oil prices rose for a 2nd straight week, after falling each of the prior seven weeks, as Houthi attacks in the Red Sea shut down the Suez trade route and forced hundreds of ships to circumvent Africa to reach their destination…after bouncing off a 6 month low to eke out a 0.3% gain at $71.43 a barrel last week after trader sentiment turned bullish on signs that the Fed would pivot to lower interest rates, the contract price for the benchmark US light sweet crude for January delivery opened higher on Monday, triggered by a disruption of shipping through the Red Sea following a series of attacks by Houthi rebels on commercial vessels in the region, and settled $1.04 higher at $72.47 a barrel after BP became the latest company to announce it was halting oil shipments through the Red Sea due to the “deteriorating security situation for shipping.”…after trading lower early Tuesday after the U.S. announced the creation of a task force to safeguard Red Sea commerce from attacks by the militants, the rally resumed during Tuesday's afternoon session, amid reports that shipping companies would continue to avoid transit through the Red Sea and instead send vessels around the southern tip of Africa, as trading in the January oil contract expired 94 cents higher at $73.44 a barrel….the rally continued into early Wednesday with markets quoting the contract price for the US oil benchmark for February delivery, which rose to a high of $75.37 ahead of the release of the EIA’s weekly petroleum stock report, but pared gains ffollowing the release to settle the session just 28 cents higher at $74.22 a barrel, after the EIA reported total oil and petroleum product supplies unexpectedly jumped by 9.5 million barrels and domestic oil production rose to a new record high….however, oil prices fell early on Thursday as traders reacted to cracks in OPEC’s unity following the news that Angola was leaving OPEC, but cut their sharp losses and settled 33 cents lower at $73.89 a barrel after Baker Hughes (BKR) reported a third straight weekly decline in the number of active U.S. rigs drilling for oil and as traders realized Angola couldn’t even pump their reduced OPEC quota…oil prices rose as much as 1% early Friday as tensions persisted in the Middle East following Houthi attacks on ships in the Red Sea, but edged lower during Friday's afternoon session and settled down 33 cents at $73.56 per barrel on concerns of further fracturing within the OPEC+ alliance after Angola abandoned the quota system to pursue private investments to expand its oil industry…oil prices still finished 3.0% higher on the week, while the February oil contract, which had closed last week at $71.78 a barrel, ended with a 2.5% gain…
Meanwhile, natural gas prices finished higher for the first time in seven weeks on colder forecasts and a bigger than expected withdrawal of gas from storage...after settling 3.5% lower at $2.491 per mmBTU last week after hitting a life-of contract low at $2.235 per mmBTU on warm winter forecasts last Tuesday, the contract price for natural gas for January delivery opened 8 cents higher on Monday, as additional heating demand was added to the forecast for the end of the month, but settled just 1.2 cents higher at $2.503 per mmBTU, as weather and fundamental outlooks suggested the upside movement would be short lived….natural gas prices followed through on that sentiment on Tuesday after heating demand vanished from the short-term forecast, and settled 1.1 cents lower at 2.492 per mmBTU, then shed another 4.5 cents to settle at $2.447 per mmBTU on Wednesday after opening 8 cents lower on the revised forecast….however, after trading in a narrow range early Thursday, natural gas prices spiked to over $2.60 per mmBTU after the EIA reported a larger than expected withdrawal of gas from storage, then traded mostly sideways to finish the day 12.5 cents higher at $2.572 per mmBTU, boosted by forecasts for colder weather and higher heating demand in early January than had been expected, and as a record amount of gas continued to flow to LNG export plants…natural gas prices held to the upside on Friday, as traders looked to forecasts calling for colder winter weather, and settled with a 3.8 cent gain to $2.610 per mmBTU on the session, and thus ended 4.8% higher for the week
The EIA's natural gas storage report for the week ending December 15th indicated that the amount of working natural gas held in underground storage in the US fell by 87 billion cubic feet to 3,577 billion cubic feet by the end of the week, which still left our natural gas supplies 240 billion cubic feet, or 7.6% above the 3,337 billion cubic feet that were in storage on December 15th of last year, and 280 billion cubic feet, or 8.5% more than the five-year average of 3,297 billion cubic feet of natural gas that were in working storage as of the 15th of December over the most recent five years…the 87 billion cubic foot withdrawal from US natural gas working storage for the cited week was more than the average 80 billion cubic feet withdrawal from supplies that was forecast by analysts polled by Reuters, and more than the 82 billion cubic feet that were pulled from natural gas storage during the corresponding mid December week of 2022, but less than the average 107 billion cubic feet withdrawal from natural gas storage that has been typical for the same early winter week over the past 5 years
The Latest US Oil Supply and Disposition Data from the EIA
The US oil data from the US Energy Information Administration for the week ending December 15th appeared to show that even after an increase in our oil exports and a significant jump in our refinery throughput, we had surplus oil to add to our stored commercial crude supplies, for the seventh time in nine weeks, and for the 10th time in the past 23 weeks, as oil that the EIA could not account for shifted from the demand side to the supply side of the oil balance sheet...Our imports of crude oil rose by an average of 233,000 barrels per day to average 6,750,000 barrels per day, after our oil imports had dropped by an average of 991,000 barrels per day the prior week, while our exports of crude oil rose by 350,000 barrels per day to average 4,121,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 2,629,000 barrels of oil per day during the week ending December 15th, 117,000 fewer barrels per day than the net of our imports minus our exports during the prior week. At the same time, transfers to our oil supply from Alaskan gas liquids, natural gasoline, condensate, and unfinished oils averaged 692,000 barrels per day, while during the same period, production of crude from US wells was 200,000 barrels per day higher at a record high of 13,300,000 barrels per day. Hence our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a total of 16,621,000 barrels per day during the December 15th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,500,000 barrels of crude per day during the week ending December 15th, an average of 403,000 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 a rounded average of 505,000 barrels of oil per day were being added to 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 December 15th appear to indicate that our total working supply of oil from net imports, from transfers, and from oilfield production was 385,000 barrels per day less than what what was added to storage plus what our oil refineries reported they used during the week. To account for that difference between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a [ +385,000] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the 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 in the week’s oil supply & demand figures that we have just transcribed.... Moreover, since 1,046,000 barrels of oil demand per day could not be unaccounted for in last week’s data, that means there was a 1,431,000 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, and therefore useless... 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)….(note there is also an aging twitter thread from an EIA administrator addressing these errors, and what they had hoped to do about it…the errors have since gotten larger; Reuters recently addressed that issue here..)
This week's rounded average of 505,000 barrel per day increase in our overall crude oil inventories came as 416,000 barrels per day were added to our commercially available stocks of crude oil, while 90,000 barrels per day were being added to our Strategic Petroleum Reserve, the third SPR increase in ten weeks and the largest since September. Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to 6,652,000 barrels per day last week, which was 7.6% more than the 6,184,000 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 200,000 barrels per day higher at a record high of 13,300,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 200,000 barrels per day higher at 12,900,000 barrels per day, while Alaska’s oil production was 4,000 barrels per day lower at 431,000 barrels per day but still added the same 400,000 barrels per day to the EIA's 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 is now 1.5% above that of our pre-pandemic production peak, and 37.1% 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 92.4% of their capacity while processing those 16,500,000 barrels of crude per day during the week ending December 15th, up from their utilization rate of 90.2% last week, and now a near normal utilization rate for mid December.. the 16,500,000 barrels per day of oil that were refined this week were 3.3% more than the 15,976,000 barrels of crude that were being processed daily during week ending December 16th of 2022, but 0.4% less than the 16,562,000 barrels that were being refined during the prepandemic week ending December 13th, 2019, when our refinery utilization rate was at 90.6%..
With the big increase in the amount of oil being refined this week, gasoline output from our refineries was also higher, increasing by 496,000 barrels per day to 10,038,000 barrels per day during the week ending December 15th, after our refineries' gasoline output had increased by 25,000 barrels per day during the prior week. This week’s gasoline production was 5.1% more than the 9,552,000 barrels of gasoline that were being produced daily over the same week of last year, and 2.0% more than the gasoline production of 9,840,000 barrels per day during the prepandemic week ending December 13th, 2019....on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 115,000 barrels per day to 4,873,000 barrels per day, after our distillates output had decreased by 83,000 barrels per day during the prior week. With those decreases, our distillates output was 4.5% less than the 5,102,000 barrels of distillates that were being produced daily during the week ending December 16th of 2022, and 3.9% less than the 2,072,000 barrels of distillates that were being produced daily during the week ending December 13th, 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 7th time in nine weeks and for the 17th time in forty-three weeks, increasing by 2,710,000 barrels to 226,723,000 barrels during the week ending December 15th, after our gasoline inventories had increased by 409,000 barrels during the prior week. Our gasoline supplies rose by more this week because the amount of gasoline supplied to US users fell by 104,000 barrels per day to 8,859,000 barrels per day, and even though our exports of gasoline rose by 62,000 barrels per day to a twelve month high of 1,193,000 barrels per day while our imports of gasoline fell by 178,000 barrels per day to 537,000 barrels per day.…So even after twenty-six gasoline inventory withdrawals over the past forty-three weeks, our gasoline supplies were still 0.3% above than last December 16th's gasoline inventories of 226,113,000 barrels, and only 2% below the five year average of our gasoline supplies for this time of the year…
Even with this week's decrease in our distillates production, our supplies of distillate fuels rose for the fourth time in twelve weeks, increasing by 1,485,000 barrels to 115,024,000 barrels over the week ending December 15th, after our distillates supplies had increased by 1,848,000 barrels during the prior week. Our distillates supplies rose again this week because our imports of distillates rose by 20,000 barrels per day to 225,000 barrels per day and because our exports of distillates fell by 145,000 barrels per day to 1,063,000 barrels per day, and while the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 53,000 barrels per day to 3,823,000 barrels per day....With 23 inventory decreases over the past forty-one weeks, our distillates supplies at the end of the week were still 4.1% below the 119,929,000 barrels of distillates that we had in storage on December 16th of 2022, and about 10% below the five year average of our distillates inventories for this time of the year...
Finally, even with our our oil exports higher and with a significant increase in refinery demand for oil, our commercial supplies of crude oil in storage rose for the 16th time in twenty-six weeks and for the 25th time in the past year, increasing by 2,909,000 barrels over the week, from 440,773,000 barrels on December 8th to 443,682,000 barrels on December 15th, after our commercial crude supplies had decreased by 4,258,000 barrels over the prior week... With that increase, our commercial crude oil inventories were still about 1% below the most recent five-year average of commercial oil supplies for this time of year, but were also about 32% above the average of our available crude oil stocks as of the 3rd weekend of December over the 5 years at the beginning of the past decade, with the big difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories had 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 December 15th were 6.1% more than the 418,234,000 barrels of oil in commercial storage on December 16th of 2022, and 4.7% more than the 423,571,000 barrels of oil that we still had in storage on December 17th of 2021, but still 11.2% less than the 499,534,000 barrels of oil we had in commercial storage on December 18th of 2020, after early pandemic precautions had left a lot of oil unused…
This Week's Rig Count
Note that this week's rig count was released on Thursday, December 21st, instead of Friday, apparently due to Christmas on the following Monday, and hence only covers changes to rigs over the six days from last Friday to Thursday; the comparisons to year ago rig counts also include a holiday shortened 6 day period ending Thursday, December 22nd, 2022....in lieu of details on the rig count, we are again just including below a screenshot of the rig count summary from Baker Hughes...in the table below, the first column shows the active rig count as of December 21st, the second column shows the change in the number of working rigs between last week’s count (December 15th) and this week’s ( December 21st) count, the third column shows last week’s December 15th active rig count, the 4th column shows the change between the number of rigs running on Thursday and the number running on the Thursday 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 period a year ago, which in this week’s case was the 22nd of December, 2022...
DUC well report for November
Monday of this week saw the release of the EIA's Drilling Productivity Report for December, which included the EIA's November data on drilled but uncompleted (DUC) oil and gas wells in the 7 most productive shale regions (click tab 3)....that data showed a decrease in uncompleted wells nationally for the 38th time out of the past 41 months, as both drilling of new wells and completions of drilled wells fell in November and hence remained well below the average pre-pandemic levels....for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 83 wells, falling from a revised 4,498 DUC wells in October to 4,415 DUC wells in November, which was also 15.1% fewer DUCs than the 5,198 wells that had been drilled but remained uncompleted as of the end of November of a year ago...this month's DUC decrease occurred as 854 wells were drilled in the seven regions that this report covers (representing 87% of all U.S. onshore drilling operations) during November, down by 5 from the 859 wells that were drilled in October, while 937 wells were completed and brought into production by fracking them, down from the 952 well completions seen in October, and down from the 947 completions seen in November of last year....at the November completion rate, the 4,415 drilled but uncompleted wells remaining at the end of the month represents a 4.7 month backlog of wells that have been drilled but are not yet fracked, down from the 4.8 month from the DUC well backlog of a month ago, while still up from the 7 1/2 year low of 4.6 months in January, on a completion rate that is roughly 20% below 2019's pre-pandemic average...
the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, decreased by 3 wells, from 764 DUCs at the end of October to 761 DUCs at the end of November, as 77 new wells were drilled into the Marcellus and Utica shales during the month, while 80 of the already drilled wells in the region were fracked...
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Ohio HB 201 Adds Fee to Utility Bills to Upgrade NatGas Pipes| Marcellus Drilling News - Ohio House Bill (HB) 201 was recently passed by both the state House and Senate and now sits on the desk of Gov. Mike DeWine (a somewhat swampy Republican, although far superior to governors like Kathy Hochul and Josh Shapiro). HB 201 started life as a bill to block the Buckeye State from following California’s lead in adopting emissions that are stricter than national regulations and call for the phaseout of the internal combustible engine by 2035. Somewhere along the way, the bill added an additional measure allowing the state’s natural gas utilities to recover the costs of installing new pipelines by tacking a fee on utility bills. It is the pipeline amendment that has the radicals going nuts in the state.
Your natural gas bill could go up if DeWine signs bill for pipeline upgrades - Cincinnati Enquirer - Ohioans could pay more on their natural gas bills if Gov. Mike DeWine signs a bill that passed swiftly through the GOP-controlled state Legislature.Last-minute changes to House Bill 201 would allow natural gas companies to charge customers for more infrastructure upgrades, extensions and planning costs, including proposed projects that might never be built."In other words, this will not be the bridge to nowhere. This will be the pipe to nowhere," Sen. Kent Smith, D-Euclid, said.But Sen. Rob McColley, R-Napoleon, contended that the change is needed to bring new jobs to Ohio. "If we are competing across state lines for economic development projects, that in many cases are going to bring hundreds if not thousands of jobs for the state of Ohio, we need to remain competitive for those projects," he said.DeWine seems to agree. “We have a great natural advantage with natural gas in Ohio," the Republican governor told reporters Friday while not expressly saying whether he'd sign the bill. "Making sure it is in the right spots and gets to the right spots is vitally important.” The charges would be limited to $1.50 per month for customers, but utilities could collect those fees for years to come. Currently, the state's four largest gas companies charge less than the $1.50 monthly cap, according to Ohio's Legislative Budget Office.How much could that cost Ohio's 3.7 million gas customers? It's hard to say without knowing what projects will be built in the future.Sen. Niraj Antani, R-Miamisburg, called the expanded fees a "massive tax increase on consumers." Ohio's Legislative Budget Office estimated the new charges "are likely to be minimal."The Ohio Consumers’ Counsel and Ohio Manufacturers' Association oppose the new charges, saying they will hurt customers and the state's economy. "As Ohioans have less money to spend on other goods and services (such as going to a restaurant, buying clothing, etc.), Ohio’s economy will suffer, not prosper. And consumers will suffer," Ohio Consumers’ Counsel Maureen Willis wrote in a letter to lawmakers. DeWine previously vetoed a proposal that would have allowed electric companies to charge for planning, developing and building utility infrastructure for big projects. That money would have come from the All Ohio Future Fund, money earmarked for megaprojects, rather than customers' bills. At the time, DeWine said the change would put too much power in utilities' hands. Now, DeWine says access to utilities is important as the state attracts companies to sites. “If you look to the future, this is one of the ingredients that we have to have for us to grow," DeWine said. Lt. Gov. Jon Husted also emphasized the importance of having sites ready to go. "We lose deals when utilities are not in place because we can’t act fast enough to get them there,” he said.
Court Orders Ohio Drillers to Produce Documents in Royalty Dispute -Marcellus Drilling News - Back in the summer of 2020, MDN told you about a lawsuit brought by an Ohio rights owner called TERA, an organization that appears to own the royalty rights for a number of leases with wells in Belmont County, OH, drilled by different producers, suing the producers for drilling into the Point Pleasant shale layer when the lease only mentions the Utica layer (see OH Landowners Sue Rice, Ascent, XTO, Gulfport for Drilling Too Deep). That lawsuit continues to grind on. Last week, a judge ruled the drillers being sued must produce certain documents sought by the plaintiff (rights owner).
PTT Working on Plan to Build Petchem Plant…in Thailand, Not Ohio -- Marcellus Drilling News -- This is your friendly (somewhat snarky) semi-annual reminder from MDN that the PTT ethane cracker project in Ohio is dead (see Facing Reality – PTT Ohio Cracker Plant Project is Dead). We periodically look for signs of life in the project, and it has been a flat line for YEARS. Nothing. Local and state leaders in Ohio sometimes pop their heads up to tell us to have hope; it will still happen. BUNKUM. Earlier today, PTT Global Chemical Public Company, the parent that would build an ethane cracker in Belmont County, OH, announced a deal with Mitsubishi Heavy Industries “to explore the utilization of hydrogen, ammonia and CCS technology to develop a large-scale petrochemical plant to achieve Net Zero.” However, the location of the plant will be in Thailand, PTT’s home country, and NOT in Ohio. We’ve pointed out for years that PTT has all sorts of money to work on big, multi-billion-dollar petrochemical plant projects elsewhere, but apparently there is not enough money for the Belmont ethane cracker. Why?
Western Pa. natural gas co. begins self-reporting air quality data as part of Shapiro partnership - A western Pennsylvania natural gas company is now publishing real-time air quality data at two of its well sites as part of a collaboration between the company and Gov. Josh Shapiro’s administration. On Monday, CNX Resources Corp., a Pittsburgh-based natural gas company with shale operations across Pennsylvania, Ohio and West Virginia, began publishing air quality data from two well sites — one in Washington County and the other in Greene County. The Shapiro administration is celebrating the move as a “historic collaboration,” noting in a statement on Monday that the public-private partnership will “help to provide fact-based, comprehensive health information for Pennsylvanians” by allowing communities near well sites to access air quality data in real-time. “My Administration is setting a new standard for Pennsylvania natural gas to be produced in a responsible, sustainable way and showing how we can bring people together to get things done,” Shapiro said. “We’re going to follow through on our commitment to reduce pollution and ensure the health and safety of our communities while maintaining Pennsylvania’s proud energy legacy and our Commonwealth’s critical role in the nation’s energy economy.”The online data, which also disclosed all the chemicals and additives used in hydraulic fracturing and drilling at those sites, is currently only available for the two sites, but the administration said the company plans to expand the program to well sites across the Commonwealth. The administration and CNX did not provide a timeline for when the expansion would be completed. However, not everyone is celebrating the news. Environmental advocates have previously expressed concern over allowing a company to essentially self-report. Advocates are equally concerned that the voluntary move lacks any real enforcement from state entities, such as the Pennsylvania Department of Environmental Protection (DEP). In Monday’s announcement, the administration reports that it has directed the DEP to “take immediate action to pursue formal rulemakings and policy changes mirroring the collaboration, including:
- New requirements for the disclosure of chemicals used in drilling,
- Improved control of methane emissions aligned with the EPA’s recently announced performance standards for emission sources in the oil and natural gas sector,
- Stronger drilling waste protections, including inspection of secondary containment,
- And corrosion protections for gathering lines that transport natural gas.
Earlier this year, the University of Pittsburgh published research that showed links between the proximity of gas industry operations and the occurrence of certain health problems in residents living near fracking operations, including cancers and worsening cases of asthma. In 1971, Pennsylvania became the first state to enshrine the right of its residents “to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment” into the state constitution, a mantra that has been at oddswith the oil and natural gas industries in the five decades since.
Gas company in Pennsylvania begins posting real-time air quality data - CNX Resources Corporation, a leading natural gas producer in Canonsburg, Pennsylvania, began posting real-time emissions facts and data on its new website, Pennsylvania Gov. Josh Shapiro announced Monday.The new website is part of a joint commitment made by CNX and Shapiro’s administration in November to provide greater transparency to the public. Officials said the website aims to provide a comprehensive health response regarding natural gas development in Pennsylvania by publicly disclosing all chemicals the company plans to use in drilling and hydraulic fracturing before it starts breaking ground on future gas wells.“My Administration is setting a new standard for Pennsylvania natural gas to be produced in a responsible, sustainable way,” Shapiro said in a press release. “We’re going to follow through on our commitment to reduce pollution and ensure the health and safety of our communities, while maintaining Pennsylvania’s proud energy legacy and our Commonwealth’s critical role in the nation’s energy economy.”The Pennsylvania Department of Environmental Protection is set to conduct an independent study of two future natural gas wells at sites proposed by CNX. The department plans to measure emissions and provide information on the chemicals being used and resulting air emissions at both locations before, during and after project development.In the official commitment, Shapiro directs the environmental agency to pursue policy changes, such as new requirements for the disclosure of chemicals used in drilling and improved control of methane emissions aligned with the EPA’s performance standards. The governor also urged for stronger drilling waste protections, including inspection of secondary containment and corrosion protections for gathering lines that transport natural gas.CNX’s website dedicated to public disclosure comes three years after the 43rd Statewide Investigating Grand Jury in 2020, when Shapiro was serving as state attorney general. It found that the state government failed to protect residents during a 10-year period of increased fracking throughout Pennsylvania. The grand jury’s report included recommendations to hold the natural gas industry accountable and prioritize public health and safety, including greater public health and safety disclosures. CNX said its transparency and real-time data collection will begin with a well pad in Washington County called NV110, but the company plans to expand the monitoring program to its operations across Pennsylvania.
Pennsylvania environmental groups hold press conferences on fracking— A group of 10 environmental groups in Pennsylvania held two news conferences on Monday.They were held to ask Governor Shapiro to take action on fracking, which is the process of extracting natural gas. The groups point to health threats they say the process poses to people and the environment.They spoke on the steps of the State Capitol and at the Department of Environmental Protection in Pittsburgh. “It really protects communities and people in Pennsylvania to push it further back away from people. You know with something that’s bad you need to get away from it. The further you’re away from it the better you are,” Lois Bower-Bjonson said.They spoke against fracking operations close to homes and schools, which they said exposes people to unsafe levels of pollution.
SRBC Approves Water Withdrawals for 7 PA Shale-Related Projects - Marcellus Drilling News - The highly functional and responsible Susquehanna River Basin Commission (SRBC), unlike its completely dysfunctional and irresponsible cousin, the Delaware River Basin Commission (DRBC), continues to support the shale energy industry by approving water withdrawals for responsible and safe shale drilling. Last Thursday, the SRBC approved 19 new water withdrawal requests within the basin, six of them for water used in drilling and fracking shale wells in Pennsylvania (and one for a gas-fired power plant). The Marcellus/Utica shale drillers receiving a green light from SRBC included EQT, Pennsylvania General Energy, Repsol (two requests), and Seneca Resources (two requests).
PA Shale Water/Wastewater Company Expands to Texas Permian | Marcellus Drilling News -- It’s been a few years since we reported on Keystone Clearwater Solutions, a company that provides water services (clean water for fracking and wastewater hauling) for shale drillers in the Marcellus/Utica. At last check, in 2021, the company purchased the operations of competitor ECM Energy Services, based in PA, further expanding Keystone’s operations in the Keystone State (see Keystone Clearwater Buys ECM Energy’s PA Water Transport Biz). We’re happy to report Keystone is expanding to the Texas Permian oil play.
35 New Shale Well Permits Issued for PA-OH-WV Dec 11-17 | Marcellus Drilling News - New shale permits issued for Dec 11 – 17 in the Marcellus/Utica continued the trend up over the previous week. There were 35 new permits issued last week versus 27 issued two weeks ago. Last week’s permit tally included 17 new permits in Pennsylvania, 13 new permits in Ohio, and 5 new permits in West Virginia. The company receiving the most permits last week was Ascent Resources with 8 new permits in two different counties: Guernsey and Belmont counties in OH. Antero was second highest with 5 new permits in Ritchie and Doddridge counties in WV. ANTERO RESOURCES | APEX ENERGY | ARMSTRONG COUNTY | ASCENT RESOURCES | BELMONT COUNTY | CENTRE COUNTY | DODDRIDGE COUNTY | EQT CORP | GREENE COUNTY (PA) | GUERNSEY COUNTY | GULFPORT ENERGY | MONROE COUNTY | RANGE RESOURCES CORP | RITCHIE COUNTY | SENECA RESOURCES | SNYDER BROTHERS | SOUTHWESTERN ENERGY |SUSQUEHANNA COUNTY | TIOGA COUNTY (PA) | WASHINGTON COUNTY | | WESTMORELAND COUNTY |XPR RESOURCES
EIA Dec DPR: Another Big Production Drop Coming in M-U, Haynesville -Marcellus Drilling News - The latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR) for December, issued Monday (below), shows EIA believes shale gas production across the seven major plays tracked in the monthly DPR for January will *decrease* production from the prior month of December. This is the sixth month in a row that EIA has predicted shale gas production will decrease for the combined seven plays. EIA says combined natgas production will slide by 200 MMcf/d (million cubic feet per day). The Marcellus/Utica, called “Appalachia” in the report, is predicted to decrease by 135 MMcf/d in January compared with December, the biggest decrease in gas production for any of the seven plays.
FERC Grants MVP Request to Double Transportation Rates The 303-mile Mountain Valley Pipeline (MVP) project will be completed and go online sometime in the first quarter of 2024 (see Equitrans Admits the Obvious – MVP Won’t be Online Until 2024). In September of this year, MVP filed a request with the Federal Energy Regulatory Commission (FERC) to amend its original certificate (that established the rates it could charge) to increase the rates it charges for new customers (not existing/already contracted customers). Earlier this week, FERC granted MVP’s request to raise rates. When Equitrans began to build MVP, the company estimated it would cost around $3.7 billion to build. Then Big Green got involved and attempted to bury the project under a blizzard of lawsuits (some financed with foreign money). Groups like the odious Appalachian Voices repeatedly sued and delayed the completion ofMVP. It took an actual Act of Congress to force finish the pipeline, the FiscalResponsibility Act (FRA) signed on June 3rd by President Biden. The new estimated cost to build, following years of delays and multiple lawsuits(paying lawyers’ confiscatory rates), is now $7.2 billion — essentially double the original cost. The original rate MVP was authorized to charge was $29.5967 per dekatherm (Dth) per month to reserve capacity and $0.0035 per Dth used. In September, MVP requested the rate be raised to $53.4208 per Dth per month to reserve capacity and $0.0231 per Dth used. It makes sense MVP would ask for a doubling of the rate given it cost twice as much to build.
FERC Approves MVP Southgate Request for 3-Yr Extension to Build - In July of this year, the Democrat Governor of North Carolina, Roy Cooper, sent a letter to the Federal Energy Regulatory Commission (FERC) asking the four commissioners to deny Mountain Valley Pipeline’s (MVP) request for a time extension to build the MVP Southgate expansion project into his state (see NC Leftist Gov. Cooper Asks FERC to Deny MVP Southgate More Time). A month later, 28 Democrats in the U.S. House did the same thing (see 28 U.S. House Democrats Ask FERC to Reject MVP Southgate Project). We’re happy to report FERC ignored them all and yesterday granted the Southgate project a three-year extension to build. Equitrans Midstream, the builder of MVP, proposed to extend the 303-mile pipeline by an extra 75 miles from the current MVP terminus in Pittsylvania County, VA, to Alamance County, NC, to provide natural gas for heating and electric generation, calling it Southgate. It appeared that Equitrans had given up on the Southgate project in October 2022 when it asked a court to cancel all outstanding eminent domain lawsuits against some 70 North Carolina residents who had refused to lease their land for the pipeline (see Equitrans Signals Giving Up on MVP Southgate – Pulls Eminent Domain). However, the company asked the court to dismiss the lawsuits “without prejudice,” meaning it could revive and refile its claims later. Then the earth literally moved. Congress passed the Fiscal Responsibility Act (FRA), and on June 3, President Biden signed it into law. The FRA provides for completing the 303-mile MVP. Not long after the FRA became law, Equitrans reactivated the Southgate project and asked FERC for three more years to build it (see Equitrans Asks FERC for Extra 3 Years to Build MVP Southgate to NC). Yesterday, FERC did just that. Perhaps the biggest surprise is that FERC Commissioner Allison Clements, a Big Green sock puppet, voted in favor of the time extension.
Chicago’s Natural Gas Pipeline Project Halted | PBS (video) The Illinois Commerce Commission’s decision to suspend a gas pipe replacement program comes as environmentalists and consumer advocates are calling for the government to invest in and transition to cleaner, renewable energy, instead of fueling money into aging energy infrastructure projects. Transcript
We Must Have More Natural Gas Pipelines To Avoid Freezing - With the dead of winter approaching, it is appropriate to reflect on last year’s gas well freeze offs Winter Storm Elliott, which occurred over Christmas and caused millions of people to lose power across the eastern United States. It followed Winter Storm Uri, which happened in Texas a year earlier. Natural gas, 40% of this country’s energy portfolio, is the primary fuel for winter heating. Some of the most progressive states, like California, with the largest renewable energy portfolios, rely on natural gas. The winter storms have taught us that waiting several years for new infrastructure to develop jeopardizes energy reliability and economic security. According to the Interstate Natural Gas Association of America, the current political environment makes delivering fuel to natural gas customers taxing. "The United States needs more natural gas pipeline capacity to maintain a resilient system that affords homes and the power grid access to multiple sources of this critical fuel," the trade group said in a prepared statement. The United States Energy Association tackled this subject during its monthly virtual press briefing in which I took part. The experts responsible for delivering dependable heat and electricity to customers agreed that more infrastructure is required. The natural gas trade group said the country must have 24,000 miles of new gas pipelines by 2035, but we are planning for much less. To that end, the North American Electric Reliability Corp. cautioned that half of this country and parts of Canada could go cold this winter because of inadequate natural gas pipeline infrastructure. Indeed, NERC and the Federal Energy Regulatory Commission issued a joint statement about the potential loss of the Everett Marine Terminal in New England and its consequences for the reliability and affordability of the region’s energy supplies. “Winter Storm Elliot caused blackouts in nine states,” said Jim Matheson,” the National Rural Electric Cooperative Association chief executive during the press briefing. “We do need more pipeline capacity. In this country, specific regions are constricted, and it’s difficult to build new pipelines in this day and age.” How Will Policymakers Respond? With that, the National Economic Research Associates issued a report concluding that this country has sufficient natural gas resources to feed the domestic population and export to fuel-hungry Europe and Asia. Prices would also remain “relatively low” — $3 to $4 per million Btus. However, the researchers added that a lack of new pipeline capacity presents a “material impediment” for the industry to maintain reliability and inexpensive fuel. The report points to the Northeast, which has quick access to the Marcellus and Utica Shale Basins but has limited pipeline capacity. Several pipeline operators have canceled their projects because of regulatory and permitting hurdles. According to the U.S. Energy Information Administration, 3 million miles of existing natural gas pipelines exist in the United States, delivering 27.6 trillion cubic feet of natural gas to about 77.7 million consumers. Gas producers say that as many as 62,000 miles of new pipelines are needed by 2050 to fuel electric generators and feed the chemical and manufacturing processes. “My natural gas plants are paperweights if I don’t have the fuel to run to them,” said Rudy Garza, chief executive of CPS Energy in San Antonio, Texas, during the event. “From a policy perspective, gas suppliers must be held to account the same as electric and gas utilities are. Utilities have the same predicament,” he added, noting that they already optimize natural gas storage units and diversify suppliers. Extreme weather has become the "new normal," and this winter, the Mid-Atlantic, New England, or the Midwest could suffer. Texas teaches us that it is unwise to rely on one energy source. When Texas froze in February 2021, its infrastructure failed — specifically, the natural gas supplies and the pipelines to transport it. The state also learned that it must winterize its wind turbines. As for Texas, about 52% of its electricity comes from natural gas while 23% comes from renewables, the U.S. Energy Department says. Coal supplies 17%, and nuclear makes up 8%. The state is also uncommon because its grid system is insulated, making it unable to get new supplies from other areas of the country. Pablo Vegas, chief executive of the Electric Reliability Council of Texas (ERCOT), said Texas’ challenge is to gear up for economic growth. Transmission system operators, like ERCOT, want to work with utilities to deploy demand response — automatically controlling thermostats and asking residential and small business users to shift their energy usage. Industrial customers use demand response. “We are focused on weatherization and inspecting our power plants and transmission lines,” says Vegas. “And we make sure we have firm fuel supply — part of a structured program that ERCOT does for the summer and winter.” Getting energy infrastructure built in the United States is an exhausting task. Lawsuits abound, which for the environmental movement is often intended to preserve ecological integrity. Judges are walking a delicate line, complicated by concerns over leaking methane and the effects of climate change. Courts do not make sweeping decisions that apply to every project. If anything, though, they are trying to facilitate productivity and growth while protecting the air, land, and water — issues that are not mutually exclusive. Winter storms can wreak havoc, with Uri and Elliott providing the proof. The Federal Reserve Bank of Dallas said Uri — a four-day event that left 4.5 million without heat — cost the Texas economy as much as $130 billion. The question before policymakers is how to defend against those events. The answer invariably requires a mixed response given the surge in demand: building more pipelines while diversifying fuel sources. That’s a lofty goal: Expanding any kind of energy infrastructure requires regulatory support and legal backing, adding years to the process.
US weekly LNG exports reach 28 cargoes - US liquefaction plants shipped 28 liquefied natural gas (LNG) cargoes in the week ending December 13, while natural gas deliveries to these terminals increased by 3.9 percent compared to the week before.The US EIA said in its weekly report, citing shipping data provided by Bloomberg Finance, that the total capacity of these 28 vessels is 105 Bcf.During the week from November 30 to December 6, 29 vessels with a capacity of 105 Bcf departed the US plants. Average natural gas deliveries to US LNG export terminals during December 7-13 rose by 0.5 Bcf/d week over week, averaging 14.6 Bcf/d, according to data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana increased by 7.5 percent (0.6 Bcf/d) to 9.2 Bcf/d, while natural gas deliveries to terminals in South Texas decreased by 2.4 percent (0.1 Bcf/d) to 4.2 Bcf/d. The agency said that natural gas deliveries to terminals outside the Gulf Coast were essentially unchanged at 1.2 Bcf/d. Cheniere’s Sabine Pass plant shipped nine cargoes and the company’s Corpus Christi facility sent four shipments during the period under review. The Freeport LNG terminal, Sempra Infrastructure’s Cameron LNG terminal, and Venture Global’s Calcasieu Pass each shipped four cargoes during the week under review. Also, the Cove Point LNG terminal shipped two cargoes and the Elba Island LNG facility sent one cargo.This report week, the Henry Hub spot price decreased 40 cents from $2.73 per million British thermal units (MMBtu) last Wednesday to $2.33/MMBtu this Wednesday, the agency said.Moreover, the price of the January 2024 NYMEX contract decreased 23.4 cents, from $2.569/MMBtu last Wednesday to $2.335/MMBtu this Wednesday.According to the agency, the price of the 12-month strip averaging January 2024 through December 2024 futures contracts declined 18.3 cents to $2.563/MMBtu.The agency said that international natural gas futures decreased this report week.Bloomberg Finance reported that weekly average front-month futures prices for LNG cargoes in East Asia decreased 33 cents to a weekly average of $15.77/MMBtu.Natural gas futures for delivery at the Dutch TTF decreased $1.18 to a weekly average of $11.73/MMBtu.In the same week last year (week ending December 14, 2022), the prices were $33.46/MMBtu in East Asia and $42.46/MMBtu at TTF, the EIA said.
Despite Export Strength, South Central Natural Gas Storage Enters Winter at Robust Levels, Pressuring Prices - Demand for American LNG is holding strong, but South Central natural gas storage remains elevated and, according to the latest government inventory data, the surplus of supplies relative to the five-year average continues to swell. The U.S. Energy Information Administration (EIA) on Thursday reported a withdrawal of 16 Bcf from South Central storage during the week ended Dec. 15. This included an 11 Bcf pull from nonsalt facilities and 5 Bcf draw from salt caverns. Still, it proved seasonally modest and left underground supplies in the region 8% ahead of the five-year average. A week earlier, EIA printed a nonsalt draw of 11 Bcf but a salt injection of 2 Bcf, putting supplies 7% above the South Central five-year average at the time. Analysts point to record levels of production...
Conservation Groups Take Aim at Driftwood LNG Pipeline Projects in Latest DC Circuit Arguments - Environmental groups are continuing to pressure LNG export facility and pipeline developers through federal appeals courts as lawsuits seeking to repeal authorizations stack up. In the latest of a series of filings to the U.S. Court of Appeals for the District of Columbia Circuit, Healthy Gulf and the Sierra Club requested FERC’s approval of two pipelines to feed the Driftwood liquefied natural gas project in Louisiana be vacated (No. 23-01226). In the brief filed Tuesday, lawyers for the groups accused the Federal Energy Regulatory Commission of violating federal law by refusing to consider the impact or amount of greenhouse gas emissions from construction of Tellurian Inc.’s Driftwood Line 200 and Line 300 pipeline projects.
Europe continues to be main destination for US LNG cargoes - LNG Prime -- France was the top destination for US liquefied natural gas (LNG) supplies in October as Europe continues to receive the majority of volumes produced at US liquefaction plants, according to the Department of Energy’s newest monthly report.The DOE report shows that US terminals shipped 53.6 Bcf of LNG to France in October, 49.8 Bcf to Spain, 49.7 Bcf to the Netherlands, 28.8 Bcf to the United Kingdom, and 28.2 Bcf to South Korea.These five countries took 54.7 percent of total US LNG exports in October.Prior to this, the Netherlands was the top destination for US LNG supplies for five months in a row.The Netherlands was the number one destination for US LNG supplies during January-October this year and the country is followed by France, the UK, Japan, Spain, South Korea, Germany, Italy, India, and China, the DOE data shows. The US exported in total 384.4 Bcf of LNG in October to 28 countries, up by 24.1 percent compared to the same month last year and a rise of 10.9 percent from the prior month, the DOE report shows.Europe received 259.7 Bcf, or 67.6 percent, of these volumes, Asia received 101.8 Bcf, or 26.5 percent, and Latin America/Caribbean received 22.9 Bcf, or 6 percent.US terminals shipped 124 LNG cargoes in October.Cheniere’s Sabine Pass plant sent 39 cargoes and its Corpus Christi terminal shipped 19 cargoes, while the Freeport LNG terminal shipped 22 cargoes and Sempra’s Cameron LNG plant sent 21 shipments during October.In addition, Venture Global’s Calcasieu plant sent 15 cargoes, Elba Island LNG sent 4 cargoes, and Cove Point LNG dispatched 4 shipments. According to DOE’s report, the average price by export terminal reached 6.81/MMBtu in October and 7.36/MMBtu in the January-October period.Moreover, the report said that in the period from February 2016 through October 2023, the US exported 5384 cargoes or 17,128 Bcf to 41 countries.The DOE data shows that South Korea remains the top destination for US LNG with 561 cargoes, followed by Japan with 438 cargoes, France with 419 cargoes, the UK with 408 cargoes, and Spain with 412 cargoes.Besides these five countries, the Netherlands, China, India, Turkey, and Brazil are in the top ten as well.
Democrats revolt against Biden plan for expanded gas exports - The Biden administration’s plans for increased natural gas exports are causing a revolt within the Democratic Party. Despite the boom in renewables reducing domestic demand for fossil fuels, the administration is backing the gas industry’s plans to sell fuel at higher prices abroad, believing they will lead to less production of climate-warming chemicals like carbon dioxide by displacing dirtier-burning coal. The fossil fuel industry is making a broader transition to gas, which it is seeking to pitch as a climate-friendly fuel — and the Biden administration has so far allowed it to more than double the number of export facilities to ship gas abroad in its pressurized and liquified form (LNG). But gas is itself a planet-heating chemical, and Democrats argue that the administration’s policies have done little to address a big problem for the climate: The U.S. fossil fuel industry plans to increase oil and gas production for decades. Democratic senators, led by Ed Markey (Mass.), have called on the administration to stop investing in gas plants abroad, noting that the administration has already spent $1.8 billion on overseas fossil fuel plants this year alone, along with voting at the World Bank to direct $400 million in new gas financing to poorer countries. “The United States can’t preach temperance from a bar stool, and right now, America is drunk on oil and gas production and exports,” Markey wrote Wednesday. In addition, 32 Democratic members of Congress urged the administration in November to begin planning for the end of fossil fuels. At the United Nations climate conference (COP28) that concluded this week, the administration unveiled a new plan to cut leaks from methane production, the predominant component in gas, in an effort to reduce one of the most serious sources of harmful pollution. But in focusing only on leaks from transporting the fuel — something the industry already has incentives to do — the Biden administration is “ducking the hard issue” on climate change, Rep. Sean Casten (D-Ill.) told The Hill. That issue: the production of planet-warming fuels themselves.
Howard Energy Touts South Texas Natural Gas Expansions, Record Throughput as LNG Demand Taking Off - Howard Energy Partners (HEP) completed about $800 million worth of growth projects and achieved record natural gas throughput on its assets during 2023, the company said Wednesday. San Antonio, TX-based HEP owns energy infrastructure assets in Texas, New Mexico, Oklahoma, Pennsylvania and Mexico. The newly completed projects include “new major pipelines and processing facilities in the most active oil and gas producing basins in the United States and new storage and logistics facilities for renewable diesel on the Texas Gulf Coast,” management said. “The company also achieved record volumes in 2023, with current average natural gas throughput of over 2.5 Bcf/d and current average terminalling throughput of more than 160,000 b/d, representing a 7% and 25% increase...
Japan's Tokyo Gas to buy US gas producer for $2.7 billion - LNG Prime -- A unit of Japan’s city gas supplier and LNG importer, Tokyo Gas, has agreed to buy Texas-based natural gas producer Rockcliff Energy from private equity firm Quantum Energy Partners for $2.7 billion.Tokyo Gas America decided to acquire all shares of Rockcliff Energy II through its ownership interest in TG Natural Resources (TGNR), according to a statement by Tokyo Gas.TGNR is a unit of Tokyo Gas America in which the firm has a 79 percent stake while a unit of Castleton Commodities International holds the rest.Tokyo Gas has been expanding its upstream business in the US through TGNR, which became its subsidiary in 2020. Rockcliff’s main business is upstream development in Texas and Louisiana targeting Haynesville shale and Cotton Valley formations. Tokyo Gas said it is expanding its shale gas business as demand for gas is expected to increase in the US due to the construction of new LNG export terminals. Also, TGNR has been seeking to acquire “superior” assets around its existing assets in Texas and Louisiana.“With this acquisition, the outcome from TGNR will become the base of overseas earnings,” Tokyo Gas said. As a result of this acquisition, the production volume of gas and natural gas liquids held by TGNR will increase by about 4 times from some 330 million cubic feet per day (9.3 million m3/day, gas equivalent) to 1,300 million cubic feet per day (37 million m3/day, gas equivalent), it said. In the US, Tokyo Gas is working with its partners Osaka Gas, Toho Gas, Mitsubishi, and also Sempra Infrastructure to produce e-methane in Texas or Louisiana, liquefy it at Sempra’s Cameron LNG facility, and transport it to Japan. E-methane is a synthetic gas produced from renewable hydrogen and carbon dioxide and can be transported via the existing gas infrastructure, including the LNG supply chain.
US natgas jumps 5% on cold forecasts, bigger-than expected storage decrease - (Reuters) - U.S. natural gas futures jumped about 5% to a one-week high on Thursday on a bigger-than-expected storage withdrawal, forecasts for colder weather and higher heating demand in early January than previously expected and as a record amount of gas continued to flow to liquefied natural gas (LNG) export plants. The U.S. Energy Information Administration (EIA) said utilities pulled 87 billion cubic feet (bcf) of gas from storage during the week ended Dec. 15. That was higher than the 80-bcf withdrawal analysts forecast in a Reuters poll and compares with a decrease of 82 bcf in the same week last year and a five-year (2018-2022) average decline of 107 bcf. Last week's decrease cut stockpiles to 3.577 trillion cubic feet (tcf), which was still 8.5% above the five-year average of 3.297 tcf for the time of year. Analysts said last week's withdrawal was smaller than usual for this time of year because warmer-than-normal weather kept heating demand low. Front-month gas futures for January delivery on the New York Mercantile Exchange rose 12.5 cents, or 5.1%, to settle at $2.572 per million British thermal units (mmBtu), their highest close since Dec. 8. It was the biggest one-day percentage gain since Nov. 11 when prices jumped 5.4%. "If incoming cold prompts speculators to close a massive short position, price gains are possible. Nonetheless, significant U.S. storage surpluses suggest any price increase may prove fleeting unless cold weather can be sustained," analysts at energy consulting firm EBW Analytics said in a note. With the front-month down for six weeks in a row, speculators last week boosted their net short futures and options positions on the New York Mercantile and Intercontinental Exchanges to the most since February, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report. Record production and ample supplies of gas in storage have weighed on gas prices for weeks, prompting some traders to forecast that futures for this winter (November-March) have already peaked at $3.608 per mmBtu on Nov. 1. Looking ahead, analysts project U.S. gas prices will rise in coming years as new LNG export plants enter service in the U.S., Canada and Mexico to meet rising global demand of the fuel. But expected delays at Exxon Mobil/QatarEnergy's Golden Pass LNG export plant in Texas and Venture Global LNG's Plaquemines in Louisiana have caused some analysts to reduce their forecasts for U.S. gas demand and prices in 2024. Financial firm LSEG said average gas output in the lower 48 U.S. states rose to 108.6 billion cubic feet per day (bcfd) so far in December from a record 108.3 bcfd in November. Meteorologists projected the weather would remain warmer than normal through Dec. 31 before turning near-normal to colder than normal from Jan. 1-5. LSEG forecast U.S. gas demand in the Lower 48 states, including exports, would drop from 126.2 bcfd this week to 120.8 bcfd next week as many businesses and government offices shut for the Christmas holiday. Those forecasts were higher than LSEG's outlook on Wednesday. Gas flows to the seven big U.S. LNG export plants rose to an average of 14.6 bcfd so far in December, up from a record 14.3 bcfd in November.
Biden Govt Sets Only Three Fossil Fuel Leases for 2024-29 - The Biden administration has cut the number of lease sales in the United States outer continental shelf (OCS) from the previously proposed 47 to just three in the final oil and gas leasing program for 2024–29. The Department of the Interior (DOI) said the reduction is needed to meet offshore wind area sales required by the Inflation Reduction Act (IRA). An IRA provision prioritizing fossil fuels requires that total acres offered in offshore oil and gas lease sales in the year till the issuance of any lease for offshore wind development must reach 60 million acres. The final program still needs to be reviewed by Congress within 60 days. A five-year oil and gas auction plan is required by Section 18 of the OCS Lands Act. “The [final] Program schedules three oil and gas lease sales in the Gulf of Mexico Program Area in 2025, 2027 and 2029”, the DOI said in a recent press release. “These three lease sales are the minimum number that will enable the Interior Department’s offshore wind energy program to continue issuing leases in a way that will ensure continued progress towards the Administration’s goal of 30 gigawatts of offshore wind by 2030”. The official memorandum on the decision noted the department had the option to hold no lease sale at all in the next five years but that such a course would not meet the country’s energy needs. The DOI did decide to hold no auction next year for offshore oil and gas licenses, the first no-lease year since 1966 according to the American Petroleum Institute (API), which opposed the decision. The decision “could threaten to increase reliance on foreign energy sources”, the lobby group said in a statement. “Demand for affordable, reliable energy is only growing, yet the administration is choosing to limit future production in a region that plays a critical role in powering our nation and supplies among the lowest carbon-intensive barrels in the world”, said the statement on the API website. Production on the US Gulf of Mexico alone accounts for 15 percent of national petroleum output and five percent of US dry gas production, according to the country’s Energy Information Administration (EIA). “Over 47 percent of total U.S. petroleum refining capacity is located along the Gulf coast, as well as 51 percent of total U.S. natural gas processing plant capacity”, the EIA states on its website. The API went on to cite an industry report that claimed the carbon intensity of oil production in the Gulf of Mexico was 46 percent lower than the international average outside the US and Canada. The report, released May 16, was prepared by the ICF consulting company for the National Ocean Industries Association. “Constrained production in this basin could be replaced by higher carbon intensity barrels from elsewhere in the world”, said the statement by the API, which counts a membership of about 600 companies. “This program is a step in the wrong direction for U.S. energy security and will only make it harder to meet growing energy demand over the long-term”, the API added.
Biden admin approves smallest offshore oil program in history - The Biden administration approved the smallest offshore oil program in U.S. history Friday, a move that’s already provoked both outrage from Republicans and disappointment from climate activists who had urged the president to take more dramatic action. Over the next five years, the Interior Department will hold just three oil auctions of drilling rights in the Gulf of Mexico, where most of the nation’s oil and gas production occurs. The agency first announced its plans for the next five years of offshore drilling in September. That makes the previously scheduled oil sale, taking place next week in the Gulf, the last opportunity for oil companies to buy leases in the nation’s waters until 2025. The shrunken program is the latest example of the White House’s efforts to curtail the nation’s fossil fuels footprint on public lands and waters, despite mandates to allow some development of the nation’s large stores of crude oil and natural gas. Climate activists had urged President Joe Biden to zero out oil sales in the five-year plan, consistent with his promise during the presidential campaign of 2020 to retire the nation’s drilling program. Oil supporters, however, demanded a return to previous norms with multiple oil auctions held every year. Interior rewrites the schedule for offshore oil and gas leases every five years. Recent five-year programs have included at least two auctions annually in the Gulf of Mexico and some sales in Alaska. But Interior’s offshore oil programs historically could include dozens of sales. The Biden administration allowed the last offshore oil program to end in 2022 without a replacement. A previous proposal floated by the Trump administration would have included 47 auctions over a five-year period. Interior said Friday that its three-sale schedule is the minimum required to comply with the Inflation Reduction Act. West Virginia Sen. Joe Manchin, a conservative Democrat who supports fossil fuels, included a provision in the 2022 climate-focused law that would prohibit new offshore wind leasing — a cornerstone in Biden’s decarbonization push — unless Interior holds an offshore oil sale of at least 60 million acres in the prior year. The five-year program announced Friday includes an oil sale every other year, in 2025, 2027 and 2029, allowing Interior ample time to conduct new offshore wind auctions. “These three lease sales are the minimum number that will enable the Interior Department’s offshore wind energy program to continue issuing leases in a way that will ensure continued progress towards the Administration’s goal of 30 gigawatts of offshore wind by 2030,” the department said Friday.
Biden administration auctions off 1.7M acres for Gulf drilling in last offshore oil lease sale until 2025 --The Biden administration has auctioned off the rights to drill for oil and gas on 1.7 million acres in the Gulf of Mexico in what will be the last offshore drilling auction it holds until 2025. Companies will pay a total of more than $380 million for the rights to drill on 311 tracts in the Gulf. Twenty-six companies submitted bids. The auction is expected to be the last chance for companies to bid for the rights to drill offshore until at least 2025, as the Biden administration recently finalized a plan with the fewest offshore oil and gas lease sales ever put forward in an agency five-year plan.That plan, finalized last week and covering 2024-29, offers up three chances to bid for the rights to drill offshore.The oil and gas industry was supportive of Wednesday’s sale but said more auctions should be held in the years ahead.“Although today’s congressionally mandated lease sale is a positive step … the lack of any offshore sales in the year ahead is a prime example of the administration’s failure to implement a long-term energy strategy,” said a written statement from Holly Hopkins, vice president of upstream policy at the American Petroleum Institute, an oil lobby group.“We urge the administration to reconsider its shortsighted approach and plan today for tomorrow’s energy demand,” Hopkins added. The recent sale was mandated by the Inflation Reduction Act — Democrats’ climate, tax and health care bill. However, it follows a contentious recent court battle in which environmental advocates sought to shrink the sale and add stipulations to protect the Rice’s Whale.The Rice’s Whale is one of the most endangered whales in the world, with likely fewer than 100 remaining, and can be found in the Gulf.After environmentalists and the Biden administration agreed to certain restrictions for the sale and leases that aimed to protect the whale, Chevron, the American Petroleum Institute and the state of Louisiana filed a lawsuit..Ultimately, the plaintiffs prevailed, and the sale was held without the removal of acres or the restriction of ship activity, which environmentalists had called for.“The oil industry and its allies know the Rice’s whale could go extinct if they keep expanding Gulf drilling, but they’ve pushed aggressively to prioritize their profits and hold this sale anyway,” Kristen Monsell, oceans legal director at the Center for Biological Diversity, said in a written statement. “Perpetual leasing, new fossil fuel export projects and oil spills are creating a hellish situation for marine life and Gulf communities,” she said, adding that the Biden administration should “phase out offshore drilling altogether.”
Gulf of Mexico Auction Draws Most High Bids in Years as E&Ps Step Up Competition - Interest in the final oil and natural gas auction in the Gulf of Mexico for the year – and potentially the only one until 2025 – was strong on Wednesday, with the highest bid total since 2015. Following a series of delays because of lawsuits, the Interior Department’s Bureau of Ocean Energy Management (BOEM) held Lease Sale 261. The auction offered almost 13,500 unleased blocks on nearly 73 million acres in the Western, Central and Eastern Planning Areas of the Outer Continental Shelf (OCS). Twenty-six exploration and production (E&P) companies submitted 352 bids totaling $442 million. High bids totaled more than $382 million for 311 tracts, with offered blocks drawing an average 1.13 bids each.
Dallas Fed Energy Survey - -- Activity in the oil and gas sector was essentially unchanged in fourth quarter 2023, according to oil and gas executives responding to the Dallas Fed Energy Survey. The business activity index, the survey’s broadest measure of conditions energy firms in the Eleventh District face, remained positive but slipped from 10.9 in the third quarter to 3.6 in the fourth quarter. The business activity index was 7.5 for E&P firms versus -4.2 for services firms, suggesting activity slightly grew for E&P firms, but declined slightly for service firms. Oil production increased but at a significantly slower pace compared with the prior quarter, according to executives at E&P firms. The oil production index remained positive but fell from 26.5 in the third quarter to 5.3 in the fourth. Meanwhile, the natural gas production index edged up from 15.4 to 17.9.Among oilfield services firms the input cost index remained positive, but slipped from 33.4 to 21.3. Among E&P firms, the finding and development costs index rose from 18.3 to 24.4. Meanwhile, the lease operating expenses index moved down from 25.6 to 22.6.Oilfield services firms reported modest deterioration in nearly all indicators. The equipment utilization index moved down from -4.2 in the third quarter to -8.4 in the fourth quarter. The operating margin index was relatively unchanged at -32.0. The index of prices received for services turned negative and fell from 2.1 to -6.2.The aggregate employment index was relatively unchanged at 4.2 in the fourth quarter. The aggregate employee hours index remained positive but fell from 9.6 in the third quarter to 2.8 in the fourth quarter. Meanwhile, the aggregate wages and benefits index edged down from 24.5 to 21.2.The company outlook index turned negative in the fourth quarter and plunged 48 points to -12.4, suggesting some pessimism among firms. The company outlook for E&P firms changed more drastically, as the company outlook index for these firms fell sharply from 46.8 to -9.0. The overall outlook uncertainty index jumped 39 points to 46.1, suggesting mounting uncertainty.On average, respondents expect a West Texas Intermediate (WTI) oil price of $78 per barrel at year-end 2024; responses ranged from $51 to $110 per barrel. Survey participants expect a Henry Hub natural gas price of $3.09 per million British thermal units (MMBtu) at year-end. For reference, WTI spot prices averaged $69.77 per barrel during the survey collection period, and Henry Hub spot prices averaged $2.48 per MMBtu.
As Shale Runs Dry, EOR Companies Respond with Solutions - The reservoir wells of the shale revolution, once gushing like geysers, are beginning to run dry.“Since [the shale revolution], there’s been about 100,000 horizontal shale wells drilled and put in production, [increasing] our production by about 6 million barrels a day,” Robert Downey, CEO of Shale Ingenuity, told Hart Energy. “But today, about a third of those wells are now producing less than 10 barrels a day because they come on like gangbusters and then they have a really steep decline. Pretty much all the wells drilled prior to 2015 are [almost] depleted.”According to a Texas Bureau of Economic Geology study, the estimated typical oil recovery is about 6% of the oil in place, or as Downey explains, “you drill this horizontal well, spend $7 million on it and produce for 10 years. And by the time the well is pretty much producing nothing, you’ve recovered a whopping 6% of the oil.”The Williston and Permian basins and the Eagle Ford Shale hold a combined 3.1 trillion barrels of oil. A 6% recovery at full development leaves 2.9 trillion barrels of oil in place, which is 77 times the proved reserves of the U.S. Getting that remaining 94% of oil is the challenge for oil and gas companies today.SuperEOR is Shale Ingenuity’s solution to the shale wells running dry. The SuperEOR process is similar to huff and puff injection, as it involves injecting a solvent into the reservoir, which expands into a gas and drives the oil out of the rock. However, the solvent has a specific composition, making this process more sustainable than other EOR methods. That’s because the solvent is able to be recovered from the rock and reused multiple times.“It’s much different than if you just injected natural gas or CO2 [into the well], because with natural gas or CO2, you have to get the bottom of pressure up to 3,000 [psi] or 4,000 psi to get those gases to go into solution. Our solvent goes into solution at 700 psi,” Downey said. “Once you inject it, it forces all this oil through the pores. It expands to a gas and it flows up the wellbore and you recover it on the surface, condense it back into a liquid state, store it on location and then reinject it.”When using SuperEOR for a core test, over 90% of the oil was able to be recovered out of the core, said Downey. The recovery process is also quick and efficient, as only five days to 10 days of solvent injection can lead to between 10 and 20 days of flowback.“If you were injecting gas, you’d be injecting for one month to two months and then flowing back for three or four months, but our cycles are fast and the recovery is much greater. So, instead of getting maybe 10% to 40% more oil, we can get 300% to 500% more oil,” Downey said.Another sustainable EOR solution is actually an OOR, or organic oil recovery solution.California-based Titan Oil Recovery uses a specialized EOR process that takes advantage of indigenous microbes that have adapted to the environment over millions of years in order to extract oil from mature reservoirs.Titan activates the biology and ecology of oil reservoirs by working with specific species of microbes that can physically deform oil, turning them into micro oil droplets. This allows the trapped oil in reservoirs to escape and be recovered. The technology has a low carbon footprint and can also reduce hydrogen sulfide production in oil fields.
Fed methane emissions rule could have big impact in ND - New federal regulations that will require the oil and gas industry to get more active in tamping down on climate-warming methane emissions could uniquely affect North Dakota. The federal Environmental Protection Agency this month released a long-anticipated list of regulations that aim to reduce 80% of methane pollution from U.S. oil and gas production. The sector is the country's second-largest contributor of methane emissions behind agriculture. The rule will prevent 58 million tons of methane emissions between next year and 2038. That is equivalent to the annual emissions of over 360 million gas-powered cars, according to an EPA calculator. Methane is the primary component of natural gas. Its warming impact is 28 times stronger than CO2 over the course of a century, according to EPA. The Bakken oilfields in western North Dakota are primarily home to oil wells where natural gas is a byproduct. When the associated gas from an oil well cannot be captured, or used on site due to a lack of infrastructure capacity, it is wastefully flared. One part of the regulations will eliminate routine flaring on new wells over the next two years. Many existing wells will also have to phase out flaring, though there will be some exceptions. The purpose of flaring is to convert gas to less-potent CO2, but methane still gets released at varying degrees depending on the strength of the flare. The practice also releases health-harming volatile organic compounds such as benzene into the air, according to EPA. North Dakota has seen large cuts in flaring over the past few years due to an increased buildout of gathering lines and processing facilities. Gas capture percentages statewide trended in the low 80s five years ago but have climbed to the middle 90s this year. The number hit 95% this September, according to the most recent report from regulators. Figures lag by two months. The state's gas capture goal of 91% has been in place since 2020. But officials have warned that flaring could climb again as producers move beyond the Bakken oil field's core area. Dakota Resource Council Executive Director Scott Skokos said the federal rule was "a long time coming." "This will make (producers) think infrastructure first, wells second," he said. But some worry the new regulations will curtail production in a state whose economy is heavily reliant on oil. Of North Dakota's 18,538 producing wells, 1,383 have no access to gas-gathering infrastructure, according to the Department of Mineral Resources, the agency that oversees the petroleum industry in the state. Mineral Resources said the flaring rule could cause a loss of 45,000 barrels of oil a day. North Dakota produced an average of 1.27 million barrels a day in September. Brady Pelton, vice president of the North Dakota Petroleum Council, a trade group representing over 500 oil and gas producers, said he believes the rule will constrain production. "The gas-to-oil ratio in the Williston Basin is only increasing, and will increase in the future ... if (the gas) has nowhere to go, it has to be flared and if it can't be flared, production will cease," he said. The ratio rises as reservoirs age due to drops in pressure, bringing more gas to the surface.
Culver City's deal to end oil production could be a model - Culver City has struck a deal with one of California’s largest oil producers to end petroleum extraction and plug all wells within the city limits by the end of the decade — an agreement that environmentalists say could serve as a model for other municipalities.After two years of negotiations, Culver City and Sentinel Peak Resources reached a settlement agreement to ban oil drilling in the city’s portion of the Inglewood oil field. The agreement requires the company to seal its 38 Culver City wells by 2030, ensuring that taxpayers are not responsible for footing those costs.The announcement comes as environmental activists focus increasing attention onthe health and financial risks of idle oil wells in Southern California, a region once dominated by oil derricks and pumpjacks. The agreement also means that Culver City will be among the first communities in the region to end fossil fuel production and cap its wells.“It’s a win for public health. It’s a win for our communities. And it’s an inspiration for others,” said Meghan Sahli-Wells, an environmental advocate and former Culver City mayor. “There are 38 oil wells in Culver City. Those will be 38 fewer pockets of poison in our community.”More than a century of oil and gas drilling in California has left more than 100,000 wells unplugged, allowing them to leak planet-warming methane and dangerous chemicals, such as benzene.The cost of properly closing these wells could run as high as $23 billion, according to a recent Sierra Club analysis. Some activists and state legislators argue that taxpayers could be on the hook for those capping expenses if oil companies fail to take responsibility.Around 41,000 of California’s uncapped wells are classified as idle, meaning they haven’t produced any oil or gas in at least two years.Three oil companies — Chevron, Aera Energy and California Resources Corp. — own two-thirds of these idle wells, according to Jasmine Vazin, an author of the report. Although the companies have recorded billions in profit in recent years, Vazin said they have been allowed to leave their wells unplugged indefinitely because there is no mandated timeline to cap inactive wells in California.“These companies have been profiting at extreme rates from extracting California’s natural resources for over a century,” said Vazin, a Sierra Club senior organizer. “So we believe when you look at the global profits of these large entities and their parent companies, there is more than enough profit to cover the cost of cleanup of their legacy of pollution in California.” California recently enacted legislation that requires oil companies to obtain a bond— a financial guarantee similar to an insurance policy — that would cover the full cost of plugging their wells. The state also collects idle well fees, which can run up to $1,500 a year for each inactive well. But Vazin said that has done little to motivate oil producers, noting more than 12,000 wells in California have been idle for at least eight years. “We have this issue where operators are sitting on thousands of idle wells and not doing anything about it. And so if there’s no policy change to really prompt and kind of force that cleanup at a much, much faster rate than is currently happening, we’re just creating this problem that just piles on top of itself,” Vazin said.
Chevron slashes California spending on ‘adversarial’ fossil-fuel policies – Chevron Corp. is slashing oil-refinery investments in California because of “adversarial” policies toward fossil fuels, a move that may boost what already are the highest pump prices in the nation. The oil giant headquartered in the San Francisco Bay area has cut spending in the Golden State by “hundreds of millions of dollars since 2022,” according to comments filed with the California Energy Commission this week. Chevron is a key supplier of jet fuel to the San Francisco and Los Angeles airports.The comments come as California lawmakers consider limiting the profits in-state refiners can reap. The most-populous US state already has the nation’s toughest fuel standards as well as a carbon cap-and-trade program that critics say forces consumers to pay more at the pump.“California’s policies have made it a difficult place to invest so we have rejected capital projects in the state,” Andy Walz, president of Chevron’s Americas Products business, wrote in the filing. “Such capital flight reflects the state’s inadequate returns and adversarial business climate.”As recently as September, Governor Gavin Newsom accused the oil industry of lying about climate change, and the state has sued Chevron and other companies for reaping excessive profits at the expense of residents and the environment. Chevron rejected those claims, saying that halting climate change requires a global policy response rather than lawsuits.The governor’s office didn’t immediately respond to a request for comment for this story. Newsom last year announced a plan for California to reduce climate-damaging emissions 85% by 2045 and cut gasoline demand by 94% during the same time frame. On some levels it’s doing well. The state has the highest electric-vehicle adoption rate in the country and its conventional diesel demand has fallen by half since 2016 amid rising production of low-carbon alternatives such as renewable diesel and biodiesel.
Santa Barbara County pleads guilty to oil spill offenses - Santa Barbara County’s Water Resources Division pleaded guilty to two misdemeanor counts related to oil discharges at the Toro Canyon Oil Water Separator. [KCOY] The discharges occurred between Jan. 2018 through July 2021 and in Jan. 2023. The Toro Canyon Oil Water Separator is an Environmental Protection Agency-designed facility that the county has monitored since 2009.Water Resources Division personnel failed to properly maintain the separator and did not apply for any of the permits required to operate it, according to the Santa Barbara County District Attorney’s Office. The DA’s office cited internal emails where county employees acknowledged not meeting legal requirements. Santa Barbara County’s Water Resources Division has agreed to pay a $15,000 criminal penalty and to be placed on one year of unsupervised probation. The county states that it has resolved potential civil liability over the spills by agreeing to a stipulated judgment requiring a $300,000 payment for supplemental environmental projects, $375,000 in civil penalties and $75,000 for a consultant for statutory and regulatory compliance at the oil water separator facility.After the Thomas Fire melted parts of the separator’s underground pipeline, oil was determined to be leaking from the damaged pipelines and visibly contaminating the creek, a Public Records Act request revealed. More than three and a half years later, in Aug. 2020, oil was still actively leaking into the surrounding environment from the lower section of the pipeline.A Water Resources Division employee reported oil-saturated soil to Public Works Department management. However, for 17 days, that went unreported to both the Certified Unified Program Agency (CUPA) and the California Office of Emergency Services. By law, both of those agencies must be contacted immediately about oil spills of this nature. When the CUPA received the report, the agency was not aware that the separator system was in operation because the necessary permits had not been filed. Investigators also documented other violations, including failure to have a Hazardous Materials Business Plan outlining how to handle spills and issues with the integrity of the system’s underground storage tank.In July 2022, the State Water Resources Control Board issued funding and approved a contractor to begin repairs on the system and start remediating soil from Toro Canyon Creek, which by then, was saturated with oil for the entire length of its surface flow. Even after the County Water Resources Division began cleanup efforts, the agency failed to obtain necessary permits from the California Department of Fish and Wildlife, nor did it conduct environmental impact assessments before directing contractors to begin vacuuming the creek. Once Fish and Wildlife learned of those violations, it ordered the County Water Resources Division to conduct the cleanup under its supervision. In Jan. 2023, when heavy rain fell in the area, the underground storage tank overflowed. The leak was not reported until nine hours later when a homeowner called in the incident. By the time county fire and CUPA officials got hold of Water Resources Division employees, hundreds of gallons of oil spilled from the underground storage tank, and oil was detected flowing at least a half mile downstream.’
BP restarts pipeline after gasoline spill in Washington state-source (Reuters) - BP (BP.L) has restarted its Olympic Pipeline that had leaked roughly 25,000 gallons of gasoline near Mount Vernon in Washington state, a source familiar with the pipeline's operations said on Thursday. The pipeline was restarted following repairs, integrity testing, and regulatory approval of the restart plan, the source said. The company has been cleaning up the spill since Sunday with the U.S. Environmental Protection Agency (EPA) and local officials. Nearly 7,000 gallons had been recovered, according to the latest update from BP and the EPA on Wednesday, which added that at least one American beaver, one pine siskin bird, and one mallard duck died due to the spill. The leak was caused by a tubing failure inside a concrete vault that connected one of the pipelines to a pressure sensor, and the main pipeline was shut down by Monday after detecting a loss in pressure. Gasoline was 2 cents stronger at 5 cents a gallon under NYMEX January gasoline futures in the Pacific Northwest market, traders said on Thursday. Around 2,100 feet (640 meters) of boom remained deployed to contain the spill and no gasoline or sheen has been seen on the Skagit River, while State Route 534 reopened to one-way traffic, according to BP and the EPA. The Olympic Pipeline had ruptured in June 1999, spilling over 230,000 gallons of gasoline that caught fire near Bellingham, Washington, and killed three young people. The explosion of BP's Deepwater Horizon rig in the Gulf of Mexico in April 2010 led to the largest oil spill in U.S. history that left 11 rig workers dead and caused $70 billion in damages.
Biden’s Arctic oil rules may leave ‘big gaps’ on climate - Proposed Interior Department rules for drilling in the Western Arctic are spurring two contradictory views: that President Joe Biden has thwarted an oil boom in northern Alaska or paved the way for one. Which perspective turns out to be right has significant implications for climate change and the future of the oil industry in the Arctic, considering the size of the petroleum reserves in the region. The Bureau of Land Management proposal, which could strengthen Interior’s ability to block future drilling on protected lands in the National Petroleum Reserve-Alaska, follows Biden’s controversial decision earlier this year to approve the massive Willow oil project in the same reserve. Drillers say the NPR-A rules could infringe on their development rights, while green groups say it fails to shift the NPR-A away from its origins as a potential stockpile of crude oil. How Interior officials apply the new language could determine which side will eventually claim victory. Earthjustice attorney Jeremy Lieb said the proposed NPR-A rules, while an improvement, don’t address the serious question of how ongoing oil development in the reserve will “align with climate commitments.” “Those are big gaps,” he said. The draft rules, which are expected to be finalized in the coming months, would direct BLM to consider cumulative impacts of oil and gas activity in the NPR-A — which some argue could include big consequences such as climate change — and require actions to mitigate those effects. The proposal doesn’t explicitly bar development across the roughly 13 million acres of the reserve that are currently set aside for conservation, but it could make drilling far more difficult where it is allowed. BLM is also proposing to potentially change or expand the boundaries of the reserve’s most protected lands every five years, which oil and gas supporters say could put the most prime drilling areas out of reach. “This rule generally sets aside most of the areas that are most prospective to oil and gas development,” fumed John Boyle, Commissioner of the Alaska Department of Natural Resources, during a November congressional hearing. He said the proposed regulations would make it “technologically infeasible for any company to put together a development plan.” The dispute underscores how the Biden administration is trying to traverse a middle ground between thwarting fossil fuel development to prove its allegiance to climate action while also following legal mandates to carry out a national oil program. The administration’s high-wire act is perhaps most visible — and criticized — in the Arctic, which NOAA said earlier this month experienced its sixth-warmest year on record. Thawing permafrost and changing temperatures are creating climate refugees in the region by forcing the relocation of villages. Exacerbating the administration’s political challenges is the fact that the NPR-A, perhaps more than other swaths of public land in the country, is governed by laws that prioritize oil and gas. For example, the Naval Petroleum Reserves Production Act of 1976 directs Interior to manage the NPR-A’s oil and gas leasing program. Signed by then-President Gerald Ford during a period of tumultuous energy prices, the law was meant to reduce the country’s dependence on foreign oil. “This is an oil and gas reserve,” said Mark Myers, a commissioner on the U.S. Arctic Research Commission and a former oil and gas regulator for the state of Alaska. “The requirements were always that oil and gas was a high priority — not an exclusive priority by any means, but a high priority.” Steve Feldgus, deputy assistant secretary for land and minerals management, acknowledged oil’s prominence in the region during a Nov. 29 hearing of the House Natural Resources Subcommittee on Energy and Mineral Resources. Pressed by Republicans angry over the proposed rules, Feldgus said the NPR-A “generates tens of millions of dollars in oil and gas revenue each year and will remain an important energy resource for some time.”
COP28 Outcome Dubbed a Win for Oil, Gas Producers - -- The outcome of the COP28 conference is being hailed as a landmark for its roadmap for transitioning away from fossil fuels, but the outcome is actually a win for oil and gas producers. That’s what Ellen R. Wald, the President of Transversal Consulting, told Rigzone, adding that “language affirming the long-called for ‘phaseout’ of oil, coal, and gas was rejected, in large part due to objections by oil producing countries like Saudi Arabia”. “The truth is that the world still needs hydrocarbons to maintain the modern way of life and for developing countries to improve their quality of life,” Wald noted. “Even those who pushed for the ‘phaseout’ language would not have been able to be present at the conference in the UAE without hydrocarbons,” Wald went on to state. “The fact that the next two COP conferences are scheduled to be held in countries that are major oil and gas producers and important exporters (Azerbaijan and Brazil) indicates that the climate conference is fast becoming the purview of hydrocarbon producers,” the Transversal Consulting President told Rigzone. Wald also said it is unlikely that any phasedown language will ever be agreed to now that oil and gas producers are taking a major role in the conferences. Wood Mackenzie’s latest edition of The Edge, a weekly column authored by Wood Mackenzie Chairman Simon Flowers, looked at COP28 “key takeaways” and included input from several company leaders, including David Brown, Wood Mackenzie’s Director of Energy Transition Practice, Ed Crooks, the company’s America’s Vice Chair, and Steven Knell, Wood Mackenzie’s Vice President of Power & Renewables Consulting. “The big news from the conference was that the concluding statement called for the ‘transitioning away from fossil fuels in energy systems, in a just, orderly, and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050’,” The Edge column published on Wood Mackenzie’s website on Thursday noted. “Some countries said the statement did not go far enough. But it is still a significant moment - the first time the governments of the world have agreed a goal to reduce consumption of oil, gas, and coal,” it added. The Edge column stated that the COP28 presidency came under intense pressure from some developed countries and from vulnerable nations to strengthen the language on fossil fuels, “in the face of opposition from leading oil and gas producers”. “The direction of travel is clear, with the calling out of oil and gas for the first time a step towards phasing out unabated fossil fuels,” the column added. “This debate will be a hot topic again at COP29,” it continued. “The commitment to triple renewables capacity, and statements in support of hydrogen, nuclear power, carbon capture and storage (CCS), and demand-side technologies (including road transport) also reflect the momentum building towards a low-carbon energy system,” it went on to state. Wood Mackenzie’s latest The Edge column noted that a phase-out of unabated fossil fuels by 2050 may be achievable but added that it will require building low-carbon supply at twice the rate of energy demand growth and a rapid acceleration of CCS. “Though governments recognize the urgency, slow progress in recent years reflects the difficulty of attracting investment,” it stated. The Edge column also highlighted that the final text “specifically calls out the role of ‘transitional fuels’ in facilitating the transition to lower-carbon technologies while ensuring energy security”. “Good news for natural gas, which can play a role in balancing intermittent renewables while the next generation of dispatchable technologies such as hydrogen-power and new nuclear capacity ramps up in the 2030s,” it added.
Shell, Trinidad and Tobago Finalize Natural Gas Export Deal from Venezuela’s Dragon Field - Venezuela’s state-owned oil and natural gas company and the government of Trinidad and Tobago have clinched a production and export agreement with Shell plc that could help provide feed gas to Atlantic LNG. After months of negotiations between both governments, Shell and Trinidad’s National Gas Company (NGC), and the United States, officials met in Caracas Thursday to solidify a natural gas export license agreement for the offshore Dragon field. “We got it done,” Trinidad energy minister Stuart Young said in a Thursday evening post on X, formerly Twitter, after Venezuela’s Petróleos de Venezuela SA (PDVSA) disclosed the agreement. “This is a great development for the people of Venezuela and Trinidad and Tobago.”
Swiss National Bank Urged To Exit Investments in Fracking - The Swiss National Bank (SNB) was urged to divest from oil and gas fracking companies on Monday, when climate activists handed over a petition signed by 60,000 people demanding the Swiss central bank exit its fracking investments. Last month, a study by SNB Coalition and Climate Alliance Switzerland showed that the Swiss bank had investments worth a total of $16.1 billion in fossil fuel companies. According to the report from the climate campaign groups, as of the end of 2022, the SNB was invested in 69 companies that produce oil and gas using fracking or transport oil and gas produced using fracking. The total investment in fracking amounts to $9 billion.“The SNB is responsible for greenhouse gas emissions due to fracking of around 7 MtCO2e through its investment shares. This is as much as the emissions of the entire Swiss agricultural sector,” the climate groups said.In Switzerland, 14 cantons, which are home to 69 percent of the Swiss population, have positioned themselves against fracking. These cantons own around three quarters of all SNB shares held by the cantons.“Due to the broadly supported rejection of fracking by cantonal governments and the population, it can be considered a norm and value of Switzerland, which the SNB should also respect,” the climate groups said in November, noting that fracking violates the bank’s investment policy. Some banks in Europe have started to reduce funding to oil and gas projects as part of their own climate targets. The most drastic measure yet was taken earlier this year by France’s biggest bank, BNP Paribas, which said in May that it would no longer provide any financing for developing new oil and gas fields regardless of the financing methods. The bank also pledged to reduce its financing for oil exploration and production by 80% by 2030 as part of its energy transition goals.
SNB Told to End Fracking Investment in Petition Signed by 60,000 - -- Climate activists handed the Swiss National Bank a petition signed by more than 60,000 people demanding a stop to investments in companies that use fracking technologies to mine oil and gas. The central bank, which has a quarter of its 641.7 billion francs ($738.4 billion) of foreign-currency reserves in stocks, has invested $9 billion in fracking companies, according to organizations Climate Alliance Switzerland and Eko. The SNB should exit them because there’s a consensus against the technology in Switzerland, the activists said. Some of the institution’s private shareholders handed over the petition Monday at the SNB office in Zurich, they said. While the protesters say 14 of the 26 Swiss cantons have banned fracking or positioned themselves against it in other ways, the central bank doubts that a consensus against the technology exists in the country. It’s banned coal mining from its investments, but refuses to do the same for fracking. “We are investing our reserves in a way that they can support monetary policy at any time,” deputy rate-setter Thomas Moser said last Thursday. “We exclude investments which violate values which are widely recognized in society.” He said the central bank “regularly checks” its investment guidelines, “because values can change.”
Environmental groups announce Rosebank legal challenges - Environmental campaign groups Uplift and Greenpeace UK will launch separate legal challenges against the decision to approve the Rosebank oil field development. Both campaign groups will ask the Court of Session in Edinburgh for a review of the approval granted by the Energy Secretary and the North Sea Transition Authority (NSTA) regulator. It will then be up to the Court of Session to decide whether to grant permission for a full hearing of the case. A UK government spokesperson told Energy Voice it will “robustly defend” its decision to approve Rosebank. The Rosebank field, located 80 miles northwest of Shetland, is the UK’s largest undeveloped oil reserve. Norwegian state-owned Equinor received approval for its plans to extract 300 million barrels of oil from Rosebank using the Knarr FPSO in September. UK offshore operator Ithaca Energy holds a 20% stake in the Rosebank project. In a joint statement Uplift and Greenpeace said they will argue the decision to approve Rosebank was unlawful because it ignores the impact of downstream emissions and is not compatible with the UK government’s net zero and climate targets. The groups also said the Rosebank plans will damage marine life in a protected area of the North Sea.
Shell fined £1m after North Sea worker’s feet are crushed --Shell has been fined £1 million by the UK’s Health and Safety Executive (HSE) after a North Sea worker’s feet were crushed offshore. Martin Hill, then 63, was part of a group of maintenance workers being transferred on the “Kroonborg” support vessel towards the Shell Galleon platform on October 17, 2017 when the incident took place on the “walk to work” gangway. HSE said the transfer went ahead in high wind and heavy seas, when it should not have, in the “pre-sunrise gloom, with not enough artificial lighting in the right places. Both of Mr Hill’s feet were trapped as the gangway telescoped together, and, after being airlifted to hospital “he narrowly avoided having both of his feet amputated”. Until 2015, transfers to Galleon had taken place by helicopter, but walk to work is statistically the safest form of personnel transfer for such installations. After pleading guilty to breaching HSE obligations, Shell was fined £1,031,250 and ordered to pay £247,000 in costs at Chelmsford Crown Court last week. The oil major said this was a rare serious accident, adding it is “concerned at and sorry” for Mr Hill’s injury. Gangway operator Ampelmann was fined £206,250 and ordered to pay £247,000 in costs. Mr Hill, now 68, said: “Both of my feet got stuck between the two sections of the gangway and consequently my feet got very badly crushed. When they got the bridge off me I passed out and next thing I knew I was on the medical centre on the ship. . “Most of the bones in my feet were broken and most of the skin was pulled off. I have used magnetic therapy to help with my injuries which has been a big help. “I am not 100% now, my feet will play up if I try and do DIY when there are steps or ladders involved, or if I go for a reasonable walk. I like to think it didn’t affect me mentally but it did – I haven’t returned to offshore work after the incident.”
Spot LNG shipping rates, European prices continue to drop - Spot charter rates for the global liquefied natural gas (LNG) carrier fleet continued to decline this week, while European and Asian prices dropped as well.Last week, the Spark30S Atlantic decreased to $142,500 per day, while the Spark25S Pacific decreased to $117,000 per day.“LNG freight rates fell once again week, with a 6 percent week-on-week decrease for Atlantic rates and a 12 percent week-on-week decrease for Pacific rates,” Qasim Afghan, Spark’s commercial analyst told LNG Prime on Friday. Afghan said that the Atlantic rate decreased by $8,750 to $133,750 per day, whilst the Pacific rate decreased by $13,500 to $103,500 per day.As per European LNG pricing, the SparkNWE DES LNG front month also declined from the last week.The NWE DES LNG for January delivery was assessed last week at $11.887/MMBtu and at a $0.745/MMBtu discount to the TTF.“The SparkNWE DES LNG price for January delivery is assessed at $10.489/MMBtu and at a $0.740/MMBtu discount to the TTF,” Afghan said on Friday.He said this is a $1.398/MMBtu decrease in DES LNG price, and the discount to the TTF narrowed by $0.005/MMBtu, when compared to last week’s January prices.“This is the 3rd consecutive week-on-week decrease in SparkNWE DES LNG prices,” Afghan said.According to Platts data, JKM, the price for LNG cargoes delivered to Northeast Asia, dropped from the last week.JKM for January settled at $15.325/MMBtu on Thursday.Platts recently said the Panama Canal delays have helped to keep Asian LNG prices at a premium to those seen in Europe as shippers seek alternative routes for US LNG shipments, while high inventories and mild temperature forecasts have kept gas demand subdued in Europe.
Additional LNG Import Projects Progress in Europe as Developers Weigh Energy Transition - New additions to European LNG import capacity are moving forward as developers straddle the line between a current natural gas supply shortage and the region’s forecasted pivot to alternative fuels in the next decade. Hanseatic Energy Hub (HEH) GmbH disclosed it expects to reach a final investment decision “in the coming weeks” on Germany’s first onshore import terminal after completing its marketing and permitting phase earlier in the month. Planned near the city of Stade in Lower Saxony, the 13.3 million metric ton/year (mmty) facility is permitted to begin importing liquefied natural gas and renewable natural gas, as well as ammonia, before being converted into a hydrogen production hub by at least 2043. .
Greece's first FSRU arrives in Alexandroupolis - Greece’s first floating storage and regasification unit (FSRU) has arrived in Alexandroupolis, where it will soon start serving Gastrade’s LNG import project.According to its AIS data, the 153,600-cbm Alexandroupolis was on Sunday anchored offshore the Greek port of Alexandroupolis.Greece’s Gastrade confirmed the arrival of the FSRU in the waters of the Thracian Sea in a statement issued late on Sunday.The firm previously said that the FSRU would arrive in the port on December 17 from Singapore.Last month, the vessel left Seatrium’s yard in Singapore following the completion of the conversion work at the yard.Gastrade’s shareholder and Greek LNG shipping firm GasLog told Keppel Offshore & Marine, now Seatrium, in February last year to proceed with the conversion of the 2010-built, GasLog Chelsea, to an FSRU. The vessel entered the yard in February this year and the partners renamed it to Alexandroupolis.
Egyptian LNG Exports Lifted by Return of Israeli Feed Gas - Egypt’s LNG exports have bounced back this month after domestic gas shortages and war in Israel have curbed output this year. Kpler data showed this week that Egypt has exported three full cargoes so far this month and a fourth vessel has a port call for Idku on Thursday. One of those cargoes is destined for Europe, while the rest are Asia-bound. The upcoming loading had no destination as of Dec. 18. “Kpler forecasts Egypt to export 0.35 million tons (Mt) in December, up from 0.18 Mt in November. We see full-year liquefied natural gas exports at 3.5 Mt in 2023,” Kpler analyst Ana Subasic told NGI.
LNG Vessels Avoid Red Sea as Tension Rises Liquefied natural gas tankers are diverting their routes from the Red Sea as violence linked to the Israel-Hamas war threatens longer journeys and delays of the super-chilled fuel. At least five ships have changed course since Friday away from waters off the coast of Yemen, an unavoidable waypoint for ships using the Suez Canal that links Europe and Asia, according to ship-tracking data compiled by Bloomberg. It isn’t immediately clear if all ships were diverted due to the tension. Companies that transport natural gas, including BP Plc and Norway’s Equinor ASA, are choosing to avoid the Red Sea as Iran-backed Houthi militants stepped up attacks in support of Hamas. Qatar, one of the world’s largest LNG producers and a key supplier to Europe, continues to transit the Red Sea toward the Suez Canal, according to shiptracking data. The diversions are also happening at a time when the world’s other vital ocean-to-ocean waterway for LNG, the Panama Canal, is being severely restricted by drought. That means more US LNG shipments to Asia may need to take longer routes around southern Africa. European natural gas prices jumped 7 percent on Monday amid growing fears of disruptions to energy flows. Still, North Asia, home to the biggest LNG importers, are well stocked for winter and buyers aren’t rushing to find alternative supplies yet, according to traders.
US LNG Cargoes to Asia Embark on Longer Routes to Avoid Red Sea - US LNG Cargoes to Asia Embark on Longer Routes to Avoid Red Sea - BNN Bloomberg -- Liquefied natural gas cargoes recently loaded from the US and bound for Asia are changing course for longer voyages lasting more than a month as they avoid the Red Sea, according to ship-tracking data on Bloomberg. The diversions highlight a shift in global trade flows after Houthi attacks in the crucial waterway forced hundreds of ships to take safer but longer routes, delaying cargoes. LNG is key for the biggest buyers in northeast Asia, particularly in the winter demand season. The US is the top shipper of the fuel. The Vivit Americas LNG vessel, which loaded at the Cove Point plant in Maryland on Dec. 16, initially flagged course to the Suez Canal before diverting three days later to travel around Africa. The ship is now signaling arrival in Japan on Jan. 25, more than a month since loading. Another tanker, Prism Courage, is also avoiding the Suez Canal on its way to South Korea. The cargo was taken from the Freeport LNG plant in Texas on Dec. 16 and will arrive in the Asian country on Jan. 26. Data intelligence company Kpler also flagged the diversions. LNG vessels began avoiding the Red Sea this week, including ballast vessels headed to pick up their next cargoes. The shorter routes from the US to Asia are via the Panama Canal, where vessels now face delays amid a drought-induced congestion, or via the Mediterranean and Suez. Qatari LNG shipments have so far continued to sail via Suez to Europe, ship-tracking data show.
Naval Force Mobilizing to Stop Red Sea Attacks Eases Natural Gas Supply Concerns in Europe - European natural gas prices retreated on Tuesday after the United States announced an international naval force to protect commercial and energy cargoes transiting the Red Sea. The Title Transfer Facility erased the gains it made Monday amid escalating tensions in the Middle East. The prompt month contract fell 8% to close at $10.47/MMBtu, its lowest point since September. The Pentagon said the UK, Bahrain, France, Norway and other countries would join the naval force to stop Iranian-backed Houthi militants from attacking commercial vessels. The Houthis, who support Palestine and Hamas, have launched rocket and drone attacks from Yemen against vessels transiting the Bab al-Mandab strait in the southern Red Sea. The strait is a key waterway that allows ships to travel to the Suez Canal and Mediterranean Sea...
Papua New Guinea Looks to Finance Stakes in LNG Projects Despite Environmental Opposition - Papua New Guinea’s Kumul Petroleum Ltd. has been gauging interest with several international banks about backing two LNG projects, but environmental opposition could be pushing the state-owned firm to rely on Chinese banks for financing. Banks in Australia, Europe and the United States have been increasingly wary of funding the island nation’s existing and proposed liquefied natural gas facilities due to environmental, social and governance (ESG) issues. Kumul’s Managing Director Wapu Sonk recently told news media the company is now in advanced talks with three Chinese banks, thanks in part to the Chinese financial industry’s “different view on ESG.” Australian oil and gas explorer Santos Ltd has twice extended an offer to Kumul after it failed to secure financing...
Uniper Joins Others in Avoiding LNG Shipments Via the Red Sea – Uniper SE has joined other energy companies, including BP plc and Equinor ASA, in avoiding the Red Sea for LNG shipments amid escalating tensions in the region. Iran-backed Houthi rebels are launching attacks on commercial vessels in the southern Red Sea. As of Friday, eight LNG vessels have diverted from the Red Sea and Suez Canal, including five that have loaded in the United States, according to Kpler data. Despite turmoil in the shipping market and longer voyages to avoid the Red Sea, LNG freight rates continue a slide that started last month amid a lull in global demand and similar prices for the fuel in Asia and Europe that have limited arbitrage opportunities. According to Spark Commodities, rates in the Atlantic Basin were down 8.53% day/day on Friday to $96,500/day, while rates in the Pacific Basin were down 6.42% to $76,500/day. Russia’s PAO Novatek has sent force majeure notices to some of its Arctic LNG 2 offtakers, saying shipments from the project will be delayed due to sanctions imposed by the United States in November, according to Reuters. Arctic LNG 2 is expected to start-up by the end of the year and begin shipping some LNG cargoes in 2024, but the sanctions will limit its shipments, according to the Reuters report, which cited anonymous sources.
China’s LNG imports rise in November - China’s liquefied natural gas (LNG) imports rose for the second month in a row in November, according to customs data.Data from the General Administration of Customs shows that the country received about 6.80 million tonnes in November, a rise of 6.6 percent compared to the same month last year.This is the highest monthly figure for Chinese LNG imports this year, the data shows.LNG imports in November also rose compared to 5.17 million tonnes in October, which also marked a year-on-year rise. The country’s imports in September declined after rising for seven months in a row.China imported 62.99 million tonnes of LNG during January-November, up by 10.9 percent compared to the same period last year, the data shows.However, Chinese LNG imports fell last year due to due to very high spot LNG prices and Covid lockdowns, which affected economic activity.LNG imports dropped compared to the January-November period in 2021 when China imported 71.36 million tonnes of LNG.Including pipeline gas, China’s gas imports rose by 8.5 percent year-on-year to 107.39 million tonnes in January-November this year.The country’s pipeline gas imports rose by 6.6 percent in November to 4.15 million tonnes, the data shows.
Russia to Raise Gas Export to China via Eastern Route - Gazprom PJSC and China National Petroleum Corp. (CNPC) have agreed to increase the volume of Russian gas export to China through the Power of Siberia Pipeline next year, Russia’s state-owned Gazprom said. At a meeting between representatives of the oil and gas majors, “[i]t was noted that Russian gas supplies via the eastern route, i.e. the Power of Siberia gas pipeline, are carried out in a reliable manner”, Gazprom said in a press release, providing no data on volumes. “The companies are preparing for the increase of these supplies which is planned for 2024. “Apart from that, a significant increase in the volumes of the gas supplies has already been provided since mid-November this year in line with the previously signed Supplementary Agreement to the relevant Sales and Purchase Agreement”. In October 2023 Gazprom announced the Supplementary Agreement with CNPC, also a state-owned company, for the supply of Russian gas to China for the rest of the year via Power of Siberia. In February 2022 Gazprom and CNPC signed a long-term agreement for gas supply for China via the pipeline. "As soon as the project reaches its full capacity, the amount of Russian pipeline gas supplies to China is going to grow by 10 billion cubic meters [353.15 billion cubic feet], totaling 48 billion cubic meters [1.7 trillion cubic feet] per year (including deliveries via the Power of Siberia gas trunkline)", Gazprom said in a news release at the time. In June 2022 the companies signed a technical agreement that "outlines the key technical parameters of the gas pipeline's trans-border section, including the submerged crossing under the boundary river Ussuri, as well as the physical and chemical properties of gas to be supplied", Gazprom said in a media release then. Connecting Russia’s Far East region and China, Power of Siberia was put onstream December 2022, as announced by Gazprom at the time.
Startup of Russian LNG Project Delayed over US Sanctions - The start of supply from Russia’s newest liquefied natural gas project will be delayed after the company declared a force majeure on shipments in the wake of US sanctions. European gas prices rose on the news. Russia’s Novatek PJSC, which leads the Arctic LNG 2 project, sent force majeure notices to some of the facility’s buyers, said people familiar with the matter who declined to be named as details are private. Sanctions that the US imposed on the project in November are making it impossible to make shipments for the time being, they said. Force majeure is a legal clause that allows companies to suspend deliveries due to factors beyond their control. The development adds to supply risks elsewhere in the market, as ships have rerouted away from the Red Sea in recent days due to attacks on vessels there. While the outlook for Arctic LNG 2 had already been clouded due to the US measures, the move presents significant challenges for the project — and could curb extra LNG supply for the global market this winter. Novatek had planned to start production from first of three trains by the end of the year with an aim for the first cargoes from the facility in early 2024. The force majeure “does not necessarily mean that no LNG will be exported from Arctic LNG 2, only that external factors are likely to prevent Novatek from fulfilling all of its contractual obligations,” Energy Aspects Ltd. analyst Jake Horslen said in a research note. Exports from the project will depend on Novatek’s ability to deliver Arctic LNG 2 volumes under existing term contracts or in spot deals “with the limited pool of potential buyers willing to ignore US sanctions,” he added. Shipping will be a limiting factor, Horslen wrote. European gas prices surged as much as 8.3 percent before settling 2 percent higher at EUR 34.20 a megawatt-hour. Novatek shares reversed earlier gains in Moscow, falling as much as 4.8 percent and heading for the lowest close since July. Arctic LNG 2 is critical for Russia’s ambition to more than triple its LNG production by the end of the decade. The plant is also set to make up a large portion of the LNG supply expected to come online in 2024, said Talon Custer, an analyst at Bloomberg Intelligence. “If the project is significantly delayed or it does not ship cargoes next year, this would severely limit global LNG supply growth — down to about 2.5 percent versus the 3.5 percent that we projected,” he said. “Lower-than-anticipated supply growth could boost prices and amplify volatility.” Novatek holds a 60 percent stake in the project. France’s TotalEnergies SE, China’s CNPC and Cnooc, and a consortium of Japanese trading house Mitsui & Co. and Jogmec hold the remainder.
Two gas wells producing 200,000 cubic meters per day commissioned in Ukraine(Interfax) - JSC Ukrgazvydobuvannya (UGV) has commissioned two gas wells at the same field producing a combined 200,000 cubic meters of gas per day, Ukrainian media reported on Tuesday, quoting the press office of Ukraine's Naftogaz. The first well was drilled back in 1975, but became idle due to technical difficulties. Following analysis, the well was sidetracked and several stages of hydraulic fracturing were performed. "This approach proved successful, providing more than 100,000 meters of additional natural gas for the country," said UGV head Oleg Tolmachev. The second well, an appraisal well, is also producing more than 100,000 of gas per day thanks to the successful selection of the drilling site and four stages of hydraulic fracturing. Active drilling has been carried out since 2021 at the field. Despite the situation in the country and related difficulties, 15 new production wells have been added to the existing well stock over the past year and a half. Several more are currently undergoing drilling and testing. This year, the gas field will return to annual production of more than 1 bcm for the first time in more than 10 years. UGV's Ukrburgaz branch drilled both wells. UGV aims to boost natural gas production 1 billion cubic meters to 13.5 bcm in 2023. UGV reduced saleable gas production 3% to 12.5 bcm in 2022.
UkrGasVydobuvannya commissions two high-flow wells -Ukraine is set to boost domestic gas production by launching two new wells, each capable of producing over 200,000 cubic meters daily.The announcement comes from PJSC UkrGasVydobuvannya, a subsidiary of the Naftogaz Group, via a press release on Dec. 19.According to the statement, UkrGasVydobuvannya activated two high-flow wells, both originating from the same deposit.One of the wells, initially drilled in 1975, had been dormant for nearly 50 years due to technical challenges. To revive its productivity, UkrGasVydobuvannya carried out multiple hydraulic fracturing stages, resulting in an additional 100,000 cubic meters of natural gas.The second well, designed for appraisal and exploitation, is expected to contribute over 100,000 cubic meters of gas.Over the past 18 months, 15 new operational wells have been established at this particular deposit, with several more in the process of drilling and testing. This should increase the deposit's annual production to over 1 billion cubic meters this year, marking a significant milestone after over a decade.
Aker BP contains oil spill following North Sea Alvheim restart - — Aker BP has resolved technical issues that recently caused unplanned downtime at the Alvheim Field in the Norwegian North Sea. This arose following a malfunction in new equipment that had been installed during maintenance, and it led to a one-month halt to production from the Alvheim area. During the operations restart, about 50 cu. m of oil leaked to the sea. The company says it notified the authorities and executed appropriate oil spill response measures, with no environmental harm reported. In a separate development, the company has signed an amendment with Odfjell Drilling that extends its firm contract for the semisub Deepsea Nordkapp, starting Jan. 1, 2025, and continuing for two years. These additional years are compensated on a market-based rate mechanism. In addition, Aker BP will pay performance and fuel savings incentive bonuses. The contract extension remains subject to approval from the license partners.
Deepsea Nordkapp cleared for production drilling in Alvheim area - Norway’s oil and gas player Aker BP has restored production at a field located in the central part of the North Sea, close to the British sector. The production restart follows unplanned downtime due to technical issues and an oil spill from the field’s FPSO, which have now been sorted out. According to Aker BP, the downtime at the Alvheim field resulted from a malfunction in new equipment installed during maintenance activities in the previous quarter, causing a deferral of around one month in the production from the Alvheim area. While explaining that about 50 cubic meters of oil leaked into the sea during the restart of operations after the shutdown, the Norwegian player confirmed that the authorities were notified and proper oil spill response measures were implemented. Furthermore, no environmental harm has been reported because of this incident since Aker BP immediately closed all valves to stop the discharge from the FPSO Alvheim when satellite images revealed oil on the sea surface at the Alvheim field. A preliminary estimate indicated a discharge of 51 m3 of oil through the produced water outlet. Aker BP’s emergency response organization mobilized alongside the Norwegian Clean Seas Association for Operating Companies (NOFO) and the Norwegian Coastal Administration to deal with the oil on the sea surface, which chose to use the oil spill response measure known as mechanical degradation, where the propellers on the Esvagt Stavanger standby vessel mixed the oil down into the water column until it dissolved. Ine Dolve, Aker BP’s SVP Alvheim, commented: “This oil spill response operation has been effective and was characterized by very good teamwork between the involved contributors. We’ve started an investigation of the incident aimed at learning and strengthening our barriers to avoid any similar incidents in the future.” Moreover, satellite and aerial surveillance measures were also initiated, in addition to the standby vessel’s oil radar. Aker BP claims that the oil spill response measure proved to be “highly effective” and the oil slick was significantly reduced in size as early as the next day. The Norwegian Coastal Administration, in consultation with the company and NOFO, decided to end the operation the next day, on December 1. At this point, no oil was visible on the sea surface in satellite images and flyovers.
Red Sea Tanker Traffic Falls Sharply amid MidEast Tension - A steep decline in the number of tankers entering a vital Red Sea conduit suggests that attacks on ships in the area are further disrupting a key artery of global trade. So far this week, only about 30 tankers, including crude oil and fuel carriers, have entered the Bab al-Mandab Strait, which lies at the sea’s southern end, according to vessel-tracking data compiled by Bloomberg. That’s equivalent to a drop of more than 40 percent versus the daily average over the previous three weeks. Less well-known than the Suez Canal at the other end of the Red Sea, the strait between Yemen and Africa is almost as crucial. Massive volumes of crude, diesel and other petroleum products from the Middle East and India are hauled through these waters on their way to Europe. Russian oil to India and China heads the other way. The Red Sea crisis is interfering with world trade, with container vessels already sailing round Africa to avoid the area. Yemen’s Houthi militants have vowed to continue targeting ships, despite a US move to compile an international naval task force to protect shipments. To be sure, vessel-tracking provides only a broad picture of how trade is being affected. The figures, which are for oil and chemical tankers, include vessels that aren’t carrying cargo. And shippers may not show up if they’ve turned off their AIS signal equipment, which is allowed for security reasons, according to guidance from industry group Bimco and others. Nevertheless, it provides an early look at how trade through the region is being affected. Separate tracking data point to the same phenomenon: the STI Solidarity, carrying petroleum product, was sailing toward Suez — but after idling off the coast of Oman for a few days, is now heading in the direction of the Cape of Good Hope.
Oil spill cleanup work continues in northeastern Taiwan | Taiwan News — Oil continues to wash ashore, aided by strong waves in Yilan County’s Toucheng Township, making cleanup difficult and time-consuming. Yilan County Government planned to complete oil cleanup operations near the Dali Fishing Port by Monday (Dec. 18), but the arrival of more oil has complicated the cleaning effort. The municipal government now believes more work is needed, per UDN. The coasts of five counties and cities in northern, eastern, and southern Taiwan have all experienced oil pollution notifications since Dec. 1. The Coast Guard is turning to science and technological aids to trace the source of the oil pollution. It is still collecting evidence and has yet to find the source of illegal oil discharges from ships at sea. The Yilan County Environmental Protection Bureau said today that oil pollution first appeared on the rocks lining the coastline for about 40 m near the Dali Fishing Harbor on Dec. 10. After receiving the report, personnel were sent to clean up the coastline. Local volunteers also pitched in to help with the cleanup, with an initial deadline set for Monday (Dec. 18). However, more oil continues to wash ashore, aided by strong waves and strengthening northeasterly monsoon winds in recent days. Such conditions have made it harder for cleanup personnel to work, even posing a safety risk as strong winds and waves led to a one-day suspension of work on Wednesday (Dec. 20). Operations will resume as soon as weather conditions improve.
Shell Nigeria Records 75 Oil Facility Breaches in One Year - Shell Petroleum Development Company (SPDC) has said it recorded 75 oil spill incidents as a result of crude oil theft and facilities’ vandalism by third parties in 2022 in the Niger Delta. In its recently-released: “Nigeria Briefing Notes For 2022 Business Activities,” the company also noted that during the year under review, 10 incidents caused by operational failures were experienced. However, the report noted that over the last 12 years, the total number of oil spill occurrences attributable to operational failures had reduced considerably. The report added that the 75 breaches were lesser compared with 106 incidents in 2021, which led to considerable spill into the environment. In 2022, SPDC said it successfully remediated an additional 230 impacted sites, compared to 187 sites remediated in 2021, adding that 776 affected sites had been remediated since 2016. “In the Niger Delta, over the last 12 years, the total number of operational hydrocarbon spills and the volume of oil spilled from them into the environment have been reduced significantly. “In 2022, about 88 per cent of the oil spills, more than 100 kilogrammes from the SPDC operated facilities were caused by the illegal activities of third parties- 75 incidents with volume of 0.6 thousand tonnes, compared with 106 incidents in 2021, with volume of 3.3 thousand tonnes. “The decreased incidents in 2022 correlate with a shutdown of production for about six months because of an unprecedented increase in crude oil theft from the Trans-Niger Pipeline, which is operated by SPDC on behalf of the SPDC JV partners. “In 2022, SPDC successfully remediated an additional 230 sites, compared to 187 sites remediated in 2021. Since 2016, 776 sites have been remediated. “Most oil spills in the Niger Delta region continue to be caused by crude oil theft, the sabotage of oil and gas production facilities, and illegal oil refining, including the distribution of illegally refined products.
Chennai Authorities Explore Solutions for Oil Spill Cleanup in Ennore – Officials from the Greater Chennai Corporation (GCC) are in discussions with the Water Resources Department (WRD) to transport dredged soil to areas affected by the oil spill in Ennore. The Ennore estuary underwent dredging in April 2023, with the dredged soil initially deposited near the estuary. The GCC, TNPCB, TNFDC, and Chennai Enviro Solutions, a private agency managing solid waste, collaborated on a cleanup effort. So far, 160 tonnes of solid waste linked to the oil spill has been cleared along Buckingham Canal, with an additional 120 tonnes removed from interior Ennore. The oil spill resulted from floodwaters mixing with oil after Cyclone Michaung, affecting an estimated area of 20 sq. km.
Emergency oil spill recovery work in Ennore completed: Tamil Nadu govt - Tamil Nadu government on Wednesday night said it has completed the emergency oil spill recovery work in the ecologically-sensitive Ennore Creek area by removing 105.82 kl oily water and 393.5 tonnes oily sludge since December 12. The oil spill from the Chennai Petroleum Corporation Limited (CPCL) refinery in Manali, which was let into the flood water on December 4-5 when the city was swamped under the influence of Cyclone Michaung, spread into an area of about 20 square kilometers, severely affecting people’s lives and the livelihood of several fishermen. While fishermen didn’t venture into fishing due to the fish catch smelling of oil, residents of Ernavur and near-by areas had to deal with oil stains which damaged their household items and faced several health issues due to strong odour of the oil that entered their homes. After the Southern Bench of the National Green Tribunal (NGT) took up the case suo motu, the Tamil Nadu government took up the oil spill cleaning work by splitting the affected area into four stretches – Ennore Creek mouth to Bridge, Bridge to Railway Bridge, Railway Bridge to entrance of Buckingham Canal, and Sivanpadai Veedu to Sathyamurthi Nagar. “A total of 105.82 kl of oily water and 393.5 tonnes of oily sludge was removed until date,” a press release from the government said. It added that CPCL, which was blamed by the Tamil Nadu Pollution Control Board (TNPCB) for the oil spill, has deployed three ambulances with a team of specialised doctors to take care of health concerns in the impacted areas. The NGT had expressed displeasure over the slow pace of the recovery process, even as the Indian Coast Guard (ICG) said the oil spill had spread to about 20 square km. Nearly 900 people, including trained personnel from sea cleaning agencies and local fishermen, worked for over eight days to complete the emergency cleaning work, which was necessitated to ensure that the oil sludge doesn’t enter the sea. A team led by Environment and Forests Secretary Supriya Sahu took a boat to review the completion of operations during which it observed that while the oil recovery and mitigation was over in most of the areas, deposits of oil in Mangroves needed a longer time period, as it is a specialized task and has to be done carefully. In consultation with experts. “It was decided to shift the entire focus now on cleaning oil ingress in Mangrove areas. It was further decided that for this purpose, the Forest Department shall engage local fishermen through CPCL resources to undertake oil cleaning work in Mangroves with the help of smaller boats using oil boomers and soak pads,” the statement added. Besides deploying five gully sucker machines, the Tamil Nadu government also installed containment booms in an area of about 1,100 metres to prevent the oil from entering the ocean. The oil which was released by CPCL into flood water reached the Kosasthalaiyar River via the Buckingham canal.
First Phase Of Chennai Oil Spill Cleanup To Be Over In 4-5 Days: Minister -Tamil Nadu Minister Udhayanidhi Stalin has said that the first phase of cleanup of the recent oil spill in Chennai will be over soon. After he surveyed the site on Friday, the minister said the cleanup will be a long process but the first stage will be over in 4-5 days. The minister also assured that a framework will be developed to deal with similar incidents in the future. The oil spill, which has crossed at least 20 sqkm into the sea, occurred shortly after Chennai began recovering from the devastating Cyclone Michaung and is now threatening to destroy the eco-sensitive Ennore creek outside Chennai. The oil spill mitigation work gained momentum on Friday, a day after the National Green Tribunal (NGT) rebuked the Chennai Petroleum Corporation Ltd (CPCL) over the slow pace of the cleanup. The oil company, from who's refinery the oil spill originated, had assured that 95% of the oil spill will be removed by the end of this week. "Crucial time has been lost. The spill has spread. We are doing our best," a expert told NDTV. While experts say it's a long, laborious process, the key focus is to save the Ennore Creek. The plan is to gradually remove a significant amount of oil using skimmers, gulley suckers besides manual collection of the spill by nearly 300 fishermen on 100 boats and then use thousands of pads to further absorb the leftover floating oil films. The company has deployed four layer boomers to contain the spread along with consulting a private oil spill mitigation company from Mumbai. At least two skimmers operating on boats have been deployed in the creek to pump waters into containers, from the worst-affected pockets. A statement from the Tamil Nadu Government said, "About 276 barrels containing 48.6 tonnes of oil waste was collected containing approximately 15 tonnes of oil". IIT Madras is investigating the impact to assess the quantum of the oil spill as CPCL has not shared any data on this yet. The Chennai Petroleum Corporation Ltd has assured that medical checkups are underway for communities living around the creek.
CPCL to pay ₹7.5 crore compensation for oil spill in Ennore - The Hindu - The Tamil Nadu government has fixed a total of ₹8.68 crore as relief fund for families and boats that were affected by the oil spill from industries, in Ennore during Cyclone Michaung. Of this, ₹7.53 crore will be paid by the Chennai Petroleum Corporation Limited (CPCL). During the hearing of a suo motu case on the oil spill on Thursday, the Southern Bench of the National Green Tribunal (NGT) was informed that the livelihood of 2,301 fisher families has been affected and as many as 787 boats belonging to Kattukuppam, Sivanpadaikuppam, Ennorekuppam, Mugadwarakuppam, Thalankuppam, Nettukuppam, VOC Nagar, Ulaganathapuram, and Sathyavanimuthu Nagar were damaged. The Fisheries Department further said that a relief amount of ₹78.7 lakh for the boats (₹10,000 each) and ₹287.6 lakh for the affected families (₹12,500 each) was also fixed. According to the Greater Chennai Corporation (GCC), 6,700 houses were affected by the oil spill and ₹7,500 will be given for each. For this, the GCC told the tribunal, ₹502.5 lakh relief is needed. Of the total ₹8.68 crore relief fund, the CPCL will pay ₹7.53 crore to the Tamil Nadu Disaster Management Authority and the remaining ₹1.15 crore will be borne by the Authority. On Wednesday, the CPCL and the State government said the emergency recovery work has been completed. While the oil seems to have been removed from most parts of the Kosasthalaiyar, traces of the slick continued to flow near Manali when The Hindu visited the area on Thursday. “CPCL has been asked to deploy 60 boats, each with four fishermen as they know the river better, to clean the remaining oil coming out from pockets every now and then, till December 31,” said Supriya Sahu, Additional Chief Secretary to Environment, Climate Change and Forests department. Another 20 boats will carry out mangrove restoration works for a month, she added.
Oil Prices Jump As BP Halts Shipments Through Red Sea After Rebel Attacks - - Oil prices have found some respite from a six-week sell-off as BPPLC BP became the latest company to announce it was halting shipments through the Red Sea due to the “deteriorating security situation for shipping.” The development comes amid increasing attacks on vessels in the Red Sea by Houthi militants in Yemen, according to Reuters. On Monday, the price of the U.S. benchmark Nymex WTI contract rose 3.9% to $74.57 a barrel, but was still 22.5% lower than its peak in September. European benchmark Brent crude, rose by 3.8% to $79.47 a barrel, but remained nearly 20% lower than its September high mark. The United States Oil Fund USO, an exchange traded fund that tracks the price of light sweet crude, was up 3.6% in early trade, but still lags its 2023 peak by 19%. American Depository Receipts in BP were trading 1.2% higher in midday trading on Monday. Among the US majors, Exxon Mobil XOM gained 1.5% to $102.47 and Chevron CVX added 0.7% to $150.50. In an emailed statement to Benzinga, BP said, “In our trading and shipping business, as in all BP businesses, the safety and security of our people and those working on our behalf is BP's priority. “In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits through the Red Sea. We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.” BP is among a number of companies who have now suspended shipments through the area. Last week Moller Maersk and Hapag-Lloyd, the second- and third-biggest container shippers in the world, said they were halting shipments through the Red Sea. On Monday,Evergreen Line said it would suspend Israel import and exports services “due to rising risk and safety considerations.” The Red Sea is an important shipping route for goods and commodities moving to and from the Arabian Peninsula and East Africa, to Europe and the Eastern U.S. Joining up with the Suez Canal, goods can be shipped though the Mediterranean Sea to Northern Europe and across the Atlantic to ports on the East Coast of the U.S. In March 2021, Brent crude gained 8% over a couple of days when the Suez Canal was blocked for nearly a week by container ship Ever Given. Brent continued to rise into April as the build up in backlogs slowed down the rate of oil shipments into Europe. The alternatives are crossing the Indian and Pacific Oceans to the U.S. West Coast or sailing around Africa. Either of which can add thousands of miles on to the journey and rack up significant extra shipping costs.
Brent Futures Rallies After Red Sea Shipping Disruption -- Oil futures settled Monday's session with gains between 1.5% and 2%, triggered by a disruption in shipping at the Red Sea following a series of attacks by Iranian-aligned Houthi forces on commercial vessels in the region. Some 8.8 million barrels (bbl) of crude oil transits each day through the Strait of Bab-el-Mandeb in the Red Sea, a narrow water passage between the Arabian Peninsula and the Horn of Africa. According to the U.S. Energy Information Administration, the amount of oil moved through the waterway chokepoint is up from 4.9 million barrels per day (bpd) seen just two years ago as more Russian oil was rerouted from the European continent towards Asia in the aftermath of Moscow's invasion of Ukraine. Similarly, 4.4 million bpd of petroleum products, including gasoline, diesel and jet fuel, were shipped during the first half of 2023 via the same chokepoint from Asian and Middle Eastern refiners towards Europe and North America. Given the key role the shipping routes on the Red Sea play in the global oil trade, the recent attacks on commercial vessels by the Houthi rebel group are particularly troublesome for traders. Oil giant British Petroleum said on Monday the company halted all oil transit through the Red Sea as it continued to assess security for its vessels. Tanker firms Moller-Maersk, Hapag-Lloyd, and Euronav have also stopped their ships from entering the southern tip of the Red Sea after a recent spike in violence against commercial shipping. U.S. and European officials are reportedly working on a multifaced security force in the Red Sea to escort all vessels passing through the waterway. Iran-allied Houthi fighters claim they are only attacking ships linked to Israel as part of their strategic shift towards maritime operations to put a stop to the war in Gaza. Further spurring gains for the oil complex, Russia's Deputy Prime Minister Alexander Novak said on Dec. 17 that it would deepen oil export cuts in December by potentially 50,000 bpd or more than previously pledged, although it was unclear if this was a result of the disruptions. Regardless of the outcome for Russian exports, the disruption will surely increase shipping costs and voyage time for all tankers and container vessels. At settlement, NYMEX West Texas Intermediate (WTI) futures for January delivery added $1.04 bbl to $72.47 bbl, and international crude benchmark Brent February futures advanced to $77.95 bbl, up $1.40. NYMEX RBOB January futures rallied $0.0220 to $2.1590 gallon, and NYMEX ULSD January contract advanced $0.0520 to $2.6728 gallon.
WTI Slides After US Crude Productions Hits New Record High, Inventories Rise Across The Board - Oil prices were higher again this morning (3rd day in a row, at two week highs) as traders and shippers braced for the prospect of more disruptions in the Red Sea. The escalated geopolitical risks have introduced a premium to an oil market plagued by skepticism that OPEC+ will adhere to production cuts and concerns that supplies from outside the cartel are increasing, especially from the US. Some of that concern has been tempered by wagers that global central banks will embark on a rate-cutting cycle next year as inflation slows. But the inventory/production data will be the driver of the next leg one way or another. API:
- Crude +939k (-2.5mm exp)
- Cushing +1.853mm
- Gasoline +669k (+700k exp)
- Distillates +2.738mm (+700k exp)
DOE
- Crude +2.9mm (-2.5mm exp)
- Cushing +1.68mm
- Gasoline +2.7mm (+700k exp)
- Distillates +1.5mm (+700k exp)
US crude stocks jumped 2.9mm barrels last week (hugely beating the 2.5mm draw expected), Cushing stocks and product inventories also built... Source: Bloomberg https://www.zerohedge.com/s3/files/inline-images/bfmAC88_0.jpg?itok=6fX0FHx_ The Biden administration added 629k barrels to the SPR last week - the most since September... US Crude production jumped 200k b/d to a new record high, despite the trend lower in rig counts...WTI was trading just above $75 ahead of the print and started sliding fast soon after...But prices are still holding some geopol risk premia...
Oil Prices Swing on Unexpected Inventory Surge and Trade Flow Disruptions The oil market on Wednesday traded lower in light of the EIA report showing an unexpected build in crude stocks on the week, with record U.S. oil output and larger than expected builds in product stocks. The crude market retraced more than 62% of its move from a high of $79.67 to a low of $67.98 as it posted a high of $75.37 ahead of the release of the EIA’s weekly petroleum stock report. It was well supported by concerns over global trade disruption and geopolitical tensions in the Middle East following the recent attacks on ships by Yemen’s Houthi militants in the Red Sea. On Wednesday, the leader of the Houthi militants warned that his group would start firing missiles at U.S. warships if Washington got more involved in its affairs or targeted Yemen. This followed his comments on Tuesday when he vowed to defy the U.S.-led naval mission and to keep targeting Red Sea shipping. However, the crude market erased all of its earlier gains and traded below the $74.00 level following the release of the EIA report. It posted a low of $73.60 in afternoon trading. The February WTI contract settled up 28 cents at $74.22 and the February Brent contract settled up 47 cents at $79.70. Meanwhile, the product markets ended the session in negative territory, with the heating oil market settling down 83 points at $2.7085 and the RB market settling down 1 point at $2.2007. The EIA reported that crude oil stocks increased by 2.909 million barrels in the week ending December 15th. The report showed that U.S. crude oil production increased by 200,000 bpd on the week to a record 13.3 million bpd. The head of Yemen's Iran-aligned Houthis, Abdel-Malek al-Houthi, said his group would start firing missiles at U.S. warships if Washington got more involved in its affairs or targeted Yemen. IIR Energy reported that U.S. oil refiners are expected to shut in 14,000 bpd of capacity in the week ending December 22nd, after operating at full capacity in the previous week. U.S. Gulf Coast refiners have reduced gasoline export prices to their lowest since 2021 because restrictions on shipping through the Panama Canal have left exporters unable to send as much of the motor fuel to international markets. The number of U.S. gasoline cargoes crossing the waterway nearly halved last month from year-ago levels. The canal is the shortest route for fuel tankers from the U.S. Gulf Coast to South America's Pacific Coast and eastern Asia. Analysts said some less cost-efficient U.S. refiners may need to reduce production to prevent fuel inventories building, as the canal maintains transit restrictions in place at least through year end. That could hit supplies of products like heating fuel, which see higher demand in the winter. Some Gulf Coast refiners have offered gasoline for export at as low as $75/barrel this month for the first time since February 2021. They have been forced to cut prices to make it economically viable for shippers without reservations who face higher costs to either secure passage slots through the Panama Canal's daily auctions or to take much longer routes sailing around it. The restrictions in Panama have led foreign buyers of U.S. gasoline to begin sourcing product elsewhere. Data from ship tracking service Kpler showed that Chile, a big buyer of U.S. gasoline via the waterway, cut its imports from the Gulf Coast to the lowest level in three years, while Asian purchases were the slowest in half a decade. According to Kpler data, Gulf Coast gasoline exports through the Panama Canal fell about 40% in November from a year ago to 203,000 bpd. Meanwhile, shipments of U.S. gasoline to storage facilities in the Bahamas were at their highest rate last month since the Covid-19 pandemic crushed demand in April 2020.
Oil prices finish lower after Angola announces decision to leave OPEC Crude-oil futures settled lower for the first time in four sessions Thursday, with traders fretting over a possible shake-up in the Organization of the Petroleum Exporting Countries following Angola's decision withdraw its membership from the group of oil producers. Crude futures had already been under pressure after a buildup in U.S. petroleum supplies and record domestic production cooled a rally sparked by disrupted shipments in the Red Sea. Price action West Texas Intermediate crude for February delivery CL00 CL.1 CLG24 fell 33 cents, or 0.4%, to settle at $73.89 a barrel on the New York Mercantile Exchange but ended off the session's low of $72.44.February Brent crude BRN00 BRNG24, the global benchmark, lost 31 cents, or 0.4%, at $79.39 a barrel on ICE Futures Europe.January gasoline RBF24 shed 1.9% to $2.16 a gallon, while January heating oil HOF24 fell 0.4% to $2.70 a gallon.Natural gas for January delivery NGF24 settled at $2.57 per million British thermal units, up 5.1%. Angola's oil minister, Diamantino de Azevedo, announced Thursday the withdrawal of his country from OPEC, according to state-controlled news agency Angop. He said that Angola would not gain anything by remaining in the organization. News that Angola is leaving OPEC lifted concerns that there might be "growing pressure within the OPEC cartel to raise production," "On the surface Angola leaving OPEC is not that big of a deal because they can barely pump their oil quota," However, the concern is that "Angola's departure might signal some underlying tension with the fact that the cartel is losing market share to non-OPEC producers and mainly the United States." Also read: Why 2023 was a tough year for commodities even as gold and orange-juice prices hit records In a weekly report released Wednesday, the Energy Information Administration said U.S. petroleum production marked a climb to another record high at 13.3 million barrels a day. On Thursday, however, Baker Hughes (BKR) reported a third straight weekly decline in the number of active U.S. rigs drilling for oil, implying an upcoming fall in output. That number fell by three to 498 this week. Several shipping companies have suspended shipments through the Red Sea after a series of drone and missile attacks by Iran-backed Houthi rebels since the start of the Israel-Hamas war. The U.S. earlier this week announced a naval coalition would move to halt the attacks. "We think oil passing through the Red Sea could ultimately be rerouted through other shipping channels, albeit at a longer distance and higher cost," "Disruptions at the Strait of Hormuz, on the opposite side of the Arabian peninsula, would pose a much bigger risk, as it allows for roughly 20% of global supply to pass. "In general, the abundance of geopolitical conflicts today place an upward bias on the price of oil," he told MarketWatch. Read: Attacks in the Red Sea add to global shipping woes Looking ahead, trading volume in oil is likely to lighten, said Tariq Zahir, managing member at Tyche Capital Advisors. The situation for oil has "not really changed much, with cuts by OPEC announced and potential slowing of the U.S. economy battling each other for the next direction of crude oil," he told MarketWatch. Zahir also said he does not believe it's a big deal "at all" that Angola is reportedly leaving OPEC. As the energy market begins a new year, Zahir said prices may start a move higher, albeit "slowly and possibly choppy." Brent and WTI rose for a third straight session Wednesday, ending at their highest since Nov. 30 but below session highs after the EIA reported a rise in U.S. crude, gasoline and distillate supplies last week. Separately Thursday, the EIA reported that U.S. natural-gas supplies in storage fell by 87 billion cubic feet for the week ending Dec. 15 - slightly more than the 83 billion-cubic-foot decline forecast by analysts surveyed by S&P Global Commodity Insights.
Oil Futures Post Weekly Gains on Red Sea Shipping Disruption -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange edged lower during Friday's afternoon session, although all petroleum contracts registered their second consecutive weekly advance amid improved sentiment in financial markets and shipping disruption in the Red Sea following a series of attacks by Houthis militia on commercial vessels off the southern coast of Yemen. In broader markets, the U.S. dollar index lost ground against a basket of foreign currencies to finish the week at 101.338, down 1.2% from the prior Friday, after fresh consumer data in the United States showed sentiment improved markedly in December, led by a more positive outlook on the labor market and business conditions. Notably, consumer expectations for inflation plunged to the lowest point since March 2021, sitting just above the 2.3%-3% range seen in the two years prior to the pandemic. Long-run inflation expectations fell from 3.2% last month to 2.9% this month, staying within the narrow 2.9%-3.1% range for 26 of the last 29 months. More evidence of easing inflation pressures could be found in Friday's release of the Personal Consumption Index, the Federal Reserve's preferred inflation measure, which fell 0.1% from the previous month on a core basis. What's more, core PCE increased just 1.9% over the past six months, indicating that if current trends continue, the Fed essentially has reached its goal. The Fed's inflation target is 2%. Separately, oil traders continue to monitor the developing situation in the Strait of Bab al-Mandab as more shipping operators vowed to avoid the Red Sea amid heightened security concerns. The United States announced a maritime security coalition consisting of 10 countries to protect safe passage for commercial vessels through the narrow waterway passage. Market sources said despite the coalition, the disruption to shipping won't be resolved quickly. The Red Sea has increased importance in global oil flow, with 8.8 million barrels per day (bpd) of crude oil transiting through the waterway in the first half of 2023, up from 4.9 million bpd two years ago, according to the U.S. Energy Information Administration. Suez Canal and Strait of Bab al-Mandab have become particularly important for Russian crude oil exports that rose from just 120,000 bpd in the two weeks leading up to the war in Ukraine to 1.7 million bpd during the most recent six months. Similarly, 4.4 million bpd of petroleum products, including gasoline, diesel, and jet fuel, have been shipped during the first half of 2023 via the same chokepoint from the Asian and Middle Eastern refiners towards Europe and North America. Limiting upside for the oil complex are concerns of fracturing within the OPEC+ alliance after Angola abandoned the quota system to pursue private investments for expansion of its oil industry. "We feel that at the moment Angola does not gain anything by remaining in the organization and, in defense of its interests, it has decided to leave," said Joao Loureno, president of Angola, according to the Angola Press Agency. The decision to leave the Organization of the Petroleum Exporting Countries following 16 years follows a dispute over production quotas in late November. OPEC+, chaired by Saudi Arabia and Russia, lowered Angola's production quota for 2024 to 1.28 million bpd from 1.455 million bpd, citing consistent underperformance on its output targets. At settlement, NYMEX West Texas Intermediate futures for February delivery slipped $0.33 to $73.56 per barrel (bbl), while Brent declined $0.32 to $79.07 per bbl. NYMEX RBOB January futures moved down $0.0284 to $2.1301 per gallon, and the NYMEX ULSD January contract fell $0.0356 to $2.6612 per gallon.
Oil Posts Largest Weekly Gain Since October on Red Sea Turmoil | Rigzone -- Oil posted the biggest weekly gain since October as attacks in the Red Sea forced hundreds of ships to take safer but longer routes, delaying the delivery of oil cargoes. US benchmark WTI edged down to settle below $74 a barrel on Friday as reports that Russia was scaling back its export reductions in January undercut some of the Red Sea risks. Crude was still up 3% for the week. Attacks by the Iran-backed Houthi militant group forced more ships take extensive detours to avoid the vital waterway, with disruptions seen lasting through February. So far this week, only about 30 tankers, including crude oil and fuel carriers, have entered the Bab al-Mandab Strait at the southern end of the Red Sea, according to vessel-tracking data compiled by Bloomberg. That’s a drop of more than 40% versus the daily average over the previous three weeks as the Houthis target merchant ships in a show of support of Hamas in its war with Israel. Crude is headed for its first annual drop since 2020 as surging production from the US and elsewhere counters efforts by the OPEC+ alliance to shore up the market through output cuts. The outlook for demand is also fragile, with the International Energy Agency forecasting that growth will slow sharply next year. Geopolitical events provide a buffer to oil’s decline, but “fundamental weakness continues to be the overarching concern,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth. WTI for February delivery fell 0.4% to $73.56 a barrel. Brent for February settlement fell 0.40% to $79.07 a barrel. Brent’s prompt spread was 27 cents in backwardation on Friday, after being in the opposite, bearish contango pattern for most of this month.
New task force will combat Houthi threat in Red Sea - The Pentagon announced Operation Prosperity Guardian to protect merchant ships and commercial boats from the Iranian-backed Houthi rebels in Yemen.The new task force includes the U.K., Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles and Spain.It will fall under the Combined Maritime Forces, a multinational alliance tasked with defending the world’s shipping lanes.The new security initiative will also be included in the alliance’s Task Force 153, in charge of defending the Red Sea and other regional areas.Defense Secretary Lloyd Austin said the task force will help keep the Houthi rebels at bay after the group has attacked several merchant ships through the important transit corridor of the Red Sea.“This is not just a U.S. issue — this is an international problem, and it deserves an international response,” Austin told reporters on Monday.Not everyone has backed the idea.Sen. Roger Wicker (R-Miss.), ranking member on the Senate Armed Services Committee, said the Biden administration must deter the Houthis from attacking in the first place. “We cannot let terrorists dictate the flow of global trade in the world’s largest shipping lane,” Wicker said in a statement, warning there could be a “catastrophe” in the Red Sea if the U.S. fails to act.Several companies — including oil giant BP and container shipping firmMaersk — have already said they will redirect transit routes to avoid the Red Sea.The World Shipping Council welcomed the news of the new task force. “The mission of this task force is critical to protecting seafarers and to defending the foundational principle of freedom of navigation,” the organization wrote in a statement.
US Formally Launches Red Sea Military Operation in Response to Houthi Attacks - The US has formally announced the launch of a new military operation in the Red Sea aimed at responding to attacks on commercial shipping by Yemen’s Houthis that started in response to the brutal Israeli assault on Gaza.Secretary of Defense Lloyd Austin announced the initiative, dubbed Operation Prosperity Guardian, while on a trip to the region and said the other countries taking part include the UK, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles, and Spain.The Houthi attacks have forced some of the world’s largest shipping lines to suspend Red Sea transits, which risks a major impact on the global economy. The British energy giant BP announced Monday that it was stopping all shipments of oil and gas through the waters.The Houthis, formally known as Ansar Allah, have vowed to target all ships heading to and from Israel and said the only way to “restore calm” to the region is through a lasting ceasefire in Gaza. The Houthis have shown no sign of backing down and announced on Monday that they launched two drone attacks on commercial vessels.The US is considering taking military action against the Houthis, which would involve bombing Yemen. The US has backed a Saudi-UAE coalition against the Houthis since 2015, but it’s rare that the US takes direct military action against them.Bloomberg reported that Saudi Arabia and the UAE are split on how the US should respond. The UAE wants military action and for the US to redesignate the Houthis as a “foreign terrorist organization,” which wouldmake the implementation of a Yemen peace deal impossible. For their part, the Saudis fear that military action could provoke more Houthi attacks and break the fragile truce that’s held relatively well in Yemen since April 2022. Before the ceasefire, the Houthis had launched multiple successful missile and drone attacks against Saudi oil facilities.
US announces naval operation targeting Yemen and Iran - US Secretary of Defense Lloyd Austin announced Monday the start of Operation Prosperity Guardian, a naval operation in the Red Sea and Gulf of Aden, targeting the Houthi rebels in Yemen and threatening Iran. Austin made the announcement in Israel, thus underscoring the role that Israeli forces, now engaged in mass murder in Gaza, will play in any future war with Iran. “The recent escalation in reckless Houthi attacks originating from Yemen threatens the free flow of commerce, endangers innocent mariners and violates international law,” Austin said Monday in a statement. “This is an international challenge that demands collective action.” Austin made clear the main target of the operation was Iran, saying at a press briefing in Israel, “Iran is raising tensions by continuing to support terrorist groups and malicious attacks by these Iranian proxies who threaten the region and risk a broader conflict.” In a backhanded threat, Austin said, “Of course, the United States does not seek war. And we urgently call on Iran to take steps to de-escalate.” The US has sent an armada of nearly 20 warships to the Middle East, led by two aircraft carrier battle groups. The new naval operation will include most of the major imperialist powers, including the UK, France, Italy and Spain. On Saturday, the US Arleigh Burke-class guided missile destroyer USS Carney engaged over a dozen drones launched from Yemen. Austin said the initiative was begun “to tackle the challenge posed by this non-state actor launching ballistic missiles and uncrewed aerial vehicles at merchant vessels from many nations lawfully transiting international waters.” At a press briefing with Israeli Defense Minister Yoav Gallant, Austin said, “We’re taking action to build an international coalition to address this threat.” After Austin leaves Israel, he is scheduled to visit the USS Gerald R. Ford aircraft carrier, currently in the eastern Mediterranean. Austin’s visit is part of a parade of high-level US officials visiting Israel. General C. Q. Brown, chairman of the US Joint Chiefs of Staff, was also in Israel on Monday. Last week, National Security Advisor Jake Sullivan visited Israel, while CIA chief Bill Burns also met with Qatari and Israeli officials in Warsaw, Poland. Earlier this month, Sullivan threatened military action against the Houthi rebels, saying the US would “take appropriate action … at a time and place of our choosing.” USNI News, the news service of the US Navy, gave a sense of the massive deployment currently under way: “The U.S. Navy has at least three destroyers in the vicinity of the Bab el Mandeb strait between the Red Sea and the Gulf of Aden—USS Carney (DDG-64), USS Mason (DDG-87) and USS Thomas Hudner (DDG-116) have all operated in the region. The U.K. Royal Navy guided-missile destroyer HMS Diamond (D34) and the French Navy guided-missile frigate FS Languedoc (653) have operated in the Red Sea as well. “Over the weekend, the U.S. moved aircraft carrier USS Dwight D. Eisenhower (CVN-69) and its escorts to the Gulf of Aden—between Somalia and Yemen, according to USNI News Fleet and Marine Tracker. Shipspotters also saw guided-missile destroyer USS Laboon (DDG-58) enter the Red Sea from the Suez Canal on Monday.” During his visit to Israel, Austin reaffirmed the US’s unlimited support for Israel’s genocide in Gaza. “I’m here with a clear message,” Austin said. “America’s support for Israel’s security is unshakable.” He added, “Hamas committed atrocities during its attack on Israel. It is a continuation of its professed goals: the killing of Jews and the elimination of the Jewish state. No country should tolerate such a danger.” He concluded, “Israel has every right to defend itself against a fanatical terrorist group whose stated purpose is to murder Jews and eradicate the Jewish state. … So make no mistake, Hamas should never again be able to project terror from Gaza into the sovereign state of Israel.”
Houthis Say They Won't Back Down Even If US 'Mobilizes the Entire World' - Yemen’s Houthis responded to the US launching a new military operation in the Red Sea by vowing attacks on commercial shipping in the region will continue even if the US “mobilizes the entire world.”The US launched a 10-nation naval task force, dubbed Operation Prosperity Guardian, after major shipping companies began pausing Red Sea transits due to the Houthi attacks. Bahrain is the only Arab country to participate in the coalition, and no nations with coasts on the Red Sea have joined. “Even if America succeeds in mobilizing the entire world, our military operations will not stop … no matter the sacrifices it costs us,” Mohammed al-Bukhaiti, a senior member of the Houthis’ political bureau, wrote on X.In another post, al-Bukhaiti said, “America’s announcement of the establishment of the Coalition of Shame will not prevent us from continuing our military operations until the crimes of genocide in Gaza are stopped and food, medicine and fuel are allowed to enter its besieged population.”The Houthis have vowed to target all commercial vessels heading to or from Israeli ports and have also fired missiles and drones at Israeli territory. In some cases, US warships have intervened and intercepted Houthi attacks.The Houthis, formally known as Ansar Allah, have controlled the Yemeni capital of Sanaa since 2014 and govern the area of Yemen where 70-80% of Yemen’s population lives. The US is considering taking direct military action against the Houthis, which would mean bombing Yemen, a step that could shatter the fragile truce between the Saudis and Houthis that has held relatively well since April 2022.The US is also threatening to kill a Saudi-Houthi peace deal by redesignating the Houthis as a “foreign terrorist organization,” which would make the implementation of the agreement impossible. For their part, Riyadh is asking the US not to strike the Houthis directly over concerns that it would provoke more attacks.
Too Late For US Naval Deterrence In Red Sea After Biden Misled World On Houthi Attacks - It has become clear there's a full-blown Houthi war on commercial shipping in the Red Sea. Weeks ago, we featured commentary that cited US defense officials who were frustrated that the Pentagon was being held back from responding forcefully against Houthis positions in Yemen by the Biden White House. President Biden stood accused of "downplaying" the threat, as statements in Politico have underscored, "Some current and former military officials were frustrated by the administration’s initial response to the Houthis’ Sunday attacks on the ships." This as some top military brass pushed for a more forceful response, lest the Iranian proxies grow more emboldened.But more emboldened is precisely what has happened, as container ships are coming under drone and missile attack on a daily basis at this point, triggering delays and rising prices on goods as major liners avoid Red Sea transit altogether. Fast-forward to this week, now nearing the end of December and The Wall Street Journal has run an alarming but apt headline this which spells out U.S. Naval Deterrence Is Going, Going, Maybe Even Gone.Increasingly, Biden's desire to make nice with the Iranians in order to keep global energy prices down ahead of the 2024 election is translating to a posture of 'looking the other way'—and some analysts worry it's too late to reestablish deterrence. The Commander-in-Chief hasn't so much as ordered a military response when American warships in waters off Yemen themselves come under direct attack. Again, this is what has deeply frustrated Pentagon leaders, who feel handcuffed. In its fresh commentary, WSJ points to the reality and immediate consequences of the US Navy coming under attack, but failing to respond or decisively hit back: Recently the news broke that the U.S. Navy destroyer USS Carney had fended off several missile and drone attacks in the Red Sea. While Biden administration officials tried to frame the battle, for a battle it surely was, as the Carney’s defending nearby merchant ships, it seems clear that Iranian-supplied Houthis were targeting the Carney directly as well as the commercial ships it was accompanying. This was only one of several recent assaults on American naval assets in the region. They have happened despite the presence of the Ford carrier strike group in the eastern Mediterranean and the Eisenhower strike group in the Gulf of Aden—a conventional level of naval deterrence that should have reduced aggressive activities by U.S. enemies. Instead, Iran attacked American ships and allies. But still, if the last 20+ years of the so-called global war on terror has taught Washington anything, it is that it's hard to deter a hardened and determined ragtag army of insurgents with things like giant naval assets sitting off a coast which are designed to fight bigger, conventional wars.
Iran threatens to close Mediterranean Sea citing US ‘crimes’ in Gaza -- Iran threatened Saturday that the Mediterranean Sea could be “closed” if the U.S. and Israel continued “crimes” in Gaza, state media reported, according to Reuters.The Iranian government has showed support for militant group Hamas in its war against Israel, while the U.S. has strongly backed Israel — despite growing criticism of the Israeli military’s war effort.“They shall soon await the closure of the Mediterranean Sea, (the Strait of) Gibraltar and other waterways,” state media Tasnim quoted Iranian Brig. Gen. Mohammad Reza Naqdi as saying.Iran has accused the Israeli military, and the U.S. as its close ally, of committing war crimes in Gaza. Over 20,000 Palestinians have died in the conflict since early October, according to the Gaza Health Ministry.The Biden administration has pressed the Israeli military to step back from major military operations amid the rising civilian death toll and international pressure.It is unclear how Iran would follow through on such a threat, as the country has no direct access to the Mediterranean Sea and no major naval presence outside the Persian Gulf. Naqdi referenced attacks on Gibraltar would be an escalation of Red Sea attacks on shippingfrom Houthi rebels in Yemen. The Iran-backed rebel group launched attacks on cargo ships and U.S. warships near the Horn of Africa last week, stepping up operations in the years-long Yemeni Civil War. “Yesterday, the Persian Gulf and the Strait of Hormuz became a nightmare for them, and today they are trapped … in the Red Sea,” Naqdi said, referencing the Houthi attacks, according to state media.The Biden administration has faced pressure to strike back at the Yemeni group over the attacks. A Navy taskforce will be deployed to the region to protect shipping, Defense Secretary Lloyd Austin announced Monday.Iran’s proxy groups in the eastern Mediterranean, Hezbollah in Lebanon and an allied group in Syria, are not believed to have the capability of long-distance strikes.Tansim reported that an Iran-backed group in Iraq attacked an Israeli natural gas facility off the coast of Israel earlier this week.
US Forces Have Come Under Attack Over 100 Times in Iraq and Syria Since October - A Pentagon official said Thursday that US troops in Iraq and Syria have come under attack at least 102 times since October 17, when the attacks started due to US support for the Israeli onslaught on Gaza.The Pentagon official told Military Times that the number includes 47 attacks in Iraq and 55 in Syria that involved a “mix of one-way attack drones, rockets, mortars, and close-range ballistic missiles.”At least 66 US troops have been injured in the attacks so far, including five who have been awarded Purple Hearts. US officials say most of the rockets and drones fired at US bases didn’t reach their intended target.Most of the attacks have been claimed by the Islamic Resistance of Iraq, an umbrella group of Iraqi Shia militias. The US has launched several rounds of airstrikes in Syria and Iraq in response and specifically targeted Kataib Hezbollah, one of the main Iran-aligned Shia militias in Iraq.The latest attack that’s been confirmed by the US military took place on Wednesday. US Central Command said a 122mm rocket was fired at the Ain al-Asad airbase in western Iraq, causing no casualties or damage.In 2020, Iraq’s parliament voted to expel all foreign military forces over the US drone strike in Baghdad that killed Iranian Gen. Qasem Soleimani and Iraqi militia leader Abu Mahdi al-Muhandis.The US refused to leave Iraq and pressured the Iraqi government to allow its forces to stay. In an effort to placate anti-US factions, the US formally changed its presence in Iraq from a combat role to an advisory role in December 2021 to help in the fight against ISIS remnants, but the US did not withdraw any troops at the time, and there are 2,500 in the country today.
As Gaza Death Toll Crosses 20,000, Aid Group Warns True Number Is Higher -After 10 weeks of Israeli military operations in Gaza, authorities have counted 20,000 dead Palestinians. An overwhelming number of the dead are innocent civilians with no ties to Hamas. An aid group warns the actual death toll is probably greater since thousands of missing Gazans remain buried under rubble. Israeli officials say civilian deaths are viewed as part of eliminating Hamas.“As the official death toll in Gaza passes 20,000, Islamic Relief is warning that the actual toll is likely to be even higher – as thousands of people are still missing and buried under the rubble and young children are increasingly suffering severe hunger and disease,” a press release from the UN Office for the Coordination of Humanitarian Affairs (OCHA) said. “To see 20,000 people killed in such a short space of time is a stain on the world’s conscience.”According to Gaza’s Government Media Office, the dead include 8,000 children and 6,200 women. At least an additional 50,000 are injured.An Israeli official told reporters on Wednesday that the mass destruction of civilian targets in Gaza is a part of Tel Aviv’s strategy of defeating Hamas. Reuters reports a legal advisor to the Israeli Defense Forces said the IDF was carrying out “thousands and thousands of attacks and often attacks that require heavy firepower” to destroy tunnels under Gaza used by Hamas. He added, “Really tragically that results in a large number of civilian casualties.”Last month, the Israeli outlet +972 Magazine reported speaking with sources who said the civilian deaths were intentional. “Nothing happens by accident. When a 3-year-old girl is killed in a home in Gaza, it’s because someone in the army decided it wasn’t a big deal for her to be killed — that it was a price worth paying in order to hit [another] target.” The source continued, “We are not Hamas. These are not random rockets. Everything is intentional. We know exactly how much collateral damage there is in every home.” The article also explains Israel’s targeting “power targets,” which include civilian infrastructure, such as high-rise apartment buildings, banks, universities, and other public buildings. The OCHA press release described the results of the Israeli policy. “The scale of destruction is staggering with at least 60% of homes and 69% of schools now reportedly damaged or destroyed, and almost 80% of hospitals no longer able to function,” it says.
Lloyd Austin Visits Israel, Vows Continued Support for Gaza Slaughter - Secretary of Defense Lloyd Austin met with Israeli officials in Tel Aviv on Monday and vowed continued US military support for the Israeli onslaught on Gaza despite the massive civilian casualty rate.In a meeting with Israeli Prime Minister Benjamin Netanyahu, Austin said the US “commitment to Israel is unshakeable,” according to The Times of Israel. “America’s commitment to Israel is unwavering, and no individual group or state should test our resolve,” he said.Austin vowed the US would continue to provide Israel with “the equipment that you need to defend your country,” referring to bombs and other military aid the US has been shipping to Israel since October 7 on a near-daily basis. US officials have said they want Israel to wrap up the current phase of its war, which involves constant airstrikes and a ground campaign, in the next few weeks and take a more targeted approach against Hamas. Austin said the US had thoughts about more “surgical” operations but made clear the timeline of the onslaught is up to Israel.“Regarding the timeline, this is Israel’s operation, and I’m not here to dictate timelines or terms. Our support to Israel’s right to defend itself is ironclad, as you’ve heard me say a number of times, and that’s not going to change,” he said. At a press conference with Austin, Israeli Defense Minister Yoav Gallant said the Israeli military will “continue to operate in different levels of intensity” as it sees fit and will eventually be able to “transition gradually to the next phase.”
'Not Worth the Paper It Is Written On': US Guts Gaza Resolution -- Anger at the Biden administration grew late Thursday after the United Arab Emirates circulated a draft U.N. Security Council resolution that omits an earlier version's call for a suspension of hostilities in the Gaza Strip, a change that could render the text's demand for an increase in humanitarian aid moot. The U.S., Israel's chief ally and arms supplier, has repeatedly delayed a vote on the resolution as it has worked to gut several elements of the text, including an effort to put the U.N. in charge of monitoring humanitarian aid deliveries to the Gaza Strip with the goal of expediting shipments as hundreds of thousands of people starve.Israel urged the United States—which has veto power at the U.N. Security Council (UNSC)—to oppose the language.The latest draft requests that the U.N. secretary-general appoint an official "with responsibility for coordinating, monitoring, and verifying" humanitarian relief shipments to Gaza while "consulting all relevant parties."The resolution that the Security Council is expected to consider on Friday—barring any last-minute objections—is a far cry from the initial draft, which demanded an "urgent and sustainable cessation of hostilities." After U.S. objections earlier this week, the text was amended to call for a "suspension" of hostilities.The latest draft merely backs "urgent steps" to "create the conditions for a sustainable cessation of hostilities.""This is disgraceful," Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft, wrote on social media. "Biden has turned the latest UNSC resolution increasingly meaningless. By striking the call for suspension of hostilities, the resolution will now ensure that Israel's slaughter in Gaza continues."U.S. President Joe Biden "is effectively running war crimes management for Israel," Parsi added.
Biden says he did not ask for cease-fire in call with Israel’s Netanyahu - President Biden said that he did not ask Israeli Prime Minister Benjamin Netanyahu to negotiate a cease-fire in the country’s war with Hamas during a call Saturday, despite rising pressure to do so. Biden told reporters that he had a “long talk” with Netanyahu, not discussing its contents, later adding that he did not ask for a cease-fire.The international community has nearly unanimously urged the U.S. and Israel to push for a cease-fire in Gaza, as the Palestinian death toll from the Israeli military offensive rises.Over 20,000 Palestinians have died in the war, Gaza health officials said, and nearly the entirety of Gaza’s 2.3 million population is in dire need of humanitarian aid, according to the United Nations.In a U.N. vote last week, just eight countries joined Israel and the U.S. in voting against a cease-fire resolution, and the U.S. abstained on a U.N. Security Council vote Friday on Gaza aid after negotiating for days to water down the measure.Within the U.S., a rising number of lawmakers and members of the public have also called on the Biden administration to change its Israel policy. A half dozen moderate Democrats urged the administration to step up pressure on Israel to end its all-out ground offensive on Gaza this week in a letter to the president.“We are deeply concerned by [Netanyahu’s] current military strategy in Gaza. The mounting civilian death toll and humanitarian crisis are unacceptable and not in line with American interests; nor do they advance the cause of security for our ally Israel,” the letter reads.“We also believe it jeopardizes efforts to destroy the terrorist organization Hamas and secure the release of all hostages,” the lawmakers continued.American support for military aid to Israel among the public has also waned since the start of the war in early October.
"America's Dictator" Sweeps To 3rd Term As President Of Egypt With Nearly 90% Of Vote - In the Middle East region, Israel has for decades been the biggest recipient of US foreign aid, but less commonly known is that Egypt has long held the number two spot. This ultimately goes back to the Camp David Accords signed in 1978 which led to the formalizing of a permanent state of peace between Egypt and Israel. Since then, the $1.3 billion given to Egypt annually at American taxpayers' expense largely goes towards maintaining the military and national security bureaucracy. Bottom line is that it all goes toward securing the regional order on Washington's terms, with Israel's security as the number one priority. While Washington might talk about "spreading democracy" - any such talk is largely an illusion in Egypt, which has long been known for violently suppressing protests, horrendous political prisons, and torture. People regularly get "disappeared" in Egypt and the US hardly bats an eye. US politicians and media pundits like to mock as "banana republics" nations it doesn't like (or those targeted for regime change: Libya, Syria, Russia, etc.), but the reality is that America long ago purchased its own banana republic in Egypt, and ever since it's been a Western media game of pretending there's a true "Egyptian democracy". Below, are details of President Abdel Fattah El-Sisi's having just won nearly 90% of the vote, via The Cradle [emphasis ZH]... Egypt’s election authority announced on Monday that President Abdel Fattah El-Sisi has secured a third six-year term leading the North African nation. Sisi won another term with 89.6 percent of the vote, the National Elections Authority said. Over 39 million Egyptians voted for the former army chief, who has ruled the nation for over a decade. This will be Sisi’s final term in office as the Egyptian constitution only allows a president to sit for three terms. He was first sworn into office in 2014 after the overthrow of the country’s first popularly elected president, Mohammed Morsi, and was reelected in 2018, both times winning with over 90 percent of the vote.
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