natural gas prices see biggest weekly percentage gain since mid-June despite highest year end inventories since 2015; largest addition to Strategic Petroleum Reserve in 42 months; record jump in gasoline supplies despite biggest drop in gasoline production in 12 months on biggest drop in gasoline demand since last Christmas; distillates supplies rose by the most since January 4th 2019 to a 102 week high on distillates production at a 30 month high while domestic distillates demand fell by the most in 8 years to a 29 year low..
US oil prices rose for the third week in four on widespread unrest in the Middle East and on an OPEC pledge to support prices…after falling 2.6% to $71.65 a barrel last week as fears of further disruptions to Red Sea shipping subsided in the face of a multinational armada of warships, the contract price for the benchmark US light sweet crude for February delivery opened higher on Tuesday to start trading in the New Year and rallied more than 2% on renewed concerns about possible disruptions to Middle Eastern supply after another attack on a container ship in the Red Sea on Sunday, but gave back those gains to settle $1.37 lower at $70.38 a barrel as broad risk-off sentiment undercut concerns about the escalating conflict in the Red Sea…oil prices held under that pessimism in early trading Wednesday and slid to a low of $69.28 a barrel despite news of an Iranian warship in the Red Sea and an Israeli air strike killing a Hamas’ leader in Beirut, but rallied to settle $2.32 or more than 3% higher at $72.70 a barrel on word that Iran had suffered two blasts that killed more than 100 people, as protests in Libya shut down their largest oil field, and as OPEC pledged to remain united in supporting prices…oil rallied further early Thursday morning after Iran vowed to retaliate for the terrorist attack that killed over 80 of its people near the site of Iranian martyr Qasem Soleimani's tomb, directly blaming Israel for the escalating violence, but then turned south after the EIA reported massive increases in gasoline and distillate fuel supplies, and settled 51 cents lower at $72.19 a barrel as US gasoline consumption collapsed to the second lowest weekly rate of 2023 and distillates demand fell to a 29 year low at the same time…but global oil prices rose early Friday, bolstered by output disruptions in Libya and increased tensions in the Middle East, and settled the New York session $1.62 higher at $73.81 a barrel, underpinned by a geopolitical risk premium from the Middle East following a series of deadly attacks in Iran, Lebanon and Iraq, and thus finished the first week of the new year with a 3% gain…
Meanwhile, natural gas prices rose every day this week and finished with a third straight weekly increase, as forecasts for the first serious outbreak of cold weather this winter drove prices higher…after rising 1.0% to $2.514 per mmBTU per mmBTU last week on colder forecasts and a bigger than expected withdrawal of gas from storage, even as natural gas price quotes finished lower than the prior week’s January’s quotes, the contract price for natural gas for February delivery opened 11 cents higher on Tuesday after updated forecasts indicated more widespread cold into mid-January, but pulled back to digest those gains before rising again to close 5.4 cents higher at 2.568 per mmBTU, supported by forecasts for stronger heating demand and steady calls from U.S. LNG plants, even as gains were held in check by stout supply…natural gas prices opened higher again on Wednesday and rallied from there, as bullish forecasts spanning to the middle of the month continue to provide support, and settled 10 cents higher at $2.668 per mmBTU, as looming winter weather trumped vigorous production volumes and expectations for another EIA report showing steady supplies…gas prices then opened 18 cents higher on Thursday as forecasts heralded notably more frigid conditions into mid-January, but retreated to an intraday low of $2.739 after the EIA reported an anemic withdrawal of gas from storage, before partially recovering to settle 15.3 cents or 6% higher at $2.821 per mmBTU, the biggest daily percentage gain since late October, on a drop in daily output and forecasts for higher heating demand over the next two weeks…natural gas futures floundered in morning trading Friday, dropping more than 10 cents amid profit-taking and stout storage levels that pointed to an ongoing supply/demand imbalance, but recovered on forecasts that extreme cold weather in mid- to late January would boost demand for heating to its highest since the record hit during the winter storm of December 2022, to settle up 7.2 cents on the day at a six week high of $2.893 per mmBTU, and thus finished 15.1% higher for the week...
The EIA's natural gas storage report for the week ending December 29th indicated that the amount of working natural gas held in underground storage in the US fell by 14 billion cubic feet to 3,476 billion cubic feet by the end of the week, which left our natural gas supplies with the highest year end inventory since 2015, 553 billion cubic feet, or 18.9% above the 2,923 billion cubic feet that were in storage on December 29th of last year, and 399 billion cubic feet, or 13.0% more than the five-year average of 3,174 billion cubic feet of natural gas that were typically in working storage as of the 29th of December over the most recent five years…the 14 billion cubic foot withdrawal from US natural gas working storage for the cited week was far less than the average 40 billion cubic feet withdrawal from supplies that had been forecast by analysts polled by Reuters, and was dwarfed by the 219 billion cubic feet that were pulled from natural gas storage during the corresponding last week of December 2022, and was also much less than the average 97 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 29th appeared to show that after a big increase in our oil exports and a modest increase in our refinery throughput, we again had to pull oil out of our stored commercial crude supplies, for the eighth time in eleven weeks, and for the 15th time in the past 25 weeks, even as oil flows 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 619,000 barrels per day to average 6,895,000 barrels per day, after falling by an average of 415,000 barrels per day the prior week, while our exports of crude oil rose by 1,377,000 barrels per day to average a near record 5,292,000 barrels per day, which combined meant that the net of our trade in oil worked out to a net import average of 1,603,000 barrels of oil per day during the week ending December 29th, 758,000 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 693,000 barrels per day, while during the same period, production of crude from US wells decreased by 100,000 barrels per day to 13,200,000 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 15,496,000 barrels per day during the December 29th reporting week…
Meanwhile, US oil refineries reported they were processing an average of 16,697,000 barrels of crude per day during the week ending December 29th, an average of 151,000 more barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period the EIA’s surveys indicated that a rounded average of 635,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US... So, based on that reported & estimated data, the crude oil figures provided by the EIA for the week ending December 29th appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production was 547,000 barrels per day less than what 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 [+547,000] 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 of that size in the week’s oil supply & demand figures that we have just transcribed.... Moreover, since line last week’s balance sheet included a (-681,000) barrels per day figure on line 16, meaning 681,000 barrels of oil demand per day could not be unaccounted for last week, that means there was a 1,229,000 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 necessarily 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 635,000 barrel per day decrease in our overall crude oil inventories came as 786,000 barrels per day were pulled out of our commercially available stocks of crude oil, the biggest draw from supplies in sixteen weeks, while 151,000 barrels per day were being added to our Strategic Petroleum Reserve, the fifth SPR increase in twelve weeks and the largest since June 2020. Further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to 6,595,000 barrels per day last week, which was still 7.0% more than the 6,162,000 barrel per day average that we were importing over the same four-week period last year. This week’s crude oil production was reported to be 100,000 barrels per day lower at 13,200,000 barrels per day because the EIA's rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 12,800,000 barrels per day, while Alaska’s oil production was 2,000 barrels per day lower at 435,000 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 still 0.8% above that of our pre-pandemic production peak, and 36.1% 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 93.5% of their capacity while processing those 16,697,000 barrels of crude per day during the week ending December 29th, up from their utilization rate of 93.3% the prior week, and a near normal utilization rate for the end of December.. the 16,679,000 barrels per day of oil that were refined this week were 20.7% more than the 13,820,000 barrels of crude that were being processed daily during week ending December 30th of 2022 (following the refinery-freeze-offs due to the Christmas 2022 blizzard), but 3.5% less than the 17,283,000 barrels that were being refined during the prepandemic week ending December 27th, 2019, when our refinery utilization rate was at 94.5%..
Even with the increase in the amount of oil being refined this week, gasoline output from our refineries was lower, decreasing by 1,275,000 barrels per day to 8,755,000 barrels per day during the week ending December 29th, after our refineries' gasoline output had decreased by 8,000 barrels per day during the prior week. This week’s gasoline production was still 3.4% more than the 8,466,000 barrels of gasoline that were being produced daily over the storm impacted week of last year, but 13.9% less than the gasoline production of 10,173,000 barrels per day during the prepandemic week ending December 27th, 2019....on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 115,000 barrels per day to a 30 week high of 5,231,000 barrels per day, after our distillates output had increased by 243,000 barrels per day during the prior week. With those increases, our distillates output was 29.6% more than the 4,035,000 barrels of distillates that were being produced daily during the week ending December 30th of 2022, but 1.5% less than the 5,311,000 barrels of distillates that were being produced daily during the week ending December 27th, 2019..
Even with this week's drop in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the 6th time in seven weeks, and by the most on record, increasing by 10,900,000 barrels to 236.954,000 barrels during the week ending December 29th, after our gasoline inventories had increased by 669,000 barrels during the prior week. Our gasoline supplies saw a record jump this week because the amount of gasoline supplied to US users fell by 1,214,000 barrels per day to 7,954,000 barrels per day, and because our exports of gasoline fell by 190,000 barrels per day to 911,000 barrels per day, and because our imports of gasoline rose by 138,000 barrels per day to 659,000 barrels per day.…Even after twenty-seven gasoline inventory withdrawals over the past forty-five weeks, our gasoline supplies were 6.4% above than last December 30th's gasoline inventories of 222,662,000 barrels, and slightly above the five year average of our gasoline supplies for this time of the year…
With this week's increase in our distillates production, our supplies of distillate fuels rose for the sixth consecutive week following eight straight decreases, and by the most since January 4th 2019, increasing by 10,090,000 barrels to a 102 week high of 125,855,000 barrels over the week ending December 29th, after our distillates supplies had increased by 741,000 barrels during the prior week. Our distillates supplies rose by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 1,319,000 barrels per day, the most in 8 years, to a 29 year low of 2,658,000 barrels per day, while our exports of distillates rose by 66,000 barrels per day to 1,325,000 barrels per day, and while our imports of distillates fell by 42,000 barrels per day to 194,000 barrels per day ...With 23 inventory decreases over the past forty-three weeks, our distillates supplies at the end of the week were 6.0% above the 118,785,000 barrels of distillates that we had in storage on December 30th of 2022, but still about 6% below the five year average of our distillates inventories for this time of the year...
Finally, with our our oil exports jumping to a near record high, our commercial supplies of crude oil in storage fell for the 15th time in twenty-six weeks and for the 27th time in the past year, decreasing by 5,503,000 barrels over the week, from 436,568,000 barrels on December 22nd to 431,065,000 barrels on December 29th, after our commercial crude supplies had decreased by 7,114,000 barrels over the prior week... With that decrease, our commercial crude oil inventories fell to about 2% below the most recent five-year average of commercial oil supplies for this time of year, but were still almost 33% above the average of our available crude oil stocks as of the last 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 29th were 2.5% more than the 420,646,000 barrels of oil in commercial storage on December 30th of 2022, and 3.2% more than the 417,851,000 barrels of oil that we still had in storage on December 31st of 2021, but still 11.2% less than the 485,459,000 barrels of oil we had in commercial storage on January 1st of 2021, after early pandemic precautions had left a lot of oil unused…
This Week's Rig Count
Since we haven't been able to get back on track to do a detailed report 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 January 5th, the second column shows the change in the number of working rigs between last week’s count (December 29th) and this week’s (January 5th) count, the third column shows last week’s December 29th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting period a year ago, which in this week’s case was the 6th of January, 2023...
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Thanks to Statehouse Republicans, we’ll soon have Ohio pipelines to nowhere – and you’ll be paying: Kent Smith --- This month, Ohio Republicans made it clear who gets special treatment on Capitol Square, when Gov. Mike DeWine signed House Bill 201 after it was amended at the last minute and rushed through both chambers.Originally, House Bill 201 was an unnecessary bill meant to prohibit any type of restrictions on gas-powered vehicles. As if that wasn’t bad enough, the amendment was yet another effort to give more of your money to the utility companies in this state and do so with as little discussion as possible.What does the amendment do, you might ask? The amendment allows gas utility companies to build pipelines anywhere under the guise of economic development. That means the utility could build a bunch of pipelines to dozens of potential industrial sites, hoping that a company moves into just one of those sites and the utility gets a new customer.Have you heard of the bridge to nowhere? Well, this legislation could now launch a pipeline to nowhere. Or a million pipelines to nowhere.Only one opponent was able to attend the Senate Energy and Public Utilities Committee to raise a voice in public opposition to this backroom, sneaky policy-making. Kim Bojko, speaking on behalf of the Ohio Manufacturers’ Association, said, “This amendment is an anti-competitive, utility-driven policy that will add costs to consumers’ bills.”The argument made for this legislation — that it was supposedly far too important to have an extended discussion about – was that, “we need to have parcels ready for the next Intel investment.”But that reasoning falls apart when you remember that Intel managed to move to Ohio without having a “Pipeline to Nowhere” policy in place.There are multiple lessons to be learned here: First, Ohioans need to hang onto their wallets any time Mike DeWine and Statehouse Republicans move quickly. Second, the Ohio GOP will ignore recent history, that is, the largest money-laundering and bribery scandal in state history, and do whatever the utility companies want – be it needed or not.This bill will cost Ohioans millions on their gas bills – for years. Both the legislation and amendment look like they were written by gas companies for gas companies. It gives utilities a free pass to charge you anytime they want to build a pipeline through someone else’s rose garden.Keep this in mind when you start to see unexplained increases in your future gas bills. The GOP supermajorities never have your best interest at heart when Ohio utility companies ask for a handout. State Sen. Kent Smith of Euclid represents Ohio’s 21st Senate District, which includes a number of Cleveland’s eastern suburbs and parts of the city of Cleveland. Have something to say about this topic? Send a letter to the editor, which will be considered for print publication.
OH Gov. Signs Law for Utilities to Charge $1.50/Mo. for New Pipes - Marcellus Drilling News The left in Ohio is up in arms again. It’s always up in arms. Everything is a crisis. Everything is a climate tragedy. Everything is a conspiracy — so says the environmental left. Last Thursday, Ohio Gov. Mike DeWine signed House Bill (HB) 201 into law. A provision was tacked onto HB 201 late in the legislative process, several weeks before it was passed, that allows natural gas utility companies to charge customers a piddly $1.50 per month ($18 per year) to help fund new pipelines that will get built in rural areas to industrial sites — areas without existing natgas pipes. The aim is to attract new businesses to locate in the Buckeye State. Many companies won’t consider a potential site without cheap, easy access to natural gas already installed. HB 201 helps make it much more likely a business will consider a site in Ohio, given access to cheap Utica Shale gas. Cue the enviro left’s shrill response.
Major Natural Gas Pipeline Replacement Planned for Columbus, OH - Marcellus Drilling News - Columbia Gas of Ohio will start work this spring to replace a 4.3-mile section of a 20-inch natural gas pipeline from Clintonville to North Linden (Columbus), a key piece of infrastructure that brings gas to thousands of homes throughout central Ohio. Columbia Gas purchased and will demolish several buildings along the pipeline’s route as part of the project. The work is scheduled to begin in April and finish by the end of the year. Columbia’s president and chief operating officer, Vince Parisi, says the pipeline is “our backbone of Columbus” and is “pretty critical” to natural gas distribution throughout the region.
Diversified Sells Major Stake in Select Appalachian Wells for $200M - Marcellus Drilling News --Diversified Energy Company, with major assets in the Appalachian region (including the Marcellus/Utica), announced yesterday the company had sold a majority stake in an unspecified number of Appalachian conventional oil and gas wells to an investment company called DP Lion Equity Holdco, for $200 million. We could not find who owns DP Lion. The company was registered as an LLC in the State of Delaware on Oct. 19, 2023. That’s about all we know about the buyer. The deal includes Diversified retaining a 20% ownership in the wells (80% goes to DP Lion). Diversified will also continue to operate the wells. Update: A sharp MDN reader sent us a link to a previous Diversified SEC filing that shows DP Lion Equity Holdco, LLC, is, in fact, a subsidiary of Diversified. So Diversified raised new money by selling some of its assets to itself! Or, more likely, to a slightly different set of investors, but the assets are still controlled (essentially owned) by Diversified.
Zefiro Evaluates 5 Orphaned Wells for Plugging in Erie County, PA - Marcellus Drilling News -- Last May, MDN told you about Zefiro Methane Corp., a private “methane offsets originator” headquartered in Vancouver, British Columbia, acquiring a majority ownership stake in Plants & Goodwin (P&G), an OFS and oil well-plugging company located in Bradford (McKean County), Pennsylvania, for an undisclosed sum (see Canadian Methane Offsets Co. Buys Northwest Pa. Well Plugging Co.). The Zefiro/P&G tie-up is now bearing fruit. DEP inspection reports reviewed by David Hess from the PA Environment Digest Blog show Zefiro has begun evaluating abandoned conventional wells in Springfield Township, Erie County, for its program.
Cabot Shareholder Lawsuit re PA Fracking Violations Tossed by Judge --Marcellus Drilling News -- In October 2020, a law firm filed a lawsuit on behalf of several Cabot Oil & Gas shareholders against Cabot (now Coterra Energy), claiming the company “had inadequate environmental controls and procedures and/or failed to properly mitigate known issues related to those controls and procedures,” and that the company “failed to fix faulty gas wells which polluted Pennsylvania’s water supplies through stray gas migration,” and that the company, in general, hid all of this from the public — namely from investors (see Second Lawsuit Filed Against Cabot Claiming Securities Fraud). A similar lawsuit previously filed was canceled due to a lack of shareholders willing to sue. However, this second lawsuit sprouted legs and has continued. But here is where it gets murky…
24 New Shale Well Permits Issued for PA-OH-WV Dec 18 – 31 -- Marcellus Drilling News -- We are catching up on permits issued…for the last two weeks of December. Normally we cover permits issued for a single week. This report covers permits issued for the two weeks covering Dec. 18 – 31. Perhaps it’s a good thing we’re reporting on two weeks as Ohio’s ODNR seems to have taken the last two weeks of the year off, issuing just a single permit. There were 24 new permits issued for the final two weeks of the year, cumulatively, versus 35 permits issued for Dec. 11 – 17. Pennsylvania issued 19 new permits for the final two weeks of last year. Ohio issued just 1. And West Virginia issued 4 permits. Range Resources took the top spot with 9 permits issued in Washington County, PA. ANTERO RESOURCES | APEX ENERGY | ARMSTRONG COUNTY | ASCENT RESOURCES | BRADFORD COUNTY | CHESAPEAKE ENERGY | CNX RESOURCES | EQT CORP | GREENE COUNTY (PA) | JEFFERSON COUNTY (OH) | RANGE RESOURCES CORP | RITCHIE COUNTY | SNYDER BROTHERS | WASHINGTON COUNTY | WESTMORELAND COUNTY
Mountain Valley proposes shrinking Southgate extension - Mountain Valley Pipeline is proposing to more than halve the length of its Southgate Extension running from southern Virginia into North Carolina, a change that would mean it no longer needs a compressor station Virginia previously rejected, according to an update with federal regulators.The Dec. 29 announcement of the reduced project, which would shrink from 75 to 31 miles, comes on the heels of the Federal Energy Regulatory Commission granting the company another three years to complete work.Southgate was previously intended to transport natural gas from Mountain Valley’s primary 303-mile pipeline — which runs from the Utica shale fields in West Virginia into Pittsylvania County — farther south into Rockingham and Alamance counties in North Carolina. The new plan would halt the extension in Rockingham.In an update filed with the Securities and Exchange Commission, Mountain Valley lead developer Equitrans Midstream said the proposal is part of an agreement with the Public Service Company of North Carolina and an unnamed third party, both of which have committed to purchase increased amounts of gas carried by the extension.“In contrast to the original, lengthier project route and design, which required an additional compressor station (the permit application for which was denied by the Virginia State Air Pollution Control Board in 2021), the revised project would include substantially fewer water crossings and would not require a new compressor station,” the update states.The original Southgate plans required the construction of a compressor station near Chatham, Virginia to repressurise gas from Mountain Valley’s main pipeline so it could travel the rest of the distance into North Carolina. However, Virginia’s air board denied a required permit for the station in December 2021, saying pollution from the facility would disproportionately impact Black and low-income people in the area surrounding it. In addition to the Virginia denial, the North Carolina Department of Environmental Quality previously rejected two requests by the pipeline company for a state water permit because of “unnecessary and avoidable impacts to surface waters and riparian buffers.” The project also still needs a federal approval known as a 404 permit from the Army Corps of Engineers because it will release dredged or fill material into waterways. The update filed with the Securities and Exchange Commission notes the anticipated completion date of the project is June 2028, two years past the new deadline FERC gave it last month, meaning the company will need to ask for another extension.“Mountain Valley remains committed to the MVP Southgate project and helping meet public demand for affordable, reliable natural gas,” said Shawn Day, a spokesperson for the project. “At the appropriate time, the MVP Southgate team intends to pursue all necessary permits and authorizations to complete construction of this important energy infrastructure project.”
MVP Redesigns Southgate Natural Gas Extension After Securing New Capacity Agreements - Mountain Valley Pipeline LLC (MVP) is revamping its proposed Southgate extension, reducing its length, cutting down on the number of water crossings and bypassing the need for a previously planned compressor station, the operator told regulators. In filings late last week with FERC and the Securities and Exchange Commission, MVP said it entered into precedent agreements in late December with the Public Service Company of North Carolina (PSNC) “and another investment grade utility customer” for the redesigned Southgate extension. PSNC had committed to 300,000 Dth/d on the earlier iteration of the Southgate project, which was approved in 2020 by the Federal Energy Regulatory Commission. As previously proposed, Southgate would have added 75.1 miles to extend the MVP..
MVP Southgate natural gas pipeline will no longer cross Alamance County The controversial MVP Southgate project will be shortened by more than half and no longer pass through Alamance County, according to public filings by Equitrans Midstream, the majority owner and operator of the natural gas pipeline.Based in Canonsburg, Pennsylvania, Equitrans Midstream announced the project’s proposed redesign in its filings to the Securities and Exchange Commission on Dec. 29. The project has not been finalized; nor has the company published a new route map.MVP Southgate was to traverse more than 70 miles, starting from Pittsylvania County, Virginia, then entering North Carolina near Eden, in Rockingham County. From there, the route would have traveled southeast through Alamance County, ending near Haw River.Now the pipeline will travel just 31 miles and end in Rockingham County. There, the routing will also likely change, according to a letter from Equitrans Midstream to federal regulators.MVP Southgate is an extension of the embattled MVP main pipeline, which would run from a fracked gas operation in West Virginia through environmentally sensitive and precarious terrain in Virginia. The main line is more than five years behind schedule because of several successful legal challenges by environmental advocates and permit denials by Virginia environmental officials.Equitrans Midstream didn’t answer emailed questions about what prompted the route change, but instead directed Newsline to a letter to the Federal Energy Regulatory Commission, also known as FERC, dated Dec. 29.In that letter, Equitrans Midstream wrote that it had entered into agreements with PSNC and an unnamed “investment grade utility customer” that “contemplate a redesigned project.”The timing of Equitrans Midstream’s announcement is curious. In mid-December, FERC approved the company’s request for an extension of time until June 2026 to complete MVP Southgate, three years later than originally proposed. (The project has been delayed because of permitting and legal problems with the main MVP line. Only after West Virginia Sen. Joe Manchin, a Democrat, succeeded in inserting a go-ahead for the main line into the federal debt ceiling package that Congress approved last June, could it proceed.)Yet in its SEC filings, Equitrans Midstream estimates MVP Southgate will be complete in June 2028 — two years after the FERC extension expires.A company spokesman didn’t explain the discrepancy between the dates, but in its letter to FERC, Equitrans Midstream noted it plans to request “an updated completion due date.” The company is “evaluating the permitting and regulatory roadmap for the project … and will provide additional information to the Commission and other applicable permitting agencies as it continues with project development.”Equitrans Midstream is seeking new natural gas shippers for the revised MVP Southgate project. This is called an “open season,” during which potential shippers bid for available capacity on the pipeline. After open season concludes, Equitrans Midstream “will finalize the scope and timeframe of the redesigned project,” the letter to FERC read.The original route would have significantly harmed the environment, at least in the short-term. It would have crossed 207 streams, three ponds and temporarily damaged 17,726 linear feet of streams, 6,538 square feet of open waters, and 14 acres of wetlands; another 0.02 of an acre of wetlands would have been permanently harmed. Nearly 14 acres of riparian buffers would have also be affected. MVP Southgate would have also crossed Stony Creek Reservoir, the main drinking water supply for the City of Burlington.Without a map of the new route it’s unclear whether MVP Southgate will still cross the Dan River as originally planned.
Chatter Grows about E&P Pullback as Mild Early Winter Weather, Robust Natural Gas Storage Pressure Prices - A growing number of analysts have penciled in lower natural gas prices and more gas and oil production cuts for 2024 to remedy supply-demand imbalance, which worsened late in 2023 amid a mild start to winter and record production levels. The heating season only saw intermittent cold spells in November before December clocked in as one of the warmest on record. The combination with record gas production had by late December swelled the surplus of gas in storage to 316 Bcf, or 10% above the five-year average. “We believe U.S. gas prices need to average lower than we thought previously to incentivize incremental demand via coal-to-gas substitution and lower supply via steeper Haynesville Shale declines,” Goldman Sachs Group’s Samantha Dart said.
TVA adds new units in Kentucky to quickly generate more power — The Tennessee Valley Authority said Tuesday that three new power-generation units are online in Kentucky, designed to help the utility quickly meet demand as it rises. TVA said the new combustion turbine units use natural gas and are located at the Paradise Combined Cycle Plant in Kentucky. It also said the new units can reach full power within 11 minutes and TVA said it can use them when other sources of power aren't available, helping the utility make sure it can continue serving its coverage area reliably. They add an additional 750 megawatts of power to TVA's operating fleet, which can power around 440,000 homes, according to a release from the TVA. The units started commercial operation on Dec. 31 and joined three other turbines that started operating in July at the Colbert site in Alabama. Those turbines also added around 750 megawatts. The new units are part of a plan to add more than 3,800 megawatts of power to the grid by 2028, according to TVA. As part of the plan, TVA also said it is replacing older and less efficient units.
Williams to Acquire Gas Storage Facilities from Hartree for $1.95B ---Williams is buying from Hartree Partners LP six underground natural gas storage facilities with transport links in the states of Louisiana and Mississippi for $1.95 billion. The companies expect to close the agreement, which involves 115 billion cubic feet (Bcf) of storage capacity, this January subject to customary conditions. Under the deal, New York City-based Hartree is also divesting to Williams 230 miles of gas pipelines and “30 pipeline interconnects to attractive markets, including LNG markets, and connections to Transco, the nation’s largest natural gas transmission pipeline”, Williams said in a recent press release. Two of the storage facilities, Pine Prairie and Southern Pines, directly serve Williams’ Transcontinental Pipeline (Transco) and “are well positioned for expansions”, Williams said. Transco is a 10,000-mile gas transmission system between south Texas and New York supplying the Appalachia, Gulf Coast and Mid-Continent regions. Williams says the pipeline carries about 15 percent of the United States’ natural gas. Williams, headquartered in Tulsa city, operates 33,000 miles of pipelines in total, which it says account for a third of the transported gas in the US. Three of the five coastal states bordering the Gulf of Mexico, or the Gulf Coast states, were among the top five natural gas consumers last year according to the country’s Energy Information Administration. Texas accounted for 15.1 percent of the national total consumption 2022 at 4.88 trillion cubic feet (Tcf). Louisiana, last year’s third biggest natural gas consumer, consumed 1.96 Tcf. Florida, at fifth, consumed 1.62 Tcf. Armstrong also noted, “Since 2010, U.S. demand for natural gas has grown by 56 percent while gas storage capacity has only increased 12 percent”. “We expect the increasing demand for high deliverability storage to drive significant earnings growth across these assets”. The acquisitions include four salt domes with a combined capacity of 92 Bcf and two depleted reservoirs with a combined capacity of 23 Bcf. The six storage facilities can be injected with up to five Bcf of gas daily on an aggregated average, while their combined withdrawal capacity is 7.9 Bcf per day, “among the highest of any natural gas storage platform in the United States”, Williams said.
Energy Transfer Accused of Blocking Rival Natural Gas Pipelines, Restricting Haynesville Development --A Momentum Midstream LLC affiliate has joined two natural gas pipeline operators in accusing Energy Transfer LP of upending industry practices for pipeline crossings in Louisiana, which they said threatens to stall development of the Haynesville Shale and growth of LNG exports. New Generation Gas Gathering (NG3) LLC, a Momentum affiliate, said its $1.6 billion pipeline and carbon capture project has been put on hold after Energy Transfer sued to block the project from crossing the midstream giant’s Gulf Run Pipeline. “Energy Transfer is blatantly and openly engaged in anticompetitive conduct and unfair trade practices in violation of Louisiana law” by using Gulf Run in an attempt “to secure a stranglehold on the movement of natural gas out of northwestern Louisiana,”.
Energy Transfer pipeline fight could hurt Haynesville - The ongoing dispute over the construction of the Energy Transfer pipeline has the potential to negatively impact the Haynesville region. The pipeline, which aims to transport natural gas from the Marcellus and Utica shale fields to markets in the Gulf Coast, has faced opposition from environmental groups and local communities concerned about the potential environmental and social impact. If the project stalls or is ultimately canceled, it could have significant economic consequences for the Haynesville region, which relies heavily on the natural gas industry. The Energy Transfer pipeline, also known as the Bayou Bridge pipeline, is a joint venture between Energy Transfer LP and Phillips 66 Partners LP. The proposed 163-mile pipeline would connect the terminus of the existing Energy Transfer pipeline in Texas to refineries and export terminals in Louisiana. However, opposition to the project has been mounting, with concerns ranging from potential water contamination to infringement upon private property rights. The Haynesville region, located in Northwest Louisiana and East Texas, is a major natural gas producing area and heavily dependent on the energy industry. The construction of the Energy Transfer pipeline would provide a boost to the local economy, creating jobs and increasing demand for natural gas extraction. If the project is halted, it could result in lost economic opportunities and stifle growth in the region. Furthermore, the Energy Transfer pipeline is seen as crucial for the export of natural gas from the Marcellus and Utica shale fields. The delay or cancellation of the pipeline could hinder the ability of these gas-rich regions to access Gulf Coast markets, potentially dampening production and reducing revenue for producers. In conclusion, the fight over the Energy Transfer pipeline has the potential to harm not just the environment, but also the economy of the Haynesville region. The outcome of the struggle will have far-reaching implications for both local communities and the energy industry as a whole.
US was top LNG exporter in 2023 as hit record levels (Reuters) - U.S. liquefied natural gas exports hit monthly and annual record highs in December, tanker tracking data showed, with analysts saying it positioned the United States to leapfrog Qatar and Australia to become the largest exporter of LNG in 2023. The U.S. was the stand out in global LNG supply growth in 2023, said Alex Munton, director of global gas and LNG research at consulting firm Rapidan Energy Group of the rise to 8.6 million metric tons leaving U.S. terminals in December. Qatar was the largest LNG exporter in 2022 and Australia the second-largest that year, U.S. government data showed. "U.S. record production was driven by two factors: the return of Freeport LNG to full service, which added 6 MT and the full-year output of Venture Global LNG's Calcasieu Pass facility that added 3 MT more than in 2022," Munton said. Full year exports from the U.S. rose 14.7% to 88.9 million metric tons (MT) driven largely by the return to full production of the Freeport LNG plant that had suffered a fire in 2022, and as others increased processing efficiency, LSEG data showed. Shipments compare to 77.5 million metric tons in 2022, the data from the financial information provider showed. Europe remained the main destination for U.S. LNG exports in December, with 5.43 MT, or just over 61%. In November, 68% of U.S. LNG exports were to Europe, LSEG data showed. The month-over-month drop reflected warmer than normal temperatures in Europe and elevated storage levels, analysts at consultants Rystad Energy said. European gas storage was about 97% full at the beginning of December, it reported. Asia was the second largest export market for U.S. LNG in December, taking 2.29 MT, or 26.6%, of exports, up from 18.5% in November. U.S. exports to Latin America were half a million metric tons, or just under 6% of total exports, LSEG ship tracking data showed. Natural gas flows to the seven big U.S. LNG export plants have climbed an average 14.9 billion cubic feet per day (bcfd) so far in January, up from a monthly record of 14.7 bcfd in December. That topped the prior all-time monthly high of 14.3 bcfd in November, LSEG data showed. U.S. gas was trading Tuesday morning at $2.55 per million British thermal units (mmBtu) at the Henry Hub benchmark in Louisiana , $9.81 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $11.52 per mmBtu at the Japan Korea Marker (JKM) in Asia .
Aethon Said Pausing Haynesville Development on Low Natural Gas Prices - Aethon Energy Management LLC has curtailed natural gas development in the East Texas portion of the Haynesville Shale because of low prices, according to joint exploration partner Black Stone Minerals LP. Houston-based Black Stone said it received notice that the private exploration and production company was exercising a “time-out” provision under its joint agreements as natural gas prices had fallen below a specified threshold. “Low gas prices are obviously challenging for operators and royalty owners in the area, but we look forward to working with Aethon to minimize downtime and get the best possible results” for investors, said Black Stone CEO Thomas Carter Jr.
Commonwealth LNG Looks to Capitalize on Growing Global Natural Gas Market as it Targets 2024 FID - As the team behind the Commonwealth LNG project proposed for Cameron, LA, pushes toward a final investment decision this year, Executive Chairman Paul Varello said the global natural gas market is on the precipice of change despite the relative calm over the past year. When Varello and the Commonwealth team proposed the more than 9 million metric ton/year (mmty) facility over a decade ago, the goal was to use the next generation of modular liquefied natural gas technology to create a plant with lower upfront costs and lower associated emissions. Now, with half of Commonwealth’s capacity under final or tentative agreements, Varello said the firm is looking toward the future of a gas market with new emerging players and new ways of making contracts.
Shell Looks to Join BP’s Push for Calcasieu Pass LNG Commissioning Probe - Shell plc is looking to intervene in a complaint against Venture Global LNG Inc. one of its fellow contract holders, BP plc, filed with FERC late last year. In December, BP filed a request with the Federal Energy Regulatory Commission requesting it compel Virginia-based Venture Global to release confidential information about the extended commissioning process at Calcasieu Pass. BP and other long-term offtakers of the project, including Edison SpA, Shell, and Repsol SA, have accused the company of hiding behind alleged technical issues to delay sending contracted cargoes in favor of selling its own spot volumes. An LNG trading unit of Shell argued Tuesday in a filing it should be allowed to join the proceeding, as it “will be directly affected by the outcome of this...
Shale driller EOG expects U.S. production growth to halve in 2024 - EOG Resources Inc., one of the biggest independent shale producers, expects U.S. crude production to grow at less than half of last year’s pace amid lower drilling activity in oil fields. After ending last year with an estimated production growth of 900,000 bpd higher than the end of 2022, U.S. oil expansion will be “considerably less,” EOG President Billy Helms said Thursday in a presentation to investors. “Bringing on a lot of production last year, you’ve got a steeper decline to offset this next year,” he said. “That tells you that US production is not going to be able to continue to grow at the pace that it did last year.” Drillers from the Permian basin in West Texas to the Bakken shale of North Dakota ramped up oil production well beyond what analysts foresaw last year, pushing output to a record just as OPEC and its allies put the brakes on supplies to arrest price declines. Helms said EOG expects to report roughly 3% growth in its 2023 oil production when posting fourth-quarter earnings in the coming weeks. EOG doesn’t see the need to increase activity, mainly in its core regions this year, but may expand drilling in its emerging Utica Shale fields located across Ohio, West Virginia and Pennsylvania, Helms said.
LNG delays, warm November hurt most shale gas stocks at end of 2023 - S&P Global -Shares in shale gas stocks generally outperformed the S&P 500 through late October 2023 until a warm start to winter and uncertainty about the in-service dates of Gulf Coast LNG terminals brought an end to the party. Most US shale gas stocks ended 2023 below the S&P 500, in contrast to 2022, when most of those stocks added double-digit percentage increases in value while outperforming the stock market index. Natural gas prices at the benchmark Henry Hub dropped 26.5% on the warm temperatures in November 2023, dragging the top 10 stocks in shale gas exploration and production companies down with them. Even rumors of potential mergers and acquisitions deals, in the wake of megadeals by Chevron Corp. and Exxon Mobil Corp., failed to excite investors about the sector as 2023 came to a close. Of the top 10 US shale producers, only Utica Shale driller Gulfport Energy Corp. outperformed the S&P 500 in 2023, gaining 80.9% in value between Dec. 30, 2022, and Dec. 29, 2023. Four shale gas E&P stocks posted double-digit percentage losses over the year. One analyst said Gulfport's stock has room to run. "This small-cap should begin showing up on investor screens as it continues to execute operationally with improving capital efficiencies," Siebert Williams Shank oil and gas analyst Gabriele Sorbara told clients when he started covering Gulfport on Dec. 19, 2023. "We believe [Gulfport] remains underappreciated by the market at the current valuation, as our $200 [price target] offers 51.6% upside on a conservative 3.3x 2025 EV/EBITDA multiple."
US natgas prices jump 6% to five-week high on colder forecasts (Reuters) - U.S. natural gas futures jumped about 6% on Thursday to a five-week high on a drop in daily output and forecasts for colder weather and higher heating demand over the next two weeks. Capping gains was a smaller-than-expected storage draw last week when milder-than-normal weather limited heating demand. The U.S. Energy Information Administration (EIA) said utilities pulled just 14 billion cubic feet (bcf) of gas out of storage during the week ended Dec. 29. That was less than the 40-bcf withdrawal analysts forecast in a Reuters poll and compares with a withdrawal of 219 bcf in the same week last year and a five-year (2018-2022) average decline of 97 bcf. Front-month gas futures for February delivery on the New York Mercantile Exchange rose 15.3 cents, or 5.7%, to settle at $2.821 per million British thermal units (mmBtu), putting the contract on track for its highest close since Nov. 24. That was the biggest daily percentage gain since late October. Even though prices were up for a third day in a row and late January is usually the coldest part of the year, many traders said winter futures for November-March likely already peaked at $3.608 per mmBtu on Nov. 1 due primarily to recent record production and ample supplies of gas in storage. Financial firm LSEG said average gas output in the lower 48 U.S. states had fallen to 107.3 billion cubic feet per day (bcfd) so far in January, down from a monthly record of 108.5 bcfd in December. Meteorologists projected the weather would remain near to warmer than normal through Jan. 12 before turning colder than normal from Jan. 13-19. With colder weather coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would rise from 134.1 bcfd this week to 135.3 bcfd next week. Those forecasts were higher than LSEG's outlook on Wednesday. Gas was trading around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $12 at the Japan Korea Marker (JKM) in Asia.
US natgas prices gain 3% to six-week high with extreme cold coming (Reuters) -U.S. natural gas prices climbed about 3% to a six-week high on Friday forecasts that extreme cold weather in mid- to late January will boost demand for the fuel for heating to its highest since hitting a record during a winter storm in December 2022. In addition to sky-high demand, extreme cold could cause production to drop by freezing oil and gas wells, pipes and other energy equipment, which the energy industry calls freeze-offs. Traders also noted that gas prices were up for a fourth day in a row because output was already down since hitting record highs in December and as record amounts of gas continued to flow to U.S. liquefied natural gas (LNG) export plants. Prices rose despite forecasts for mild weather this week and next, and ample amounts of gas in storage. Analysts said there was currently about 12.1% more gas in storage than normal for this time of year. Front-month gas futures NGc1 for February delivery on the New York Mercantile Exchange rose 7.2 cents, or 2.6%, to settle at $2.893 per million British thermal units (mmBtu), their highest close since Nov. 22. For the week, the front-month gained about 15% after sliding about 4% last week. That was the biggest weekly percentage gain since mid-June. Even though the coldest part of winter was still coming, many traders said winter futures for November-March likely already peaked at $3.608 per mmBtu on Nov. 1 due primarily to recent record production and ample supplies of gas in storage. Financial firm LSEG said average gas output in the Lower 48 U.S. states fell to 107.4 billion cubic feet per day (bcfd) so far in January, down from a monthly record of 108.5 bcfd in December. Meteorologists projected the nation's weather would remain mostly warmer than normal through Jan. 11 before turning colder than normal from Jan. 12-20. With colder weather coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would rise from 135.0 bcfd this week to 135.9 bcfd next week and 150.1 bcfd in two weeks. The forecasts for this week and next were higher than LSEG's outlook on Thursday. On a daily basis, total U.S. demand, including exports, would reach 158.2 bcfd on Jan. 16, according to LSEG's latest forecasts. That would be the most since winter storm Elliott in December 2022 but would fall short of the daily all-time high of 162.5 bcfd on Dec. 23, 2022, according to federal energy data from S&P Global Commodities Insights. U.S. pipeline exports to Mexico rose to an average of 5.5 bcfd so far in January, up from 4.6 bcfd in December but still well below the monthly record of 7.0 bcfd in August. Analysts expect exports to Mexico to rise in coming months once U.S.-based New Fortress Energy's NFE.O plant in Altamira in Mexico starts pulling in U.S. gas to turn into LNG for export. Gas flows to the seven big U.S. LNG export plants rose to an average of 14.8 bcfd so far in January, up from a monthly record of 14.7 bcfd in December.)
200 orphan oil and gas wells plugged in 2023 by Michigan regulators - – Michigan environmental regulators said they plugged about 200 orphan oil and gas wellsin 2023 as part of efforts to reduce methane emissions and address climate change.Orphan wells are abandoned or improperly plugged oil and gas wells without a solvent owner or operator to hold accountable.Michigan officials ramped up the rate of plugging these types of old wells after receiving a $25 million grant from the U.S. Department of Interior – a significant uptick over the typical $1 million annual appropriation. The surge in money came from the federal bipartisan infrastructure law.“Through this boost in funding, we hope to do 25 years’ worth of work in the next few years,” said Adam Wygant, director of the oil and gas division at Michigan Department of Environment, Great Lakes, and Energy (EGLE).“This additional federal infrastructure money allows us to hire two new staff dedicated to the orphan well program and permanently plug these wells at a rate eight times faster than before, restoring the land for future use,” he said.Nearly half of Michigan’s known orphan wells were plugged in 2023 alone. Officials had a list of about 450 identified orphan wells when the federal grant dollars were awarded last summer.The state’s orphan well program launched about 30 years ago and since then about 400 sites have either been sealed or cleaned up.Improperly abandoned well sites can leak contaminants into surface and groundwater, and methane and other greenhouse gases also escape and contribute to climate change.
Oil spill in Victoria causes gas-like odor across the Coastal Bend region The Goliad County Emergency Management department said an oil spill at the Port of Victoria caused a strong gas-like odor to spread across the Coastal Bend region on Thursday. Officials from Ingleside to Rockport and Corpus Christi said they received a high volume of calls from residents about the smell.In Goliad County, officials reported more than 30 calls of symptoms related to the odor."Although we feel like most of the county was unaffected, we had numerous calls for headaches, nausea, burning eyes, and even respiratory issues," said Sarah Ontiveros, coordinator for the Goliad County Emergency Management, in a letter posted to social media.The smell came from a large oil spill in Victoria containing an unknown amount of crude oil, diesel, and hydrogen sulfide.Victoria's Office of Emergency management confirmed the spill and said incident cleanup and response efforts were under the authority of the Texas Commission on Environmental Quality.Goliad County issued a temporary "shelter in place" on Thursday. Officials said it was not mandatory and was issued strictly as a precaution because of the amount of calls received.An update from Goliad County on Friday morning said the TCEQ continued to work with Victoria and Calhoun counties to address the spill.
Texas City oil spill: 11,000 gallons of petroleum collected from Moses Bayou ditch after oil-water separator at facility overflows - (KTRK) -- Residents in Texas City may notice crews in the area working to clean up an oil spill that was discovered last week. The spill was first detected on Christmas Day near an oil pumping station on the city's west side when people who live nearby complained about a strong oil odor. According to the Texas City Emergency Management, 261 barrels of sweet crude oil, which is approximately 11,000 gallons, have been collected so far from Moses Bayou, a drainage ditch (Ditch No. 6) that flows into Galveston Bay. The waterway reportedly does not intersect or flow into the Gulf Coast Water Authority's nearby freshwater supply canals. Authorities discovered the spill came from a small facility on Century Boulevard that reported an issue with its oil-water separator, which caused an overflow. Despite complaints of heavy odor, officials said there are no reports of any medical calls to the area due to exposure. Those in the area are still being asked to continue to avoid contact with the affected area and/or affected wildlife. An Environmental Protection Agency representative said that as of Saturday, a blue heron was rescued from the spill but later died, and a dead Belted Kingfisher was found. "We have multiple agencies conducting air monitoring, including the Environmental Protection Agency (EPA), CTEH, the Texas City Fire Department, and E3 OMI, at no point during this incident has anyone detected a reading that would indicate a threat to health," Texas City Emergency Management Coordinator Joe Tumbleson said. "All partners represented in the Emergency Operations Center concur that there has been no impact to area well water or to surface water that feeds into our drinking water system." Tumbleson added that there was no impact to Moses Lake and that the spill was contained.
261 barrels of crude oil removed from Texas City ditch after spill - About 261 barrels of crude oil have been removed from a Texas City ditch following an oil spill, Texas City Emergency Management said on Tuesday. The spill was found on Dec. 25 in the ditch that is also referred to as Moses Bayou. The oil was coming from an oil pumping station in the city’s west side that had a faulty oil-water separator. Crews are continuing their efforts. They’re working on drainage ditch 6, and they hope to completely finish cleaning up by Feb. 15. “Texas City Emergency Management, in partnership with local, county, state, and federal agencies, have continuously monitored the oil spill incident,” said Joe Tumbleson, Texas City Emergency Management Coordinator. “We are grateful to report that there has been no impact on Moses Lake, and no loss of containment has occurred. The leading edge of the spill remains just west of the Texas City golf course.” Tumbleson said they have not detected unsafe air conditions or water conditions. “All partners represented in the Emergency Operations Center concur that there has been no impact to area well water or to surface water that feeds into our drinking water system.” People were also asked to avoid the affected area and wildlife. Several agencies have responded to the spill such as: The Texas Department of Emergency Management (TDEM), the Texas General Land Office, the Environmental Protection Agency, Galveston County Emergency Management, Water Drainage District #2, the United States Coast Guard, and the Texas Parks and Wildlife Department (TPWD). Officials are still unsure how much crude oil was discharged from the faulty oil-water separator at the pumping station. They also have not confirmed how long oil was spilling from the site. What happened Since Dec. 26, multiple state, federal, and local agencies have coordinated the cleanup, said Texas City Emergency Management Coordinator Joe Tumbleson. The spill was first detected Christmas Day when residents near the oil facility called Texas City officials to complain about a strong oil odor, Tumbleson said. After hours of searching for the source, officials found the oil came from a faulty oil-water separator at a small oil facility on Century Boulevard near Moses Bayou. Tumbleson said his office alerted the facility owner, Sawtooth Oil and Gas, of the spill. It is not known how long oil had been coming out of the facility, Tumbleson said. He said company officials explained that the unmanned facility had an issue with its oil-water separator that caused an overflow. The small facility where the oil spilled is about 200 feet from the drainage ditch. Tumbleson said the oil coming from the spill is sweet crude oil. While maps refer to the waterway as a bayou, it is a drainage ditch (Ditch No. 6). It is the longest drainage ditch maintained by Galveston County Drainage District No. 2. It stretches from the Lago Mar subdivision eastward behind Mainland City Centre and eastward to Moses Lake in Texas City. The oil spill site is near Century Boulevard, and the waterway flows past four subdivisions. Tumbleson said the oil in the water stretches about half a mile from Century Blvd. to State Highway 3. Thus far, harm to wildlife has been minimal. Janie Acevedo-Beauchamp of the Environmental Protection Agency said as of Saturday, a blue heron was rescued from the spill, but later died. A dead Belted Kingfisher was also found, Acevedo-Beauchamp said. There have been no other confirmed reports of adverse effects on wildlife. Texas Game Wardens are monitoring the area to track any wildlife impact. The waterway does not intersect or flow into the Gulf Coast Water Authority’s nearby freshwater supply canals. Records show as well that there are about 180 people who live within a 1/4-mile radius of the spill site. But the drainage ditch/Moses Bayou flows within yards of several subdivisions. Residents have complained of the heavy odor of oil, but there are no confirmed reports of any medical calls to the area because of exposure. Aside from the heavy smell of oil, air monitoring in the area has found no indications of harmful levels of chemicals in the air.
Texas City oil spill clean-up expected to last until mid-January | Local News - City emergency management officials expect an oil spill that spread along Moses Bayou last week to be cleaned up by Jan. 15 and said it wouldn’t affect drinking water of wells.
APA Joining E&P Merger Parade with Takeover of Permian-Focused Callon - Houston’s APA Corp., which in recent years has pursued overseas oil and gas prospects, is storming back to the Permian Basin with a $4.5 billion all-stock takeover of Callon Petroleum Co. APA, long a Permian exploration and production (E&P) stalwart, already has a broad portfolio in the Midland and Delaware formations. In the Delaware, where the super independent has a wide swath of natural gas-rich opportunities, Callon has nearly 12,000 acres. The deal overall would give APA another 145,000 acres. “Callon has built a strong portfolio in the Permian Basin that is complementary to our existing Permian assets and rounds out our opportunity set in the Delaware,” APA CEO John J. Christmann Jr. said.
New Mexico considers setback requirements for oil wells near schools and day care centers (AP) — A bill to ban oil and gas production within a mile (1.6 kilometers) of schools and day care centers across New Mexico is among the first published proposals as the state Legislature prepares for a 30-day session that could bring an overhaul to fundamental oil and gas regulations. Regulators in the No. 2 U.S. state for oil production are considering reforms including setback requirements aimed at protecting children from pollution, amid pressure from environmental groups and other advocates to bolster pollution controls and fulfill constitutional obligations to regulate the industry. Published Wednesday, a bill introduced by Democratic state Rep. Debra Sariñana of Albuquerque would halt approval of new drilling permits within a mile of school facilities starting in July of this year. It also would halt most oil and natural gas operations in those zones by 2028. Democratic Gov. Michelle Lujan Grisham directed the state Energy, Minerals and Natural Resources Department to consult with a variety of stakeholders and develop its own robust set of proposed reforms to the New Mexico Oil and Gas Act, which regulates production of the two fossil fuels. The results of that process will include the establishment of setbacks from schools, hospitals, medical facilities, multifamily housing, single family homes and water bodies statewide. Lujan Grisham spokesperson Maddy Hayden said in an email Wednesday that the distance of the setbacks has yet to be determined. A draft of the agency’s proposal includes language that refers to a setback of 2,640 feet (0.80 kilometers) for schools, homes and health care facilities. Sariñana, a retired high school math teacher, said her proposal would likely affect about 800 existing wells out of more than 65,000 across the state. “It’s about our kids. This year it’s about our kids,” she said.
New Mexico governor proposes 10% spending increase amid windfall from oil production (AP) — New Mexico’s governor is proposing a nearly 10% general fund spending increase for the coming fiscal year to shore up housing opportunities, childhood literacy and health care access, with additional payouts for electric vehicles purchases.Democratic Gov. Michelle Lujan Grisham on Thursday published the $10.5 billion budget plan for the fiscal year running from July 2024 through June 2025. It would increase general fund spending by roughly $950 million over current annual obligations.The Democratic-led Legislature develops its own competing spending plan in advance of a 30-day legislative session that begins Jan. 16. Lujan Grisham can veto any and all budget provisions approved by legislators. The nation’s No. 2 oil-producing state anticipates a multibillion-dollar surplus for the coming fiscal year, driven largely by oil and natural gas production in the Permian Basin that underlies southeastern New Mexico and western Texas. The governor has signaled affordable housing as a major priority, proposing one-time spending of $500 million to expand opportunities through down-payment assistance, and to finance affordable housing and related infrastructure. The state separately would use $40 million to launch a statewide homelessness initiative.
‘No Significant Impact’ in Pausing Natural Gas, Oil Activity on Colorado’s Thompson Divide, Say Feds - A multi-year effort to pause oil and natural gas development across a portion of Colorado’s Western Slope may soon be finalized, according to federal officials. A draft environmental assessment (DEA) issued in December by the U.S. Forest Service (USFS) found there would be “no significant impact” if federal mineral leasing was withdrawn for 20 years across 224,713 acres of national forest land in the Thompson Divide near Crested Butte. The Biden administration has proposed a 20-year pause in leasing across the federal land, mostly in Gunnison and Pitkin counties. The federal lands are overseen by the Interior Department’s USFS and the Bureau of Land Management. The impact on oil and natural gas development would be negligible, the USFS stated.
Chevron Warns of $3.5-4B in 4Q Upstream Impairments, Mostly California, GOM Assets -Chevron Corp.’s upstream oil and natural gas assets are set to take a big one-time hit in the fourth quarter results, primarily because of “continuing regulatory challenges” in California, where the integrated major is headquartered. The San Ramon-based producer on Tuesday detailed the upstream impairments in a Securities and Exchange Commission Form 8-K filing. The actions in aggregate “are currently estimated to result in noncash, after-tax charges of $3.5-4.0 billion in the company’s fourth quarter 2023 results,” executives noted in the filing.
Berkeley's gas ban is all but dead. What does that mean for other cities? -On Tuesday, a federal appeals court decided not to revisit its earlier decision to strike down Berkeley, California’s first-in-the-nation gas ban in new buildings. The ruling dealt a blow to the city of Berkeley, which requested a rehearing after the 9th U.S. Circuit Court of Appeals’ initial decision in April, and casts uncertainty over similar policies to electrify buildings in dozens of other cities. In effect, the court simply chose to uphold its earlier judgment in April to invalidate Berkeley’s gas ban, legal experts told Grist. But unless the city of Berkeley chooses to appeal the case to the Supreme Court, the 9th Circuit’s judgment is now final. (The Berkeley city attorney’s office did not respond to a request for comment on its next steps in time for publication.) That means that for cities in the 9th Circuit region, which spans 11 western states and territories including California, Oregon, and Washington, local gas bans similar to Berkeley’s are no longer legal. “For cities in the 9th Circuit that have laws that are modeled closely on the Berkeley ordinance, this is a door closing,” said Amy Turner, director of the Cities Climate Law Initiative at Columbia University’s Sabin Center for Climate Change Law. In 2019, Berkeley became the first city in the country to pass a ban on installing natural gas piping in new buildings, requiring all-electric appliances. Dozens of cities across the 9th Circuit region, including more than 70 in California alone, quickly followed suit, drafting new laws to reduce greenhouse gas emissions and indoor air pollution. But later that year, the California Restaurant Associationinitiated a lawsuit against Berkeley’s policy, arguing that natural gas stoves were essential for preparing foods like “flame-seared meats” and “charred vegetables.” In 2021, a federal district court ruled against the restaurant industry, but that decision was overturned in April 2023 by the 9th Circuit. That court held that national energy efficiency standards preempted Berkeley’s law, which would in effect prevent the use of gas-powered appliances that meet federal standards. The city of Berkeley requested a rehearing of the case before 11 judges on the 9th Circuit — a petition that was denied in this week’s decision.
Long Lake residents concerned about mystery oil spill - - Last week a mystery sheen was spotted floating down the Spokane river in Millwood. According to the Department of Ecology, they are still not sure where it came from. They are able to confirm that it's oil with no PCBs, which are highly carcinogenic chemical compounds.
AltaGas Greenlights Montney Shale Natural Gas Processing Expansion - Calgary-based AltaGas Ltd. has sanctioned the Pipestone Natural Gas Processing Plant Phase II expansion project in the Alberta Montney Shale region. Construction is set to begin this year on the expansion, which is fully permitted. The project would provide an additional 100 MMcf/d of sour deep-cut natural gas processing capacity and an additional 20,000 b/d of liquids-handling capabilities, according to AltaGas. AltaGas announced the final investment decision (FID) for the project late last month upon closing its acquisition of the existing Pipestone processing complex and adjacent Dimsdale gas storage facility from Tidewater Midstream and Infrastructure Ltd. for C$650 million ($487 million). The asset package also included the Pipestone condensate truck-in/truck-out terminal...
Peak Gasoline Demand Turns Out to Be a Mirage: Javier Blas - After fueling the 20th century automobile culture that reshaped cities and defined modern travel, gasoline was supposed to begin its long goodbye this year. It didn’t. Sure, Tesla Inc. and its rivals sold more electric vehicles in 2023 than ever before, reducing fossil fuel demand. In the moneyed suburbs of London, New York and Beijing, EV cars are a common sight. From that narrow perspective, it looks like the world has already started ”transitioning away from fossil fuels,” as agreed at the recent COP28 climate talks. But it’s a mirage. Even as EV sales increased, the global oil industry sold more gasoline than ever this year, surpassing the previous 2019 peak that the International Energy Agency had expected would remain an unassailable all-time high. Outside wealthy neighborhoods, the internal combustion engine still reigns supreme; in middle- and working-class areas, the energy transition remains a distant prospect.From the 1950s onward, when Henry Ford’s dream of a car in every middle-class American driveway became a reality, gas stations sprung up next to drive-in restaurants and strip malls, transforming the US landscape and economies across the globe. The gasoline used to power automobiles accounts for roughly one-in-four barrels of petroleum-refined products consumed worldwide. As the climate crisis garners increased attention, the fuel is destined to play an outsized role in the energy transition — an early indicator of whether the shift away from fossil fuels is happening, and at what speed. The theory was that as EV cars became more popular, gasoline demand would be “disproportionally” impacted, the IEA predicted in its most recent five-year oil outlook, released in June. “This means that the fuel is likely to exhibit the earliest and most pronounced peak in demand” of all fractions of the oil barrel, it added. While consumption would recover this year, it wouldn’t reach pre-pandemic levels; the outlook was for a gentle, but constant, downward trend. In the middle of the year, the IEA predicted that gasoline usage would “never return to 2019 levels,” when demand reached 26.7 million barrels a day. Instead, consumption rose to about 26.9 million barrels a day this year, according to the latest IEA figures.1 And 2024 is poised for another, even if small, increase, to just above 27 million barrels a day. As thing stand, the peak in gasoline demand has been delayed by five years, to 2024 from 2019. And I won’t be surprised if, once more data are available and forecasts are updated, the peak is pushed forward even further.
China Funds Big Green Groups While Russia Funds Anti-Fracking Groups -Marcellus Drilling News -- The two biggest enemies of the United States, Russia and China, are attacking our country and its fossil fuel infrastructure using proxies — nonprofit groups — funneling money to said groups that use the money to finance a blizzard of lawsuits and other activities aimed at destroying our fossil energy industry. We’re in a war, and we don’t even know it! Just the News, one of the best independent news sites on the web, has an expose focusing on China’s role in funding Big Green groups that, in turn, attack our fossil energy industry.
Orlen: Polish LNG imports continue to rise - Poland’s LNG imports via the Swinoujscie terminal rose almost 6 percent in 2023 compared to the year before, boosted by shipments from the US, according to Orlen. The Swinoujscie LNG terminal received 62 cargoes or about 4.66 million tonnes of LNG in 2023, Orlen said in a statement. This compares to 58 LNG carriers or 4.4 million tonnes of LNG in 2022, which marked a record and a rise of 57 percent year-on-year. The growth of LNG imports in 2022 was possible due to the expansion of Gaz System’s facility in Swinoujscie, where PKN Orlen booked a regasification capacity of 6.2 bcm per year. This is some 1.2 bcm more than before. Thanks to further investments, the capacity will increase to 8.3 bcm of gas per year in 2024 and Orlen booked all of these volumes as well. In November 2022, PKN Orlen completed its merger with Poland’s dominant gas firm, PGNiG, which is in charge for all of the LNG supplies coming to the Swinoujscie facility. The Swinoujscie LNG terminal received its first commercial cargo in June 2016. Prior to that it also received two commissioning LNG cargoes. Orlen received the 250th cargo at the LNG terminal in September this year, and the 268th cargo on December 28. The 216,200-cbm Q-Flex LNG carrier, Al Sahla, delivered the last cargo under a long-term contract with QatarEnergy LNG, previously known as Qatargas, Orlen said. US liquefaction and export terminals remain the biggest suppliers of LNG to Poland. Orlen has contracts with Cheniere and Venture Global LNG. However, the latter has still not declared commercial operations at its Calcasieu Pass facility. The Polish firm said that 41 ships arrived in 2023 from the US to Swinoujscie as part of long-term and spot purchases. Qatar was the second-largest supplier with 19 shipments, while one shipment each arrived from Trinidad and Tobago and Equatorial Guinea. In 2022, 36 deliveries came from the US, and 18 ships arrived from Qatar. Chartered LNG carriers, expansion Besides boosting LNG supplies, Orlen is developing its fleet of chartered LNG carriers. In October 2023, Norway’s Knutsen and Poland’s Orlen named two newbuild LNG carriers at Hyundai Samho’s yard in Mokpo, South Korea. The carriers in question are Saint Barbara and Ignacy Lukasiewicz. Prior to that, South Korea’s Hyundai Heavy Industries delivered two LNG carriers to Knutsen that are serving Orlen under charter deals.
China Regains Top LNG Buyer Position - China has regained the title of world’s biggest buyer of liquefied natural gas, as a further rebound in deliveries threatens to tighten supply of the heating and power plant fuel. LNG shipments to China rose 12 percent last year to nearly 71 million tons, according to ship-tracking data compiled by Bloomberg. High prices and virus restrictions had significantly cut demand in 2022, which helped free up LNG shipments to gas hungry nations elsewhere. Although China’s LNG deliveries remain below 2021 levels, due in part to cheaper alternatives, the nation is expected to drive global demand growth for the next decade. China’s imports are slated to increase almost 20 percent to 84 million tons through 2025, and to 136 million tons by 2030, according to Rystad Energy. A surge in shipments to China before new supply comes online later this decade risks upending the gas market’s careful balance. Europe is far more dependent on the fuel after the loss of Russian pipeline gas, and a jump in Chinese LNG buying — especially this year or next — could threaten a price war between the regions. Gas makes up just 8.5 percent of China’s total energy mix, based on data from the Energy Institute, leaving it with plenty of room to grow as it replaces dirtier alternatives like coal. In Japan, by contrast, gas makes up a fifth of the mix, while it’s a third in the US. China imported 17 percent of all LNG shipments last year, according to ship-tracking data. For comparison, the entirety of western Europe accounted for 26 percent. Gazprom’s gas supplies to China via the Power of Siberia pipeline reached 22.7 billion cubic meters last year, above contracted volumes. China’s thermal coal benchmark, already on a downturn last year, may slide further as milder demand growth makes little headway in clearing the nation’s surplus.
JKM Prices Continue Decline Despite Earthquake in Japan - A 7.6-magnitude earthquake that hit western Japan continued to have little impact on the country’s natural gas demand and Asian natural gas prices on Wednesday. Two coal-fired power plants were closed and some gas-fired generation had been reduced in the Noto region after the quake hit Monday. The Naoetsu LNG import facility was briefly shut down, as well, but has since been reopened. Kpler vessel-tracking data on Wednesday showed the Ibri liquefied natural gas vessel offshore ready to unload at Naoetsu with a cargo from the Bintulu LNG facility in Malaysia. Japan’s spot electricity price for Thursday declined by nearly 10% as the country’s power reserve was at required levels. While the earthquake, which killed more than 50 people and injured hundreds more, could impact...
Oil spill response effective at Alvheim FPSO, says Aker BP – Aker BP has issued details of how it responded to an oil spill at the Alvheim field in the Norwegian North Sea at the end of November.During a production re-start on the Alvheim FPSO following an unplanned shutdown, with one well online, an estimated 51 cu m of oil were discharged through the produced water outlet.The company responded by closing all necessary valves immediately to stop the flow and mobilized its emergency response organization alongside the Norwegian Clean Seas Association for Operating Companies (NOFO) and the Norwegian Coastal Administration (NCA) to deal with the oil on the sea surface.NOFO and the NCA opted to implement a technique known as mechanical degradation, which involved the standby vessel Esvagt Stavanger mixing the oil down into the water column until it dissolved.Satellite and aerial surveillance measures also took place, in addition to the standby vessel’s oil radar.According to Aker BP, the response was effective with the size of the oil slick significantly reduced by the following day. That led the NCA, in consultation with NOFO and Aker BP, to end the operation on December 1.By that point no oil was visible on the sea surface either in satellite images or via flyovers, and no harm was found to have been caused to birds or marine life in the area.“Our co-operation with NOFO and the Norwegian Coastal Administration shows that the Norwegian shelf has sound and effective oil spill preparedness in place, should the need arise,” said Marit Blaasmo, Aker BP’s Senior Vice President—People & Safety.
Aker BP commissions spill detection upgrade for offshore Norway platforms — Aker BP has asked Vissim to develop an upgraded oil spill detection solution for its fixed and floating installations offshore Norway. These comprise platforms at the Valhall, Ula, Edvard Grieg, Ivar Aasen, Alvheim and Skarv fields in the North Sea and Norwegian Sea. According to Vissim, the new radar-based oil spill detection system will employ upgraded image processing technology to enable detection of smaller oil spills. It will also employ machine learning to classify detected phenomena to prevent the system from generating false alarms, one of the main concerns with radar-based oil spill detection as it can cause undue stress among the operators. Norway’s regulatory environment requires offshore operators to implement detection technologies that make them independent of weather conditions. Vissim’s combined solution is said to facilitate vessel tracking and oil spill detection via the same radar. A higher degree of sensitivity in image processing is claimed to make the new system less susceptible to false alarms triggered by heavy rain, vessel wake and other incidents. Since the fall of 2023, the company has been developing an expanded digital dashboard for Aker BP’s oil spill monitoring and detection needs. This integrates input from various detection sources, including radars, satellites and sensors on subsea production equipment, combining them into one visual overview.
Venezuela oil giant says 80 percent of oil spill cleaned up --Venezuela's state oil company said Thursday that an oil spill at a refinery on the country's western coastline was no longer "active" and that more than 80 percent of the affected area had been cleaned up.Wednesday's spill at the El Palito facility in the northwestern state of Carabobo occurred when heavy rainfall caused fluids to overflow from lagoons at the site, PDVSA said on social media platform X."It is important to clarify that it is not heavy crude oil, but a discharge of hydrocarbons, wastewater or effluents that were directed to the coastal marine environment," the company said."At this time there is no active source of spillage, there is no rupture of pipeline or system," it went on, adding that the "situation is being controlled by highly trained personnel under current safety protocols."The spill sloshed tarry ooze onto beaches, affecting several seaside resorts and causing environmental groups and fishermen to sound the alarm. Work was under way Wednesday to clean up the spill.The last oil spill recorded in the area was in July 2020, when waste from the same refinery flowed into the sea. That accident contaminated Morrocoy National Park, a tourist area with a score of islets with white sand beaches.
Venezuela Deploys Troops Amid Dispute with Guyana --Venezuela has decided to deploy more than 5,000 soldiers on its eastern Caribbean coast after neighboring Guyana received a warship from the UK amid a dispute over the Essequibo territory, according to President Nicolas Maduro. “Venezuela has the right to defend itself, to tranquility, to peace,” Maduro said Thursday on state TV, while accusing Guyana of violating an agreement signed two weeks ago to continue talks over the oil-rich territory without the use of arms. “We do not accept provocations, threats from anything or anyone.” Venezuela made a similar move in 2018 to halt ships working for Exxon Mobil Corp off in the area. Today’s actions, which Maduro said were just the first stage of a wider plan, could lead to an escalation of the long-dormant dispute between the neighboring countries over the Essequibo, a region roughly the size of Florida that’s controlled by Guyana but claimed by Venezuela since the 19th century. Venezuela’s Navy Commander Neil Villamizar said 5,682 military personnel from several components of Venezuela’s armed forces were deployed, along with three ocean patrol vessels, three multipurpose vessels, seven missile boats, eight amphibious vehicles and over 20 fighter planes, including 12 Sukhoi. While the troops deployed represent roughly 4 percent of Venezuela’s estimated military force, it matches the number of Guyana’s estimated combatants. That balance of power could shift if Guyana’s allies intervene, according to Rocio San Miguel, an expert in military issues and the president of Caracas-based watchdog group Control Ciudadano. Earlier in December, the UK reaffirmed its support for Guyana following the renewal of Venezuela’s border claim on the Essequibo region. Following a visit by David Rutley, British Minister for the Americas, Caribbean and Overseas Territories, Britain deployed a Royal Navy warship known as HMS Trent to Guyana to take part in joint exercises.
Argentina Eyes Free Market for Oil - Argentine President Javier Milei is seeking to extinguish decades of government intervention in the nation’s oil industry by unshackling crude exports and leaving local fuel prices at the whim of market forces. Milei included such measures in sweeping legislation he sent to congress on Wednesday, the latest move since the libertarian president took office on Dec. 10 with a mission to deregulate Argentina’s tightly controlled economy. While his bill has far-reaching consequences for a slew of industries, it features a chapter specifically addressing oil. The free-market provisions in his bill seek to replace rules from the 1960s that prioritize ensuring affordable fuel supplies at home. Those rules, which give refiners the right to first refusal on export cargoes and let the government meddle in crude and gasoline pricing, have in recent years held back the vast shale patch known as Vaca Muerta — Spanish for dead cow. Under Milei’s proposal, sales abroad “will be free” and “the executive branch won’t be able to intervene in, or fix, prices in the domestic market.” “Energy prices will couple with international values,” Juan Jose Carbajales, an energy consultant who once served as oil and gas undersecretary, wrote in a report. “The most radical change is eliminating the requirement to satisfy the needs of the local market — it’s an historic rupture with a century of Argentine tradition.” It would also be a boon for drillers including YPF SA — the state-run oil company that Milei wants to privatize — whose shale investments have been curtailed by cheap prices at pump, as well as Vaca Muerta’s other major crude producers, Chevron Corp., Shell Plc and local outfit Vista Energy. Milei’s bill will likely face stiff opposition in congress, where his party is a minority, since it rips at the fabric of status-quo Argentine policymaking. While the legislation is being debated, Milei will move to liberalize oil markets on a more informal basis, according to two people familiar with the matter. The government will stop brokering talks between oil producers and refiners, allowing them to set crude and gasoline prices as they wish, said the people, who weren’t authorized to publicly disclose private deliberations. Shale oil in Argentina traded at $58 a barrel in the third quarter, when Brent traded at $86, according to YPF.
Nigeria Destroys Dozens of Illegal Oil Pipelines, Refineries - Nigerian National Petroleum Co. Ltd. (NNPC) has dismantled dozens of unauthorized oil pipelines and refineries in different parts of Nigeria during a year-end week-long operation, the national oil and gas company said. Authorities uncovered 42 refineries and 14 illegal pipelines operating in the Niger Delta between December 23 and 29, NNPC said in a video report Tuesday. One illegal oil storage site was also discovered. Ten incidences of pipeline vandalism, eight cases of infraction of vessel automatic identification system and four oil spills were also recorded during the operation, under NNPC’s campaign to stop oil theft. Eighteen persons have been arrested on suspicion of involvement in the incidents, which affected several companies not only NNPC. Also among the victims were Maton Engineering Nigeria Ltd., Pipeline Infrastructure Nigeria Ltd. and Shell Petroleum Development Co., according to the report released on social media platform X, formerly Twitter. “For NNPC Ltd. there is no backing down on the war on crude oil theft until the menace is eradicated for good”, NNPC said in the report. The lingering problem of oil theft comes amid a shortage of refinery feedstock in the West African country. Last month the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said it had met with the Nigerian Midstream Petroleum Regulatory Authority to seek stronger action to ensure domestic crude supply. The meeting “came on the heels of the prevailing shortage of feedstocks to the modular refineries operating within the shores of the country and formed the basis a meeting between the regulators”, the NUPRC said in a press release. Last November the government inaugurated a special committee to combat oil theft. In the country’s annual oil and gas fair last May, the oil and gas regulatory body Nigerian Content Development and Monitoring Board (NCDMB) urged the government to address “wanton crude oil theft in the Niger Delta” to “enable the production of hydrocarbons at reasonable costs and profitability”, stated a press statement from the NCDMB. “[M]ost indigenous operators were unable to evacuate their crude oil through pipelines for over one year and are now forced to explore alternative options at high costs”, the NCDMB said then. Equinor ASA announced November it was selling its stake in the Niger Delta’s Agbami oil field as it exits the country. Norway’s majority state-owned Equinor holds a 20.21 percent stake in Agbami, which is operated by Chevron Corp. with a 67.3 percent interest. Prime 127 Nigeria Ltd. holds the remaining 12.49 percent. The world’s biggest oil discovery in 1998, Agbami holds an estimated 900 million barrels of recoverable volumes, according to information from Chevron. According to the latest report on oil theft by government agency the Nigeria Extractive Industries Transparency Initiative, the country lost over 505 million barrels of crude and 4.2 billion liters of petroleum products, or $40.06 billion and $1.84 billion respectively, between 2009 and 2018. “Cumulatively, total crude and product losses for the period amount to $41.9 billion. This is the size of Nigeria’s entire foreign reserves”, it said in the report published November 2019. Oil has been among the top five sectors contributing to Nigeria’s economy. In the latest gross domestic product data by the National Bureau of Statistics, petroleum and natural gas comprised 5.48 percent of the nation’s economy in the third quarter of 2023, making this sector the fifth-largest contributor to the economy behind crop production, trade, telecommunication and information, and real estate.
Nigeria's top court says Shell's appeal should be heard after oil spill claim (Reuters) - Nigeria's Supreme Court on Friday ruled that Shell should be granted a hearing over an alleged oil spill in the Niger Delta after the Court of Appeal halted an asset sale and ordered a judgement claim to be paid prior to hearing its case. The case, one of several against Shell Plc (SHEL.L) locally and abroad, started with a High Court ruling in November 2020 that ordered Shell to pay 800 billion naira ($878 million) to communities of Egbalor Ebubu in Rivers state, who accused the firm of an oil spill that damaged waterways and farms. Shell denies causing the spill. Shell had appealed to stop the High Court from executing its judgement but the Court of Appeal ordered Shell to deposit the money in an account controlled by the court, before its appeal could proceed. Shell was also ordered to pause the disposal of local assets last June until the Supreme Court ruling, to allow for any compensation due to the Niger Delta Community. Mohammed Ndarani, the community's lawyer, told Reuters that the Supreme Court had now returned the case to the Court of Appeal. The Supreme Court ruled on Friday that the appeal court did not look into the merits of the case and directed that Shell be granted a hearing. The case is being closely watched after the country's oil regulator refused to approve Exxon Mobil's $1.28 billion asset sale to Seplat Energy in 2022, raising concerns among international oil companies about the difficulty of selling assets in Nigeria. Shell, like other oil majors operating in the country, is focusing on deep water drilling and divesting from onshore operations, which are prone to crude theft and vandalism of pipelines, hitting Nigeria's oil production.
An oil spill in an ignored wetland in Tamil Nadu- The Hindu -- On December 3-4, Cyclone Michaung, which lingered 100 km off the coast of Chennai for about 16 hours, brought heavy rainfall to the city. It forced the Tamil Nadu government to not only deal with the problem of heavy flooding, but also turn its attention to the wetlands of the heavily industrialised Ennore-Manali region in the northern part of the city where oil had spilled over from the premises of a public sector refinery.Even as oil from the Chennai Petroleum Corporation Limited (CPCL) refinery flooded houses and entered the Buckingham Canal and the Kosasthalaiyar river, which empties into the Bay of Bengal, at Ennore, the Tamil Nadu Pollution Control Board underplayed the extent of the ecological disaster. Since the spill occurred in inland waters, the Indian Coast Guard could confirm that the oil had entered the sea only through an aerial assessment.The State government began to act only eight days after the spillage and after it was nudged by the National Green Tribunal (NGT). The government’s 20-member oil spill crisis management committee, headed by the Chief Secretary, inspected the mouth of the river, or Ennore Creek, and directed the CPCL to compensate for the damages caused to the environment and the fisher folk, and ramp up remediation. The initial work was not only delayed but also haphazard. Without an approved standard operating procedure in place and for reasons that are unclear, the Tamil Nadu State Disaster Management Authority and district authorities, who, as per the draft ‘Tamil Nadu State Oil Disaster Contingency Plan’, are the nodal agency and the on-scene commander, respectively, took a back seat.The Department of Environment, Climate Change and Forests set up a coordination centre at Ennore. Along with the CPCL, the Department deployed one oil skimmer and 200 fishermen with their boats from the hamlets of Ennore to remove the oil. As of December 16, 300 additional workers from four sea-cleaning agencies were brought in along with a fleet of machinery comprising five gully suckers, four skimmers, poclains and tippers. Over 50 tonnes of oil-laden sludge have been removed from Kosasthalaiyar so far.The Department has said that remediation is expected to be completed by December 19. However, it would be unwise to rush the clean up as, in addition to the 11-kilometre stretch from the CPCL plant to Ennore Creek, oil has spread further south till the Kasimedu harbour and up north to the Pulicat backwaters, a fishing ground and also a biodiversity hotspot for thousands of migratory birds. State government officials and the CPCL said that the incident was “unprecedented” and that they were “caught unawares”. However, in 2017, two cargo ships carrying oil collided near Kamaraj Port in Ennore, significantly affecting the fisherfolk and their livelihoods. Besides, there are 17 highly polluting industries in Manali of which nine are petrochemical, and the residents of the region have been flagging pollution concerns for years.
Ennore oil spill shows pelicans forage, use wetlands over a larger geography- A week after an oil-drenched spot-billed pelican was sighted 400 km away at the Tiruppur Nanjarayan tank bird sanctuary, bird experts are calling for detailed studies to understand Chennai’s largest local migration of waterbirds and their relationship with wetlands. Post Ennore oil spill, which caused misery to people and ecology, the affected birds, especially pelicans, were photographed widely in different wetlands in and around Chennai. Now these birds are being sighted several hundreds of kilometres away as well. This suggests pelicans forage and use wetlands across a wide geography over days and weeks. This has been somewhat confirmed post the oil spill, when oiled black pelicans are being seen in rotation in Ennore, Cooum, Adyar, Pallikaranai, Sholinganallur and Kovalam in different numbers on different days and even as far as Nanjarayan. “I have been observing local migration of pelicans at Pallikaranai and Kallukuttai lake on a daily and weekly basis. Early morning, they fly in from the north in dozens of flocks and settle in Kallukuttai and Velachery lakes and surrounding wetlands, and in a few hours they fly south - possibly to Pallikaranai, Kovalam estuary and other wetlands. On different days their numbers vary - suggesting that pelicans forage and use wetlands across a larger geography. More observations and studies are needed to understand the movements of pelicans and large water birds and their relationship with wetlands,” said bird expert and author M Yuvan. Udumalaipettai DFO Devendra Kumar Meena told TNIE the bird was first spotted by forest watchers last Friday and again sighted at the Nanjarayan bird sanctuary on Tuesday. Local Nature Society volunteers also visited and confirmed that it was an oil spill affected bird. “The pelican is active and feeding well. Two eco-guides, four protection watchers are fielded along with a forester to monitor the bird and explore the possibility of capturing it to wash off the oil. We haven’t seen it for the last two days. Our staff are searching in nearby wetlands. We are also surprised how the bird travelled such a long distance with oil all over the body,” he said. Meanwhile, in Ennore, the rescue team captured two pelicans and brought them to the Guindy National Park for necessary treatment on Thursday. E Prasanth, Chennai wildlife warden, said there was information that ‘black’ pelicans are spotted even in Kaliveli bird sanctuary in Villupuram district. “So far, we have captured eight pelicans, including two birds captured today. The rescued birds were given 4-5 soap washes, but still there is oil. It would take some time for the birds to fully recover. In a month’s time, we plan to release them. Health wise, they are in good shape and feeding well,” he said.
Philippine Coast Guard Contains 30-L Oil Spill in Davao City: Cleanup Operation and Investigation Underway - THE Philippine Coast Guard, including the Coast Guard District Southeastern Mindanao (CGDSEM), Coast Guard Station (CGS), and Coast Guard Sub-Station, effectively contained a 30-liter oil spill at Km. 11, DavSam Port, Sasa, Davao City, on the night of January 2. Surveillance revealed an affected area of approximately 200 cubic meters. Ensign John Caven Esteban, deputy commander of the Marine Protection Force of the Coast Guard District Southern Mindanao, confirmed in a media interview on Wednesday, January 3, that the cleanup operation took several hours from 8 p.m. to 11 p.m. on January 2. Responding promptly to the incident at 7:50 pm on the same day, Coast Guard personnel utilized an oil spill absorbent boom and absorbent pads to recover sludge, mainly consisting of diesel and bunker oil. They returned the next morning to ensure zero oil spills. The recovered sludge is set to be turned over to the Coast Guard's waste collector. An ongoing investigation aims to determine the spill's source, considering possibilities such as a resident, a waste factory, or a sea vessel, despite potential washout due to the strong current within Davao Gulf.
India turns to Saudi as purchases of Russian oil fall in Dec (Reuters) - India increased imports of Saudi oil in December as payment problems drove its Russian oil buys to an 11-month low, with at least five cargoes of the sweet Sokol variant heading to other locations, data from vessel tracking agencies showed. Indian Oil Corp (IOC.NS), which was set to get the Sokol oil, had to withdraw from its inventory and buy from the Middle East to make up the shortfall, sources told Reuters last month. Top refiner IOC is the only state-run firm with an annual deal to buy a variety of Russian grades, including Sokol, from Russian oil major Rosneft. India's oil imports from Russia in December declined between 16% and 22%, according to Reuters calculation on the basis of data from flow tracking agencies Vortexa, Kpler and LSEG. Its imports of Saudi oil, rose by about 4%, however, data from Kpler and Vortexa showed. LSEG data shows India's monthly Russian oil imports declining by 22% to 1.21 million barrels per day (bpd) in December, while Kpler shows a drop of 16% to 1.39 million bpd. "Perhaps it's still too early to write off India's appetite for the Sakhalin grade (Sokol)," said Viktor Katona, lead crude analyst at Kpler, adding that three new Sokol cargoes on the NS Antarctic, Jaguar and Vostochny Prospect were heading for India. Aframax ships NS Century, NS Commander, Sakhalin Island, Lityny Prospect and Krymsk; and a very large crude carrier Nellis carrying Russian Sokol oil for IOC were sailing for the Strait of Malacca, Kpler and LSEG ship tracking data showed. The NS Century faced sanctions imposed by the United States in November for the sale of Russian oil at a price above the cap of $60 a barrel fixed by the G7 grouping of nations and had been floating near Colombo since. "China appears to be the final solution for some cargoes," said Katona. Here is a table of India's preliminary imports from its top three suppliers. Volumes are in 1,000 bpd.
OPEC to Resume Regular Monitoring Meetings Next Month - OPEC+ will resume its regular oil market monitoring meetings with an online session early next month, delegates said. The Joint Ministerial Monitoring Committee, which includes group leaders Saudi Arabia and Russia, will convene in the first week of February, said the delegates, who asked not to be identified because the information is private. One person said that the meeting has been scheduled for Feb. 1. The Organization of Petroleum Exporting Countries and its allies began a new round of production cutbacks this month, in a bid to avert a global supply surplus during the first quarter and defend crude prices. Brent futures were little changed near $77 a barrel on Tuesday. Oil slumped almost 20 percent in the fourth quarter as record supplies from the US and elsewhere countered the effect of supply constraints by OPEC+ and robust fuel demand. Oil consumption growth is forecast to slow down sharply this year, prompting predictions of an oversupply. OPEC+ agreed at its last meeting in November to deepen existing supply cuts this quarter by around 900,000 barrels a day. Yet the price impact has been muted as crude traders are skeptical of how much will actually be implemented, with several key members struggling to dial back output further. Prices are getting some support from the turmoil in the Middle East, which has flared in recent weeks with attacks on merchant shipping through the region. The conflict between Israel and Hamas rages on, while Iran has dispatched a warship to the Red Sea after the US Navy destroyed three boats operated by Houthi militants. The OPEC+ JMMC typically meets every two months to review oil market conditions on behalf of ministers. The full 22-nation coalition is next due to gather on June 1 in Vienna. Member nation Angola quit the group last month after 16 years amid a bitter dispute over its production quota, but its departure isn’t expect to have any impact on supplies from the country or the wider alliance.
The Oil Market Posted an Outside Trading Day and Ended Lower in its First Session of the New Year - On Tuesday, the oil market posted an outside trading day and ended lower in its first session of the new year amid the sharp losses seen in the equities market. At the start of a new year, the oil market opened higher and rallied on concerns about possible disruptions to Middle Eastern supply after the latest attack on a container ship in the Red Sea on Sunday. The market rallied close to $2 as it extended its gains to $73.64 early in the session. However, the market retraced more than 62% of its move from a low of $67.98 to a high of $76.18 as it tumbled to a low of $70.06 amid the sharp losses seen in the equities markets, which saw some profit taking and realignment of portfolios at the start of the new year. The market later retraced some of its sharp losses ahead of the close. The February WTI contract settled down $1.27 at $70.38 and the March Brent contract settled down $1.15 at $75.89. The product markets ended the session down, with the heating oil market settling down 31 points at $2.5258 and the RB market settling down 1.14 cents at $2.0949. Denmark's Maersk will decide on Tuesday whether to resume sending vessels through the Suez Canal via the Red Sea or redirect them around Africa following a weekend attack on one of its ships. On Sunday, Maersk paused all Red Sea sailings for 48 hours following attempts by Yemen-based Houthi militants to board the Maersk Hangzhou. U.S. military helicopters repelled the assault and killed 10 of the attackers. Maersk had more than 30 container vessels set to sail through Suez via the Red Sea, while 17 other voyages were put on hold. A decision will be taken on Tuesday regarding how to proceed. The Hangzhou, which was hit by an unknown object during the attack, was able to continue on its way with LSEG shipping data showing the vessel now close to the Suez Canal. The botched Houthi boarding operation was the second attack on the Maersk Hangzhou in as many days. The ship, which is carrying 14,000 containers en route from Singapore, was hit by a missile on Saturday about 55 nautical miles southwest of Al Hodeidah, Yemen. White House national security spokesperson John Kirby declined to say what options the U.S. is considering when asked on ABC's "Good Morning America" if Washington would consider a preemptive strike on the Houthis. Earlier on Sunday, British Foreign Secretary David Cameron said he told Iranian Foreign Minister Hossein Amirabdollahian in a call that Iran should help stop the Houthi attacks in the Red Sea. Three sources stated that OPEC+ plans to hold a meeting of its Joint Ministerial Monitoring Committee in early February, though an exact date has not been decided. At its last full ministerial meeting on November 30th, OPEC+ agreed to voluntary output cuts totaling about 2.2 million bpd during the current quarter, led by Saudi Arabia rolling over its current voluntary cut. The JMMC meeting is expected to assess the deal's implementation in January. Germany's Hapag-Lloyd will continue to divert its vessels around the Suez Canal for security reasons. A spokesperson said "We monitor the situation closely day-by-day, but will continue to reroute our vessels until Jan. 9." The spokesperson added that the company will decide on that day whether or not to continue rerouting ships. IIR Energy reported that U.S. oil refiners are expected to shut in 10,000 bpd of capacity in the week ending January 5th, increasing available refining capacity by 11,000 bpd. Offline capacity is expected to increase to 432,000 bpd in the week ending January 12th.
Oil rises on Middle Eastern turmoil, Libyan supply disruption - Oil extended gains as supply disruptions in Libya, increased tensions in the Middle East and an OPEC statement stressing its commitment to stabilizing prices ushered bulls back into the market. West Texas Intermediate rose more than 3 per cent to trade above US$72 on Wednesday amid the slew of bullish developments. Libya’s Sharara field, the country’s largest, has begun the process of fully shutting down after protests. The field had been pumping about 300,000 barrels a day recently.Meanwhile, Houthi militants claimed to have attacked another merchant ship in the Red Sea. Iran has dispatched a warship to the waterway, representing its most audacious move to challenge U.S. forces in the key trade route and possibly emboldening the Houthis.Further heightening tensions, Iran suffered two blasts that killed more than 100 people. The Iranian government didn’t say who was responsible for the attacks. “Nobody wants to be short crude below $70 when there is unrest in the Middle East,” The Organization of Petroleum Exporting Countries also on Wednesday released a statement saying it was committed to “unity, full cohesion and market stability.”Traders are assessing whether strong non-OPEC supply will remain a dominant oil-market theme in again 2024. Higher output from outside of the producer group has so far countered its efforts to tighten the market — but extended curbs take effect this week.WTI for February delivery climbed 3.1 per cent to $72.59 a barrel at 11:42 a.m. in New York. Brent for March settlement rose 2.9 per cent to $78.10 a barrel.
Oil Jumps Afrer Libya's Sharara Oil Field Shut Down By Protesters; Terrorist Attack In Iran -After sliding to fresh multi-week highs yesterday despite a burst of geopolitical risks and adverse escalations - almost as if the intern in charge of the White House oil trading desk was only left with a sell button - WTI rebounded after briefly sliding below $70 this morning and traded near session highs, reversing all of yesterday's losses after a Bloomberg report that Libya's Sharara oil field would be shuttered due to protests. The previously noted news that over 100 people have been killed in Iran in a terrorist attack near the grave of former IRGC commander Qassem Soleimani, in a terrorist attack only led to further gains.As OilPrice notes, after false rumors of the closure of the giant Libyan Sharara oil field on Tuesday, a letter from Libya’s National Oil Company on Wednesday confirmed the shutdown of one of Libya’s most important oil fields.According to Libya’s Al-Ahrar disgruntled protestors took to the field on Wednesday morning stating that the field would not be re-opened until their demands and those of the entire region of Fezzan in Southern Libya would be met.In talks with Libya’s Al-Ahrar TV, spokesman Abu Bakr Abu Shreya of protest group the Fezzan Gathering Association demanded better services and development of Southern Libya.Fears are that the protests may spread to the nearby 60,000 bpd El Feel field.Sharara produces around 270kb/d, out of Libya's total 1.2mb/d total output; the last time the field saw a short disruption for the last time in July of 2023 when protests erupted following the arrest of an official who tried to become the boss of Libya’s central bank. During a period of relative stability following the truce between the rivaling parties in 2020, Libya’s crude oil production has risen to around 1.2 million barrels per day, and Libya’s state oil firm has plans to ramp up production to 2 million bpd by 2030 according to Minister of Oil and Gas Mohamed Oun.While these disruptions may be relatively short-lived, they will be a reminder that the relative stability in Libya in 2023 has not been the norm in recent years. Libyan production fell below 700kb/d for a couple months in 2022, collapsed for most of 2020, and has been very volatile for years. Oil markets will focus on delivery of the new OPEC+ cuts, on potential risk of disruption from the widening conflict in the region, and on understanding the potential for more of the positive supply surprises we saw last year. However, Libya could be another important variable.
Oil prices rise more than 3% on mounting Middle East tensions, OPEC pledge to support market - Oil rose more than 3% on Wednesday as the U.S. warned Houthi militants against further attacks in the Red Sea and OPEC pledged to remain united in supporting prices. Protests in Libya have also shut down the Sharara oil field, which produces 300,000 barrels per day, two engineers told Reuters on Wednesday. The West Texas Intermediate contract for February gained $2.32, or 3.29%, to settle at $72.70 a barrel. The Brent contract for March added $2.36, or 3.11%, to settle at $78.25 a barrel. Houthi militants, who are based in Yemen and backed by Iran, claimed Wednesday that they targeted the CMA CGM Tage container ship. French shipping giant CMA CGM told CNBC in a statement that the vessel “did not suffer any incident.” This comes a day after Danish shipping giant Maersk halted all shipping through the Red Sea until further notice due to repeated Houthi attacks on vessels. German shipping company Hapag-Lloyd confirmed Wednesday that it would continue to avoid the Red Sea. The U.S. and 12 allies called Wednesday for the Houthis to immediately halt “these illegal attacks,” warning the militants would “bear the responsibility of the consequences should they continue to threaten lives, the global economy, and free flow of commerce in the region’s critical waterways.” “The United States does not seek conflict with any nation or actor in the Middle East,” National Security Council spokesperson John Kirby told reporters during a White House briefing Wednesday. “But neither will we shrink from the task of defending ourselves, our interests, our partners, or the free flow of international commerce,” Kirby said. Oil prices have been volatile this week, with U.S. crude and the global benchmark settling more than 1% lower on Tuesday despite Maersk’s decision to continue avoiding the Red Sea due to attacks by the Houthis. “We haven’t seen prices react much in part because fundamentals are softer for crude right now,” Amrita Sen, founder and director of research at Energy Aspects, told CNBC on Wednesday. “We’ve seen some inventory builds toward year end and that’s why the market just isn’t sensitive to this.” “Even if there are attacks we’re not expecting any oil supply losses on the back of it,” Sen said. “The market is going to look for specific supply disruptions that actually helps tighten balances before we see a significant increase in prices.” OPEC and its allies issued a statement Wednesday pledging to remain united in the group’s “efforts to maintain oil market stability going forward.” Several members of the group pledged in November to cut 2.2 million barrels per day through the first quarter of this year to support prices. Traders have been skeptical of that pledge because it is voluntary and OPEC has struggled to maintain a united front. The promised voluntary cuts have done little to support prices as the U.S. pumps crude at a record clip and demand weakens in China. U.S. crude and the global benchmark fell more than 10% in 2023 on worries that the market is oversupplied.
WTI Holds Day's Gains After API Reports Big Crude Draw - Crude prices soared today, round-tripping yesterday's losses, after traders apparently woke up to the tensions in the MidEast.Traders have largely looked past shipping disruptions in the Red Sea and the threat of a wider war in the Middle East over the past few weeks as those factors have yet to impact global oil supply and output, but the Danish shipping giant Maersk said today it would indefinitely suspend shipments through the Red Sea.But major fatalities following explosions at a ceremony held to mark the four-year death anniversary of an Iranian Maj. Gen. Qassem Soleimani (prompting Iran to explicitly threaten a response) and reports that Libya's largest oilfield has been shut down due to protests, may have been the straw to break the back of complacency. Overall, the oil market seems "likely to be in rough balance, but uncertainty about supplies abound - from sanctions on Iran, Russia and Venezuela having less effect, to the possibility that [U.S. President Joe] Biden will try to tighten them," said Michael Lynch, president of Strategic Energy & Economic Research.
- Crude -7.42mm (-3.00mm exp)
- Cushing +765k
- Gasoline +6.91mm
- Distillates +6.69mm
Crude stocks saw an unexpectedly large drawdown last week, but very large builds in products spoiled the bulls' party. Cushing stockpiles rose for the 11th month...
WTI Extends Losses After Massive Product Inventory Builds, Large SPR Add --Oil prices are sliding back again this morning, after surging yesterday to erase Tuesday's losses, following a bigger than expected crude draw reported by API (but notably large product inventory builds).Broad 'risk-off' sentiment in markets to start the year (and dollar strength) appear to be dulling any impact from possible supply disruptions in Libya for now. DOE
- Crude -5.50mm (-3.00mm exp)
- Cushing +706k - 11th weekly build in a row
- Gasoline -10.9mm - largest build ever
- Distillates -10.9mm - largest build since Jan 2019
Crude inventories declined for the second week in a row (more than expected) but gasoline and distillate stocks exploded higher...Bloomberg's Alex Longley notes one key thing to remember with all this data is that it essentially covers the final week of the year. That’s a time when the figures can get wonky for all kinds of reasons - tax purposes if you’re holding barrels in Texas, swaths of the country celebrating the holiday period, etc. So it’s worth taking some of the more extreme numbers with a grain of salt.The Biden administration added 1.055mm barrels to the SPR last week - the largest addition since June 2020...
Oil Falls as Rising US Fuel Supply Counters Mideast Tensions -- After advancing more than 3% in the prior session, oil futures on the New York Mercantile Exchange (NYMEX) and Brent crude traded on the Intercontinental Exchange retreated Thursday as investors balanced concerns over rising tensions in the Middle East against inventory data showing U.S. gasoline and distillate fuel supplies spiked more than 20 million barrels (bbl) last week as demand slumped into the New Year's holiday. U.S. Energy Information Administration's inventory report released late morning was overwhelmingly bearish for refined products, showing outsized builds across all three product categories amid exceptional demand weakness. Nationwide gasoline inventories spiked 10.9 million bbl in the final week of December, distillate fuel supplies surged 10.21 million bbl and jet fuel stocks built by 2 million bbl. At the same time, gasoline consumption collapsed to the second lowest weekly rate of 2023 at 7.954 million barrels per day (bpd), down 1.24 million bpd or 13% from the previous week. While it's not unusual for gasoline demand to soften into the New Year's holidays, the curve of last week's decline was pronounced compared to pre-pandemic years. There seems to be growing disconnect between the strength of U.S. labor market and gasoline demand that used to be closely correlated before the pandemic-driven lockdowns. For context, weekly unemployment claims in the final week of December dropped to a three-month low 202,000 applications but gasoline consumption eroded to a near recessionary level. Demand for middle distillates didn't fare any better, eroding to the lowest weekly rate of 2023 at 2.658 million bpd, down 1.32 million bpd from the previous week. Distillate fuel consumption closely correlates with nationwide industrial activity. The U.S. manufacturing index released by the Institute of Supply Management on Wednesday showed the industrial economy contracted for the 14th consecutive month in December. Limiting the downside for the oil complex, tensions in the Middle East continue to rattle oil markets in the aftermath of the deadliest attack in Iran since its 1979 Islamic Revolution. ISIS claimed responsibility Thursday morning for the twin blast that killed over 80 people at the tomb of military General Qasem Soleimani. In initial response, Tehran blamed Israel for the attack and vowed to immediately retaliate, spiking tensions in a volatile region. Robert McNally, president and founder of Rapidan Energy Group, estimates that there is at a minimum a 30% chance of material supply disruption in the Middle East at this juncture. "While Tehran doesn't want the war, President Biden doesn't want the war -- no one is willing to de-escalate either. Everyone is escalating here over the holidays. The market is too complacent. I think there must be at least $12 of geopolitical risk premium," McNally told Bloomberg TV on Tuesday. Separately, antigovernment protests in southern Libya shuttered the country's largest oil field, El Sharara, and the El Feel oil field, removing some 350,000 bpd from the global oil market. Both fields are in the Murzuq Basin in southern Libya jointly operated by Libya's state-owned company NOC, Spain's Repsol, France's Total, Austria's OMV and Norway's Equinor. Libya's oil fields and infrastructure have been frequently targeted by protestors and rival militias since the fall of Moammar Qadhafi in 2011. At settlement, ICE March Brent futures fell $0.66 to $77.59 bbl after reaching an intrasession high of $79.41 bbl, and NYMEX February West Texas Intermediate futures declined to $72.19 bbl, down $0.51. NYMEX February ULSD futures dropped back $0.0160 to $2.5884 gallon, while NYMEX February RBOB futures retreated $0.0480 to $2.1101 gallon.
Oil sets 3% weekly gain on Libyan outages, Middle East attacks -- Oil posted a weekly advance, bolstered by output disruptions in Libya and increased tensions in the Middle East. West Texas Intermediate rallied near US$74 a barrel, posting a 3 per cent weekly gain. Protesters in Libya have disrupted supply from the Sharara and El-Feel fields, which could take about 300,000 barrels a day out of the market. Meanwhile, the Houthi militant group in Yemen claimed another strike on a merchant ship in the Red Sea. U.S. Secretary of State Antony Blinken was en route to the Middle East after a deadly attack in Iran that has stoked concerns that the conflict is broadening. The geopolitical risk is offsetting bearish U.S. stockpile data that showed large increases in gasoline and diesel inventories. Crude’s gain this week comes despite analysts turning more pessimistic on the market. Wall Street already is cutting price forecasts for this year after global benchmark Brent dropped by almost a fifth last quarter. A surge in supplies from outside the OPEC+ alliance, led by U.S. shale drillers, is expected to continue, while consumption growth is forecast to slow. Prices: WTI for February delivery climbed $1.62 to settle at $73.81 a barrel in New York Brent for March settlement rose $1.17 to settle at $78.76 a barrel.
Suspected Israeli Airstrikes Kill at Least Six Militants in Eastern Syria - Three suspected Israeli airstrikes hit eastern Syria near the Iraqi border on Saturday, killing at least six militants. The strikes hit targets near the city of al-Bukamal in the Deir Ezzor province. Both the US and Israel have launched airstrikes in the area before, but a US official told The Associated Press that the US was not responsible for this round.Israel has not commented, but Israeli officials typically maintain a policy of ambiguity when it comes to bombing Syria and do not comment on individual strikes. The Israeli media outlet Ynet described the airstrikes as “attacks attributed to the” Israeli Defense Forces. Syria’s Defense Ministry also reported Israeli airstrikes on the city of Aleppo later on the same day, with only some material damage reported.Iraqi militia sources told AP that four members of Lebanon’s Hezbollah were killed in the strikes near al-Bukamal as well as two Syrian militants. The UK-based Syrian Observatory for Human Rights (SOHR) put the death toll much higher, saying 25 were killed, five Syrian nationals and 20 non-Syrians, but the number is not confirmed.Israel has bombed Syria with impunity for years and has ramped up airstrikes on the country since October 7. The US has also launched several rounds of airstrikes against Shia militias in eastern Syria and Iraq in response to attacks on US bases that started over President Biden’s full-throated support for Israel’s onslaught in Gaza.
Unknown gunmen bomb crude oil pipeline in Yemen (Xinhua) -- Unknown gunmen carried out an attack and blew up a major crude oil pipeline in the country's southeastern province of Shabwa on Monday evening, a government official told Xinhua. The blast was directed at the pipeline responsible for transporting crude oil from the Jannah Hunt oil field in the Usaylan district, the source said on condition of anonymity. This pipeline stretches to the Nushima export port located on the Arabian Sea in Shabwa. He clarified that the sabotage attack caused significant damage to the pipeline, leading to towering flames and thick plumes of smoke in the area. The attack on the pipeline occurred following the withdrawal of military personnel, who abandoned their posts in securing the pipeline due to grievances over unpaid salaries from the government, according to the official. Yemen's crude oil export operations have been severely disrupted due to the ongoing conflict between the Yemeni government and the Houthi group. The nine-year-long conflict has not only destabilized the nation but has also fostered the rise of armed gangs and extremist groups across Yemen, further complicating the security landscape. The recent pipeline attacks only exacerbate an already dire situation, further undermining the country's infrastructure and economic stability.
US Military Sinks Three Houthi Boats in Red Sea, Killing 10 - The US military sank three vessels belonging to Yemen’s Houthis during a confrontation in the Red Sea on Sunday, killing 10, as tensions continue to rise in the region due to the US-backed Israeli slaughter in Gaza.According to US Central Command, four Houthi boats were attacking and attempting to seize the container ship Maersk Hangzhou, which was struck by a missile a day earlier. CENTCOM said helicopters from the aircraft carrier USS Dwight D. Eisenhower responded to the Hangzhou’s distress call and then engaged with the Houthi boats.“In the process of issuing verbal calls to the small boats, the small boats fired upon the US helicopters with crew-served weapons and small arms,” CENTCOM said. “The US Navy helicopters returned fire in self-defense, sinking three of the four small boats, and killing the crews.” The Houthis said the boats the US attacked were “performing their humanitarian and moral duty… to prevent Israeli ships or those heading to the ports of occupied Palestine from passing through the Red Sea.” According to Al Maydeen, Houthi military spokesman Yahya Saree said the US “bears the consequences and repercussions of this crime” and affirmed that the US military “maneuvers in the Red Sea to protect Israeli vessels will not deter Yemen from fulfilling its religious, moral, and humanitarian duty to support and champion the oppressed in Palestine and Gaza.”
Iran Dispatches Warship To Red Sea, Houthis Warn Of "Repercussions" After US Forces Kill Rebels During Maersk Ship Attack Regional instability risks mount in the Red Sea following the Iran-backed Houthi attack on a Maersk container ship on Sunday. US Forces responded with attack helicopters that eliminated three small boats and ten rebels.After the skirmish, a spokesperson for the Yemeni militia group warned of "consequences and repercussions" for the US aggression. Houthi military spokesman Yahya Sarea confirmed on the Yemeni TV channel Al-Masirah that US forces killed ten of its fighters. "US enemy forces attacked three boats belonging to the Yemeni Naval Forces, which led to the martyrdom and the loss of ten people from the Naval Forces," Sarea said.The spokesman said its fighters were "performing their humanitarian and moral duty" to deter Israel-related commercial vessels from transiting the Red Sea "in solidarity and support for the Palestinian people."He said the US "bears the consequences" for attacking and killing ten of its fighters, adding that the "military movements in the Red Sea to protect Israeli ships will not prevent Yemen (Houthi militia) from performing its humanitarian duty in support of Palestine and Gaza."Perhaps even more problematically from a global escalation perspective, Iran dispatched a warship to the Red Sea.The Alborz destroyer traversed the Bab El-Mandeb strait, a narrow choke point between the Red Sea and the Gulf of Aden, on Monday, Iranian state media said, adding that Iran’s naval fleet has been operating in the area “to secure shipping lanes, repel pirates, among other purposes since 2009.”
Houthis Claim Another Container Ship Attack As Middle East Turmoil Worsens - Turmoil in the Middle East today has been marked by twin explosions near the burial site of the late Iranian commander Qasem Soleimani in Kerman, resulting in at least 73 fatalities and injuring 170 others. Additionally, there are new reports of another attack on a commercial vessel in the Red Sea by the Iran-backed Houthi rebels. According to Bloomberg, the Houthis' armed forces' spokesman claimed rebel forces attacked the container ship "CMA CGM TAGE" after the vessel's captain ignored multiple warnings. The United Kingdom Maritime Trade Operations (UKMTO) organization reported a vessel that would've been in the same proximity of CMA CGM TAGE came under attack. However, French container shipping giant CMA CGM SA said the container ship "did not suffer any incident" and was sailing through the Red Sea area with a destination of Alexandria. Bloomberg data shows the container ship switched off its automatic identification system in the Arabian Sea before the Bab al-Mandab Strait on December 30. The transponder was turned on Tuesday.
Israel-Hamas war threatens global shipping as risk of wider conflict intensifies - Shipping companies are diverting their cargo away from the Red Sea as attacks by the Houthi rebel group in Yemen intensify in response to the ongoing siege of Gaza. The attacks by the Houthi rebels, officially known as Ansar Allah, are now sparking confrontations in other parts of the Middle East, and U.S. diplomats are moving to reassure allies and stanch a wider conflict. “The Houthis will bear the responsibility of the consequences should they continue to threaten lives, the global economy, and free flow of commerce in the region’s critical waterways,” said the U.S., Japan, the United Kingdom, Germany and eight other countries in a joint Wednesday statement. There have been 25 attacks since Nov. 18 against merchant ships moving through the Southern Red Sea and Gulf of Aden, Vice Admiral Brad Cooper, commander of the Bahrain-based U.S. 5th Fleet, told reporters Thursday. In December, the U.S. launched naval operation “Prosperity Guardian” along with the United Kingdom, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles and Spain to protect commercial ships from attacks by the Houthis. Pentagon officials have been keeping in nearly constant contact with merchant ships at sea using a tactical communications network, a senior defense official told The Hill Thursday. The U.S also sunk Sunday three small Houthi boats following an attack on a merchant ship, prompting Iran to send its Alborz destroyer to the Red Sea the following day. But the Houthis remain unbowed, vowing to continue their attacks in response to the bombardment of Gaza by Israeli forces. More than 22,000 Palestinians have died and more than 57,000 have been injured during the siege of Gaza, according to the Gaza health ministry.
Houthi drone ship explodes in Red Sea as US steps up warnings - A drone boat filled with explosives launched from the part of Yemen controlled by Iran-backed Houthi militants drew within “a couple of miles” of U.S. Navy and commercial ships in the Red Sea before detonating on Thursday, according to the Pentagon. The explosion of the unmanned surface vessel (USV) — which had transited 50 miles from Yemen out into Red Sea shipping lanes — came after the U.S. and 11 other countries called on Yemen’s Houthis to stop their attacks on merchant ships in the area, warning of unspecified “consequences.” The incident also marks the first time the group had used a drone ship to attempt to attack commercial vessels in the Red Sea and the Gulf of Aden since the Israel-Hamas war began in October, according to Vice Admiral Brad Cooper, head of U.S. Naval Forces Central Command. “It came within a couple of miles of ships operating in the area — merchant ships and U.S. Navy ships — and we all watched as it exploded,” Cooper told reporters, noting that the intended target of the attack was unclear. Since Nov. 18, the Houthis have aimed numerous exploding drones and missiles at merchant ships in an attempt to damage the vessels in protest of Israel’s deadly and catastrophic air campaign and on-the-ground military operations in the Gaza Strip. The bombardments have successfully disrupted international shipping, with some companies suspending their Red Sea transits. Cooper said there have been 25 Houthi attacks on merchant vessels transiting the southern Red Sea and Gulf of Aden since mid-November, including Thursday’s, with “no signs that their irresponsible behavior is abating.” There have been no casualties thus far, but he hinted that it may only be a matter of time before that could occur. “Shipping lanes in this region are dense. The vessels approach a chokepoint. . . they often form very narrow lines and travel near each other,” Cooper said. “This, coupled with the fact that Houthi missiles often miss their intended target, means that any ship, really at any time, is at risk of collateral damage when passing through the Houthi-controlled territory in the vicinity of the southern Red Sea.”
US, Allies Release Statement Threatening Houthis Over Red Sea Attacks - The US and some of its allies released a joint statement on Wednesday threatening Yemen’s Houthis over their attacks on Israeli-linked shipping in the Red Sea, which started in response to the brutal Israeli assault on Gaza.“Let our message now be clear: we call for the immediate end of these illegal attacks and release of unlawfully detained vessels and crews. The Houthis will bear the responsibility of the consequences should they continue to threaten lives, the global economy, and free flow of commerce in the region’s critical waterways,” the statement reads.The statement was issued by the US, Britain, New Zealand, the Netherlands, Japan, Germany, Italy, Denmark, Canada, Belgium, Australia, and Bahrain, the only Arab nation to sign onto the threat.The Times of London previously reported that the US and Britain were working on a joint statement that would threaten action against the Houthis if they didn’t stop the Red Sea attacks. Sources told the paper that options being considered by the US and UK were direct airstrikes on Yemen or using special operations forces to target Houthi boats. The US has already sunk Houthi boats, killing 10 during a confrontation on Sunday.Bombing Yemen would risk shattering the fragile peace in Yemen between the Houthis and the US-backed Saudi-led coalition. It would also risk sparking a major regional war as the Houthis could expand the scope of what they’re targeting, and they are capable of striking at long distances with their missiles and drones.The Houthis, formally known as Ansar Allah, have vowed not to back down in the face of the US military. Ansar Allah officials have repeatedly stated that they will not stop their attacks on Israeli-linked commercial shipping until the Israeli siege on Gaza ends.The Biden administration has shown no interest in using any of its leverage on Israel to end the slaughter in Gaza. The US continues to provide unconditional military support and is opting for regional escalation rather than cutting off Israel.
US Drone Strike Kills Iraqi Militia Leader in Baghdad - A US drone strike in Baghdad killed a senior militia leader on Thursday, marking another significant escalation that could lead to a full-blown regional war.The strike killed Mushtaq Talib al-Saidi, also known as Abu Taqwa, a deputy commander of the Popular Mobilization Forces (PMF) operations in Baghdad. The PMF is a coalition of mostly Shia Iraqi militias that are part of the government’s security forces.At least one other militia member was killed in the strike, which targeted a PMF base in Baghdad. Later on Thursday, the Pentagon confirmed it was responsible for the bombing.The Pentagon claims Abu Taqwa was believed to be responsible for attacks on US bases in Iraq and Syria that started in October in response to US support for Israel’s onslaught in Gaza, but the US has not provided any evidence for the assertion.The drone strike has enraged the Iraqi government, which condemned it as a “flagrant violation of the sovereignty and security of Iraq” and said it was “no different from a terrorist act.”The US has launched several rounds of airstrikes in Iraq since October, all of which have been strongly condemned by the government of Iraqi Prime Minister Mohammed Shia al-Sudani, the US’s supposed partner in the country.Al-Sudani’s government has also condemned the attacks on US bases in Iraq but wants to work to find the perpetrators and strongly opposes the unilateral US airstrikes and extra-judicial killings.Al-Sudani said last week that his government was “heading towards” ending the presence of foreign forces in Iraq, which includes 2,500 US troops. Iraq’s parliament voted to expel US troops back in 2020 following the US drone strike that killed Iranian Gen. Qasem Soleimani and PMF leader Abu Mahdi al-Muhandis, but the US has refused to leave.
Amid Escalation, Israel Attacks Hezbollah Targets in Southern Lebanon - With the very real possibility that the assassination of Hamas figure Saleh al-Arouri in Beirut earlier this week could expand the ongoing war, Israel seemingly increased the odds Thursday with a flurry of attacks on Hezbollah targets in Southern Lebanon. These hit an observation post and multiple infrastructure targets. They also reportedly struck an anti-tank squad.Arouri was instrumental in brokering the major Israel-Hamas hostage exchange, and was reportedly trying to get another one going before Israel killed him. Hezbollah leader Hassan Nasrallah warned in a televised speechthat the assassination would not go unpunished and hitting Beirut was a very big deal indeed.But while top Likud figures were crowing about the killing, many Israelis were openly expressing concern that the death of Arouri effectively put to rest the hope of a second hostage exchange. For those who still have family members held by Hamas, this is clearly nothing to celebrate.And yet that may have been the point for Israeli hawks, who are not really on board for the exchange, and are more than happy to put the kibosh on a clear path to peace. If that means expanding the war into Lebanon, some of them are very much also on board with making that happen too. Perennial hawk Avigdor Lieberman is openly calling for a 50-year occupation of Southern Lebanon to punish Hezbollah and establish a permanent buffer zone, effectively another occupied territory. This isn’t exactly official Israeli policy right now, but if it were to become so, nothing would facilitate it so much as provoking a full war with Hezbollah.We Are Entirely Too Close To Another Major War In The Middle East - Caitlin Johnstone -- The US and its allies have published a joint statement warning Yemen’s Houthis to cease the attacks they’ve been making on commercial vessels in the Red Sea. The Houthis, officially known as Ansarallah, have successfully slashed Israeli port activity by an extremely massive margin with their maritime tactics in response to Israel’s ongoing massacre in Gaza. The statement asserts that the Yemeni attacks “are a direct threat to the freedom of navigation that serves as the bedrock of global trade in one of the world’s most critical waterways,” complaining that they are “adding significant cost and weeks of delay to the delivery of goods,” and ultimately threatens that the Houthis will “bear the responsibility of the consequences” should these attacks continue. Many critics have been pointing out the irony of the western power alliance threatening military intervention to protect shipping containers and corporate profits while actual human beings are being butchered by Israeli airstrikes and starved by Israeli siege warfare with nothing but friendly support from these same powers.“Palestinians would really love to get the same amount of attention and protection as shipping containers,” tweeted Palestinian-Canadian journalist Yasmine El-Sawabi.That the US and its allies would go to war against the people who are trying to stop an active genocide tells you everything you need to know about them. The fact that they’d do it for corporate profit margins tells you even more, and the fact that they’d do it to a nation they’ve already helped inflict unfathomable horrors upon in recent years tells you more still.And that’s just one of the potential wars looming on the horizon in connection with the Israeli onslaught in Gaza. As Trita Parsi recently explained in The Nation, there are three other fronts along which wars could also erupt in the region apart from a western conflict with the Houthis: in Iraq and Syria where US forces have been repeatedly under attack by militants in response to the Gaza assault, in Lebanon between Israel and Hezbollah, and the absolute nightmare scenario of a full-scale war with Iran.“That risk exists on four fronts: Between Israel and the Lebanese Hezbollah, in Syria and Iraq due to attacks on US troops by militias aligned with Iran, the Red Sea between the Houthis and the US Navy, and between Israel and Iran following both the assassination of an Iranian general in Syria and the explosion in Kerman today at the commemoration of the death of General Qassem Soleimani that has killed more than 100,” Parsi writes.
Iran Vows a 'Harsh Response' for Bombing That Killed Over 100 Iranians - Iran has vowed a “harsh response” to the bombing in the southeastern Iranian city of Kerman that killed at least 103 people, including women and children, but has not formally attributed blame for the attack.The bombing targeted a memorial commemorating the fourth anniversary of the US killing of Iranian Quds Force Commander Qasem Soleimani, who was targeted by a US drone strike in Baghdad on January 3, 2020. Iranian officials have said two separate bombs were placed in bags on the side of a road leading to a cemetery where a large crowd of people was heading.“The evil and criminal enemies of the Iranian nation once again created a disaster and martyred a large number of dear people in Kerman,” Iranian Supreme Leader Ayatollah Ali Khamenei said in a statement. “This disaster will have a harsh response, God willing.”Israel is a suspect in the bombing since it has a history of conductingsabotage attacks, assassinations, and drone attacks inside Iran and recently killed a senior Islamic Revolutionary Guard Corps (IRGC) commander in Syria, as well as a senior Hamas official in Beirut. Israel also appears to be attempting to provoke a regional war that would draw in the US.But the scale of the bombing was bigger than anything Israel has carried out inside Iran in the past. US officials are pointing to ISIS as a potential culprit, as the group has also carried out attacks inside Iran in recent years and was an enemy of Soleimani.The Iranian mission to the UN hinted Israel could have been responsible in a post on X. “The fear of the Zionist regime & its puppet terrorist groups of Martyr Soleimani led to another crime in Kerman during his commemoration ceremony,” the mission said. “Iran will respond with fire & fury to the orchestrators, perpetrators, & anyone who’s aided & abetted in this terrorist attack.”
Doomsday: What could drive Israel and Iran to start launching nuclear weapons? - Although Israel’s Gaza war is most visibly being waged against Hamas, the ultimate adversary is Iran. If Israel’s counter-terrorism efforts should sometime bring it into direct confrontation with Iran, the result could be an immediate escalation between these two adversary states. In such a plausible scenario, even a still-pre-nuclear Iran could elicit a “limited” Israeli nuclear reprisal. The principal escalation dangers would be an Iranian use of radiation dispersal weapons or an Iranian rocket attack on Israel’s Dimona nuclear reactor. For Israel, a country smaller than Lake Michigan, nuclear weapons and strategy remain essential to national survival. Israel’s traditional policy of deliberate nuclear ambiguity, or “the bomb in the basement,” goes back to its early days. During the 1950s, Prime Minister David Ben-Gurion understood the need for a dramatic “equalizer” against larger and more populous regional enemies. Today, facing a recalcitrant and soon-to-be nuclear Iran, Israel needs to update and refine its policy of deliberate nuclear ambiguity. The key objective of such needed changes would be credible nuclear deterrence, a goal that will now require selective nuclear disclosure. Though ironic and counter-intuitive, Iran will need to be convinced that Israel’s nuclear arms are not too destructive for actual use. There will be perplexing nuances. For Israel to fashion reason-based nuclear policies, Iran should be considered rational. But it is conceivable that Iran might act irrationally, perhaps even in alliance with other states (such as Syria or North Korea) or kindred terror groups (such as Hamas, Hezbollah, Palestinian Islamic Jihad or the Houthis). Unless Jerusalem were to consider Pakistan an authentic enemy, Israel presently has no already-nuclear enemies. Still, as an unstable Islamic state, Pakistan is potentially subject to a coup d’état by assorted Jihadist elements and is closely aligned with Saudi Arabia. The Sunni Saudi kingdom could sometime decide to “go nuclear” itself because of Shiite Iran’s steadily accelerating nuclear progress. For Israel’s nuclear deterrence to work longer-term, Iran will need to be told more rather than less about Israel’s nuclear targeting doctrine and the invulnerability of Israel’s nuclear forces. In concert with such changes, Jerusalem will need to clarify its still-opaque “Samson Option.” The point would not be to “die with the Philistines” (per the biblical Book of Judges), but to enhance “high destruction” options of its nuclear deterrence posture. Though the only gainful purpose of Israel’s nuclear weapons should be deterrence at different levels of military destructiveness, there will remain circumstances under which Israeli nuclear deterrence could fail. How might such intolerable circumstances arise? Four distinct scenarios emerge, with results that range from very destructive to catastrophic. First, if Iran were to launch “only” a massive conventional attack on Israel, Jerusalem could respond with a limited nuclear retaliation. If Iranian first-strikes were to involve chemical or biological weapons, Israel might also decide to launch a measured nuclear reprisal. This decision would depend, in large part, on Jerusalem’s expectations concerning follow-on Iranian attacks and its calculations of comparative damage-limitation. A nuclear retaliation by Israel could be ruled out conclusively only in circumstances where the Iranian aggression is entirely conventional and “hard-target” oriented — that is, oriented toward Israeli weapons and military infrastructures, not toward Israel’s civilian populations. A second scenario would involve Israel feeling compelled to preempt Iranian aggression with conventional weapons. In that case, that enemy state’s response would largely determine Israel’s next moves. If this response were in any way nuclear, including “mere” radiological weapons, Israel would likely turn to certain controlled forms of nuclear counter-retaliation. If Iran’s retaliation were to involve other non-nuclear weapons of mass destruction, Israel could still feel pressed to take the escalatory initiative. This decision would depend upon Jerusalem’s considered judgment of enemy intent and on its corollary calculations of damage-limitation. If the Iranian response to Israel’s preemption were limited to hard-target conventional strikes, it is unlikely that Israel’s decision-makers would go nuclear. If, however, the Iranian conventional retaliation was “all-out” and directed in part toward Israeli civilian populations, an Israeli nuclear counter-retaliation could not be excluded. Such a counter-retaliation could be ruled out only if Iran’s conventional retaliation were proportionate to Israel’s preemption; confined to Israeli military targets; circumscribed by legal limits of “proportionality” and “military necessity,” and accompanied by verifiable assurances of non-escalatory intent. A third (and highly unlikely) scenario involves Israel launching a preemptive nuclear strike against Iran. Although circumstances could arise wherein such a strike would be rational and permissible under international law, it is improbable that Israel would allow itself to reach such end-of-the-line circumstances. An Israeli nuclear preemption could reasonably be expected only if Iran had already acquired nuclear or other weapons of mass destruction, threatened to use them, began a countdown to launch, and Jerusalem believed that exclusively conventional preemption could not save the Jewish State from destruction.
ISIS Takes Credit for Bombing in Kerman, Iran That Killed At Least 84 - ISIS took credit for the Wednesday bombing in Kerman, Iran, that killed at least 84 people, but Iran has yet to formally attribute blame for the attack.According to Iran’s PressTV, ISIS issued a statement on its Telegram channels that said two of its members detonated explosive belts in a suicide attack. Iranian officials initially said two bombs were likely placed in bags at the scene, but a source told Iran’s IRNA news agency that at least one of the explosions was the result of a suicide bombing.“The suicide bomber in the first incident was a man who was completely dismembered as a result of the explosion and the identification of the suicide bomber is under investigation,” the source said. “The cause of the second blast was most likely the same.”The bombing targeted a memorial commemorating the fourth anniversary of the US killing of Iranian Quds Force Commander Qasem Soleimani, who was targeted by a US drone strike in Baghdad on January 3, 2020. Initial reports said over 100 were killed, but the latest death toll is 84.Israel is also a suspect in the bombing since it has a history of carrying out sabotage attacks and assassinations inside Iran, but never anything on the scale of the bombing in Kerman. Israel has also been carrying out attacks across the region and recently killed a senior member of Iran’s Islamic Revolutionary Guard Corps in Syria. Iranian officials have hinted at a potential Israeli role but say they’re carrying out an investigation to find the perpetrators. Supreme Leader Ayatollah Ali Khamenei vowed a “harsh response” to the bombing.
Turkey Arrests 34 Suspected Mossad Spies Over Abduction Plot Aimed At Hamas Leaders --Turkey has busted up what it says is a major Israeli spy plot on its soil, having arrested 34 suspects on Wednesday, alleged to have been plotting attacks on foreigners in Turkey, namely Hamas operatives.In total 46 arrest warrants were issued, with the Chief Prosecutor's Office in Istanbul says ongoing efforts are underway to capture the remain suspects at large. The are all suspected of conducing espionage activities specifically on behalf of the Mossad intelligence agency.According to statements in Turkish media, "The investigation found that Israeli intelligence was behind activities targeting foreigners residing in Türkiye, from reconnaissance to assaults and abduction attempts."However, "No other details are available regarding the investigation, but Mossad was implicated in the past in investigations about attempts to kidnap Palestinians living in Türkiye."Indeed Hamas operatives and some of the group's leadership have long been known to hide out and conduct business in Turkey. Israel has recently vowed to pursued the group's leadership abroad, possibly in a Munich-style assassination campaign.In early December, Turkish Intelligence warned of "serious consequences" if Israeli agents try to seek Hamas members abroad, or especially on Turkish soil. This had been in response to provocative words issued by Ronen Bar, head of Israel's domestic security agency Shin Bet. He had said at the time, "The cabinet has set us a goal, in street talk, to eliminate Hamas. This is our Munich. We will do this everywhere, in Gaza, in the West Bank, in Lebanon, in Turkey, in Qatar." Since then, Israel-Turkey relations have deteriorated, almost to the point of complete breakage in official diplomatic relations. President Erdogan has even recently liked his Israeli counterpart PM Netanyahu to Hitler. As for this current 'spy round-up' - Turkish authorities say hundreds of thousands in cash has already been recovered, as well as weapons and munitions: Interior Minister Ali Yerlikaya shared a video of operations jointly carried out by police and the National Intelligence Organization (MIT). On a social media post, Yerlikaya said an investigation into international espionage activities led to the operations. "We will not allow espionage targeting our national unity," Yerlikaya said. The minister said authorities discovered more than 143,000 euros ($157,300) and more than $23,000 in the possession of suspects, along with one pistol and a large amount of munitions.
Report: Israel Rejected Hamas Offer on New Hostage Deal - Israel rejected an offer made by Hamas through Qatari and Egyptian mediators on a new hostage deal, Axios reported on Monday.Citing unnamed Israeli officials, the report said Israel received the offer on Sunday and conveyed that it was “unacceptable” the following day. The proposal included a three-phase process that would have started with Israel beginning to pull its forces from Gaza and Hamas releasing 40 hostages.The proposed deal would have ended the Israeli onslaught on Gaza and the war altogether once the final phase was implemented, which would have involved Hamas releasing all the Israeli military personnel they had captive. But Israeli officials have vowed the assault on Gaza will continue through the entire year of 2024.“The proposal we received from Hamas on Sunday was totally off base and we asked the mediators to try and produce a more acceptable proposal. They are working on it and let’s see what happens,” one Israeli official said.While Israel rejected the deal, Israeli officials said the proposal showed Hamas is willing to negotiate despite previously saying there would be no talks until a full ceasefire.But successful negotiations became much less likely on Tuesday as an apparent Israel dramatically escalated tensions in the region by launching a drone strike in Beirut and killing a senior Hamas official, Saleh al-Arouri, who was a key figure in the deal that led to the release of over 100 Israeli hostages and over 200 Palestinian prisoners.
Israeli Military Says Gaza Slaughter Will Continue for All of 2024 - The Israeli Defense Forces (IDF) said Sunday that it would withdraw some troops from Gaza but that it expects the brutal assault on the enclave to continue through the entire year of 2024, The Times of Israel reported.IDF spokesman Rear Adm. Daniel Hagari said the military was “adjusting” its “fighting methods to each area in Gaza” to prepare for a long conflict. “Tonight, 2024 will begin. The goals of the war require lengthy fighting, and we are prepared accordingly,” he said. Hagari said the IDF was taking these measures “out of the understanding that we will be needed for additional missions and continued fighting during the entire coming year.” He said that some “of the reservists will return to their families and work this week.” The Times later reported that the IDF was pulling a total of five brigades out of Gaza. Israeli Prime Minister Benjamin Netanyahu and other top Israeli officials have made clear they plan to continue the Gaza slaughter for the long term. Despite international calls for a ceasefire and accusations of genocide, Netanyahu said Sunday that his campaign will continue for “many more months.” The US continues to provide unconditional and full-throated support for the massacre as the Biden administration bypassed Congress for the second time to get more arms into Israel’s hands.In less than three months of relentless airstrikes and a ground campaign in Gaza, the Israeli operations have killed over 21,000 Palestinians, including over 8,000 children, and wounded over 50,000, according to Gaza’s Health Ministry.
Ethnic Cleansing of Gaza Is Becoming an Official Israeli Government Policy - The idea of cleansing Gaza of its Palestinian population is slowly becoming an official Israeli government position, Zman Israel reported on Wednesday.A senior Israeli official said that Israel is already in discussions with Congo and other nations on absorbing Palestinian refugees. “Congo will be willing to take in migrants, and we’re in talks with others,” the official said. Israeli officials are framing the plan as a “voluntary” resettlement, but the Israeli military is making Gaza uninhabitable. Besides the massive bombing campaign that has destroyed nearly 70% of the homes in Gaza, the siege has left many Palestinians facing starvation and disease.The Zman report came a day after the US condemned rhetoric from two Israeli ministers, Bezalel Smotrich and Itamar Ben Gvir, about the expulsion of Palestinians from Gaza and the establishment of Jewish settlements in the conflict. The US State Department said the Israeli government has insisted the statements do not reflect government policy, but that claim does not align with reality.Israeli Prime Minister Benjamin Netanyahu said he was working on finding countries to accept Palestinians. “Our problem is [finding] countries that are willing to absorb Gazans, and we are working on it,” he said. On Tuesday, Israeli Intelligence Minister Gila Gamliel told Zman that “voluntary migration is the best and most realistic program for the day after the fighting ends.” Gamliel penned an op-ed for The Jerusalem Post published in November, where she proposed the “voluntary resettlement” of Palestinians from Gaza.Similarly, two members of the Israeli Knesset, Danny Danon, a member of Netanyahu’s Likud party, and Ram Ben-Barak, a member of the opposition party Yesh Atid, called for Western countries to take in Palestinian refugees in pages of The Wall Street Journal, demonstrating the idea is popular across the political spectrum.It was obvious from the start of the Israeli onslaught in Gaza that the Israeli government wanted to achieve ethnic cleansing in the enclave. In October, a leaked document drafted by Gamliel’s Intelligence Ministry proposed pushing all 2.3 million Palestinians in Gaza into Egypt. But Cairo is standing firm on its opposition to accepting Palestinian refugees and enabling Israel’s plans, forcing the Israeli government to look elsewhere.
Israel’s Genocide Betrays the Holocaust -- Chris Hedges -- Israel’s lebensraum master plan for Gaza, borrowed from the Nazi’s depopulation of Jewish ghettos, is clear. Destroy infrastructure, medical facilities and sanitation, including access to clean water. Block shipments of food and fuel. Unleash indiscriminate industrial violence to kill and wound hundreds a day. Let starvation — the U.N. estimates that more than half a million people are already starving — and epidemics of infectious diseases, along with the daily massacres and the displacement of Palestinians from their homes, turn Gaza into a mortuary. The Palestinians are being forced to choose between death from bombs, disease, exposure or starvation or being driven from their homeland. There will soon reach a point where death will be so ubiquitous that deportation - for those who want to live - will be the only option. Danny Danon, Israel's former Ambassador to the U.N. and a close ally of Prime Minister Benjamin Netanyahu, told Israel’s Kan Bet radio that he has been contacted by “countries in Latin America and Africa that are willing to absorb refugees from the Gaza Strip.” “We have to make it easier for Gazans to leave for other countries,” he said. “I'm talking about voluntary migration by Palestinians who want to leave.” The problem for now “is countries that are willing to absorb them, and we're working on this,” Netanyahu told Likud Knesset members. In the Warsaw Ghetto, the Germans handed out three kilograms of bread and one kilogram of marmalade to anyone who “voluntarily” registered for deportation. “There were times when hundreds of people had to wait in line for several hours to be ‘deported,’” Marek Edelman, one of the commanders of the Warsaw Ghetto uprising, writes in “The Ghetto Fights.” “The number of people anxious to obtain three kilograms of bread was such that the transports, now leaving twice daily with 12,000 people, could not accommodate them all.”The Nazis shipped their victims to death camps. The Israelis will ship their victims to squalid refugee camps in countries outside of Israel. Israeli leaders are also cynically advertising the proposed ethnic cleansing as voluntary and a humanitarian gesture to solve the catastrophe they created.This is the plan. No one, especially the Biden administration, intends to stop it. The most disturbing lesson I learned while covering armed conflicts for two decades is that we all have the capacity, with little prodding, to become willing executioners. The line between the victim and the victimizer is razor thin. The dark lusts of racial and ethnic supremacy, of vengeance and hate, of the eradication of those we condemn as embodying evil, are poisons that are not circumscribed by race, nationality, ethnicity or religion. We can all become Nazis. It takes very little. And if we do not stand in eternal vigilance over evil — our evil — we become, like those carrying out the mass killing in Gaza, monsters. The cries of those expiring under the rubble in Gaza are the cries of the boys and men executed by the Bosnian Serbs at Srebrenica, the over 1.5 million Cambodians killed by the Khmer Rouge, the thousands of Tutsi families burned alive in churches and the tens of thousands of Jews executed by the Einsatzgruppen at Babi Yar in Ukraine. The Holocaust is not an historical relic. It lives, lurking in the shadows, waiting to ignite its vicious contagion. We were warned. Raul Hilberg. Primo Levi. Bruno Bettelheim. Hannah Arendt. Aleksandr Solzhenitsyn. They understood the dark recesses of the human spirit. But this truth is bitter and hard to confront. We prefer the myth. We prefer to see in our own kind, our own race, our own ethnicity, our own nation, our own religion, superior virtues. We prefer to sanctify our hatred. Some of those who bore witness to this awful truth, including Levi, Bettelheim, Jean Améry, the author of “At the Mind's Limits: Contemplations by a Survivor on Auschwitz and Its Realities,” and Tadeusz Borowski, who wrote “This Way for the Gas, Ladies and Gentlemen,” committed suicide. The German playwright and revolutionary Ernst Toller, unable to rouse an indifferent world to assist victims and refugees from the Spanish Civil War, hanged himself in 1939 in a room at the Mayflower Hotel in New York City. On his hotel desk were photos of dead Spanish children.
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