The Latest US Oil Supply and Disposition Data from the EIA
US oil data from the US Energy Information Administration for the week ending August 18th indicated that after modest offsetting decreases in our oil imports and our oil exports and little change in refining, we had to pull oil out of our stored commercial crude supplies for the 14th time in twenty-one weeks, and for the 16th time in the past 35 weeks, as our production of oil also ticked up to a new post pandemic high....Our imports of crude oil fell by an average of 225,000 barrels per day to 6,933,000 barrels per day, after rising by an average of 476,000 barrels per day the prior week, while our exports of crude oil fell by 341,000 barrels per day to average 4,258,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 2,675,000 barrels of oil per day during the week ending August 18th, 116,000 more barrels per day than the net of our imports minus our exports during the prior week. Over the same period, production of crude from US wells was reportedly 100,000 barrels per day higher at a forty month high of 12,800,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 15,475,000 barrels per day during the August 18th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,776,000 barrels of crude per day during the week ending August 18th, an average of 30,000 more barrels per day than the amount of oil that our refineries were processing during the prior week, while over the same period the EIA’s surveys indicated that an average of 792,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US. So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending August 18th appear to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 509,000 barrels per day less than what our oil refineries reported they used during the week. To account for that obvious disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a [ +509,000 ] 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 error of that magnitude in the week’s oil supply & demand figures that we have just transcribed.... However, since most oil traders react to these weekly EIA reports as if they were accurate, and since these weekly figures therefore 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 reliable 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 had hoped to do about it)
This week's 792,000 barrel per day decrease in our overall crude oil inventories came as an average of 876,000 barrels per day were being pulled out of our commercially available stocks of crude oil, while an average of 85,000 barrels per day were being added to the oil in our Strategic Petroleum Reserve, the third increase in the SPR after three years of withdrawals...outside of the lower figures of the past two weeks, the 348,948,000 barrels of oil that still remain in our Strategic Petroleum Reserve would still be the lowest since August 19th,1983, as repeated tapping of our emergency oil 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 withdrawals of last year. However, those Biden administration withdrawals amounted to about 42% of what was left in the SPR when they took office, and that left us with what is now less than a 18 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 860,000 barrels per day last week, which was 6.3% more than the 6,454,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day higher at a forty month high of 12,800,000 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 higher at 12,400,000 barrels per day, while Alaska’s oil production was 18,000 barrels per day higher at 402,000 barrels per day, but still added the same 400,000 barrels per day to the rounded national total as it did last week...US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was still 2.3% below that of our pre-pandemic production peak, but was 32.0% 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 94.5% of their capacity while using those 16,776,000 barrels of crude per day during the week ending August 18th, down from their 94.7% utilization rate during the prior week, utilization rates that are in the normal range for early August... The 16,776,000 barrels per day of oil that were refined this week were 3.2% more than the 16,255,000 barrels of crude that were being processed daily during week ending August 19th of 2022, but 5.2% less than the 17,702,000 barrels that were being refined during the prepandemic week ending August 16th, 2019, when our refinery utilization rate was at 95.9%, on the high side of the normal range for this time of year...
With the increase in the amount of oil being refined this week, the gasoline output from our refineries was also higher, increasing by 130,000 barrels per day to 9,715,000 barrels per day during the week ending August 18th, after our refineries' gasoline output had decreased by 336,000 barrels per day during the prior week. This week’s gasoline production was 3.0% more than the 9,429,000 barrels of gasoline that were being produced daily over the same week of last year, but 1.8% less than the gasoline production of 9,897,000 barrels per day during the prepandemic week ending August 16th, 2019. At the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 337,000 barrels per day to 5,066,000 barrels per day, after our distillates output had decreased by 182,000 barrels per day during the prior week. Even with that increase, our distillates output was 2.6% less than the 5,200,000 barrels of distillates that were being produced daily during the week ending August 19th of 2022, and 5.1% less than the 5,340,000 barrels of distillates that were being produced daily during the week ending August 16th, 2019...
With this week's increase in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the eighth time in twenty-seven weeks, increasing by 1,468,000 barrels to 217,626,000 barrels during the week ending August 18th, after our gasoline inventories had decreased by 262,000 barrels during the prior week. Our gasoline supplies rose this week even though the amount of gasoline supplied to US users rose by 59,000 barrels per day to 8,910,000 barrels per day, because our imports of gasoline rose by 307,000 barrels per day to 893,000 barrels per day, and because our exports of gasoline fell by 51,000 barrels per day to 830,000 barrels per day, while ...Even after nineteen gasoline inventory decreases over the past twenty-seven weeks, our gasoline supplies were 0.9% above last August 19th’s gasoline inventories of 215,647,000 barrels, and about 5% below the five year average of our gasoline supplies for this time of the year…
Meanwhile, with this week's big increase in our distillates production, our supplies of distillate fuels increased for the eleventh time in twenty-four weeks, rising by 945,000 barrels to 116,688,000 barrels during the week ending August 18th, after our distillates supplies had increased by 296,000 barrels during the prior week. Our distillates supplies rose this week even as the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 188,000 barrels per day to 3,836,000 barrels per day, and even as our imports of distillates fell by 41,000 barrels per day to 88,000 barrels per day, and while our exports of distillates rose by 15,000 barrels per day to 1,182,000 barrels per day....With 36 inventory increases over the past sixty-six weeks, our distillates supplies at the end of the week were 4.6% above the 111,594,000 barrels of distillates that we had in storage on August 19th of 2022, but are still about 16% below the five year average of our distillates inventories for this time of the year...
Finally, with oil supply and demand little changed from a week ago, our commercial supplies of crude oil in storage fell for the 16th time in 34 weeks and for the 25th time in the past year, decreasing by 6,134,000 barrels over the week, from 439,662,000 barrels on August 11th to 433,528,000 barrels on August 18th, after our commercial crude supplies had decreased by 5,960,000 barrels over the prior week. With this week's decrease, our commercial crude oil inventories were about 2% below the most recent five-year average of commercial oil supplies for this time of year, but were about 29% above the average of our available crude oil stocks as of the third weekend of August over the 5 years at the beginning of the past decade, with the difference 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 then fell in the wake of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze offs, our commercial crude supplies as of this August 18th were 2.8% more than the 421,672,000 barrels of oil we had in commercial storage on August 19th of 2022, and were 0.92% more than the 432,564,000 barrels of oil that we still had in storage on August 20th of 2021, but were 14.6% less than the 507,763,000 barrels of oil we had in commercial storage on August 21st of 2020, after early pandemic precautions had left a lot of oil unused…
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Frackalachia Update: Peak Natural Gas and the Economic Implications for Appalachia – Ohio River Valley Institute - By the first quarter of 2020, EQT Corporation, the nation’s largest domestic producer of natural gas, was supplying more than 4 billion cubic feet of natural gas per day. Just a decade earlier, EQT’s output wasn’t even one-tenth as much and the company ranked an undistinguished 25th for output among US producers. But EQT had the good fortune and foresight to base all of its operations in Appalachia, which made it the greatest beneficiary of what turned out to be the world’s richest natural gas field. In those early days of 2010, when EQT was the scuffling little guy trying to find a place among giants, such as ExxonMobil, the company employed just 1,815 people. But, by 2020, when EQT’s production had surpassed that of ExxonMobil and all others, its employee count mushroomed to . . . 624.Yes, EQT’s head count actually declined by nearly two-thirds between 2010 and 2020. In fairness, some of EQT’s job reduction was attributable to its spin-off of Equitrans Midstream (EQM) in 2018. But, even if you add EQM’s 2020 head count to EQT’s, combined employment at the two companies was only 1,395 in 2020, still a quarter smaller than EQT’s workforce in 2010.EQT’s tale of skyrocketing output accompanied by a shrinking workforce helps us understand important things about the shale gas industry. It helps explain why, as the Ohio River Valley Institute documented in 2021, the Appalachian natural gas boom failed to deliver what had been expected to be hundreds of thousands of new jobs for the region. And it demonstrates that as the natural gas industry matures, it becomes less jobs-intensive and its already meager contributions to economic development and prosperity become even fewer. The dynamic is simple. As a larger share of output comes from existing wells and fewer new ones are dug and work is completed on the construction of processing plants and pipelines, fewer workers are needed.
Appalachian Economy Sees Few Gains From Natural Gas Development, Report Says - Natural gas production in the Appalachian region of the United States has failed to produce promised increases in jobs and income since the fracking boom began there in the late 2000s, with economic stagnation likely to persist now that output of the fuel has passed its peak, according to a report issued on Tuesday. The study from the Ohio River Valley Institute, a nonprofit research group, found that gas-producing areas of Pennsylvania, Ohio and West Virginia lost more than 10,000 jobs from 2008 to 2021 and that their personal income growth trailed that of the three states and the U.S. as a whole. Their population dropped by more than 46,000 during the period.Even though gross domestic product of the 22-county region surged at four times the rate of the states overall from 2008 to 2019, little of that new wealth helped local economies because natural gas investment is mostly made in capital, not labor, and because many of the industry’s workers came from distant areas like Texas or Oklahoma where oil and gas skills were more readily available, the report said.“GDP, which is often cited as a principal barometer of economic health, failed to produce commensurate gains in local measures of prosperity and well-being, including job, income and population growth,” it said.The American Petroleum Institute of Pennsylvania, a trade group for oil and gas producers, rejected the report as “flawed” and argued that the industry has brought strong economic benefits to the state.“Few places in the U.S. are as critical to producing reliable, affordable natural gas as Pennsylvania and the Appalachia region,” said Stephanie Catarino Wissman, executive director of API-PA. “Pennsylvania is the second-leading producer of natural gas, behind only Texas, generating good-paying jobs and hundreds of millions of dollars annually for state and local economies.” She said an analysis by the consulting firm PwC found the oil and gas sector generated some 93,000 direct jobs to Pennsylvania in 2021, and contributed $75 billion to the economy, or 8.9 percent of the total.In the future, the region is expected to see more economic stagnation because its natural gas production likely peaked in 2022, according to this year’s Annual Energy Outlook from the U.S. Energy Information Administration. The agency predicted that 2022’s peak annual natural gas production from the Utica and Marcellus Shales that underlie Appalachia won’t be equaled again until 2045, and that the region’s share of U.S. national gas production will fall to 37.2 percent by 2050 from 41.9 percent last year, as increasing output from fields in the U.S. southwest and Gulf Coast takes a greater market share.Worldwide, demand for natural gas is falling, said John Hanger, a former secretary of Pennsylvania’s Department of Environmental Protection, during a video call with reporters to release the report. Global demand dropped 1.2 percent in 2022 as more countries saw the fuel as “too risky” for their economies because of its unstable price, and as they increasingly switched to renewables to curb climate change, said Hanger, who served as a panelist on the institute’s call for reporters. “In 2022, the world writ large started to deploy renewable energy and other non-fossil fuels including the electrification of buildings, to wean itself off natural gas,” Hanger said. “The golden age of gas is over.”
Critics question climate implications of Appalachian hydrogen hub - Critics say a pair of proposals to make Appalachian Ohio part of regional hydrogen hubs is likely to benefit the state’s oil and gas industry more than the climate. The two proposals are among 21 projects competing for shares of a $7 billion pot of grant money under the 2021 Bipartisan Infrastructure Law. The law defines hydrogen hubs as networks of clean hydrogen producers, their potential consumers and infrastructure connecting them. At least one of the winning projects is to be a “blue” hydrogen hub, meaning it would make hydrogen from fossil fuels with carbon capture, storage and possible reuse, or CCUS. The Appalachian Regional Clean Hydrogen Hub plans to collect methane from a web of natural gas pipelines in Ohio, West Virginia, Pennsylvania and Kentucky for a hydrogen production facility in West Virginia. The ARCH2 coalition includes Battelle, natural gas industry companies, the state of West Virginia, and more. The Decarbonization Network of Appalachia, or DNA H2Hub, has the economic development group Team Pennsylvania as its project lead and is also proposing a blue hydrogen hub for Pennsylvania, West Virginia and Ohio. Equinor and Shell are among the group’s corporate partners. Because both hubs would use methane from the region as feedstocks, they represent potentially large customers for the natural gas industry. “We believe there are opportunities for the industry in a regional hub or hydrogen ecosystem and that Appalachia is more suited than most areas because of our compactness, access to natural gas and manufacturing infrastructure,” said Rob Brundrett, president of the Ohio Oil & Gas Association. “There certainly would be a benefit, especially the role natural gas plays in the creation of blue hydrogen, but we think it is too early to tell exactly what and how much benefit it may be to the industry.” Much will depend on how hydrogen from the hubs will be used, whether it will displace other current uses of methane, and overall costs and market prices for natural gas. Rough estimates from the Ohio Oil & Gas Association are that recent production has gone in equal shares to power generation, heat and chemicals. On the high end, blue hydrogen hubs might increase natural gas consumption and industry revenues. On the low end, sales to hydrogen hubs could offset potential losses if other uses decrease as a result of the energy transition. Hydrogen production with natural gas and capture of carbon emissions from burning natural gas have gone on for decades, said policy advisor Rachel Fox at the American Petroleum Institute. Current U.S. hydrogen production is approximately 10 million metric tons per year, she said. “The new challenge and opportunity is to scale these two complementary technologies together,” Fox continued. “API and our members are excited about the H2Hubs program and the impact it could have on the growth of a low-carbon hydrogen economy.” She said the industry has shown 65% to 90% carbon capture rates are commercially achievable.
USA, state leaders view Williams building for possible expansion - – Utica Shale Academy officials are setting their sights on further expansion of the community school’s campus and state leaders viewed a potential location at the former Williams Energy office in Salineville. Local and state representatives met Aug. 7 at USA’s Energy Center and walked the short distance to the site at 10 E. Main St. The four-story, 27,000-square-foot building previously served as the Citizen’s Bank national headquarters and was most recently utilized by Williams as a district office until it relocated to Canton in March. Williams officials guided the tour and said the facility underwent renovations in 2018 with general maintenance performed to the HVAC system, plus several dozen heat pumps were replaced within the past two years. John Carey, director of the Ohio Department of Development’s Governor’s Office of Appalachia, visited two months ago to view the construction site and returned to join the group of officials which included Ohio Sen. Michael Rulli and Ohio Rep. Monica Robb Blasdel (both R-Columbiana), Mark Lamoncha of the Ohio Department of Education, Sustainable Opportunity Development Center Director Julie Needs, architect Ryan McNutt with FMD Architects of Fairlawn and officials with Williams Energy, USA and the Southern Local School District. USA Superintendent Bill Watson said it was the latest effort to extend the program’s reach and will build upon its many offerings. “Utica Shale Academy owns four lots and we’re looking to expand to the Williams Building and turn the Hutson Building into a junior high school over the next year,” said Watson. “We acquired the former Destiny House Church for the Utica Shale Academy Community Center and plan to have certified health workers and programs for pregnant mothers and fathers, diaper assistance, drug rehabilitation, transportation, food, housing and workforce development. There will be a workout facility in the basement and services are free. We want people to know it’s there and they can benefit from it.”
'Orphan well' mishap stirs suspicion and frustration in tiny Pennsylvania town - NEW FREEPORT PA is kind of place where residents tend to keep to themselves. But last summer, a message appeared on a township Facebook page that jolted the roughly 80-person community.“There was a FRAC OUT at the bottom of Fox Hill,” read the June 2022 post from Guy Hostutler, a New Freeport supervisor.He was referring to what can happen when an abandoned well is disturbed by nearby drilling, causing it to leak gas and fluid.“If you smell gas or have discolored water DO NOT DRINK OR USE!” Hostutler wrote. Bill Yoders and his wife, Tammy, immediately stopped drinking their water. So did Tim Brady, Steve Roberts Sr. and several other residents. The natural gas company that was doing the drilling, EQT Corp., promised to investigate the incident, and the Pennsylvania Department of Environmental Protection launched its own probe.But more than a year later, New Freeport residents say they are still without definitive answers over what exactly happened and whether their water is safe to drink. The Yoderses, Brady and Roberts are among those who are not taking any chances and are still drinking only bottled water.“I worked my whole life, going to spend my retirement on water and I’m going to pay them back by pissing it off the back porch,” said Bill Yoders, a former pipeliner.The situation in New Freeport has implications that go far beyond this rural corner of southwest Pennsylvania.At least 3.5 million abandoned oil and gas wells are scattered across the U.S. in forests, backyards and even near waterways. More than 100,000 are documented “orphan wells” — ones that have been left behind by companies that no longer exist. The neglected wells have been found to leak cancer-causing chemicals and emit methane, a planet-warming greenhouse gas that’s over 80 times more powerful than carbon dioxide. In extreme cases, gas from abandoned wells has been linked to explosions. The environmental and health risks are especially high in places like Pennsylvania, where companies have long drilled for oil and natural gas without adequate oversight by state agencies, according to a 2020 report commissioned by the then-state attorney general, increasing the chances that pollutants from the wells and surrounding reservoirs can seep into the ground, water systems and potentially people’s homes.“It is literally the wild west out there,” said David Hess, who was the head of the state Department of Environmental Protection, or DEP, from April 2001 to January 2003. “These companies can do whatever they want and ask for forgiveness later or not.”
Pennsylvania Residents Call for Action After Study Links Fracking to Asthma and Lymphoma -- A “bombshell” set of studies that linked fracking exposure to lymphoma, asthma and low birth weight is making waves in Pennsylvania and prompting calls by some for a ban on fracking in the state. The studies were released only after years of pressure from people living in the heart of one the most active shale plays in the nation. Some of these residents have faced dire health consequences — and have had to battle repeated attempts by the fossil fuel industry to discredit their health concerns. For those on the front lines, the question now is what happens next. The three studies co-published by the Pennsylvania state government and the University of Pittsburgh found serious health effects resulting from shale gas production in the southwestern part of the commonwealth. A study on the incidence of childhood cancer found five to seven times the rates of lymphoma among children who live within one mile of a natural gas well compared to those who live no closer than five miles from such a well. A study on birth outcomes found a correlation between low birth weight and a mother’s proximity to active wells during their production phase — when oil or gas is collected from a well, after drilling fluid has been shot deep vertically, then horizontally, underground.And a study on asthma risk found a strong link between natural gas production and hospitalization for asthma in people living within 10 miles of a natural gas well. These findings are backed up by a mountain of previous research. But for Dr. Ned Ketyer, president of Physicians for Social Responsibility Pennsylvania, who first called on state regulators to investigate fracking’s link to a grouping of rare childhood cancer cases in 2019, the asthma revelation is, nonetheless, a “bombshell.” “I live in Washington County,” he said. “There is no resident who lives more than 10 miles away from a fracking well or another site of fracking infrastructure. “We are all at risk,” he continued. “And the risk is significant.” The road to that finding and others, released Tuesday, Aug. 15, was not an easy one, he told Capital & Main. Ketyer was among a group who first proposed the research in the wake of a 2019 investigative report by thePittsburgh Post-Gazette that found 67 rare cancer patients across four counties surrounding Pittsburgh, rattling community members who live on the front lines of fracking in the No. 2 natural-gas-producing state in the country.
Assessing the relationship between energy-related methane emissions and the burden of cardiovascular diseases: a cross-sectional study of 73 countries - Abstract: The energy industry significantly contributes to anthropogenic methane emissions, which add to global warming and have been linked to an increased risk of cardiovascular diseases (CVD). This study aims to evaluate the relationship between energy-related methane emissions and the burden of CVD, measured in disability-adjusted life years (DALYs), in 2019. We conducted a cross-sectional analysis of datasets from 73 countries across all continents. The analyzed datasets included information from 2019 on environmental energy-related methane emissions, burden of DALYs due to CVD. The age-standardized prevalence of obesity in adults and life expectancy at birth were retrieved. The relationship between the variables of interest was evaluated using multiple linear regression models. In the multiple model, we observed a positive linear association between methane emissions and the log-transformed count of DALYs related to CVD. Specifically, for each unit increase in energy-related methane emissions, the burden of CVD increased by 0.06% (95% CI 0.03–0.09%, p < 0.001). The study suggests that reducing methane emissions from the energy industry could improve public health for those at risk of CVD. Policymakers can use these findings to develop strategies to reduce methane emissions and protect public health.
Only 6% of gas capacity needs major changes to meet EPA’s proposed GHG rules: RMI report --About 94% of existing gas-fired power plant capacity already meets the Environmental Protection Agency’s proposed greenhouse gas emissions limits or could meet them with “minor” operational changes, according to RMI.“Existing gas plants would not have to significantly change operations to reduce their emissions in line with the EPA’s proposed performance standards,” RMI analysts said in analysis released Monday. “The standards provide flexibility for gas plants to play their current role in supporting grid reliability.”However, the PJM Interconnection and other grid operators as well asutilities and power companies in comments to EPA earlier this month warned the agency’s proposal could threaten grid reliability, partly by driving power plants into retirement.In May, the EPA proposed greenhouse gas emissions limits for coal-, gas- and oil-fired power plants, with initial requirements beginning in 2030 for coal-fired generators and 2032 for gas-fired units. The limits can be met by highly efficient operations, carbon capture and sequestration, co-firing natural gas for coal units, and with green hydrogen for gas generators, according to the proposal.For existing gas-fired power plants, the rules would apply to those larger than 300 MW that run with at least a 50% capacity factor. They would have two compliance options: CCS with 90% carbon capture by 2035, or co-firing of 30% low-GHG hydrogen beginning in 2032 and co-firing 96% starting in 2038, according to the agency. New gas-fired power plants with a 20% or higher capacity factor must meet those emissions limits.Nearly 80% of the 470 GW existing gas-fired generating capacity would be unaffected by the proposed standards because they fall below the 300-MW threshold or operate less than half the time, according to RMI, a non-profit group focused on reducing greenhouse gas emissions from the energy sector. The analysis was based on data from the U.S. Energy Information Administration accessed through the Public Utility Data Liberation Project.Much of the almost 100 GW of capacity that would be affected by the proposal could comply with minor changes in their operations by reducing their capacity factors, the RMI analysts said.Six percent of gas-fired capacity would likely have to reduce their capacity factor by more than 20% or invest in emissions reduction technology to meet the 2032 or 2035 deadlines, they said.According to RMI, the top 10 companies with the most capacity that would be affected by the EPA’s proposal are: Florida Power & Light, known as FPL, Georgia Power, Entergy Louisiana, Southern Power, Duke Energy Florida, Tennessee Valley Authority, Duke Energy Progress, Duke Energy Carolinas, Invenergy and Lightstone Generation.About 54% of FPL’s fleet, or about 11,390 MW, would be affected by the EPA’s proposal. But only 3% of that capacity operates above a 70% capacity factor, according to RMI.Meanwhile, gas-fired capacity factors are expected to fall as more renewable energy and energy storage comes online.
Joe Manchin is furious over the Inflation Reduction Act he helped write - White House is torn over Joe Manchin’s fury at climate law he crafted - The obscure federal agency that oversees the nation’s immense tangle of pipelines, power lines and transfer stations is unfamiliar to most Americans. But it has very much been on Sen. Joe Manchin III’s mind. By the end of last year, the West Virginia Democrat had become deeply displeased with how the Federal Energy Regulatory Commission was helping the Biden administration advance its aggressive climate goals. Manchin, a staunch ally of fossil fuel interests, was particularly critical of the agency’s efforts to write regulations that more fully consider climate impact when it reviews new natural gas infrastructure. So he kneecapped the agency. The chairman of the Senate Energy and Natural Resources Committee, Manchin refused to hold a confirmation hearing for the reappointment of Richard Glick, the agency’s chair and a key ally of President Biden, after Glick’s term expired at the end of the year. That has effectively stripped the board of its Democratic majority, leaving it deadlocked and limiting its ability to advance renewable energy projects.Manchin isn’t the essential tiebreaking vote for Democrats in the Senate anymore, but a year after the enactment of the Inflation Reduction Act — which wouldn’t have passed without his support — he’s irate at the way Biden is implementing the law. And he’s fighting back: Besides his pressure on FERC, Manchin has vowed to oppose appointments to the Environmental Protection Agency and the Interior Department. He is even publicly flirting with running for president in 2024, an unlikely prospect but one that could be devastating for Biden — and a situation that senior White House officials are closely monitoring. “I’m so absolutely in disagreement with how they’re trying to promote an energy policy. … It’s just not all about, ‘All green and clean,’” Manchin said on a West Virginia radio show earlier this month. “I’m in disagreement continuously with them.” Now Biden and his aides are in the delicate position of trying to agree to Manchin’s demands where they can to avoid antagonizing him more, while still advancing a climate agenda that the senator strongly opposes — even though his vote last year made it possible in the first place.
After case dismissals, work on Mountain Valley Pipeline resumes in Virginia - Construction on the Mountain Valley Pipeline has resumed in Virginia following the dismissal of several legal challenges that had been holding it up for years. Matthew Stafford, a manager with the Virginia Department of Environmental Quality, told the State Water Control Board Wednesday the company resumed work on the pipeline on Aug. 4 and has completed eight stream and wetland crossings. The 303-mile project is intended to deliver natural gas from the Marcellus and Utica shale fields to southern Virginia and was first approved by the Federal Energy Regulatory Commission in 2017. However, its progress was stalled by lawsuits over the pipeline’s environmental impacts that led the Richmond-based U.S. Court of Appeals for the 4th Circuit to repeatedly overturn key federal permits it had been issued. Mountain Valley’s prospects changed dramatically in June when Congress passed the Fiscal Responsibility Act with a provision that required approval of all pending permits and stripped the 4th Circuit of jurisdiction to hear any challenges of those approvals. On Aug. 11, the 4th Circuit dismissed the last remaining pipeline cases, concluding any legal action over the constitutionality of the Fiscal Responsibility Act’s Mountain Valley provisions must be heard by the U.S. Supreme Court. Mountain Valley has said it expects to complete work by the end of this year. In Virginia, Stafford said work remains in sections of Montgomery and Roanoke counties. He told the board about 90% of the project’s tree clearing is complete, as is 82% of trenching, 87% of pipe laying, 82% of welding, 77% of backfilling and 19% of restoration. DEQ has received one pipeline-related complaint since June 22, he said, but after investigation “found no noncompliance.” However, David Sligh, conservation director at Wild Virginia, one of the groups that has been active in litigation against Mountain Valley, told the board that on July 14, a DEQ inspection of the pipeline found major sediment accumulation in a tributary of Flatwoods Branch, which is home to the endangered Roanoke logperch. “We’re looking at a great deal of construction coming up here in the next six months, and we can add important information that you need to know,” Sligh said. A DEQ spokesperson did not immediately respond to a request for comment on Sligh’s information. Asked about Sligh’s claims, Mountain Valley spokesperson Natalie Cox pointed to a FERC filing by the company this March that accused Wild Virginia of seeking to “delay and obstruct” the project’s completion. “The best environmental outcome to protect the streams, wetlands, upland areas, and all terrestrial and aquatic species is to complete construction as soon as possible so that the right-of-way can be fully restored and revegetated,” Mountain Valley wrote. As work resumes, the project is also facing increased scrutiny from the federal Pipeline and Hazardous Materials Safety Administration. Earlier this month, the agency issued a Notice of Proposed Safety Order for Mountain Valley calling for further assessment of pipeline conditions following the construction delays. “PHMSA’s ongoing investigation indicates that conditions may exist on [Mountain Valley] facilities that pose a pipeline integrity risk to public safety, property, or the environment,” wrote Robert Burrough, director of the agency’s Eastern Region Office. Cox said Mountain Valley “has worked closely with PHMSA.” “Safety has always been MVP’s top priority, and we are committed to meeting or exceeding all applicable regulations to ensure the safety of our employees, contractors, assets, and communities,” Cox stated. “We expect federal and state regulators will continue to audit our construction practices during the next few months, and we welcome their expertise and oversight.”
Lake Michigan fuel spill near Manistee estimated at 1,500 gallons — The U.S. Coast Guard estimates that around 1,500 gallons of diesel fuel was spilled into Lake Michigan earlier this month, according to a news release from Monday. A freighter that frequently transports coal to Manistee, the Manitowoc experienced a hull breach that led to a diesel fuel spill on Aug. 2.The bulk carrier remained anchored off the Manistee coast until a temporary patch was put into place. On Aug. 4, the ship was cleared to head to Muskegon for permanent repairs.An investigation into the cause of the spill is ongoing, the release stated.The crew of the Manitowoc conducted and recorded initial fuel tank soundings, according to the release. After making temporary repairs, additional soundings were conducted, and a comparison of the two showed that approximately 1,500 gallons of diesel fuel was released during the incident.The maximum potential spill was determined to be approximately 45,174 gallons, according to coast guard estimates from Aug. 3. That is the amount that the freighter left port with and had onboard before arriving in Manistee.The coast guard and its partners in local, state and tribal governments, reported no known impacts to the shoreline or to marine wildlife as a result of the spill.“Diesel fuel spreads across the top of the water and weathers from sun, wind and wave action,” part of the release stated. “All diesel fuel is believed to have dissipated and evaporated without sinking into the water column.”
Offshore Oil Workers Fall Ill as Heat Sears USA Gulf Coast - Heat-related illnesses are hitting workers on offshore oil and gas platforms as searing temperatures bake the US Gulf Coast. A rare heat advisory from the Interior Department’s Bureau of Safety and Environmental Enforcement warned offshore oil companies on Tuesday to take extra precautions in the Gulf, including periodic breaks. In a few recent instances, affected workers have been taken to shore for further evaluation, the alert said. Extreme heat has smothered Texas and Louisiana for weeks. For the nearby offshore production regions, the heat index — a measure of what temperatures feel like when combined with humidity — has reached 100F to 110F (38C to 43C) degrees, said Rich Otto, a forecaster with the US Weather Prediction Center. The water temperature in the Gulf of Mexico has hit 88F in many areas off the coast of Texas and Louisiana, according to the US National Data Buoy Center.
Biden Revived Rules Designed to Prevent Another Deepwater Horizon Disaster - The Department of the Interior announced on Tuesday that it had reinstated Obama-era safety rules for offshore drilling that were created after the 2010 Deepwater Horizon catastrophe, which killed 11 people and fouled the Gulf of Mexico. The Trump administration weakened those safety measures, arguing that they were a burden to the oil and gas industry. The new regulation, which was finalized on Tuesday and will take effect in October, revives most of the 2016 requirements for the use and testing of safety equipment on offshore rigs. Deb Haaland, the Interior secretary, and Kevin Sligh, the director of the Bureau of Safety and Environmental Enforcement, or BSEE, said in a joint statement that the new rules were critical for ensuring the safety of offshore operations. “Finalizing this rule will enable BSEE to continue to put the lives and livelihoods of workers first, as well as the protection of our waters and marine habitats,” Mr. Sligh said. Jackie Savitz, the chief policy officer for Oceana, an ocean conservation nonprofit group, called the rule “a big step in getting us back on track” but argued offshore oil and gas will never be free of risk.“There is no way we can do enough to prevent an oil spill, it is an inherently risky business and it’s not a matter of if, but when we will have another one. So a big part of prevention has to be to stop selling new leases,” Ms. Savitz said Republicans and the oil and gas industry are widely expected to challenge the rule, which includes the real-time monitoring of drilling operations and the certification of emergency devices by third parties. The industry has argued that the Biden administration’s safety measures are “arbitrary” and will create economic hardships for oil and gas companies.
Permian Resources Buys Earthstone in $4.5B Deal - Permian Resources Corporation and Earthstone Energy Inc announced in a joint statement that they have entered into a definitive agreement under which Permian Resources will acquire Earthstone in an all-stock transaction valued at approximately $4.5 billion, inclusive of Earthstone’s net debt. The all-stock transaction will consist of 1.446 shares of Permian Resources common stock for each share of Earthstone common stock, representing an implied value to each Earthstone stockholder of $18.64 per share, based on the closing price of Permian Resources common stock on August 18, the statement noted, adding that Permian Resources will issue approximately 211 million shares of common stock in the transaction. After closing, existing Permian Resources shareholders will own approximately 73 percent of the combined company and existing Earthstone shareholders will own approximately 27 percent of the combined company, the statement revealed. The deal has been unanimously approved by the boards of directors of both Permian Resources and Earthstone and the companies’ largest shareholders have executed a voting and support agreement in connection with the transaction, the statement highlighted. The deal is expected to close by year-end 2023, subject to customary closing conditions, regulatory approvals, and shareholder approvals, according to the statement. Permian Resources’ executive management team will lead the combined company with the headquarters remaining in Midland, Texas, the statement pointed out.
Appeals court strikes down Utah oil railroad approval, siding with environmentalists - (AP) — A U.S. Appeals Court on Friday struck down a critical approval for a railroad project that would have allowed oil businesses in eastern Utah to significantly expand fossil fuel production and exports.The ruling is the latest development in the fight over the proposed Uinta Basin Railway, an 88-mile (142-kilometer) railroad line that would connect oil and gas producers in rural Utah to the broader rail network, allowing them to access larger markets and ultimately sell to refineries near the Gulf of Mexico. The railroad would let producers, currently limited to tanker trucks, ship an additional 350,000 barrels of crude daily on trains extending for up to 2 miles (3.2 kilometers).The Washington, D.C.-based appeals court ruled that a 2021 environmental impact statement and biological opinion from the federal Surface Transportation Board were rushed and violated federal laws. It sided with environmental groups and Colorado’s Eagle County, which had sued to challenge the approval.The court said the board had engaged in only a “paltry discussion” of the environmental impact the project could have on the communities and species who would live along the line and the “downline” communities who live along railroads where oil trains would travel.“The limited weighing of the other environmental policies the board did undertake fails to demonstrate any serious grappling with the significant potential for environmental harm stemming from the project,” the ruling stated.Surface Transportation Board spokesperson Michael Booth said the agency does not comment on pending litigation.Though the Uinta Basin Railway proposal still must win additional approvals and secure funding before construction can begin, proponents saw the 2021 environmental impact statement from the board as among the most critical approvals to date. The statement received pushback from environmentalists concerned that constructing new infrastructure to transport more fossil fuels will allow more oil to be extracted and burned, contributing to climate change.
‘Drill, frack, burn coal’: Republicans echo Trump at presidential debate - Former President Donald Trump might not have been at Wednesday’s Republican presidential debate, but his energy policy and rejection of climate science took center stage.Trump’s push for energy dominance cast a long shadow over the eight candidates onstage in Wisconsin, and all promised to essentially follow in his footsteps if they can overcome his massive polling advantage to win the nomination next year.“This isn’t that complicated guys, unlock American energy, drill, frack, burn coal, embrace nuclear,” technology entrepreneur Vivek Ramaswamy said.The debate showed that, while the candidates aim to differentiate themselves from the front-runner, none are seizing on climate policy or support for renewable energy manufacturing and jobs as a way to stand out.“We’re going to open up all energy production, we’re going to be energy dominant in this country,” Florida Gov. Ron DeSantis said in the first minutes of the debate, echoing a familiar Trump line.Energy policy is one of theprimary areas of agreement for the Republican candidates. They have all called for a massive increase in domestic oil and gas production and a shift away from President Joe Biden’s aggressive clean energy push. The candidates have universally criticized Biden’s Inflation Reduction Act, and some have promised to repeal the climate law or slow its implementation if Congress won’t go along.Candidates also pushed for a slowdown in clean energy by claiming it only helps China, a regular talking point on Capitol Hill.“These green subsidies that Biden has put in, all he’s done is help China because he doesn’t understand,” former South Carolina Gov. Nikki Haley said, adding, “Half of the batteries for electric vehicles are made in China, so that’s not helping the environment, you’re putting money in China’s pocket.” Wednesday’s debate was hosted by Fox News, which frequently promotes climate disinformation to its large cable audience. Fox hosts have routinely rejected climate science and frequently host on their programs climate deniers who claim that recent heat waves, drought and extreme storms have no connection to human-caused climate change.
Reaching 2050 Net Zero Demands Large and Rapid Oil Consumption Drop | Rigzone -- Reaching net-zero emissions by 2050 demands large and relatively rapid declines in oil and gas consumption, led by the transport and power sectors, coupled with widespread deployment of carbon capture technologies among heavy industry. That’s according to analysts at BMI, a Fitch Solutions company, who made the statement in a new report sent to Rigzone recently. “While net-zero pathways can take a myriad of forms, there is no pathway in which oil and gas demand does not precipitously decline, supply chain emissions are not dramatically reduced, and carbon capture and storage has no role to play,” the analysts said in the report. One potential pathway to net zero highlighted in the report sees demand falling by around 75 percent, “led by the transport, power, residential, and commercial sectors”. Industrial demand remains relatively resilient in this pathway, but carbon capture technologies are widely deployed downstream, the analysts outlined. “Upstream and midstream carbon intensity also falls substantially under this scenario, with carbon credits playing only a marginal role in offsetting residual emissions,” the analysts added. In the report, the BMI analysts noted that current demand trajectories are poorly aligned with the Paris Agreement, “with carbon budgets being rapidly exhausted”. “Based on our existing forecasts for refined fuels and natural gas consumption, by 2032 global demand will be more than 35 percent above a level consistent with a net-zero 2050 target, absent substantial reductions in the carbon intensity levels and far wider deployment of CCS,” the analysts said. “These forecasts also suggest that the bulk of the carbon budget available to oil and gas under a 1.5C pathway will have been used up by the end of the decade. Assuming climate targets are ultimately met, this points to the likelihood of significant future policy discontinuity, carrying considerable risk to the oil and gas sector,” they added. “Extreme examples would include stringent curbs on the import or use of fossil fuels, or moratoriums on drilling and production. Companies can adapt to incremental and forwardly transparent policy evolution, but rapid policy shifts [can] be hugely disruptive to operational and financial performance,” the analysts warned. The BMI representatives said in the report that aligning corporate strategy to the Paris Agreement can help insulate a company against these risks. In a separate report sent to Rigzone, analysts at BMI stated that, as we progress towards a net-zero economy, oil and gas companies, whose core business is the production, transformation, and sale of emissions-intensive fossil fuels, have three options open to them – “adapt, mitigate or manage their decline”. “Adaptation involves the company decoupling its revenue growth from emissions growth, shifting its asset base into alternative, low-carbon energies,” the analysts said in this report. “Mitigation entails some degree of diversification, but largely within the oil and gas sector itself, with companies focusing on a less pollutive, more specialized and more durable product suite downstream and stripping greenhouse gas emissions out of the upstream and midstream supply chain,” they added. “Managed decline involves the company in a more or less ‘business as usual’ approach. Investments are focused towards minimizing cost and maximizing recovery and the asset base remains broadly unchanged,” the analysts continued. In this report, the BMI analysts warned that, as the energy transition accelerates, more stringent disclosure requirements will be brought into place across a wider array of markets. “Those companies that fail to align with the Paris Agreement will then find themselves increasingly vulnerable to litigation,” the analysts said in the report. “Equally, efforts to capture emissions at either the asset or company level are currently patchy and unstandardized,” they added. “However, as emissions monitoring, reporting and verification standards and capabilities are improved, wide divergence in emissions reduction efforts will be laid bare, introducing new legal, regulatory, and reputational risks to the sector,” the analysts went on to state.
Oil and Gas Explorers Will Become Bolder - Oil and gas explorers will become bolder in the coming years, Julie Wilson, the Director of Global Exploration Research at Wood Mackenzie outlined in a release sent to Rigzone recently, which highlighted that exploration spend will recover from “historic lows”. “While this rebound might surprise some, it must be seen in context,” Wilson noted in the release. “Exploration went through a boom during 2006-2014 and spend peaked at $79 billion (in 2023 terms). But in the prior six years, the average was $27 billion per year in 2023 terms,” Wilson added. “While spending will increase, it won’t return to anywhere close to past highs and there will likely be a ceiling on the increase. There is a lack of high-quality prospects that would satisfy today’s economic and ESG metrics and a continued focus on capital discipline will keep a lid on overspending,” Wilson continued. According to a new report from Wood Mackenzie, exploration spend (excluding appraisal) will recover from historic lows to average $22 billion per annum in real terms over the next five years, the release outlined. A chart of exploration spend in real 2023 terms, which spanned from 2020 to 2027 and was included in the release, showed that this spend peaked in 2013. During that year, the majority of the spend went towards deepwater, according to the chart. Exploration spend came in above $20 billion in 2000, then rose well above $40 billion in 2006, well above $50 billion in 2007, and near $70 billion in 2008, the chart outlined. It then increased year on year to 2013, before dropping to its lowest point last year, the chart revealed. Wood Mackenzie highlighted in its latest release that, according to its report, “tailwinds from attractive exploration economics, the need for energy security, and the emergence of new frontiers will incentivize oil and gas companies, led by NOCs and majors, to increase exploration spending through 2027”. The growth will begin in 2023, with spending projected to increase 6.8 percent over 2022 totals, the release stated, adding that a major driver for this increased activity “is the robust business case”. Full cycle returns from exploration have been consistently above 10 percent since 2018 and exceeded 20 percent in 2022, Wood Mackenzie highlighted in the release.
Argentina to launch pipeline conversion project to move Vaca Muerta gas to north | S&P Global Commodity Insights - Argentinian Energy Secretary Flavia Royon said Aug. 22 that a project will be launched in the next few days to convert a pipeline in northern Argentina to transport natural gas north from the Vaca Muerta shale play, helping to compensate for a decline in imports from Bolivia. "The reversion of the pipeline is urgent," she said at the Argentina Energy Roundtable organized by the Institute of the Americas in Buenos Aires. "Bolivia is suffering a sharp decline in its gas production. It is not going to be able to comply with its supply agreement with Argentina." Argentina has relied on gas imports from Bolivia for nearly 20 years to meet demand in the north, where gas fields on its side of the border have been flagging in production and reserves. This reliance on Bolivian gas in northern Argentina, including for power generation, has raised concerns of shortages over the past few years as Bolivian output dwindles. Bolivia's gas output fell 18% to 34.6 million cu m/d in May from an average of 42.2 million cu m/d for all of 2022 and was down 43% from a peak of 60.8 million cu m/d for all of 2014, according to data from the Bolivian National Institute of Statistics. Vaca Muerta is emerging as the new source of gas for the north of Argentina thanks to its huge resources -- estimated at 300 Tcf, equivalent to 150 years of national demand -- and the construction of a pipeline to move the production to the center of the country. The first section of that Vaca Muerta pipeline started operations in July, moving 11 million cu m/d to central Buenos Aires province. The addition of compression plants will increase the flow on that first section to 22 million cu m/d later this year, but the second section of the pipeline is needed to feed the north with gas, Royon said. The second section will take the flow on the Vaca Muerta pipeline to 44 million cu m/d in 2025 to feed supplies to the center of the country, where there is a connection to the northern pipeline. Royon said the government is working on how to finance the second section of the pipeline, adding that the auction for its construction will be held in September. In April, Royon said these two pipeline projects will allow Argentina to stop importing gas from Bolivia by 2024 or 2025, leaving gas imports from the global LNG market to times of peak winter demand in the months of June, July and August.Talks Start to Avert Strike at Australia's Biggest LNG Terminal -Talks to avoid strikes at Australia’s biggest liquefied natural gas export terminal began Wednesday morning, with the threat to supply set to continue rocking global markets for the fuel. Woodside Energy Group Ltd. and officials representing workers at its North West Shelf LNG facility have started discussions in Perth to negotiate pay and conditions, according to people with knowledge of the matter. Talks are expected to continue until the evening. The Offshore Alliance, a group representing two major labor unions, previously said that it will move forward with strikes as early as Sept. 2 if a deal isn’t reached on Wednesday. The risk of disruptions to LNG exports from Australia, one of the world’s biggest suppliers, has sent Asian and European prices surging this month. Strikes at Woodside and Chevron Corp. facilities, which is facing similar labor action, may put as much as 10 percent of global LNG supply at risk just as the Northern Hemisphere prepares for winter.
Fresh Oil Spill Reported in Ogoni, MOSOP Commend Containment - A fresh oil spill has been reported in Ogoni. The spill which occurred on Friday, August 18, 2023 was detected following oil leaks from a pipeline in Bodo community, Gokana local government area of Rivers State. The precise cause of the pipeline failure which caused the spill has not been determined and the operators of the pipeline, the Shell Petroleum Development Company of Nigeria Limited, SPDC, were yet to make an offcial statement on the spill. Information from the community says the spill occurred on Friday, August 18, 2023. Community sources also con rm that the spill was promptly contained after it was reported. President of the Movement for the Survival of the Ogoni People, MOSOP, Fegalo Nsuke con rmed the incident this morning and expressed worries over the frequency of oil spill occurrences in the Ogoni region. Nsuke said “the frequency of oil spills in the Ogoni area raises questions about the integrity of oil assets in the entire NIger Delta region.” While commending the prompt response from the operators of the pipeline, Shell, he demanded an unbiased investigation into the cause of the spill. “We understand the spill has been contained and that the containment was prompt and averted serious pollution and the environmental problems that came with similar spills. That is commendable. However, we will expect a transparent and speedy investigation into the spill to enable a proper response that can avert similar cases in future”. The MOSOP leader further called on the Bodo community to cooperate with repair works and remediation e|orts if and when they are initiated. “I will urge the Bodo community to cooperate with e|orts to repair the pipeline as well as any remediation e|orts if and when they are initiated. I will urge tolerance, as usual, to allow them to x the pipelines for our collective safety” . “We do not think they will do anything extraordinary which could jeopardize the safety of residents and we believe Shell’s presence in this instance will be to x the faulty pipeline and that should be in our interest. I urge everyone to cooperate with that process and be very instance will be to x the faulty pipeline and that should be in our interest. I urge everyone to cooperate with that process and be very vigilant”, he said.
July Russian oil imports dip; Saudi import down to 2-1/2-yr low: Trade data -- India's July crude oil imports from Russia dipped for the first time in nine months, while inbound shipments from Saudi Arabia tumbled to their lowest in 2-1/2 years following OPEC+ cuts, tanker data from trade and industry sources showed. Both China and India, the world's biggest and third-biggest oil importers, cut imports from Russia and Saudi Arabia in July after prices rose and as the two oil producers reduced output and crude oil shipments. Saudi Arabia volunteered to cut output by another 1 million barrels per day (bpd) from July through September, and Russia will reduce exports in August by 500,000 bpd, part of a deal among members of the Organization of the Petroleum Exporting Countries and its allies, a grouping know as OPEC+, to curb supplies and support prices. India's overall imports also declined 5.2% from June to 4.4 million bpd oil in July, the data showed, as several refining plants are shut for maintenance during monsoon season. Russian oil imports declined 5.7% to 1.85 million bpd and Saudi shipments fell by 26% to 470,000 bpd, the data showed. India imports more than 80% of its overall oil needs.
India imports $12.4 billion worth of crude from Russia but discounts are waning -India has been enjoying the discounted crude oil from Russia for over a year now. But the discount that India seems to be enjoying is coming down even as Russia remains one of its biggest suppliers as it imported crude to the tune of $12.4 billion in Q1FY24. “This year, in Q1FY24, while India continues to import crude oil at discounted rate from Russia compared with other countries; the premium has actually gone down relative to last year,” says Jahnavi Prabhakar, economist at Bank of Baroda. In the April-June quarter of FY23, the premium that India enjoyed from Russian crude – that’s the difference between international prices and Russian supply — was at $12.6 per barrel. In the same quarter this year, it has come down to $8.8 per barrel. Russia also announced in early August that it’s planning to cut crude oil production by 300,000 barrels per day. Prime Minister Alexander Novak had said that the country is going in for voluntary cuts to ensure the “oil market remains balanced”. It will also cut its exports by that quantity, he added. This is in addition to a pledge to reduce its oil output by around 500,000 barrels per day, or some 5% of its oil production, from March to the end of the year.
Russian Oil Refineries Get Busier as Fuel Subsidies Cut Looms Russia’s oil refineries increased crude-processing rates in the first half of August — before a sharp cut to state subsidies that’s about to take effect. Daily primary processing rates averaged 5.63 million barrels over Aug. 1-16, according to a person with knowledge of the matter. That’s almost 10,000 barrels a day higher than the average for the most of July, even as Rosneft’s PJSC’s Saratov refinery started planned maintenance. Gazprom PJSC’s Surgut condensate-processing plant completed work last week and Surgutneftegas PJSC’s Kirishi raised throughput this month compared with July, contributing to the overall increase, said Mikhail Turukalov, an independent US-based oil analyst. There was also a slight increase at Gazprom Neft’s Omsk refinery and TAIF-NK, he added. The nation’s crude flows to domestic refineries and its supplies overseas are among key indicators for oil market observers following trends in Russia’s output after official data was classified amid Western sanctions. The Kremlin pledged to cut output by 500,000 barrels a day from February levels and maintain the curbs through 2024. While there was little evidence of the full adherence to the pledge earlier this year, last month Russia “more than fulfilled” its commitment, according to the Paris-based International Energy Agency. “It’s difficult to assess whether monthly growth of refinery throughput will keep through August,” said Turukalov. “Rosneft’s Angarsk refinery started planned works Aug. 15 and if its Ryazan refinery begins maintenance Aug. 20, then Russia’s processing rates will be lower this month compared with July.” August is the final month before the government halves subsidies for domestic supplies of gasoline and diesel, adding an incentive for Russian refiners to process more crude.
China And Russia Execute A Pincer Movement Around Iraq’s Biggest Oil Assets -- Crucial to Iraq’s plan to increase its oil production capacity to around 7 million barrels per day (bpd) by 2027 are the supergiant fields of Rumaila and West Qurna 2, as analysed in depth in my new book on the new global oil market order. Within the last two weeks, Russian state oil proxy Lukoil agreed to dramatically increase output from West Qurna 2. At around the same time, Daqing Drilling Engineering Company – a subsidiary of Chinese state oil proxy China National Petroleum Corporation (CNPC) – was awarded a US$192 million engineering, procurement, and construction contract for Rumaila. Both critical developments in Iraq’s oil sector follow a comment from a very high-ranking official from the Kremlin – related exclusively to OilPrice.com at the time by a senior source in the European Union’s (E.U.) energy security apparatus – that: “By keeping the West out of energy deals in Iraq – and closer to the new Iran-Saudi axis – the end of Western hegemony in the Middle East will become the decisive chapter in the West’s final demise”. The key question now for U.S. and its allies is what happens next in Iraq? From China’s and Russia’s perspective, things are going very well indeed, based on the plan they put into action after the U.S.’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA, colloquially ‘the nuclear deal’) with Iran in May 2018. At the broadest level, the objective was to control all of Iran’s massive oil and gas resources between them, and then to extend this influence into Iraq, and then into Saudi Arabia so that they controlled all their oil and gas resources too. This would provide China with all the energy it needed to power its economic growth into the future so that it could overtake the U.S. as the world’s leading economic superpower by 2030 (the ‘hard’ target date at that point in 2018). China’s path towards realising its objectives was made much easier by the U.S. withdrawal from the JCPOA. Within just three months of this, China and Iran had agreed in principle nearly all the key energy, financial, and military cooperation policies that would be enshrined a year later in the ‘Iran-China 25-Year Comprehensive Cooperation Agreement’ as first revealed anywhere in the world in my 3 September 2019 article on the subject and analysed in full in my new book on the new global oil market order. Aside from the obvious energy advantages to China of such an agreement, it was also aware that this pact would create an enormous perceived security threat to Iran’s arch-historical enemy, Saudi Arabia. From that point, then, China capitalised on Saudi Arabia’s fears to further leverage the relationship it had developed with Saudi Crown Prince Mohammed bin Salman (MbS) via a face-saving offer over the Aramco IPO that enabled him to become heir to King Salman, as also analysed in the book. A spate of deals was done between Saudi Arabia and China, to the point that by the time of Russia’s invasion of Ukraine in February 2022, Saudi Arabia was already so aligned to China that Saudi Aramco’s chief executive officer, Amin Nasser, said: “Ensuring the continuing security of China’s energy needs remains our highest priority – not just for the next five years but for the next 50 and beyond”. These developments, as China had anticipated back in May 2018, culminated in the 10 March 2023 agreement between Iran and Saudi Arabia to restore relations, brokered and monitored for the future by Beijing. The longstanding division of tasks between China and Russia is evident in the current phase of their takeover of Iraq’s oil and gas sector. Well-known Russian oil and gas firms are present in major exploration and development contracts across the country, including in the semi-autonomous region of Kurdistan, which it uses to create trouble – and therefore leverage – with southern Iraq. China, conversely, remains content to play the quieter, longer game, in order not to provoke direct confrontation with the U.S. and its allies.
Saudi massacres of refugees: Mass murder by key US ally -- Border guards in Saudi Arabia, armed and trained by the imperialist powers, especially the United States, have committed sadistic crimes against humanity, according to a report by Human Rights Watch (HRW) released Monday. The report documents the systematic murder of hundreds of migrants, mainly from Ethiopia, at the Yemen-Saudi border between March 2022 and June 2023. Based on eyewitness, video and satellite evidence, the report, headlined, “They Fired on Us Like Rain,” found that large groups of migrants were targeted with mortars, rockets and tanks, leaving “scenes of horror: women, men, and children strewn across the mountainous landscape severely injured, dismembered, or already dead.” These attacks sometimes continued for days. Many with limbs torn off had to be abandoned, with survivors describing memories of the screams and the mental trauma of being forced to leave them behind. Fourteen-year-old Hamdiya told HRW, “We were fired on repeatedly. I saw people killed in a way I have never imagined. I saw 30 killed people on the spot. I pushed myself under a rock and slept there. I could feel people sleeping around me. I realized what I thought were people sleeping around me were actually dead bodies.” Sometimes upwards of 100 people were killed in a single assault. Mass killings continued as the victims fled back toward Yemen. Mass graves are being dug at crossing points along the border. Migrants apprehended by border guards report being asked in which limb they would like to be shot before the maiming was carried out. Others were beaten with rocks and metal bars. This was sometimes the method used to deal with those who had survived attacks from a distance with explosive weapons. “A 17-year-old boy described how Saudi border guards forced him and other survivors to rape two girl survivors after the guards had executed another survivor who refused.” Survivors temporarily detained in Saudi Arabia before being expelled back into Yemen were beaten, kept in unsanitary, overcrowded conditions—fed once a day and held in sites flooded with sewage. HRW writes cautiously that “the abuses may qualify as crimes against humanity, if there is now a Saudi state policy of murder of civilian migrants,” but the evidence is overwhelming. Between the start of the year and April 30, 2023, writes HRW, “UN experts reported receiving allegations of ‘artillery shelling and small arms fire allegedly by Saudi security forces causing the deaths of up to 430 and injuring 650 migrants, including refugees and asylum seekers.’ They went goes on to state that this ‘appears to be a systematic pattern of large-scale indiscriminate cross-border killings.’”
US and Iran reach agreement amid escalating pressure, tensions and threats - The US has agreed an informal and limited deal with Iran over its nuclear programme in a bid to stymie growing relations between Tehran and Moscow, as Washington prepares to escalate the war in Ukraine against Russia. Following more than a year of indirect talks, Iran’s clerical bourgeois nationalist regime has apparently agreed not to process uranium beyond the 60 percent level, to release several jailed Iranian-American dual nationals, to stop attacks on American forces by its regional allies, and to not transfer ballistic missiles to Russia. In return, the US has agreed not to tighten sanctions, seize oil tankers or seek punitive resolutions against Iran at the United Nations or the International Atomic Energy Agency (IAEA). It has also agreed to the unfreezing of some Iranian assets in third countries for non-sanctionable activities, including food and medicine imports. The details are sketchy, with the Biden administration refusing to comment or confirm the arrangements, which do not constitute a formal written accord. In part at least, this is to avoid triggering the 2015 US Iran Nuclear Agreement Review Act, which requires any nuclear agreement reached with Tehran to be approved by Congress, which is openly hostile to any such deal. The Republican Party has lashed out at the news, with former Vice President Mike Pence, who is running for the 2024 Republican presidential nomination, calling the deal “the largest ransom payment in American history to the Mullahs in Tehran.” In the last week, Iran has transferred four Iranian-Americans imprisoned in Tehran’s Evin Prison to house arrest, including Siamak Namazi, Emad Sharghi and Morad Tahbaz, jailed on charges of spying, and two other unnamed Americans, one a scientist and the other a businessman, one of whom had already been released to house arrest. They will be allowed to return to the US once $6 billion of Iran’s frozen oil revenues in South Korea and $4 billion in Iraq have been transferred via the central bank in Qatar to Iran. The cash will provide a crucial lifeline for President Ebrahim Raisi’s regime, which is struggling with a $10 billion budget deficit, although it can only be spent on food and medicine. According to Iran’s state news agency, IRNA, the US will then release five Iranians held in American prisons. A report in The Wall Street Journal last week said that Tehran had decided to lower the quantity of enriched uranium it possesses and dilute some of the uranium already enriched back to 60 percent—far higher than that agreed under the 2015 nuclear accord that the Trump administration unilaterally abandoned in 2018--while slowing the enrichment process. This may indicate that Tehran is prepared to come to a broader agreement with Washington and the European powers. Foreign Minister Hossein Amir-Abdollahian, speaking at a televised news conference, said Tehran was committed to resolving its nuclear dispute with world powers through diplomacy, saying, “We have always wanted a return of all parties to full compliance of the 2015 nuclear deal.” These developments come after the US ramped up the pressure on Iran, even as Washington’s allies in the Gulf have normalized relations with Tehran. Saudi Arabia has reopened its embassy in Tehran, while Amir-Abdollahian has held talks with his counterpart in Riyadh.
Iran’s booming oil exports exceed 2m bpd: report - Tehran Times - Iran’s oil exports continue to increase in August, surging above two million barrels per day (bpd) which is their highest since the beginning of the year, Bloomberg reported on Monday citing TankerTrackers data. It was already known that Iran's shipments were surging, but the data for August would represent a marked leg higher if maintained for the remainder of the period. The flow rate for the past 28 days shows shipments running at a rate of 2.1 million barrels a day, the Bloomberg report said. As reported, TankerTrackers’ satellite images show a new surge in Iran's flows in August amid the reduction in the supplies of other top exporters. Bloomberg added that the increase in Iran's shipments will boost global supply when Saudi Arabia and Russia curb output. Earlier this month, Bloomberg reported that China’s oil imports from Iran have been soaring in August so that the shipments are expected to reach 1.5 million bpd, the highest since 2013. Citing estimates from data intelligence firm Kpler, Blomberg put China’s imports of Iranian oil during the January-July 2023 period at 917,000 bpd on average. Iran has been ramping up oil exports this year as it becomes more geopolitically assertive, with most of the shipments heading to China, Bloomberg said. In late July, Kpler said that Iran’s oil shipments to China have more than tripled over the past three years despite the U.S. sanctions on the country and the increase in Russia’s shipments to the Asian country. According to the data analyzing firm, Iranian crude exports to its major trade partner have been hovering around one million bpd in 2023, while the figure was roughly 325,000 bpd in 2020. Also, the International Energy Agency (IEA) in a recent report titled "Oil 2023" confirmed Iran's daily export of one million barrels of oil to China, saying: “Despite severe financial restrictions, Iran managed to increase its crude oil production by about 140,000 barrels per day in 2022 to an average of 2.5 million barrels per day. It seems that Tehran has maintained its crude sales to China, which has been around one million barrels per day since the third quarter of last year.” According to official data, Iranian oil production also increased in the current year so that in May the country’s oil output reached 2.9 bpd, 350,000 bpd more than in 2022.
