed. Local refiners together processed about 6 per cent more crude in 2022/23 at about 5.13 million bpd, government data show.

Assam: IGGL completes Asia’s largest underwater hydrocarbon pipeline across the Brahmaputra river to connect Majuli with Jorhat - The Indradhanush Gas Grid Limited (IGGL) has completed the largest underwater hydrocarbon pipeline in Asia (24-inch diameter and above), which is also the second longest in the world and connects the river island Majuli with Jorhat in Assam. Horizontal Directional Drilling (HDD) was used to successfully carry out the difficult task of constructing the pipeline beneath the mighty Brahmaputra river, marking the achievement of a significant milestone in the building of the North East Gas Grid (NEGG), which connects North East India to the National Gas Grid. The total length of the pipeline in this single HDD crossing is 4,080 meters across the main water channel of the Brahmaputra River. It was laid after overcoming several obstacles, many of which were caused by monsoon rains and flooding. In order to complete this one-of-a-kind river crossing, two HDD rigs simultaneously began drilling from opposite sides of the Brahmaputra, with the junction of the two drilling heads taking place at 30 meters below the river bed. The Brahmaputra River HDD crossing spans a total of 5,780 meters when all major and smaller water channels are taken into account. The pipeline was installed in three distinct portions that are 1000 M, 4080 M, and 700 M in length, with the first and third parts already finished. The engineers and workers were seen celebrating and congratulating one another on completing the herculean task.

Global Shipping Is Under Pressure to Stop Its Heavy Fuel Oil Use Fast – That’s Not Simple, but Changes Are Coming -Most of the clothing and gadgets you buy in stores today were once in shipping containers, sailing across the ocean. Ships carry over 80% of the world’s traded goods. But they have a problem – the majority of them burn heavy sulfur fuel oil, which is a driver of climate change.While cargo ships’ engines have become more efficient over time, the industry is under growing pressure to eliminate its carbon footprint.The European Union Parliament this year voted to require an 80% drop in shipping fuels’ greenhouse gas intensity by 2050 and to require shipping lines to pay for the greenhouse gases their ships release. The International Maritime Organization, the United Nations agency that regulates international shipping, also plans to strengthen its climate strategy this summer. The IMO’s current goal is to cut shipping emissions 50% by 2050. President Joe Biden said on April 20, 2023, that the U.S. would push for a new international goal of zero emissionsby 2050 instead.We asked maritime industry researcher Don Maier if the industry can meet those tougher targets.Why Is It So Hard for Shipping to Transition Away from Fossil Fuels?Economics and the lifespan of ships are two primary reasons.Most of the big shippers’ fleets are less than 20 years old, but even the newer builds don’t necessarily have the most advanced technology. It takes roughly a year and a half to come out with a new build of a ship, and it will still be based on technology from a few years ago. So, most of the engines still run on fossil fuel oil.If companies do buy ships that run on alternative fuels, such as hydrogen, methanol and ammonia, they run into another challenge: There are only a few ports so far with the infrastructure to provide those fuels. Without a way to refuel at all the ports that a ship might use, companies will lose their return on investment, so they will keep using the same technology instead.

Oil-spill damage could reach P7B | The Manila Times -- DAMAGE to the environment caused by the oil spill in Oriental Mindoro may reach P7 billion, Environment Secretary Antonia Yulo-Loyzaga said on Wednesday. In an interview with ANC's Headstart, Loyzaga said the amount was based on an initial calculation by the Department of Environment and Natural Resources (DENR) of the damage to exposed areas including mangroves, seagrasses, coral reefs and fisheries. "The possible exposure area for us is about P7 billion," she said, referring to the damage caused by the sinking of MT Princess Empress. "What we have to do now is verify on the ground how much of these reefs have actually been touched by the oil, how many of the mangroves have actually been destroyed and how much of the seagrasses have actually been affected," she said. Loyzaga mentioned that one of the important things being considered now is that the oil is being moved not just by the wind, but also by the current. Based on projections of the UP Marine Science Institute, using maps provided by the US National Oceanic and Atmospheric Administration, oil is moving toward the Verde Island Passage. Verde Island is situated along the bodies of Verde Island Passage (VIP) between the islands of Batangas and Mindoro, a declared marine reserve and recognized as the center of global shore-fish biodiversity. According to the DENR-Biodiversity Management Bureau (BMB), the estimated P7 billion potential damage include the overall area of all the three habitats in the affected provinces. "The actual value of the habitats affected by the spill will rely on ground validation, thorough habitat impact assessments and further economic valuation exercises," the DENR-BMB said, adding that the actual value of affected environmental areas will be determined once the oil spill has been "permanently contained and terminated." Meanwhile, Loyzaga said the DENR will need to "actually go underneath and verify" once it is safe to dive in waters severely affected by the oil spill. "We're not allowed to fish in the area. We're also not allowed to dive yet, but we want to do that immediately because we want to observe what the physical impacts are," she added. The Environment chief explained the role of the DENR in the oil spill containment. "The DENR is responsible for offshore and nearshore contamination and impacts," she said. "The general operation is legally under the direction of the Philippine Coast Guard. So they are onsite right where the source is happening. We are left to actually work on the forensics, what is happening, where the hazards are going, what will be affected, and our area is nearshore and offshore," Loyzaga added. The MT Princess Empress tanker was carrying 800,000 liters of industrial oil when it sank off the coast of Naujan, Oriental Mindoro, on Feb. 28, 2023.

IMO Asks States For Equipment For FSO Safer Oil Spill --The IMO is urging Member States to contribute equipment to help UN-led efforts to prevent a possible catastrophic oil spill from the FSO Safer, an ageing and rapidly decaying floating storage offshore (FSO) unit moored 4.8 nautical miles off the Red Sea coast of Yemen. A converted super tanker, the FSO Safer contains an estimated 150,000 metric tonnes (approximately 1.1 million barrels) of crude oil, four times the amount spilled during the Exxon Valdez incident in 1989. It has been moored at Ras Isa since 1988 where it had been receiving, storing and exporting crude oil flowing from the Marib oil fields. But in 2015, due to the war in Yemen, production, offloading and maintenance operations were suspended. FSO Safer has not been inspected since then, but all assessments of its structural integrity suggest it has now deteriorated to the extent that it is beyond repair, and at imminent risk of breaking up or exploding. The danger is of a significant oil spill that would surpass Yemen’s capacity and resources to effectively respond. One critical gap identified in Yemen’s preparedness to respond to an oil spill is the lack of specialized equipment within the country. Because of lengthy lead times for the manufacture and acquisition of oil spill response equipment, the IMO is seeking contributions of used or near end-of-life spill response equipment that can be transported to the region within weeks. An indicative list of the required equipment annexed to Circular Letter No.4714 includes items for the containment and recovery and the resource protection aspects of the operation, such as booms to contain any spill and oil skimmer brushes, as well as oil dispersants and rapid erection, self-standing storage tanks. The IMO is providing expertise in oil spill preparedness and response in line with its mandate set out in the International Convention on Oil Pollution Preparedness, Response and Co-operation (OPRC). An oil spill from the FSO Safer would be a major humanitarian and environmental disaster likely to heavily impact the north-western coastline of Yemen, including the Yemeni Islands in the Red Sea, and Kamaran Island in particular - an area that encompasses vulnerable ecosystems. There is also potential for oil to drift and impact neighbouring countries, including Djibouti, Eritrea and Saudi Arabia. Many Yemeni coastal communities that could be affected already rely on humanitarian aid to meet their basic needs, and a significant oil spill would seriously impact on the health and livelihoods of the people relying on resources from the sea. It could also severely disrupt operations at Yemen’s Hudaydah port, the point of entry for essential imported food, fuel and life-saving supplies. UNDP estimates the cost of clean-up alone would be $20 billion.

Sudan’s Conflict has its Roots in three Decades of Elites fighting over Oil and Energy - Sudan stands on the brink of yet another civil war sparked by the deadly confrontation between the Sudan Armed Forces of General Abdelfatah El-Burhan and the Rapid Support Forces of Mohamed Hamdan Dagalo (“Hemedti”).Much of the international news coverage has focused on the clashing ambitions of the two generals. Specifically, that differences over theintegration of the paramilitary Rapid Support Forces into the regular army triggered the current conflict on April 15, 2023.I am a professor teaching at Columbia University and my research focuses on the political economy of the Horn of Africa. A forthcoming paper of mine in the Journal of Modern African Studies details the strategic calculus of the Sudan Armed Forces in managing revolution and democratisation efforts, today as well as in past transitions. Drawing on this expertise, it is important to underline that three decades of contentious energy politics among rival elites forms a crucial background to today’s conflict.The current conflict comes after a decade-long recession which has drasticallylowered the living standards of Sudanese citizens as the state teetered on the brink of insolvency.Long gone are the heady days when Sudan emerged as one of Africa’s top oil producers. Close to 500,000 barrels were pumped every day by 2008. Average daily production in the last year has hovered around 70,000 barrels.In the late 1990s, amid a devastating civil war, President Omar Al-Bashir’s military-Islamist regime announced that energy would help birth a new economy. It had already paved the way for this reality, ethnically cleansingthe areas where oil would be extracted. The regime struck partnerships with Chinese, Indian and Malaysian national oil companies. Growing Asian demand was met with Sudanese crude. Petrodollars poured in. Billions of dollars were channelled to the construction and expansion of several hydro-electric dams on the Nile and its tributaries. These investments intended to enable the irrigation of hundreds of thousands of hectares. Food crops and animal fodder were to be grown for Middle Eastern importers. Electricity consumption in urban centres was transformed; production in Sudan was boosted by thousands of megawatts. The regime spent more than US$10 billion on its dam programme. That’s a phenomenal sum and testament to its belief that the dams would become the centrepiece of Sudan’s modernised political economy.Then, in 2011, South Sudan seceded – along with three-quarters of Sudan’s oil reserves. This exposed the illusions on which these dreams of hydro-agricultural transformation rested. The regime losthalf of its fiscal revenues, and about two-thirds of its international payment capacity.The economy shrank by 10%. Sudan was also plagued by power cuts as the dams proved very costly and produced much less than promised. Lavish fuel subsidies were maintained but as evidence shows, these disproportionately benefited select constituencies in Khartoum and failed to protect the poor. Amid these overlapping energy, food and political crises, Sudan’s Armed Forces and Rapid Support Forces have been violently competing for control of the political economy’s remaining lucrative niches, such as key import-export channels. Both believe the survival of their respective institutions is essential to preventing the country from descending into total disintegration. In view of such contradictions and complexity, there are no easy solutions to Sudan’s multiple crises. The political, economic and humanitarian situation is likely to worsen further.

Four Scenarios That Could Send Oil Prices To $200 -It was the talk of the town last year. Traders bet on oil hitting $200 by March this year. Hedge fund managers warned it could even reach $250 before 2022 was over. None of that happened, and in hindsight, it’s easy to see why: global oil markets have time and again proved they are a lot more resilient than traders give them credit for. But is oil at $200 still a possibility? It always is, under certain scenarios.

• #1 Major Ukraine escalation. It was because of Russia’s invasion of Ukraine last year that people started talking about $200. Pierre Andurand went even further, warning that oil could rise to $250 because “I think we’re losing the Russian supply on the European side for ever.” It turned out that the European side is not losing Russian supply but is simply getting it through third countries now, so that’s saved the global economy from a major oil price-induced headache. Oil always finds a way. Yet a major escalation in the conflict, possibly through more direct NATO involvement, could send prices flying high.
• #2 More OPEC+ cuts. As far as chances go, this scenario is less likely than the first one. To get prices to $200, OPEC+ would need to cut much deeper, but more importantly, the group would have to want it. It doesn’t. Because $200 is way too high a price, and it would sap demand. OPEC+ has suggested with its latest moves that its sweet price spot is around $80-90 per barrel, so it is trying to keep prices around that level.
• #3 Russia production cuts. All the $200-per-barrel forecasts from last year had to do with Russian oil. Most forecasters who saw oil rising to $200 cited European and U.S. bans on Russian oil imports as the basis for their forecasts, and at the time, it did seem like a sound basis. Of course, those forecasts never considered the option that Russia would simply switch buyers and Europe and the U.S. would switch sellers, which is exactly what happened. Whatever the case with those cuts, the simple fact is that Russia can reduce its production deliberately. And if it does, prices will jump.
• #4 Underinvestment comes to bite. The scenarios outlined so far are more of a mental exercise than realistic scenarios. None of them are particularly likely, even though at least a couple seemed so likely they made traders buy $200 Brent options. Yet there is one more scenario that is a realistic one. It’s not as bombastic as a war, but that makes it all the more dangerous. It is the scenario where consistent underinvestment shrinks supply so much, that prices have nowhere to go but up. Saudi Arabia has been warning about it. U.S. shale producers have been warning about it. And the G7 just declared they would fight “unabated fossil fuels,” which essentially means discouraging more oil and gas production.

Oil prices fall 1 percent on uncertainty over global outlook, rate hikes Oil prices fell more than 1% on Monday as concerns about rising interest rates, the global economy and the outlook for fuel demand outweighed support from the prospect of tighter supplies on OPEC+ supply cuts. Brent crude slipped 91 cents, or 1.11%, to $80.75 a barrel by 0627 GMT, while U.S. West Texas Intermediate crude was at $76.96 a barrel, also down 91 cents, or 1.17% lower. Both contracts fell more than 5% last week, their first weekly drop in five, as U.S. implied gasoline demand fell from a year ago, fuelling worries of a recession at the world's top oil consumer. Weak U.S. economic data and disappointing corporate earnings from the tech sector sparked growth concerns and risk aversion among investors, CMC Markets analyst Tina Teng said. The stabilising U.S. dollar and climbing bond yields are also adding pressure on commodity markets, she added. Central banks from the United States to Britain and Europe are all expected to raise interest rates when they meet in the first week of May, seeking to tackle stubbornly high inflation. China's bumpy economic recovery from COVID-19 also clouded its oil demand outlook, although Chinese customs data showed on Friday that the world's top crude importer brought in record volumes in March. China's imports from top suppliers Russia and Saudi Arabia topped 2 million barrels per day (bpd) each. Still, refining margins in Asia have weakened on record production from top refiners China and India, curbing the region's appetite for Middle East supplies loading in June. Nevertheless, analysts and traders remained bullish about China's fuel demand recovery towards the second half of 2023 and as additional supply cuts planned by OPEC+ - the Organization of the Petroleum Exporting Countries and allied producers including Russia - from May could tighten markets. "Planned output cuts by the OPEC+ alliance and a strong demand outlook from China could provide a fillip to prices in the coming days, where Brent is likely to find key support around $79 a barrel, while for WTI crude support is aligned at $75 a barrel,"

Oil Edges Up After the Vast Weekly Loss | Rigzone - Oil recouped some of last week’s slump in lower-volume trading as many investors took a pause while awaiting further clues to demand. West Texas Intermediate rose to trade near $79 a barrel, swinging in a $2.50 range during a volatile session throughout the day. Last week, the commodity experienced the biggest weekly drop since the banking crisis in March amid signs of shrinking refining margins in Asia. “There are a lot of traders sitting on the sidelines trying to figure out a direction,” “Traders are looking for a dip to get into; if we hold $75, we can start making a way higher.” Crude has wiped out nearly all of the rally seen earlier this month after the Organization of Petroleum Exporting Countries and its allies announced surprise new production cuts. Citigroup Inc. said it was taken aback by the magnitude of the pullback in Asian refining margins, which is partly attributable to the ramp up of new Middle Eastern refineries. WTI for June delivery rose 89 cents to settle at $78.76 a barrel at 3:13pm in New York. Brent for June settlement rose $1.07 to $82.73 a barrel. Later this week, the Federal Reserve will release the last of its major reports on US jobs, inflation and consumer spending before its May policy meeting. Additionally, some of the world’s biggest oil majors, including Chevron and Exxon, will report their first-quarter earnings on Friday.

The Oil Market Traded Lower on Tuesday After Two Sessions of Gains The oil market traded lower on Tuesday after two sessions of gains as concerns over the global economic outlook and a firmer dollar countered optimism about demand in China. The oil market posted a high of $79.07 in overnight trading. However, as the market failed to test its resistance at its previous high of $79.18, the market erased its gains and sold off more than $2 as it posted a low of $76.50 by mid-morning. The market was weighed down by the strength in the dollar amid worries about corporate earnings and the global economy. The market later bounced off its low and retraced some of its losses ahead of the close. The June WTI contract settled down $1.69 at $77.07 and the June Brent contract settled down $1.96 at $80.77. The product markets also ended the session lower, with the heating oil market settling down 7.99 cents at $2.4511 and the RB market settling down 4.32 cents at $2.5886. S&P Global Commodity Insights is estimating global refinery capacity offline will be reduced by 50,000 b/d to 8.3 million b/d for the week ending April 21st, as a result of the recent restarts in the U.S. and Europe. Motiva Enterprises plans to restart a 54,000 bpd coker at its 626,000 bpd Port Arthur, Texas refinery on Wednesday. The unit had nearly completed restarting on April 19th when a malfunction shut it down.Platts is reporting that PDVSA’s 955,000 b/d Paraguana Refining Center was operating at just 150,000 b/d or 15.7% of its capacity as of April 24th, down 6.1% from the previous week. Low crude oil inventories and unscheduled plant shutdowns were reportedly behind the reductions.Colonial Pipeline Co is allocating space for Cycle 26 on Line 1, its main gasoline line from Houston, Texas to Greensboro, North Carolina. The current allocation is for the pipeline segment north of Collins, Mississippi. Colonial Pipeline Co is also allocating space for Cycle 26 shipments on Line 2, its main distillate line from Houston, Texas to Greensboro, North Carolina. This allocation is for the pipeline segment north of Collins, Mississippi. Refinitiv clean products analyst, Raj Rajendran, said gasoline shipments across the Atlantic originating from Northwest Europe rebounded in April after hitting a nearly three-year low in March, adding that shipments to West Africa have been hit by lower demand and remain well-supplied from shipments last month. Transatlantic and West Africa-bound shipments stand at 1.27 million metric tons so far in April, down from 1.79 million metric tons exported last month and 1.84 million metric tons shipped this month in 2022. Separately, according to Refinitiv data, diesel exports to Europe are set to increase to 7.37 million tons in April, their highest since January. Exports from the East for arrival in April are set to reach a new record high of 4.39 million tons.

WTI Oil Falls to 3-Week Low on Signs of US Consumer Pullback -- Oil futures fell sharply in afternoon trading Tuesday, sending West Texas Intermediate to the lowest settlement since March 31. The decline came on fresh signs U.S. consumers are pulling back on spending ahead of the summer travel season. The U.S. consumer confidence index fell to a nine-month low 101.3 in April, reflecting persisting worries over a recession and concern over the labor market. "Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months. They also expect fewer jobs to be available over the short term," said Ataman Ozyildirim, senior director of economics at The Conference Board. Interestingly, April's decline in consumer confidence reflects a deterioration in the outlook for consumers under 55 years of age and for households earning $50,000 and over. U.S. macroeconomic data for the month of April have been mixed so far, showing marginal rebounds in regional manufacturing activity but a broader pullback in consumer spending. The Dallas Federal Reserve's Manufacturing Survey released Monday showed industrial activity in the region turned choppy in April after a slight upswing recorded in the prior month, with business outlook remaining deeply negative. In a note released Monday, Goldman Sachs said American households continue to rapidly draw down excess savings to offset inflationary pressures, and that is being one of the major factors depressing overall economic growth. The investment bank forecasts U.S. GDP growth to ease to 0.6% for the second and third quarters before rebounding slightly to 0.9% in the final three months of the year. At settlement, NYMEX June WTI futures fell $1.69 to $77.07 per bbl, while international crude benchmark ICE Brent futures for June delivery declined $1.96 to $80.77 per bbl. NYMEX May RBOB futures eroded to $2.5886 per gallon, down $0.0432, and May ULSD futures dropped back $0.0799 to $2.4511 per gallon.

Oil Prices Slip As Banking Fears Return --Oil prices dropped early on Wednesday after another banking sector scare and after U.S. consumer confidence fell for the third time in four months. As of 8:00 a.m. EDT on Wednesday, ahead of the EIA’s weekly inventory report, the U.S. benchmark WTI Crude was trading down by 0.47% at $76.71. The international benchmark, Brent Crude, was barely hanging onto the $80 a barrel level – Brent was down by 0.85% on the day at $80.09.Oil continued the slide from Tuesday when prices fell by 2% to the lowest level so far this month. Prices were dragged down by renewed concerns about the U.S. banking sector after California-based lender First Republic spooked the financial markets on Tuesday, saying it had lost 40% of its deposits in the first quarter. First Republic shares plunged by 49% on Tuesday, reigniting fears of another banking sector crisis after the collapse of SVB in March. A stronger U.S. dollar also weighed on oil prices on Tuesday. Estimates provided by the American Petroleum Institute (API) of a large crude oil draw and a drop in gasoline inventories failed to offset fears about the economy. U.S. consumer confidence declined in April to 101.3, down from 104.0 in March, the Conference Board said on Tuesday, the third drop in consumer confidence in four months. “Consumers became more pessimistic about the outlook for both business conditions and labor markets. Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board. “The oil market has already seen a fair amount of weakness over the last week as falling refinery margins raised concern about demand,” ING strategists said on Wednesday. “With little in the way of oil-related releases this week, oil price direction is likely to continue to be dictated by external drivers,” they added.

WTI Bounces Off OPEC+ Lows As SPR Draws Down For 4th Straight Week - Oil prices are extending losses once again as weak durable goods (under the hood) and growing banking crisis fears prompted WTI to erase all of the post-OPEC+ production-cut gains.“Concerns about the outlook for demand seem to be the main culprit” for lower prices in recent days, and are countering the effects of lower OPEC+ output, “For the market in general, including the oil market, it’s now wait-and-see before next week’s Fed and European Central Bank meetings which will set the tone.”For now, confirmation of API's large crude draw could trigger a rebound off this key support level...API

• Crude -6.083mm (-700k exp)
• Cushing +465k
• Gasoline -1.919mm (-700k exp)
• Distillates +1.693mm (-400k exp)

DOE

• Crude -5.05mm (-700k exp, BBG -3.6mm whisper)
• Cushing +319k
• Gasoline -2.408mm (-700k exp)
• Distillates -577k (-400k exp)

The official data confirmed API's report of a large crude draw last week (and we also saw product inventories drawdown once again). Stocks at the Cushing hub rose for the first time in 8 weeks...The Biden admin drew down from the SPR for the 4th straight week...The so-called "adjustment factor" on crude stocks jumped again...why is the adjustment 'always' to the upside?Graphics Source: Bloomberg. US crude production was flat at 12.2mm b/d despite the trend lower in rig counts...WTI was trading around $76 ahead of the official print, having erased all of the post-OPEC+ production-cut gains... And bounced higher after the official data reported the draws...

The Oil Market Continued to Trend Lower on Wednesday, Extending the Losses Seen During Tuesday's Session The oil market continued to trend lower on Wednesday, extending the losses seen during Tuesday’s session as weak economic data raised concerns over a recession. The market retraced some of its previous losses in overnight trading as it traded to a high of $77.93. However, the market erased its gains and sold off sharply to a low of $74.05 ahead of the close after completely backfilling its gap from early this month at $75.83. The market retraced almost 50% of its move from a low of $64.58 to a high of $83.38 as it extended its losses in afternoon trading. The oil market was pressured despite the EIA report showing draws across the board, with a larger than expected draw in crude stocks of over 5 million barrels. Demand concerns and renewed recessionary fears overshadowed the supportive EIA report. The June WTI contract settled down $2.77 at $74.30 and the Brent contract settled down $3.08 at $77.69. The product market ended the session in negative territory, with the heating oil market settling down 7.81 cents at $2.3730 and the RB market settling down 3.92 cents at $2.5494. The EIA reported that U.S. product supplied of gasoline increased in the latest week to the highest level since December 2021. U.S. product supplied increased by 992,000 bpd to 9.51 million bpd in the week ending April 21st. The EIA also reported that crude oil stocks held in the SPR fell by 5.1 million barrels on the week to 460.9 million barrels, the lowest level since October 1983.Russian Deputy Prime Minister Alexander Novak said that OPEC+ remains an efficient tool for coordination on global oil markets and added that there are risks to energy security without OPEC+. He said the group was not regulating oil prices but rather was closely watching the balance of supply and demand. He said that he hoped there would be an opportunity for in-person meetings of the OPEC+ oil-producing group. He said that reaching agreement among the organization's membership was sometimes difficult. Separately, Russia’s Deputy Prime Minister said that the Russian energy sector had successfully coped with severe Western sanctions imposed on it after Moscow launched what it calls a "special military operation" in Ukraine on February 24, 2022. He said that 20% of Russian oil previously supplied to Europe had been rerouted to other markets such as Asia, showing the resiliency of its energy sector. He said the total balance of oil supply and demand has not changed.IIR Energy reported that U.S. oil refiners are expected to shut in about 1.08 million bpd of capacity in the week ending April 28th, increasing available refining capacity by 34,000 bpd. Offline capacity is expected to fall to 479,000 bpd in the week ending May 5th.The Association of American Railroads reported that its weekly railcar loadings on major U.S. railroads in the week ending April 26th increased by 5.1% on the year to 240,584. It reported that the number of railcar loadings transporting petroleum and petroleum products fell by 2.3% on the year to 9,855.

Oil Shrugs Bullish EIA Report, WTI Slides below $75 a Bbl -- Oil futures fell sharply in afternoon trading Wednesday, with both crude benchmarks erasing all OPEC-fueled gains as traders look to deterioration in refining margins over the last few weeks that have prompted some refiners in Asia and European Union to lower processing rates. West Texas Intermediate and Brent crudes have now erased all the gains triggered by the OPEC+ decision to cut oil production by nearly 1.6 million bpd beginning next week. Concerns over the demand outlook and health of the global economy seem to be driving oil prices lower, countering the effects of restrained supplies from OPEC+ producers. Refiners in Northwest Europe and Asia are suffering from weak profit margins, particularly for making diesel fuel that has taken a hit from reduced manufacturing activity across major economies. Diesel margins for European refiners halved since the start of February, according to Bloomberg News, with speculators amassing their biggest bearish position in Europe's diesel benchmark since 2020. Gasoline margins have also slumped. Against this background, bullish inventory report from the U.S. Energy Information Administration did little to backstop the slide in oil prices on Wednesday. EIA data this morning revealed U.S. crude oil inventories declined by 5.1 million bbl from the previous week to 460.9 million bbl, 2% below the five-year average. The outsized draw was realized despite a 1 million bbl transfer of crude oil from the nation's Strategic Petroleum Reserve to the commercial side. Similar sales will continue through June, according to the Department of Energy. Domestic oil production decreased 100,000 bpd in the reviewed week to 12.2 million bpd, according to EIA.In the gasoline complex, EIA data showed stockpiles fell by a sizable 2.4 million bbl to 221.1 million bbl, about 7% below the five-year average. Gasoline demand shot up to the highest level so far this year at 9.511 million bpd, up 992,000 bpd from the prior week. Distillate fuel oil supplies fell 557,000 bbl to about 12% below the five-year average at 111.5 million bbl. Distillate supplied to the U.S. market, a measure of demand, remained little changed from the prior week at 3.728 million bpd. Total products supplied to the domestic market over the last four-week period averaged 19.8 million bpd, up 2.2% from the same period last year.At settlement, NYMEX June WTI futures fell $2.77 to $74.30 bbl, while international crude benchmark ICE Brent futures for June delivery declined $3.08 to $77.69 bbl. NYMEX May RBOB futures eroded to $2.5494 gallon, down $0.0392 on the session, and May ULSD futures dropped back $0.0781 to $2.3730 gallon.

Oil steadies after Russia says global oil markets in balance -- Oil prices steadied on Thursday, paring losses from the previous session, after a top Russian official said global oil markets were balanced. Russian Deputy Prime Minister Alexander Novak said OPEC+ does not see the need for further oil output cuts but is always able to adjust its policy. Russia is part of the OPEC+ group of oil-producers that this month announced a combined reduction of around 1.16 million barrels per day, a surprise decision the U.S. described as unwise and which sent oil prices higher. "The small increase in crude oil prices has been caused by short-covering from the sell-off over the last several days," On Wednesday, the benchmarks dropped almost 4% as jitters about a U.S. economic downturn overshadowed a larger-than-expected fall in U.S. crude inventories. Investors are watching economic data for any directional cues on energy demand. U.S. economic growth slowed by more than expected in the first quarter, although jobless claims fell in the week ending April 22, data showed. On Wednesday, U.S. data showed capital goods spending fell more than expected. Oil prices were also pressured as weak risk sentiment spread from the banking sector due to First Republic Bank's continued slump. Analysts see weak refinery margins as a major drag on oil prices, with heating oil and gas oil as "the main possible culprit for the outsized weakness". "Inventories in this product are somewhat reluctant to deplete, possibly due to resilient Russian exports," Russia has increased exports of refined products despite an EU embargo and oil price cap, sources told Reuters. Falling refinery profit margins could lead to cuts in runs and a further reduction in crude demand, said Ole Hansen, head of commodity strategy at Saxo Bank. Backwardation in the Brent futures curve has eased to just about $2.20 per barrel, having touched $4 a barrel on April 12. Backwardation, when prices for the front-month contract are higher than contracts for later months, typically indicates tight supply. Markets will look for direction from the first quarterly print of euro zone gross domestic product growth, due on Friday. The data could affect monetary policy decisions by the European Central Bank when it meets on May 4.

Oil Mixed as US Growth Slows Amid Persistent Inflation -- Oil futures settled Thursday's session mixed, with RBOB and ULSD contracts softening on expectations for weaker demand growth this year after U.S. gross domestic product slowed more than expected in the first quarter, leading to lower refining margins and muted demand for petroleum products. The U.S. economy has been caught between slowing growth and still-high inflation, showed macroeconomic data released Thursday, highlighting the tough challenge faced by the Federal Reserve. U.S. GDP grew at just 1.1% during the first three months of the year, easing sharply from 2.6% seen over the final quarter of 2022, according to data released Thursday morning from the Bureau of Economic Analysis. Economists were mostly expecting a more robust reading of 2%. In the meantime, the Fed's preferred inflation metrics -- Personal Consumption and Expenditures -- picked up the pace to 4.9% in the January-through-March period, the quickest pace in a year. PCE index had fallen for three straight quarters from 7.5% recorded during the first quarter 2022. High inflation is underscored by a still-tight labor market that continues to show signs of strength despite a slowdown in the broader economy. A separate report released Thursday morning showed applications for unemployment benefits fell for the first time in three weeks as the nationwide unemployment rate hovers around a 50-year low 3.5%. The number of Americans filing for jobless claims for the week ended April 22 fell 16,000 to 230,000, the Labor Department reported Thursday. Thursday's macroeconomic data strengthened the case for the Federal Open Market Committee to raise the federal funds rate by yet another 25 basis points at their May 2-3 policy meeting. Two-year Treasury yields climbed on that bet Thursday morning, while U.S. dollar strengthened to 101.252, up 0.046% against a basket of foreign currencies. As the economy slows, refiners in the United States, Northwest Europe, and Asia have suffered weaker profit margins, particularly for making diesel fuel amid lower consumption due to reduced manufacturing and trade activity. Diesel margins for European refiners halved since the start of February, according to Bloomberg News, with speculators amassing their biggest bearish position in Europe's diesel benchmark since 2020. In the U.S., refining margins have fallen sharply to the lowest level in a year. At settlement, NYMEX June West Texas Intermediate futures advanced to $74.76 per barrel (bbl), up $0.46 per bbl on the session, while international crude benchmark ICE Brent futures for June delivery gained $0.68 per bbl to $78.37 per bbl. NYMEX May RBOB futures eroded to $2.5328 per gallon, down $0.0166 on the session, and May ULSD futures edged $0.0188 lower to $2.3542 per gallon.

Oil Prices Head For Second Consecutive Weekly Loss - Oil prices were on course early on Friday to post a second consecutive weekly loss as concerns about the economy trumped larger-than-expected draw in U.S. commercial oil stocks.Brent Crude prices fell this week below the $80 per barrel threshold as negative sentiment in the market prevailed due to concerns about a recession with rising interest rates in major developed economies.The Fed, the European Central Bank (ECB), and the Bank of England are all expected to continue raising the key interest rates at their upcoming policy meetings. The Fed’s decision will be announced next week after the May 2-3 rate-setting meeting. Early on Friday, WTI was trading a bit above $75 and Brent at around $79 a barrel.Oil has now fallen back to the levels from before the surprise OPEC+ announcement of additional cuts in early April. The shock announcement sent prices rising for four consecutive weeks as short sellers ran for the exits and traders opened fresh long positions.But last week and this week, fears of recessions returned and underwhelming U.S. consumer and GDP data further weighed on oil prices.Data showed this week that U.S. consumer confidence declined in April, the third drop in consumer confidence in four months. In addition, U.S. economic growth slowed sharply to 1.1% in the first quarter from 2.6% growth in Q4, as companies curtailed investments amid rising interest rates and borrowing costs.The large crude draw and a drop in gasoline inventories in the U.S., which the EIA reported on Wednesday, failed to offset the gloomy mood on the oil market.“There was little in the way of fresh developments to justify the sell-off, but clearly sentiment in the market remains negative as a result of the macro outlook,” ING strategists Warren Patterson and Ewa Manthey said on Thursday. “The prompt ICE Brent timepsread has also fallen back into a small contango, suggesting a more comfortable prompt market in terms of supply,” they added.According to Saxo Bank’s strategists, “The technical break below $80 in Brent may attract additional short selling from momentum focused traders, with weak risk sentiment spreading from the banking sector.”

Crude prices up 2% on rising U.S. oil demand and lower output - Oil prices rose on Friday after energy firms posted positive earnings and U.S. data showed crude output was declining while fuel demand was growing. On its last day as the front-month, Brent futures for June delivery rose $1.13, or 1.49%, to $79.50 a barrel. The more actively traded July contract was up about 2.8% at $80.40. U.S. West Texas Intermediate (WTI) crude settled up 2.7%, or $2.02, to $76.78 a barrel. Brent and WTI notched their second straight weekly declines, with a fourth straight monthly decline for Brent as disappointing U.S. economic data and uncertainty over further interest rate hikes weighed on the demand outlook.. "The market was down much of the week on worries about a looming economic recession and an expansion of the banking crisis with First Republic," "But, today there were headlines showing there may be a solution to the First Republic problem, and there was data pointing to a rise in oil demand and a decline in output," U.S. officials are coordinating urgent talks to rescue First Republic Bank, as private-sector efforts led by the bank's advisers have yet to reach a deal, according to three sources familiar with the situation. The U.S. Federal Deposit Insurance Corp (FDIC), the Treasury Department and the Federal Reserve are among government bodies that have started to orchestrate meetings with financial companies about a solution for First Republic, the sources said. U.S. crude production fell in February to 12.5 million barrels per day (bpd), its lowest since December. Fuel demand rose to nearly 20 million bpd, its highest since November, according to the Energy Information Administration (EIA). The number of rigs drilling for oil in the U.S. was unchanged this week at 591, but inched down by one in April in their fifth monthly decline, energy services firm Baker Hughes Co said. Oil companies Exxon Mobil Corp and Chevron Corp are riding a wave of strong demand and have held the line on cost-cutting implemented when fuel demand collapsed during COVID-19 lockdowns. Crude prices have been lower in recent weeks and months due to uncertainty over further interest rate hikes that could reduce demand for oil. For the week, Brent fell about 2.6% after falling 5% last week, and WTI dropped 1.4% after falling 6% last week. For the month, Brent finished 0.3% lower, and WTI rose about 1.5% in April after falling during the prior five months. U.S. consumer spending was unchanged in March, but persistent strength in underlying inflation pressures could prompt the Fed to hike rates again next week to slow inflation, feeding fears of a possible recession.

Oil Posts Sixth Monthly Loss as Demand Fears Offset OPEC+ Cuts -- New York Mercantile Exchange oil futures and Brent crude on the Intercontinental Exchange settled the final trading session of April higher, although all petroleum contracts suffered their sixth consecutive monthly loss as investors look to a sharply slowing economy in the United States and Eurozone, while China's reopening had failed to boost global oil demand, with refiners in Asia seen cutting run rates amid poor margins. Diesel and gasoline markets in Asia have weakened significantly over the past month despite the reopening of China -- the region's largest economy, according to trade sources. In Singapore, profits from producing middle distillates more than halved in recent weeks to the lowest level this year -- another bearish sign for the outlook on the market. Bloomberg News reported that some refiners in the region have already cut run rates as margins sink and China's exports of refined products surged amid weak domestic demand. China's industrial sector had not fully recovered from the COVID-induced slump before trade tensions with the United States flared again, leading some analysts to forecast that the long-awaited rebound might never come. . Domestically, investors are fixated on a sharply slowing U.S. economy that eased to just a 1.1% annualized growth rate in the first quarter and likely dipped below 1% at the start of the second quarter. Goldman Sachs forecast GDP growth would average 0.6% for the second and third quarters before rebounding to 0.9% in the final three months of the year. This outlook doesn't bode well for fuel consumption either from businesses or consumers. The Federal Reserve's preferred inflation metric, Personal Consumption and Expenditures, picked up the pace to 4.9% in the January-through-March period, the quickest increase in a year. High inflation is underscored by a still-tight labor market that continued to show signs of strength in April despite a slowdown in the broader economy. Weekly unemployment claims fell for the first time in three weeks as of April 22, delivering an unwelcome surprise to the Federal Reserve that has tried to slow the red-hot labor market for more than a year now. Against this backdrop, OPEC+ production cuts of 1.6 million bpd announced on April 2 did little to backstop the slide in oil prices. West Texas Intermediate and Brent crudes have now erased all gains fueled by the OPEC+ cuts as traders fret over the health of the global economy and potential recession in the United States. On Thursday, Russia's Deputy Prime Minister Alexander Novak said that "OPEC+ considers global oil market balanced that requires no further production cuts." At settlement, NYMEX June WTI futures advanced to $76.78 bbl, up $2.02 on the session, while international crude benchmark ICE Brent futures for June delivery gained $1.17 bbl to expire at $79.54 bbl. Next-month delivery July Brent contract settled the session at $80.33 bbl. NYMEX May RBOB futures expired at $2.5780 gallon, up $0.0452, and next-month delivery June contract settled the session at $2.5301 gallon. May ULSD futures expired $0.0245 higher at $2.3787 gallon, and the next-month delivery June contract narrowed discount to just $0.0016 to settle at $2.3771 gallon.

Iran seizes Texas-bound oil tanker, Navy says -Iranian forces on Thursday seized a Marshall Islands-flagged oil tanker that was bound for Texas, according to the U.S. Navy. The Navy’s 5th Fleet said the oil tanker Advantage Sweet was seized by Iran’s Islamic Revolutionary Guard Corps (IRGC) in the Gulf of Oman, which lies between the Arabian Sea and the Strait of Hormuz. The American naval fleet said the merchant ship issued a distress call, and the U.S. is monitoring the situation. “Iran’s actions are contrary to international law and disruptive to regional security and stability,” the 5th Fleet said in a statement. “The Iranian government should immediately release the oil tanker.” It was not immediately clear why the IRGC seized the vessel, but the U.S. says Iran has seized five commercial vessels in the Middle East in the past two years. The Gulf of Oman lies in the backyard waters of Iran. Tensions between the U.S. and Iran have escalated after indirect talks over reviving a deal to halt Tehran’s nuclear buildup have largely failed. Washington has also accused Iran of supplying explosive drones to Russia for use in the war against Ukraine. The U.S. deploys boats and forces in the Middle East region to protect oil tankers and other traffic. Lately, those deployments have also included unmanned vessels, or drone boats.

Iran TV airs footage of commandos seizing US-bound tanker (AP) — Masked Iranian navy commandos conducted a helicopter-borne raid to seize a U.S.-bound oil tanker in the Gulf of Oman, footage aired by Iran’s state television showed Friday. The capture on Thursday of the Turkish-managed, Chinese-owned Advantage Sweet represents the latest seizure by Iran amid tensions with the U.S. over advancing nuclear program. While Tehran says the tanker was seized over it running into another Iranian vessel, it has provided no evidence yet to support the claim — and the Islamic Republic has taken other ships as bargaining chips in negotiations with the West. The footage showed the commandos descending on the deck of the Advantage Sweet by ropes from a hovering helicopter. A photograph showed one commando with his fist in the air after apparently taking the vessel. The U.S. Navy’s 5th Fleet has said the Iranian seizure was at least the fifth commercial vessel taken by Tehran in the last two years. “Iran’s continued harassment of vessels and interference with navigational rights in regional waters are a threat to maritime security and the global economy,” it added. The vessel’s manager, a Turkish firm called Advantage Tankers, issued a statement acknowledging the Advantage Sweet was “being escorted by the Iranian navy to a port on the basis of an international dispute.” All the ship’s 24 crew members are Indian. “The safety and welfare of our valued crew members is our No. 1 priority,” the firm said. “Similar experiences show that crew members of vessels taken under such circumstances are in no danger.”

Senators urge Biden to enable agency to seize tankers of Iran oil (Reuters) - As Iran's oil exports rise despite U.S. sanctions over its nuclear program, senators from both parties urged President Joe Biden to enable a federal government agency to seize Iranian oil and gas shipments. Senators Joni Ernst, a Republican, and Richard Blumenthal, a Democrat, said in a letter to Biden that the Department of Homeland Security's Homeland Security Investigations (HSI) office has not been able to seize an Iranian oil shipment for more than a year. HSI's enforcement has been curtailed by policy limitations within the Department of Treasury's Executive Office for Asset Forfeiture, the senators said in the letter, a copy of which was reviewed by Reuters. The White House did not immediately respond to a request for comment. Since the activation of HSI's enforcement program in 2019, it has seized nearly $228 million in Iranian crude and fuel oil linked to Iran's Quds Force, the foreign espionage and paramilitary arm of the Islamic Revolutionary Guards Corps (IRGC), the senators said. Iran says its nuclear program is for civilian purposes while the United States suspects Tehran wants to develop a nuclear bomb by enriching uranium. Iran's mission to United Nations did not immediately respond to a request for comment on Thursday. Iran's oil exports have reached their highest level since the reimposition of U.S. sanctions in 2018, Iranian oil minister Javad Owji said last month. He said that 83 million more oil barrels were exported in the last year than the previous year. The letter, signed by 12 senators, was sent on the same day that the U.S. Navy said Iran seized a Marshall Islands-flagged tanker in the Gulf of Oman, the latest in a series of seizures or attacks on commercial vessels. Iran's army said it had seized the tanker after it had collided with an Iranian boat.

Saudi Petrochemicals Giant Sabic Tilting Toward Circular Economy with Like-Minded Peers - Saudi Basic Industries Corp. is taking its petrochemicals manufacturing business full circle, using innovation and more than a dash of technology to help global customers achieve their sustainability goals. Some of those goals are designed to use less natural gas and oil. Maughon, based in Houston, is often at one of more than a dozen research and development (R&D) centers around the world, whose 2,000-member workforce has set ambitious goals. The end goal is to create a circular economy manufacturing products to be reusable, like recycling plastic into pellets to make new plastic products.“There is a recognition, certainly in the Kingdom, that low-cost solar and wind, carbon capture capability, incentives by the government, and directives over renewable energy use etc., are really driving a lot of us,” Maughon said.“Saudi Arabia’s leaders definitely understand that despite the historical footprint of oil and gas, they are also sitting on a large opportunity in renewables and other technologies…It’s all about timing and how you manage the transition, but they definitely understand where their future needs to be.” State-owned Saudi Arabian Oil Co., aka Aramco, which owns 70% of Sabic, set a target in October 2020 to cut direct and indirect emissions by 2050. That goal complements the Kingdom’s ambitions to achieve net-zero emissions by 2060. Aramco already has signaled that it intends to develop significant hydrogen export capability and become a global leader in carbon capture and storage (CCS), renewable energy and nature-based solutions.Investments are earmarked to build out a blue hydrogen and CCS market and become a “critical supplier” of low-emissions fuels. Blue hydrogen is manufactured from natural gas, with emissions reduced through CCS. The petrochemicals business is tied to the Kingdom’s ambitions. Efforts now are centered on converting some chemicals manufacturing to “fully renewable power,” Maughon noted.

Taliban take out 'mastermind' of bombing that killed 13 U.S. troops in Afghanistan - The terrorist leader responsible for planning the attack on Abbey Gate during the evacuation from Kabul airport that killed 13 American service members was killed in a Taliban operation in Afghanistan, National Security Council spokesperson John Kirby confirmed Tuesday. The U.S. government had no part in the Taliban raid, which took place in recent weeks, said a senior administration official, who like others interviewed for this story who were granted anonymity to speak ahead of a formal U.S. announcement. The officials declined to say exactly when the raid occurred, or name the terrorist killed, citing “sensitivities.” “The ISIS-K terrorist who was the mastermind of the horrific attack at Abbey Gate that killed 13 brave American servicemembers and many others has been removed from the battlefield,” Kirby said in a statement after POLITICO published this story, referring to the Islamic State Khorasan, the branch operating in Afghanistan, Pakistan and Central Asia. “He was a key ISIS-K official directly involved in plotting operations like Abbey Gate, and now is no longer able to plot or conduct attacks.” After U.S. officials learned of the Taliban operation, the intelligence community worked with the military in recent days to independently confirm the terrorist’s death with “a high level of confidence,” the official said. The Biden administration is holding off on announcing the news until the family members of the victims of the Abbey Gate attack have been notified. “We are not partnering with the Taliban, but we do think the outcome is a significant one,” the senior official said. Lawmakers on both sides of the aisle have criticized the chaotic withdrawal after the rapid collapse of the Afghan government in August, 2021. They have also questioned whether the Biden administration has the ability to prevent another terrorist attack on the homeland without a presence on the ground in Afghanistan.